SI-BONE Inc.
08/05/2025 | Press release | Distributed by Public on 08/05/2025 14:18
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes to those statements included elsewhere in this Quarterly Report on Form 10-Q, and with the consolidated financial statements and management's discussion and analysis of our financial condition and results of operations in our Annual Report on Form 10-K filed with the SEC on February 25, 2025. Some of the information contained in this discussion and analysis, or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many important factors, including those set forth in the "Risk Factors"section of our Annual Report on Form 10-K filed on February 25, 2025, our actual results could differ materially from the results described in, or implied, by these forward-looking statements.
Overview
We are a medical device company dedicated to solving musculoskeletal disorders of the sacropelvic anatomy. Leveraging our knowledge of pelvic anatomy and biomechanics, we have pioneered proprietary minimally invasive surgical implant systems to address sacroiliac joint dysfunction as well as address unmet clinical needs in pelvic fixation and management of pelvic fractures.
Our products include a series of patented titanium implants and the instruments used to implant them, as well as implantable bone products. Since launching our first generation iFuse in 2009, we have launched multiple implant product lines, including iFuse-3D in 2017, iFuse TORQ in 2021, iFuse Bedrock Granite in 2022, and iFuse INTRA and iFuse TORQ TNT in 2024. In the United States, iFuse, iFuse-3D, iFuse TORQ and iFuse Bedrock Granite have clearances for applications in sacroiliac joint dysfunction, adult spinal deformity and pelvic trauma. iFuse TORQ TNT has clearances for applications in pelvic trauma and sacroiliac joint dysfunction. In Europe, iFuse, iFuse-3D and iFuse TORQ are approved for applications in sacroiliac fusion, adult spinal deformity and pelvic fracture fixation.
We market our products primarily with a direct sales force as well as a number of third-party sales agents in the United States, and with a combination of a direct sales force, and sales agents and resellers in other countries. As of June 30, 2025, over 127,000 procedures have been performed using our products by over 4,600 physicians in the United States and 38 other countries since we introduced iFuse in 2009.
Factors Affecting Results of Operations and Key Performance Indicators
We monitor certain key performance indicators that we believe provide us and our investors indications of conditions that may affect results of our operations. Our revenue growth rate and commercial progress is impacted by, among other things, our key performance indicators, including our ability to expand access to solutions, increase physician penetration, launch new products, address human capital needs and gain operational efficiencies.
Expand Access to Solutions
As we expand our portfolio, the experience, caliber, and strong clinician relationships of our sales force, including our network of third-party sales agents, will be crucial to drive adoption of our future products and procedures. Since our initial public offering in 2018, we have made significant investments in our commercial infrastructure to build a valuable sales team to expand the market, drive physician engagement and deliver revenue growth.
While we will continue to selectively expand our sales force, we are also focused on increasing our sales managers' capacity and driving sales force productivity by adding more clinical support specialists and implementing hybrid models, including selectively adding third-party sales agents for case coverage, and by placing instrument trays and implants at select sites of service. This expansion of our sales force is one aspect of increasing the overall number of procedures in a given period that we can support with products, which is what we call "surgical capacity." Our surgical capacity is also limited by the volume of implant inventory and the number of instrument trays held ready for surgery, either at our headquarters facility, forward deployed with our sales force or placed at customer facilities. As we grow, and as adoption of our solutions continues to mature, our overall surgical capacity may become an important driver of the amount of revenue that we can generate.
As of June 30, 2025, our U.S. sales force consisted of 85 territory sales managers and 75 clinical support specialists directly employed by us and 295 third-party sales agents, compared to 85 territory sales managers and 67 clinical support specialists directly employed by us and 204 third-party sales agents as of June 30, 2024. As of June 30, 2025, our international sales force consisted of 10 sales representatives directly employed by us and a total of 29 third-party sales agents and resellers, compared to 11 sales representatives directly employed by us and a total of 29 third-party sales agents and resellers as of June 30, 2024.
