Okay. Thanks, everyone, for being here. I'm really excited to be introducing some of the management team from Establishment Labs. We're going to be starting off with a presentation from CEO Peter Caldini, and then Raj Denhoy, CFO, will be joining us for some Q&A afterwards.
Great. Thank you. Thank you very much. It's a great pleasure to be here, really an opportunity to share some exciting news and exciting update on Establishment Labs. We just completed a very successful 2025, and I think most importantly, we're very well positioned for strong, significant growth in 2026 and beyond. So for those of you that are not as familiar with Establishment Labs story, we are a medical technology company focused on breast aesthetics and reconstruction. We really drive innovation to improve women's health and well-being. So we've been around for 20 years. We sold over 4.5 million devices worldwide, and we're in 90 countries. And just recently, after getting FDA approval at the end of 2024, we've launched in the U.S., and we've had a very successful start in our first year.
Some of that growth is really unprecedented, what we've seen in the market in the past, but it's really our science-based innovation that is really setting the standard for breast aesthetics and reconstruction by delivering really differentiated products in the marketplace that's unmatched from a safety and a performance standpoint. We just pre-announced our strong results in 2025 on Monday. [We] grew 27% on a global basis. But more importantly, the growth in the U.S., we have achieved significant revenue growth, and it's not been seen before in the market in the U.S., and I'm going to provide some more information on that, and then also, we're not stopping there. Real growth moving forward is going to be around our minimally invasive platform. This really has an opportunity to revolutionize the category. It's by providing patients with superior outcomes.
And then also what we're seeing in the marketplace, and some of this is driven by us, but it's also some of the tailwinds you're seeing from GLP-1s that's really giving an opportunity to expand the marketplace. And I'm going to share some information on that as well. But a big focus for us in 2025 is really around driving profitability. And I think we've seen a lot of great success on that. And as we grow and drive our revenue growth, we're very well positioned to drive significant profitability moving forward. Now, something about our implants. There is nothing like our implants in the market today. Every Motiva implant has four patented technologies, one of which is SmoothSilk, the SmoothSilk surface that enhances biocompatibility and reduces the level of inflammation as well as bacterial attachment.
And when we looked at launching in the U.S. several years ago, we could have come out with a Me-t oo product. It would have been faster. It would have been cheaper. But we really wanted to make sure we came to market and we developed a superior, better product than exists in the marketplace. So by leveraging these technologies, the four technologies that we have, we're able to provide implants for patients as well as surgeons that is unmatched from a safety as well as a performance standpoint. Now, this is seen with our FDA clinical study data. When you look at the five-year data point, we have less than 1% device-related complications. Now, when you compare that versus some of the competitive products, same time horizon, same type of clinical studies, you'll see up to 10 times greater device-related complications.
It's that product of the performance, the safety that has enabled us to have the success that we've had in a market like the U.S. So, for example, what we've been able to achieve in the U.S. in terms of our revenue growth and share growth is far superior than what the latest or the last entrant into the category, which was Sientra, that's no longer around, that took them 10 years to achieve. As I mentioned, we had a very successful 2025 from a revenue standpoint as well as driving profitability. We pre-announced 27% growth, so we're in the revenue range of between $210.5 million and $211.5 million. Very strong fourth quarter. We had a record fourth quarter in all U.S. markets, but also, most importantly, strong growth in the U.S. market, over $45 million in just the first year.
That’s from a revenue standpoint, but a lot of our focus was around driving profitability, being more efficient in terms of how we manage the business. We achieved EBITDA positive in Q3. We expect that to be the same in Q4 and continue in that trajectory. But we also improved our cash balance to $75.5 million at the end of last year, end of 2025 versus, and that’s about a $5 million increase from Q3 2025. So let’s talk about the U.S. launch. It’s been very successful. It’s one of the fastest launches and probably the fastest launch in the breast aesthetics history. And one of the key drivers for that success is really we’ve been able to assemble a best-in-class organization over the last 18 months.
