Alphatec (ATEC) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 25% year-over-year to $146 million, driven by 27% growth in surgical revenue and 6% growth in EOS revenue, with record 244 surgeon training engagements and 20% growth in new surgeon users.

• Adjusted EBITDA turned positive at $5.6 million, a significant improvement from a $3.1 million loss in the prior year, with margin expansion and operating leverage.

• Net loss narrowed to $40.7 million from $51.4 million in Q2 2023, reflecting improved gross profit and lower litigation expenses.

• Launched EOS Insight, an AI-driven, end-to-end informatics platform for spine surgery, marking a major clinical and technological milestone.

• Over $50 million invested to expand operational footprint and support new user growth.

Financial highlights

• Q2 2024 surgical revenue was $130 million, up 27% year-over-year and 6% sequentially; EOS revenue was $16 million, up 6% year-over-year.

• Non-GAAP gross margin improved to 71.2%, up 190 basis points year-over-year; GAAP gross margin was 70.5%.

• Adjusted EBITDA margin reached 3.8% of sales, a 650 basis point improvement year-over-year.

• Operating loss improved to $35.3 million from $49.9 million year-over-year.

• Cash and cash equivalents were $100 million at June 30, 2024, with $531 million in debt.

Outlook and guidance

• Full-year 2024 revenue guidance raised to $602 million, with surgical revenue expected at $537 million and EOS revenue at $65 million.

• Adjusted EBITDA for 2024 guided to $25.5 million, representing 610 basis points of margin expansion.

• High-teen percent surgical volume growth and high single-digit percent revenue per procedure growth expected for the year.

• Free cash flow breakeven targeted for 2025, with positive inflection expected in Q4 2024.