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Alphatec (ATEC) - 2025 FY - Earnings Call Transcript
2025-09-03 15:32
Financial Data and Key Metrics Changes - The company reported sustained revenue growth, with a guidance of approximately 21% top-line growth for the year [10][12] - Q2 cash usage was at the high end of the guidance range of $0 to $5 million, with expectations of slightly positive free cash flow for the year [5][9] - Adjusted EBITDA profitability is ahead of expectations, contributing to confidence in achieving free cash flow profitability by 2025 [6][26] Business Line Data and Key Metrics Changes - The company added 21% new surgeons in Q2, maintaining a consistent new surgeon metric around 20% over the past eight quarters [15] - Existing territories grew by 29% in Q2, indicating strong surgeon interest and demand [18] Market Data and Key Metrics Changes - The company anticipates a step down in market performance from Q2 to Q3, followed by a rebound from Q3 to Q4 [10][11] - The two-year stack growth rate for Q1 was about $31 million, while Q2 was approximately $34 million, with expectations of $33 million each quarter in the second half [11][12] Company Strategy and Development Direction - The company aims to focus on unique clinical solutions that drive surgeon interest, with a long-term view of improving spine surgery [15] - The upcoming launch of the Valence robot is expected to address clinical challenges and expand the addressable market in spine surgery [31][33] - The company is committed to investing in sales and R&D to drive sustainable growth opportunities while achieving financial commitments [28][74] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year, citing strong surgeon adoption and procedural volume growth as tailwinds [30] - The company is optimistic about the clinical value of its solutions, which is expected to drive adoption and utilization rates [48] Other Important Information - The company has been expanding its international presence, particularly in Australia, New Zealand, and Japan, with plans for growth in these markets [49][50] - The PTP Corpectomy launch is seen as a natural evolution within the PTP ecosystem, aimed at enhancing clinical value and procedural volume [55][58] Q&A Session Summary Question: What investor feedback have you received since Q2 results? - Management noted that investors are focused on the durability of top-line growth and the company's profitability profile [4] Question: What gives you confidence in achieving free cash flow profitability in 2025? - Management highlighted better-than-expected performance in the first half of the year and effective cash flow management [5] Question: How do you see the rest of the year playing out from a cash flow perspective? - Management projected free cash flow generation of $1 million to $5 million in Q3 and high single digits in Q4 [9] Question: Can you discuss your recruitment efforts and market environment? - Management indicated a favorable environment for recruitment, with a focus on adding reps to support new surgeon additions [14][15] Question: What are the key performance metrics for new sales reps? - Management explained that new reps typically ramp up over a two-year period, with significant growth potential by year three [20][21] Question: How do you balance attracting new sales talent while achieving cash flow positivity? - Management outlined a structured investment approach in sets and inventory to support revenue growth while maintaining cash flow [24][26] Question: What are your international plans for 2025 and beyond? - Management confirmed a focus on Australia, New Zealand, and Japan, with plans for profitable growth in these markets [49][50] Question: How does the PTP Corpectomy fit into your broader strategy? - Management described PTP as a platform approach that allows for addressing various pathologies, with corpectomy being a natural addition [55][58]
Alphatec (ATEC) - 2025 FY - Earnings Call Transcript
2025-09-03 15:30
Financial Data and Key Metrics Changes - The company reported a cash usage of $5 million in Q2, at the high end of the guidance range, and expects to achieve slightly positive free cash flow for the year [4][5] - The guidance for top-line growth has been raised to approximately 21% for the year, with expectations of $130 million in total revenue for 2023, 2024, and 2025 [10][12] Business Line Data and Key Metrics Changes - The company achieved a 21% increase in new surgeon adds in Q2, maintaining a consistent growth rate over the past eight quarters [15] - Existing territories grew by 29% in Q2, indicating strong demand and interest from surgeons [19] Market Data and Key Metrics Changes - The company anticipates a slight step down in market performance from Q2 to Q3, followed by a rebound in Q4 [10] - The two-year stack growth rate for Q1 was approximately $31 million, and for Q2 it was about $34 million, with expectations of $33 million for each quarter in the second half [11][12] Company Strategy and Development Direction - The company is focused on compelling surgeons with unique clinical solutions and aims to expand its market share in the spine sector [15] - The upcoming launch of the Valence robot is expected to address clinical challenges in spine surgery, with a focus on integrating it with existing procedures [33][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving free cash flow profitability in 2025, citing better-than-expected performance in the first half of the year [4][5] - The company is optimistic about strong surgeon adoption rates, which are expected to drive procedural volume growth [31] Other Important Information - The company plans to maintain a narrow and deep international strategy, focusing on profitable markets like Australia, New Zealand, and Japan [55][56] - The PTP Corpectomy launch is seen as a natural evolution within the PTP ecosystem, aimed at enhancing clinical value and procedural volume [61][62] Q&A Session Summary Question: What investor feedback have you received since Q2 results? - Investors are focused on the durability of top-line growth and the company's profitability profile [3] Question: What gives you confidence in achieving free cash flow profitability in 2025? - Confidence stems from better-than-expected cash flow performance in the first half of the year [4] Question: How do you see the rest of the year playing out from a cash flow perspective? - Expectations for Q3 are a free cash flow generation of $1 million to $5 million, with high single digits anticipated in Q4 [9] Question: Can you discuss the overall spine market and recruitment efforts? - The company is benefiting from market disruptions and is onboarding sales representatives to support surgeon interest [14] Question: What are the key performance metrics for new sales reps? - New reps typically ramp up over a two-year period, with significant revenue growth expected by year three [21][22] Question: How do you balance attracting new sales talent while achieving cash flow positivity? - The company has a structured investment approach, spending $0.75 for every dollar of year-over-year growth [27][28] Question: What are your international plans for 2025 and beyond? - The focus remains on Australia, New Zealand, and Japan, with plans for growth and profitability in these markets [55][56] Question: How does the PTP Corpectomy fit into the broader ecosystem? - It is seen as a natural evolution that adds clinical value and supports procedural volume growth [61][62]
These 3 health tech stocks spiked 37% in a day; Time to buy?
