Paragon 28 (FNA) Piper Sandler 36th Annual Healthcare Conference summary

Market and business overview

• Foot and ankle market remains underpenetrated with high complication rates, creating strong demand for innovation.

• 2024 was a standout year for product launches, providing significant growth tailwinds despite market choppiness.

• Q3 finished strong, with regional variability attributed to an exaggerated holiday season.

• Domestic business saw growth in new surgeons and reps, though productivity per rep dipped due to onboarding.

• International growth is driven by deepening presence in established markets like the UK, South Africa, Australia, Canada, and Spain.

Financial strategy and operational efficiency

• Targeting EBITDA positivity in 2025 and cash positivity in 2026, with clear organizational commitment.

• Achieved profitability in Q3, aided by seasonality and supply price renegotiations to pre-COVID levels.

• Inventory built during COVID will take 12–18 months to clear, impacting P&L until late 2025 or early 2026.

• Restructuring reduced annualized costs by $8 million and 7% of headcount, supporting sustainable growth.

• Plans for leveraged growth with faster top-line expansion than OpEx or COGS over the next two years.

Working capital and productivity

• Days sales outstanding (DSO) stable at around 50, considered best in class.

• Inventory days targeted to reduce from 545 to around 400 over the long term through improved asset allocation.

• Average producing rep generates just under $700K annually, with expectations for growth as new reps ramp up.

• Focus is on rep productivity after one or two years rather than overall average, supporting long-term runway.