And you couple the organization with the implants and the profile in terms of our performance and safety has enabled us to achieve the $45 million in just the first year. We estimate that we're exiting, or we exited 2025 at a market share rate of approximately 20%. And we keep on driving that growth with adding additional accounts, increasing the utilization rate. So that's just the beginning. So that's our first year, and we expect continued growth in 2026 and beyond. What are some of the drivers for the market share growth in the U.S.? Now, if you think about the breast implant category, there really hasn't been a lot of new news. It's been relatively stagnant. There hasn't been a lot of innovation. There's been limited marketing support. And we came in with new news, new innovation, but also a lot of marketing support.
We've been able to not only drive awareness for Motiva, but also for the category as a whole. For some examples of that, we had over 9.2 billion impressions in the first year. I think what's very monumental and very unique in the category is patients are walking in, talking to the surgeon, and asking for Motiva by name. That's unheard of in the industry. One of the key drivers was in terms of creating that awareness. We're the first ones to actually use celebrity endorsers. We did a deal, a sponsorship with Meghan Trainor, which was highly successful. It not only helped drive awareness for Motiva, but it was also really starting to increase the awareness or the era of transparency. Women are starting to talk more openly about getting breast augmentation and really starting to remove the stigma attached to it.
Motiva breast implants was the fastest growing procedure in RealSelf in 2025, so really a monumental growth, so marketing was a key driver for us in 2025, and that will continue in 2026 and beyond. What are some of the other drivers for market share growth in the U.S. in 2026? We've talked about launching Preservé. It's our minimally invasive platform. We've rolled it out in U.S. with a lot of success. We've had a number of early surgeons working with that product back in August, so there's about 50 early experienced surgeons and very positive success, and we see that the minimally invasive platform has a lot of potential, not only for us to steal share, but expand the category as well. We also submitted a PMA supplement for our smaller sizes.
We believe that there's about 10% of the market that we're not currently serving, that we don't have our complete matrix. So by getting that approval, we'll be able to close that gap and continue to generate additional sales. A key milestone for us is when we'll get the recon indication. We submitted the PMA supplement at the end of last year, and it's really the timeline dependent on FDA. But this is a sizable opportunity for us in the U.S. We believe once we get r econ indication, we're going to generate the same type of share that we're getting in the augmentation space. Another key driver for us in the U.S., and we've talked about this previously, is continuing to expand our sales force. We're going to be adding up to 15 reps in 2026, and that continues to be around the augmentation space.
Obviously, once we get the recon indication, there will be another step change in terms of supporting that side of the business. And we keep on growing accounts. We're over 1,500 right now, but it's also not only growing the accounts, it's increasing the utilization rate as the adoption curve continues to move forward. Now, a little bit about the recon indication. This is a tremendous opportunity for us. I mentioned that we submitted the PMA supplement at the end of last year. The size of the recon business in the U.S. is the same size as the augmentation from a revenue standpoint. So it really gives us an opportunity to double the market that we're currently competing in. Now, we are already in over 200 locations with our Flora Tissue Expander.
So once we get the indication approval, we already have a head start in terms of driving growth for the recon indication, and so we expect the acceleration to be very quick. Now, a key driver for us moving forward in the U.S. with the minimally invasive as well as O. U.S. is around the minimally invasive platform. Preservé will be launching in the U.S. Outside the U.S., we launch Preservé. We also have Mia, and this is really an opportunity, as I mentioned before, to not only drive growth for us, but it's an opportunity to drive share and expand the category, so this unique approach using Motiva Implants and tools has the opportunity to provide superior outcome for patients, and really, it's doing that by focusing on really reducing and maintaining as much as the breast tissue as well as the breast functionality.
So those results, you don't need general anesthesia. The recovery time is incredibly fast versus traditional augmentation, which is far more invasive, and it's under 15 minutes, and the incision, which leads to a smaller scar, is certainly much smaller, so we see this as a significant driver for our business. In 2026, it should represent over $30 million in revenue. Now, a little bit about the minimally invasive, why we see this as a market expansion opportunity. We've done some market research, but we're also hearing from the early experienced surgeons in the U.S. It really targets a segment of women that is currently untapped in the category. These tend to be women that are more affluent, but there are also a lot of barriers in terms of general anesthesia, the recovery time, so this really targets those types of consumers.