Finbold· 2025-08-04 09:56
Core Insights - The broader stock market experienced significant losses due to trade policy changes and negative economic data, while select health technology stocks, including 4D Molecular Therapeutics, Sensei Biotherapeutics, and Alphatec Holdings, saw substantial gains averaging around 37% [1] Group 1: 4D Molecular Therapeutics - Shares of 4D Molecular Therapeutics surged over 42% to close at $6.42 following the release of promising clinical data for its gene therapy candidate, 4D-150, targeting diabetic macular edema and wet age-related macular degeneration [2] - The therapy showed strong, dose-dependent results, with a reported 78% reduction in treatment burden at the Phase 3 dose compared to standard aflibercept dosing, along with sustained visual improvements and no reported inflammation [4] - The European Medicines Agency endorsed the company's plan to seek approval based on a single Phase 3 trial, aligning with earlier FDA guidance [5] Group 2: Sensei Biotherapeutics - Sensei Biotherapeutics emerged as a top gainer despite no major company-specific news, likely due to increased speculative interest in its immuno-oncology pipeline and anticipation of upcoming trial data [6] - The stock rose 38% to close at $10.32, following the announcement that Sensei will present clinical data from its Phase 1/2 trial of its lead candidate at the European Society for Medical Oncology Congress on October 17 [7] Group 3: Alphatec Holdings - Alphatec Holdings' stock jumped 30% to close at $13.77 after the company raised its full-year 2025 revenue outlook to $742 million, driven by strong demand for its surgical platforms and EOS imaging technologies [9] - The company reported second-quarter 2025 revenue of $185.5 million, reflecting a 28% year-over-year increase, although it also reported a widened net loss of $41.1 million, or $0.27 per share [11] - Despite remaining unprofitable, investor confidence appears to be increasing in Alphatec's commercial execution and long-term growth prospects [12]
Alphatec (ATEC) Q2 Revenue Jumps 27%
The Motley Fool· 2025-08-01 23:08
Alphatec (ATEC 30.15%), a medical technology company specializing in spinal surgery solutions, reported earnings on July 31, 2025. The release showed top- and bottom-line figures (GAAP revenue and non-GAAP EPS) that easily topped analyst estimates. Revenue (GAAP) totaled $186 million, beating the consensus GAAP estimate of $178.78 million. Non-GAAP earnings per share (EPS) reached $0.02, compared to an expected non-GAAP loss of ($0.04). This marked a significant improvement from the ($0.08) non-GAAP loss in ...
Alphatec (ATEC) Beats Q2 Earnings and Revenue Estimates
ZACKS· 2025-07-31 22:56
This quarterly report represents an earnings surprise of +133.33%. A quarter ago, it was expected that this medical equipment and supplies holding company would post a loss of $0.12 per share when it actually produced a loss of $0.23, delivering a surprise of -91.67%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Alphatec, which belongs to the Zacks Medical - Instruments industry, posted revenues of $185.54 million for the quarter ended June 2025, surpassing the Z ...
Alphatec (ATEC) - 2025 Q2 - Earnings Call Transcript
2025-07-31 21:30
Financial Data and Key Metrics Changes - The company reported total revenue of $186 million, representing a 27% increase year over year, with surgical revenue growing by 29% to $168 million [9][10] - Adjusted EBITDA reached a record $23 million, accounting for 13% of revenue, marking an improvement of 880 basis points year over year [4][16] - Free cash flow was $5 million, indicating a positive cash generation trend [4][18] Business Line Data and Key Metrics Changes - Surgical revenue growth was driven by a procedural volume increase of 28%, with surgeon adoption growing by 21% and utilization increasing by 6% [10][11] - EOS revenue increased by 11% year over year, contributing $17 million to total revenue [13] - Same store sales in established territories grew by 29%, reflecting strong demand in existing markets [5][11] Market Data and Key Metrics Changes - The company has achieved a market share ranking of third in the U.S. spine market, indicating significant competitive positioning [7][38] - The company continues to grow at five to six times the overall market rate, showcasing its strong market presence [22] Company Strategy and Development Direction - The company is focused on creating clinical distinction and enhancing surgeon adoption through innovative product offerings and a robust sales force [24][30] - Investments in technology infrastructure are aimed at supporting long-term growth and profitability, with a focus on integrating various surgical tools into a cohesive ecosystem [30][34] - The company plans to launch a new robotic system in early 2026, which will be integrated into existing surgical workflows [65][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain positive cash flow and profitability, with expectations for continued strong revenue growth [20][19] - The company anticipates a sequential step down in revenue from Q2 to Q3, typical for the seasonality of the business [98] - Management highlighted the importance of operational improvements and asset management in driving future profitability [19][20] Other Important Information - The company has raised its full-year revenue guidance by $8 million to $742 million, reflecting strong performance in the surgical business [20][63] - Non-GAAP gross margin was reported at 70%, with a slight decrease year over year due to product mix changes [14] Q&A Session Summary Question: What differentiates the upcoming robotic system? - The company emphasized the integration of navigation robotics into the surgical workflow, aiming for increased precision and efficiency in spine procedures [41][46] Question: How much of the same store growth is attributed to new reps and instrument availability? - Management noted that both new hires and increased instrument availability have contributed to growth, with a focus on surgeon adoption and utilization driving results [51][56] Question: What are the expectations for organic growth and geographic penetration? - The company expects over 20% organic growth, with a focus on expanding in under-indexed geographies and leveraging the EOS technology for predictive analytics [62][94] Question: What is the outlook for CapEx and free cash flow? - Management indicated a commitment to positive free cash flow while maintaining strategic CapEx investments to support growth initiatives [109]
Alphatec (ATEC) - 2025 Q2 - Quarterly Report
2025-07-31 20:51
[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's financial analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Alphatec Holdings' unaudited condensed consolidated financial statements and detailed notes for Q2 2025 and prior periods [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (in thousands) | Asset/Liability/Equity | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :------------------ | | **Assets** | | | | Cash and cash equivalents | $157,063 | $138,840 | | Accounts receivable, net | $95,919 | $82,987 | | Inventories | $169,760 | $175,264 | | Total current assets | $443,326 | $417,399 | | Property and equipment, net | $139,729 | $156,394 | | Goodwill | $75,218 | $70,976 | | Intangible assets, net | $95,593 | $93,518 | | Total assets | $790,293 | $775,710 | | **Liabilities** | | | | Accounts payable | $47,240 | $52,984 | | Accrued expenses and other current liabilities | $87,013 | $81,466 | | Total current liabilities | $154,184 | $153,026 | | Long-term debt | $551,988 | $574,522 | | Total liabilities and stockholders' equity (deficit) | $790,293 | $775,710 | | **Stockholders' Equity (Deficit)** | | | | Total stockholders' equity (deficit) | $23,771 | $(14,169) | - **Total assets** increased by **$14.583 million** from $775.710 million at December 31, 2024, to $790.293 million at June 30, 2025[11](index=11&type=chunk) - **Total stockholders' equity (deficit)** significantly improved from a deficit of **$(14.169) million** to a positive **$23.771 million**[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over specific periods, including revenue, costs, and net loss Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue from products and services | $185,544 | $145,573 | $354,724 | $284,050 | | Cost of sales | $56,443 | $42,979 | $109,627 | $84,105 | | Gross profit | $129,101 | $102,594 | $245,097 | $199,945 | | Operating loss | $(13,085) | $(35,307) | $(57,376) | $(78,648) | | Net loss | $(41,144) | $(40,680) | $(93,051) | $(89,175) | | Net loss per share, basic and diluted | $(0.27) | $(0.29) | $(0.63) | $(0.63) | - **Revenue from products and services** increased by **27%** for the three months ended June 30, 2025, and by **25%** for the six months ended June 30, 2025, compared to the same periods in 2024[14](index=14&type=chunk) - **Operating loss** significantly narrowed for both periods, indicating improved operational efficiency[14](index=14&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section details the company's comprehensive loss, including net loss and other comprehensive income/loss items Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(41,144) | $(40,680) | $(93,051) | $(89,175) | | Foreign currency translation adjustments | $6,208 | $(742) | $9,423 | $(3,206) | | Comprehensive loss | $(34,936) | $(41,422) | $(83,628) | $(92,381) | - The **comprehensive loss** decreased for both the three and six months ended June 30, 2025, primarily due to positive foreign currency translation adjustments, which offset the net loss[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity%20%28Deficit%29) This section tracks changes in stockholders' equity (deficit) over time, reflecting transactions and comprehensive loss Key Changes in Stockholders' Equity (Deficit) (in thousands) | Item | Six Months Ended June 30, 2025 Impact | Six Months Ended June 30, 2024 Impact | | :--------------------------------------- | :------------------------------------ | :------------------------------------ | | Balance at December 31, 2024/2023 | $(14,169) (2024) | $78,116 (2023) | | Stock-based compensation | $37,942 | $34,282 | | Common stock issued for stock option exercises | $505 | $156 | | Common stock issued for vesting of performance and restricted stock awards, net of shares retained for tax liability | $(3,515) | $(7,825) | | Purchase of capped calls | $(42,485) | — | | Foreign currency translation adjustments | $9,423 | $(3,206) | | Net loss | $(93,051) | $(89,175) | | Reclassification of equity-based liability | $123,441 | $1,839 | | Common stock issued for warrant exercises | $52 | $150 | | Common stock issued for employee stock purchase plan and stock option exercises | $2,326 | $2,524 | | Common stock issued for asset acquisition | $1,000 | $250 | | Warrant modification | $2,301 | — | | Balance at June 30, 2025/2024 | $23,771 | $17,111 | - **Total stockholders' equity (deficit)** improved significantly from a deficit of **$(14.169) million** at December 31, 2024, to a positive **$23.771 million** at June 30, 2025[18](index=18&type=chunk) - This was primarily driven by a large **reclassification of equity-based liability ($123.441 million)** and stock-based compensation, partially offset by net loss and the purchase of capped calls[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | | Operating activities | $10,509 | $(49,832) | | Investing activities | $(23,785) | $(69,512) | | Financing activities | $31,125 | $(1,128) | | Effect of exchange rate changes on cash | $374 | $(670) | | Net change in cash and cash equivalents | $18,223 | $(121,142) | | Cash and cash equivalents at end of period | $157,063 | $99,828 | - The company generated **$10.509 million** in cash from operating activities for the six months ended June 30, 2025, a significant improvement from a cash usage of **$(49.832) million** in the prior year[22](index=22&type=chunk) - Financing activities provided **$31.125 million**, primarily from convertible notes issuance, leading to a net increase in cash and cash equivalents of **$18.223 million**[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Organization and Significant Accounting Policies](index=10&type=section&id=1.%20Organization%20and%20Significant%20Accounting%20Policies) This note details Alphatec Holdings' business, consolidation principles, key accounting policies, and recent accounting pronouncement assessments - The Company is a medical technology company specializing in spinal disorder treatment, marketing products in the U.S. and internationally[23](index=23&type=chunk) - Revenue is primarily derived from sales of spinal implant products, imaging equipment, and related services, recognized when control transfers to customers[33](index=33&type=chunk) - The FASB issued **ASU No. 2023-09 (Income Taxes)** effective for fiscal years after December 15, 2024, and **ASU No. 2024-03/2025-01 (Expense Disaggregation Disclosures)** effective for fiscal years after December 15, 2026, both of which the Company is assessing for impact[38](index=38&type=chunk)[39](index=39&type=chunk) [2. Fair Value Measurements](index=13&type=section&id=2.%20Fair%20Value%20Measurements) The company measures certain assets and liabilities at fair value on a recurring basis, primarily cash equivalents (money market funds) and long-term debt (convertible notes). Money market funds are classified as Level 2, while the 2026 and 2030 Senior Convertible Notes are valued using Level 1 inputs (quoted market prices) Fair Value Measurements (in thousands) | Asset | June 30, 2025 (Level 2) | December 31, 2024 (Level 2) | | :------------------ | :---------------------- | :-------------------------- | | Money market funds | $15,547 | $57,006 | | Debt Instrument | June 30, 2025 (Level 1) | December 31, 2024 (Level 1) | | :-------------------------- | :---------------------- | :-------------------------- | | 2026 Notes | $62,300 | $299,600 | | 2030 Notes | $415,000 | — | [3. Inventories](index=14&type=section&id=3.%20Inventories) Inventories are reported at the lower of cost or net realizable value, consisting of raw materials and finished goods. Total inventories decreased from $175.264 million at December 31, 2024, to $169.760 million at June 30, 2025 Inventories (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :------------------ | | Raw materials | $21,470 | $19,378 | | Finished goods | $148,290 | $155,886 | | Total Inventories | $169,760 | $175,264 | [4. Property and Equipment, net](index=14&type=section&id=4.%20Property%20and%20Equipment,%20net) Property and equipment, net, decreased from $156.394 million at December 31, 2024, to $139.729 million at June 30, 2025. This change is primarily due to accumulated depreciation, which totaled $30.8 million for the six months ended June 30, 2025 Property and Equipment, net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Surgical instruments | $291,363 | $283,597 | | Machinery and equipment | $13,040 | $12,710 | | Computer equipment | $32,183 | $32,082 | | Office furniture and equipment | $6,519 | $6,759 | | Leasehold improvements | $4,399 | $4,321 | | Construction in progress | $598 | $541 | | Less: accumulated depreciation and amortization | $(208,373) | $(183,616) | | Property and equipment, net | $139,729 | $156,394 | - Total depreciation and amortization expense was **$30.8 million** for the six months ended June 30, 2025, compared to $29.5 million for the same period in 2024[43](index=43&type=chunk) [5. Goodwill and Intangible Assets](index=14&type=section&id=5.%20Goodwill%20and%20Intangible%20Assets) Goodwill increased to $75.218 million at June 30, 2025, primarily due to foreign currency fluctuations. Intangible assets, net, also increased to $95.593 million, with developed product technology being the largest component. Amortization expense for intangible assets was $8.5 million for the six months ended June 30, 2025 Goodwill (in thousands) | Date | Amount | | :---------------- | :------- | | December 31, 2024 | $70,976 | | Foreign currency fluctuation | $4,242 | | June 30, 2025 | $75,218 | Intangible Assets, net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Developed product technology | $62,044 | $64,357 | | Internally developed software | $11,131 | $2,768 | | Trademarks and trade names | $3,472 | $3,276 | | Customer relationships | $3,744 | $3,902 | | Software in development | $6,917 | $12,927 | | In-process research and development | $8,285 | $6,285 | | Total intangible assets, net | $95,593 | $93,518 | - Total amortization expense attributed to intangible assets was **$8.5 million** for the six months ended June 30, 2025, compared to $8.3 million for the same period in 2024[45](index=45&type=chunk) [6. Contract Assets and Contract Liabilities](index=15&type=section&id=6.