ATEC

Image source: The Motley Fool. Tuesday, Aug. 4, 2026, at 4:30 p.m. ET Chairman and Chief Executive Officer - Patrick Miles Executive Vice President and Chief Financial Officer - J. Todd Koning Operator: Good afternoon, everyone, and welcome to the webcast of ATEC's Second Quarter Financial Results. We would like to remind everyone that participants on the call will make forward-looking statements. These statements are based on current expectations and are subject to uncertainties that could cause actual results to differ materially. These uncertainties are detailed in documents filed regularly with the SEC. During this call, you may hear the company refer to non-GAAP or adjusted measures. Reconciliations of these measures to U.S. GAAP can be found in the supplemental financial tables included in today's press release, which identify and quantify all excluded items and provide management's view of why this information is useful to investors. Leading today's call will be ATEC's Chairman and CEO, Pat Miles; and CFO, Todd Koning. Now I'll turn the call over to Pat Miles. Patrick Miles: Thank you much. Appreciate it. Welcome to our Q2 2026 financial results call. There will be some forward-looking statements, so please review at your leisure. This quarter reflects a solid performance in both growth and profitability. We did $214 million in Q2, up 15%, with surgical up 17%, cases were up about 20%, and surgeons about 24%. Those are the leading indicators that affirm that this is both a utilization story and an adoption story. We're adding surgeons. They are doing more with us. The business is working and we are scaling. The quarter also showed strong leverage. We generated $36 million of adjusted EBITDA, up $15 million sequentially at a 17% margin, while producing positive cash flow. When you step back, this is exactly the compounding engine we've been building. More surgeons, more cases, more platform pull-through, and now it's dropping to the bottom line, creating profitable growth. EOS came in at $17 million for the quarter. Fundamentally, EOS affords us access, and as importantly, accelerated hardware usage from EOS Insight when it goes live. I'll come back to that later. Todd's going to take you through the numbers, and then I'll walk you through the catalysts that give us more enthusiasm today than ever before. We are just getting started. Over to you, Todd. J. Koning: Thank you, Pat. The second quarter results reflect the continued strength and consistency of the company we are building. We delivered strong revenue growth, significant profitability expansion, and positive free cash flow, extending our track record of converting top-line performance into meaningful financial results through disciplined execution and scale. We've been very deliberate in how we allocate resources, invest in growth initiatives, improve asset efficiency, and leverage our infrastructure as the business grows. That discipline continues to translate revenue growth into expanding EBITDA margins and cash generation. Consistent with recent quarters, we continue to see robust surgeon adoption and procedural volume growth, clear indicators of long-term demand for our procedural solutions. Total revenue was $214 million, up 15% year-over-year, with surgical revenue of $196 million, growing 17%, a $28 million increase over the prior year period. That growth continues to be driven by the core elements of our model, approximately 24% growth in surgical adoption and 20% procedural volume growth. The consistency of net new surgeon adds and case volume, both at or above 20% again this quarter, speaks to the ongoing momentum and durability in our surgical business. Overall revenue per case declined approximately 2.7% year-over-year, driven by case mix and strong international growth. The remaining pressure was primarily attributable to biologics attachment, which stabilized in Q2 but remained below prior year levels. Improving biologics attachment remains an area of focused execution. Encouragingly, and consistent with prior periods, our average revenue per case across individual core procedures remains strong. Lateral, ALIF, and cervical were all up year-over-year. Also, revenue per case improved sequentially by 1.5% in the quarter, reflecting increasing stability in the underlying business. Turning to EOS. Revenue was $17 million in the quarter, up from $14 million in Q1, and essentially flat year-over-year, with demand for systems remaining strong. EOS Insight adoption continues to grow, and we are seeing increasing evidence that these accounts become meaningful adopters of our procedural solutions following implementation. Among established EOS Insight accounts, implant revenue increased approximately 32% within 6 months of go-live. These results reinforce the strategic value of EOS and EOS Insight as important drivers of surgeon engagement, procedural adoption, and long-term growth. Turning to the P&L, gross margin for the quarter was 72.5%, an increase of 260 basis points year-over-year, driven by continued improvement in inventory efficiency, cost reductions, and product mix. Operating expenses grew 11% while improving approximately 260 basis points as a percentage of revenue, signifying strong operating leverage and reflecting our approach to make disciplined, targeted reinvestments in the business. The combination of strong revenue growth, gross margin expansion, and disciplined execution drove adjusted EBITDA of $36 million, up approximately 53% year-over-year. Adjusted EBITDA margin expanded 420 basis points to 17%, further proof of the increasing scalability of our operating model and our ability to deliver expanding profitability. Turning to the balance sheet, we ended the quarter with approximately $119 million in cash and $85 million of available borrowing capacity, providing roughly $204 million of total liquidity. We generated $34 million of operating cash flow during the quarter while investing approximately $33 million in inventory and instrument sets to support continued surgeon adoption growth of more than 20% and position the business for the expected revenue ramp in the second half of 2026. As a result, we generated approximately $1 million of positive free cash flow, exceeding our expectation of roughly break-even, and delivered positive trailing 12-month free cash flow for the fourth consecutive quarter. We expect the third quarter to reach $4 million to $6 million of free cash flow. During the quarter, as we announced previously, we completed our new term loan A and revolving credit facility with JPMorgan and TD Cowen. The transaction consolidated 2 legacy facilities into one single capital structure, extended our maturities to 2031, and is expected to reduce annual interest expense by more than $6 million. Together, these actions further strengthen our balance sheet, lower our cost of capital, and provide additional flexibility as we continue to grow and scale the business. Turning to the revenue outlook, we are maintaining our full-year revenue guidance of approximately $882 million, representing growth of roughly 15% for the year. This includes surgical revenue of approximately $805 million, unchanged from our prior outlook, and representing growth of approximately 17%, and EOS revenue of approximately $77 million. We expect high-teens surgical case volume growth in the second half of the year. Average revenue per case is expected to decline in the low single digits for the full year, with the year-over-year impact continuing to moderate as we move through the second half and exit the year. This implies that the second-half surgical revenue growth will accelerate to 18% from 17% in the first half of the year. Given our growth outlook, sustained improvement in gross margins, and ongoing operating discipline, we are raising our adjusted EBITDA guidance to approximately $140 million, representing a 16% margin, up from our prior outlook of $134 million. We continue to expect at least $20 million of free cash flow for the full year. We are reaffirming our revenue and free cash flow guidance and raising our profitability outlook, reflecting our confidence in the continued progression of margins, profitability, and cash flow generation. With that, I'll turn the call back to Pat. Patrick Miles: Thanks, Todd. Our strategy is unchanged because it is working. If we go back 8 years since we started the ATEC turnaround, we have 10x the quarterly revenue. I don't say this because it reflects a destination, but more to reinforce that we are doing things differently. For us, it is more of a starting point. We are generating results because we remain committed to creating clinical distinction, earning surgeon adoption, and building an aligned sales machine that scales. That's been our model for years. Serve spine surgery uniquely well, earn surgeon trust, and evolve the sales model. Creating clinical distinction is the root of everything we do. We don't focus on designing individual products. We integrate them into procedures that make for better surgical intervention. Adoption and growth come because the surgeons whose trust we've earned make the clinical decision to keep expanding what they do with us. We know that philosophy is working because surgeon demand remains very high. But clinical distinction only compounds if you have a sales machine to carry it into the field. Our disciplined, energized, and built-to-scale sales force is part of the procedure. It's what turns a better procedure into broad adoption. Put the 3 commitments together and the outcome is straightforward. Do something clinically meaningful, surgeons adopt, and it scales. What creates a 20% increase in case volume and a 24% net new surgeon growth is that we focus on selling entire procedures, not just widgets. The volume of variables that undermine spine surgery success are many. The opportunity to mitigate them through carefully architected spine procedures is apparent. We assemble procedures from the ground up, and better spine procedures leads to expanded indications, expanded indications to greater complexity, and all that generates more revenue. We start in lateral for a reason. It's where we have the most know-how and the most apparent opportunity for us to create distinction. PTP has profoundly improved surgery, creating optionality for the surgeon while minimizing morbidity for the patient. I was reminded of this recently while watching a lateral case. What used to be a long surgery with a myriad of variables is now a reproducible, efficient, and confidence building surgeon experience. The benefits of lateral surgery for patients has been apparent for decades. The challenge has been enabling more surgeons to feel confident that they can predictably perform the procedure safely and reproducibly. The advancements we've introduced to lateral surgery, including SafeOp, Valence, patient positioners, retractors, and implants, all designed to function as an entire comprehensive procedure, have produced a compounding effect on growth. We train and convert a surgeon to perform lateral surgery safely and reproducibly. Once that surgeon becomes more confident, they begin to treat more and more of their patients laterally instead of using other approaches and also to use the lateral approach to address more complex pathologies. That is why our new surgeon growth metric is such an important leading indicator of future growth and why we know that we have just scratched the surface of our long-term potential. Once surgeons trust you in lateral, they expand their utilization across other procedures, such as cervical, TLIF, posterior fixation. That's how surgeon utilization compounds. More surgeon users applying multiple products within each procedure is how we drive convoyed sales or products per case. It's what happens when you design procedures the right way from the ground up. EOS continues to be a pivotal part of our strategy. Installation can be bumpy quarter-to-quarter, but the post-installation EOS experience is playing out as expected. EOS Edge is a foundationally necessary clinical tool that avails us access to many of the world's most prestigious institutions. These were hard, if not impossible, institutions for us to access previously. However, with a tool as clinically relevant as EOS, we gain access, which gives us a hunting license to drive and expand adoption of our surgical procedures. What's also becoming increasingly important is that many of these institutions are training the next generation of spine surgeons. By establishing ourselves with leading academic centers and fellowship programs, we are expanding our influence with a younger cohort of surgeons who are learning alignment-based, data-driven surgery from the outset. From this access, EOS is shaping future adoption. When EOS becomes part of the clinical workflow from diagnosis, pre-surgical planning, interoperative reconciliation, and follow-up, it starts driving case volume through Insight, alignment, bone mineral density assessment, surgical planning, patient-specific rods. Over time, EOS builds something more valuable than one product. It generates a structured data set. That becomes the moat. We are already realizing the benefit to the tune of about a 32% revenue lift per surgeon after EOS Insight is adopted. This is still just the beginning of the advantage we expect to see EOS and Insight provide, but early returns are very encouraging. Turning to surgical execution, historically, spine companies competed around implants. We think the