TELA Bio Q2 2025 Earnings Call Transcript

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Provided by Quartr
August 11, 2025

Key Takeaways

  • Positive Sentiment: The company exceeded $20 million in Q2 revenue, up 26% year-over-year, with unit sales growing 17% for OviTex and 40% for OviTex PRS, while net loss narrowed to $9.9 million.
  • Positive Sentiment: LiquiFix revenue jumped 121% year-over-year and the product secured contracts with three major national GPOs, two of which granted it an innovative technology designation.
  • Positive Sentiment: OviTex IHR inguinal hernia SKUs delivered a 322% year-over-year revenue increase, and the June European launch plus a four-year NHS framework agreement bolster international market access.
  • Neutral Sentiment: President Jeff Blizzard, a med-tech veteran, was appointed to lead a shift to a patient-outcome centric commercial strategy, optimize territory management, and build surgeon partnerships.
  • Positive Sentiment: The company reiterated full-year 2025 guidance of $85 million–$88 million in revenue (23%–27% growth), supported by disciplined expense management and strong field productivity.
AI Generated. May Contain Errors.
Earnings Conference Call
TELA Bio Q2 2025
00:00 / 00:00

There are 9 speakers on the call.

Operator

Thank you for standing by, and welcome to TeleBio's Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. To remove yourself from the queue, you may press 11 again.

Operator

As a reminder, this call is being recorded. I would now like to turn the call over to Louisa Smith from the Gilmartin Group. Please go ahead.

Speaker 1

Thank you, Latif, and good afternoon, everyone. Earlier today, TeleBio released financial results for the second quarter twenty twenty five. A copy of the press release is available on the company's website. Joining me on today's call are Tony Koblish, Chief Executive Officer Jeff Blizzard, President and Roberto Kuka, Chief Operating Officer and Chief Financial Officer. Before we begin, I'd like to remind you that during this conference call, the company may make projections and forward looking statements regarding future events.

Speaker 1

We encourage you to review the company's past and future filings with the SEC, including, without limitation, the company's annual report on Form 10 ks and quarterly reports on Forms 10 Q, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward looking statements. These factors may include, without limitation, statements regarding product development and pipeline opportunities, product potential, the impact of various macroeconomic conditions identified in our filings like changes in surgical procedural volumes, the regulatory environment, sales and marketing strategies, capital resources or operating performance. With that, I'll now turn the call over to Tony.

Speaker 2

Thank you, Louisa. Good afternoon, and thank you for joining TELA Bio's second quarter twenty twenty five earnings call. I'll begin the call with the usual quarterly review covering key performance drivers followed by Jeff Blizzard, our recently appointed President, sharing his initial observations from his first few months and outlining his objectives for TeleBio's future commercial strategy. Roberto will then provide more detailed financial analysis and our outlook for the remainder of the year. Finally, I'll provide some closing remarks before opening the floor for questions.

Speaker 2

Turning to our results for the quarter. Q2 set a new high watermark for Tele as the first quarter to exceed $20,000,000 in revenue, stemming from the highest global unit sales in the quarter across all product categories. Our OviTex reinforced tissue matrix portfolio for hernia repair and abdominal wall reconstruction continues to scale with over 73,000 units sold across The U. S. And Europe from launch through July.

Speaker 2

The OviTex PRS portfolio for plastic and reconstructive surgery has scaled to more than 16,000 units sold in The U. S. From the launch through July. We're also accelerating our progress in driving greater adoption and brand recognition in minimally invasive procedures, particularly within the inguinal hernia repair market. In 2023, we began our partnership with Advanced Medical Solutions to bring their Class III FDA PMA approved Liquefix non penetrating fixation technology to The U.

Speaker 2

S. Market. As of the end of Q2, we have secured contracts with three major national GPOs to further improve market access for Liquefix. Notably, two of these GPO contract awards recognize the unique profile and patient benefits of Liquefix by awarding it an innovative technology designation. We saw year over year Liquefix revenue growth of 121% this quarter and expect increased market access to contribute to further growth in the future.

