Alphatec (ATEC) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $151 million, up 27% year-over-year, driven by 30% growth in surgical revenue and strong EOS segment performance.

• Adjusted EBITDA was $7.4 million (5% margin), marking the second consecutive positive quarter and a 530 basis point improvement year-over-year.

• Over 200 surgeon training engagements and 20% procedural volume growth, with 19% increase in new surgeon adoption.

• Record EOS Insight orders and continued investment in innovation, including AI-driven tools and robotics.

• Expanded term loan by $50 million, increasing total capacity to $200 million and enhancing liquidity.

Financial highlights

• Q3 2024 surgical revenue: $135 million, up 30% year-over-year; EOS revenue: $15 million, up 7%.

• GAAP gross margin was 68%, non-GAAP gross margin 69%, down 60 bps year-over-year due to product mix.

• Adjusted EBITDA improved by $7.9 million year-over-year, with 24% of revenue growth dropping through to AEBITDA.

• Cash burn reduced by over 50% sequentially to $21 million; quarter-end cash balance was $81 million, pro-forma cash post-financing $128 million.

• Net loss for Q3 2024 was $39.6 million, improved from $42.7 million in Q3 2023; net loss per share was $0.28.

Outlook and guidance

• FY 2024 revenue guidance raised to $605 million (25% growth), with $540 million surgical and $65 million EOS revenue.

• Full-year adjusted EBITDA guidance increased to $27 million, with 640 bps margin expansion and 30% drop-through.

• Free cash use expected at $125–$135 million for 2024; cash flow break-even targeted for 2025.

• Long-term targets for 2027: $1 billion revenue, 18% adjusted EBITDA margin, and $65 million free cash flow.

• High-teens surgical volume growth and high single-digit revenue per surgery growth expected for FY 2024.