future belongs to those who can meaningfully improve how surgery is diagnosed, planned, executed, and evaluated. That's exactly what we've invested in with EOS, Valence, and SafeOp. Interoperatively, let me start with Valence. Across the initial clinical experience, we're seeing what we expected. Surgeons finding value in the technology, the workflow is elegant, and the procedural integration is working. The experience continues to improve with increased usage and feedback. We've been very deliberate with Valence. Our near-term focus has been getting the experience right through expanded utilization. We've always thought Valence as a foundation to bringing more technology into the OR. Milestones like our recent FDA clearance for IOA, or interoperative alignment, and Contour 3D, our automated rod bender, expand our capability, while strengthening the technology foundation we're building. We don't view Valence as another navigation platform. We believe it will become the operating system through which more of the procedural experience is orchestrated. SafeOp plays an equally important role. It continues to evolve and expand in its utility across more procedures. It's a source of real-time, actionable intelligence around neurolocation and health, helping surgeons make better real-time decisions interoperatively. When you combine improved surgeon decision-making through EOS Insight with interoperative technology such as Valence and SafeOp, with the procedural innovations we've introduced over the past several years, what emerges is an integrated ecosystem that deepens surgeon confidence and makes ATEC increasingly essential to surgical execution. Our aim is to be indispensable. EOS, Valence, and SafeOp move us meaningfully closer to that objective. Another area where we are seeing growing influence is in deformity. These are some of the most demanding procedures in spine, and we're earning a seat at the table in partnering with leading KOLs. EOS imaging, alignment data, bone mineral density assessment, patient-specific planning, patient-specific rods, and a differentiated deformity portfolio all come together to help surgeons execute a myriad of complex cases with greater confidence. What's encouraging is that many of these relationships started elsewhere in the portfolio and migrated to complex deformity based upon the trust through EOS, use of our lateral, cervical, and other procedures. International growth has proved our clinical distinction model translates globally. We've been deliberate in focusing our efforts in some of the most attractive spine markets in the world: Japan, Australia, and New Zealand. And we're seeing the model play out as intended. Clinical distinction drives surgeon confidence. Surgeon confidence expands utilization. Utilization drives growth. As we enter these new markets, we're exporting and replicating a proven model. In every market where we successfully replicate, that model expands the long-term opportunity in front of us. Our international growth is a reflection of a clinical thesis that works. When you step back and look at our business today, what gives us great confidence is the ecosystem that we've built and are refining. We've talked throughout this call about the growth algorithm at ATEC. Clinical distinction compels surgeon adoption. Surgeon adoption expands utilization. Utilization compounds over time. The encouraging thing is that multiple cats are now reinforcing that algorithm simultaneously. We have procedural innovation driving the convoyed sales effect. Lateral continues to earn surgeon confidence and expand utilization. EOS and EOS Insight are creating access and building a differentiated informatics platform. We are growing our influence in deformity and pediatrics, commercializing Valence, integrating SafeOp more deeply into surgical execution, and successfully replicating our clinical model in attractive international markets. We continue to be a magnet for the best sales talent in spine. Each of these catalysts is an expression of the same strategy. Create clinical distinction, earn surgeon trust, and expand utilization. Scale the business with the best sales force in spine. That's what we're doing. Let me leave you with this. I'm excited for the back half of the year. As we discussed, new surgeon growth in Q1 and Q2 exceeded 20%, which is a powerful leading indicator for future growth. Both EOS installations and orders rebounded nicely in Q2, reinforcing our confidence in the opportunity ahead. International is contributing as designed and will become a bigger part of our story over time. We have also continued to invest in instruments and inventory while attracting the right people to support the strong surgeon adoption we continue to see. We're in this for the long haul. We are building ATEC for decades and beyond. This quarter showed we can continue to grow at multiples of the market and turn that growth into profitability and cash. We are the preferred destination in spine. Best surgeons, best talent, and best outcomes. It's a long game. We believe the long game belongs to us. Thanks to everyone on the call, and most especially the ATEC faithful. Our best days are yet ahead. With that, Operator, let's take some questions. Operator: The first question comes from Vik Chopra with BMO Capital Markets. Vikramjeet Chopra: Congrats on a nice quarter. Pat or Todd, I guess, whoever wants to answer this one. With surgical volumes growing 20% in the quarter and surgeon users are up 24%, I guess where do you see the greatest remaining opportunities to drive sales force productivity and SG&A leverage as the business scales towards a $1 billion-plus in revenues? Patrick Miles: Yes, Vik, thanks for the question. I'll start. I think that the lateral piece is in its infancy. And I would love to see more TLIF turn into lateral. And as a 10% market shareholder, they're just -- there is so much opportunity out there, it's kind of crazy. And so I see from a sales force efficiency perspective, just picking up more of that business. Clearly, we'll talk about it, but disappointed in some of the biologics attachments. So there's opportunity to pick up just more biologic attachment to the volume of procedures that we're doing. And so totally bullish on the back half. We're in the infancy of the whole deformity thing. We've not yet reflected the type of footprint that we can create in deformity. We're in its infancy. I think EOS, the influence coming from EOS is in its infancy. So there's just tons of place I see as being opportune for us to continue to grow at an outpaced rate. J. Koning: And Vik, I'd add just on the scaling and how that translates to the profitability of the business, like clearly you saw a strong profitability drop-through of about 45% here in the second quarter. We raised the guidance really on the strength of an improving gross margin profile in the second half of the year. And so, last year we dropped through about 40% of the revenue growth to profitability. Our guidance implies about the same 40%. And so feel quite good about our ability to continue to grow the business and see that scale and improved profitability profile as we grow. Patrick Miles: Just as an add to that, I think the structure has been built. And I think when you start to think about the ecosystem from a product perspective and then just foundationally, just the buildings and the people and the like, we'll continue to grow people-wise, but it's going to be one of those things where we'll continue to build off the scale. J. Koning: Correct. Vikramjeet Chopra: Can I just ask a quick follow-up, Pat? You mentioned the biologics attachment rate. I think you said in your prepared remarks that it stabilized during the quarter. Can you talk about what initiatives you have in place to drive improvement? And when we should expect that headwind to become neutral or potentially a tailwind? Patrick Miles: Yes, I think the 2 things in the near term is more discipline from a selling perspective is clearly a key one. We're also going to continue to put the pedal to the metal on new products. And I think we have a number of new products coming forth that are going to enable us to continue to provide a meaningful distinction. I think it's one of the hardest places ever outside of BMP to create real product distinction. And that's why we did the Theradaptive deal. It's one of those things where it's like, we realized that we'll be the second company to have BMP on the marketplace. Medtronic's doing $700 million in BMP. It's purely the most unique product in the space. It's the one that's gone through the IDE. We'll have gone through the IDE with Theradaptive. And so we're totally enthusiastic that we, in essence, got that done, just saying as we need to distinguish ourselves in a space that's ultimately profoundly important to the field. Operator: Our next question comes from Mathew Blackman of TD Cowen. Mathew Blackman: Can you hear me okay? Patrick Miles: Loud and clear. Mathew Blackman: Great, guys. I've got 1.5 questions. Let's start with -- and both for Todd, I guess the half question, any chance you'd be willing to break down the 20% worldwide surgical procedure growth into U.S. versus OUS? Just curious if we could get some geographic granularity on that? And then one follow-up. J. Koning: Matt, we're not breaking that out at the moment. I think as we get more meaningfully sized outside the U.S., we'll begin to break that out. But it is a growing contribution, for sure. Mathew Blackman: Okay, and I guess the real question is, obviously you had talked about revenue per procedure for the full year when we spoke last quarter, being flattish, now you're talking about sort of being down low single digits. Can you just tell us what changed? Is it that the biologics attachment rate? Is it still outsized cervical uptake or is deformity lagging? Just any help into understanding the change and the outlook for the revenue per procedure, and then I'll hop back in queue. J. Koning: Yes, absolutely, Matt. So I think, one, it's important to note, we grew volumes in the first half 20%, and our guidance implies high-teens volumes in the second half. So I think the underlying growth and health of the business is strong. Those volumes obviously being driven by both cervical and international, which is a mix headwind, and that may be a little bit more of a mix headwind than our guidance implied. But fundamentally, it's the fact that our biologics attach rate has stabilized rather than improved. And so what we did was we include less improvement in the second half than we had previously from an attach rate standpoint to ensure that we had essentially reflected the current level of performance in our attach rate in the second half. And then as we go into the fourth quarter, the revenue per procedure comps get just a bit easier. And so that's how we think about the second half revenue per procedure. Mathew Blackman: Okay, fair enough. I just wanted to make sure. It does sound like it's cervical mix, maybe slower ramp on biologics, but importantly not sort of lagging on the deformity side. I know 2Q isn't the biggest quarter, but 3Q certainly could be. I just want to make sure that opportunity is still sort of front and center. J. Koning: Yes, you're right, Matt. I think the point is that when we looked at our revenue per procedure performance in the quarter, about three quarters of, I'll call it the miss in terms of revenue per procedure of where we wanted it to be, was really a biologics phenomena more than anything. Patrick Miles: Yes, I was going to pipe, yes, just the deformity influence just continues to grow as expected. And so the EOS thing is playing out. And I can't be more enthusiastic about the foundational thesis of it and just how it's being reflected in the field. Mathew Blackman: And you also have more deformity sets out this quarter than you did, sorry, in the third quarter than you did last year, right? That's also part of the incremental CapEx spend this year? J. Koning: Yes. Operator: The next question comes from Allen Gong of JPM. Allen Gong: Hi, this is [ Henry ] on for Allen. I appreciate you taking the questions. Recently from some of the other ortho companies, we've heard indications of maybe some procedure volume slowdowns. Can you add any color on what you're seeing from your perspective? And maybe more specifically, if there's been any material impact from the recent ACA changes? And then just a quick follow-up. Patrick Miles: Yes, I'll let Todd speak to ACA change. But the dynamic is one of -- our volume was robust. Our new surgeon additions, robust. I think that it's fascinating in terms of what's elective and what's not. And I think that neural pain is one of those things where there's an inevitability of an intervention. If you go under the knife to get a spine surgery, rarely is it elective. And so we're seeing -- we're a proxy for nothing, just as a quick point. But we're seeing robust volumes and kind of a consistent marketplace. And so, Todd... J. Koning: Yes, and just on the ACA piece, we've done some analysis. And I think our work would suggest that we're probably less than 5% exposed to ACA volume, so we really think it's a non-factor for us. And then turning to gross margins a little bit. It was obviously a great quarter from that perspective. Is there anything in particular you both would like to call out on the performance this quarter? And then looking forward, how sustainable can we expect results like this to be? J. Koning: Thanks, Henry. I