For the quarter ended June 30, 2025, over 30 percent of our procedures for sacroiliac joint dysfunction were performed at ambulatory surgery centers (ASCs) or Office-Based Labs (OBLs). With the steady increase in the numbers of minimally invasive procedures, including sacroiliac joint fusion procedures, being performed at ASCs or OBLs, we continue to actively engage with these facilities to educate their management groups on our clinical evidence, exclusive commercial payor coverage and focus on driving improved education and pathways between pain physicians and surgeons.
Physician Engagement
Engaging and educating physician and other healthcare professionals about the clinical merits and patient benefits of our solutions will be important to grow physician adoption. Our medical affairs team works closely with our sales team to increase physician engagement and activation. Physician activity includes both the number of physicians performing our procedures as well as the number of procedures performed per physician. In addition to training new physicians, we have several initiatives to re-engage inactive physicians.
We use a combination of hands-on cadaveric and dry-lab training, as well as the SI-BONE SImulator - a portable, radiation-free, haptics and computer-based simulator - for training purposes, and optimize our programs to improve adoption rate, time to first case and ultimately physician productivity.
We are currently targeting over 12,000 U.S. physicians, including over 8,000 orthopedic and neurological spine surgeons and approximately 4,500 interventional spine physicians, to perform our procedures. As of June 30, 2025 and 2024, in the United States more than 3,600 and 2,900 physicians, respectively, have been trained on our products and have treated at least one patient. Outside the United States, as of June 30, 2025 and 2024, more than 1,100 and 1,000 physicians, respectively, have been trained on our product and have treated at least one patient. Since launching our academic training program in August 2018, we have trained residents and fellows in over 285 academic programs in the United States, resulting in the training of approximately 2,000 surgical residents and fellows.
Expand Addressable Markets
Expanding our platform of sacropelvic solutions to address sacroiliac joint dysfunction, pelvic fixation and pelvic trauma has been a key tenet of our strategy, and we have made substantial progress on this mission. With iFuse-3D, iFuse TORQ, iFuse Bedrock Granite and iFuse TORQ TNT, we believe that the value of our innovative, versatile, and complementary product portfolio provides physicians with a comprehensive set of alternatives, and positions us as the top choice for physicians for sacropelvic solutions. We also offer an allograft bone implant for physicians who believe that this kind of implant can be important in addressing sacroiliac joint dysfunction.
Demonstrating the safe and effective use of our implants in post-market clinical trials, including their use in ways that may not yet be part of standard-of-care practice, is an important component of our market-building strategy. In June 2022, we completed enrollment in SILVIA, a two-year prospective international multi-center randomized controlled trial comparing pelvic fixation with and without the addition of an iFuse-3D implant. iFuse-3D is used to provide sacroiliac fusion as part of multilevel spinal fusion procedures, both to improve the stability of the pelvic fixation construct and to decrease the incidence of new-onset postoperative SI joint pain. Data analysis from SILVIA showed that the study's primary clinical endpoint was met, namely that placement of iFuse-3D implants adjacent to pelvic fixation screws in these procedures reduced the incidence of new-onset SI joint pain following the procedure. A manuscript describing these findings is currently under review.
In September 2022, we began enrolling patients in our SAFFRON study, a prospective randomized controlled trial of surgery using our iFuse TORQ device compared to non-surgical management in patients with debilitating sacral fragility or insufficiency fractures. The study was completed using available data. Results from SAFFRON were published in May 2025 and showed a higher rate of recovery of mobility after surgical treatment using iFuse TORQ compared to non-surgical treatment.
STACI is a prospective study on the use of iFuse TORQ in patients with sacroiliac joint dysfunction. The purpose of STACI is to provide information on the safety and effectiveness of minimally invasive sacroiliac joint fusion performed by interventional physicians using iFuse TORQ. Study enrollment completed in November 2024. Early results from STACI were published in June 2025 and showed that placement of iFuse TORQ by interventional pain management physician was associated with a low adverse event rate and early improvement in pain and function.