%20Contract%20Assets%20and%20Contract%20Liabilities) Contract assets, representing revenue recognized but contingent on further performance, decreased from $5.678 million at December 31, 2024, to $3.968 million at June 30, 2025. Contract liabilities, or deferred revenue, increased slightly to $14.055 million, with $11.497 million classified as current Contract Assets and Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Contract assets | $3,968 | $5,678 | | Total Contract liabilities | $14,055 | $13,598 | | Current portion of contract liabilities | $11,497 | $10,467 | - The Company recognized **$7.8 million** of revenue from the opening contract liabilities balance for the six months ended June 30, 2025[48](index=48&type=chunk) [7. Debt](index=16&type=section&id=7.%20Debt) This note details the issuance of $405.0 million in 2030 Convertible Notes, repurchase of 2026 Notes, and other debt obligations - Issued **$405.0 million** aggregate principal amount of **0.75% Convertible Senior Notes due 2030** in March 2025, with an initial conversion price of approximately **$15.54 per share**[49](index=49&type=chunk)[50](index=50&type=chunk) - Repurchased **80% of the 2026 Convertible Notes** for **$268.4 million** in March 2025, leading to a **$17.6 million loss on debt extinguishment** for the six months ended June 30, 2025[74](index=74&type=chunk) Outstanding Debt Balances and Key Terms (in thousands) | Debt Instrument | Principal Outstanding (June 30, 2025) | Interest Rate (June 30, 2025) | Maturity Date | Net Carrying Value (June 30, 2025) | | :-------------------------------- | :------------------------------------ | :---------------------------- | :------------ | :--------------------------------- | | 2030 Convertible Senior Notes | $405,000 | 0.75% (effective 9.1%) | March 15, 2030 | $275,069 | | Braidwell Term Loan | $200,000 | 10.19% (effective 11.7%) | January 6, 2028 | $200,000 (principal) | | Revolving Credit Facility | $15,000 | 7.94% | Sept 29, 2027 (or earlier) | $15,000 (principal) | | 2026 Convertible Senior Notes | $63,250 | 0.75% (effective 1.4%) | August 1, 2026 | $62,801 | | Other Debt (PGE loans) | $2,800 | 0.98% - 1.25% | 2027 | $2,800 (principal) | Future Principal Payments on Debt (in thousands) | Period | Amount | | :---------------- | :------- | | Remainder of 2025 | $1,259 | | 2026 | $64,689 | | 2027 | $15,600 | | 2028 | $206,500 | | 2029 | — | | Thereafter | $405,000 | | Total Principal | $693,048 | [8. Derivative Liability](index=24&type=section&id=8.%20Derivative%20Liability) The embedded conversion option of the 2030 Notes was initially accounted for as a derivative liability. However, in June 2025, the conditions for separate accounting were no longer met, leading to its reclassification to additional paid-in capital. The change in fair value of this derivative liability resulted in a $16.780 million loss for the three months ended June 30, 2025, and a $0.620 million gain for the six months ended June 30, 2025 Change in Conversion Option Derivative Liability (in thousands) | Item | Amount | | :-------------------------------- | :------- | | December 31, 2024 | $— | | Addition of derivative liability | $124,062 | | Change in fair value (Q1 2025) | $(17,400) | | March 31, 2025 | $106,661 | | Change in fair value (Q2 2025) | $16,780 | | Reclassification to shareholders' equity | $(123,441) | | June 30, 2025 | $— | - A **loss of $16.780 million** on derivative liability was recognized for the three months ended June 30, 2025, while a **gain of $620 thousand** was recognized for the six months ended June 30, 2025, due to changes in valuation and subsequent reclassification[14](index=14&type=chunk)[83](index=83&type=chunk) [9. Commitments and Contingencies](index=25&type=section&id=9.%20Commitments%20and%20Contingencies) The company has various operating lease agreements, a minimum purchase commitment, and is involved in legal proceedings, including a recent litigation settlement Future Minimum Annual Lease Payments (in thousands) | Period | Amount | | :---------------------- | :------- | | Remainder of 2025 | $3,666 | | 2026 | $6,864 | | 2027 | $6,736 | | 2028 | $6,208 | | 2029 | $6,123 | | Thereafter | $10,698 | | Total undiscounted lease payments | $40,295 | - The company has a remaining **minimum purchase commitment of $7.5 million** with a third-party supplier through December 2026[88](index=88&type=chunk) - A litigation settlement was recorded in May 2025, contributing to litigation-related expenses for the six months ended June 30, 2025[90](index=90&type=chunk) [10. Stock-Benefit Plans and Equity Transactions](index=27&type=section&id=10.%20Stock-Benefit%20Plans%20and%20Equity%20Transactions) This note details stock-based compensation, outstanding warrants, and a new salary-to-equity conversion program for executive officers Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------- | :------------------------------- | :----------------------------- | | Cost of sales | $553 | $3,596 | | Research and development | $4,159 | $7,803 | | Sales, general and administrative | $10,912 | $26,543 | | Total | $15,624 | $37,942 | - As of June 30, 2025, there was **$75.1 million of unrecognized compensation expense** for RSUs and PRSUs, to be recognized over a weighted average period of **1.83 years**[94](index=94&type=chunk) Outstanding Warrants for Common Stock (as of June 30, 2025, in thousands, except strike price) | Warrant Type | Number of Warrants | Strike Price | Expiration | | :-------------------------- | :----------------- | :----------- | :----------------------- | | 2018 Squadron Medical Warrants | 845 | $3.15 | May 2027 | | 2019 Squadron Medical Warrants | 4,839 | $2.17 | May 2027 | | 2020 Squadron Medical Warrants | 1,076 | $4.88 | May 2027 | | Executive Warrants | 1,327 | $5.00 | December 2026 | | Other | 90 | $12.15 | Various through June 2026 | - A **salary conversion plan** was adopted on March 31, 2025, reducing cash base salaries for certain executive officers by **10% to 50%** in exchange for RSUs[103](index=103&type=chunk) [11. Business Segment and Geographic Information](index=29&type=section&id=11.%20Business%20Segment%20and%20Geographic%20Information) The company operates as a single business segment, with revenue primarily generated in the United States - The Company operates in **one business segment**, with consolidated net loss as the measure of segment profit or loss[104](index=104&type=chunk) Net Revenue and Property and Equipment, net, by Geographic Region (in thousands) | Region | Revenue (Six Months Ended June 30, 2025) | Property and equipment, net (June 30, 2025) | | :------------- | :--------------------------------------- | :------------------------------------------ | | United States | $334,138 | $137,940 | | International | $20,586 | $1,789 | | Total | $354,724 | $139,729 | [12. Net Loss Per Share](index=30&type=section&id=12.%20Net%20Loss%20Per%20Share) Basic and diluted net loss per share were $(0.27) and $(0.63) for the three and six months ended June 30, 2025, respectively, with anti-dilutive shares excluded Net Loss Per Share (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--------------------------------- | :------------------------------- | :----------------------------- | | Net loss | $(41,144) | $(93,051) | | Weighted average common shares outstanding | 149,907 | 148,337 | | Net loss per share, basic and diluted | $(0.27) | $(0.63) | Potentially Dilutive Shares Excluded from Diluted EPS (as of June 30, 2025, in thousands) | Category | Amount | | :--------------------------------------- | :------- | | Options to purchase common stock and ESPP | 2,050 | | Unvested restricted stock unit awards | 8,911 | | Warrants to purchase common stock | 8,177 | | 2026 Notes | 3,449 | | 2030 Notes | 34,527 | | Total | 57,114 | [13. Income Taxes](index=30&type=section&id=13.%20Income%20Taxes) The company's effective tax rate was significantly lower than the federal statutory rate due to its net loss position and valuation allowance Effective Tax Rate from Operations | Period | Effective Tax Rate (2025) | Effective Tax Rate (2024) | | :-------------------------- | :------------------------ | :------------------------ | | Three Months Ended June 30 | 0.09% | 0.70% | | Six Months Ended June 30 | 0.11% | 0.40% | - The effective tax rate differs from the federal statutory rate of **21%** primarily due to the Company's net loss position and valuation allowance[109](index=109&type=chunk) [14. Related Party Transactions](index=30&type=section&id=14.