Xtant Medical (XTNT) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights This section provides an overview of Xtant Medical's strong Q2 2025 financial performance and key strategic business developments Second Quarter 2025 Financial Highlights Xtant Medical reported strong Q2 2025 financial results, achieving significant year-over-year growth in revenue, gross margin, and a turnaround to positive net income and Adjusted EBITDA, reversing prior year losses. The company also raised its full-year 2025 revenue guidance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $35.4 million | Up 18% | | Gross Margin | 68.6% | 62.1% | Up 6.5 percentage points | | Net Income | $3.6 million | Net loss of $3.9 million | Turnaround | | Adjusted EBITDA | $6.9 million | Adjusted EBITDA loss of $0.6 million | Turnaround | | Cash from Operations | $1.2 million generated | Cash used of $5.1 million | Turnaround | - Raised FY25 revenue guidance to $131-$135 million, representing growth of 11%-15% over FY24[4] Recent Business Highlights The company is strategically focusing on its core biologics business, evidenced by the launch of next-generation products and the planned divestiture of non-core spinal implant and OUS businesses to strengthen the balance sheet and support biologics development - Enhanced focus on core biologics business while prudently managing expenses and driving operating leverage, consistent profitability, and cash flow[3] - Announced definitive agreements to sell its non-core Coflex® and CoFix® spinal implants and all OUS businesses to Companion Spine for total proceeds of approximately $19.2 million[4][5] - Launched OsteoFactor Pro™, a next-generation growth factor designed to improve bone healing and support surgical success[4] - Launched Trivium™, a premium, next-generation demineralized bone matrix (DBM) allograft[4] - Now the only vertically integrated company to develop and manufacture solutions across all major orthobiologic categories[3] Second Quarter 2025 Detailed Financial Results This section presents a comprehensive breakdown of Xtant Medical's financial performance for Q2 2025, including revenue, expenses, and profitability metrics Revenue and Gross Margin Total revenue increased by 18% year-over-year, primarily driven by increased orthobiologics sales and new licensing revenue. Gross margin also saw a significant improvement, attributable to royalty revenue, lower product costs, and greater scale | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :----- | :--------------------- | :--------------------- | :--------- | | Total Revenue | $35,411 | $29,943 | 18.3% | | Product Revenue | $30,436 | $29,943 | 1.6% | | License Revenue | $4,975 | $- | N/A | - Gross margin for Q2 2025 was 68.6%, compared to 62.1% for Q2 2024, primarily due to royalty revenue, lower product costs, and greater scale[6][23] Operating Expenses and Net Income Operating expenses decreased year-over-year, mainly due to reduced compensation and commission expenses, which contributed to a significant turnaround from a net loss to positive net income | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change | | :----- | :--------------------- | :--------------------- | :----- | | Total Operating Expenses | $19,660 | $21,528 | Down $1,868 | | Net Income (Loss) | $3,550 | $(3,861) | Turnaround | | Diluted EPS | $0.02 | $(0.03) | Turnaround | - Reduction in operating expenses primarily attributable to reduced compensation and commission expenses, partially offset by an increase in professional fees related to sales and marketing[7] Adjusted EBITDA The company achieved positive Adjusted EBITDA in Q2 2025, a substantial improvement from a loss in the prior year, reflecting operational leverage and strategic adjustments in non-GAAP calculations | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change | | :----- | :--------------------- | :--------------------- | :----- | | Adjusted EBITDA | $6,904 | $(569) | Turnaround | - Beginning in Q4 2024, the phasing of the bargain purchase gain on sell-through of inventory from the Surgalign acquisition is no longer included in acquisition-related fair value adjustments for non-GAAP adjusted EBITDA calculation, with prior periods recast to conform[8][27] Cash and Cash Equivalents Xtant Medical increased its cash and cash equivalents balance as of June 30, 2025, compared to the end of the previous fiscal year | Metric | As of June 30, 2025 (in thousands) | As of December 31, 2024 (in thousands) | | :----- | :--------------------------------- | :----------------------------------- | | Cash and cash equivalents | $7,037 (including restricted cash) | $6,221 (including restricted cash) | 2025 Financial Guidance This section outlines Xtant Medical's updated revenue projections for the full fiscal year 2025, reflecting anticipated growth and strategic adjustments Full-Year 2025 Revenue Guidance Xtant Medical raised its full-year 2025 revenue guidance, anticipating significant growth over 2024, with further updates expected after the completion of the non-core asset sale | Metric | New FY25 Guidance | Prior FY25 Guidance | | :----- | :---------------- | :------------------ | | Revenue Range | $131 million to $135 million | $127 million to $131 million | | Growth over FY24 | 11% to 15% | N/A | - Xtant intends to update its outlook following the completion of the sale of its non-core Coflex® and CoFix® spinal implants and all OUS businesses to Companion Spine[11] Company Information This section provides essential background on Xtant Medical, its mission, non-GAAP financial measures, and cautionary statements regarding forward-looking information About Xtant Medical Holdings, Inc. Xtant Medical is a global medical technology company focused on the design, development, and commercialization of a comprehensive portfolio of orthobiologics serving the chronic and surgical wound care and sports medicine markets, as well as spinal implant systems - Mission: Honoring the gift of donation so that patients can live as full and complete a life as possible[15] - Focus: Global medical technology company focused on surgical solutions for the treatment of spinal, orthopedic, and woundcare disorders, with a