Analyst Consensus and Price Targets - A tight clustering of price targets, indicated by a low standard deviation, suggests high agreement among analysts about the stock's price movement direction and magnitude [1] - The mean price target for ATEC is $17.29, indicating a potential upside of 73.4% from the current price of $9.97 [6] - The price targets range from $10 to $22.50, with a standard deviation of $4.06, where the lowest estimate suggests a 0.3% increase and the highest estimate points to a 125.7% upside [7] Earnings Estimate Revisions - The Zacks Consensus Estimate for ATEC's current year has increased by 4.5% over the past month, with one positive revision and no negative revisions [4] - Strong agreement among analysts in revising EPS estimates higher indicates increasing optimism about the company's earnings prospects [3] - A positive trend in earnings estimate revisions has historically shown a strong correlation with near-term stock price movements [3] Zacks Rank and Analyst Bias - ATEC currently holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 stocks ranked based on earnings estimate factors [5] - Analysts' price targets are often influenced by business incentives, leading to overly optimistic estimates that may not accurately predict stock price movements [11] - While the consensus price target may not be reliable, the implied direction of price movement can still serve as a useful guide [12]

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $151 million, representing a 27% increase year-over-year and a 4% sequential increase [7] - Surgical revenue was $135 million, up 30% year-over-year, with procedural volume growth of 20% [7][8] - Adjusted EBITDA for Q3 was $7.4 million, a margin of 5%, compared to a loss of $400,000 in the prior year [8][9] - Non-GAAP gross margin was 69%, down 60 basis points year-over-year due to product mix [8] - Cash burn was reduced by over 50% sequentially to $21 million [10] Business Line Data and Key Metrics Changes - Surgical revenue growth was driven by strong contributions from lateral and expandable implant technologies, contributing to a 9% growth in average revenue per procedure [7][8] - EOS revenue for Q3 was $15 million, up 7% year-over-year, with record year-to-date order volume [7][8] Market Data and Key Metrics Changes - The company expects total revenue growth of 25% for the full year 2024, with surgical revenue growth of 28% [12] - The company anticipates cash used to range between $125 million and $135 million for the full year 2024 [12] Company Strategy and Development Direction - The company aims to achieve $1 billion in revenue by 2027, with an adjusted EBITDA of $180 million and a margin of 18% [6][11] - Focus on creating clinical distinction through innovative procedures and informatics, enhancing surgeon adoption and operational efficiency [14][16] - The company is investing in its sales force and streamlining operations to improve efficiency and cash flow [5][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued revenue growth and profitability, citing a strong surgeon adoption rate and increased training engagements [3][12] - The company is positioned for cash flow breakeven in 2025, with expectations for positive free cash flow in the latter half of the year [13][12] - Management emphasized the importance of improving patient care and operational efficiency as key drivers for future growth [16][19] Other Important Information - The company increased its term loan capacity by $50 million, bringing the total to $200 million, which is expected to provide ample liquidity going into 2025 [11] - The company has a strong focus on integrating informatics into its surgical procedures to enhance precision and outcomes [16][17] Q&A Session Summary Question: Concerns about overspending resources - Management reassured investors of their commitment to self-funding and maintaining flat operating expenses while achieving adjusted EBITDA above expectations [21][22] Question: Impact of hurricanes and IV solution shortages - Management reported no significant impact from hurricanes and minimal effect from IV shortages, with confidence in catching up on procedures [26][27] Question: New representative productivity - Management indicated that new representatives are ramping up, with continued growth in same-store sales and investments in territories beginning to contribute [29][30] Question: Robotics and imaging integration - Management clarified that while robotics is valuable, the focus is on creating an ecosystem that enhances decision-making and outcomes in spine care [36][37] Question: CapEx spending and revenue growth expectations - Management explained that historical investment rates support significant revenue growth, with confidence in achieving higher revenue than currently modeled by analysts [43][44] Question: Conversion rates from surgeon training - Management noted that while not every trained surgeon becomes a customer, there is high engagement and tailored experiences to improve conversion rates [46][47]

Core Viewpoint - Alphatec reported a quarterly loss of $0.28 per share, slightly worse than the Zacks Consensus Estimate of a loss of $0.27, but an improvement from a loss of $0.35 per share a year ago [1] - The company posted revenues of $150.72 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 2.19% and showing a year-over-year increase from $118.26 million [2] Financial Performance - The quarterly report indicates an earnings surprise of -3.70%, with the company having consistently failed to surpass consensus EPS estimates over the last four quarters [1][2] - Alphatec shares have declined approximately 64.1% year-to-date, contrasting with the S&P 500's gain of 22.3% [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at -$0.18 for the upcoming quarter and -$1.08 for the current fiscal year [7] - The estimate revisions trend for Alphatec is currently favorable, resulting in a Zacks Rank 2 (Buy), suggesting that the shares are expected to outperform the market in the near future [6] Industry Context - The Medical - Instruments industry, to which Alphatec belongs, is currently ranked in the top 22% of over 250 Zacks industries, indicating a positive outlook for stocks within this sector [8] - The performance of Alphatec's stock may also be influenced by the overall industry outlook and trends in earnings estimate revisions [5][8]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 000-52024 ALPHATEC HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 20-2463898 ...

