Cool. All right. Welcome everyone to day three of the Stephens Investment Conference. I'm Mason Carrico. I'm the diagnostics and medtech analyst here. Excited to have Vericel with us. We've got Joe Mara, CFO, and Eric Burns, VP of Finance and IR. Appreciate you guys joining us. Thanks for having us. Appreciate it. Maybe just to kick it off here, recently reported Q3. Maybe if you do not mind, start us off with a quick high-level recap before we get into Q&A. Yeah. Again, thanks Mason and team for having us at the conference. We appreciate being here once again today. I will start by saying we will be making a few forward-looking statements, so please check with our filings in the SEC for additional information. In terms of our third-quarter updates, we had our call a couple of weeks ago. Really, we had a very strong quarter, I would say, across the entire portfolio and across the business. Very strong top line. We had record third-quarter revenue of about $67.5 million. MACI had a very strong quarter, about $56 million and 25% growth. Burn care actually had its strongest quarter of the year and one of its strongest quarters to date as well at about $12 million. Really good breadth across the portfolio from a top-line perspective. I would say, as importantly, if you look at kind of the P&L dynamic, another great quarter from a P&L perspective. It is about 70% growth from an adjusted EBITDA perspective to about $17 million. We achieved 25% margin there for the quarter. We were GAAP net income positive of about $5 million. I would say those are pretty notable achievements for us to occur before our seasonally highest fourth quarter. Certainly good third quarter from a P&L perspective. I would say the other piece that we have talked about that is going to start to increase is our cash generation. We actually generated roughly $20 million, whether you look at operating cash flow or free cash flow in the quarter. That is pretty substantial. I think as we've talked about with our funding for our new manufacturing facility complete, we expect that to really inflect in the coming quarters and years. Good to see that in the third quarter as well. Broadly, I would just say we think we have a lot of momentum in the business. Our MACI indicators are strong. A number of the Arthro indicators are strong, which I know we'll get into. Our Salesforce expansion hiring is very much on track, and we think we're well positioned for that to roll out early next year. From a longer-term perspective, I would say the MACI Ankle study, we're still on track for that to be initiated in the fourth quarter. We did give an update on our ex-U.S. project as well with a potential rollout in the U.K. in 2027. I think overall, we think the third quarter was very strong. Broadly, I think we feel like the company is not only well positioned for a strong 2026, but really kind of for multi-years over the long term. We continue to believe we're pretty unique with a pretty unique profile with both strong top-line growth, really strong bottom-line growth. Again, now we're going to see that cash generation as well. Got it. That's helpful. Maybe just to set the stage a little bit for MACI, you guys have called out a 60,000-patient TAM. Could you just split that by location of defect and kind of where MACI Open's penetration stands today? Yeah. We do have some slides in our corporate presentation to the extent it's helpful if anyone's following along. To that point, we've got about 60,000 patients on an annual basis that we call out as part of the MACI TAM. If you double-click on that, there's a couple of dimensions to that. MACI has been really a go-to product in a couple of key segments for us that have really helped drive the growth. The first is the patella, and the second one is our larger defects. You can kind of think of those being the key drivers with the MACI Open procedure before we got to MACI Arthro. Those make up about a third of the market in total. We have pretty strong penetration into the teens on patella and in the double-digit range on those larger defects. If you think about the rest of the market, which is really the larger part of the market, it's about two-thirds, that's primarily the smaller defects. In particular, an area within the femoral condyles of about 2 sq cm, 4 sq cm. cm. We certainly have some business there. That definitely makes up part of kind of MACI's revenue historically. What's interesting about the arthroscopic delivery option is essentially the technology was designed for those 2 sq cm, 4 sq cm in particular and for smaller defects. We think this gives us a good opportunity to take what is really in the single-digit penetration range and potentially drive that up. At the same time, I would say we're going to continue to focus on the patella and the larger defects. Really all three of those going forward should be areas of growth for us. Again, the Arthro opportunity potentially opens us up to be more competitive on the smaller defects. Got it. Before we do move to Arthro, from MACI Open, like you were saying, it's had success in the patella and the larger defects. I mean, as we look ahead for that core MACI offering, do you expect it to