Really great to be here at the J.P. Morgan Healthcare Conference and have some time to talk about Treace Medical. Safe Harbor disclosures are here. Please refer to our SEC filings on our website for detailed presentations of risks. Treace Medical is a medical device company with a focused mission to improve surgical outcomes for bunion patients. Since our IPO in 2021, we continue to execute on our strategic plans, resulting in strong market share gains and encouraging Adjusted EBITDA progress. With continued gains across our key operating metrics, this reaffirms our belief that we have the right strategies in place to expand market penetration with our differentiated technologies. We are the bunion experts. In 2015, we pioneered and commercialized the Lapiplasty 3D Bunion Correction Procedure to bring a better solution to surgeons and deliver better outcomes for patients.
Our innovative 3D bunion solutions are backed by strong IP, marketed by the industry's only bunion-focused direct sales channel, and have established Treace Medical as the largest dollar share player in the U.S. bunion market today. In Q3 of last year, we transformed our business from a Lapiplasty company to a comprehensive bunion solutions company by commercializing several new 3D bunion technologies into our base of over 3,300 surgeon customers. We're pleased with the adoption we've already seen with these new technologies, as demonstrated by our accelerating procedure volume growth in the back half of 2025. With an expanded portfolio and sales force, we anticipate continued sale case volume growth, and we will maintain focus on operating expenses and efficient capital deployment. With one in four adults in the U.S.
Affected by bunion deformities and such large gaps in treatment success, we believe the bunion market represents one of the most under-penetrated opportunities in med tech today. Bunions are hereditary in nature and progressive. They don't go away, but tend to worsen over time. And this results in roughly nearly four and a half million Americans seeking medical attention each year for their bunion pain. And we estimate about 25% of those patients are symptomatic surgical candidates. And it's this group of just over a million patients that represent our $5 billion-plus U.S. TAM. That said, less than half of these candidates are opting to have surgery, and we believe this is largely due to patient reluctance due to the downsides of past surgical approaches, notably pain, lengthy recoveries, and high rates of recurrence.
We believe most bunion surgeries fail before the patient even leaves the operating room. There are three planes involved in the bunion deformity, and modern research demonstrates how important correcting this third frontal plane is on surgical outcomes, as failure to properly correct it can result in 10 to 12 times greater risk the bunion will return, and it's this third frontal or rotational plane that was historically unrecognized and unaddressed in conventional treatments until our company and our surgeon advisors targeted it and developed our initial solution over 10 years ago with Lapiplasty, so with the introduction of the Lapiplasty 3D procedure, surgeons now had a new option: a comprehensive 3D fix for this 3D problem, and one that can lead to more consistent and more enduring corrections.
Lapiplasty offers proprietary instrumentation and a surgical method that allows surgeons to confidently and reproducibly correct all three planes of the bunion deformity in four straightforward steps. Without the patented Lapiplasty tools and methods, this is a very challenging procedure for most surgeons to perform. So Lapiplasty effectively delivered surgeons a paint-by-numbers approach to three-plane bunion correction. And this, along with 10 years of positive clinical results and our continued commitment to make Lapiplasty faster, easier, and even more reproducible, has allowed Lapiplasty to be adopted across the broad surgeon community. And we've strategically invested in multiple clinical data sets to track and report the results of our proprietary Lapiplasty procedure on patients.
Last September, we announced peer-reviewed publication of our positive four-year interim results from our ALIGN 3D multi-center prospective Lapiplasty study. Results demonstrated low recurrence rates, sustained, and significant improvements in both pain and validated patient-reported outcome scores. This unique combination of reproducible outcomes and broad surgeon adoption supported by this level of differentiating clinical evidence has made Lapiplasty the gold standard in Lapidus surgery today. And now that we have a large bunion-focused sales team in place and a growing base of over 3,300 customers, we've transformed Treace Medical from a single technology Lapiplasty company to a comprehensive bunion solutions company.