We continue to invest in research and development initiatives to bring new and differentiated solutions to the market that deliver on our vision of improving patient quality of life through differentiated solutions to target segments with a clear unmet clinical need. Robust clinical evidence is central to drive adoption and favorable reimbursement, and we remain focused on continuing to set the industry standard in delivering evidence-based care through best-in-class clinical trials that demonstrate the efficacy, safety, and economic benefit of our solutions. During the six months ended June 30, 2025, we spent $8.8 million on research and development, equating to 9% of our revenue. During the six months ended June 30, 2024, we spent $8.7 million on research and development, equating to 11% of our revenue.
Enhance Employee Experience and Engagement
Our ability to recruit, develop and retain highly skilled talent is a significant determinant of our success. To attract, develop and retain our talent, we seek to create a diverse and inclusive workplace with opportunities for our employees to thrive and advance in their careers. We support this with market-competitive compensation, comprehensive benefits, and health and wellness programs.
In addition to fostering an inclusive workplace and ensuring equitable compensation for our employees, we maintain a strong focus on enhancing employee retention and job satisfaction. To achieve this, we have established a feedback mechanism to continually monitor and respond to employee sentiment. Using this feedback, we deploy strategies that enhance the skills of our people managers and improve internal communications with employees. Furthermore, we provide ongoing learning and leadership training opportunities to support professional growth.
In 2024, we conducted instructor-led trainings designed to build people leadership capabilities and train managers on delivering actionable feedback. We have also adopted a goal for each of our managers to have regular check-ins with employees to discuss their personal goals and career plans in furtherance of our commitment to career and professional development.
Gain Operational Efficiency
To support our growing portfolio of solutions, we continue to evolve our business processes to identify, measure and improve operational efficiency. The information developed will allow us to optimize processes, increase sales force productivity and improve asset utilization.
We are focused on increasing our territory sales managers' and sales representatives' capacity, efficiency and productivity. We may do this by adding more clinical support specialists and third-party sales agents as part of hybrid arrangements for case coverage, and by consigning instrument trays and implants at select sites of service. As of June 30, 2025, our trailing twelve month average revenue per territory sales manager has increased to approximately $2.1 million from $1.7 million as of June 30, 2024.
We have made significant investments in instrument trays used to perform surgeries. Our goal is to deploy instrument trays to the market where the demand exists to increase our asset utilization rates over time and use capital more effectively by having our instrument trays used in more surgeries in any given time period. Given supply chain disruptions impacting the industry, we are working closely with our suppliers to reduce lead time for our implants to ensure we can support our expanding physician footprint and over time build the resilience in our supply chain to reduce our cash investment in inventory. Additionally, we are partnering with our suppliers around design for manufacturing, specifically for newer products, to reduce the overall cost of the implants as we scale, and reduce waste and rework. Lastly, we are integrating our demand planning and manufacturing systems, to ensure we leverage actual usage trends as we build surgical capacity to support our growth.
Components of Results of Operations
Revenue
Our revenue from sales of implants fluctuates based on volume of cases (procedures performed), discounts, mix of international and U.S. sales, different implant pricing and the number of implants used for a particular patient. Similar to other orthopedic companies, our case volume can vary from quarter to quarter due to a variety of factors including reimbursement, sales force changes, physician activities, product launches, and seasonality. In addition, our revenue is impacted by changes in average selling price as we respond to the competitive landscape and price differences at different medical facilities, such as hospitals, ASCs and OBLs. Further, revenue results can differ based upon the mix of business between U.S. and international sales mix of our products used, and the sales channel through which each procedure is supported. Our revenue from international sales is impacted by fluctuations in foreign currency exchange rates between the U.S. dollar (our reporting currency) and the local currency.
Our business is affected by seasonal variations. For instance, we have historically experienced lower sales in the summer months and higher sales in the last quarter of the fiscal year as patients have more time in the winter months to have the procedure completed or want to take advantage of their annual limits on deductibles, co-payments and other out-of-pocket payments specified in their insurance plans. However, taken as a whole, seasonality does not have a material impact on our financial results from year to year.