continue to gain traction and adoption at a similar pace moving forward within those two defect types? Is there a reason that penetration would be leveling off there? Yeah. I think the answer there is it continues to be a key growth driver for MACI. Surgeon growth has been the foundation for our growth for the past several years. When surgeons adopt MACI, that's probably the go-to for them to start using MACI on would be patella and large defects. As we add more surgeons, we expect we'll continue to do over the coming years. Those will continue to be go-to areas for them initially, and that will drive the growth in that part of the TAM. Got it. On surgeon training, I think for Arthro, you're now at least, what you last disclosed, I think you're up to 800. I think that split, it's like roughly a third are new to MACI, a third were prior users who focused on the patella, and a third were prior users who treated the patella but also utilized it in some condyle defects. You've called out that some of the historically only patella-focused surgeons are now taking more femoral condyle biopsies. Is that broad across that group? I guess, how are you seeing that trend play out in that surgeon base? Yeah. What we're seeing is those surgeons that historically did MACI on the patella primarily, some of them are getting trained on Arthro. We see that as an indication that they're planning on using MACI now in a broader part of the knee and are going to select more patients for MACI than they otherwise would have pre-Arthro. We have called out that the biopsy growth we're seeing in that segment is kind of one of the higher growing areas. You would expect it's probably not the patella that's inflecting higher. It's the smaller defects inflecting higher for those surgeons. Got it. You have also mentioned a meaningful number of cases now coming from trochlear defects. What is driving that utilization? Are you seeing that trend of adoption in that defect type broadly across the 800 surgeons? Is it more specific to one of the groups that we called out? Yeah. We designed the instruments really with the small condyle defects in mind. I would say we were a little surprised how quickly we saw meaningful use on the trochlear area kind of out of the gates. It is a decent-sized part of the TAM. Around 10,000 patients are in the trochlea. It's a difficult area for surgeons to treat with anything because of where it is in the knee. You have to go around or through the patella tendon, and then it's somewhat of a narrow groove in there to put something in. It's difficult. What surgeons are finding they're able to do with the arthroscopic instruments is either go directly through the patella tendon or kind of pin the tendon to the side and then use the instrumentation we already have designed to implant MACI in there. It wasn't an area we really focused on initially on the launch in terms of our sales reps kind of detailing in that particular part. Based on what we're seeing, it's certainly an area we're going to kind of recalibrate and potentially be more focused on as we move forward. It provides a potential opportunity for growth we hadn't really factored in to our initial thoughts. Got it. Another just broad positive indicator, I guess, is the biopsy growth rates of Arthro-trained surgeons. You guys have called out that's much higher than the growth rates of non-trained surgeons. I guess when I step back and think about it, I would assume that the early adopters of Arthro were already maybe higher volume users of MACI in general. I guess when you look at that cohort of patients or of surgeons, did you see a meaningful acceleration in biopsy growth pre-training or after training? Yeah. Broadly, what we've seen is, and what we said is once surgeons are trained, we see an immediate inflection in their biopsy growth. It does skew a little bit toward the higher-end users. We do have a pretty good representation across our user base from a low volume to our higher volumes. We are seeing that growth kind of broadly across the board. Got it. Okay. For the 250 or so, I guess a third of 800 trained surgeons who are new to MACI, could you talk about biopsy implant trends across this group? I guess, is it unreasonable for us to think that that surgeon group may do 1-2 biopsies this year? Yeah. Without getting maybe into specifics, I'd say we're pretty pleased with the pace these surgeons have gone from these are new surgeons, right? They've gone from Arthro training to taking biopsies in a timeline that we're very pleased with. We're seeing them get up the curve after getting their initial introduction to MACI through the arthroscopic training. They're then starting to take biopsies and started moving that journey that all surgeons go through as they adopt MACI for the first time. Okay. You have also indicated early data is showing that there is a higher overall conversion rate for MACI Arthro implanting surgeons. I guess, how consistent is that trend across the trained surgeon cohort? Is it concentrated in only a subset of maybe early high-volume users? Even as you are bringing on new surgeons, I get that there is a bit of a lag there. Are you seeing it more broadly as