TELA Bio (TELA) Q3 2026 Earnings Call Transcript

DATE

Tuesday, Nov. 10, 2026

CALL PARTICIPANTS

• Chief Executive Officer - Heather Getz
• President - Jeff Blizard
• Senior Vice President of Strategic Commercial Operations and Marketing - Jim Hagen

TAKEAWAYS

• Total Revenue -- $19 million, representing an 8% year-over-year decrease driven primarily by volume declines in OviTex PRS.
• International Revenue -- $3.6 million, growing 18% year over year due to high-value complex cases in the United Kingdom.
• U.S. Hernia Revenue -- $15.4 million, reflecting slight year-over-year decline despite sequential growth in both volume and revenue.
• LIQUIFIX Customer Base -- 60% expansion year-to-date, contributing to a record quarterly sales performance for the product.
• Adjusted EBITDA Loss -- $3.4 million, an improvement of 55% sequentially driven by a lower cost structure following realignment.
• Annualized Cost Savings -- $17 million, achieved through a strategic cost reduction initiative commenced on Sept. 1, 2026.
• Targeted Headcount Reduction -- 20%, part of the effort to streamline external resources and preserve capital.
• Gross Margin -- 64.9%, decreasing from 67.5% due to a higher charge for excess and obsolete inventory.
• Non-GAAP Gross Margin -- 71%, after adjusting for a $1.1 million noncash inventory charge.
• Operating Expenses -- $17.6 million, a decrease of 17.8% year over year excluding other expenses.
• Cash and Cash Equivalents -- $22.7 million as of Sept. 30, 2026, intended to support the extension of the company runway into 2028.
• 2027 Expense Guidance -- $76 million to $78 million, with management noting that spending typically trends higher in the first half of the year.
• Net Loss -- $9.3 million, or $0.16 per share, compared to a net loss of $8.6 million in the prior year period.
• Adjusted Net Loss -- $7.3 million, or $0.13 per share, excluding $2 million in severance and legal expenses.
• Revenue Covenant Testing -- Suspended for two quarters ending Dec. 31, 2026, as agreed upon by Perceptive under the company credit agreement.
• Total Addressable Market -- $4 billion worldwide, with approximately $3 billion concentrated in the United States soft tissue repair market.
• OviTex PRS Revenue -- $2 million decrease, representing a 20% year-over-year decline and a 6% sequential reduction due to surgeon turnover and practice changes.
• Inventory Write-off -- $1 million, specifically for expired product recorded during the third quarter.
• Sales Force Headcount -- 90 employees globally, following a realignment intended to concentrate resources in areas with high revenue growth potential.
• Market Capitalization -- $36.11 million, providing the total equity value of the company based on current market rates.

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RISKS

• Getz stated, "The biggest challenges we face are really getting into some of the accounts where there are competitive bundling contracts occurring," noting that these practices limit access to certain hospital systems.

SUMMARY

TELA Bio, Inc. (NASDAQ:TELA) reported a year-over-year revenue decrease of 8% for the third quarter, primarily attributed to volume declines in its plastic and reconstructive surgery segment. Management initiated a $17 million annualized cost reduction plan, which included a 20% headcount reduction, to extend the company cash runway into 2028. The company regained compliance with NASDAQ minimum bid price requirements and received 510(k) clearance for its Liora Monofilament Scaffold. Management indicated that U.S. hernia products saw sequential growth in both volume and revenue, while the international business grew 18% behind strength in the United Kingdom.

• CEO Getz noted that despite hurdles, "our core product portfolio is best-in-class at providing both value and performance and is supported by robust clinical data."
• Management indicated that the shift toward smaller product sizes in minimally invasive and robotic hernia repairs created a gap between unit and revenue growth.
• Blizard indicated that the revenue decline for OviTex PRS was specific to a limited number of markets where key surgeons had reduced their procedural volumes.
• The company hosted 120 European surgeons in Madrid for an educational event to exchange clinical experiences and share best practices.
• Getz stated, "Every dollar of capital needs to be allocated to where we will see the highest ROI," as part of a disciplined capital allocation strategy.
• TELA Bio intends to provide a commercial update for the newly cleared Liora Monofilament Scaffold in early 2027.