%20Related%20Party%20Transactions) The company purchases inventory from a Squadron Supplier Affiliate, with $5.1 million in purchases for the six months ended June 30, 2025 Inventory Purchases from Squadron Supplier Affiliate (in thousands) | Period | 2025 Purchases | 2024 Purchases | | :-------------------------- | :------------- | :------------- | | Three Months Ended June 30 | $2,300 | $3,200 | | Six Months Ended June 30 | $5,100 | $8,000 | | Amount due as of June 30, 2025 | $2,900 | $1,800 (Dec 31, 2024) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operating results, liquidity, and capital resources, including recent debt transactions and forward-looking statements [Overview](index=31&type=section&id=Overview) Alphatec Holdings is a medical technology company focused on advancing spine disorder treatment through its InformatiX™ platform - Alphatec Holdings, Inc. is a medical technology company focused on designing, developing, and advancing technology for surgical treatment of spine disorders[112](index=112&type=chunk) - The company aims to revolutionize spine surgery through clinical distinction and integrate technologies into its InformatiX™ product platform[112](index=112&type=chunk) - Achieved approximately **40% revenue compound annual growth rate** since its transformation commenced in 2018, driven by surgeon and sales talent adoption[113](index=113&type=chunk) [Recent Developments](index=31&type=section&id=Recent%20Developments) This section highlights the issuance of $405.0 million in 2030 Convertible Notes and the repurchase of 80% of 2026 Notes - In March 2025, the company issued **$405.0 million principal amount of 0.75% Senior Convertible Notes due 2030**, with net proceeds of approximately **$392.9 million**[115](index=115&type=chunk) - Used **$42.5 million** of the proceeds to enter into capped call instruments to reduce potential dilution from the 2030 Notes[115](index=115&type=chunk) - Repurchased **80% of the 2026 convertible notes** for approximately **$268.4 million**[115](index=115&type=chunk) [Revenue and Expense Components](index=31&type=section&id=Revenue%20and%20Expense%20Components) This section details the primary sources of revenue from products and services and the various categories of operating expenses - Revenue is primarily from sales of spinal surgery implants and medical imaging equipment (EOS full-body and weight-bearing x-ray imaging devices), and related services[116](index=116&type=chunk) - Cost of sales includes direct product costs, royalties, service labor, and parts, with product costs comprising raw materials, components, direct labor, and overhead[117](index=117&type=chunk)[118](index=118&type=chunk) - Operating expenses include Research and development, Sales, general and administrative, Litigation-related expenses, Amortization of acquired intangible assets, and Restructuring expenses[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) [Critical Accounting Policies and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management confirms no material changes to critical accounting policies since the 2024 Annual Report on Form 10-K - Management believes there have been no material changes during the three months ended June 30, 2025, to the critical accounting policies discussed in the Annual Report on Form 10-K for the year ended December 31, 2024[126](index=126&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance, including revenue, cost of sales, and operating expenses [Total revenue](index=33&type=section&id=Total%20revenue) Revenue from products and services increased by 27% for the three months and 25% for the six months ended June 30, 2025 Revenue from products and services (in thousands, except %) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :------- | :------- | :--------- | :--------- | | Three Months Ended June 30 | $185,544 | $145,573 | $39,971 | 27% | | Six Months Ended June 30 | $354,724 | $284,050 | $70,674 | 25% | - The increase in revenue was primarily due to an expanded surgeon user base, continued growth of the new product portfolio, and increasing adoption of the company's technology[127](index=127&type=chunk) [Cost of sales](index=35&type=section&id=Cost%20of%20sales) Cost of sales increased by 31% and 30% for the three and six months ended June 30, 2025, respectively, driven by higher product volume Cost of sales (in thousands, except %) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :------- | :------- | :--------- | :--------- | | Three Months Ended June 30 | $56,443 | $42,979 | $13,464 | 31% | | Six Months Ended June 30 | $109,627 | $84,105 | $25,522 | 30% | - The increase in cost of sales was primarily driven by higher product volume, aligning with the increase in revenue[128](index=128&type=chunk) [Operating expenses](index=35&type=section&id=Operating%20expenses) Operating expenses increased by 3% and 9% for the three and six months ended June 30, 2025, influenced by litigation and compensation Operating Expenses (in thousands, except %) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Research and development | $18,276 | $19,105 | $(829) | (4)% | $35,308 | $37,117 | $(1,809) | (5)% | | Sales, general and administrative | $118,507 | $112,731 | $5,776 | 5% | $245,524 | $226,341 | $19,183 | 8% | | Litigation-related expenses | $1,593 | $2,090 | $(497) | (24)% | $13,807 | $6,518 | $7,289 | 112% | | Amortization of acquired intangible assets | $3,803 | $3,836 | $(33) | (1)% | $7,456 | $7,690 | $(234) | (3)% | | Restructuring expenses | $7 | $139 | $(132) | (95)% | $378 | $927 | $(549) | (59)% | | Total operating expenses | $142,186 | $137,901 | $4,285 | 3% | $302,473 | $278,593 | $23,880 | 9% | - **Research and development expenses** decreased due to lower stock-based compensation[129](index=129&type=chunk) - **Sales, general and administrative expenses** increased due to higher compensation and variable selling expenses tied to revenue growth and strategic distribution channel investment[130](index=130&type=chunk) - **Litigation-related expenses** increased significantly for the six-month period due to a settlement[131](index=131&type=chunk) [Total interest expense and other expense, net](index=35&type=section&id=Total%20interest%20expense%20and%20other%20expense,%20net) Interest expense and other expenses increased significantly due to new debt, debt extinguishment loss, and derivative liability changes Total Interest Expense and Other Expense, Net (in thousands, except %) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Interest expense, net | $(12,309) | $(5,815) | $(6,494) | 112% | $(20,150) | $(11,156) | $(8,994) | 81% | | Loss on debt extinguishment | — | — | — | 100% | $(17,576) | — | $(17,576) | 100% | | (Loss) gain on derivative liability | $(16,780) | — | $(16,780) | 100% | $620 | — | $620 | 100% | | Other income, net | $993 | $156 | $837 | 537% | $1,330 | $274 | $1,056 | 385% | | Total other expense, net | $(28,096) | $(5,659) | $(22,437) | 396% | $(35,776) | $(10,882) | $(24,894) | 229% | - **Interest expense** increased significantly due to an additional draw on the Braidwell Term Loan and amortization of debt discount from the 2030 Notes[135](index=135&type=chunk) - A **$17.6 million loss on debt extinguishment** was recorded for the six-month period due to the repurchase of 2026 Notes[136](index=136&type=chunk) - **Other income, net**, increased substantially due to employee retention credit and foreign currency fluctuations[138](index=138&type=chunk) [Income tax provision](index=36&type=section&id=Income%20tax%20provision) The income tax benefit decreased for both periods, primarily due to the recognition of income tax benefits in various jurisdictions Income Tax Benefit (in thousands, except %) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :------- | :------- | :--------- | :--------- | | Three Months Ended June 30 | $(37) | $(286) | $249 | (87)% | | Six Months Ended June 30 | $(101) | $(355) | $254 | (72)% | - The change in income tax benefit was primarily related to the recognition of income tax benefits in several jurisdictions[139](index=139&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's cash flows, debt structure, and commitments, highlighting sources and uses of capital [Summary of Cash Flows](index=38&type=section&id=Summary%20of%20Cash%20Flows) This section provides a summary of cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 Summary of Cash Flows (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $10,509 | $(49,832) | | Investing activities | $(23,785) | $(69,512) | | Financing activities | $31,125 | $(1,128) | | Effect of exchange rate changes on cash | $374 | $(670) | | Net increase (decrease) in cash and cash equivalents | $18,223 | $(121,142) | [Operating Activities](index=38&type=section&id=Operating%20Activities) Cash provided by operating activities significantly improved to $10.5 million for the six months ended June 30, 2025 - Cash provided by operating activities was **$10.5 million** for the six months ended June 