Why did TNON's Q4 2024 EPS forecast miss expectations?

The EPS of Tenon Medical Inc (TNON) for Q4 2024 missed expectations, as evidenced by a significant negative EPS surprise of $3.09 million, which is attributed to a combination of factors:

1. **Unexpected Reimbursement Preauthorization Headwinds**: Tenon Medical faced unexpected reimbursement preauthorization headwinds, which significantly impacted revenue. These headwinds were primarily due to regional coding confusion. Despite anticipation of upcoming coding clarity and clinical data to resolve these issues, they continue to affect the company's financial performance.
2. **Decline in Surgical Procedures**: The number of surgical procedures using the catamaran system decreased, which directly affected revenue. This decline was due to the restructuring of the sales operation and the unexpected reimbursement preauthorization impacts. Such changes in surgical volumes can have a substantial effect on the financial results of a company like Tenon Medical, which relies heavily on the sales of its medical devices.

In summary, the EPS miss for TNON in Q4 2024 was primarily due to unexpected reimbursement preauthorization headwinds and a decline in surgical procedures, combined with other operational challenges.

|code|Ticker|Name|Date|Total Revenue|Net Income|Diluted EPS|market_code|
|---|---|---|---|---|---|---|---|
|TNON|TNON.O|Tenon Medical|2024 Q1|719000|-3576000|-1.25|186|
|TNON|TNON.O|Tenon Medical|2024 Q2|901000|-3826000|-1.02|186|
|TNON|TNON.O|Tenon Medical|2024 Q3|887000|-3184000|-3.63|186|
|TNON|TNON.O|Tenon Medical|2024 Q4|770000|-3087000||186|

|code|Ticker|Name|Date|EPS Surprise|Diluted EPS|market_code|
|---|---|---|---|---|---|---|
|TNON|TNON.O|Tenon Medical|2024 Q1||-1.25|186|
|TNON|TNON.O|Tenon Medical|2024 Q2||-1.02|186|
|TNON|TNON.O|Tenon Medical|2024 Q3|2.53|-3.63|186|