Shoulder Innovations Reports Third Quarter 2026 Financial Results and Raises Full Year Outlook

Higher implant volume and pricing lifted gross margin, while increased commercial and development spending kept operations loss-making.

Rhea-AI Summary

Shoulder Innovations (NYSE: SI) reported third-quarter 2026 revenue of $16.2 million and raised its full-year revenue outlook following higher implant sales. Revenue rose 38% year over year, with 2,126 implant systems sold, up approximately 34%, and average selling price up 2% to $7,616. Gross margin increased to 78.5% from 76.2%.

Net loss narrowed to $7.048 million from $8.729 million, while operating loss was $7.597 million versus $7.641 million. Cash, cash equivalents and marketable securities totaled $92.3 million at September 30. The company now expects 2026 revenue of $68 million to $70 million, versus $67 million to $69 million previously, representing approximately 44% to 48% annual growth. It also received FDA 510(k) clearance and began commercial launch of the N-22 humeral head, and completed the first surgical cases with InSet Go.

17 points · 0 major

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0 major · 10 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate point. Forward-looking: it has not happened yet and may not happen.Full-year 2026 revenue guidance raised to $68 million–$70 million, from $67 million–$69 million.
• Moderate pointThird-quarter revenue increased 38% year over year to $16.2 million.
• Moderate pointThird-quarter gross margin rose to 78.5%, versus 76.2% a year earlier.
• Moderate pointThird-quarter net loss narrowed to $7.048 million, from $8.729 million a year earlier.
• Minor point. Forward-looking: it has not happened yet and may not happen.Expected 2026 revenue growth increased to approximately 44%–48%, versus approximately 42%–46% previously.

12 minor points

• Minor pointThird-quarter implant systems sold increased approximately 34% year over year to 2,126.
• Minor pointThird-quarter average implant selling price increased 2% year over year to $7,616.
• Minor pointThird-quarter loss per share narrowed to $0.34, from $0.64 a year earlier.
• Minor pointThird-quarter adjusted EBITDA loss narrowed to $5.487 million, from $7.510 million a year earlier.
• Minor pointNine-month revenue reached $50.074 million, versus $32.901 million a year earlier.
• Minor pointNine-month net loss narrowed to $25.580 million, from $32.587 million a year earlier.
• Minor pointNine-month loss per share narrowed to $1.23, from $7.00 a year earlier.
• Minor pointNine-month adjusted EBITDA loss narrowed to $20.467 million, from $29.083 million a year earlier.
• Minor pointN-22 humeral head received FDA 510(k) clearance and began commercial launch for anatomic procedures.
• Minor pointInSet Go completed its first surgical cases.
• Minor pointCommercial leadership expansion continued to support new territory expansion.
• Minor point. Forward-looking: it has not happened yet and may not happen.InSet Neo shoulder robotic platform has a planned FDA submission.

Negative

• Moderate pointCash, equivalents and marketable securities fell to $92.334 million at September 30, from $124.305 million at year-end 2025.
• Moderate pointNine-month operating loss widened to $26.609 million, from $17.797 million a year earlier.
• Moderate pointNine-month selling, general and administrative expenses rose to $55.431 million, from $38.428 million a year earlier.
• Moderate pointNine-month research and development expenses rose to $10.310 million, from $4.514 million a year earlier.
• Minor pointThird-quarter selling, general and administrative expenses increased 14% to $17.1 million year over year.

5 minor points

• Minor pointThird-quarter research and development expenses increased 107% to $3.2 million year over year.
• Minor pointThird-quarter operating loss remained $7.597 million, versus $7.641 million a year earlier.
• Minor pointNine-month debt extinguishment loss totaled $589,000, versus none a year earlier.
• Minor pointThird-quarter stock-based compensation expense increased to $1.018 million, from $298,000 a year earlier.
• Minor pointNine-month stock-based compensation expense increased to $2.825 million, from $615,000 a year earlier.

News Explained

Shoulder Innovations announced a settlement agreement with Catalyst OrthoScience to resolve all outstanding patent litigation between the companies, disclosing an agreement aimed at resolving those disputes.