30, 2025, primarily due to favorable working capital changes, partially offset by inventory purchases[145](index=145&type=chunk) [Investing Activities](index=38&type=section&id=Investing%20Activities) Cash used in investing activities was $23.8 million, primarily for surgical instruments to support business growth - Cash used in investing activities was **$23.8 million** for the six months ended June 30, 2025, mainly for the purchase of surgical instruments to support business growth and new product launches[146](index=146&type=chunk) [Financing Activities](index=38&type=section&id=Financing%20Activities) Cash provided by financing activities was $31.1 million, driven by 2030 Notes proceeds, offset by 2026 Notes repurchase - Cash provided by financing activities was **$31.1 million** for the six months ended June 30, 2025, driven by proceeds from 2030 Notes, offset by the repurchase of 2026 Notes, purchase of capped calls, and revolving credit facility payments[147](index=147&type=chunk) [Debt and Commitments](index=38&type=section&id=Debt%20and%20Commitments) This section details outstanding debt, including term loans, revolving credit, and convertible notes, along with purchase commitments - As of June 30, 2025, the company had **$200.0 million** outstanding under the Braidwell Term Loan (Term SOFR + 5.75%, matures Jan 2028) and **$15.0 million** under the Revolving Credit Facility (Term SOFR + 3.5%, matures Sept 2027 or earlier)[148](index=148&type=chunk)[149](index=149&type=chunk) - Outstanding **2026 Notes** totaled **$63.3 million** (0.75% interest, matures Aug 2026) and **2030 Notes** totaled **$405.0 million** (0.75% interest, matures Mar 2030)[150](index=150&type=chunk)[151](index=151&type=chunk) - A remaining minimum inventory purchase commitment of **$7.5 million** exists through December 2026[152](index=152&type=chunk) [Contractual obligations and commercial commitments](index=40&type=section&id=Contractual%20obligations%20and%20commercial%20commitments) No material changes to outstanding contractual obligations outside the normal course of business since December 31, 2024 - No material changes to outstanding contractual obligations outside the normal course of business since December 31, 2024[153](index=153&type=chunk) [Off-Balance Sheet Arrangements](index=40&type=section&id=Off-Balance%20Sheet%20Arrangements) The company confirms it does not have any off-balance sheet arrangements - The company does not have any off-balance sheet arrangements[154](index=154&type=chunk) [Recent Accounting Pronouncements](index=40&type=section&id=Recent%20Accounting%20Pronouncements) No new material accounting pronouncements or changes during the six months ended June 30, 2025, beyond Note 1 disclosures - No new accounting pronouncements or changes to accounting pronouncements during the six months ended June 30, 2025, other than those disclosed in Note 1[155](index=155&type=chunk) [Forward Looking Statements](index=40&type=section&id=Forward%20Looking%20Statements) This section outlines forward-looking statements regarding future financial performance and market acceptance, subject to risks and uncertainties - The report contains forward-looking statements regarding anticipated operating losses, future revenue, expenses, capital requirements, liquidity, profitability, and market acceptance of products[156](index=156&type=chunk) - Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from expectations[158](index=158&type=chunk)[159](index=159&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no significant changes to the market risk disclosures previously reported in the Annual Report on Form 10-K for the year ended December 31, 2024 - No significant changes to quantitative and qualitative disclosures about market risk since the Annual Report on Form 10-K for the year ended December 31, 2024[161](index=161&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. There have been no material changes to internal control over financial reporting during the three months ended June 30, 2025 [Disclosure Controls and Procedures](index=42&type=section&id=Disclosure%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025 - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[162](index=162&type=chunk) [Changes in Internal Control over Financial Reporting](index=42&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes to internal control over financial reporting occurred during the three months ended June 30, 2025 - No changes materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the three months ended June 30, 2025[163](index=163&type=chunk) [PART II – OTHER INFORMATION](index=43&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section includes information on legal proceedings, risk factors, equity sales, trading arrangements, and exhibits [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding material legal proceedings is incorporated by reference from Note 9 of the Notes to Condensed Consolidated Financial Statements - Material legal proceedings are described in Note 9 of the Notes to Condensed Consolidated Financial Statements[165](index=165&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K, except for the addition of a new risk factor concerning the adverse effects of tariffs and other trade measures on the company's business, results of operations, financial position, and cash flows - A new risk factor has been added regarding the potential adverse effects of tariffs and other trade measures on the company's business, including impacts on suppliers and international sales[166](index=166&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the three months ended June 30, 2025, the company issued unregistered shares of common stock totaling 134,842 shares for consulting services, asset purchases, and development services, relying on the Section 4(a)(2) exemption from registration Unregistered Sales of Equity Securities (Three Months Ended June 30, 2025) | Date Issued | Number of Shares | Grant Date Fair Value per Share | | :------------ | :--------------- | :------------------------------ | | April 1, 2025 | 4,246 | $10.08 | | April 1, 2025 | 74,405 | $10.08 | | April 9, 2025 | 10,000 | $10.05 | | April 17, 2025 | 947 | $10.56 | | May 1, 2025 | 24,375 | $11.06 | | May 5, 2025 | 20,869 | $11.98 | | Total | 134,842 | | - Shares were issued for consulting services, purchase of assets from a third party, and development services agreements[167](index=167&type=chunk)[168](index=168&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) This section details the adoption of Rule 10b5-1 trading arrangements by the company's Chairman and CEO, Pat Miles, and Executive Vice President, Sales, David Sponsel, during the three months ended June 30, 2025, for the purchase or sale of securities Rule 10b5-1 Trading Arrangements Adopted (Three Months Ended June 30, 2025) | Name | Title | Action | Date | Total Shares to be Sold | Expiration Date | | :----------- | :-------------------------------- | :----- | :--------- | :---------------------- | :-------------- | | Pat Miles | Chairman and Chief Executive Officer | Adopt | 6/3/2025 | 1,200,000 | 6/30/2026 | | David Sponsel | Executive Vice President, Sales | Adopt | 6/12/2025 | 74,784 | 9/2/2026 | - These plans are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and comply with the company's insider trading policy[170](index=170&type=chunk)[171](index=171&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including amendments to the certificate of incorporation, equity incentive plans, certifications under Sarbanes-Oxley Act, and interactive data files (iXBRL) for financial statements - Exhibits include amendments to the certificate of incorporation and equity incentive plans, certifications (302 and 906), and iXBRL financial data[174](index=174&type=chunk)[176](index=176&type=chunk) [SIGNATURES](index=47&type=section&id=SIGNATURES) The report is duly signed on behalf of Alphatec Holdings, Inc. by its Chairman and Chief Executive Officer, Patrick S. Miles, and Executive Vice President and Chief Financial Officer, J. Todd Koning, as of July 31, 2025 - The report was signed by Patrick S. Miles, Chairman and Chief Executive Officer, and J. Todd Koning, Executive Vice President and Chief Financial Officer, on July 31, 2025[180](index=180&type=chunk)
Alphatec (ATEC) - 2025 Q2 - Earnings Call Presentation
2025-07-31 20:30
Q2 2025 FINANCIAL RESULTS PAT MILES, CHAIRMAN & CEO | TODD KONING, CFO | JULY 31, 2025 FORWARD-LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. 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 ...