Cost of Goods Sold, Gross Profit, and Gross Margin
We utilize third-party manufacturers for production of our implants and instrument trays. Cost of goods sold consists primarily of costs of the components of implants and instruments, instrument tray depreciation, royalties, scrap and inventory obsolescence, as well as distribution-related expenses such as logistics and shipping costs. Our cost of goods sold has historically increased as case levels increase and from changes in our product mix.
Operating Expenses
Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. Personnel costs are the most significant component of operating expenses and consist of salaries, sales commissions and other cash and stock-based compensation related expenses. We intend to make investments to execute our strategic plans and operational initiatives. We anticipate certain operating expenses will continue to increase to support our growth.
Sales and Marketing Expenses
Sales and marketing expenses primarily consist of salaries, stock-based compensation expense, and other compensation related costs, for personnel employed in sales, marketing, medical affairs, reimbursement and professional education departments. In addition, our sales and marketing expenses include commissions and bonuses, generally based on a percentage of sales, as well as certain commission guarantees paid to our senior sales management, territory sales managers, clinical support specialists and third-party sales agents.
Research and Development Expenses
Our research and development expenses primarily consist of engineering, product development, clinical and regulatory expenses (including clinical study expenses), consulting services, outside prototyping services, outside research activities, materials, depreciation, and other costs associated with development of our products. Research and development expenses also include related personnel compensation and stock-based compensation expense. We expense research and development costs as they are incurred.
Research and development expenses for engineering projects fluctuate with project timing. Based upon our broader set of product development initiatives and the stage of the underlying projects, we expect to continue to make investments in research and development. As such, we anticipate that research and development expenses will continue to increase in the future.
General and Administrative Expenses
General and administrative expenses primarily consist of salaries, stock-based compensation expense, and other costs for finance, accounting, legal, insurance, compliance, and administrative matters.
Interest Income
Interest income is primarily related to our investments of excess cash in money market funds and marketable securities.
Interest Expense
Interest expense is primarily related to borrowings, amortization of debt issuance costs, and accretion of final fees on the First-Citizens Third Amended Loan Agreement.
Other Income (Expense), Net
Other income (expense), net consists primarily of net foreign exchange gains and losses on foreign transactions.
Results of Operations
Comparison of the Three Months Ended June 30, 2025 and 2024
Revenue, Cost of Goods Sold, Gross Profit, and Gross Margin:
| Three Months Ended June 30, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||||||||
| Revenue | $ | 48,630 | $ | 39,969 | $ | 8,661 | 21.7 | % | |||||||||||||||
| Cost of goods sold | 9,823 | 8,393 | 1,430 | 17.0 | % | ||||||||||||||||||
| Gross profit | $ | 38,807 | $ | 31,576 | $ | 7,231 | 22.9 | % | |||||||||||||||
| Gross margin | 79.8 | % | 79.0 | % | |||||||||||||||||||
We derive the majority of our revenue from sales to customers in the U.S. Revenue by geography is based on billing address of the customer. The table below summarizes our revenue by geography:
| Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||
|
Amount
|
%
|
Amount
|
%
|
$ Change | % Change | |||||||||||||||||||||||||||||||||
|
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||||||||||||
|
United States
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$ | 46,425 | 95.5 | % | $ | 37,813 | 94.6 | % | $8,612 | 22.8 | % | |||||||||||||||||||||||||||
|
International
|
2,205 | 4.5 | % | 2,156 | 5.4 | % | 49 | 2.3 | % | |||||||||||||||||||||||||||||
| $ | 48,630 | 100.0 | % | $ | 39,969 | 100.0 | % | |||||||||||||||||||||||||||||||
Revenue. The increase in revenue for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was primarily driven by a $8.6 million increase in our U.S. revenue from increased case volumes due to our expanded product portfolio.