Key Figures

Q3 net revenue: $16.2 million; +38% Gross margin: 78.5% Average implant system selling price: $7,616; +2% +5 more

Q3 net revenue

$16.2 million; +38%

Q3 2026 vs. Q3 2025

Gross margin

78.5%

Q3 2026 vs. 76.2% in Q3 2025

Average implant system selling price

$7,616; +2%

Q3 2026 vs. Q3 2025

Implant systems sold

2,126; approximately +34%

Q3 2026 vs. Q3 2025

2026 net revenue guidance

$68 million to $70 million

Raised from prior guidance of $67 million to $69 million

Net loss

$7.0 million loss

Q3 2026 vs. $8.7 million loss in Q3 2025

Adjusted EBITDA

$5.5 million loss

Q3 2026 vs. $7.5 million loss in Q3 2025

Cash, cash equivalents and marketable securities

$92.3 million

As of September 30, 2026

Previous Earnings Reports

3 past events · Latest: Aug 06

Same Type 3 events

1. Aug 06

   Q2 earnings report

   24h Move

   -8.2%

   Revenue rose 56%, gross margin reached 78.3%, and full-year guidance was raised.

2. May 13

   Q1 earnings report

   24h Move

   +15.2%

   Revenue increased 65%, and 2026 revenue guidance was raised to $65–$68 million.

3. Nov 11

   Q3 earnings report

   24h Move

   +32.0%

   Revenue rose 58% and the company increased full-year revenue guidance to $45–$46 million.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

510(k) clearance, convertible notes, gaap, stock-based compensation

4 terms

510(k) clearance regulatory

"Received FDA 510(k) clearance for and initiated commercial launch of the N-22 humeral head"

A 510(k) clearance is a U.S. regulatory approval that lets a medical device be sold because it is shown to be substantially similar to an already-legal device; think of it as a passport saying the new product is close enough to a known item to enter the market without a full, lengthy review. For investors, 510(k) clearance signals faster, lower-cost market access and reduced regulatory risk compared with new, untested device pathways, which can materially affect timelines, costs and revenue prospects.

convertible notes financial

"preferred stock warrant liability and convertible notes in the prior year"

Convertible notes are a type of short-term loan that a company receives from investors, which can later be turned into company shares instead of being paid back in cash. They matter to investors because they offer a way to support a company early on while giving the potential to own a stake in its success if the company grows and later raises more funding.

gaap financial

"determined in accordance with U.S. GAAP"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

stock-based compensation financial

"depreciation and amortization, and stock-based compensation expense"

Stock-based compensation is when a company pays employees, directors or consultants with shares or the right to buy shares instead of or in addition to cash. It matters to investors because issuing stock or options spreads ownership thinner (like cutting a pie into more slices), which can reduce each existing share’s claim on profits and can also change reported earnings; investors watch it to assess true cost of running the business and how management is incentivized.

View in glossary

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52% Year-to-Date 2026 Revenue Growth

GRAND RAPIDS, Mich., Nov. 5, 2026 /PRNewswire/ -- Shoulder Innovations, Inc. (Shoulder Innovations, or the company) (NYSE: SI), a commercial-stage medical technology company exclusively focused on transforming the shoulder surgical care market, today reported financial results for the third quarter ended September 30, 2026.

Third Quarter Financial Highlights

• Generated net revenue of $16.2 million in the third quarter, a 38% increase over the third quarter of 2025
• Achieved gross margin of 78.5% for the third quarter compared to 76.2% for the third quarter of 2025
• Increased average selling price of our implant systems to $7,616 in the third quarter, a 2% increase over the third quarter of 2025
• Increased full year 2026 net revenue guidance to $68 million to $70 million, representing growth of approximately 44% to 48% over full year 2025 net revenue

Recent Business Highlights

• Sold 2,126 total implant systems in the third quarter, an approximate 34% increase over the third quarter of 2025
• Completed the first surgical cases with InSet® Go, the company's next-generation InSet® anatomic glenoid implant
• Received FDA 510(k) clearance for and initiated commercial launch of the N-22 humeral head, extending the company's N-22 line for patients with metal hypersensitivity to anatomic procedures
• Announced exclusive partnership with ALM Ortho to develop additively manufactured solutions for severe deformity and complex revision cases
• Continued to expand the commercial leadership organization to support new territory expansion
• Promoted Jon Osborne to Chief Commercial Officer with responsibility for all elements of the company's commercial organization
• Announced a settlement agreement with Catalyst OrthoScience Inc. to resolve all outstanding patent litigation between the two companies

"Our third quarter results reflect the consistency of our commercial model, as we added new surgeons ahead of plan, grew volume within our existing customer base, and kept our product roadmap moving," said Rob Ball, CEO of Shoulder Innovations. "This performance enabled us to again raise our outlook for the full year, and confirmed our conviction regarding our ability to grow market share through a differentiated approach to shoulder surgical care."