Alphatec (ATEC) - 2025 Q2 - Quarterly Results
2025-07-31 20:19
[Executive Summary / Q2 2025 Financial Highlights](index=1&type=section&id=Executive%20Summary%20%2F%20Q2%202025%20Financial%20Highlights) [Q2 2025 Key Financial Results](index=1&type=section&id=Q2%202025%20Key%20Financial%20Results) Alphatec Holdings, Inc. reported strong financial performance for Q2 2025, with significant growth in total revenue and surgical revenue, alongside improved profitability metrics such as Adjusted EBITDA margin and non-GAAP net income | Metric | Quarter Ended June 30, 2025 | | :---------------------- | :-------------------------- | | Total revenue | $186 million | | GAAP gross margin | 70% | | Non-GAAP gross margin | 70% | | GAAP operating expenses | $142 million | | Non-GAAP operating expenses | $122 million | | GAAP net income / (loss) | ($41) million | | Non-GAAP net income / (loss) | $3 million | | Adjusted EBITDA | $23 million | | Adjusted EBITDA margin | 13% | | Ending cash balance | $157 million | [Recent Corporate Highlights](index=1&type=section&id=Recent%20Corporate%20Highlights) The company achieved industry-leading growth, driven by strong surgical revenue, increased surgeon adoption, and disciplined execution leading to significant margin expansion and positive free cash flow - Surgical revenue grew by **29%** to **$168 million**, driven by continued momentum of PTP™ and LTP™[4](index=4&type=chunk) - Achieved **21%** growth in new surgeon adoption, indicating future growth potential[4](index=4&type=chunk) - Delivered adjusted EBITDA margin of **13%**, expanding by **880 bps** Year-over-Year[4](index=4&type=chunk) - Inflected to non-GAAP net income profitability and generated **$5 million** of free cash flow[4](index=4&type=chunk) [Full-Year 2025 Financial Outlook](index=2&type=section&id=Full-Year%202025%20Financial%20Outlook) Alphatec Holdings, Inc. raised its full-year 2025 guidance for both total revenue and non-GAAP adjusted EBITDA, reflecting confidence in continued growth and profitability Full-Year 2025 Financial Guidance Update | Metric | Previous Expectation | New Expectation | | :-------------------- | :------------------- | :-------------- | | Total Revenue Growth | - | 21% | | Total Revenue | $734 million | $742 million | | Surgical Revenue | - | $666 million | | EOS Revenue | - | $76 million | | Non-GAAP Adjusted EBITDA | $78 million | $83 million | [Non-GAAP Financial Information](index=2&type=section&id=Non-GAAP%20Financial%20Information) [Definition of Non-GAAP Measures](index=2&type=section&id=Definition%20of%20Non-GAAP%20Measures) The company utilizes non-GAAP financial measures to offer investors a supplementary tool for assessing core performance and future earnings potential, emphasizing that these measures should be considered in addition to, not as a substitute for, GAAP financial statements - Non-GAAP financial measures provide investors with an additional tool for evaluating the Company's core performance and future earnings potential, used by management in its own evaluation[7](index=7&type=chunk) - Key non-GAAP measures defined include Free Cash Flow, Non-GAAP Gross Profit and Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Net Income (Loss) and Non-GAAP EPS, and EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) - Non-GAAP measures may not be directly comparable to those of other companies and should not be considered superior to GAAP measures[7](index=7&type=chunk) [Non-GAAP Adjustments](index=3&type=section&id=Non-GAAP%20Adjustments) Alphatec's non-GAAP financial measures exclude specific items such as amortization of acquired intangibles, litigation-related expenses, stock-based compensation, and other non-recurring or non-cash charges to provide a clearer view of the company's ongoing operational performance [Amortization of acquired intangible assets](index=3&type=section&id=Amortization%20of%20acquired%20intangible%20assets) - Excludes amortization expense from intangible assets acquired in business combinations and asset acquisitions to focus on core operational performance[13](index=13&type=chunk) [Litigation-related expenses](index=3&type=section&id=Litigation-related%20expenses) - Excludes litigation fees and settlement expenses deemed not normal and recurring to core business operations, primarily related to the **2018** business transformation[14](index=14&type=chunk) [Purchase accounting adjustments on acquisitions](index=3&type=section&id=Purchase%20accounting%20adjustments%20on%20acquisitions) - Excludes non-cash expenses from fair value step-ups associated with tangible assets acquired in business combinations or asset acquisitions[15](index=15&type=chunk) [Restructuring expenses](index=3&type=section&id=Restructuring%20expenses) - Excludes one-time severance, personnel costs, or facility-related costs incurred during operational realignments or acquisition synergies, as these are not part of ongoing operations[16](index=16&type=chunk) [Stock-based compensation](index=3&type=section&id=Stock-based%20compensation) - Excludes non-cash stock-based compensation expense to provide meaningful supplemental information regarding operational performance, given its variability and subjective assumptions[17](index=17&type=chunk)[18](index=18&type=chunk) [Transaction-related expenses](index=5&type=section&id=Transaction-related%20expenses) - Excludes one-time costs related to business combinations, asset acquisitions, or debt financing activities, as they are not indicative of underlying core business trends[19](index=19&type=chunk) [Foreign currency exchange impact](index=5&type=section&id=Foreign%20currency%20exchange%20impact) - Excludes non-cash and non-operating gains and losses from foreign currency transactions when evaluating operating results[20](index=20&type=chunk) [Loss on debt extinguishment](index=5&type=section&id=Loss%20on%20debt%20extinguishment) - Excludes non-recurring charges from early debt repayment, refinancing, or settlement, as they are not indicative of ongoing operating performance[21](index=21&type=chunk) [Loss (gain) on derivative liability](index=5&type=section&id=Loss%20%28gain%29%20on%20derivative%20liability) - Excludes non-cash fair value adjustments on embedded derivative features related to convertible debt, as these are volatile and unrelated to core business operations[22](index=22&type=chunk) [Non-cash interest expense](index=5&type=section&id=Non-cash%20interest%20expense) - Excludes non-cash interest expense, primarily from amortization of debt discounts and deferred financing costs, as it does not reflect core operating performance or current cash expenditures[23](index=23&type=chunk) [Long-term income tax rate adjustment](index=5&type=section&id=Long-term%20income%20tax%20rate%20adjustment) - Applies a structural long-term projected non-GAAP income tax rate of **26%** for greater consistency across reporting periods, reevaluated as necessary for significant changes[24](index=24&type=chunk) [Other non-recurring expenses](index=5&type=section&id=Other%20non-recurring%20expenses) - Excludes unusual or