With our broad suite of 3D systems now in hand, we're highly focused on accelerating our penetration into the bunion market and advancing our market leadership position, while also leveraging the foundation we've built within our customer base to introduce additional technologies that we believe can expand wallet share over time. In 2018, our Surgeon Advisory Board published a peer-reviewed paper describing four classes of bunion deformities. As a business, we initially focused our early efforts on driving market share and acceptance across all these classes.
That said, it's been our strategy all along to address all four of these classes of bunions with targeted 3D corrections, giving surgeons more options to address the evolving needs and expand the base of potential surgical candidates over time. Here you see the family of advanced 3D systems we now offer our surgeons to target these four bunion classes. As focused experts in this space, this is what we do best: develop highly instrumented 3D approaches that can truly democratize these challenging procedures to speed adoption across the broad surgeon community.
Our new Nanoplasty and Percuplasty 3D MIS systems target the high-volume osteotomy segment of the market, a segment that we estimate represents 70% of the 450,000 annual cases in the U.S. And then we have our new Speed MTP system, which targets roughly 20% of bunions who have arthritic great toe or MTP joints. MTP fusion is one of the most common procedures performed by foot and ankle surgeons, making it a strategically important procedure for Treace to serve and to innovate in. Prior to launching these three new systems, we estimate we have captured about 25% on average of our 3,300 customers' total bunion-related volumes. In 2026, we are laser-focused on penetrating the remaining 75% of their cases by leveraging our expanded portfolio of targeted solutions. And we're encouraged by the early uptake we're seeing.
Just two quarters into full availability of these systems, we're already seeing mid-single-digit bunion procedure volume growth. At a high level, a key component of our innovation strategy involves making our 3D bunion procedures less invasive, resulting in less pain, quicker recoveries, and minimizing visible scarring. We believe this not only makes our procedures more attractive to patients today, but more appealing to an even larger number of the nearly four and a half million U.S. bunion sufferers in the future. Surgeon and patient interest in MIS bunion surgery is high, and from a patient's point of view, you can see how much more appealing a Treace MIS approach would be to a traditional open osteotomy.
That said, today there are some real rate limiters to expanding this emerging segment of the high-volume osteotomy market, specifically steep learning curves, high variability of outcomes, and lack of attention to correcting this third or frontal plane component of the deformity with current MIS options. As a result, we believe that only around 10%-15% of the estimated 300,000 metatarsal osteotomies are being performed with MIS approaches today, but this is changing. Treace Medical is now a driving force in this segment and pioneering the future of MIS bunion surgery with a full suite of advanced 3D technologies to meet the evolving needs and preferences of surgeons and patients.
Our Percuplasty and Nanoplasty systems are performed through poke holes or tiny incisions and provide a unique experience for the surgeon, a highly instrumented procedure that allows them to dial in all three planes of the bunion deformity with the control and the confidence that they need, and we've complemented these with our own MIS power system. This is the console and handpiece that powers the single-use cutting burs that are used in the Percuplasty procedure and can also be used across a wide variety of other MIS procedures throughout the foot. MIS is on the rise, and we believe we're well positioned to win in this space.
During 2025, we've already enabled hundreds of first-time MIS surgeon users, as well as experienced MIS users using competitive products to confidently introduce our advanced suite of 3D procedures into their practice, and we're only getting started. Since 2015, our company has been hyper-focused on evolving our Lapiplasty technology, making it easier, faster, and minimally invasive with our Micro- Lapiplasty option. We estimate Lapidus fusion represents about 30% of the estimated 450,000 annual bunion procedures in the U.S. today and represents the largest dollar segment of the bunion market, a market where we are the recognized leaders, and in 2026, we plan to commercialize our next-generation Lapiplasty platform known as Lapiplasty Lightning. Lightning combines next-generation 3D correction instrumentation with new implants based on our novel SpeedPlate hybrid fixation technology.
Lightning not only reduces steps for a faster procedure, but importantly, it provides surgeons greater accuracy and greater control over their 3D correction. We performed our first case using Lightning technology successfully last week, and we look forward to full commercialization towards the end of 2026. The age of personalized surgery is here, and we continue to innovate and expand surgeon access with our IntelliGuide PSI platform, industry's first and only preoperative planning and patient-specific cut guide system for bunion and midfoot corrections. Not only can our IntelliGuide technology offer a personalized treatment, it streamlines procedures and gives surgeons greater confidence and control, particularly in more challenging or revisional deformity corrections.