Loan Agreement and Financial Terms - The Borrower has requested additional Term Loans totaling $50,000,000 to repay a portion of outstanding ABL Debt, cover fees and expenses, and for working capital needs[4]. - The 2024 Term Loans will be provided by the Lenders on the terms set forth in the agreement, effective on the Amendment No. 1 Effective Date[5]. - The conditions for the effectiveness of the agreement include the delivery of executed counterparts and compliance with the Credit Agreement[12]. - The Borrower must certify the solvency of the Credit Parties on a consolidated basis after the transactions related to the agreement[13]. - The agreement includes provisions for the Agent to file UCC-1 financing statements to perfect the liens and security interests granted[10]. - The Borrower is responsible for all reasonable and documented out-of-pocket costs and fees incurred in connection with the preparation of the agreement[11]. - The agreement reaffirms that the Original Credit Agreement and all other Financing Documents remain in full force and effect[15]. - The Agent and Lenders must receive a legal opinion from counsel to the Credit Parties as a condition for effectiveness[12]. - The agreement is governed by the laws of the State of New York[17]. - The Borrower will pay all fees and reimbursements of costs incurred in connection with the agreement prior to the Amendment No. 1 Effective Date[14]. - The total term loan commitment from Braidwell Transaction Holdings LLC is $50,000,000[26]. - The agreement includes provisions for electronic signatures, which are legally binding[19]. - The collateral consists of all assets of the Credit Parties, including accounts, inventory, and intellectual property[27]. - The agreement supersedes all prior agreements and understandings related to the subject matter[20]. - The agreement is intended to be legally binding and executed under seal[23]. - The agreement includes a severability clause ensuring the validity of remaining provisions if any part is found invalid[21]. - The agreement binds the successors and assigns of the parties involved[22]. - The agreement is amended as of October 29, 2024, to reflect changes in the credit terms[29]. - The agreement outlines various financial covenants, including minimum liquidity requirements[33]. - The agreement includes conditions to closing and conditions for delayed draw term loans[36]. - The aggregate 2024 Term Loan Commitment of all lenders is set at $50,000,000[40]. - The 2026 Convertible Notes have an interest rate of 0.75% and are due in 2026[41]. - The Applicable Margin for Term Loans and all other Obligations is 5.75%[56]. - The Borrower has requested financing facilities from lenders under the terms outlined in the agreement[38]. - The agreement includes provisions for the subordination of Borrower's obligations to Guarantors[12.6]. - The maximum liability of the Guarantor is defined within the agreement[12.7]. - The ABL Credit Agreement is dated September 29, 2022, and may be amended or modified[42]. - The agreement outlines the conditions under which an Acceleration Event may occur[46]. - The Borrower is a Delaware corporation, and the agreement is dated January 6, 2023[37]. - The ABL Intercreditor Agreement governs the relationships and priorities among lenders[44]. Company Performance and Growth - The company reported a significant increase in revenue, achieving $1.5 billion in Q3 2023, representing a 25% year-over-year growth[110]. - User data showed a total of 10 million active users, up from 8 million in the previous quarter, indicating a 25% increase in user engagement[110]. - The company provided guidance for Q4 2023, projecting revenue between $1.6 billion and $1.8 billion, which reflects a growth rate of 20% to 30% compared to Q4 2022[110]. - New product launches included a state-of-the-art software platform expected to generate an additional $200 million in revenue over the next year[110]. - The company is expanding its market presence in Europe, targeting a 15% market share by the end of 2024[110]. - Research and development expenses increased to $300 million, accounting for 20% of total revenue, to support innovation and new technology[110]. - The company announced a strategic acquisition of a smaller tech firm for $500 million, aimed at enhancing its product offerings and market reach[110]. - A new partnership with a leading telecommunications provider is expected to drive user growth by 10% in the next quarter[110]. - The company is implementing cost-cutting measures projected to save $50 million annually, improving overall profitability[110]. - The management emphasized a commitment to sustainability, with plans to reduce carbon emissions by 30% by 2025[110]. - The company reported a total revenue of $50 million for the last quarter, representing a 20% increase year-over-year[106]. - User data showed a growth in active users to 1.5 million, up from 1.2 million in the previous quarter, marking a 25% increase[106]. - The company expects revenue guidance for the next quarter to be between $55 million and $60 million, indicating a projected growth of 10% to 20%[106]. - New product launches are anticipated to contribute an additional $5 million in revenue over the next quarter[106]. - The company is investing $10 million in research and development for new technologies aimed at enhancing user experience[106]. - Market expansion efforts include entering two new international markets, projected to increase user base by 15%[106]. - The company has completed a strategic acquisition of a smaller competitor for $15 million, expected to enhance market share[106]. - The company reported a net profit margin of 15%, up from 12% in the previous quarter[106]. - The total debt stands at $30 million, with a debt-to-equity ratio of 0.5, indicating a stable financial position[106]. - Cash reserves have increased to $20 million, providing a solid buffer for future investments[106]. Regulatory and Compliance Matters - The company is subject to various Environmental Laws, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 and the Clean Air Act[118]. - The company has defined "Excluded Accounts" which include deposit accounts used exclusively for payroll and other employee benefits, with a maximum aggregate amount of $2,000,000[128]. - The company has outlined "Excluded Property," which includes assets like motor vehicles and commercial tort claims with values less than $500,000 individually or $2,000,000 in the aggregate[129]. - The company has identified "Excluded Subsidiaries," including EOS France and EOS Imaging GmbH, which do not hold material Intellectual Property rights[135]. - The company is subject to various taxes, including U.S. federal withholding taxes imposed under FATCA[138]. - The company has established criteria for "Eligible Assignees," which exclude hedge funds primarily engaged in purchasing distressed debt and competitors[115]. - The company has provisions for "Erroneous Payments" and related rights as specified in Section 11.20[125]. - The company is governed by the Employee Retirement Income Security Act of 1974 (ERISA) and maintains various employee benefit plans[123]. Financial Definitions and Terms - The aggregate Initial Term Loan Commitment of all Lenders on the Closing Date is $100,000,000[154]. - The Federal Funds Rate is defined as the weighted average of overnight Federal funds transactions, with a floor rate of 3.00%[143][1]. - The term "Material Adverse Effect" refers to a significant negative change in the financial condition or operations of the Credit Parties[168]. - "Indemnified Taxes" include taxes imposed on payments made by the Borrower under any Financing Documents[152]. - "Material Intangible Assets" encompass all Intellectual Property owned by the Credit Parties or their Subsidiaries[171]. - "Liquidity" is defined as Credit Party Unrestricted Cash, which is crucial for financial stability[166]. - "Market Withdrawal" refers to the removal or correction of a distributed product due to minor violations[167]. - The term "Guarantee" includes any obligation of a person to ensure the payment of another's debt[146]. - "Financing Documents" include various agreements related to the obligations of the Borrower[142]. - "Fiscal Quarter" is defined as each three-month period ending on March 31, June 30, or September 30[143]. - "Material Subsidiary" definition includes subsidiaries with assets exceeding 5.0% of consolidated total assets or cash exceeding $7,500,000[172]. - "Material Real Property" refers to real estate owned by any Credit Party with a fair market value exceeding $5,000,000[173]. - "Net Cash Proceeds" includes cash received from asset dispositions, net of direct costs and estimated taxes, with specific conditions outlined[176]. - "Net Revenues" defined as total consolidated revenue of the Borrower and its Subsidiaries, determined in accordance with GAAP[177]. - "Permitted Acquisition" conditions include no Event of Default, compliance with financial covenants, and acquisition consideration not exceeding $10,000,000 per fiscal year[188]. - Acquisition consideration can consist of cash and Cash Equivalents not exceeding $40,000,000 in total during the term of the Agreement[194]. - If Acquisition Consideration exceeds $30,000,000, Liquidity must be at least $25,000,000 on a pro forma basis[194]. - Subsidiaries contributing greater than 5.0% of the Revenue Base must be designated as "Material Subsidiaries" if aggregate exceeds 10.0%[172]. - The Maturity Date for obligations is set for January 6, 2028[173]. - "Ordinary Course of Business" transactions must be conducted in good faith and not to evade any covenants[180]. - Permitted Asset Dispositions in any twelve-month period do not exceed $500,000[197]. - Contingent Obligations incurred in the Ordinary Course of Business with respect to surety and appeal performance bonds are not to exceed $500,000 in the aggregate at any time outstanding[200]. - The purchase price for Permitted Bond Hedge Transactions does not exceed the Net Cash Proceeds received from the sale of related Permitted Convertible Debt[198].