Speaker 2

Similarly, OviTex IHR continues to gain traction in inguinal hernia repair. Since its introduction in April 24, the quarterly revenue specifically attributed to our OviTex IHR SKUs has grown 322% compared to 2024 and twenty nine percent sequentially over Q1 sales. We announced the European commercial launch of OviTex IHR in June and continue to anticipate further growth within the portfolio. Switching gears, I want to take a few minutes to discuss an important and exciting addition to our company's management team. In June, we appointed Jeff Blizzard as President to lead the commercial organization.

Speaker 2

He brings a wealth of experience in med tech and a track record of delivering predictable growth. Jeff was most recently the global head of surgical sales at AvioMed, a role he held ahead of and through the company's acquisition by Johnson and Johnson. Under his leadership, the surgical division of ObuMed grew substantially over multiple years. Jeff also brings extensive European market experience to Tele, which will be critical for executing our international expansion strategy. OUS is a great growth opportunity for us and European sales grew 25% over Q2 last year, driven by 29% unit growth, demonstrating robust and sustained expansion across the region.

Speaker 2

In July, we were awarded a four year framework agreement with the National Health Service, or NHS, in England. This prestigious agreement enables the purchase of OviTex through the NHS national catalog and represents a key step forward in our international strategy and an opportunity to drive additional revenue contributions through OUS sales. The second quarter was also marked by several key publications and surgeon presentations highlighting the value of the OviTex and OviTex PRS portfolio, adding to what we view as a growing repository of some of the best clinical data across the soft tissue repair and reconstruction landscape. At the Society of Robotic Surgery meeting in July held in Strasbourg, France, an abstract titled Use of Robotic and Open Approaches for Ventral Hernia Repair, When is the Robot Utilized in a Busy Hernia Center, was presented. This abstract developed by Doctor.

Speaker 2

Paul Zotek in collaboration with Doctor. Bruce Ramshaw of CareSyntax highlighted data demonstrating lower occurrence rates in the range of three percent, in addition to a favorable complication profile in a real world of four twenty seven patients who underwent open or robotic ventral hernia repairs with OviTex reinforced tissue matrix. The study had a mean follow-up of approximately two years for the open cohort and approximately one point five years for the robotic cohort. Looking ahead, two OviTex PRS abstracts have been accepted for oral presentation in the upcoming American Society of Plastic Surgeons Annual Meeting taking place in October. In addition to these conference updates, two new peer reviewed publications were added to our clinical library.

Speaker 2

Doctors David Mathis and Chris Kawatanes published Abdominal Wall Reinforcement Using OviTex After Deep Inferior Epigastric perforator flap in the Journal of Reconstructive Microsurgery. This paper demonstrates the efficacy and safety of OviTex in retrorectus abdominal wall reinforcement following deep flap harvest. OviTex was not associated with increased rates of seroma, surgical site infections, or wound dehiscence when compared to no mesh use, and was effective at minimizing the risk of abdominal bulges. Also, Drs. Rahim Nezrale and Paul Zotek published ventral hernia repair with onlay placement of biosynthetic ovine lumen is not inferior to retroreflex placement in plastic and reconstructive surgery, highlighting no difference in complications and consistently low recurrence rates when looking at the retrorectus and onlay placement of OviTex reinforced tissue matrix.

Speaker 2

These latest publications and presentations further underscore the clinical utility of our products within the soft tissue and reconstructive markets, along with our commitment to advancing evidence based innovation. With that, I'll now turn the call over to Jeff to share his initial observations and strategy for the sales process.

Speaker 3

Thanks, Tony. Let me start by saying that my first few months at TeleBio have been productive and highly encouraging. I was attracted to the position believing that the company had key elements in place for success and I can now confirm that is the case. We have exceptional products, outcomes with clinical data, and a very skilled sales organization. In these first few months, I've traveled every region and met our full field team.