While focused on deeply penetrating into the bunion market, we've been strategically adding complementary technologies to allow our sales force to tap into adjacent procedures and more fully service their surgeons' needs over time. During 2025, we expanded our SpeedPlate and sterile instrument line with multiple launches in both of these categories. We also introduced the company's first biologics platform. In 2026, we plan to add new offerings into these categories and commercialize our Percuplasty SuperBite line of compression screws, arming our sales force with another bread-and-butter fixation platform so they can more fully service their customers' needs in their cases. All of these technologies are designed to wrap around our core bunion-related procedures.
We believe this allows our sales reps to bring greater value to their customers while also creating greater selling efficiency and scalability. Speaking now to our go-to-market strategy. First, we are focused on addressing foot and ankle surgeons' most frequently performed high-volume surgeries with a comprehensive suite of best-in-class procedural solutions. We provide surgeons with excellent education and hands-on training on these technologies through our Bunion Masters training events. This enables our new surgeons to be well-equipped to confidently incorporate our procedures into their practices. Our surgeons are supported by the expertise of our clinical specialist employees and our bunion-focused direct sales team, a team that we will continue to expand in 2026 with the addition of highly experienced foot and ankle sales reps.
We believe our focused approach and our passion and commitment to helping our surgeons achieve better and better outcomes for their bunion patients is a key differentiator for our company and a reason why so many surgeons embrace Treace products. Our goal is to increase our rate of penetration into the $5 billion-plus U.S. Bunion market by leveraging our comprehensive portfolio and our focused sales team, while also adding complementary technologies to increase customer wallet share over time. We've made significant progress towards this goal by increasing our surgeon customer base from nearly 1,300 active surgeons in 2020 to over 3,300 active surgeons in 2025, a 21% CAGR in surgeon user growth over the past five years.
Our surgeon customer base, on average, uses more of our products each year as they choose to treat more and more of their patients with our growing portfolio of best-in-class technologies. All of this has driven our bunion market penetration to nearly 8% of all surgical bunion cases in 2025, doubling our penetration over the past four years. While we're building this position in the market, we've also made significant progress on improving our profitability. We are confident that we have a great business model which will enable us to sustain strong gross margins and scale our operating expenses. In 2024, we improved Adjusted EBITDA by 55% year-over-year, putting us in a much stronger footing, and this improvement remained a core focus in 2025, where we again do expect profitability in Q4 and strong year-over-year improvements.
In addition, for 2025, we expect to see a significant reduction in cash usage, and we also strengthened our balance sheet by securing a new debt facility in the fourth quarter of 2025, giving us more flexibility to support and accelerate our commercial plans. As the leader in the largest and most unpenetrated segment of the foot and ankle market, we have now transformed our company from a single technology player to a diversified and comprehensive 3D bunion solutions portfolio company.
We've seen positive customer response and uptake on our new technologies with strengthening procedure volumes in the back half of 2025, a trend that we expect to continue in 2026 as we continue to gain market share. We have a robust R&D pipeline behind this, plus additional drivers we expect to continue to fuel the company's growth in the years to come. Thank you very much for your time. Appreciate being here. I think we'll now take some time for Q&A.
So you pre-announced fourth quarter results earlier this week, so maybe we can start there. Revenues came in at $62.1-$62.5 million, which is a little bit ahead of where the Street was. So any color you could share on some of the revenue drivers that drove the results in the quarter and what trends looked like exiting 2025?
Sure. The drivers in Q4, we saw continued robust uptake of our new technologies. Obviously, it's a busy time of the year for bunion surgery, even if it was a little dampened compared to expectations. Our three new technologies continued to drive higher adoption from Q3 and into Q4, so we saw good penetration there. In Q3, we had about 20% of our overall 3,300 surgeons that had used one or more of these three new technologies. We built upon that in Q4, so we're really pleased with what we saw there. It was just good execution. It was right where we thought it would, well, where we thought it would land, where we communicated, and we're pleased with it, and we'll continue to build on that for 2026.
