Carlsmed Inc(CARL) - 2025 Q2 - Quarterly Results

Executive Summary Carlsmed reported strong Q2 2025 results, with revenue nearly doubling, driven by AI-enabled aprevo® platform adoption Q2 2025 Financial Highlights Carlsmed reported strong financial results for the second quarter of 2025, with revenue nearly doubling year-over-year, driven by the increased adoption of its AI-enabled aprevo® technology platform Q2 2025 Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | YOY Growth | | :---------------- | :------ | :------ | :--------- | | Revenue | $12.1M | $6.1M | 99% | | Gross Profit | $8.9M | $4.6M | 93.5% | | Gross Margin | 73.4% | 75.0% | -1.6 pp | | Net Loss | $(6.8)M | $(6.3)M | 7.9% | | Adjusted EBITDA Loss | $(6.2)M | $(6.2)M | 0.0% | CEO Commentary The CEO highlighted strong commercial performance driven by the adoption of the aprevo® platform and its ability to deliver favorable patient outcomes. The company also successfully completed its first personalized cervical spine surgery, aiming to become the new standard of care - Strong commercial performance was driven by the continued adoption of the AI-enabled aprevo® technology platform and its ability to deliver more favorable patient outcomes[2] - Successfully completed the first personalized cervical spine surgery using the aprevo® technology platform in July, with a launch planned for 2026[2] - Carlsmed is well-positioned for continued scale and aims to become the new standard of care in spine fusion surgery[2] Second Quarter 2025 Detailed Financial Results Carlsmed's Q2 2025 financial performance is detailed, covering revenue, gross profit, operating expenses, net loss, and Adjusted EBITDA Revenue and Gross Profit Performance Revenue for Q2 2025 increased by 99% year-over-year, primarily due to a higher volume of surgical procedures. Gross profit also saw significant growth, though the gross margin slightly decreased due to expedite production fees Revenue and Gross Profit (Three Months Ended June 30) | Metric | 2025 ($M) | 2024 ($M) | YOY Change ($M) | YOY Change (%) | | :------------- | :-------- | :-------- | :-------------- | :------------- | | Revenue | $12.1 | $6.1 | $6.0 | 99% | | Cost of Sales | $3.2 | $1.5 | $1.7 | 113.3% | | Gross Profit | $8.9 | $4.6 | $4.3 | 93.5% | | Gross Margin | 73.4% | 75.0% | -1.6 pp | -2.1% | - The increase in revenue was driven by the increased number of surgical procedures utilizing the aprevo® technology platform[3] - The decrease in gross margin was primarily driven by expedite production fees charged by the contract manufacturer to meet customer timing requirements[3] Operating Expenses Breakdown Total operating expenses increased by 41% in Q2 2025, primarily due to higher personnel costs across R&D, sales and marketing expansion, and increased general and administrative costs associated with becoming a publicly traded company Operating Expenses (Three Months Ended June 30) | Expense Category | 2025 ($M) | 2024 ($M) | YOY Change ($M) | YOY Change (%) | | :----------------------- | :-------- | :-------- | :-------------- | :------------- | | Research and Development | $4.2 | $4.0 | $0.2 | 5.0% | | Sales and Marketing | $7.9 | $4.9 | $3.0 | 61.2% | | General and Administrative | $3.3 | $2.0 | $1.3 | 65.0% | | Total Operating Expenses | $15.4 | $10.9 | $4.5 | 41.3% | - R&D expenses increased due to higher personnel costs supporting product development and AI initiatives, partially offset by lower prototype and COMPASS registry costs[3] - Sales and marketing expenses rose due to personnel additions, variable sales expenses tied to revenue growth, and increased marketing efforts[3] - G&A expenses increased primarily due to personnel additions for business growth and costs associated with the transition to a publicly traded company[3] Net Loss and Adjusted EBITDA Carlsmed reported a slightly increased net loss in Q2 2025 compared to the prior year, while its Adjusted EBITDA loss remained consistent Net Loss and Adjusted EBITDA (Three Months Ended June 30) | Metric | 2025 ($M) | 2024 ($M) | YOY Change ($M) | YOY Change (%) | | :----------------- | :-------- | :-------- | :-------------- | :------------- | | Net Loss | $(6.8) | $(6.3) | $(0.5) | 7.9% | | Adjusted EBITDA Loss | $(6.2) | $(6.2) | $0.0 | (0.8)% | 2025 Full Year Financial Outlook Carlsmed provides its full-year 2025 financial outlook, projecting significant revenue growth compared to the prior year 2025 Full Year Financial Outlook Carlsmed anticipates full-year 2025 revenue to be between $45.5 million and $47.5 million, reflecting a substantial year-over-year growth rate of 67% to 75% compared to 2024 2025 Full Year Financial Outlook | Metric | Guidance Range | | :----- | :------------- | | Revenue | $45.5M - $47.5M | | YOY Growth (vs 2024) | 67% - 75% | Recent Business Developments and Financial Position This section highlights Carlsmed's recent strategic milestones and its current cash and liquidity position Strategic Milestones Carlsmed achieved key strategic milestones, including the first personalized cervical spine surgery and securing New Technology Add-On Payment (NTAP) reimbursement for its aprevo® cervical procedures - The first personalized cervical spine surgery using the AI-enabled aprevo® technology platform was successfully performed[10] - aprevo® cervical procedures received CMS New Technology Add-On Payment (NTAP) reimbursement, effective October 1, 2025[10] Cash and Liquidity As of June 30, 2025, Carlsmed maintained a healthy cash position, which was further bolstered by significant net proceeds from its initial public offering in July 2025 Cash and Liquidity | Metric | As of June 30, 2025 | | :-------------------- | :------------------ | | Cash and cash equivalents | $33.5 million | | Net proceeds from IPO (July 2025) | $93.5 million | Non-GAAP Financial Measures This section defines Adjusted EBITDA, a non-GAAP financial measure, and explains its rationale and limitations for investors Adjusted EBITDA Definition and Rationale Carlsmed utilizes Adjusted EBITDA as a non-GAAP financial measure to provide investors with a clearer view of its core operating performance by excluding certain non-cash or non-recurring items, facilitating comparisons across periods and industry peers - Adjusted EBITDA is calculated as net income (loss) adjusted to exclude net interest expense/income, income tax expense/benefit, depreciation and amortization expense, stock-based compensation expense, and change in fair value of warrant liabilities[7] - Management believes Adjusted EBITDA helps investors understand the Company's performance in a manner similar to management's evaluation for strategic and annual operating planning[8] - Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for GAAP financial results[9] Conference Call and Company Information This section provides details on the Q2 2025 conference call, company overview, forward-looking statements, and contact information Webcast & Conference Call Details Carlsmed hosted a conference call and concurrent webcast on August 28, 2025, to discuss its second quarter and first half 2025 financial performance - A conference call and webcast were held on August 28, 2025, at 4:30 pm Eastern Time to review Q2 and first half 2025 performance[5] About Carlsmed Carlsmed is a medical technology company dedicated to pioneering AI-enabled personalized spine surgery solutions with the goal of improving patient outcomes and reducing healthcare costs - Carlsmed is a medical technology company pioneering AI-enabled personalized spine surgery solutions[11] - The company's mission is to improve outcomes and decrease the cost of healthcare for spine surgery and beyond[11] Forward-Looking Statements This section contains cautionary forward-looking statements regarding future expectations and plans, emphasizing that actual results may differ materially due to various risk factors and that these statements are valid only as of the press release date - Statements about future expectations, plans, and prospects, including the ability to scale the aprevo® platform and launch aprevo® cervical in 2026, constitute forward-looking statements[12] - Actual results may differ materially from forward-looking statements due to various important factors, including those set forth under 'Risk Factors' in the S-1 Registration Statement[12] - Carlsmed disclaims any obligation to update these forward-looking statements, which should not be relied upon as representing views after the press release date[12] Investor and Media Contacts Contact information for investor relations and media inquiries is provided for stakeholders seeking further information - Investor Relations contact: Caroline Corner, PhD at IR@Carlsmed.com[13] - Media contact: LeAnn Burton, Senior Director Brand Marketing at LBurton@Carlsmed.com[13] Condensed Financial Statements This section presents Carlsmed's unaudited condensed statements of operations, balance sheets, and Adjusted EBITDA reconciliation Condensed Statements of Operations and Comprehensive Loss This section presents the unaudited condensed statements of operations for the three and six months ended June 30, 2025, and 2024, detailing the company's revenue, cost of sales, operating expenses, and net loss Condensed Statements of Operations and 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 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $12,083 | $6,081 | $22,272 | $11,167 | | Cost of sales | $3,214 | $1,519 | $5,767 | $2,941 | | Gross profit | $8,869 | $4,562 | $16,505 | $8,226 | | Total operating expenses | $15,371 | $10,881 | $28,726 | $19,874 | | Loss from operations | $(6,502) | $(6,319) | $(12,221) | $(11,648) | | Net loss and comprehensive loss | $(6,766) | $(6,277) | $(12,495) | $(11,724) | | Net loss per share attributable to common stockholders, basic and diluted | $(1.47) | $(1.55) | $(2.94) | $(2.91) | Condensed Balance Sheets This section provides the unaudited condensed balance sheets as of June 30, 2025, and December 31, 2024, detailing the company's assets, liabilities, and stockholders' deficit Condensed Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Assets | | | | Cash and cash equivalents | $33,472 | $40,125 | | Accounts receivable, net | $9,711 | $6,766 | | Total current assets | $46,192 | $49,351 | | Total assets | $53,270 | $51,824 | | Liabilities, Convertible Preferred Stock, and Stockholders' Deficit | | | | Total current liabilities | $9,484 | $8,818 | | Total liabilities | $27,614 | $26,228 | | Total stockholders' deficit | $(83,073) | $(70,630) | Reconciliation of GAAP Net Loss to Adjusted EBITDA This section provides a reconciliation of GAAP net loss to Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, outlining the specific adjustments made to derive the non-GAAP measure Reconciliation of GAAP Net Loss to Adjusted EBITDA (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 | $(6,766) | $(6,277) | $(12,495) | $(11,724) | | Interest (income) expense | $27 | $(103) | $4 | $15 | | Depreciation and amortization | $61 | $35 | $101 | $75 | | EBITDA | $(6,678) | $(6,345) | $(12,390) | $(11,634) | | Stock-based compensation | $258 | $52 | $433 | $87 | | Change in fair value of warrant liabilities | $237 | $61 | $270 | $61 | | Adjusted EBITDA | $(6,183) | $(6,232) | $(11,687) | $(11,486) |