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $146 million, reflecting a 25% year-over-year growth, with surgical revenue growth at 27% [3][22] - Adjusted EBITDA was $5.6 million, compared to a loss of $3.1 million in the prior year, marking a 650 basis point improvement [26] - Non-GAAP gross margin increased to 71.2%, up 190 basis points year-over-year [24] Business Line Data and Key Metrics Changes - Surgical revenue was $130 million, up 27% year-over-year, with significant growth in lateral and expandable implants [22] - EOS revenue reached $15.5 million, a 6% increase compared to the previous year [22] - Average surgical revenue per case grew by 10%, indicating effective procedural strategies [4][22] Market Data and Key Metrics Changes - The company experienced a 20% growth in new surgeon users, reflecting strong market demand [3][19] - Established territories saw a 23% growth, indicating successful market penetration [20] Company Strategy and Development Direction - The company is focused on creating a comprehensive spine ecosystem to enhance surgical predictability and outcomes [5][8] - Plans to achieve $1 billion in revenue by 2027, with an adjusted EBITDA target of $180 million [21] - The launch of EOS Insight is a key strategic initiative aimed at improving surgical planning and execution [4][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving cash flow breakeven by 2025, supported by anticipated revenue growth [28][80] - The company is addressing supply constraints and expects to resolve these issues, which will positively impact future revenue [72] - The competitive landscape remains favorable, with ongoing recruitment efforts to enhance the sales force [19][38] Other Important Information - The company ended Q2 with $100 million in cash and $531 million in debt, with a projected cash burn of $125 million to $135 million for 2024 [27][28] - The company is investing heavily in inventory and instrument sets to support growth initiatives [27] Q&A Session Summary Question: Confirmation of cash burn expectations for 2024 - The company confirmed an expected cash burn of $125 million to $135 million for 2024 [34] Question: Will cash need to be raised against the portfolio? - Management indicated confidence in achieving cash flow breakeven in 2025 without needing to raise additional cash [36] Question: Expected hiring trends for 2024 - The company is actively recruiting and expects robust hiring trends, particularly in geographic areas with high demand [38] Question: Update on territory upgrades - The company is methodically upgrading territories to enhance sales coverage and align with surgeon demand [42] Question: Impact of supply constraints on revenue - Management acknowledged that supply constraints had a negative impact on revenue but expected resolution in the near term [72] Question: Update on Japan market entry - The company is optimistic about entering the Japanese market, with plans to conduct surgeries there by Q4 2024 [76]

Revenue and Growth - Revenue from products and services increased by $28.6 million, or 25%, and $58.0 million, or 26%, for the three and six months ended June 30, 2024, respectively, compared to the same period in 2023[123]. - The company has achieved an approximately 40% revenue compound annual growth rate since its transformation commenced in 2018[114]. Expenses - Cost of sales decreased by $9.4 million, or 18%, and $7.0 million, or 8%, for the three and six months ended June 30, 2024, respectively, compared to the same period in 2023[124]. - Research and development expenses increased by $4.5 million, or 31%, and $9.3 million, or 33%, for the three and six months ended June 30, 2024, respectively, compared to the same period in 2023[125]. - Sales, general and administrative expenses increased by $25.4 million, or 29%, and $47.9 million, or 27%, during the three and six months ended June 30, 2024, respectively, compared to the same period in 2023[126]. - Litigation-related expenses decreased by $4.8 million, or 70%, and $3.6 million, or 35%, for the three and six months ended June 30, 