think the 3 things I called out in my prepared remarks were just inventory efficiency, and that's really just a function of the good work our operations team and our sales channel have done in terms of improving our -- just really the -- yes, just like turning our sets and being able to understand where our inventory is and controlling it within the field. And hence you get less write-off and less loss as a function of that. So it's really the chain of custody that we've improved there and through a lot of good focused work. I think on the second point, is we've improved some cost reductions, so our standard margins are solid. And that's really a function of either new design work we've done or revised designs that we've done. So -- or it's also the work of or the result of just volume efficiency with our supply chain partners. So I think, again, from an operations and engineering standpoint, good work is being rewarded from a gross margin standpoint there. And then the third piece is the mix. And so we had less biologics and less EOS mix in the quarter, and so both of those things are a function of the sales dynamic. And so as you look in the second half, we obviously have a lot more EOS mix in the second half than we do in the first half, which is why our guidance would imply something closer to 71%, which is about 50 basis points better than what our previous guidance would have implied in the second half. Operator: The next question comes from Tom Stephan of Stifel. Thomas Stephan: First one, just on free cash flow. Todd, maybe for you, I think you mentioned $4 million to $6 million in 3Q. So hopefully my math here is right, but that implies $25 million or so in the fourth quarter to get to the $20 million plus, which is a pretty big step up sequentially and year-over-year. And I think in the second quarter free cash flow might have been down a bit year-over-year. So, Todd, talk to the -- I guess drivers of that improvement notably as we kind of exit 2026. And where your level of confidence stands in achieving that $20 million plus free cash flow number for the full year? And then I'll have a follow-up. J. Koning: Thanks, Tom. So we, as I noted on the call, we've invested $33 million this quarter. Frankly, we invested about the same amount in the first quarter. So if our range is $90 million to $100 million on the full year, we've done $66 million. So we've front-loaded that investment and clearly that's purposeful to take advantage of the growth opportunities we have in the second half. And so if you look at where we are today and if you take a drop-through of 36.5%, or excuse me, 36% year-over-year in the second half on revenue growth to EBITDA, you come to the conclusion that our Q3 to Q4 step up in EBITDA is about $10 million. And so if we deliver $5 million as a midpoint on the free cash flow in Q3, you add $10 million of it to -- to that to get to Q4. So now you're at $15 million. And knowing that you're going to spend less on sets and inventory in the fourth quarter than you do in the third quarter by the order of probably $10 million to $15 million or so. That really is that bridge that gets you from $5 million to $25 million, Tom. So I know optically it's a big step up, but the components really are incremental EBITDA growth combined with the fact that you're investing less in sets and inventory in the fourth quarter than you are really in the first three quarters. Thomas Stephan: Got it. Super clear. Appreciate it. And then maybe to shift gears a bit just to surgical. Pat or Todd, it'd be great if you could comment on surgical trends kind of throughout 2Q, exiting 2Q, and notably into 3Q. I guess when I look at the implied guide to hit surgical, which you maintained, I think it does require the 2-year CAGR in the back half to remain fairly consistent with the second quarter. So maybe if you can talk to surgical trends and what drives your confidence in sustaining kind of this 2Q performance through the back half? J. Koning: Thanks, Tom. I think a couple things. When you looked at the year-over-year dollar adds in Q2, we were at $28 million, and that's compared to $26 million in the first quarter. So surgical dollar adds year-over-year accelerated Q1 to Q2. So that's good. The year-over-year growth at 17% stabilized from Q1. So I think that's another good measure. When you look at the year-over-year, 2-year CAGRs, to your point, it actually is a bit of an acceleration in Q2 over Q1, and the same holds for the dollar add rate in Q2 over Q1. So I think the trends, I think all point to a stabilizing and improving environment as we've worked through the first half so far. Then I really point to the fact that we've seen north of 20% surgeon adds. That's generated 20% surgical volume. That surgical volume growth at 20% is north of the high teens that's implied in the guide in the second half. And when we look at the pipeline, look at the opportunity, we've clearly forward-invested in the sets and inventory to take the most of the opportunity that we see in front of us. And so we think we're well-positioned from a sales force and a set addition standpoint. So we have the assets to drive the revenue. And I think the dynamics that have really gone on in the first half of the year, all point to our confidence in the second half. Operator: The next question comes from Patrick Wood of UBS. Patrick Woodt: You've got, [ Daniela ] on for Patrick. Appreciate you taking my question. I wanted to ask you about Valence and how the launch has been going. You called out in the prepared remarks that EOS placements have been notable across academic centers, so I was wondering if you've also seen outsized demand for Valence at those facilities? Or perhaps it's more the outpatient ASC settings since I'm sure the smaller footprint and lower ASP versus peers is a great value prop. So any color you could give on the facility mix of placements would be very helpful. Patrick Miles: Yes, I wish I could provide great distinction because your question is totally relevant. And the interesting part is we're seeing academic institutions evaluate and kind of integrate the Valence piece, and the early experience from a utilization perspective has kind of been both. And it's gone kind of as we expected. The real virtue, in my mind, just becomes the elegant workflow of it. There's an in-field camera, which may seem like a small thing to you guys, but it's completely controllable by the surgeon. And I think what's been the great reception is just the ability to, again, control all the variables within the procedure. Because of the cost of goods, one would presume this is a great ASC tool, which we believe it to be as well, but what we're seeing is kind of a mix in terms of both academic and community hospital and ASC-type utilities. So I wish I could provide you some great insight other than the fact that the utilization is going as planned. We're placing as many as we expected to, and most of them are going the way of earn-out type of dynamics. People aren't coming up with capital in the same way they did years ago. Operator: The next question comes from David Saxon of Needham & Company. David Saxon: I wanted to follow up on the case volume growth assumption, the high teens in the back half versus 20% in the first half. So I guess, directionally, a slowdown, what's driving that? And then on the case mix perspective, cervical starts to face tougher comps, I believe. So just your level of confidence in sustaining the lateral case volume growth, so you can, in fact, start to see that better case mix. Patrick Miles: Yes, I'll do the subjective and I'll let Todd do the quantitative, which is always harder. What we're seeing is really kind of new product acceptance on the lateral side. And so there's a lot of enthusiasm and momentum. PTP continues to show up big. And so as we see new users and the expectation of utilization and a ramping dynamic, I think that there's a lot of confidence here. Also, the whole deformity season is still forthcoming in the grand scheme of things. So our view that we're going to get, again, more thoracolumbar type of volume is there. Those are the general things that provide my confidence, and I think numerically, we're just trying to be as thoughtful as we possibly can in terms of being methodical. And so... J. Koning: Yes, I think, David, your question is volumes were 20%, but we're guiding to high teens. Why? Why the deceleration from a volume standpoint? And I would just point to the fact that we just reaffirmed our full-year guide. We beat the consensus a bit in the first -- in second quarter. And so ultimately, we're just trying to focus on execution. And I think that kind of is the result of keeping the full-year guide unchanged in the context of beating the consensus number in the second quarter. Operator: The next question comes from Caitlin Roberts of Canaccord Genuity. Caitlin Roberts: it's Mikaela for Caitlin. Congrats on a solid quarter. Last quarter you outlined some initiatives to improve your EOS execution. Can you maybe talk a little bit more about the progress you've made there? And are there any additional investments you need to make? Maybe if you can talk more about like what you're seeing so far in Q3 and how we should think about placement throughout the remainder of the year? Sorry, that was a long one. Patrick Miles: No, it's a good one. Can I tell you, like, the EOS thing is one of the biggest differentiators that we have within the whole ecosystem, and it is a foundational tool. And as I said in my prepared remarks, I don't know of a more clinically relevant tool there is. And when you start to think about just the opportunity to effectuate improved surgery, the type of information that the surgeons are distilling, I think, is such a key piece. And so, here's an example, and I'll get right to the answer to the questions. But when you start to think about three-dimensional reconstruction of the spine and you start to think about the Scoliosis Research Society providing a 3D classification, we can be the proxy of that classification. And so when you start to think about, hey, I'm going to do a surgery, I'm going to be able to immediately understand the classification. We should be able to create some predictive elements around that, how the patient is going to do within that classification and plan the case that way. And so the types of institutions that are coming forth and buying into this thesis has been significant, both from an academic perspective. You know what's been interesting is we've seen placements in the community as well. Like there's an institution where I was speaking to somebody internally today, whereby these guys are generating a lot of revenue from an EOS unit in their clinic. And so the great part is it's a private group generating revenue in their clinic that ultimately effectuates better surgery. And so it's a very thesis that we've laid down in terms of just why we're doing what we're doing. The other thing is you're seeing the translation of EOS Insight. And so I think we gave -- if you're using EOS Insight, we're seeing a 32% increase in revenue in that institution. And so you start to see, gosh, these things are starting to take hold. And so from an infrastructure perspective, I would just say that we continue to get more sophisticated. I would say the early experience from our capital equipment, the process wasn't as robust as we probably could have been. And so the type of sophistication that we've brought into the company that's guiding and leading those efforts is, it's a different day. And the sophistication is far better. And so I would just tell you that I see this thing becoming more and more predictable. I think the people internally that are driving that effort continue to elevate. And so I don't see us needing a significantly different group, but I would tell you that what we're doing is just getting better. And that's kind of how we've been throughout the entirety of the 8 years I've been here is we've integrated a technology, we've improved the technology, and we've gotten significantly better. And the same thing is taking place today right now. Operator: The next question comes from Lawrence Biegelsen of Wells Fargo. Larry Biegelsen: Maybe another one on EOS. I believe in your prepared remarks, you said you feel like you have the right team now in place. How are you feeling about their productivity levels? And what is the level of risk and ramp to hitting your guide? And then looking to next year, should we expect incremental rep investment? Patrick Miles: Yes, I would say great confidence in our guide. I would tell you that, again, this is the weirdest system that I've ever been associated with. And I would tell you to channel check me. I've never met a surgeon who doesn't want an EOS. The challenge becomes in, really, as much as anything, it's even less price. It's more of, hey, do I have room for it? And it's some of the installation dynamics that ultimately create the challenge. And can I put it in a place where I'll get the volume required to ultimately offset the expense of it? And so I feel great about where we are. We're going to continue to get better. And -- but I will tell you, as it relates to our guide and what we look at to get to $1 billion in '27, I feel great about where we are. We can't sell enough of these from my perspective. It's like, I'm never going to be satisfied with regard to where we are with the volume of these things. Because ultimately, they become foundational tools for