Maybe we can talk a little bit more about underlying foot and ankle market trends. There was some softness over the course of 2025. We heard some of your peers say that they saw trends improving around the time of the third quarter earnings call. So how did that look exiting 2025? I know it's typically a seasonally stronger quarter for you, but how have demand trends looked compared to years past?
So during 2025, we saw variability in patient scheduling, a little softer patient demand year overall. And Q4 is always our largest volume quarter, so we didn't see the lift that we would expect to see going into September and October, and that kind of carried through into Q4. That said, we're pleased with seeing the procedure volumes increase we had. We had mid-single-digit procedure volume growth in Q3, and we did a little better on the procedure volume growth rate in Q4, but still in that mid-single-digit range.
But as we head into 2025, it's one of those variables that we're watching and how the patients will respond, macroeconomic environment, consumer sentiment, some of these things are playing into the mix. Yes, other companies commented on softness in either certain segments of the foot and ankle market during 2025 or the overall market. And we think there was a patient dynamic at play in terms of their decisions to ultimately undergo surgery during that year.
2026 is a big year for you as you focus, or as you shift from being focused on purely Lapiplasty to adding two pretty meaningful new products to the portfolio. So can you share some of your early insights and learnings from the rollouts of Nanoplasty and Percuplasty? What's physician feedback been like, and how has uptake trended relative to your expectations?
Yeah, the response to these three new technologies. We have two technologies targeting the largest segment of the bunion market, 70% of the bunions being. And this emerging trend of MIS, it's early on in terms of enabling surgeons to get great results. So as we exposed surgeons to these new MIS technologies in our training labs, they were very excited about what our instrumented technology can do for them. They're used to really struggling with these procedures or having high variability. They came in, they saw in the lab a procedure that they can take and incorporate into their practice. And instead of having a 40-case learning curve, have two or three cases, and they really got this instrumented jig system down. That's what we're so great at. That's what we did with Lapiplasty.
It was so successful to take this challenging procedure and give instrumentation that allows them to do it reproducibly over and over again. So we saw that play out. To the extent there were maybe some decisions along the way where a surgeon decided to treat a more moderate bunion instead of a Lapiplasty, they wanted to try a Nanoplasty. It was new. It was from Treace Medical. They'd seen it. So we had some of that during the rollout too. But the reaction has been great. The Speed MTP is another category we haven't played in in the past. It's a high-volume procedure performed by foot and ankle surgeons, MTP fusion.
Treace is now a player in that space. We've leveraged our differentiated Speed Plate fixation technology and instrumentation to make a really, really great system. We're converting competitors in that space today, and the sales force is having a great time with it. So those three technologies, we're having great results. Surgeons are responding in a very positive way, and we'll continue to drive that really hard during 2026.
So with the addition of these two new products, it really rounds out the portfolio and puts you on more equal footing with some of your larger peers that have had larger bags of ortho products to sell. So where have you been seeing demand coming from? Is it largely just conversion from Lapiplasty to Nanoplasty and Percuplasty within existing accounts, or are you seeing wins in entirely new accounts and switches from competitive products?
Yeah, we're seeing both. Our 3,300 surgeon customers, on average, we have 25% of their cases with Lapiplasty. So we're going in there, and we're filling these gaps. We didn't get MTP fusions before. Now we're getting MTP fusions from our customers. We didn't get their osteotomies before. Now we're winning some of their osteotomy business with these MIS technologies. And we're bringing in a lot of new surgeons into the funnel that want to do MIS, that they're looking at the different companies and what they offer, and they're looking at what Treace offers and trying it in the lab, and they're saying, "That's the one I want to use." So we're kind of winning on both fronts, introducing new surgeons into Treace.
And once they start using one of our MIS products, they get open to using some other products. And we've seen some of these new surgeons come into Treace using MIS, adopting our Speed MTP, and then using Lapiplasty for their Lapidus cases. Every surgeon needs to do Lapidus one time or another and for a certain range of their patients. So as we bring more surgeons into the fold using this broad portfolio, it gives us an open door to address all their procedures for the first time with procedures that are all best in class in each of their categories.
