Carlsmed (CARL) investor relations material

Business model and technology platform

• Focuses on personalized surgery using patient and surgeon data to create 3D models and 3D-printed devices, enabling better outcomes and lower healthcare costs.

• Operates as a digital-first, software-driven company with a closed-loop system that collects and uses post-op data to continuously improve algorithms and outcomes.

• No inventory is required due to on-demand 3D printing and direct delivery to operating rooms, supporting rapid scalability.

• Initially targeted complex adult spinal deformity, expanding to degenerative disc disease and cervical indications.

• Utilizes big data and AI to refine surgical planning and device creation, creating a flywheel effect as more procedures are performed.

Market adoption and growth

• Installed base grew 60% year-over-year in Q1, with strong adoption among early and mid-career surgeons, especially through teaching institutions.

• Surgeons trained in residency are bringing the procedure to private practice and new academic centers, accelerating adoption.

• Cervical platform launched in December, with 20% of total surgeons trained on it within a short period.

• Corra platform, targeting cervical plating, had first procedures in February and is set for full commercial launch in December.

• Expectation for significant pull-through from lumbar to cervical procedures, with investments in medical education to support this.

Reimbursement and regulatory environment

• CMS is proposing to consolidate lumbar cases into three DRGs, simplifying reimbursement and potentially accelerating hospital adoption.

• Medicare’s changes are expected to provide broader access and economic benefits for hospitals and payers, with the final rule effective October 1.

• Anticipates the new DRG structure will materially benefit adoption and utilization from 2027 onward.