In some of the market research, we've seen that one out of four patients that are exposed to Preservé are willing or interested in doing a breast augmentation, and 83% of those women want to do a Preservé procedure. What we're also learning is that most patients, almost all patients that do Preservé, what is an opportunity for us, not only for us as a business, but also the surgeons, is they're willing to pay a premium. So in the U.S., with the early experienced surgeons, the 50 early experienced surgeons, on average, patients are spending up to 20% more than traditional augmentation, in some cases up to 40%. What we're also hearing in terms from the early experienced surgeons is that patients are actually traveling to different parts of the U.S. because it's only limited in the number of locations to do Preservé surgeries.
And also, we're hearing from those surgeons that it's actually bringing in more volume and more business. So we fully expect that once we roll this out, that it has an opportunity to drive category growth for Motiva. Now, as I mentioned, we expect to do over $30 million in revenue in 2026. We already launched Preservé outside the U.S., first in Brazil, rolled that out to Europe, and we're in 29 global markets. It's a key driver for our growth in 2025, and we expect that in 2026, especially in our direct markets. And we expect a formal launch at the end of Q1 2026 in the U.S. Now, Mia, we continue to have very good growth in the Mia. It's much more on the premium segment. It's a trans-axillary approach. There's no scar on the breast. And we've doubled the number of accounts through our franchise model.
We continue to see good growth as Preservé comes underneath and really expands the market as well. Now, we see a significant opportunity leveraging the minimally invasive technology with the gluteal implants. This is a market that we believe is very underdeveloped. The current solutions are high risk and not the best outcome. So we really believe with our technology that we can leverage that, provide patients with a superior outcome, but also a safer alternative. Right now, we're doing clinical studies in Latin America. We expect that the first launch will be in 2027 in Latin America, and depending on the regulatory framework and our rollout time, we'll be looking at rolling this out in the U.S. and Europe and Asia as well in the coming years.
So key driver for us as a business, the minimally invasive platform, we're off to a very good start in O.U.S. markets, but that will continue in 2026 and beyond. Now, there's a number of market tailwinds out there. Everybody talks about the GLP-1s. A lot of the surgeons that we're engaged with tell us that a number of women are coming in, doing and looking at breast augmentation procedures based on the impact of GLP-1s. But another key driver, and some of this is driven by us with our celebrity endorsements, a lot of the social media that we're doing is really creating an era of transparency. People, celebrities are coming out talking about the augmentations. People are much more public about having breast augmentations and really reducing a lot of the stigma that was really impacting the potential growth for the augmentation market.
And we're also seeing a lot of mainstream media talking about breast augmentations. You have The Wall Street Journal, you have The Washington Post talking about smaller sizes, more natural outcomes. So significant tailwinds that I think will continue to drive the market. But as I said before, a lot of this is driven by a lot of the marketing efforts that we're doing as well. Now, talking about 2027 and beyond, we have a significant innovation pipeline. So it's not just about 2026. We see double-digit growth or over 25% growth in the next two years in 2027 and beyond. You look at the real impact that we believe that we're going to have for the breast recon indication will be in 2027, the real commercial impact. Then we talk about continuing to expand the global footprint for the minimally invasive platform.
In order to launch that in the U.S., we're going to be submitting a PMA supplement the first half of this year. We're going to need to get the Ergo 2 approval in order to launch Mia, and then we talked about the GEM in 2027 and beyond once we start rolling that out in other geographies, but as a company, we're always going to be looking at different innovations. We're the only company in this space that focuses on innovation, and that's really the DNA of this company, and so really tremendous opportunities, really executing on what we have. There's a lot of close-in opportunities, but also in the outer years and leveraging this technology. Now, as we continue to grow, and we're very well positioned to drive incremental profitability over the next couple of years.