well? Yeah. Intuitively, if you think about the arthroscopic procedure, our assumption all along was that the patient's willingness to go forward with the procedure could be higher with arthroscopic delivery because of the potential improvements they could see in the postoperative pain, mobility, range of motion, kind of speed to full weight-bearing. We've heard that as well from our surgeons, from market research we do, or just anecdotal feedback from surgeons since launch. We're starting to see that play out, although I would caveat historically. What we said is that surgeons that are using arthroscopic delivery now, their implant growth is meaningfully higher than their biopsy growth through the first three quarters of the year. That's a long enough period of time to say that that would probably indicate an increasing conversion rate. We'll see how that plays out over kind of the broader launch as we go forward. But early days, it's exactly what we hope to see. Got it. On the time from biopsy to implant, I think that's remained around six months on average. Are there levers that you can pull to accelerate that, or is that just kind of the normal pace for MACI? Yeah. There's a normal rhythm to when a patient's going to go from biopsy to implant just based on there's going to be a follow-up appointment at some point after their initial biopsy during the arthroscopic procedure that they take the biopsy and assess the defect. That might be 6-10 weeks after the initial surgery. They make the decision whether or not to go forward with MACI or any other procedure, really. It is the patient's life. For their schedule, what does it look like? They have to figure out when they're going to want to take time off from work. It is really the patient dynamic that drives the timeline. Got it. On the MACI Salesforce expansion, I think you expect that to be complete in the fourth quarter. You said, "I think in the fourth quarter, they'll be supporting existing territories before they move into new territories at the start of 2026." How should we think about the contribution from this expansion to 2026 growth? Is the goal primarily incremental volume, faster surgeon activation, deeper penetration in existing accounts? How do you guys think through that next year? Yeah. I mean, I'd say, first off, our hiring is essentially complete. I would say from a pace perspective, we're probably a bit ahead of our expectations. I think we've done a great job in terms of adding reps. We'll be ready to have all our reps in the field as of January 1st. A number of them have already been trained and are out kind of in territories in the fourth quarter, what will be their new territories in many cases. I'd also say, as or more importantly, we've been very pleased with the quality of the individuals we've been adding. There's been a lot of interest in the roles. We think this is going to be kind of a great addition to the team and highly complementary to our existing Salesforce. If you kind of take a step back, I mean, we've expanded our Salesforce multiple times. I mean, the last time was 2020, so it has been a number of years. At that time, we went from roughly 50- 75 territories. Now we're going from roughly 75 to about 100 territories. We do think MACI's at a different point in time relative to where we were a few years ago. We do think the new reps, when they get into their territories, will have pretty mature kind of businesses versus kind of white space and having to create some of that from scratch in the earlier expansions. That should position them well, I think, to perform, which is part of it. I also say they're very seasoned in terms of the reps we're bringing in, so that should certainly help. I would say broadly, it certainly you have to have some patience. It will take a few months, call it, for the reps to get up to speed. Generally, we've increased our rep productivity every time we've expanded our Salesforce. That would certainly be our expectation over time here as well. I think given where we are, surgeon growth has been such a strong contributor to growth. I think ultimately, to answer the question, we think the kind of Salesforce expansion can do a bit of both. Surgeon growth should continue to be a key part of our growth drivers. I would also say there's an opportunity here really with a larger Salesforce, with more reach and frequency, and really a focus not only in just expanding the new surgeons, but what can we do in terms of kind of depth and practices and trying to drive that higher biopsies per surgeon, higher implants per surgeon. I'd say that's a big focus for us as we go into 2026. I think we commented a couple of weeks ago on the call as other investments we're making in addition to the Salesforce expansion for the broader Salesforce. Things we think can impact the execution. Think things like our new CRM and new tools and analytics and other things we're trying to add to improve execution. If you take a real big step back, I would say what we're trying to do is, as we commented on the call, we've grown this business from, call it, $30 million to roughly a $250 million on the MACI side and really focused on now in terms of what are the things