Tenon Medical Reports Q1 2025 Financial Results with Increased Revenue and Net Loss

Tenon Medical, Inc. reported its financial results for the first quarter of 2025, revealing a slight increase in revenue to $726,000, up from $719,000 in the same period last year. The company experienced a gross profit of $323,000, which represents a gross margin of 44%, a decrease from 65% in the prior year. The increase in revenue was attributed to a rise in revenue per surgical procedure, despite the number of procedures remaining consistent. However, the cost of goods sold rose significantly to $403,000 from $249,000, primarily due to the absorption of production overhead costs and increased operational expenses.

Operating expenses for the quarter totaled $4 million, a marginal increase from $3.976 million in the previous year. Research and development expenses rose slightly to $692,000, while sales and marketing expenses increased by 19% to $1.647 million, reflecting higher commission and payroll costs. General and administrative expenses decreased to $1.662 million from $1.926 million, mainly due to lower insurance and stock-based compensation costs. The net loss for the quarter was $3.616 million, compared to a loss of $3.576 million in the same period last year.

In terms of strategic developments, Tenon Medical has focused on expanding its sales and marketing infrastructure for its Catamaran™ SI Joint Fusion System, which was launched nationally in October 2022. The company is targeting three commercial opportunities: primary SI joint procedures, revision procedures of failed implants, and SI joint fusion as an adjunct to spine fusion constructs. As of March 31, 2025, Tenon Medical had cash and cash equivalents of $10.3 million, a significant increase from $6.5 million at the end of 2024, primarily due to financing activities that included proceeds from the issuance of common stock and warrants.

The company has indicated that it expects to continue incurring losses and negative cash flows in the foreseeable future, with an accumulated deficit of approximately $72.4 million as of the end of the quarter. Management has expressed concerns regarding its ability to sustain operations without additional capital, projecting that existing cash reserves will not be sufficient to meet obligations for at least the next twelve months. To address this, Tenon Medical plans to pursue additional funding through public or private equity offerings, debt financing, and collaborations.

Looking ahead, Tenon Medical remains focused on enhancing its product offerings and expanding its market presence. The company is actively working to increase clinician adoption of its Catamaran System while navigating the challenges of a competitive medical device landscape. The management's outlook emphasizes the need for strategic capital raising to support ongoing operations and growth initiatives, as well as the importance of maintaining a strong sales and marketing presence to capitalize on the opportunities within the SI joint treatment market.