Mr. Ball continued, "From a new product standpoint, we're pleased to have recently completed the first successful cases with InSet Go, our next-generation glenoid implant. Beyond our own pipeline, our partners are extending what our platform can offer, with a new partnership bringing bespoke solutions for the most complex revision cases and our soft tissue relationship positioning us to serve more of each shoulder specialist's practice. As we head into the final quarter of 2026, the commercial organization we've built continues to perform, our pipeline has never been deeper, and we look forward to finishing the year strong and building on that momentum into 2027, including the planned FDA submission of InSet Neo, our shoulder-specific robotic platform."

Third Quarter 2026 Financial Results

Net revenue in the third quarter of 2026 increased 38% to $16.2 million, compared to $11.8 million in the third quarter of 2025. The increase was primarily due to an increase in the number of implant systems sold, driven by new surgeon customers and higher utilization among existing customers, as well as an increase in the average selling price of implant systems.

Gross margin in the third quarter of 2026 was 78.5%, compared to 76.2% in the third quarter of 2025. The increase was due to increases in the average selling price of implant systems, as well as benefits from cost reduction programs.

Selling, general and administrative expenses in the third quarter of 2026 increased 14% to $17.1 million, compared to $15.1 million in the third quarter of 2025. The increase was primarily due to investments in the commercial organization and higher variable selling expenses, partially offset by lower legal expenses.

Research and development expenses in the third quarter of 2026 increased 107% to $3.2 million, compared to $1.5 million in the third quarter of 2025. The increase was due to investment in new product development efforts, including substantial work related to the InSet Neo robotic platform.

Operating loss in the third quarter of 2026 and 2025 was unchanged at $7.6 million, as higher gross profit was offset by increased operating expenses. Net loss in the third quarter of 2026 was $7.0 million, compared to a net loss of $8.7 million in the third quarter of 2025. The decrease in net loss was primarily due to changes in the fair value of the company's preferred stock warrant liability and convertible notes in the prior year.

Adjusted EBITDA in the third quarter of 2026 was a loss of $5.5 million, compared to a loss of $7.5 million in the third quarter of 2025. The decrease in the loss was primarily due to higher gross profit, partially offset by the aforementioned operating expenses. In addition, the prior year included changes in the fair value of the company's preferred stock warrant liability and convertible notes.

As of September 30, 2026, cash and cash equivalents, and marketable securities totaled $92.3 million.

2026 Financial Outlook

Shoulder Innovations expects net revenue for the full year 2026 to be in the range of $68 million to $70 million, representing growth of approximately 44% to 48% over full year 2025 net revenue. This compares to prior guidance of $67 million to $69 million, representing growth of approximately 42% to 46% over full year 2025 net revenue.

Conference Call

Management will host a conference call today, November 5, 2026, at 4:30 p.m. ET / 1:30 p.m. PT to discuss the company's third quarter 2026 financial results. Those interested in listening to the conference call may do so by dialing (877) 407-8216 for domestic callers or (412) 902-1015 for international callers and providing access code 13762885. A live and archived webcast of the event will be available in the "Investor Relations" section of the Shoulder Innovations website at https://ir.shoulderinnovations.com.

Use of Non-GAAP Financial Measures and Key Business Metrics

In addition to our results and measures of performance determined in accordance with U.S. GAAP, we believe that non-GAAP financial measures can be useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions. We use and present Adjusted EBITDA for these purposes. We define Adjusted EBITDA as net loss before interest (income) expense, net, income tax expense, loss on extinguishment of debt, depreciation and amortization, and stock-based compensation expense. We have reconciled our historic non-GAAP financial measures to the applicable most comparable GAAP measures in this press release.

We believe that Adjusted EBITDA, together with a reconciliation to net loss, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. However, Adjusted EBITDA has limitations as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these potential limitations include: (i) other companies, including companies in our industry which have similar business arrangements, may report Adjusted EBITDA, or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures; (ii) although depreciation and amortization expenses are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditures for such replacements or for new capital expenditure requirements; (iii) Adjusted EBITDA also does not reflect changes in, or cash requirements for, our working capital needs or the potentially dilutive impact of stock-based compensation; and (iv) Adjusted EBITDA does not reflect the interest (income) expense, net, or the cash requirements necessary to service interest or principal payments, on existing or future debt that we may incur. Because of these and other limitations, you should consider Adjusted EBITDA only as supplemental to other GAAP-based financial measures.