that can help us kind of get to that $500 million number from a MACI perspective. Obviously, Arthro is a key part of the story, the Salesforce expansion, but people, processes, other initiatives we think can be helpful. That is all a huge focus for us in 2026 and beyond. Got it. Maybe a last piece of that growth opportunity. Historically, you've taken that mid to high single-digit pricing annually for MACI. Just could you speak to your confidence in being able to maintain that going forward? Yeah. First off, again, MACI is reimbursed under a medical benefit. It has its own J- code today. Generally, I would say kind of it's managed. Pretty much every patient has to get a prior authorization before having the procedure. Plans generally manage MACI through that process. They're making sure these are the right kinds of patients. There's the right lesions. They know kind of what the product is, what the pricing is, etc. One thing that we really focus on is kind of how many of our cases are getting through that prior authorization process. I think we've talked about it's over 90% that get through that prior authorization process. I think when there's an appeal, it actually ticks up even within that range. I think as we move forward, certainly we'll continue to be thoughtful from a pricing perspective and do research. What we hear and the reality, MACI, is this is a cell therapy product. It's a biologic. It's considered a high-tech product. I think our expectation moving forward is this will continue to be part of our growth. Got it. Maybe putting it all together, you've got MACI Open being a core driver. It's staying a core driver. You've got higher biopsy growth among trained surgeons. There's positive early indicators for the conversion rate. You've got the Salesforce expansion. I mean, putting it all together, how is that kind of informing that 20% growth outlook for MACI that you pointed to for next year? Yeah. I mean, we made some preliminary comments from a guidance perspective across the franchises. We always think about our formal guidance will come next year, but we did make some comments a couple of weeks ago. It typically starts at the company level. I would say as we think about MACI, what I pointed to was coming into the call, most of the estimates out there were kind of at 20% ±. What I think we pointed to was if you look at MACI in 2024, it grew 20%. I think on a year-to-date basis, through three quarters, it's at 20%. From a guidance perspective, I would say we want to remain pretty prudent as we move into next year and essentially said, "We're not going to guide above that number." It'll probably be something similar on an incremental revenue basis on a year-over-year basis. 2025 is trending at that $40 million+. I would say we're going to be pretty prudent as we move into next year. Having said all that, I mean, to your point, I mean, I think we feel like there's some good momentum in MACI as we close out the year. Obviously, we're going to have a full year with our trained surgeons next year from an Arthro perspective. We expect to train more surgeons. And then you factor in the Salesforce expansion, which will take some time for some of those reps to get up to speed as we talked about. That is important. Then some of these other initiatives around it, I think, will be important as well. I think internally, we have pretty high expectations for MACI for 2026 and beyond with some of the longer-term initiatives. We probably just want to be a little bit prudent to start. There are a number of things that we think can be impactful in 2026, but beyond 2026 as well, I would say. Got it. Maybe to touch on burn care relatively quickly here. Epicel's revenue, it's hovered around that $30 million-$35 million for a few years now. It's variable quarter to quarter. I think that's well understood. What actions can you take operationally or, I guess, strategically to smooth out that pattern and kind of drive the next leg of growth? Is the quarter-to-quarter variability just part of the product, just given kind of the patient set and pricing there? Yeah. I mean, I think generally, I mean, the variability on a quarterly basis is just likely to be there. I mean, you might see some more stability. We saw that a few years ago for a number of quarters. That probably is proving to be a little bit more of an aberration. In the last couple of years, there's been a lot of variability there. I would say on the Epicel side in particular, if you look back at last year, I would say Epicel and burn care as a whole had a very strong year from a growth rate perspective. Coming into 2026, I think we essentially got a little bit behind the eight ball with a softer Q1. It was similar to what we saw in Q4. That is definitely playing into kind of where the trends are on an annual basis on Epicel. If you look back historically, Epicel has typically grown. It's just not a kind of linear line. We do certainly, our goal is to grow on the burn care franchise in total. I think execution-wise, there's nothing structurally different with Epicel. Execution-wise, I think the teams are doing a good job in terms of filling the funnel with biopsies. I think what we've