Gross Profit and Gross Margin.Gross profit increased $7.2 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, mainly driven by higher revenue. The gross margin was 79.8% for the three months ended June 30, 2025 compared to a gross margin of 79.0% for the three months ended June 30, 2024 due to lower product costs, partially offset by higher royalties and reserves.
Operating Expenses:
| Three Months Ended June 30, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
|
(in thousands, except for percentages)
|
|||||||||||||||||||||||
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Sales and marketing
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$ | 30,781 | $ | 28,970 | $ | 1,811 | 6.3 | % | |||||||||||||||
|
Research and development
|
4,309 | 4,352 | (43) | (1.0) | % | ||||||||||||||||||
|
General and administrative
|
10,721 | 8,332 | 2,389 | 28.7 | % | ||||||||||||||||||
|
Total operating expenses
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$ | 45,811 | $ | 41,654 | $ | 4,157 | 10.0 | % | |||||||||||||||
Sales and Marketing Expenses. The increase in sales and marketing expenses for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was primarily due to a $2.5 million increase in commissions and personnel cost driven by higher revenues and increase in headcount, partially offset by a decrease of $0.7 million related to travel, stock-based compensation and consulting.
Research and Development Expenses. The research and development expenses for the three months ended June 30, 2025 is consistent with research and development expenses for the three months ended June 30, 2024.
General and Administrative Expenses. The increase in general and administrative expenses for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was primarily due to a $1.4 million increase in personnel costs and stock-based compensation associated with an increase in headcount within general and administrative departments and a $0.9 million increase in legal and consulting.
Interest and Other Income (Expense), Net:
| Three Months Ended June 30, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||||||||
|
Interest income
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$ | 1,520 | $ | 2,015 | $ | (495) | (24.6) | % | |||||||||||||||
|
Interest expense
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(666) | (880) | 214 | (24.3) | % | ||||||||||||||||||
|
Other income (expense), net
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(2) | 4 | (6) | (150.0) | % | ||||||||||||||||||
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Total interest and other expense, net
|
$ | 852 | $ | 1,139 | $ | (287) | |||||||||||||||||
Interest Income.The decrease in interest income for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was primarily due to lower investment balances.
Interest Expense. The decrease in interest expense for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was due to lower interest rates associated with the First-Citizens Third Amendment Term Loan.
Other Income (Expense), Net. The change in other income (expense), net for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was primarily due to foreign currency fluctuations.
Comparison of the Six Months Ended June 30, 2025 and 2024
Revenue, Cost of Goods Sold, Gross Profit, and Gross Margin:
| Six Months Ended June 30, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||||||||
| Revenue | $ | 95,920 | $ | 77,836 | $ | 18,084 | 23.2 | % | |||||||||||||||
| Cost of goods sold | 19,418 | 16,395 | 3,023 | 18.4 | % | ||||||||||||||||||
| Gross profit | $ | 76,502 | $ | 61,441 | $ | 15,061 | 24.5 | % | |||||||||||||||
| Gross margin | 79.8 | % | 78.9 | % | |||||||||||||||||||
We derive the majority of our revenue from sales to customers in the U.S. Revenue by geography is based on billing address of the customer. The table below summarizes our revenue by geography:
| Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | $ Change | % Change | |||||||||||||||||||||||||||||||||
| (in thousands, except for percentages) | ||||||||||||||||||||||||||||||||||||||
|
United States
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$ | 91,261 | 95.1 | % | $ | 73,238 | 94.1 | % | $18,023 | 24.6 | % | |||||||||||||||||||||||||||
|
International
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4,659 | 4.9 | % | 4,598 | 5.9 | % | 61 | 1.3 | % | |||||||||||||||||||||||||||||
| $ | 95,920 | 100.0 | % | $ | 77,836 | 100.0 | % | |||||||||||||||||||||||||||||||
Revenue. The increase in revenue for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was primarily driven by a $18.0 million increase in our U.S. revenue due to the increase in case volumes due to our expanded product portfolio.