Speaker 3

That exercise further reinforced my belief that our sales force is capable of substantially growing OvaTecs. I've also identified specific areas where immediate adjustments could unlock our true potential. One of these key shifts is that we'll implement a cultural level at that that we will implement at a cultural level at Tele is to lean into more building of a patient and outcome centric partnership with our healthcare providers. Until now, our approach to selling has been transactional in nature. And while it sounds counterintuitive, our sales teams are of course focused on revenue generation.

Speaker 3

We want our teams to be far more focused on emphasizing patient outcomes and fostering surgeon engagement and education across our total portfolio. Earlier this year, we rolled out a territory manager and account specialist model, and this will remain our best structure to support our shift and priorities. It allows our strongest performers to focus on opening new accounts while maintaining consistent clinical support in established territories. What we need to build are sustainable recurring business relationships rather than relying on one off sales cycles that don't create value for patients, surgeons, or for tele. We are optimizing our field organization to improve resource allocation and management oversight.

Speaker 3

There were certain territorial inefficiencies that were limiting our clinical presence and sustained engagement efforts, and we've addressed those head on. Another area in which I see significant opportunities for accelerated revenue growth is market development and education. We're launching an educational initiative around targeting prominent teaching hospitals and training programs to access the next generation of surgeons. This is an area where TeleBio has not previously focused significant effort in. Investing in education and engagement at these institutions will generate substantial long term returns, particularly as the market continues to shift away from plastic repair solutions.

Speaker 3

We've also made some strategic organizational changes over these last two months to maximize our commercial effectiveness. Greg Firestone, who was instrumental in our contracting success, is now leading our global market access team, including health economics and reimbursement policy efforts. This is an area in which we've been under focused on and Greg's expertise will now be implemented on a global scale, while we work to tackle broader market access dynamics. When I look at our competitive positioning, I see multiple advantages inherent in our size at TELA Bio and our agility. While our larger competitors have a leg up when it comes to contracting they lack our operational flexibility and clinical consultation capabilities.

Speaker 3

Our strategy is straightforward. We're going to be present during procedures. We're going to demonstrate clinical expertise, and we will achieve superior patient outcomes. This creates physician champions that contracts alone simply cannot overcome. This rationale becomes more compelling, excuse me, when hospitals and their administrators weigh the economic impact of lower occurrence rates and improve patient satisfaction.

Speaker 3

We have the foundational and necessary GPO access. And now we're focusing on education and outcome demonstration to build physician preference that transcends contracting barriers. I'd also like to address Salesforce development, because this is top of mind for many when evaluating TELUS history of execution and forward looking strategy. As I mentioned, I've met with every single member of our field team, and the majority have the right cultural fit and capability profile. We're seeing positive engagement around patient centric messaging, and our reps are demonstrating the necessary intrinsic motivation for patient outcomes that drive sustainable success in the medical technology sector.

Speaker 3

We can improve on our current revenue per representative, and there's ample capacity for this to occur at the account level. We will achieve this through improved territory management, enhanced data analytics, and a strategic placement of our top performers where opportunities are the greatest. We're also implementing some cost effective data visualization tools to help our territory managers frame their weekly and quarterly activities more effectively. The data exists today, but we need better packaging for the field consumption, action planning, and account visibility. As we consider future commercial team additions, we also are reassessing our approach to recruiting.

Speaker 3

When connecting with our large national recruiters, I've been very clear about what we're looking for. We're not interested in traditional sales reps who take orders. We want program builders who have experience and expertise in the Operating Room setting and who are focused on the entire clinical journey of the patient. That means patient discovery, being present during procedures, and following up at the bedside post procedure, and its exact profile that our patient centric approach requires. These are the types of professionals who build long lasting relationships with surgeons, and truly understand the clinical impact of our products.

Speaker 3

Regarding our investment approach, we're ensuring that every initiative under our refined strategy is self funding rather than margin dilutive. Through comprehensive evaluation of the commission structures, expense policies, operational efficiencies, we're eliminating less effective spending while reinforcing the culture of accountability and discipline essential for public company success. Significant opportunities exist to improve execution with our current resources. Our patient centric culture, combined with optimized territory design and data driven decision making, creates the foundation for sustainable, predictable revenue growth as we capitalize on the substantial market opportunity that investors have long recognized in TELA Bio. I'm thrilled to have an active role in shaping the future in this company, and I'm truly excited for what's to come.