which we can put EOS Insight in. And that's the piece that will ultimately pull the surgical field forward in terms of just the planning and the execution and the evaluation of what we're doing. And so probably a lot of subjective commentary there, but I would say I'm highly confident. We got the right team in place. We're going to continue to get better. And I like the setup. Operator: The next question comes from Mason Carrico with Stephens. Mason Carrico: On new surgeon users, have you seen any change in the composition of what new surgeons buy first? Historically, I know that lateral was the entry point, but is the larger share coming from, or I guess recent new adds at least coming from surgeons starting in cervical or some other category? Patrick Miles: You know what, it's been interesting, really. It's like -- I would say the place that we're getting into sooner is in academic institutions. And I would say a younger guy who is less far along in his surgical career that may not want to take on lateral will ultimately go down the cervical road, just because I think it's the best thing that surgeons do from an outcome perspective. It's the most predictable intervention that surgeons have as ACDF. And so I think that our portfolio has really distinguished itself in terms of just the assembly of goods, kind of the same procedural thesis that we've applied from our original lateral. And so the great part though is, you know what, they ultimately all get to lateral. And the beauty is, is they start to buy into the whole procedural thesis and that procedural thesis walks in there. I think when we started the turnaround of the company, we knew that the best place to distinguish ourselves was in the lateral realm. And so that was the place that everybody jumped in. And I would almost say that it was a more mature surgeon cohort. And so these younger guys I think are just, again, being very thoughtful and predictable. And I would suggest that some of those are doing what you say, which is they're coming on and jumping into the cervical realm. J. Koning: And I think it's also reflective of the fact that we've recently launched some fairly distinguished cervical portfolios, products that really are attracting people in a way they haven't in the past. Patrick Miles: Yes, I think in a great way. I can't say enough nice things about our product development team and our marketing team on the cervical side. They've done an outstanding job. Mason Carrico: Got it. That's helpful. And then on the dynamic of EOS getting you in the door at some leading institutions and giving you a hunting license within them, could you just unpack the mechanics of that a little bit? How many months after an EOS installation do you get your first surgeon user coming online? Is it usually 1 surgeon or multiple surgeons at once? Any incremental detail you're willing to give there? Patrick Miles: Yes, as you know, it becomes such a subjective walk and it's different in every place, be it academic or otherwise. But what would be typical is, we get the installation in. We've been very effective in terms of getting the image sharing agreement with the institutions as well, which ultimately is the foundation for the EOS Insight software. And so usually there's a few surgeons that are kind of driving that whole effort because they've either been here or they've experienced the utility of the software. And then we'll have a clinical account manager go out and spend time and ultimately familiarize them with the utility. But usually I would say it's 3 or 4 guys that ultimately engage into that effort. And then what we've seen is it ramp. And what's been fun is like seeing the patient-specific rods really start to take off and be the reflection of the utility of the EOS Insight software. And so get the system in there, familiarize the group with our clinical account manager, make sure that the pass off to the local rep is effective, continue to go and sit with the surgeon and review surgeries, which is a hunting license like no other. And then start to reflect in patient-specific rods, which has just been phenomenal. And so we've seen a meteoric rise in that. We've seen great engagement, and that's why you're seeing the 32% increase in places where we've installed the software. And so it's not like, I think that initially people didn't understand why we were so enthusiastic with regard to the value that the EOS unit brings. We are in the infancy of it with regard to the alignment stuff, the case planning, the bone mineral density measures, like the volume of things that we can integrate through this effort is huge. And so we feel like we are in the early, early days of this. And that's why I think that there's so much bullishness in terms of the route forward. Operator: The next question comes from Keith Hinton of Freedom Capital Markets. Keith Hinton: Great, yes, just one on EOS Insight. Can you talk a little bit about where the penetration rate is for EOS Insight into the installed base, kind of what your goals are for the next, say, 12 to 24 months? And in terms of the new placements that you're getting, are you seeing EOS Insight sort of penetrating those accounts more quickly than the legacy accounts? Or is it just sort of a matter of time across the board? Patrick Miles: Yes, it's a great question. And I would say early, I'd say 15% to 20% on the EOS fleet. But the great part is it's happening in a hurry. The other thing I think is relevant is, EOS was such a foundational pediatric tool. Like, the whole low dose was the original attraction to a lot of the hospitals that acquired them. And one of the things that has been just so exciting is our ability to be relevant with regard to EOS Insight into these pediatric institutions by delivery of Insight, which becomes the software tool that enables them to help plan better. And so I would tell you that the early experience has been more on the adult side. The enthusiasm has been all around reconstructive deformity surgery, mostly in adults. But what we're starting to see is more and more of the pediatric institutions totally appreciative of what's forthcoming with regard to the SRS classification that I made mention to. And so when you start to think about where we are in the phase of this? We are in its absolute infancy, like the volume of EOS units can continue to multiply over the next 10 years and the type of insights and the type of data collection that we could do and the translation of the data collection ultimately moves the field forward. And so we remain totally bullish. I would tell you that we're early in the experience if only 20% of the installed base has Insight, as you can appreciate. We have to get through the data sharing elements, but that's going much more expedient than we would have expected. And so I think once people start to appreciate the features of the tool, they are in love with it. Keith Hinton: Great. And then if I could just sneak in on one quick one about the guide. You mentioned in terms of revenue per case, going from flattish to down low single digits, partially on the bio attach rate, but you're still expecting some improvement on bio attach rate in the back half. So, if you were to not see that improvement and just have bio attach be kind of flat versus the front half of the year, how much potential downside would that create on the revenue per case side? J. Koning: Yes, not a ton, Keith. It's really only assumed in the fourth quarter. Operator: The last question comes from Sean Lee of H.C. Wainwright. Xun Lee: Congrats on a great quarter, guys. So I was thinking more on the longer term. I noticed that the growth in new surgeon users has remained strong and ahead of both revenue and the case growth. So I was wondering generally how long -- how many quarters does it take for these surgeons to really become repeat users of Alphatec? And on a longer-term perspective, from -- did you value breadth more, increasing more surgeons or depth and more procedures per surgeon? Patrick Miles: Yes, I love the guys who adopt and then utilize. And I'm just partially kidding. It's a fascinating question. I think that when we talk about earning trust, like I think we really mean it. It's like, spine surgery is no game. And I think that the surgeons are anxious when they just start using a new company. And I think that once they hit a certain comfort level, and I think there's kind of consistent dynamics around the design and development of certain goods. And so what happens is there just becomes a familiarity of it. And I think it's kind of the hardest thing to turn people away. And so if someone was trained on a certain company and they're halfway through their career, sometimes it's very hard to turn them just because of the lack of familiarity with some of the mechanisms and whatnot. But what's been interesting with the EOS thing is I would tell you that the cohort that we're attracting is a younger cohort. And to me it makes me happy because I think we have a longer run and I think the type of impact that we've had on the academic institutions as of late especially based upon the foundational EOS thing has been really rewarding. And so maybe we're not getting the big whale who we're turning from a different company at the same rate we're getting a new guy who's utilizing or has a less busy practice, but growing into a busy practice. And so I would tell you that it's tough to quantify specifically, but it's one of those things where we're seeing a great uptake with a younger cohort of surgeon that ultimately has a huge run ahead. I think that the kind of dynamic that inspires them to join us is the assembly of goods, which is the procedural thing, which they have seen and heard about from the lateral thing. They'll try it in cervical, then they'll apply it to the lateral. But over time, I think the initial impetus for them joining us is the EOS and EOS Insight and that kind of predictive analytics route, if you will. J. Koning: Yes. And the only thing I'd add to that, Sean, is every year in our fourth quarter call, we show how the different cohorts of surgeons grow in their utilization. And so, you can see a curve that's reasonably consistent over time. And after -- excuse me, after maybe 4 or 5 years, that curve starts to bend a bit. But it's a pretty consistent experience over the first 3 to 4 years. Operator: I would now like to turn the conference back over to CEO, Pat Miles for closing remarks. Patrick Miles: Yes, just a thank you to all those on the call, especially the ATEC faithful. Love what we're building, and thanks for your interest. Operator: This concludes today's conference. Thank you for your participation. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Alphatec (ATEC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by a 'compounding engine' where 24% growth in new surgeon adoption and 20% procedural volume growth fueled a 15% revenue increase. Management attributes the 17% surgical revenue growth to a shift from selling individual 'widgets' to architecting entire procedures, particularly in lateral surgery. The EOS imaging platform serves as a critical 'hunting license,' providing access to prestigious academic institutions and fellowship programs that were previously inaccessible. Profitability expansion was achieved through disciplined resource allocation and a 260-basis-point improvement in gross margins, driven by inventory efficiency and supply chain volume leverage. The company is successfully replicating its clinical distinction model in high-value international markets like Japan and Australia, which is beginning to contribute meaningfully to the top line. Management highlighted that 32% revenue lift per surgeon is observed within six months of EOS Insight adoption, validating the informatics platform as a driver of implant pull-through. Full-year surgical revenue guidance remains at $805 million, implying an acceleration to 18% growth in the second half of 2026. Adjusted EBITDA guidance was raised to $140 million (16% margin) based on sustained gross margin improvements and operating discipline. Management expects high-teens surgical case volume growth in the second half, supported by front-loaded investments of $66 million in inventory and instrument sets. Free cash flow is projected to reach $4 million to $6 million in Q3, stepping up significantly in Q4 as capital expenditure on instrument sets moderates. The long-term strategy focuses on converting the EOS data moat into predictive analytics for surgical planning, aiming for $1 billion in revenue by 2027. Revenue per case declined 2.7% year-over-year, primarily due to stabilized but lower-than-expected biologics attachment and international mix headwinds. A new capital structure with JPMorgan and TD Cowen consolidated legacy facilities, extending maturities to 2031 and reducing annual interest expense by over $6 million. Biologics attachment remains a focused area for execution; management plans to address this through sales discipline and the future launch of a BMP product via the Theradaptive partnership. Management noted that EOS installations can be 'bumpy' quarter-to-quarter due to facility space requirements and complex installation dynamics rather than lack of demand. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management sees significant remaining opportunity in converting TLIF procedures to lateral and expanding their footprint in the deformity market. Profitability is scaling through a 45% drop-through of revenue growth to EBITDA, supported by improved inventory 'chain of custody' and supply chain efficiencies. The shift to 'low single digit' decline (from flattish) is mostly due to biologics attachment stabilizing at lower levels rather than improving as quickly as originally forecasted. Management removed aggressive second-half improvement assumptions for biologics to reflect current performance levels, though comps become easier in Q4. Management stated that ATEC has less than 5% exposure to ACA-related volumes, making it a non-factor for their growth trajectory. Spine surgery for neural pain is viewed as non-elective, leading to robust and consistent volume despite macro concerns in the broader ortho market. A younger cohort of surgeons is increasingly entering the ATEC ecosystem through cervical procedures before graduating to more complex lateral and deformity cases. EOS Insight acts as the initial impetus for these younger surgeons, who are more inclined toward data-driven, alignment-based surgical planning.

