Alphatec Holdings, Inc. Q1 FY2025 earnings call

• Revenue for Q1 was $169 million, with surgical growth at 24% year-over-year, which is 4 times the market. • Delivered $11 million of adjusted EBITDA, the second best quarter ever and above expectations. Cash burn in Q1 was $15 million, at the low end of the range. • Key strategic imperatives include creating clinical distinction through procedural solutions, furthering clinical value by minimizing surgical variables with technology, expanding the sales force, and validating the EOS and informatics thesis. The EOS order growth was a record, and the company is focused on being the preferred destination in spine surgery. • The company has a more cash-efficient organization due to changes made last year, and is committed to delivering growth, profitability, and cash flow commitments.

Total revenue for Q1 2025 was $169 million. Surgical revenue was $152 million, representing 24% year-over-year growth, which is nearly $30 million in year-over-year growth. EOS revenue was $17 million, up 8% compared to the prior year. Surgical revenue contributed approximately 90% of total revenue ($152M / $169M), while EOS contributed about 10% ($17M / $169M).

• Revenue outlook for 2025 expects adoption of the unique procedural approach to drive revenue growth of 20% to approximately $734 million, including surgical revenue growth of 21% to approximately $658 million and EOS revenue of approximately $76 million. • Adjusted EBITDA outlook for 2025 is $78 million, up from prior guidance of $75 million, including absorbing the impact of expected tariffs in the second half of the year. • Cash flow outlook: Q1 cash burn was at the low end of the range. Expect Q2 to range from $0 to $5 million, with Q3 and Q4 generating positive cash flow, resulting in cash flow positive for the full year 2025.

• Tariff impact on EOS units: Direct exposure to tariffs is limited to EOS units imported from France for U.S. installations and associated repair parts, estimated to impact cost of goods sold in the low single-digit millions of dollars.

Q: Brooks O'Neil asked about the corpectomy system market segment and competitive dynamics.

A: Pat Miles responded that the company is the only one doing the corpectomy system in the prone position, it's a unique approach, and the system is engineeringly outstanding, tying in well with other things they're doing.

Q: Vik Chopra asked about tariff exposure and robot launch plans.

A: Todd Koning said tariff exposure is low single-digit millions, hitting COGS in the second half, and limited to EOS equipment. Pat Miles said robot launch is on track, in alpha phase, with an end-of-year launch.

Q: Matt Miksic asked about cash outlay and competitive dynamics.

A: Pat Miles mentioned improvements in asset utility and operational prowess, and Todd Koning discussed cash use range and cadence of cash flows for the year.

Q: Mathew Blackman asked about sales force productivity and EOS.

A: Pat Miles talked about sales force evolution and Mathew Blackman's questions on EOS placements and pull-through.

Q: Samantha on for Matthew O'Brien asked about volumes and robot feedback.

A: Pat Miles said market is healthy, volumes are good, and robot feedback is great but focusing on workflow.

Q: Young Li asked about spine market resiliency.

A: Pat Miles and Todd Koning said spine is resilient as it's not elective.

Q: Eric on for Josh Jennings asked about international expansion and pricing.

A: Pat Miles discussed focus on certain international markets and Todd Koning talked about pricing and innovation.

Q: Michaela filling in for Caitlin Cronin asked about leveraging interventionalist call point.

A: Pat Miles said the company is focused on spine surgeons and not defocusing into interventionalist or pain environments.

Q: Sean Lee asked about EOS system use and growth.

A: Pat Miles discussed the maturity of the business, runway on EOS and SafeOp, and surgeons' yearning for the technology.