Gross Profit and Gross Margin.Gross profit increased $15.1 million for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, mainly driven by higher revenue. The gross margin was 79.8% for the six months ended June 30, 2025 as compared to 78.9% for the six months ended June 30, 2024. Gross margin increased in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to changes in procedure and product mix, partially offset by higher royalties and reserves.
Operating Expenses:
| Six Months Ended June 30, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
|
(in thousands, except for percentages)
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Sales and marketing
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$ | 61,462 | $ | 58,357 | $ | 3,105 | 5.3 | % | |||||||||||||||
|
Research and development
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8,843 | 8,697 | 146 | 1.7 | % | ||||||||||||||||||
|
General and administrative
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20,681 | 16,508 | 4,173 | 25.3 | % | ||||||||||||||||||
|
Total operating expenses
|
$ | 90,986 | $ | 83,562 | $ | 7,424 | 8.9 | % | |||||||||||||||
Sales and Marketing Expenses. The increase in sales and marketing expenses for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was primarily due to a $4.2 million increase in commissions and personnel costs driven by higher revenues, partially offset by $1.1 million decrease in travel costs and stock-based compensation.
Research and Development Expenses. The research and development expenses for the six months ended June 30, 2025 is consistent as compared to the research and development expenses for the six months ended June 30, 2024.
General and Administrative Expenses. The increase in general and administrative expenses for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was primarily due to a $2.5 million increase in personnel costs and stock-based compensation associated with an increase in headcount within general and administrative departments, and a $1.7 million increase in legal, consulting, and bad debt expense.
Interest and Other Income (Expense), Net:
| Six Months Ended June 30, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||||||||
| Interest income | $ | 3,112 | $ | 4,128 | $ | (1,016) | (24.6) | % | |||||||||||||||
| Interest expense | (1,328) | (1,761) | 433 | 24.6 | % | ||||||||||||||||||
| Other income (expense), net | 6 | (89) | 95 | 106.7 | % | ||||||||||||||||||
| Total interest and other expense, net | $ | 1,790 | $ | 2,278 | $ | (488) | (21.4) | % | |||||||||||||||
Interest Income.The decrease in interest income for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was primarily due to lower investment balance.
Interest Expense. The decrease in interest expense for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was primarily due to lower interest rates associated with the First-Citizens Third Amendment Term Loan.
Other Income (Expense), Net. The change in other income (expense), net for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was primarily due to foreign currency fluctuations.
Liquidity and Capital Resources
As of June 30, 2025, we had cash and marketable securities of $145.5 million as compared to $150.0 million as of December 31, 2024. We have financed our operations primarily through the sale of our common stock in our public offerings and debt financing arrangements. As of both June 30, 2025 and December 31, 2024, we had $35.5 million in outstanding debt.
As of June 30, 2025, we had an accumulated deficit of $444.0 million as compared to $431.4 million as of December 31, 2024. During the six months ended June 30, 2025, we incurred a net loss of $6.2 million. During the years ended December 31, 2024 and 2023, we incurred a net loss of $30.9 million and $43.3 million, respectively, and expect to incur additional losses in the future. We have not achieved positive cash flow from operations to date.
Based upon our current operating plan, we believe that our existing cash and marketable securities will enable us to fund our operating expenses and capital expenditure requirements over the next 12 months from the filing of this Form 10-Q. However, the financial impact of a potential economic downturn or capital market disruptions pose risks to and uncertainties in our future available capital resources. We may face challenges and uncertainties and, as a result, may need to raise additional capital as our available capital resources may be consumed more rapidly than currently expected due to, but not limited to (a) decreases in sales of our products and the uncertainty of future revenues from new products; (b) changes we may make to the business that affect ongoing operating expenses; (c) changes we may make in our business strategy; (d) regulatory and reimbursement developments affecting our existing products; (e) changes we may make in our research and development spending plans; and (f) other items affecting our forecasted level of expenditures and use of cash resources. In addition, as we seek to deploy new product offerings, the need for additional capital to fund the purchase of inventories of implants and instrument trays may become more acute and may limit the number of revenue opportunities that we pursue. Each new product family introduced typically requires the purchase of consumable implant inventory as well as investment in a fleet of instrument trays required to support procedures nationwide.