Despite the growing preference for MIS osteotomy, Lapiplasty is still a really great product. So how do you see Nanoplasty, Percuplasty, Lapiplasty fitting into the portfolio? What role does each of them fill, and how should we think about the mix of your business looking over time?
Yeah, a lot of surgeons have their own algorithms and from their training programs. We have a lot of surgeons in our 3,300 customer base that just won't do an osteotomy. They'll do a Micro- Lapiplasty. They'll do something minimally invasive, maybe on the Lapiplasty or Lapidus side. So some of them have an algorithm that says, "Most of my patients are going to be treated with a Lapidus procedure. Other surgeons, most I like to do with an osteotomy and avoid Lapidus where I can." So having this bag allows us to sort of fit their own mental and training algorithms and let them choose which of our technologies they want to apply to their patients. So we think that puts us in a really strong position.
Yeah. Correct me if I'm wrong, but I think the market historically has been 70% or so osteotomy and the balance Lapidus. Is there any reason that, at least on a volume basis, your business won't look similar?
Today, that's a possibility down the road. We need to see how that will play out. Again, you have certain preferences within our surgeon base towards what concentration of Lapidus technology they're going to use on their patients. And then you have that other end that's more osteotomy biased. So it could shift a bit over time, but we'll just have to see how that plays out. The great news is these are good ASP products. They're winning in their spaces. They're getting great reviews from our customers.
Our sales force is very excited about these technologies. We're seeing a lot of highly experienced reps from other companies now that Treace has this broad bag wanting to come join Treace. So that's a great opportunity for us to continue to build that sales team strength over time and bring in new customers.
Maybe we could dive a bit deeper into each of the key levers of the revenue model: surgeon ads, price, and volume. How should we think about the implications of these new products on price? Historically, you had been seeing nice, consistent increases in price year-over-year as you've added more products to the portfolio, so to what extent can additions of ancillary products offset the mixed headwinds from the MIS osteotomy products, and how do we think about ASP on a blended basis?
Mark, you want to jump in?
Yeah, so as John showed in the deck, there's a lot of complementary instrument products, and we continue to release those. There are a lot that we continue to release, and these are sterile instruments that are used single-use in a Lapiplasty case or other types of procedural cases. So that's always helpful. They're items that are designed to assist a surgeon and make the technique, the surgery, a little quicker. So we'll continue to do that and add. So when we think about overall, though, we are seeing a trend that there are lower ASPs for some of these minimally invasive procedures versus the ASPs or the revenue that we're generating per case for Lapiplasty.
So there is a difference. It is lower. So overall, it will probably bring down the average for the company. But what we're seeing is, and John mentioned it, that we're seeing a nice uptick in our case volumes. So we believe that we can attract more surgeons and more of their cases. Specifically, when we think about that from a case volume perspective, we've talked over the last few years that, on average, we're getting only one in four or about 25% of our surgeons' cases.
Now we really have the opportunity to really push into that other 75% that we haven't really been successful in because we just didn't have those products. And so we really think that that case volume is really going to drive and really help that overall positioning from a revenue perspective. But as you mentioned in your question, that these other products do have lower ASPs, but we're getting the cases that we didn't get in the past.
So for example, the MTP cases. Those are cases where patients come in, they have some kind of bunion, but the surgeon says, "Hey, I can't do a Lapiplasty or a Lapidus," or, "I really can't do an osteotomy. I need to do something else." Well, now we've got a procedure there. So that's an incremental case that we can pick up that's going to help our overall revenue.
Yeah. You had a pretty meaningful bump in reimbursement last year. To what extent did that create any cushion for price, and what sort of impact did you see that have on uptake?
Yeah, good question. When that happened, we were a little cautious in our commentary. I think as you will recall on that, in terms of what type of tailwind that might create, and that we needed to watch it a little bit. A lot of our procedures in the hospital outpatient setting, because other procedures are done along with the Lapiplasty, were already at that elevated level. The ASC was a big change, kind of going up 100%. So at the end of the day, it's a decision at the facility level whether they're going to use a higher-end technology or not.