When you look at our revenue, we're expecting to grow at least 25% over the next two years. But if you look at our corporate infrastructure, it has really already been built. So we have enough capacity from a manufacturing standpoint to supply over 50% of the global market. A lot of our corporate roles and our corporate functions are already established. So really, as we drive the revenue, it doesn't require as much investment to maintain or to support the revenue growth. As I mentioned, this year, we broke the 70% gross margin mark. And I think that's going to continue to drive growth and continue to increase as we launch the minimally invasive platform, as we continue to grow in the U.S., and also as we get the recon indication. So significant margin expansion we expect in the coming years.
It's also a lot of our discipline in terms of how we manage the business. We've been very successful in getting to EBITDA positive. We're on track to achieve cash flow positive in 2026 by really implementing a lot of the discipline that enabled us to get to this point. In summary, as I mentioned before, 2025 was a great year for Establishment Labs, but we're really well positioned for 2026 and beyond. We are the leaders in terms of breast aesthetics and reconstruction. We're setting the standards. We continue to evolve with our innovation to drive the category. You're seeing significant growth in the U.S. We've accomplished significant share from a standpoint of our exit velocity, and we expect that to continue to grow.
And then we're also going to be rolling out the minimally invasive platform, which has a tremendous opportunity for us to drive share as well as expand the market. We are seeing the tailwinds in terms of the GLP-1s, the era of transparency, much more openness around breast augmentation. And then we have really established an infrastructure that can support our business. We expect to have very sizable profits moving forward. So that's a summary. Very exciting time in Establishment Labs. And I guess, Alan, now it's a Q&A.
Thanks for that, Peter. So I think I just want to start with the quarter that you just talked about. You already talked about it in the presentation, but put up a really good performance, $64 million-$65 million in the quarter, give or take.
The U.S. really kind of hitting the growth from third quarter to fourth quarter that I think we were really hoping to look at. I guess just taking it from a high level at first, when we think about the health of the underlying market, obviously you were able to drive the growth that you were looking for in the U.S. market. You've talked about how there's market trends between GLP-1s, between social media that are continuing to support your growth. How do you think about the overall health of the broader market when it comes to consumer spending and the durability of that into 2026?
Yeah, I mean, I think when you look at it on a global basis specific to breast implants, I mean, we've seen it's a relatively stable market in most of the geographies in which we compete. So for us, with that stability and as we keep on driving share growth through our minimally invasive platform, as well as what we're doing in the U.S. in terms of expanding our sales force, the smaller sizes, I think we really have an opportunity to continue to drive growth, and we don't see any issues or concerns regarding the macroeconomic environment as it relates to its impact on implants.
I guess internationally, so you didn't break it out, but clearly based on the performance internationally as a whole, you did in line to better than expected. You break out your international markets into three segments. So when we think about performances across Latin America, APAC, EMEA, there's been some market challenges there. You've been able to stabilize in some of your direct markets in third quarter. But have we seen that strength in direct markets continue into fourth quarter? What was distributor demand like? And if you could talk about just dynamics between the three different geographies.
Yeah, so I'll talk about the direct and the distributor markets. I mean, that was a strategic choice by us, Alan, to kind of really drive growth in the direct markets. These are markets we have much better economics. The price point is actually double than what we have in the distributor market. And quite frankly, we were probably a little bit too dependent on the distributor marketplace. So that was still in Q4 a key driver for our performance O.U.S. And over time, the plan is to continue to drive growth in those markets and really reduce our dependency on the distributor business. And in terms of the geographical breakout.
Yeah, I'd say, Alan, it's kind of in keeping with what we've seen over the balance of this year. As Peter noted, direct markets continue to drive the business for us. And if you think about within our segments in Europe, we are split between distributors and direct. That market continues to do very well, again, driven by the health in the direct markets. Latin America is a bit of a mix as well. We're direct in Brazil and Argentina. We're seeing very good results in Argentina and our distributor markets there. Brazil has been a little challenging. We've talked about it, but we have seen stability in that market for the last several quarters. And then Asia-Pacific is the one that is 100% distributor, right? And while we're seeing very good underlying trends in that business, there's always going to be that timing of orders, right?