This article first appeared on GuruFocus. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Alphatec Holdings Inc (NASDAQ:ATEC) delivered strong financial results in Q2 2026, with total revenue of $214 million (up 15% YoY) and surgical revenue of $196 million (up 17% YoY), demonstrating robust top-line growth. The company saw significant operational leverage, with adjusted EBITDA of $36 million (up 53% YoY) and a 420 basis point expansion in adjusted EBITDA margin to 17%, showcasing improved profitability. Surgeon adoption and procedural volume growth remained robust, with a 24% increase in net new surgeons and a 20% increase in case volume, indicating strong momentum and durability in the surgical business. Gross margin improved substantially by 260 basis points year-over-year to 72.5%, driven by better inventory efficiency, cost reductions, and favorable product mix. The company generated positive free cash flow of approximately $1 million in Q2, exceeding expectations, and delivered positive trailing 12-month free cash flow for the fourth consecutive quarter, with Q3 guidance of $4-6 million. EOS Insight is proving its strategic value, with established accounts showing a 32% increase in implant revenue within six months of go-live, reinforcing the platform's ability to drive surgeon engagement and procedural adoption. Management raised its full-year adjusted EBITDA guidance to approximately $140 million (16% margin), up from the prior outlook of $134 million, reflecting confidence in continued margin progression and profitability. Overall revenue per case declined approximately 2.7% year-over-year, driven by case mix and strong international growth, with the remaining pressure primarily attributable to a biologics attachment rate that stabilized but remained below prior year levels. The company revised its full-year revenue per case outlook to decline in the low single-digits, down from a prior expectation of being flattish, due to a slower-than-expected improvement in biologics attachment and a more significant mix headwind from cervical and international growth. EOS revenue was essentially flat year-over-year at $17 million, and while installations rebounded in Q2, the company acknowledged that installation dynamics can be bumpy quarter to quarter, creating some unpredictability in this segment. The company expects surgical case volume growth to decelerate to high-teens in the second half of 2026, down from 20% in the first half, reflecting a more conservative outlook despite strong current momentum. Free cash flow generation in Q2 was modest at approximately $1 million, and the company had to invest heavily ($33 million) in inventory and instrument sets to support growth, which could pressure near-term cash flow despite the positive full-year outlook. Biologics attachment remains a headwind, and management expressed disappointment in this area, noting that it is a key area of focused execution but has not yet shown the desired improvement, potentially limiting revenue per case growth. Warning! GuruFocus has detected 5 Warning Signs with ATEC. Is ATEC fairly valued? Test your thesis with our free DCF calculator. Q: With surgical volume growing 20% and surgeon users up 24% in the quarter, where do you see the greatest remaining opportunities to drive salesforce productivity and SG&A leverage as the business scales towards $1 billion plus in revenues? A: Pat Miles (Chairman and CEO) stated that the lateral procedure market is still in its infancy, with the company holding only a 10% market share, leaving significant room for growth. He highlighted opportunities in improving biologics attachment rates, expanding the deformity footprint, and leveraging EOS influence. Todd King (CFO) added that the company saw a strong profitability drop-through of about 45% in Q2 and raised guidance based on an improving gross margin profile, with the full-year guidance implying a similar 40% drop-through rate. Q: You mentioned the biologics attachment rate stabilized during the quarter. What initiatives are in place to drive improvement, and when should this headwind become neutral or a tailwind? A: Pat Miles (Chairman and CEO) explained that near-term initiatives include more disciplined selling and launching new products to create distinction. He noted that the company completed the "third adaptive deal" to secure BMP (bone morphogenetic protein), which he described as the most unique product in the space, with Medtronic generating $700 million in BMP sales. He expressed enthusiasm about being the second company to bring BMP to market, which should help differentiate the company in this important area. Q: You previously talked about revenue per procedure being flattish for the full year, but now you're guiding to a low single-digit decline. What changed? A: Todd King (CFO) clarified that the change is primarily due to the biologics attach rate stabilizing rather than improving, which led the company to include less improvement in the second half than previously assumed. He noted that volumes grew 20% in the first half, driven by cervical and international growth, which are mix headwinds. He added that revenue per procedure comps get easier in the fourth quarter, and about three-quarters of the mix miss was a biologics phenomenon rather than a deformity issue. Q: We've heard indications of procedure volume slowdowns from other ortho companies. Can you add color on what you're seeing and any material impact from recent ACA changes? A: Pat Miles (Chairman and CEO) stated that the company's volume was robust and new surgeon additions were strong, noting that spine surgery is rarely truly elective due to the inevitability of intervention for neural pain. Todd King (CFO) added that the company's analysis suggests less than 5% exposure to ACA volume, making it a nonfactor. The company continues to see a consistent marketplace with robust volumes. Q: On free cash flow, you mentioned $4-6 million in Q3, which implies about $25 million in Q4 to hit the $20 million plus target. What are the drivers of that improvement? A: Todd King (CFO) explained that the company front-loaded investments, spending $33 million in Q2 and a similar amount in Q1, with a full-year range of $90-100 million. He detailed that the Q3 to Q4 step-up in EBITDA is about $10 million, and with lower spending on sets and inventory in Q4 (by $10-15 million), the bridge from $5 million in Q3 to $25 million in Q4 is achievable. He emphasized that the components are incremental EBITDA growth and reduced capital investment in the fourth quarter. Q: Can you comment on surgical trends throughout Q2, exiting Q2, and into Q3? What drives your confidence in sustaining Q2 performance through the back half? A: Todd King (CFO) noted that year-over-year dollar adds accelerated from $26 million in Q1 to $28 million in Q2, and the 17% year-over-year growth stabilized. He pointed to north of 20% surgeon adds generating 20% surgical volume growth, which is above the high-teens implied in the second-half guide. He highlighted the company's forward investment in sets and inventory to capitalize on the opportunity, positioning the company well to drive revenue in the second half. Q: On Valence, how has the launch been going? Are you seeing placements at academic centers or more in outpatient ASC settings? A: Pat Miles (Chairman and CEO) said the experience has been a mix of both academic and community hospital/ASC settings, going as expected. He highlighted the elegant workflow and the in-field camera controllable by the surgeon as key virtues. He noted that placements are going as planned, with most structured as earnout-type dynamics since customers aren't providing capital upfront as they did years ago. The company sees Valence as an operating system for orchestrating the procedural experience rather than just another navigation platform. Q: On the case volume growth assumption of high-teens in the back half versus 20% in the first half, what's driving the deceleration, and what's your confidence in sustaining lateral and cervical case volume growth? A: Pat Miles (Chairman and CEO) cited new product acceptance on the lateral side, with PTP (posterior transpsoas) continuing to show strong momentum, and the forthcoming deformity season as sources of confidence. Todd King (CFO) added that the company reaffirmed its full-year guide while beating consensus in Q2, and the high-teens guidance reflects a methodical and thoughtful approach to execution rather than a fundamental slowdown. Q: Last quarter you outlined initiatives to improve EOS execution. Can you talk about progress made and any additional investments needed? A: Pat Miles (Chairman and CEO) described EOS as one of the company's biggest differentiators and a foundational tool. He highlighted the ability to provide 3D reconstruction and Scoliosis Research Society (SRS) classification proxies, which enables predictive elements for surgical planning. He noted that EOS Insight adoption is driving a 32% increase in revenue at institutions where it's live. He said the company has brought in more sophisticated leadership for capital equipment processes and continues to improve, but doesn't foresee needing a significantly different team. Q: On EOS, you said you have the right team in place. How are you feeling about productivity levels and the risk to hitting your guide? Should we expect incremental rep investment next year? A: Pat Miles (Chairman and CEO) expressed great confidence in the guide, noting he's never met a surgeon who doesn't want an EOS. The challenge is more about installation dynamics and space rather than price. He For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Alphatec Holdings, Inc.? Here are five stocks we like better. Q2 revenue rose 15% to $214 million, driven by 20% growth in surgical case volume and a 24% increase in surgeon users. Adjusted EBITDA climbed 53% to $36 million, with margin expanding to 17%, while the company generated approximately $1 million in positive free cash flow. Alphatec maintained its 2026 revenue outlook of approximately $882 million and raised adjusted EBITDA guidance to $140 million from $134 million. Full-year free cash flow is still expected to reach at least $20 million. Revenue per case declined 2.7% year over year, primarily because of lower biologics attachment and case mix, prompting the company to lower its full-year revenue-per-case outlook to a low-single-digit decline. EOS Insight adoption and the Valence technology platform remain key growth initiatives. Alphatec (NASDAQ:ATEC) reported second-quarter 2026 revenue of $214 million, up 15% from a year earlier, as growth in surgical procedures and surgeon adoption supported higher profitability and positive free cash flow. Chairman and CEO Pat Miles said surgical revenue rose 17% to $196 million, while surgical case volume increased about 20% and surgeon users increased approximately 24%. He characterized those metrics as evidence of both increasing utilization by existing surgeons and adoption by new surgeons. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control “We’re adding surgeons. They are doing more with us,” Miles said. “The business is working, and we are scaling.” CFO Todd Koning said adjusted EBITDA totaled $36 million, up approximately 53% year over year and $15 million sequentially. Adjusted EBITDA margin expanded 420 basis points to 17%. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Gross margin increased 260 basis points from the prior-year quarter to 72.5%, which Koning attributed to inventory efficiency, cost reductions and product mix. Operating expenses rose 11%, but declined by approximately 260 basis points as a percentage of revenue. The company generated $34 million in operating cash flow during the quarter and invested about $33 million in inventory and instrument sets, producing approximately $1 million in positive free cash flow. Alphatec said this exceeded its expectation for roughly breakeven free cash flow and marked its fourth consecutive quarter of positive trailing-12-month free cash flow. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Alphatec ended the quarter with approximately $119 million in cash and $85 million in available borrowing capacity, for roughly $204 million of total liquidity. During the quarter, the company completed a new term loan A and revolving credit facility with J.P. Morgan and TD Cowen. Koning said the financing consolidated two legacy facilities, extended maturities to 2031 and is expected to reduce annual interest expense by more than $6 million. While procedure volume and surgeon adoption grew, overall revenue per case declined approximately 2.7% year over year. Koning said the decline reflected case mix, strong international growth and lower biologics attachment. Biologics attachment stabilized in the second quarter but remained below prior-year levels. Revenue per case improved 1.5% sequentially, however, and average revenue per case in the company’s core lateral, ALIF and cervical procedures increased from a year earlier, according to Koning. In response to analyst questions, Miles said the company sees opportunities to improve biologics attachment through greater sales discipline and new products. He also cited the company’s TheraCell transaction and its expectation of becoming the second company in the market with BMP, or bone morphogenetic protein. Koning said approximately three-quarters of the difference between the company’s revenue-per-procedure performance and its internal expectations during the quarter was related to biologics. Alphatec now expects average revenue per case to decline in the low single digits for the full year, rather than remain approximately flat as previously anticipated. The company said the expected improvement in biologics attachment is largely assumed only in the fourth quarter. EOS revenue was $17 million in the quarter, compared with $14 million in the first quarter and roughly flat from a year earlier. The company said demand for EOS systems remained strong, while installations can vary from quarter to quarter. Alphatec said EOS Insight adoption is expanding and is beginning to support surgical implant demand. Among established EOS Insight accounts, implant revenue increased approximately 32% within six months after implementation, according to Koning. Miles said EOS systems provide access to academic institutions and other facilities that were previously difficult for the company to reach. He described EOS Insight as a tool that can support diagnosis, pre-surgical planning, intraoperative reconciliation and follow-up. During the question-and-answer session, he said EOS Insight penetration was in the range of 15% to 20% of the EOS installed base, with adoption moving faster than expected as data-sharing arrangements are completed. The company also discussed its Valence technology platform. Miles said early clinical experience has shown that surgeons find value in the technology and its workflow, while utilization and customer feedback continue to shape the product’s development. He said recent FDA clearances for intraoperative alignment and Contour 3D, an automated rod bender, expanded Valence’s capabilities. “We don’t view Valence as another navigation platform,” Miles said. “We believe it will become the operating system to which more of the procedural experience is orchestrated.” Alphatec maintained its full-year 2026 revenue outlook of approximately $882 million, representing roughly 15% growth. The guidance includes approximately $805 million of surgical revenue, up about 17%, and approximately $77 million of EOS revenue. Second-half surgical revenue growth is expected to accelerate to 18%, compared with 17% in the first half. Surgical case volume is expected to increase in the high teens during the second half. Full-year free cash flow is still expected to be at least $20 million. Third-quarter free cash flow is expected to be between $4 million and $6 million. The company raised its full-year adjusted EBITDA outlook to approximately $140 million, representing a 16% margin, from its previous outlook of $134 million. Koning said the increase reflected expectations for improved gross margins and continued operating discipline. Regarding free cash flow, Koning said inventory and instrument-set investment was intentionally front-loaded in the first half to support surgeon adoption and anticipated second-half growth. He said lower fourth-quarter investment in inventory and sets, combined with expected EBITDA growth, was expected to support a significant increase in free cash flow later in the year. Miles said the company continues to see growth opportunities in lateral procedures, deformity, EOS-driven surgeon access, biologics, international markets and sales-force productivity. He added that Alphatec is seeing international growth in markets including Japan, Australia and New Zealand, though the company did not provide a geographic breakdown of procedure growth. Alphatec Holdings, Inc (NASDAQ: ATEC) is a medical technology company focused on the design, development and commercialization of products for the surgical correction of degenerative spinal conditions. The company's portfolio centers on interbody implants, biologics, fixation devices and surgical planning tools intended to improve patient outcomes in spinal fusion procedures. Alphatec's flagship offerings include customizable interbody cages, bone graft materials and specialized instrumentation designed for minimally invasive and open spinal surgeries. Founded as Alphatec Spine in 1985 and rebranded as Alphatec Holdings in 2018, the company has grown from a single-product organization into a multi-platform innovator in the spine market. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Alphatec Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Total revenue of $214 million, up 15% year-over-year Surgical revenue of $196 million increased 17%, driven by 20% case volume growth Company reaffirms 2026 revenue outlook CARLSBAD, Calif., August 04, 2026--(BUSINESS WIRE)--Alphatec Holdings, Inc. (Nasdaq: ATEC), a spine-focused provider of innovative solutions dedicated to revolutionizing the approach to spine surgery, today announced financial results for the quarter ended June 30, 2026, and business highlights. Second Quarter 2026 Financial Results Second Quarter Highlights Surgical revenue of $196 million increased 17%, or $28 million year-over-year Net new surgeon users increased 24%, supporting continued durable growth Adjusted EBITDA of $36 million, or 17% of revenue, expanded 420 basis points year-over-year Generated positive free cash flow with continued trailing twelve-month free cash flow positivity "ATEC’s procedural approach continues to create true distinction in the spine market," said Pat Miles, Chairman and Chief Executive Officer. "During the quarter, we saw 20 percent case volume growth, continued to expand our surgeon user base, and generated strong profitability. Surgeons understand that better technology, workflows, and data can transform the surgical experience and drive improved patient outcomes. With ATEC’s dedication to clinical innovation, data-driven decision-making, and sales execution, our opportunity to earn surgeon trust remains substantial, allowing us to create long-term value for years to come." Financial Outlook for the Full Year 2026 The Company is reaffirming its full-year revenue outlook and increasing adjusted EBITDA guidance following a second quarter characterized by strong case volume growth, continued surgeon adoption, expanding profitability, and positive free cash flow generation. For fiscal year 2026, the Company continues to expect total revenue of approximately $882 million, including approximately $805 million of surgical revenue and approximately $77 million of EOS revenue. This outlook represents approximately 15% total revenue growth and approximately 17% surgical revenue growth for the year. The Company now expects adjusted EBITDA of approximately $140 million, an increase from its prior expectation of approximately $134 million, reflecting continued progress in operating leverage and margin expansion. The Company also continues to expect at least $20 million of free cash flow for fiscal year 2026. Financial Results Webcast The Company will host a live webcast today at 1:30 p.m. PT / 4:30 p.m. ET. To access the live webcast, please use this link or visit the Investor Relations Events & Presentations section of ATEC’s corporate website. A replay of the webcast will remain available through the Investor Relations section of ATEC’s corporate website for twelve months. Analyst Webcast Participation To participate in the question-and-answer session, analysts must register in advance using this link. Upon registration, access details, including a unique code, will be provided via email. Non-GAAP Financial Information To supplement the Company’s financial statements presented in accordance with generally accepted accounting principles in the United States of America (GAAP), the Company reports certain non-GAAP financial measures listed below under "Non-GAAP Financial Measures." The Company believes that these non-GAAP financial measures provide investors with an additional tool for evaluating the Company's core performance, which management uses in its own evaluation of continuing operating performance, and provides a baseline for assessing the Company’s future earnings potential. The Company’s non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial measures differently, particularly related to non-recurring, unusual items. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. We have not reconciled our non-GAAP financial measures for the full year 2026 because certain items that impact these figures are either uncertain or outside our control and cannot be reasonably predicted. Accordingly, a reconciliation of forward-looking, non-GAAP financial measures is not available. Included below are definitions of the non-GAAP financial measures the Company uses. Non-GAAP Financial Measures Free cash flow: Calculated by subtracting capital expenditures from cash flow provided by or used in operating activities. Management uses free cash flow to measure progress on its capital efficiency and cash flow initiatives. Non-GAAP Gross Profit and Non-GAAP Gross Margin: Non-GAAP gross profit represents GAAP gross profit with adjustments to exclude the impact of certain items recorded to cost of goods sold. Such potential adjustments are described within the section below under "Non-GAAP Adjustments" and included in the non-GAAP reconciliation attached below. Non-GAAP gross margin represents non-GAAP gross profit as a percentage of GAAP net sales. Non-GAAP Operating Expenses: Non-GAAP operating expenses represent GAAP operating expenses, such as sales, general, and administrative expense, and research and development expense, with adjustments to exclude the impact of certain items recorded in GAAP operating expenses. Such potential adjustments are described within the section below under "Non-GAAP Adjustments" and included in the non-GAAP reconciliation. Non-GAAP Net Income (Loss) and Non-GAAP EPS: Non-GAAP net income (loss) represents GAAP net loss with adjustments to exclude the impact of certain items recorded in GAAP net loss. Such potential adjustments are described within the sections below under "Non-GAAP Adjustments" and included in the non-GAAP reconciliation. Non-GAAP EPS represents non-GAAP net income (loss) divided by weighted-average shares outstanding. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin: EBITDA represents earnings before non-operating income/expense, taxes, depreciation and amortization. Adjusted EBITDA consists of EBITDA with adjustments to exclude certain items described within the section below under "Non-GAAP Adjustments" and included in the non-GAAP reconciliation. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of GAAP net sales. Non-GAAP Adjustments The Company's non-GAAP financial measures reflect the exclusion of the following items: Amortization of acquired intangible assets: Represents amortization expense associated with intangible assets including, but not limited to customer relationships, intellectual property, and trade names acquired in business combinations and asset acquisitions. This adjustment does not include amortization from other intangibles. Litigation-related expenses: We are involved in various litigation matters that from time to time result in settlements. Litigation matters can vary in their characteristics, frequency and significance to our operating results and core business operations. We review litigation matters from both a qualitative and quantitative perspective to determine whether such matters are a normal and recurring part of our business. We include in our GAAP financial statements litigation fees and settlement expenses that we determine to be normal, recurring and routine to our business. When we determine that certain litigation matters are not normal and recurring to our core business operations, we believe excluding these expenses will provide our management and investors with useful incremental information. Litigation fees and settlement expenses excluded from our non-GAAP financial measures in the periods presented relate primarily to patent litigation and other litigation matters that relate directly to the business transformation that we started in 2018 and are discussed more fully in our periodic reports filed with the Securities and Exchange Commission. Purchase accounting adjustments on acquisitions: Includes non-cash expenses incurred as a result of fair value step-ups associated with tangible assets acquired in business combinations or asset acquisitions. Restructuring expenses: From time to time, in order to realign the Company’s operations or to realize synergies from acquisitions, the Company may eliminate roles or restructure its operations and footprint. In such cases, the Company may incur one-time severance and personnel costs associated with