In addition, we believe that the number of implant systems sold is a key business metric and a useful indicator of our ability to drive demand for our implant systems, generate net revenue and expand our business. We regularly review a number of operating and financial metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate our business plan and make strategic decisions.

About Shoulder Innovations

Shoulder Innovations is a commercial-stage medical technology company exclusively focused on transforming the shoulder surgical care market, with a current offering of advanced implant systems for shoulder arthroplasty. These systems are a core element of Shoulder Innovations' ecosystem, which is designed to improve core components of shoulder surgical care – preoperative planning, implant design and procedural efficiency – to benefit each stakeholder in the care chain. Shoulder Innovations' ecosystem is also comprised of enabling technologies, efficient instrument systems, specialized support and surgeon-to-surgeon collaboration. Together, these elements seek to address the long-standing clinical and operational challenges in the shoulder surgical care market by delivering predictable outcomes, procedural simplicity, and efficiency across all sites of care.

Forward-Looking Statements

This press release contains, and other communications of the company may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as "believe," "expect," "anticipate," "intend," "estimate," "project," "outlook," "forecast," "target," "trend," "plan," "goal," or other words of comparable meaning or future-tense or conditional verbs such as "may," "will," "should," "would," or "could."

Statements concerning the company's future are forward-looking statements, and are based on management's current expectations, assumptions and beliefs about the company's business, financial performance, creation of long-term shareholder value, operating results, the industry in which we operate and possible future events. These statements include, but are not limited to, statements regarding the company's anticipated growth prospects and future operating and financial performance. Forward-looking statements convey the company's expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. Forward-looking statements are not guarantees of future results and are subject to risks, uncertainties, assumptions and other important factors, which may change over time and many of which are beyond the company's control, and which could cause the company's actual results to materially and adversely differ from those expressed in any forward-looking statement, including (i) our history of significant net losses; (ii) failure to manage the growth of our business; (iii) our inability to compete successfully against our existing or potential competitors; (iv) failure to develop, retain, or expand an effective dedicated commercial leadership team; (v) risks associated with litigation; (vi) our dependence upon the adoption of our implant systems by hospitals, ambulatory surgery centers, surgeons and patients; (vii) our ability to enhance our implant systems, expand our indications and develop and commercialize additional products in a timely manner; (viii) risks associated with our third-party manufacturers and suppliers; (ix) demand forecasts for our implant systems; (x) our ability to demonstrate to shoulder specialists or key opinion leaders the merits of our implant systems; (xi) federal and state healthcare laws and government regulation and oversight over our devices and operations; (xii) our ability to obtain and maintain patent and other intellectual property protection over our products; (xiii) risks associated with our common stock; and (xiv) the other important factors described in our most recently filed Annual Report on Form 10-K and subsequent other filings with the Securities and Exchange Commission.

These documents are available in the Investor Relations section of the company's website at www.shoulderinnovations.com (information on the website is not incorporated by reference into this press release and should not be considered part of this document).

You should not place undue reliance on forward-looking statements. The information in this press release is provided as of today's date only, and, except as required by federal securities law, we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or for any other reason after today.

Contact
Brian Johnston or Sam Bentzinger
Gilmartin Group LLC
ir@shoulderinnovations.com