INDUSTRY GLOSSARY

• OviTex: A reinforced tissue matrix product portfolio designed for hernia repair and abdominal wall reconstruction.
• PRS: Plastic and Reconstructive Surgery, a segment of the company clinical focus.
• LIQUIFIX: A precision liquid mesh fixation system used in hernia repair procedures.
• Liora: A fully reabsorbable surgical mesh for soft tissue reinforcement that recently received FDA 510(k) clearance.
• GPO: Group Purchasing Organization, an entity that helps healthcare providers realize savings by aggregating purchasing volume.
• IDN: Integrated Delivery Network, a formal system of providers and sites that offer a continuum of care to a specific population.
• ASP: Average Selling Price, the typical price for which a product is sold across various channels.
• TAM: Total Addressable Market, the overall revenue opportunity that is available to a product or service.
• KOL: Key Opinion Leader, an influential expert or professional whose opinion is valued within a specific medical field.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the TELA Bio Third Quarter 2026 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Louisa Smith.

Louisa Smith: Thank you, operator, and good afternoon, everyone. Earlier today, TELA Bio released financial results for the third quarter ended September 30, 2026. A copy of the press release is available on the company's website. Joining me on today's call are Heather Getz, Chief Executive Officer; Jeff Blizard, President; and Jim Hagen, Senior Vice President of Strategic Commercial Operations and Marketing. 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.

We encourage you to review the company's past and future filings with the SEC, including, without limitation, the company's quarterly reports on Form 10-Q, which identify the specific risk 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, pipeline opportunities, sales and marketing strategies and the impact of various additional risk factors as identified in our regulatory filings. Heather will begin with the Q3 results and the changes made to strengthen TELA Bio. Jeff will discuss the commercial performance, and then Heather will finish with a review of the financial results in more detail before we take your questions.

With that, I'll now turn the call over to Heather.

Heather Getz: Good afternoon, everyone, and thank you for joining us. Last week marked my 90th day as CEO of TELA Bio, and I want to use this time not just to walk through our Q3 results, but to share what I've learned, what's already in the process of being changed and where we're headed. When I joined in August, I made a commitment to our Board, our employees and all of you that I would listen first, but act swiftly to stabilize the company and extend our runway. Over these past 3 months, I have done just that. I've met with surgeons, investors and employees across the organization. Three things became clear.

First, we believe our core product portfolio is best-in-class at providing both value and performance and is supported by robust clinical data. Even more than I originally appreciated. I will be discussing today additional evidence of OviTex's outstanding clinical profile, which was issued recently. Second, our capital allocation needed to be much more focused. We've been spreading investments across too many initiatives and too quickly without clear prioritization. Third, when we adjusted our go-to-market strategy late last year, we created some gaps that also need to be addressed. The good news is that we have already made meaningful progress on addressing these items, as you will hear today.

I'll start with the $17 million cost reduction plan commenced on September 1. The program was intended to preserve capital while maintaining investment in our core growth priorities as well as product innovation. We intend to translate the lower cost structure into reduced cash consumption as we improve commercial execution. Second, on October 5, NASDAQ notified us that we had regained compliance with its minimum bid price requirement and TELA Bio will remain listed on the NASDAQ Global Market under the symbol TELA. Importantly, as disclosed following our October 8 special meeting, we do not intend to implement a reverse stock split at this time, but have the option for 12 months, if so needed.

Third, we implemented an adjusted go-to-market strategy that centers our commercial resources on selling the whole bag with a focus on winning complex, higher ASP procedures as well as targeted selling in other segments that leverage access and opportunity. To do this, we aligned all of our resources that touch the customer, including medical affairs, strategic contracting and sales operation. We enhanced field training of both clinical and sales processes, and we updated our sales incentive structure to reward both retention and growth. While I believe we will see sequential improvement in Q4, this is not a 1-quarter fix. It is a multipronged, multi-quarter process.

I am proud of how the team navigated the third quarter, selling against the continued practice of anticompetitive contracting and bundling in hospitals, overcoming the disruption from the organizational realignment as well as a challenging market dynamic in which many hospitals and other medical device companies reported that elective procedures were down. Despite these headwinds, we finished Q3 with $19 million in revenue. We delivered sequential revenue and unit growth in the U.S. hernia portfolio, year-over-year volume growth in the U.S. hernia portfolio and continued year-over-year growth in Europe. These results are encouraging signs of our portfolio strength and our team's commitment.