Speaker 3

I'll now turn the call over to Roberto to review our second quarter financial results.

Speaker 4

Thanks, Jeff. Revenue for the 2025 increased 26% year over year to $20,200,000 with revenue from OviTex growing 12% and OviTex PRS revenue growing 53%. OviTex unit sales grew 17% for the quarter, while PRS unit sales grew 40% for the quarter. Gross margin was 69.8 for the second quarter compared to 68.8% for the prior year period. The increase was primarily due to a lower charge for excess and obsolete inventory as a percentage of revenue.

Speaker 4

Sales and marketing expense was $16,900,000 in the second quarter compared to $16,700,000 for the prior year period. This increase was mainly due to higher commission expense on an increased revenue base, which offset lower compensation costs from a decrease in headcount and lower consulting and travel expenses. General and administrative expense was $4,100,000 for the second quarter compared to $3,600,000 in the prior year period. R and D expense for the second quarter was $2,200,000 compared to $2,300,000 in the prior year period. Loss from operations was $9,900,000 in the second quarter compared to $11,600,000 in the prior year period.

Speaker 4

Net loss was $9,900,000 in the second quarter compared to $12,600,000 in the prior year period. We ended the second quarter with $35,000,000 in cash and cash equivalents. We are reiterating our full year 2025 guidance anticipating revenue to be in the range of $85,000,000 to $88,000,000 representing growth of 23% to 27% over the full year 2024. With that, I'll hand the call back to Tony for closing remarks.

Speaker 2

Thank you, Roberto. Before we move to take your questions, it's important to understand the truly exceptional real world performance and impact of our OviTex platform. As such, we plan on sharing with the investment community a patient case each quarter that exemplifies the tangible progress we're making toward our vision of a world moving past traditional synthetic mesh. A recent case highlights the importance of this mission. Following a catastrophic workplace accident resulting in a complete loss of the abdominal wall domain and a double leg amputation, a patient in their mid-30s was left in a state where they could not be fitted for prosthetics and could not lie down comfortably to sleep.

Speaker 2

The treating surgeon, a first time OVATEX user, performed an abdominal wall reconstruction with OVATEX 1S using a bridging technique. Today, eight months later, the patient is walking on prosthetics' legs and has reported to a surgeon that he is sleeping comfortably and living an active life. For his part, the surgeon has stated that no other material previously utilized or considered in his practice could have delivered such a result, achieving this level of improvement in the quality of life for this patient. This case represents the essence of our mission, bringing innovative solutions to market that can translate directly to improve patient lives and clinical outcomes. In closing, I'm pleased with our Q2 performance and the trajectory we are on.

Speaker 2

I'm confident the steps we have taken to further our sales organization will have a meaningful impact. Jeff's successful track record of scaling commercial organizations and delivering results combined with our superior products and unparalleled clinical data positions us to drive towards our vision of a world moving beyond permanent plastic synthetic mesh while delivering sustainable and predictable growth in a growing market. I'd like to extend a heartfelt thank you to every member of our committed TeleBio team and the many valued partners who've helped us make so much progress over the past few years. The momentum we've built is just the beginning. There's so much more ahead.

Speaker 2

There's never been a more exciting time to be part of TELA Bio. With that, I'll now ask Latif to open the line for your questions.

Operator

Thank you. Star, one, one on your telephone. To remove yourself from the queue, you may press 11 again. Please limit yourself to one question and one follow-up to allow everyone the opportunity to participate. Please stand by while we compile the Q and A roster.

Operator

First question comes from the line of Caitlin Cronin of Canaccord Genuity. Please go ahead, Caitlin.

Speaker 5

Hi. Thanks so much for taking the questions. I guess

Speaker 6

Hi, Caitlin.

Speaker 5

Starting off hi. I guess just starting off relating to, you know, Salesforce headcount. Just would love an update on how many territory managers and account specialists you guys ended the quarter with, and any changes to the expectations of where you'll end 2025?