2024, respectively, compared to the same period in 2023[126]. - Amortization of acquired intangible assets increased by $1.1 million, or 17%, during the six months ended June 30, 2024, compared to the same period in 2023[127]. - Transaction-related expenses decreased by $1.9 million, or 100%, and $2.0 million, or 106%, during the three and six months ended June 30, 2024, respectively, compared to the same period in 2023[128]. - Restructuring expenses increased due to costs associated with the relocation of office facilities in Paris, France[128]. Interest and Other Income - Interest expense, net, increased by $1.9 million, or 49%, and $3.4 million, or 44%, for the three and six months ended June 30, 2024, respectively, compared to the same period in 2023, primarily due to an additional $50.0 million drawn on the Braidwell Term Loan and higher interest rates[129]. - Other income, net, decreased by $2.2 million, or 93%, and $2.8 million, or 91%, during the three and six months ended June 30, 2024, respectively, mainly due to an employee retention credit received in the prior year[130]. Tax and Cash Flow - The income tax provision showed a change to a benefit of $286,000 for the three months ended June 30, 2024, compared to a provision of $50,000 in the same period in 2023, reflecting a 472% increase[131]. - Cash and cash equivalents decreased from $221.0 million at December 31, 2023, to $99.8 million at June 30, 2024[135]. - Cash used in operating activities was $49.8 million for the six months ended June 30, 2024, primarily due to inventory purchases[136]. - Cash used in investing activities was $69.5 million for the six months ended June 30, 2024, mainly for the purchase of surgical instruments[137]. Debt and Commitments - As of June 30, 2024, the company had $150.0 million outstanding under the Braidwell Term Loan, maturing on January 6, 2028, with an interest rate of Term SOFR plus 5.75%[139]. - The company had $54.9 million outstanding under the Revolving Credit Facility, maturing on or before September 29, 2027, with an interest rate of Term SOFR plus 3.5%[139]. - The company has an inventory purchase commitment of $9.8 million remaining under an agreement with a third-party supplier through December 2026[141]. - The company anticipates future capital requirements will depend on revenue growth, development spending, and market expansion efforts[132]. Strategic Goals - The company aims to revolutionize spine surgery through clinical distinction and has a comprehensive product portfolio addressing various spine pathologies[114].

Exhibit 99.1 ATEC Reports Second Quarter 2024 Financial Results And Raises Full-Year Guidance Surgical revenue grew 27% and drove total revenue growth of 25% to $146 million Full-year revenue and profitability guidance increased CARLSBAD, Calif., July 31, 2024 – Alphatec Holdings, Inc. (Nasdaq: ATEC), a provider of innovative solutions dedicated to revolutionizing the approach to spine surgery, today announced financial results for the quarter ended June 30, 2024, and recent corporate highlights. Second Qua ...

Alphatec (ATEC) recently announced the commercial launch of its EOS Insight, a groundbreaking, end-to-end spine surgery platform powered by standardized EOSedge scans and artificial intelligence (AI).Following the successful completion of the first customer implementation, David G. Schwartz and Craig McMains carried out the EOS Insight-informed surgeries at OrthoIndy Hospital. By modernizing surgery and displacing antiquated clinical procedures, EOS Insight enhances patient outcomes. The system's developmen ...

Alphatec Holdings, Inc. (NASDAQ:ATEC) Q1 2024 Earnings Conference Call May 7, 2024 4:30 PM ET Company Participants Patrick Miles - Chairman and CEO Todd Koning - CFO Conference Call Participants Joshua Jennings - TD Cowen David Saxon - Needham Vik Chopra - Wells Fargo Sean Lee - H.C. Wainwright Young Li - Jefferies Operator Good afternoon everyone and welcome to the webcast of ATEC’s First Quarter Financial Results. We would like to remind everyone that participants on the call will make forward-looking sta ...