We also recognize that PRS remains below where it needs to be, and we believe with our recently fine-tuned sales strategy, we will return to previously strong adoption rates in the coming quarters. To be clear, there is no issue with the product, but changes need to be made on how we are addressing the market. Jeff will provide specific details in his commentary about our plans to grow PRS sales. Clinically, we continue to validate the strength of our portfolio with 4 new peer-reviewed publications and podium presentations on both OviTex and OviTex PRS, demonstrating favorable outcomes compared to gold standard synthetic and biologic alternatives.

One was the OviTex meta-analysis authored by 3 internationally respected KOLs and published in Hernia. These results demonstrated significantly reduced ventral hernia recurrence rates and comparable safety outcomes with OviTex compared to traditional biologic and synthetic mesh despite being used in patients with increased risk factors and comorbidities. Another was the publication of our largest PRS study to date that has been accepted for publication in the Plastic and Reconstructive Surgery journal. This study demonstrates no statistical differences in major infections or operative complications while showing lower odds of seroma formation. I also want to recognize our engineering, quality and regulatory teams for the FDA 510(k) clearance of the Liora Monofilament Scaffold.

Liora is a fully reabsorbable surgical mesh for soft tissue reinforcement and our first implant fully developed in our Malvern cleanroom. Our ability to develop and produce a product in-house creates a foundation for greater ownership of the path from product design through manufacturing. We are proud of this achievement and the capabilities it represents. We are taking a disciplined approach to the next steps with Liora. We will provide you with an update to the commercial plan in early 2027. As you've just heard, we have made significant operational progress across the organization in a relatively short period of time. Going forward, our strategy depends on disciplined execution.

We are doubling down on our core products and selling our whole bag in areas where we have opportunity while continuing to add access at the GPO, IDN and hospital level. Every dollar of capital needs to be allocated to where we will see the highest ROI. Now I'll turn the call over to Jeff to discuss our commercial results in more detail.

Jeffrey Blizard: Thank you. As Heather just highlighted, our third quarter results demonstrate meaningful progress and positive momentum across our global commercial organization. At $19 million in total sales, the U.S. revenue was $15.4 million, while European revenue ended at $3.6 million. Breaking down the $15.4 million in the third quarter, our U.S. hernia revenue was up slightly sequentially, while volume grew both year-over-year and sequentially. LIQUIFIX also delivered its strongest performance to date, setting a new TELA Bio quarterly sales record with its customer base expanding 60% year-to-date. As discussed in previous calls, a gap has been created between unit and revenue growth as continued adoption in minimally invasive and robotic hernia repair has shifted demand towards smaller product sizes.

In Q4, we expect this gap to continue to narrow as year-over-year comparisons stabilize the product mix. While we do not anticipate immediate convergence, our revenue growth should be more in line with our unit growth. Turning to plastic and reconstructive surgery. We're able to slow the decline and refocus and retrain the sales team. OviTex PRS revenue was down 20% year-over-year and 6% sequentially. It is important to note that the decline in PRS revenue has been concentrated in a limited number of markets rather than broadly across the organization.

In 2026, in addition to some turnover, we had several key surgeons experience personal or professional circumstances forcing them to step away from their practices, which adversely affected procedural volumes. We are supporting a renewed focus on PRS with enhanced product and procedural training alongside expanded medical office capabilities to provide deeper clinical and educational support to both our sales teams and surgical customers. Collectively, these actions are designed to strengthen commercial effectiveness, deepen surgeon engagement and rebuild momentum in the strategically important part of our business. Given the longer sales cycle in PRS and the more concentrated surgeon community, the progress we have made in several high-volume centers have not yet offset the declines. Shifting to our international business.

In Europe, we've maintained strong momentum, delivering double-digit year-over-year growth at 18%. This year-over-year growth was driven by higher-value complex cases, particularly in the U.K. In late September, we hosted 120 European surgeons in Madrid for a 2-day educational event entitled Advancing Reconstruction. This program brought together several multiple surgical specialties to exchange clinical experiences, share best practices and explore innovative approaches to improving patient outcomes, all challenging the notion that hernias are a chronic disease. Innovations in surgical techniques and OviTex products provide surgeons with a greater opportunity to achieve a successful outcome during this initial procedure. Ultimately, the goal is to deliver durable repair, minimize the risk for recurrence and reduce the need for subsequent interventions.

We believe initiatives like these strengthen our global surgical community and support long-term portfolio growth. I'd now like to touch on our initiatives in strategic contracting. While we continue to face market access barriers from large competitors, we're not sitting idle. Our field is making progress in developing clinical champions, and our contracting team is complementing these efforts in establishing OviTex agreements site by site. While this process takes longer, these practices are necessary to get OviTex used within these hospitals and their health systems, given the contracting environment in the U.S. In parallel, TELA will continue to pursue a national agreement to broaden access and simplify contracting.