Speaker 2

Yeah, given that Jeff has been on board for about ten weeks now, I'll take the first part of this time frame. So there were 69 territory managers and 25 account specialists in place, and that really has been a steady number. Really had one in and one out, unregrettable, I would say. And the plan going forward is to attain rapidly our stated target previously of 76 territory managers. We are at the place that we want to be for account specialists.

Speaker 2

With that, I'll ask Jeff to comment.

Speaker 3

Thanks, Tony. Right now, as Tony said, we have in place 69 and we're actively recruiting for the '25 budget. We have four new candidates that are in their final interviews next week. So we are continuing to actively recruit.

Speaker 2

Yeah, so we have seven to fill, and we have four that are very close.

Speaker 5

That's great. And then, just an update on the guidance. I understand it's reiterated, but any changes to the cadence of revenues and OpEx this year?

Speaker 4

So the cadence will be similar to our historical cadence, excluding last year where we had some disruptions. So the way to think about it, we've mentioned this before, we tend to see flattish growth from the fourth to the first quarter of the year. We then see a step up from the first to the second quarter as we did just see. We then see slightly flatter growth in the second to the third quarter because of the holidays, the summer holidays in North America. And then we see a bigger step up in the third to the fourth quarter.

Speaker 4

So the arithmetic of all those quarters coming together is that the second half tends to be heavier than the first first half. But if you look at our historical performance, you see that we have, delivered that, multiple years in the past. OpEx, we expect to be largely flattish from quarter to quarter. So you'll see some leverage dropping to the bottom line from that revenue growth on top of it.

Speaker 5

Great. Thanks so much.

Operator

Thanks, Caitlin. Thank you. Our next question comes from the line of Frank Takinen of Lake Street Capital Markets. Please go ahead, Frank.

Speaker 7

Great. Thanks for taking the questions. Maybe I'll start with some follow ups related to some of Jeff's commentary. I think I heard towards the end of your script, eliminating some of the less effective spending and reinforcing accountability with focus on a patient centric culture. Can you maybe bring us a little bit deeper into what this means?

Speaker 7

What are some of the areas where you may pull back spending a little bit more? And then what are some of the areas that you might specifically invest in to focus on a patient centric culture?

Speaker 2

Yeah, great, great question, Frank.

Speaker 3

I appreciate that. So one of the things we've we came in initially and did is, we revised the T and E policy, to get in line with Avamed guidelines, ensuring that everybody in our organization knew the rules of the road as well as what we had for budgets. That is a bottom line spend that we want to control and we made everybody then take an SOP revised SOP as to signing off on the new T and E guidelines. Other areas we're looking at is trunk stock and consignment, making sure that we are constantly on our expiration dates, and knowing that that's waste at the end of the year that we don't have to write off. And I'm sorry, the second part of the question again.

Speaker 7

This is more where made you invest more to focus on that patient centric culture.

Speaker 3

So it's really around it's recruiting, it's getting the right hires in the right location. So it's, you know, a big thing we feel in this role is making sure our sales team mirrors the call point, and has the clinical capability to hold their own at the Operating Room table, and bringing in best practices and sharing other cases with their current physicians and surgeons to show them how a patient will benefit from another experience.

Speaker 7

Got it, very helpful. And then maybe just one more. I think, Tony, we've talked about in the past having some more established reinforced tissue matrix contracts to kind of make sure that Tele has its own area for contracting at the hospital level. Can you maybe talk a little bit more about those? I think we've had a couple of recent successes in that category.

Speaker 7

How has that translated in the field to growth and adoption within those accounts?

Speaker 2

Yeah, that's right. I'll answer that question. Thanks, Frank, and I'll just add a little bit to that. Obviously, as Jeff's comments, we're agile and nimble and can adjust. So we've done a great job so far of rolling out the reinforced tissue matrix category.