Shoulder Innovations, Inc. Condensed Statements of Operations and Comprehensive Loss (Unaudited) (in thousands, except share and per share amounts)
	Three Months Ended				Nine Months Ended
	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Net revenue	$   16,191		$   11,756		$   50,074		$   32,901
Cost of goods sold	3,486		2,795		10,942		7,756
Gross profit	12,705		8,961		39,132		25,145
Selling, general, and administrative expenses	17,137		15,077		55,431		38,428
Research and development expenses	3,165		1,525		10,310		4,514
Operating loss	(7,597)		(7,641)		(26,609)		(17,797)
Other (income) expense
Interest (income) expense, net	(574)		78		(1,683)		661
Change in fair value of convertible notes, net	—		2,217		—		2,217
Change in fair value of Series E purchase option	—		—		—		11,719
Loss on extinguishment of debt	—		—		589		—
Other (income) expense, net	25		(1,207)		65		193
Total other (income) expense	(549)		1,088		(1,029)		14,790
Loss before income tax expense	(7,048)		(8,729)		(25,580)		(32,587)
Income tax expense	—		—		—		—
Net loss	$   (7,048)		$   (8,729)		$  (25,580)		$  (32,587)
Other comprehensive loss, net
Unrealized loss on marketable securities	(17)		(43)		(238)		(158)
Total other comprehensive loss, net	(17)		(43)		(238)		(158)
Comprehensive loss	$   (7,065)		$   (8,772)		$  (25,818)		$  (32,745)
Net loss per share attributed to common stock – basic and diluted:
Net loss per share	$    (0.34)		$    (0.64)		$    (1.23)		$    (7.00)
Weighted average shares outstanding
Weighted average common shares outstanding – basic and diluted	20,844,461		13,604,556		20,745,098		4,652,825

 

Shoulder Innovations, Inc. Condensed Balance Sheets (Unaudited) (in thousands, except share and per share amounts)
	September 30, 2026		December 31, 2025
Assets
Current assets
Cash and cash equivalents	$       36,416		$       26,871
Marketable securities	55,918		97,434
Trade accounts receivable, net of allowance for credit losses	9,286		8,268
Inventories, net	24,380		21,591
Prepaid expenses	2,590		1,518
Other current assets	2,494		1,483
Total current assets	131,084		157,165
Property and equipment, net	13,768		12,532
Operating lease right-of-use asset	60		110
Other assets	648		—
Intangible assets, net	14		100
Total assets	$      145,574		$      169,907
Liabilities, convertible preferred stock, and stockholders' equity
Current liabilities
Accounts payable	$        4,560		$        8,874
Current operating lease obligations	37		62
Accrued liabilities	7,679		5,259
Total current liabilities	12,276		14,195
Long-term liabilities
Long-term debt	14,848		14,911
Other long-term liabilities	24		51
Total long-term liabilities	14,872		14,962
Total liabilities	$       27,148		$       29,157
Commitments and contingencies
Stockholders' equity
Common stock, $0.001 par value, 730,000,000 shares authorized and 20,922,204 and 20,623,457 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively	$            21		21
Preferred stock, $0.001 par value, 20,000,000 shares authorized and no shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively	—		—
Additional paid-in capital	241,506		238,012
Accumulated deficit	(122,980)		(97,400)
Accumulated other comprehensive income (loss)	(121)		117
Total stockholders' equity	118,426		140,750
Total liabilities, convertible preferred stock, and stockholders' equity	$      145,574		$      169,907

 

Shoulder Innovations, Inc. Reconciliation of Reported Net Loss to Adjusted EBITDA (Unaudited) (in thousands, except share and per share amounts)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Net loss	$       (7,048)		$       (8,729)		$      (25,580)		$      (32,587)
Interest (income) expense, net	(574)		78		(1,683)		661
Income tax expense	—		—		—		—
Loss on extinguishment of debt	—		—		589		—
Depreciation and amortization expense	1,117		843		3,382		2,228
Stock-based compensation expense	1,018		298		2,825		615
Adjusted EBITDA	$       (5,487)		$       (7,510)		$      (20,467)		$      (29,083)

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SOURCE Shoulder Innovations

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What is Shoulder Innovations' updated 2026 revenue guidance?

Shoulder Innovations expects full-year 2026 revenue of $68 million to $70 million, representing approximately 44% to 48% growth over 2025. Previous guidance was $67 million to $69 million, representing approximately 42% to 46% growth.

How did Shoulder Innovations perform in the third quarter of 2026?

Shoulder Innovations generated $16.2 million in revenue, up 38% year over year, and reported a net loss of $7.048 million, compared with $8.729 million a year earlier. Gross margin increased to 78.5% from 76.2%.

What drove Shoulder Innovations' higher third-quarter revenue and gross margin?

Revenue growth reflected new surgeon customers, higher utilization among existing customers and higher implant selling prices. Gross margin benefited from increased average selling prices and cost reduction programs.

Why did Shoulder Innovations' third-quarter operating expenses increase?

Commercial investment and product development increased operating expenses. Selling, general and administrative spending reflected commercial organization investments and higher variable selling expenses, partly offset by lower legal expenses. Research and development spending included substantial work on the InSet Neo robotic platform.