The focus remains on translating access into hospital approvals, physician adoption and sustained utilization. As I close, I want to emphasize the most important takeaway from Q3, the resilience and execution of our commercial team. In Q3, we constructed a data-driven plan that built around our top markets, strategically positioned our team in the areas with the greatest opportunity to win. By aligning territories with contract access, surgeon partnerships and high potential programs, we have concentrated our talent to where we have the clearest path for revenue growth. This disciplined approach ensures that our strongest commercial resources are deployed where we have access, relationships and opportunity, all while preserving continuity across key accounts.

In the midst of these changes to our organization, we delivered sequential U.S. hernia growth that accelerated post realignment, achieved a record quarter for LIQUIFIX and posted another quarter of double-digit European growth. These accomplishments reinforce our confidence in the direction of our entire commercial organization. Heather, I'll turn it back to you for the financial review.

Heather Getz: Thank you, Jeff. As we discussed, revenue was $19 million in the third quarter of 2026, a decrease of 8% compared to the third quarter of 2025. The decrease in revenue was driven by a decline in OviTex PRS of $2 million, partially offset by growing international sales. U.S. hernia revenue was down slightly year-over-year, and we saw sequential increases in the U.S. hernia products, both volume and revenue. Gross profit was $12.3 million or 64.9% of revenue in the third quarter of 2026 compared to $14 million or 67.5% of revenue in the same period of '25. The decrease in gross margin was primarily due to a higher charge for excess and obsolete inventory as a percentage of revenue.

After adjusting for the $1.1 million noncash charge, gross margin would have been 71%. Total operating expenses, excluding other expenses, was $17.6 million in the third quarter of 2026 compared to $21.4 million in the third quarter of 2025, a decrease of 17.8%. Loss from operations was $7.3 million in the third quarter of 2026, a $300,000 improvement compared to 2025. Adjusted EBITDA loss was $3.4 million in the third quarter of 2026, an improvement of 40% year-over-year and 56% sequentially.

These improvements can be attributed to our realignment in the third quarter, which totaled $17 million of annualized savings across the organization, including a targeted headcount reduction of approximately 20% and the streamlining of external resources while preserving our ability to invest in our core growth priorities and product innovation. We ended the quarter with $22.7 million in cash and cash equivalents. Also to note, Perceptive agreed to suspend minimum revenue covenant testing for 2 quarters under our credit agreement. That covenant will not be tested for the quarters ending September 30 and December 31, 2026. We appreciate their support as we execute our cost reduction program. This consent is specific to the minimum revenue covenant.

We continue to manage the business against our other obligations under the facility. Before we open the line for questions, I want to again thank our employees for the important work they do every day to make OviTex an option to patients around the world. The U.S. sequential hernia growth and the continued European growth are encouraging, particularly given the organizational changes during the quarter. We built on our strong clinical foundation with the 4 peer-reviewed publications detailing OviTex and OviTex PRS' outstanding performance. The Liora clearance is another achievement we can be proud of. In addition to these achievements, we have taken meaningful steps to reduce operating costs and strengthen TELA Bio's foundation, extending our runway.

Our objective moving forward is to convert our operational and commercial progress along with our lower cost structure into a more durable business model. The renewed energy and commitment I have seen is contagious, and I am proud to be a part of the mission to build the best-in-class solution for soft tissue repair. With that, we are ready to take your questions. Operator, please proceed.

Operator: [Operator Instructions] Our first question comes from the line of Frank Takkinen of Lake Street Capital Markets.

Frank Takkinen: I was hoping to start with a bigger picture question off the bat. Obviously, you're only 90 days in, Heather, but I think a key question many investors are asking is what can the growth potential of this business be? I mean, previously, I think we thought of this, the potential had definitely a 20% plus growth profile over time. I'm curious now that you've been there for a little bit, what kind of growth company do you think this can become? -- not necessarily looking for a time line once that's achieved, but maybe a longer-term thought process of the growth profile this company can carry.

Operator: Speakers, we're not hearing any audio from your line.

Heather Getz: Can you hear me now?

Frank Takkinen: I can hear you... [Audio Gap]

Operator: We can hear you loud and clear.