Speaker 2

We have approximately 25 of these contracts in place right now, and this falls at the feed more of the larger IDN systems, but we are actively working with the larger GPOs as well on this, and so far the reception has been super positive. So you recall that the reinforced tissue matrix will give us a standalone product category, given our intellectual property protection and the uniqueness of our product portfolio. We'll have the ability to get outside of whatever tiered pricing and bundling structures with this RTM strategy. But really, I think it gets back to this patient centric approach. If there is a view that we have the best product, not just from published clinical data, but anecdotal evidence, evidence in the hands of every surgeon and their patients, I think the supply chain is going to have to acknowledge that we have an excellent product, and I think this patient centric effect that we're implementing will absolutely allow us to transcend whatever bundling strategies or tiered pricing agreements are out there.

Speaker 2

So we have a two pronged approach now. Think we're adding this patient centric element as a way to move beyond this constrained bundling situation that's been in place for the last several quarters.

Speaker 7

Perfect. That's helpful. I'll stop there. Thank you.

Speaker 2

Thank you, Thank

Operator

you. Our next question comes from the line of Michael Sarkon of Jefferies. Please go ahead, Michael.

Speaker 8

Hey, good afternoon and thanks for taking our questions. I guess first to start for you, Jeff, and congrats on the new role. You're going be making some changes to the selling strategy in the organization. I guess, could you elaborate some more on how you plan to mitigate any risks of commercial disruption that could come from the changes?

Speaker 3

Not many changes, it's subdued. Team possesses a lot of the right skill sets. The only change that we've been focused on now is getting that patient centric mentality versus the transaction. Instead of hitting metrics, we drift away from what the business is all about. It's about a patient and their outcomes.

Speaker 3

And ultimately, the user experiences are annuity stream. So we have to change that mindset a bit. But nothing from an overhaul or even a cultural or line in the sand change. Really is. It's just reminding people what their why is here.

Speaker 2

Yeah, and Michael, I'll just add a little bit. You know, you remember Jeff was on the board for about a year and was certainly, although not in an operating role in the details, was advising us on best practices and structures and definitely is a supporter of the TMAS model. And so the good news here is that we're just going to work with what we have and upgrade any open territories that we have, but we have a good foundation in place to work from.

Speaker 8

Got it. That's really helpful. Thank you. And then maybe Tony, just on performance in the quarter, really good strong growth from PRS. I know you're humming there and you also had some pretty easy comps.

Speaker 8

I was wondering on the OvaTec side, it looked like unit volume growth deceled pretty significantly despite having an easier comp in 2Q of last year than 1Q of last year. I was wondering if you can just update us on demand trends for OviTex through the quarter.

Speaker 2

Sure. Yes, I think with OviTex, we are slowly but surely transitioning ourselves from a company that got its start first in the most complex, brutal abdominal wall reconstruction, then moving down into the more complicated and moderate ventral reconstruction, and then down into the simple ventrals, and now we're a full service hernia portfolio provider. We started in hiatal and developed robot compatible capabilities around hiatal, and then most recently with Inguinal. So I think we're in the process of transitioning our hernia business from one that's focused on the very high end complex to a broad portfolio provider, and we've just got to work through the process of getting the lower ASP, get super high incidence volume procedures like inguinal moving, which we're doing quite well, while maintaining and growing that ventral moderate to complex Now once we get through this shift from niche player to broad player, I think we're going to see a situation where the whole portfolio rises.

Speaker 2

If you have the shelf space, if you have the patient centric focus on the surgeon helping the patient, we will get more surgeons pulling the product off of the consignment stock, and it should raise all hernia types across the spectrum. So I'd say we're just in that transition phase from complex to broad, and we feel very good about where we're heading there, and I think the IHR growth is looking fairly strong and Liquefix certainly is a great companion to that inguinal portfolio as well. So we have a great solution now that makes us a broad provider. We've just got to make that transition to execute across the whole hernia spectrum.

Speaker 8

Great. Thank you, Tony. Thank you.

Operator

Thank you. Our next question comes from the line of Dave Turkaly of JMP Citizens. Please go ahead, Dave.