And so I'd say overall, as Peter noted, the demand for our products globally remains very good, and we're seeing it across all the geographies.
Okay. And then that 25%, minimum of 25% in 2026, 2027, if I look at where consensus is today, they're right at the mid-20s for 2026. So it sounds like that's the floor to next year. What needs to at least implies that you see a path to upside. So what is the base case that gets you to 25%, and what needs to happen for you to outperform that?
Yeah, I think if you can think about 27% growth we posted in 2025, right? So we're coming off a very strong year. We have a lot of momentum heading into 2026. What we need in order to make those numbers is just continue to execute. We haven't assumed any new product approvals. We haven't assumed reconstruction revenue in the United States in those numbers. So it's really a continuation of what we're currently doing. And so far, as I noted, we haven't picked up any change in the marketplace. The demand remains very good, and what we're seeing in terms of the orders, even here in early 2026, remains very good.
The U.S. is definitely one of the major parts of the growth story going forward. You have tailwinds there next year between Preservé, which is going to start launching, or maybe has already started launching in the first quarter of this year, and also just additional sizes, reconstruction. The reconstruction might be more of 2027. So I guess starting on the augmentation side, and especially with Preservé, how much of a growth uplift do you think Preservé can really add? And what is your approach to the launch this year, given it might be something a little bit more familiar for physicians, at least compared to, say, like EMEA? And how quickly can you really roll that out? And should we think of that as being potentially a workhorse, especially in the U.S., where your ASP compared to the rest of the world is already a little bit higher?
Yeah, I mean, I think the Preservé launch is going to be a key driver for us, as I mentioned, not only to drive market share, but also, there's a lot of indication that it has the potential to expand the category. We're hearing that from the surgeons. And our rollout plan is really going to be focused on making sure we get the right education for the surgeons. So we expect that once we get that started, that it's going to really turn into a flywheel, and it's going to accelerate through the course of the year. But we expect significant growth in 2026 on our Preservé launch, but also the things that we're doing on our breast augmentation. When you're adding the additional sales reps, we've already got, as you highlighted, over 1,500 accounts.
As we work through that utilization, the adoption curve, that's also going to continue to increase. So I think you're going to see it on both ends, the traditional augmentation as well as on the Preservé.
So diving a little bit deeper into that 1,500+ number, I think in the past you've talked about how when we look at, when we focus on the higher volume, the customer base, there's only like a couple thousand that really do the majority of procedures in the U.S. So when I think about 1,500, obviously not every single one of those is going to be one of those high-volume surgeons, but you've clearly done a very good job of going broad and really making sure that you're getting into a lot of accounts. So when I think about the growth outlook for 2026, how much of that is from going deeper into existing accounts? How much of that is going broader? Should we think about maybe a lot of those are the higher volume accounts, I would imagine, and now you're going to be adding on relatively smaller accounts?
So just how about that?
Yeah. So in the U.S., I think obviously we're going to continue to expand the number of accounts. We add accounts every day. I think Jeff today had two additional, three additional accounts. So that's also going to continue to be a part of that growth process for us. But it's also, I think, we're going to be going deeper and increasing the utilization rate. As the surgeons work through their adoption curve, I think you're going to see a lot more acceleration from that standpoint in terms of enhancing the utilization in those accounts.
And then I guess I do want to touch on the competitive landscape, right? You had Sientra. They haven't exactly exited the market, but they've definitely maybe been de-emphasizing that piece of their business. You have the large players, J&J and Alcon, but arguably breast augmentation also isn't a big focus for them. But clearly you've come into the market and really taken it by storm. Getting to 20% share within essentially a year is a very big success. So are you seeing anything on the competitive front? Any kind of reaction?
No, I think you see a lot of one-offs. I wouldn't say there's a real concerted effort by either of those players. And I think while they're sizable businesses, when we look at it within the portfolio of those companies, it's actually very small. And these are not categories that are very prioritized for the J&Js and the AbbVies of the world. So we haven't seen a significant competitive response. And quite frankly, I'm not sure that's surprising. These are not businesses that are priorities, and that's really enabled us to get significant traction in the U.S.
