The following is a summary of the Paragon 28, Inc. (FNA) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Paragon 28 globally achieved a Q1 2024 revenue of $61.1 million, an increase of 17.4%.

• US business saw net revenue of $51.1 million in Q1, a 13.5% increase, with contributions from the increase in producing sales rep roster.

• International net revenue for Q1 was $10 million, indicating a 42.2% reported growth.

• Gross profit margin for Q1 was 80%, a decrease from 82.9% in Q1 2023 due to higher supplier prices and product/geographic mix shift.

• Q1 2024 saw an increase in Selling, general, and administrative expenses, reaching $54.2 million, a rise of 23.7% from Q1 2023.

• The company reported an increased adjusted EBITDA loss of $5.5 million for Q1 2024.

• Operating cash flow was negative $11 million in Q1 2024 compared to negative $5 million in Q1 2023.

• Paragon ended Q1 2024 with a total liquidity of $58 million in cash and $50 million available through a credit facility.

• 2024 net revenue guidance is reaffirmed at $249 million to $259 million.

Business Progress:

• Record six new product launches and a limited market release in Q1 targeted high-growth Foot and Ankle segments.

• Investment in product development continued, adding 6% to the US producing sales rep roster.

• Significant international market expansions were made, particularly in the United Kingdom and Australia.

• Over 25 active projects in pipeline, with several aligned with Smart28.

• Reiteration of commitment to operating leverage and cost management while also investing in commercial and educational opportunities.

• Expectation of OpEx reduction as a percentage of revenue in future quarters as revenue increases and previous operational expense investments are leveraged.

• Successful launching of new products in the bunion market, like MIS, bunion portfolio, and FJ 2000, which are surpassing expectations.

• Continuation of investment in innovation and technology with a consistent percentage of revenue on R&D planned for the future.

• Geographic expansion plans underway including an increase in the US salesforce and broader international expansion.

• Full product launch planned in the coming months for the Lapidus clamp, currently in limited release.

More details: Paragon 28 IR

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