We have heard about around the edges, some use of Speed Plate technology, maybe in ASCs a little bit more, but the material impact wasn't really there. The way we view it, though, the big win is for the patient because more patients now have an opportunity to get their Lapiplasty or high-end bunion procedure done in an ASC setting, which is definitely a lot more patient-friendly, I think all of us would admit, than maybe going to a hospital. So that's kind of the way we see it.
You talked about the big potential with these new products really being the tailwinds to volume. So maybe we could dig a little bit deeper into that. How should we be thinking about volume growth from here, given you're going from targeting just a third of the bunion procedure TAM to tripling that, essentially? Do you think we can see an inflection in volume growth from here?
I'd say that's certainly our aspiration, our goal. We'd like to build upon that, but we also want to make sure we're measured in how that can translate in 2026. We're still dissecting data from Q4, as you can imagine, and looking at the user trends and the mixed trends and what segments were driving the volume. But yeah, we aspire to really trying to ramp that procedure volume growth as high and as quickly as we can.
And that's absolutely what our commercial team is focused on. They've done extremely well. Think about, as a company, what we've been able to do primarily as a single product company and to get and to drive nearly a third of all the surgeons in the U.S. using that technology. And so that's what the commercial organization's focus on, is saying, "We can go to our surgeon customers and say, 'Look, we have,'" and what's shown here on the screen, "'We have all these solutions for you.'" We can be agnostic, and we can go to our surgeon customers and say, "What's best for your patient?"
And we believe that we absolutely can pick up incremental volume as a result of that. So that's what we're focused on this year. The first place where we're going to start is looking at our large surgeon customer base and continue to expand on that volume. And then we're going to pick up additional surgeon customers as well. But that's the aspiration. That's the goal. That's the focus for this year.
Yeah. Just on the topic of surgeon adds, that's the last lever of the model. How much of a focus is expanding the surgeon base versus going deeper into existing ones, and where do you stand in penetrating the overall surgeon opportunity?
Yeah, maybe I'll start with that. So I think, given the priorities, one, we're really proud that we have one in three surgeons in the U.S. that are using Lapiplasty and Treace products. So that's a great place to start. It's so much easier to work with and introduce new products to your existing customer surgeon base. And so that's going to be our primary focus. With that said, these new procedures and, excuse me, these new products allow us to approach surgeons that maybe they're more osteotomy biased. Maybe they have a bias more towards MTPs or something else that we haven't offered previously. So we're going to continue to add new surgeons, but I think the primary focus is to really offer and get more of our surgeon base using more of our broad portfolio.
There's a lot of moving pieces this year. They're moving in different directions. I know you haven't guided, not expecting you to, but how should we interpret what all of this means for growth this year?
Yeah, for growth this year, we've been talking about in Q3 of last year, Q4 of last year, this mid-single digit case volume growth. We believe that case volume growth will continue into 2026. And we're working through, with our commercial organization and with our surgeon customers, what that mix is ultimately going to be. You mentioned that that mix is shifting this year. But we think overall that it's going to be additive because of our new products. So we will drive that commercial volume and success, that case volume. And so that's what's going to, we believe, will continue throughout this year. And it's going to come, and we believe that it can be in all of these categories of our products. The MIS is just beginning. We believe that's going to be a strong place for us, and Speed MTP as well is going to be strong.
Great. John, in your presentation, you talked about adding on to the sales force. On the third quarter call, you also talked about using distributors in certain markets to launch these new products. So maybe we could dig into your commercial organization a bit more. What does the direct versus distribution strategy look like from here and any implications in terms of what that means on price and margins going forward?
Sure. Great question. We started the company using a 100% independent sales agent model, and we evolved that over time, and at the IPO, we took the opportunity to really build out the direct sales force, ramp that into the high 70s to 80% of our revenue mix, and we're around 70, three-quarters of our revenue coming from the direct channel today. There's just certain geographies and areas and expertise within the independent sales network that makes sense, and we continue to partner with those groups, and they've proven they can drive the business, and we'll continue to have that mix and blend within our channel. But predominantly, that mid-70s type of direct sales mix is kind of the right blend for us, we believe.