And then on the reconstruction side, you just submitted that in the U.S. in December. Your presentation has that more of a 2027 benefit, but as it has the opportunity to potentially double your addressable opportunity in the U.S., definitely worth talking about. When we think about why the U.S. is a better market for that, you have better reimbursement in place. So when we think about the competitive positioning there, clearly you're having success on the augmentation side. But is that same kind of, I don't want to maybe call it hands-off, but a little bit of a looser approach from your competitors, the same thing we can expect in reconstruction once you start launching there?
Yeah, I think first off, once we get the indication approval, I think we are going to get the same type of traction in the recon indication that we've gotten in the augmentation. I think by having that superior product, we already have an establishment with our Flora tissue expander in those accounts. So I would expect that that acceleration actually be somewhat quicker than what we've seen from the augmentation where we're really starting at zero. So I think in terms of a competitive response, I don't think it's going to be any different, Alan, in the recon indication. As I mentioned before, the fundamental issue is these are not categories that they prioritize.
I guess touching on more product-specific, Preservé launching into the U.S. now. You've been having more of an early experience internationally. It sounds like that early experience has been going well. The feedback has been good. I just want to kind of compare and contrast that with Mia, right? In the presentation, you frame Mia as being definitely more of a premium product. Preservé is also, especially compared to your Ergonomix1 , a premium product. When I think about having the breadth of your portfolio now with Preservé and Mia at the top, how are those kind of working together in the portfolio?
Yeah, so I mean, the first thing when you look at the U.S. right now, it's just going to be Preservé. We are going to be submitting the PMA supplement really the beginning of this year. So I think in order to launch Mia, you need to have the Ergo 2, the Ergo 2 Diamond. So I think that's more in the outer years. But outside the U.S., I think they've worked very complementary. With the Mia, it's a more premium segment. There are some limitations in terms of the cup size and the type of surgeons that are willing to use it. So in a lot of cases, with the trans-axillary approach and the fact that the Mia does not have any scar on the breast is a significant benefit, but it's much more in the premium segment.
And what we've seen outside the U.S. is actually the Mia accounts are also adopting Preservé, and you're seeing hand-in-hand significant growth for both businesses. So it hasn't really cannibalized the business in the early stages, so we're very pleased with that. But they work very well together, especially when you have that segmentation. And there's specific benefits for Mia that you will not get from Preservé.
And then I guess diving a little bit deeper into international markets, Latin America, I think it's been struggling for a while now. We started to see stabilization this year, but not exactly a recovery. So did that continue into fourth quarter of stabilization, but maybe not really recovery? And then what is the right expectation for 2026?
Yeah, I think without breaking out to fourth quarter, we haven't provided that detail yet. We'll do so on our fourth quarter call. But as you noted, we have seen a generally good performance out of Latin America, with the exception of Brazil, which has been a little challenging for us. But as I noted, it's been stable now for a couple of quarters, really the back half of last year. It's really stabilized. And as we move into 2026, we do have some programs to hopefully accelerate growth there. Preservé has launched in Brazil. We're seeing good demand for the product in that market. And so we do have expectations that we'll see some growth out of Brazil. Latin America as a whole, outside of that market, has generally been pretty good for us.
Mexico, Colombia, these are some of our biggest markets, and the demand there remains very good. So I think overall, Latin America, we have good expectations for 2026.
And then on the APAC side, right, it's a little bit interesting there because Japan and South Korea are undoubtedly success stories for ESTO, where you have maybe a majority share, correct me if I'm wrong, at least a very significant share in both of those markets, and you got there relatively quickly. So I guess starting there, and I do want to talk about China after, you've already reached a really healthy share position in those markets. So how do you continue to drive growth there? You have implant upgrades, I imagine, but how do you grow the market further?