been seeing in the last few quarters is a little bit of variability from a patient health perspective. That said, again, Q2 was solid, kind of closer to our run rates from last year. Q3 was very strong. We just wanted to be a little bit prudent in terms of the Q4 commentary just because biopsies at that point, start the quarter, were looking more like last year. I think that's going to happen. I actually think the team's done a good job. The Salesforce is selling both products. We have seen some Epicel dormant accounts come with selling Epicel. The next year would rather. There are certainly some good signs there, but it will vary on a quarterly basis, I would say. Yeah. Yeah. That makes sense. On NexoBrid, I think you're up to around 70 P&T approvals at this point. From, I guess, a hospital perspective, what's been the friction point that I think over the past handful of quarters that I guess maybe has made it have a softer trajectory than maybe initial expectations beyond just the P&T approvals? Is it workflow? What do you kind of have to overcome to see utilization ramp at a center? Yeah. I mean, if you think about NexoBrid, I mean, it relates to the last question on Epicel, which is the goal here was to add a complementary product that was synergistic on the burn care side, could potentially impact Epicel. That has been the case. I'd say the other piece of it was, could it get to a scale where it may dampen some of the variability you see on the Epicel side? It hasn't gotten up the curve enough to really do that yet. I'd say from a metric perspective, it's interesting as you referenced. I mean, I think we've done a good job in terms of the number of P&T approvals, around 70, more than 60 ordering centers. I mean, those are actually pretty strong metrics. I think what we've continued to see is a pretty big bell curve, however, in terms of the usage within the centers. We have some kind of more regular users or high users that are using it quite a bit. It's kind of more in their workflow, more in their kind of regular cadence. We've got a few that have kind of initially started using it and just a huge group in the middle. I think the focus in the last year or so has been to try to move that kind of middle group up the curve and enable those to be more regular users. It is ticking up, but it's kind of been doing that, obviously, more slowly than we would have liked. I would say from a hospital perspective, there's probably a couple of elements there, which is there are some kind of bureaucratic aspects in terms of ordering and things like the Epic systems that kind of getting ordering flow in that has probably slowed us down in a few cases. I just think from a workflow and a training perspective, there's a lot to do there to kind of change that standard of care from surgical excision, which has its own workflow and kind of set of responsibilities for the surgeon and the staff, to a new product, which is totally different. That is very much what we're focused on from kind of a tactical perspective. Again, the idea is to try to move more users up the curve. Got it. Maybe I'll just pause here for a second if there are any questions from anyone in the audience. No? All right. Maybe moving to the pipeline here on MACI's international expansion. I think you said you'll be targeting the U.K. first. Could you just run us through the timeline there as well as maybe any expectations around pricing? Yeah. So we're pretty excited about kind of our ex-U.S. kind of work and this initiative. So just as a reminder, MACI actually was available outside the U.S. and Europe and Australia a number of years ago. And so when we bought those assets about 10 years ago, we shut down the manufacturing in Europe. And so in order to continue there, we would have had to pause kind of our U.S. business, U.S. manufacturing. So we made a strategic decision not to do that. But when we built our new facility in the Boston area, which is in Burlington and now complete, that's actually set up with both U.S. manufacturing standards and ex-U.S. manufacturing standards. And MACI has a six-day shelf life. So that's kind of operationally what enables us to potentially get back outside the U.S.. So that's in process. From a manufacturing perspective, we're on track and still expecting to manufacture MACI in our new facility in 2026. That's obviously one part of this. We've been working with kind of an outside group that's done a great job kind of thinking about all the different kind of market opportunities and timelines. Where we've gotten to is we think the U.K. is actually a great place to start from an ex-U.S. perspective. I would say first off, there is a potential regulatory pathway that we could work through as early as 2026, which could put us on track for a launch in 2027. Timeline-wise, that potentially makes a lot of sense to start there. I also say there's a high level of awareness and interest in MACI from having been there before and the surgeons that we've kind of talked to more recently. That is certainly a positive. Lastly, I would say it's a pretty concentrated market. I mean, there's really only a dozen or so kind of key centers. We don't think we need a huge