Term Loan
Our outstanding debt is related to a Loan and Security Agreement (the "Original Loan Agreement") dated August 12, 2021 (the "Effective Date"), entered into by us and Silicon Valley Bank, a California corporation ("SVB"). Pursuant to the Original Loan Agreement, SVB provided us with a term loan in the aggregate principal amount of $35.0 million (the "Original Term Loan").
On January 6, 2023, we entered into a First Amendment to Loan and Security Agreement with SVB (the "First Amendment", and together with the Original Loan Agreement, collectively the "Amended Loan Agreement"). Upon entry into the Amended Loan Agreement, we borrowed $36.0 million pursuant to a new term loan (the "First Amendment Term Loan"), which was substantially used to repay in full the $35.0 million Original Term Loan outstanding under the Original Loan Agreement, and we also obtained a secured revolving credit facility in an aggregate principal amount of up to $15.0 million (the "Revolving Line").
On January 25, 2024, we entered into a Second Amendment to Loan and Security Agreement with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as successor in interest to SVB ("First-Citizens") which further amended our Amended Loan Agreement (the "Second Amendment" and together with the Amended Loan Agreement, collectively, the "Second Amended Loan Agreement"). The Second Amendment revised certain provisions related to financial covenants and the periods in which such covenants applied.
On November 8, 2024, we entered into a Third Amendment to Loan and Security Agreement with First-Citizens (the "Third Amendment" and together with the Second Amended Loan Agreement, collectively, the "Third Amended Loan Agreement"), relative to a new term loan in the original aggregate principal amount of $36.0 million extended by First-Citizens to the Company (the "Third Amendment Term Loan"), which was substantially used to refinance and repay in full the then-outstanding $36.0 million existing First Amendment Term Loan. We also paid a certain final payment fee due relative to such prior First Amendment Term Loan. The Third Amendment set the maturity date for the Third Amendment Term Loan to September 1, 2029 (the "Third Amendment Term Loan Maturity Date"), and set the first principal repayment due date relative to the Third Amendment Term Loan to October 1, 2027; provided that upon the achievement of the Performance Milestone (as defined in the Third Amendment), the first principal payment shall become due on October 1, 2028. Interest on the outstanding principal balance of the Third Amendment Term Loan is payable monthly at a floating rate per annum equal to the greater of 4.25% and the WSJ prime rate minus 0.5%. The Company may elect to prepay the Third Amendment Term Loan in whole prior to the Third Amendment Term Loan Maturity Date, subject to a prepayment fee equal to 1.5% of the original principal amount of the Third Amendment Term Loan if the loan is prepaid within 18 months following the closing of the Third Amendment. The Third Amendment further revised certain provisions related to financial covenants and the periods in which such covenants apply, and First-Citizens and the Company also agreed to terminate the Revolving Line and an uncommitted accordion term loan provision.
Our material cash requirements include various contractual and other obligations consisting of long-term debt obligations with First-Citizens, operating lease obligations and purchase obligations with some of our suppliers and have not changed materially since the Form 10-K filed with the SEC on February 25, 2025. As of June 30, 2025, expected timing of those payments are as follows:
| Payments Due By Period | |||||||||||||||||||||||||||||
| Total | Less than 1 year | 1-3 years | 4-5 years | More than 5 years | |||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||
|
Principal obligations (1)
|
$ | 36,000 | $ | - | $ | 6,000 | $ | 30,000 | $ | - | |||||||||||||||||||
|
Interest obligations (2)
|
8,207 | 1,288 | 5,056 | 1,863 | - | ||||||||||||||||||||||||
| Operating lease obligations | 1,491 | 540 | 935 | 16 | - | ||||||||||||||||||||||||
| Purchase obligations | 1,902 | 1,902 | - | - | - | ||||||||||||||||||||||||
| Total | $ | 47,600 | $ | 3,730 | $ | 11,991 | $ | 31,879 | $ | - | |||||||||||||||||||
(1)Represents the principal obligations of our First-Citizens Third Amendment Term Loan.