Yeah, I think in 2026, the back half of 2026, as well as into 2027, we're going to be launching Preservé in those markets. That has, as I mentioned before, an opportunity not only to drive incremental share, but as you made the point, we already have sizable share. There is the opportunity to expand the market. So that's going to be a key driver in those markets, and continue to drive that innovation. There's still opportunities for us to grow through our distributors, and I think we're very fortunate in the success we've had in those markets, but I think when you overlay that type of innovation with Preservé, it has the opportunity to steal additional share, but also expand the category.
On the other side, you have China, which in terms of pure market size, I think we were really bullish at the start. It was going to be the second largest market after the U.S. Unfortunately, the launch hasn't really had the traction that I think we really would have wanted in the bull case. You invested a bit more money into that business, into the distributor specifically. So have you seen any of those efforts bearing fruit? And I guess just help us to understand why isn't the market doing quite as well, both maybe specifically for you and also just for breast augmentation as a whole?
Yeah, I think, I mean, certainly I think it's pretty well known some of the macroeconomic issues in China that's really impacted our category. So I think that's kind of suppressed the market opportunity, certainly in the short term. In terms of our distributor, I think we've communicated that we were not as happy with their commercial development. We've seen a lot of progress over the last couple of quarters in terms of the increase in sellout. And our engagement has really been around to optimize a lot of their strategy, pricing points, and things like that. In terms of creating awareness, I would say that distributor has done a very good job in that market. It's really about them building out their capabilities. It's a large market.
But we fully expect that China will have in a year or two to have the same type of share that we see in other markets throughout Asia.
Okay, that would be really great. So I guess when I think about the 25%+ , that assumes in 2026, 2027, that assumes that China picks up?
Yeah, so we have the expectation is this year we'll have some sales in China, and then as the market progresses and our distributor progresses, we expect that to grow in 2027 and beyond.
Got it. And then shifting over to the financials with the time we have left, I think one of the big benefits, again, of having the U.S. launch performing really well is that it is a higher margin opportunity for you. You were able to get adjusted EBITDA profitability a little bit sooner than I think you were expecting. You're still on track for free cash flow positive next year. So how do you balance investing, adding another 15 sales reps in the U.S., maybe putting a little bit more effort into China as well to really get that jump started against continuing to drive leverage and maintaining cash flow discipline?
Yeah, I think as Peter noted in the presentation, the infrastructure for our company has largely been built for the last 20 years, right? So you think about the various support structures you need, finance, legal, HR, all of those functions are in place. And the incremental spending for us from this point is really around commercial, right? So adding salespeople, adding support for those people, additional shipping costs. But these expenses will grow at a rate significantly lower than what the top line will for the next couple of years. And that's where this leverage really starts to flow through. We're talking about operating expenses, but you're also seeing it to a great degree on what's happening on the gross profitability line. We were in the mid-60s% a year and a half, two years ago, and now we've crested above 70%.
The U.S., recon, direct markets, all of these initiatives that are driving our growth are all at a higher gross profit margin than we have historically seen as our company. So you're seeing the gross profit increase dramatically, and then we're able to really control the amount of incremental spending we need to support the growth. And that leverage will start to become very apparent as we move through 2026 into 2027. And that's what ultimately drives us to this cash flow break-even that we expect to achieve at some point this year.
So as an extension to that, you clearly, you're adding more reps in the U.S. just to support the augmentation launch, but then next year you have reconstruction. The year after that, or in 2027, you might be moving into glutes as well. So when I think about the need to potentially expand your sales force to address those targets, do you think you can do that with these additional 15 on top of the 40 or so you have today? Or will there be an additional rep adds needed?
Yeah, I think again, we will continue to invest in commercial and primarily again to support the United States as you described. But the incremental investment is around adding sales reps and the people needed to support them. So if we have 40-ish sales reps now, we'll add another 15 this year to support continued growth through 2026. We'll see another incremental step up in 2027 to support recon. But you think about the revenue potential that that drives, given the size of the markets and the profitability of the markets in the United States, it's going to the contribution margin from those sales over the next couple of years is going to be very significant.
Got it. Unfortunately, that's all the time we have left. Thank you so much for the time today.
Great, thank you.
Thank you.