Speaker 7

Yeah, great. Thanks. This is actually Dana on for Dave. I just had one follow-up on OviTex PRS. So really good growth during the quarter, but I was just hoping to get a little bit more color on what really drove the positive results there.

Speaker 7

And then with that, volume growth was 40%, which is really great, but just curious where the ASP lift came from. Is that more so does some of the newer configurations?

Speaker 2

Yes, excellent. That's good question. Yes, we've got a very nice new product development cadence that's going to be rolling out between this year, I would say right through to '27. And the first product launch there is the large long term resorbable PRS products. These will be the largest tissue matrices available for PRS in the industry.

Speaker 2

This mates exceptionally well with the simultaneous launch by one company, and maybe there is more coming, of large size implants which previously were custom and now are becoming more off the shelf. So although we really had one quarter of these large PRS products on the market, we did see a very nice uplift in the final month, which helped to drive that PRS growth and also raised the ASP a little bit. So that product is going to continue to gain traction throughout the year. The other massive difference for the PRS portfolio is we really have not had published clinical data to work with until very recently. So, you know, in the last quarter or so, we are somewhere between three fifty and four hundred PRS patients in either published or society presentations that detail exceptional results and offer a very nice clinical value proposition story that's emerging around the PRS portfolio.

Speaker 2

So yes, we had three surgeons, I think, in Q2 of last year that were high volume users that retired, which was part of that, but really it's the advent of the clinical data that's now propelling us forward, and these large sizes, I think, are going to be very good for us going forward. Now, there's more PRS products coming, I would say, the '6 and early 'twenty seven. We will have an exceptionally broad product portfolio there, just like we have on the hernia side. That's our goal is to have an exceptional utility based on the product range. So there's more coming on the PRS side as well.

Speaker 7

Great. Thanks for the questions.

Operator

Thanks, Daniel. Thank you. Our next question comes from the line of Matthew O'Brien of Piper Sandler. Your question please, Matthew.

Speaker 6

Hi, this is Samantha on for Matt. Thanks for taking our question. I guess we just quickly wanted to touch on guidance again. Thank you for the cadence that you outlined. It does apply an acceleration, particularly in Q4.

Speaker 6

Just wondering if you could speak to what gives you the confidence in reiterating the sales level, maybe the productivity of the sales team or anything else you want to call out?

Speaker 4

Sure. So there's a natural reason for the back waiting in the fourth quarter of our sales. So it's a combination of people who have co pays for their surgeries tend to try to use up their health savings accounts in the fourth quarter is one driver. Second, both our sales reps and physicians will have numbers they're trying to make for the year. So they will do or support more surgeries in the fourth quarter.

Speaker 4

And then we understand that people who are scheduling surgeries often try to schedule them around the holidays, so they have family who are home to help look after them. So the fourth quarter just has a natural heaviness to it compared to the prior quarters. Added to that, with the high productivity of the sales reps that we have in place that helped us to get the solid second quarter number, With the new reps that Jeff is going be bringing in over the course of the next couple of quarters, who should be ramping up over those two quarters, we feel very good about hitting our guidance number, and continuing to deliver good sequential revenue growth.

Speaker 2

I would just add one extra color. The sequential growth required is not dissimilar to what we just delivered on sequential growth, so we feel confident that we can make that happen.

Speaker 6

Great, thank you for that. And then just one more on the teaching hospitals that was, I guess outlined in Jeff's commentary about the educational initiative. Could you talk about the, I guess, split of centers you're in now, whether how many are teaching hospitals versus non teaching hospitals and maybe how penetrated or how much runway there is in each of those groups?

Speaker 3

That's a great question. We've actually, we started consulting with a third party called MedScout, which is helping us identify those key programs. So it's a they're big. There's a lot of them across The US and outside The US. So we'll have a roster, refined in the q three, timeline to implement our strategy again.

Speaker 3

So right right now, we're relying on third party to get us the most accurate and up to date info.

Speaker 5

Got it. Thank you.

Speaker 2

Thanks, Samantha.

Operator

Thank you. We've reached the end of our Q and A session, and that does conclude today's conference call. Thank you for participating. You may now disconnect.

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