And we've already targeted some additional areas and territories throughout the U.S. where we can add some of our direct sales reps in those territories. So we'll continue to add this year in targeted areas where we believe that we can gain more volume.
We've talked a lot about MIS osteotomy. Maybe we could talk about some of the other new products that you're rolling out. You talked about Lapiplasty Lightning, so maybe we can start there. Can you remind us what exactly makes Lapiplasty Lightning different, and how should we be thinking about the impact that this has on Lapiplasty? I know there's a big shift to MIS osteotomy. You had previously talked about Lapiplasty really climbing up there in terms of penetration. And so do you think that Lightning is something that could reinvigorate growth in this portion of the business?
We certainly do. We're leaders in this space. We're the lead innovators in the space, and we're committed to having the best technology. We want to be the best technologies on all fronts of ways to treat the bunion. And Lightning is pretty exciting in that it's a culmination of years of observation and learnings. And we have a design team that's really dialed into how do we make this procedure quicker, easier, give you more control over the ability to move the bone in three planes. And then how do you improve upon the fixation options?
So Speed - I'm sorry, Lapiplasty Lightning instrumentation, it reduces steps for a faster procedure and gives surgeons more control over how they can move the bones, and then they can put on their implants faster. And we have an implant technology that's going to, we believe, appeal to a new surgeon audience as well. Some surgeons like to use a certain type of fixation construct, and we don't have that fixation construct today. So between the improvements in the instrumentation and the new implant technology, we think this can appeal to a broader surgeon audience as well.
Is it fair to assume that this comes at a premium to—is it mini? Was that the last version of Lapiplasty?
Micro.
Micro?
Okay.
Well, the implants are the sale, the item we sell. So it's going to be a similar sale, but the instrumentation, it's just going to demonstrate our commitment, give our surgeons, our current users, that next generation to make them even better and better and more proficient, and then appeal to a new surgeon audience as well.
Maybe we can shift gears a little bit, talk about the P&L. You were really close to Adjusted EBITDA profitability, and you still aren't that far off.
But how should we think about what these strategic changes and product changes, the implications that they have in terms of profitability, and how you think about balancing reinvigorating growth and driving profitability at this point?
Yeah. So first and foremost, I think it's important to realize that all of these new products still have the great gross margins that we have and that we've historically had with Lapiplasty. So all these new products are not going to limit that profitability at that level. So that's great news. We'll continue to have high 70s, close to 80% gross margins across the business, across all these product lines, which is fantastic. As we think about profitability, we definitely made an encouraging improvement in bottom line Adjusted EBITDA in 2025 versus 2024.
We haven't given the final results there, but we guided back in November, and we guided to strong improvements in 2025. So we'll have more to talk about how the full year ended a little bit later. But as we think about 2026, there's going to be some natural ways where we will have some leverage on the P&L. We're very focused on improving profitability as well as reducing our cash burn in 2026. We made strong improvements in 2025.
Again, from what we talked about on our last earnings call, at least 30+% improvements in Adjusted EBITDA and 40%-45% improvements in reducing our cash used in 2025 versus the prior year. So there's new opportunities that we have in 2026. Some of them we've already put in motion in 2025 and some of the changes that we made in our overall cost structure. There's some things that we did in 2025 that we won't need to repeat in 2026. So it's going to be some natural leverage. And as we introduced and rolled out all these new products, we definitely needed to have the capital for all the instrumentation.
So now we've got all that. So that will be an opportunity that we won't need to invest as much into our surgical instrumentation in 2026. So that's going to be beneficial in our cash usage. And then there's some of the medical education. We leaned in really heavy in 2025 to really get the word out about all these new products that are coming. Now, we are still very focused on medical education. We think that's a core value to the company and what we do for surgeons. We believe that it's incredibly useful and essential for their success. So we will continue to educate surgeons, but not at the same level. So there's going to be some natural benefits that we're going to have in 2026 versus 2025.
With that, we're almost out of time, so maybe we can wrap it up there. Thank you, John and Mark, for being here, and thanks, everyone, for listening in.
Thanks.
Thank you.