(2)Represents the future interest obligations on our First-Citizens Third Amendment Term Loan estimated using an interest rate of 7% as of June 30, 2025.
This compares to $48.1 million of contractual obligations as of December 31, 2024.
Cash Flows
The following table sets forth the primary sources and uses of cash for each of the periods presented below:
| Six Months Ended June 30, | |||||||||||||||||
| 2025 | 2024 | $ Change | |||||||||||||||
|
Net cash provided by (used in):
|
(in thousands) | ||||||||||||||||
|
Operating activities
|
$ | (4,738) | $ | (13,905) | $ | 9,167 | |||||||||||
|
Investing activities
|
1,159 | 4,517 | (3,358) | ||||||||||||||
|
Financing activities
|
2,336 | 1,881 | 455 | ||||||||||||||
|
Effects of exchange rate changes on cash and cash equivalents
|
445 | (187) | 632 | ||||||||||||||
| Net increase (decrease) in cash and cash equivalents | $ | (798) | $ | (7,694) | $ | 6,896 | |||||||||||
Cash Used in Operating Activities
Net cash used in operating activities for the six months ended June 30, 2025 of $4.7 million resulted from cash outflows due to a net loss of $12.7 million, adjusted for $16.6 million of non-cash items, and cash outflows from net changes in operating assets and liabilities of $8.7 million. Net cash used in operating activities for the six months ended June 30, 2024 of $13.9 million resulted from cash outflows due to a net loss of $19.8 million, adjusted for $14.0 million of non-cash items, and cash outflows from changes in operating assets and liabilities of $8.1 million. The decrease in net loss, net of non-cash items for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was mainly due to increased revenues. Net cash outflows from changes in operating assets and liabilities for the six months ended June 30, 2025 was primarily due to higher inventory build-up related to our new product introductions and lower accrued liabilities attributable to the normal timing of expenses, offset by lower account receivable balance resulting from improved collections. Net cash outflows from changes in operating assets and liabilities for the six months ended June 30, 2024 was primarily due to lower accrued liabilities attributable to the normal course timing of expenses and higher Account Receivable due to timing of collection.
Cash Flows From Investing Activities
Net cash provided by investing activities in the six months ended June 30, 2025 was $1.2 million as compared to cash provided by investing activities of $4.5 million in the six months ended June 30, 2024. Net cash provided by investing activities for the six months ended June 30, 2025 consisted of maturities of our marketable securities net of purchases of $5.3 million, and purchases of property and equipment of $4.2 million primarily related to individual components in instrument sets to support revenue growth. Net cash used in investing activities for the six months ended June 30, 2024 consisted of purchases of our marketable securities net of maturities of $9.7 million, and purchases of property and equipment of $5.2 million primarily related to individual components in instrument sets.
Cash Provided by Financing Activities
Cash provided by financing activities in the six months ended June 30, 2025 and 2024 was $2.3 million and $1.9 million, respectively, resulting from the issuance of common stock under our stock-based incentive compensation plans.
Critical Accounting Policies, Significant Judgments, and Use of Estimates
This discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported revenue generated, and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Our critical accounting policies and estimates are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies, Significant Judgments, and Use of Estimates" in our 2024 Annual Report. There had been no material changes to the descriptions of these accounting policies, judgments and estimates.
Seasonality
Our business is affected by seasonal variations. For instance, we have historically experienced lower sales in the summer months and higher sales in the last quarter of the fiscal year. However, taken as a whole, seasonality does not have a material impact on our financial results.
SI-BONE Inc. published this content on August 05, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on August 05, 2025 at 20:19 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]