Treace Cuts Quarterly Loss to $0.19 per Share Despite 4% Revenue Decline
Key Facts
Treace Medical Concepts reported a net loss of $12.6 million, or $0.19 per share, in the third quarter of 2026, compared with a loss of $16.3 million, or $0.26 per share, a year earlier. The company said in its earnings release that the loss narrowed by $3.7 million year over year. On an adjusted profitability measure, the company posted a profit of $0.3 million before interest, taxes, depreciation and amortization, after a loss of $2.6 million in the year-earlier period. The results showed an improvement in the loss and adjusted profitability alongside lower sales. Revenue was $48.3 million, down 4% from $50.2 million in the third quarter of 2025.
Treace attributed the revenue decline mainly to a product mix shift toward lower-priced minimally invasive products and a decrease in the number of bunion procedure kits sold. The company said the picture differed when sales to distributors that stock products were excluded: kit sales volume then increased and revenue grew at a mid-single-digit rate. The company said surgical procedure volume grew at a double-digit rate during the quarter. But that growth did not prevent a decline in reported revenue, as the impact of a lower-priced sales mix and fewer procedure kits sold persisted. This reflects a divergence between growth in procedural activity and some measures of product adoption on the one hand, and recorded sales on the other.
Gross profit was $38.4 million, compared with $39.7 million in the year-earlier quarter, in line with the decline in revenue. Meanwhile, gross margin rose to 79.5% from 79.1% a year earlier. The company cut operating expenses by $5.5 million, or 10%, to $49.9 million from $55.4 million. Treace attributed the decline mainly to targeted companywide cost-reduction initiatives. Lower operating expenses, together with an improved gross margin, helped narrow the loss and move adjusted EBITDA into positive territory.
On products, Treace said about 45% of surgeons using the Lapiplasty system now use one or more of the three bunion correction systems the company launched in the third quarter of 2025. The share rose from 40% in the second quarter of 2026. This expansion in use of the new systems points to wider adoption among the surgeon base associated with Lapiplasty. The company also said surgical procedure volume grew at a double-digit rate in the quarter. These indicators come as reported revenue declined, with the company attributing the decrease to product mix and the number of procedure kits sold.
The company narrowed its fiscal 2026 revenue outlook to $206–210 million, compared with its previous range of $204–212 million. The new guidance implies an annual revenue decline of between 3% and 1% compared with 2025. The update raised the low end of the outlook and lowered the high end, while the range continued to point to an annual decline. This places the quarter's results, which included a year-over-year revenue decrease, within the company's expectations for the rest of the fiscal year. The guidance in the release did not indicate a shift to annual revenue growth.
Cash, cash equivalents and marketable securities totaled $39.8 million as of September 30, 2026. The company said cash usage since the start of the year fell 53%, or $9.7 million, compared with the same period in 2025. The existing credit facility provides additional borrowing capacity of up to $115 million, subject to its terms. These figures put liquidity and the decline in cash usage in the context of the quarterly results and updated outlook. In the market, TMCI shares closed at $4.18 on November 5, 2026, according to EL7 data.
Treace said it will hold a call to discuss its third-quarter results on November 6, 2026, at 8:00 a.m. Eastern time. The timing allows the company to present the period's results and details on the same day its release was issued. The results include lower revenue than a year earlier, alongside a smaller loss and improved adjusted earnings. The updated annual revenue range of $206–210 million was also among the key points in the company's release. The company scheduled the call to discuss the quarterly results.