infrequent items not indicative of ongoing operating performance, such as discrete costs for tax strategy implementation or customer restructuring[25](index=25&type=chunk)[26](index=26&type=chunk) [Company Information](index=6&type=section&id=Company%20Information) [About Alphatec Holdings, Inc.](index=6&type=section&id=About%20Alphatec%20Holdings%2C%20Inc.) Alphatec Holdings, Inc. is a medical device company focused on revolutionizing spine surgery through clinical distinction and innovative procedural solutions, aiming to be the Standard Bearer in Spine - ATEC is a spine-focused medical device company dedicated to revolutionizing spine surgery through clinical distinction[27](index=27&type=chunk) - The company's Organic Innovation Machine™ develops new approaches integrated with its InformatiX™ platform to improve surgical outcomes[27](index=27&type=chunk) - ATEC's vision is to be the **Standard Bearer in Spine**[27](index=27&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section provides a standard disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that could cause actual results to differ materially from projections, and disclaims any obligation to update these statements - The press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially[28](index=28&type=chunk) - Factors influencing actual results include product development success, strategic plan execution, regulatory approvals, reimbursement, and litigation outcomes[28](index=28&type=chunk) - ATEC disclaims any intention or obligation to update or revise forward-looking statements unless required by law[28](index=28&type=chunk) [Investor/Media Contact](index=6&type=section&id=Investor%2FMedia%20Contact) Contact information for investor and media inquiries is provided, including specific personnel and email addresses - Investor/Media Contact: Robert Judd, Investor Relations, **(760) 494-6790**, investorrelations@atecspine.com[29](index=29&type=chunk) - Company Contact: J. Todd Koning, Chief Financial Officer, investorrelations@atecspine.com[29](index=29&type=chunk)[30](index=30&type=chunk) [Condensed Consolidated Financial Statements (GAAP)](index=8&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20%28GAAP%29) [Statements of Operations](index=8&type=section&id=Statements%20of%20Operations) The GAAP Condensed Consolidated Statements of Operations show significant revenue growth for both the three and six months ended June 30, 2025, compared to the prior year, though the company reported a net loss in both periods Revenue and Gross Profit (GAAP) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue from products and services | $185,544 | $145,573 | $354,724 | $284,050 | | Cost of sales | $56,443 | $42,979 | $109,627 | $84,105 | | Gross profit | $129,101 | $102,594 | $245,097 | $199,945 | Operating and Net Loss (GAAP) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total operating expenses | $142,186 | $137,901 | $302,473 | $278,593 | | Operating loss | ($13,085) | ($35,307) | ($57,376) | ($78,648) | | Net loss | ($41,144) | ($40,680) | ($93,051) | ($89,175) | | Net loss per share, basic and diluted | ($0.27) | ($0.29) | ($0.63) | ($0.63) | [Balance Sheets](index=9&type=section&id=Balance%20Sheets) The Condensed Consolidated Balance Sheets show an increase in cash and total assets from December 31, 2024, to June 30, 2025, with a notable shift from a stockholders' deficit to positive equity Key Balance Sheet Items (GAAP) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $157,063 | $138,840 | | Total current assets | $443,326 | $417,399 | | Total assets | $790,293 | $775,710 | | Total current liabilities | $154,184 | $153,026 | | Total long-term liabilities | $588,735 | $613,250 | | Stockholders' equity (deficit) | $23,771 | ($14,169) | [Reconciliation of Non-GAAP Financial Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) [Non-GAAP Gross Profit and Margin Reconciliation](index=10&type=section&id=Non-GAAP%20Gross%20Profit%20and%20Margin%20Reconciliation) The reconciliation shows that non-GAAP gross profit and margin are slightly higher than GAAP figures, primarily due to the exclusion of amortization of acquired intangible assets, stock-based compensation, and purchase accounting adjustments Non-GAAP Gross Profit and Margin | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Gross profit, GAAP | $129,101 | $102,594 | $245,097 | $199,945 | | Non-GAAP gross profit | $129,718 | $103,652 | $248,807 | $201,793 | | Gross margin, GAAP | 69.6% | 70.5% | 69.1% | 70.4% | | Non-GAAP gross margin | 69.9% | 71.2% | 70.1% | 71.0% | [Non-GAAP Operating Expenses Reconciliation](index=10&type=section&id=Non-GAAP%20Operating%20Expenses%20Reconciliation) Non-GAAP operating expenses are notably lower than GAAP figures, reflecting adjustments for non-cash and non-recurring items such as stock-based compensation, litigation-related expenses, and amortization of acquired intangibles Non-GAAP Operating Expenses | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Operating expenses, GAAP | $142,186 | $137,901 | $302,473 | $278,593 | | Stock-based compensation adjustment | ($15,071) | ($16,406) | ($34,346) | ($33,245) | | Litigation-related expenses adjustment | ($1,593) | ($2,090) | ($13,807) | ($6,518) | | Amortization of acquired intangible assets adjustment | ($3,803) | ($3,836) | ($7,456) | ($7,690) | | Non-GAAP operating expenses | $121,712 | $113,822 | $246,486 | $228,722 | [Adjusted EBITDA Reconciliation](index=10&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA demonstrates a significant positive trend and margin expansion, indicating improved operational profitability when excluding various non-cash and non-recurring items from GAAP net loss Adjusted EBITDA and Margin | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net loss, GAAP | ($41,144) | ($40,680) | ($93,051) | ($89,175) | | EBITDA | $6,243 | ($15,429) | ($18,141) | ($40,885) | | Adjusted EBITDA | $23,467 | $5,565 | $33,986 | $2,530 | | Adjusted EBITDA margin | 12.6% | 3.8% | 9.6% | 0.9% | | Adjusted EBITDA margin expansion | 880 bps | - | 870 bps | - | [Non-GAAP Net Income (Loss) Reconciliation](index=11&type=section&id=Non-GAAP%20Net%20Income%20%28Loss%29%20Reconciliation) The non-GAAP net income reconciliation shows an inflection to positive non-GAAP net income in Q2 2025, highlighting improved underlying profitability after adjusting for various non-cash and non-recurring items Non-GAAP Net Income (Loss) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net loss, GAAP | ($41,144) | ($40,680) | ($93,051) | ($89,175) | | Non-GAAP net income (loss) | $2,591 | ($11,725) | ($5,432) | ($27,251) | | Non-GAAP net income (loss) per share | $0.02 | ($0.08) | ($0.04) | ($0.19) | | Weighted average shares outstanding | 149,907 | 142,687 | 148,337 | 141,845 |
Alphatec (ATEC) - 2018 Q4 - Earnings Call Presentation
2025-06-16 16:45
Q4 & FY2018 Results And Strategic Outlook Pat Miles, Chairman and CEO March 7, 2019 FORWARD-LOOKING STATEMENTS This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. 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 Co ...