workforce reductions, or costs associated with exiting and/or relocating facilities. We exclude these costs as we do not consider such amounts to be part of the ongoing operations. Stock-based compensation: Stock-based compensation is charged to cost of revenue and operating expenses. We exclude stock-based compensation from certain of our non-GAAP financial measures because we believe that excluding these non-cash expenses provides meaningful supplemental information regarding operational performance. Because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, the subjective assumptions involved in those determinations, and the volatility in valuations that can be driven by market conditions outside the Company’s control, the Company believes excluding stock-based compensation expense enhances the ability of management and investors to understand and assess the underlying performance of its business over time. Transaction-related expenses: Represent one-time costs incurred in connection with business combinations, asset acquisitions, or debt financing and modification activities. These expenses may include, but are not limited to, legal and advisory fees, due diligence costs, contract termination charges, and other third-party expenses directly related to the planning or execution of these transactions. We exclude these costs because they can vary significantly from period to period and are not indicative of the underlying trends in our core business. Foreign currency exchange impact: Gains and losses related to foreign currency transactions, which are recorded as other income (expense), net. Management excludes these items when evaluating the Company's operating results as they are primarily non-cash and non-operating in nature. Loss on debt extinguishment: Represents charges recognized in connection with the early repayment, refinancing, or settlement of debt, including write-offs of unamortized debt discounts, premiums, or deferred financing costs, and any associated prepayment penalties. We exclude these items from non-GAAP results because they are non-recurring in nature, not indicative of ongoing operating performance, and can vary significantly from period to period based on financing activity. Loss (gain) on derivative liability: Represents non-cash fair value adjustments associated with embedded derivative features related to our convertible debt. These mark-to-market changes are driven by fluctuations in our stock price and other valuation inputs, and do not reflect current operating performance. We exclude these amounts from non-GAAP results because they are non-cash, volatile, and unrelated to the Company’s core business operations. Non-cash interest expense: Consists primarily of interest expense related to the amortization of debt discounts, deferred financing costs, and other non-cash components associated with our convertible notes and other long-term debt instruments. We exclude this item from non-GAAP net income because it is non-cash in nature and does not reflect our core operating performance or current period cash expenditures. Long-term income tax rate adjustment: The Company employs a structural long-term projected non-GAAP income tax rate of 26% for greater consistency across reporting periods. This long-term projected non-GAAP tax rate reflects historical and expected tax positions and excludes any benefit from deferred tax assets or valuation allowance changes. The long-term rate considers various factors, including the Company’s anticipated tax structure, its tax positions in different jurisdictions, and current impacts from key U.S. legislation where the Company operates. We will reevaluate this tax rate, as necessary, for events such as major changes in the U.S. tax environment, substantial changes in the Company’s geographic earnings mix due to acquisition activity, or other shifts in the Company’s strategy or business operations. Other non-recurring expenses: These represent items that are unusual or infrequent in nature and that we believe are not indicative of our ongoing operating performance. Examples may include discrete costs associated with tax strategy implementation or one-time expenses related to customer restructuring or reorganization events. We evaluate such items based on their nature and significance and disclose material adjustments in our non-GAAP reconciliations. About Alphatec Holdings, Inc. ATEC, through its wholly owned subsidiaries, Alphatec Spine, Inc., EOS imaging S.A.S., and SafeOp Surgical, Inc., is a medical device company dedicated to revolutionizing the approach to spine surgery through clinical distinction. ATEC’s Organic Innovation Machine™ is focused on developing new approaches that integrate seamlessly with the Company’s expanding InformatiX™ platform to better inform surgery and more safely and reproducibly achieve the goals of spine surgery. ATEC’s vision is to be the Standard Bearer in Spine. For more information, visit us at www.atecspine.com. Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The Company cautions investors that there can be no assurance that actual results will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward-looking statements include, but are not limited to: references to the Company's revenue, balance sheet, growth, adjusted EBITDA, profitability, free cash flow, and financial outlook and commitments; planned product launches, timelines, introductions, regulatory submissions or clearances; and the Company's ability to compel surgeon adoption and drive procedural growth; and the expected reduction in interest expense and related cost savings over the life of the new credit facility, including assumptions regarding borrowing costs, interest rates, and the utilization of the facility. Important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to: the uncertainty of success in developing new products or products currently in the pipeline; the uncertainties in the Company's ability to execute upon its strategic operating plan; the uncertainties regarding the ability to successfully license or acquire new products, and the commercial success of such products; failure to achieve acceptance of the Company's products by the surgeon community; failure to obtain FDA or other regulatory clearance or approval or unexpected or prolonged delays in the process; continuation of favorable third-party reimbursement; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company's ability to achieve profitability; uncertainty of additional funding and the form of such funding; product liability exposure; an unsuccessful outcome in any litigation; patent infringement claims; claims related to the Company's intellectual property; and the Company's ability to meet its financial obligations; changes in interest rates or credit market conditions that could affect the anticipated borrowing cost savings; and the Company's ability to satisfy the terms and covenants of the new credit facility. A further list and description of these and other factors, risks and uncertainties can be found in the Company's most recent annual report, and any subsequent quarterly and current reports, filed with the U.S. Securities and Exchange Commission. ATEC disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law. View source version on businesswire.com: https://www.businesswire.com/news/home/20260804610121/en/ Contacts Investor/Media Contact: Robert JuddInvestor Relations(760) [email protected] Company Contact: J. Todd KoningChief Financial [email protected]

Alphatec (ATEC) came out with quarterly earnings of $0.07 per share, missing the Zacks Consensus Estimate of $0.09 per share. This compares to earnings of $0.02 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -22.22%. A quarter ago, it was expected that this medical equipment and supplies holding company would post a loss of $0.01 per share when it actually produced break-even earnings, delivering a surprise of +100%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Alphatec, which belongs to the Zacks Medical - Instruments industry, posted revenues of $213.51 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.04%. This compares to year-ago revenues of $185.54 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Alphatec shares have lost about 51.8% since the beginning of the year versus the S&P 500's gain of 11%. While Alphatec has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Alphatec was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.11 on $228.53 million in revenues for the coming quarter and $0.36 on $883.37 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Instruments is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Lucid Diagnostics Inc. (LUCD), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 13. This company is expected to post quarterly loss of $0.04 per share in its upcoming report, which represents a year-over-year change of +60%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Lucid Diagnostics Inc.'s revenues are expected to be $1.5 million, up 29.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alphatec Holdings, Inc. (ATEC) : Free Stock Analysis Report Lucid Diagnostics Inc. (LUCD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Alphatec (ATEC) reported break-even quarterly earnings per share versus the Zacks Consensus Estimate of a loss of $0.01. This compares to a loss of $0.23 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +100.00%. A quarter ago, it was expected that this medical equipment and supplies holding company would post earnings of $0.04 per share when it actually produced earnings of $0.06, delivering a surprise of +50%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Alphatec, which belongs to the Zacks Medical - Instruments industry, posted revenues of $192.11 million for the quarter ended March 2026, missing the Zacks Consensus Estimate by 3.74%. This compares to year-ago revenues of $169.18 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Alphatec shares have lost about 50.9% since the beginning of the year versus the S&P 500's gain of 5.2%. While Alphatec has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Alphatec was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.07 on $216.85 million in revenues for the coming quarter and $0.33 on $891.95 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Instruments is currently in the bottom 42% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. PAVmed Inc. (PAVM), another stock in the same industry, has yet to report results for the quarter ended March 2026. The results are expected to be released on May 15. This company is expected to post quarterly loss of $0.69 per share in its upcoming report, which represents a year-over-year change of +67.1%. The consensus EPS estimate for the quarter has been revised 82.2% higher over the last 30 days to the current level. PAVmed Inc.'s revenues are expected to be $0.1 million, up 900% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alphatec Holdings, Inc. (ATEC) : Free Stock Analysis Report PAVmed Inc. (PAVM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Surgical revenue grew 17%; total revenue grew 14% Company announces refinancing of existing debt with inaugural bank facility, reducing interest expense by more than $6 million annually and extending maturities to 2031 CARLSBAD, Calif, May 05, 2026--(BUSINESS WIRE)--Alphatec Holdings, Inc. (Nasdaq: ATEC), a spine-focused provider of innovative solutions dedicated to revolutionizing the approach to spine surgery, today announced financial results for the quarter ended March 31, 2026, and business highlights. First Quarter 2026 Financial Results First Quarter Highlights Surgical revenue of $178 million grew 17% year over year, driven by 21% growth in case volume Net new surgeon users increased 23% year over year, reinforcing durable growth Adjusted EBITDA of $21 million, or 11% of revenue, expanded 460 basis points year over year Free cash use of $11 million; trailing twelve-month free cash flow improved to $7 million "ATEC’s surgical business continues to demonstrate strong momentum, with volume-driven growth and increasing surgeon adoption reinforcing the strength of our procedural approach," said Pat Miles, Chairman and Chief Executive Officer. "We are adjusting our EOS expectations, but the underlying fundamentals of our business are strong and our conviction in the long-term opportunity has not changed. We are confident that our data-driven procedural ecosystem improves patient outcomes, which in turn drives durable growth, expanding margins, and long-term value." Financial Outlook for the Full Year 2026 The Company now expects total revenue for the fiscal year ending December 31, 2026 to approximate $882 million, representing approximately 15% total revenue growth, including 17% growth in surgical revenue. The Company reiterates surgical revenue guidance of approximately $805 million and adjusts EOS revenue to approximately $77 million. The Company continues to expect adjusted EBITDA of approximately $134 million, or 15% of revenue, reflecting ongoing and disciplined operating leverage. The Company also continues to expect at least $20 million of free cash flow for the full year 2026. Company Refinances Existing Debt with Inaugural Bank Facility The Company announced it has entered into an inaugural bank facility, including a revolving credit facility and Term Loan A, led by JPMorgan Chase Bank, N.A. and TD Securities (USA) LLC. The new facility refinances the Company’s existing debt, reduces borrowing costs, and extends maturities to 2031. The facility will reduce interest expense by more than $6 million annually, with the potential to generate more than $35 million of savings over the life of the facility. Additional details regarding the transaction are included in a separate press release issued today. Financial Results Webcast The Company will host a live webcast today at 1:30 p.m. PT / 4:30 p.m. ET. To access the live webcast, please visit the Investor Relations section of ATEC’s corporate website. A replay of the webcast will remain available through the Investor Relations section of ATEC’s corporate website for twelve months. Analyst Webcast Participation To participate in the question-and-answer session, analysts must register in advance using this link. Upon registration, access details, including a unique code, will be provided via email. Non-GAAP Financial Information To supplement the Company’s financial statements presented in accordance with generally accepted accounting principles in the United States of America (GAAP), the Company reports certain non-GAAP financial measures listed below under "Non-GAAP Financial Measures." The Company believes that these non-GAAP financial measures provide investors with an additional tool for evaluating the Company's core performance, which management uses in its own evaluation of continuing operating performance, and provides a baseline for assessing the Company’s future earnings potential. The Company’s non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial measures differently, particularly related to non-recurring, unusual items. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. We have not reconciled our non-GAAP financial measures for the full year 2026 because certain items that impact these figures are either uncertain or outside our control and cannot be reasonably predicted. Accordingly, a reconciliation of forward-looking, non-GAAP financial measures is not available. Included below are definitions of the non-GAAP financial measures the Company uses. Non-GAAP Financial Measures Free cash flow: Calculated by subtracting capital expenditures from cash flow provided by or used in operating activities. Management uses free cash flow to measure progress on its capital efficiency and cash flow initiatives. Non-GAAP Gross Profit and Non-GAAP Gross Margin: Non-GAAP gross profit represents GAAP gross profit with adjustments to exclude the impact of certain items recorded to cost of goods sold. Such potential adjustments are described within the section below under "Non-GAAP Adjustments" and included in the non-GAAP reconciliation attached below. Non-GAAP gross margin represents non-GAAP gross profit as a percentage of GAAP net sales. Non-GAAP Operating Expenses: Non-GAAP operating expenses represent GAAP operating expenses, such as sales, general, and administrative expense, and research and development expense, with adjustments to exclude the impact of certain items recorded in GAAP operating expenses. Such potential adjustments are described within the section below under "Non-GAAP Adjustments" and included in the non-GAAP reconciliation. Non-GAAP Net Income (Loss) and Non-GAAP EPS: Non-GAAP net income (loss) represents GAAP net loss with adjustments to exclude the impact of certain items recorded in GAAP net loss. Such potential adjustments are described within the sections below under "Non-GAAP Adjustments" and included in the non-GAAP reconciliation. Non-GAAP EPS represents non-GAAP net income (loss) divided by weighted-average shares outstanding. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin: EBITDA represents earnings before non-operating income/expense, taxes, depreciation and amortization. Adjusted EBITDA consists of EBITDA with adjustments to exclude certain items described within the section below under "Non-GAAP Adjustments" and included in the non-GAAP reconciliation. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of GAAP net sales. Non-GAAP Adjustments The Company's non-GAAP financial measures reflect the exclusion of the following items: Amortization of acquired intangible assets: Represents amortization expense associated with intangible assets including, but not limited to customer relationships, intellectual property, and trade names acquired in business combinations and asset acquisitions. This adjustment does not include amortization from other intangibles. Litigation-related expenses: We are involved in various litigation matters that from time to time result in settlements. Litigation matters can vary in their characteristics, frequency and significance to our operating results and core business operations. We review litigation matters from both a qualitative and quantitative perspective to determine whether such matters are a normal and recurring part of our business. We include in our GAAP financial statements litigation fees and settlement expenses that we determine to be normal, recurring and routine to our business. When we determine that certain litigation matters are not normal and recurring to our core business operations, we believe excluding these expenses will provide our management and investors with useful incremental information. Litigation fees and settlement expenses excluded from our non-GAAP financial measures in the periods presented relate primarily to patent litigation and other litigation matters that relate directly to the business transformation that we started in 2018 and are discussed more fully in our periodic reports filed with the Securities and Exchange Commission. Purchase accounting adjustments on acquisitions: Includes non-cash expenses incurred as a result of fair value step-ups associated with tangible assets acquired in business combinations or asset acquisitions. Restructuring expenses: From time to time, in order to realign the Company’s operations or to realize synergies from acquisitions, the Company may eliminate roles or restructure its operations and footprint. In such cases, the Company may incur one-time severance and personnel costs associated with workforce reductions, or costs associated with exiting and/or relocating facilities. We exclude these costs as we do not consider such amounts to be part of the ongoing operations. Stock-based compensation: Stock-based compensation is charged to cost of revenue and operating expenses. We exclude stock-based compensation from certain of our non-GAAP financial measures because we believe that excluding these non-cash expenses provides meaningful supplemental information regarding operational performance. Because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, the subjective assumptions involved in those determinations, and the volatility in valuations that can be driven by market conditions outside the Company’s control, the Company believes excluding stock-based compensation expense enhances the ability of management and investors to understand and assess the underlying performance of its business over time. Transaction-related expenses: Represent one-time costs incurred in connection with business combinations, asset acquisitions, or debt financing and modification activities. These expenses may include, but are not limited to, legal and advisory fees, due diligence costs, contract termination charges, and other third-party expenses directly related to the planning or execution of these transactions. We exclude these costs because they can vary significantly from period to period and are not indicative of the underlying trends in our core business. Foreign currency exchange impact: Gains and losses related to foreign currency transactions, which are recorded as other income (expense), net. Management excludes these items when evaluating the Company's operating results as they are primarily non-cash and non-operating in nature. Loss on debt extinguishment: Represents charges recognized in connection with the early repayment, refinancing, or settlement of debt, including write-offs of unamortized debt discounts, premiums, or deferred financing costs, and any associated prepayment penalties. We exclude these items from non-GAAP results because they are non-recurring in nature, not indicative of ongoing operating performance, and can vary significantly from period to period based on financing activity. Loss (gain) on derivative liability: Represents non-cash fair value adjustments associated with embedded derivative features related to our convertible debt. These mark-to-market changes are driven by fluctuations in our stock price and other valuation inputs, and do not reflect current operating performance. We exclude these amounts from non-GAAP results because they are non-cash, volatile, and unrelated to the Company’s core business operations. Non-cash interest expense: Consists primarily of interest expense related to the amortization of debt discounts, deferred financing costs, and other non-cash components associated with our convertible notes and other long-term debt instruments. We exclude this item from non-GAAP net income because it is non-cash in nature and does not reflect our core operating performance or current period cash expenditures. Long-term income tax rate adjustment: The Company employs a structural long-term projected non-GAAP income tax rate of 26% for greater consistency across reporting periods. This long-term projected non-GAAP tax rate reflects historical and expected tax positions and excludes any benefit from deferred tax assets or valuation allowance changes. The long-term rate considers various factors, including the Company’s anticipated tax structure, its tax positions in different jurisdictions, and current impacts from key U.S. legislation where the Company operates. We will reevaluate this tax rate, as necessary, for events such as major changes in the U.S. tax environment, substantial changes in the Company’s geographic earnings mix due to acquisition activity, or other shifts in the Company’s strategy or business operations. Other non-recurring expenses: These represent items that are unusual or infrequent in nature and that we believe are not indicative of our ongoing operating performance. Examples may include discrete costs associated with tax strategy implementation or one-time expenses related to customer restructuring or reorganization events. We evaluate such items based on their nature and significance and disclose material adjustments in our non-GAAP reconciliations. About Alphatec Holdings, Inc. ATEC, through its wholly owned subsidiaries, Alphatec Spine, Inc., EOS imaging S.A.S., and SafeOp Surgical, Inc., is a medical device company dedicated to revolutionizing the approach to spine surgery through clinical distinction. ATEC’s Organic Innovation MachineTM is focused on developing new approaches that integrate seamlessly with the Company’s expanding InformatiXTM platform to better inform surgery and more safely and reproducibly achieve the goals of spine surgery. ATEC’s vision is to be the Standard Bearer in Spine. For more information, visit us at www.atecspine.com. Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The Company cautions investors that there can be no assurance that actual results will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward-looking statements include, but are not limited to: references to the Company’s revenue, balance sheet, growth, and financial outlook and commitments; planned product launches, timelines, introductions, regulatory submissions or clearances; and the Company's ability to compel surgeon adoption and drive procedural growth; and the expected reduction in interest expense and related cost savings over the life of the new credit facility, including assumptions regarding borrowing costs, interest rates, and the utilization of the facility. Important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to: the uncertainty of success in developing new products or products currently in the pipeline; the uncertainties in the Company’s ability to execute upon its strategic operating plan; the uncertainties regarding the ability to successfully license or acquire new products, and the commercial success of such products; failure to achieve acceptance of the Company’s products by the surgeon community; failure to obtain FDA or other regulatory clearance or approval or unexpected or prolonged delays in the process; continuation of favorable third-party reimbursement; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to achieve profitability; uncertainty of additional funding and the form of such funding; product liability exposure; an unsuccessful outcome in any litigation; patent infringement claims; claims related to the Company’s intellectual property; and the Company’s ability to meet its financial obligations; changes in interest rates or credit market conditions that could affect the anticipated borrowing cost savings; and the Company’s ability to satisfy the terms and covenants of the new credit facility. A further list and description of these and other factors, risks and uncertainties can be found in the Company's most recent annual report, and any subsequent quarterly and current reports, filed with the U.S. Securities and Exchange Commission. ATEC disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law. View source version on businesswire.com: https://www.businesswire.com/news/home/20260505659249/en/ Contacts Investor/Media Contact: Robert Judd Investor Relations (760) 494-6790 [email protected] Company Contact: J. Todd Koning Chief Financial Officer [email protected]