comprehensive portfolio of orthobiologics and spinal implant systems[1][15] Non-GAAP Financial Measures The company uses certain non-GAAP financial measures, such as adjusted EBITDA, to supplement its GAAP consolidated financial statements, believing they provide useful information for investors and internal performance evaluation, though they are not a substitute for GAAP measures - Non-GAAP measures (e.g., adjusted EBITDA) supplement GAAP statements, providing useful information for investors and aiding management in evaluating business performance and resource allocation[17] - Adjusted EBITDA is defined as net income/loss from operations before depreciation, amortization, interest expense, and provision for income tax/benefit, further adjusted for separation-related expenses, non-cash compensation, disposition/acquisition-related expense, acquisition-related fair value adjustments, and unrealized foreign currency translation gain or loss[9] - Investors should consider non-GAAP financial measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP[17] Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements, including the company's full-year 2025 revenue guidance and the anticipated closing of the non-core asset sale, which are inherently subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements include the Company's full year 2025 revenue guidance and the anticipated closing of the sale of Coflex® and CoFix® spinal implants and all OUS businesses to Companion Spine[18] - Risks and uncertainties include the possibility that the sale may not be completed or its anticipated benefits not realized, higher-than-anticipated completion costs, diversion of management's attention, potential litigation, future operating results, ability to increase revenue, supply chain disruptions, regulatory approvals, and other factors detailed in SEC filings[18] Financial Statements This section includes the detailed consolidated balance sheets, statements of operations, and cash flows, along with non-GAAP reconciliations Consolidated Balance Sheets The consolidated balance sheet shows an increase in total assets and stockholders' equity from December 31, 2024, to June 30, 2025, driven by growth in current assets, particularly trade accounts receivable and inventories | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Assets | $103,479 | $93,837 | | Current Assets | $75,589 | $67,116 | | Cash and cash equivalents | $6,923 | $6,199 | | Trade accounts receivable, net | $26,951 | $20,660 | | Inventories | $40,135 | $38,634 | | LIABILITIES & STOCKHOLDERS' EQUITY (in thousands) | June 30, 2025 | December 31, 2024 | | Total Liabilities | $54,977 | $50,874 | | Total Stockholders' Equity | $48,502 | $42,963 | Consolidated Statements of Operations The consolidated statements of operations reflect strong performance for Q2 and the six months ended June 30, 2025, with significant revenue growth, improved gross profit margins, reduced operating expenses, and a shift from net loss to net income compared to the prior year | Metric (in thousands) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------- | :------ | :------ | :------------ | :------------ | | Total Revenue | $35,411 | $29,943 | $68,315 | $57,816 | | Gross Profit | $24,284 | $18,582 | $44,527 | $35,884 | | Gross Profit % | 68.6% | 62.1% | 65.2% | 62.1% | | Total Operating Expenses | $19,660 | $21,528 | $38,840 | $42,300 | | Income (Loss) from Operations | $4,624 | $(2,946) | $5,687 | $(6,416) | | Net Income (Loss) | $3,550 | $(3,861) | $3,608 | $(8,261) | | Diluted EPS | $0.02 | $(0.03) | $0.02 | $(0.06) | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, the company generated positive cash from operating activities, a significant improvement from cash used in the prior year, while investing activities remained a net outflow and financing activities resulted in a net outflow | Cash Flow Activity (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $2,554 | $(10,843) | | Net cash used in investing activities | $(1,460) | $(1,154) | | Net cash (used in) provided by financing activities | $(257) | $11,613 | | Net change in cash and cash equivalents and restricted cash | $816 | $(445) | | Cash and cash equivalents and restricted cash at end of year | $7,037 | $5,478 | Non-GAAP EBITDA and Adjusted EBITDA Reconciliation The reconciliation shows a strong positive Non-GAAP EBITDA and Adjusted EBITDA for both Q2 and the six months ended June 30, 2025, marking a significant improvement from negative figures in the prior year, with adjustments for non-cash and acquisition-related items | Metric (in thousands) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------- | :------ | :------ | :------------ | :------------ | | Net Income (Loss) | $3,550 | $(3,861) | $3,608 | $(8,261) | | Non-GAAP EBITDA | $5,978 | $(1,835) | $8,130 | $(4,327) | | Non-GAAP EBITDA/Total revenue | 16.9% | -6.1% | 11.9% | -7.5% | | Non-GAAP Adjusted EBITDA | $6,904 | $(596) | $9,941 | $(1,546) | | Non-GAAP Adjusted EBITDA/Total revenue | 22.7% | -2.0% | 16.6% | -2.7% | - Adjustments to EBITDA include separation-related expenses, non-cash compensation, divestiture/acquisition-related expense, acquisition-related fair value adjustments, and unrealized foreign currency translation (gain) loss[27] Additional Information This section provides details regarding the Q2 2025 earnings conference call and investor relations contact information Conference Call Details Xtant Medical hosted a webcast and conference call on August 12, 2025, to discuss its Q2 2025 financial and operating results, with replay information available on the company's investor website - Webcast and conference call held on August 12, 2025, at 8:30 am ET to discuss Q2 2025 financial and operating results[12] - A replay of the call will be available on the Investor section of the Company's website at www.xtantmedical.com[14](index=14&type=chunk) Investor Relations Contact Contact information for investor relations is provided through LifeSci Advisors, with specific contacts and email addresses listed - Investor Relations Contacts: Kevin Gardner (kgardner@lifesciadvisors.com) and Rob Windsor (rwindsor@lifescipartners.com) of LifeSci Advisors[19]