TELA Bio’s Earnings Call: Growth Amid Challenges

Tela Bio, Inc. ((TELA)) has held its Q1 earnings call. Read on for the main highlights of the call.

TELA Bio’s recent earnings call painted a picture of optimism and strategic growth, despite some challenges. The company reported strong revenue growth and product demand, particularly in the European market. While facing hurdles such as tariff impacts and increased net loss, TELA Bio’s strategic organizational changes and innovative product launches suggest a promising trajectory for future growth.

Revenue Growth

TELA Bio reported $18.5 million in revenue for the first quarter of 2025, marking a 12% increase year-over-year and a 5% sequential growth from the fourth quarter of 2024. This growth underscores the company’s robust financial health and its ability to expand its market presence.

Strong Product Demand

The company’s flagship products, OviTex and OviTex PRS, experienced significant demand, with each showing approximately 152% year-over-year growth. This surge in demand highlights the effectiveness of TELA Bio’s product offerings in meeting market needs.

European Market Expansion

TELA Bio’s European business grew by 17% compared to the first quarter of 2024, demonstrating the company’s strong international presence and its ability to capitalize on global market opportunities.

Sales Force Effectiveness

The introduction of a new territory manager and account specialist structure has proven effective, with 25 new sales team members trained in 2025. This strategic move has enhanced the company’s sales capabilities and market reach.

Market Leadership in Hernia Repair

TELA Bio is well-positioned to capitalize on the industry’s shift away from synthetic mesh. The OviTex products have shown strong market traction, reinforcing the company’s leadership in the hernia repair market.

Innovative Product Launches

The launch of larger sizes of OviTex PRS to address more complex procedures has enhanced operating room efficiency and reduced costs, showcasing TELA Bio’s commitment to innovation and customer satisfaction.

Wide Engagement with Surgeons

TELA Bio has presented its products to over 5,000 surgeons globally through various educational and symposium events, strengthening its engagement with the medical community and expanding its influence in the market.

Gross Margin Impact from Tariffs

A 10% tariff on products manufactured in New Zealand negatively impacted gross margins by 50 to 100 basis points. This challenge highlights the external factors affecting the company’s financial performance.

Increased Net Loss

The net loss for the first quarter of 2025 was $11.3 million, compared to $5.7 million in the prior year period. This increase was partly due to the absence of a one-time gain from a product line sale in 2024.

PRS Unit Sales Decline

PRS unit sales declined by 3% in the first quarter of 2025 due to a strong performance in the same period of 2024. However, stronger average selling prices helped offset this decline.

Forward-Looking Guidance

TELA Bio reaffirmed its 2025 revenue guidance of $85 to $88 million, projecting a 23% to 27% growth over the full year 2024. The company expects operating and net losses to decrease over the course of the year, despite the impact of a 10% tariff on products shipped from New Zealand.

In summary, TELA Bio’s earnings call reflects a company on the rise, with strong revenue growth and strategic initiatives paving the way for future success. Despite challenges such as tariff impacts and increased net loss, the company’s innovative product launches and effective sales strategies position it well for continued growth and market leadership.