footprint to move into the U.K. On the pricing side, I would say more to come. We're kind of doing that work now. You typically see a lower price outside the U.S. We do have a positive NICE opinion from a few years ago. I would say more to come on that. We're certainly doing the work. When we're closer to that, we'll probably have more to say there. Got it. Moving to your margin profile, you've guided the 74% gross margin, 26% adjusted EBITDA margin for this year. You've kind of laid out, I guess, a preliminary outlook for what margin expansion could be next year. I mean, as we kind of look into whether it's 2026 or moving towards your 2029 targets, what are the key drivers behind your margin expansion? I mean, what level of growth or revenue mix gets you there? Could you just walk us through how we should think about that trajectory from here? Yeah. I mean, I think broadly, the margin expansion has been probably a bit ahead of our expectations over the last few years, whether it's gross margin or adjusted EBITDA. We've gotten up the curve relatively quickly. We pointed to some preliminary numbers next year, obviously kind of more to come as we formally get into guidance and whatnot next year. I'd say the drivers really are from a margin expansion, particularly gross margin, is you need that strong top-line growth. Let's say something even in a similar range to kind of where we've been. A lot of our costs, particularly on the cost of goods side, is fixed from a manufacturing perspective in particular, which is just a lot of labor for our products. That combination, I think that you just see the leverage in the business as we kind of move forward. We have relatively small kind of field forces and concentrated call points on both franchises. That is certainly helpful. I think the profile of the company is just set up with the leverage to get us there. I would say if you kind of step back and think about where we are now and where this is potentially going, again, we think this makes us pretty unique. Last year, we had about $50 million of adjusted EBITDA. Last year, if you look at where we are this year, we are trending to something closer to $70 million. We are already kind of getting close to that $100 million mark from an adjusted EBITDA perspective. What we said a couple of weeks ago was even with similar kind of revenue growth from a top-line perspective, we know MACI's brand health is quite strong. That would essentially get us trending toward the $200 million mark by the end of the decade. Pretty significant. That last piece that we talked about earlier, which is the adjusted EBITDA, tends to be a pretty good proxy for cash flow. Now with the building behind us, we think we're set up not only for that kind of continued P&L growth and improvement there, but I would also say pretty significant cash generation. I'd say we're excited about that going forward. Got it. I mean, was Q3, I guess, a good representation of that? I think you did say that the facility costs rolled off for the most part at the end of Q2, correct? Yep. Yep. The $20 million, I think that nearly matched, or $22 million of operating cash flow nearly matched Q4 of last year, which again is our seasonally highest. That gives you a sense of kind of where we were. Got it. Maybe lastly, you've got over $180 million in cash, really strong balance sheet. You've got free cash flow ramping. How are you kind of prioritizing incremental investments from here? I mean, organic, inorganic, where does M&A, I guess, stack up in that priority list? Yeah. From an internal perspective, things like the Salesforce expansion, the ankle trial, I mean, all that's kind of built in our operating P&L. There are some investments we're making there. Ex-U.S., probably a bit lower, but that'd be another one I'd call out. Internally, there's certainly some we feel like we want to continue to invest for growth to drive the strong P&L. I would say from a broader capital allocation perspective, as you mentioned, we've got the building behind us. I mean, that was roughly a $100 million project, which we self-funded and actually grew our cash balance while we did that. Essentially, our CapEx kind of run rates get to a much lower level as we move forward. We will see significant cash generation. The other area to think about, of course, is business development. The company is really built on business development. MACI and Epicel kind of coming in a number of years ago. We licensed NexoBrid. We have a dedicated business development and corporate development team. We tend to look at kind of everything that transacts in the space. To the extent something could be additive, that's certainly something we would consider. I would say just having said that, I would say we're going to remain extremely disciplined. We have a very strong financial profile. We've got a very innovative set of assets. We want to maintain that discipline. Something has to make a lot of sense for us, but it certainly could be an area that we would use capital on if it made sense. Got it. I think that's a good place to wrap unless we have any questions. All right. Appreciate you guys coming. Thanks for having us. Thanks for having us.