Heather Getz: Okay. And do we still have Frank on the line?

Frank Takkinen: I'm still here.

Heather Getz: Okay. So sorry about that. Hopefully, the cost reductions didn't affect our phone bill. But what I was saying was you had asked about what our growth ability is. And we still believe that we have substantial growth ability and the changes that we've put into effect will allow us to accelerate back into double-digit growth. The timing of that is what I'm still evaluating with what type of acceleration we can get through year-end and into 2027. But we still are addressing a very substantial market about a $4 billion TAM worldwide, $3 billion in the U.S. and we still have the products that can meet the needs of the surgeons and the patients within both markets.

Frank Takkinen: Okay. Very helpful. And then maybe just for my second one, I was going to follow up on PRS a little bit more. I think if I remember correctly, a big piece of the initiative was you previously had dedicated PRS reps. Now that's being rolled back into the broader sales team. One, can you talk about where we are in the process of rolling that back into the rest of the sales team? Maybe how many reps are back actively selling the whole bag? And then any other dynamics occurring in the PRS business, whether that be competitive or other outside factors that are impacting growth there?

Heather Getz: Sure. So PRS, the organizational changes that we made within sales have been implemented. And what we're focused now on is rebuilding that sales funnel and supporting the existing users while continuing to improve the knowledge of our sales team. The PRS market has a longer sales cycle than hernia and developing new surgeon relationships and reactivating previously engaged accounts will take time. So we expect this to -- the business to build over time. And we were able to gain some traction in Q3, unfortunately, it was not enough to offset the immediate loss of some of the other accounts through physicians, some retiring or going out on maternity leave.

So there's nothing wrong with the product, and we believe that we'll regain our previous momentum. Do you want to add anything, Jeff?

Jeffrey Blizard: No, I think Heather nailed it, Frank, those changes organizationally to the PRS pilot where we looked at moving to exclusive salespeople was only 6 people that we had targeted in key cities, and we suspended that trial or the clinical pivot to those people in Q1. So it's been a while since we've now put it back in the full sales bag and everybody has full portfolio responsibility.

Operator: Our next question comes from the line of Michael Sarcone of Jefferies.

Michael Sarcone: I guess just a follow-up on the PRS topic. Heather, I think you had mentioned you've got some confidence in getting PRS back to previous growth levels. I guess can you talk about what underlies that confidence to return to growth?

Heather Getz: Sure. So as I mentioned, a couple of things. One, some of the challenges that we have within that market are self-inflicted with the breaking out of the PRS reps and then putting them back in and then also from an educational perspective, getting our newest reps back engaged and focused on selling the whole bag, right, not just hernia, that's taken time. And because it is a slightly different market with different requirements and how we sell, that does have a bit of a ramp. I also mentioned that the market is a bit more concentrated.

And so that when we did lose some key users, it's a little bit more difficult to replace that immediately than in the hernia market. So we're confident the product works. It works well. One of the things that -- one of the publications that we had this quarter was with PRS. It was our largest study to date, and that actually compared us to a traditional biologic, and it found that our product performed just as well as that product. And in some cases, such as in the formation of seroma, we actually showed less seroma formation than that competition.

So we do -- we're getting and gaining clinical evidence to demonstrate the efficacy of that product, and we're reengaging and retraining our sales team to ensure that they have the skills to sell it.

Michael Sarcone: Great. And then just on U.S. hernia, I understand both volumes grew year-over-year in 3Q. I guess, do you think you can return to year-over-year growth starting in 4Q?

Heather Getz: We're getting close. What I can -- what I do believe is that we'll see sequential growth from Q3 into Q4. Q4 of last year was our highest quarter of the year. And so that will be an inflection point for us as well.

Operator: Our next question comes from the line of Caitlin Roberts of Canaccord Genuity.

Caitlin Cronin: Just to start on the sales force, maybe an update on the total headcount and how the reps are starting to ramp that were newer adds.

Jeffrey Blizard: So to date, globally, we have about 90, including our full sales leadership team. That for us and our ramp time is dependent. We have some that are now over a year in that sales force and others that are coming up. And as Heather mentioned, we've improved our training and onboarding, especially around the PRS side with a focus on product, the patient selection, the product results and then ultimately, the requirement for us to be bedside. So a lot of that and the onboarding is building those relationships, especially with plastic and hernia surgeons, but to be in these programs.

And I'd say after the reorganization that was made in September, we did see a big inflection of our revenue jump for that last month in September. So that's what we're most proud of is that these changes were not only deliberate, but they are starting to pay off.

Caitlin Cronin: Understood. And you also noted the elective procedure environment. Maybe some more color on that, what you saw and how much of an impact that did have in the Q3 and how much you expect that to have going forward?

Heather Getz: Yes. Caitlin, it's hard to say. That was more of a macro commentary that we've heard generally within the market. Q3 also does tend to be a more challenging market with procedures as the summer months, both domestically as well as in Europe. So I couldn't put a number on it, just more that we do think that it impacted our ability to be fully productive in Q3.

Operator: Our next question comes from the line of Samantha Munoz of Piper Sandler.

Samantha Munoz: We also wanted to touch on, I guess, expectations for Q4. And then I guess, if you could just talk about the puts and takes for growth of the business looking into 2027.

Heather Getz: Yes. So look, we're encouraged by the progress that we've made in Q3 and going into Q4, given that I am 90 days in and 60 days post our realignment, I'm still evaluating what that growth trajectory or ramp will look like. But I do believe that we will see sequential growth going into the fourth quarter, and that growth will continue into 2027.

Samantha Munoz: Okay. Great. And then I guess just one more on the cost reduction initiative. Of the $17 million, could you help us think through the timing of those savings and then the balance of expense discipline with also the investments that you're making?

Heather Getz: So the reductions are substantially complete as of the end of the quarter. And even with just a partial quarter of those reductions, we had a 55% improvement in our adjusted EBITDA loss from Q2 to Q3 and a 40% year-over-year improvement. What I would expect, I think a good way to look at it is the $17 million of reductions is based on our first half run rate annualized. So when you look into 2027, we would expect our expenses to be in that $76 million to $78 million range.

That being said, the first part of the year with things like national sales meetings and some other medical events that we host, the front part of the year does tend to be a little bit heavier in expenses than the second part in sales and marketing.

Operator: Our next question comes from the line of Chase Knickerbocker of Craig-Hallum.

Unknown Analyst: This is Nick Mattiacci on for Chase. So Heather, I know you touched on this a bit in your prepared remarks, but now that you've had more time to speak with customers and just get familiar with the business, can you talk about how you view the competitive positioning of the OviTex portfolio and where you see it having the clearest right to win and also then how you're aligning the sales strategy around those opportunities to drive market share gain?

Heather Getz: Sure. Yes, I was incredibly impressed when I was in the field and talking with surgeons, they love our product, and they love the outcomes that they're seeing with our product. The biggest challenges we face are really getting into some of the accounts where there are competitive bundling contracts occurring. So when you think about that, there's about 20% -- 10% to 20% of their business that we're able to gain. And we're also competing against other folks in that arena as well. And so I mean, look, we look at it and when people use us, they love it.

And what we try to do is get it into the most people's hands as possible so that they do have the ability to experience it, and then it allows them to become our champions in the administration or in the supply chain in order to advocate for our products. I think you had some additional -- I don't think I hit on all the pieces.

Unknown Analyst: No, no, I think you covered that. And then just the next one for me is I think you had mentioned that the U.S. hernia growth accelerated following the realignment. Can you just talk about the trends you've seen across the business since the restructuring and if there's been any disruption at all? And if you're willing to share anything about how the trends have progressed in October?

Jeffrey Blizard: Yes. Our total hernia growth, Jason, nice to meet you. This is Jeff. Our total hernia growth is combined with LIQUIFIX now and LIQUIFIX set a new quarterly record here at TELA. What happened, I think, post the reorganization was really some discipline in organization that Heather had put back into TELA. We had made sure that each rep assumed the full portfolio of the total bag between OviTex PRS and LIQUIFIX. We can now compete where we have a clear right to win, and that's going after higher risk and more complex procedures. We've prioritized our contract status with accounts where we can go in and build business where we have physician championships.

And ultimately, we have better onboarding now, clinical sales training, customer targeting tools like MedScout, and we have aligned our territories to go seek the business where we know that those pockets are and we can build with key programs, especially in the academic centers.

Operator: I am showing no further questions at this time. So I would like to turn it back to Heather Getz for closing remarks.

Heather Getz: Great. Thank you, everyone, for joining us today and for your interest in TELA. I appreciate all of our employees' efforts and our customers' trust. I'm excited about the momentum that we have within the organization and for 2027, and I look forward to updating you on our next call. Thank you.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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