Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $32.4 million, a 3% increase from $31.5 million in Q4 2024, despite a $2 million revenue loss due to the early closure of the Companion Spine transaction [4][12] - Full year 2025 revenue reached $133.9 million, representing a 14% growth from $117.3 million in 2024 [6][16] - Adjusted EBITDA for Q4 2025 was $1.9 million, compared to approximately $0.4 million in Q4 2024, while full year adjusted EBITDA was $16.3 million, a significant improvement from a loss of $2.3 million in 2024 [19][16] - Net income for Q4 2025 was $57,000, compared to a net loss of $3.2 million in Q4 2024, and full year net income was $5 million, compared to a net loss of $16.5 million in 2024 [16][19] Business Line Data and Key Metrics Changes - The biologics product family was essentially flat in Q4 2025, but is expected to grow due to new product launches and increased sales force [6][8] - The sale of non-core assets to Companion Spine was transformational, allowing the company to focus on high-margin biologics [5][11] - Gross margin for Q4 2025 was 54.9%, up from 50.8% in Q4 2024, driven by a favorable sales mix [14] Market Data and Key Metrics Changes - The company anticipates organic growth in its core biologics business, despite headwinds from the divestiture and loss of license revenue [11][12] - The hardware business is expected to decline at a steady rate, approaching high teens percentage in 2026 [30] Company Strategy and Development Direction - The company is focused on self-sustainability, positive cash flows, and tighter operating discipline, with a strategic emphasis on in-house manufacturing [7][11] - Plans to double the number of regional sales representatives and expand the national accounts team to drive institutional adoption [8][11] - Continued investment in R&D and new product introductions is central to the company's growth strategy [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and foundation for growth, with a revenue outlook for 2026 projected between $95 million and $99 million [11][12] - The company expects to maintain positive free cash flow and does not anticipate the need for additional outside capital [5][11] Other Important Information - The company completed the sale of its Coflex assets for approximately $21.4 million, which has strengthened its cash position [5][6] - Cash equivalents and restricted cash as of December 31, 2025, were $17.3 million, up from $6.2 million in 2024 [20] Q&A Session Summary Question: Outlook for 2026 and organic growth in core biologics business - Management expects sequential quarter-over-quarter growth in 2026, driven by new product offerings and an expanded commercial organization [24] Question: Headwinds from loss of license revenue related to Q-Codes - The Q-Code revenue will cease, but management anticipates ramping up sales under the Xtant brand as distributors shift to using their contracts [26] Question: Decline in hardware business throughout 2026 - A slow decline in the hardware business is expected, with a steady rate approaching high teens percentage [30] Question: Specific products expected to support biologics growth - Key products include OsteoVive Plus, OsteoFactor Pro, and CollagenX, with significant growth opportunities identified [34] Question: Growth channels for biologics business - The majority of growth is expected to come from Xtant branded products through independent agent networks, with OEM channels contributing around 20% [38][42] Question: Strategic thoughts on the hardware business - The hardware business is still beneficial for the biologics segment, but management is evaluating its long-term strategic value [45]

Core Insights - Xtant Medical reported a full-year 2025 revenue of $133.9 million, reflecting a 14% increase year-over-year, and achieved positive net income, adjusted EBITDA, and operating cash flow [1][3][5] Financial Performance - Fourth quarter 2025 revenue was $32.4 million, up approximately 3% compared to the prior year quarter, despite a $2.0 million revenue reduction due to the early closing of the Companion Spine transaction [2][5] - For the full year 2025, total revenue reached $134.0 million, a 14% increase from $117.3 million in 2024 [3][5] - Gross margin for the full year 2025 was 62.9%, an increase from 58.2% in 2024, attributed to sales mix and greater scale [3][6] - Net income for the full year 2025 was $5.0 million, or $0.03 per diluted share, compared to a net loss of $16.5 million, or a net loss of $0.12 per basic and diluted share in 2024 [3][8] - Non-GAAP adjusted EBITDA for the full year 2025 was $16.3 million, compared to an adjusted EBITDA loss of $2.3 million in 2024 [3][9] Cash Flow and Financial Position - As of December 31, 2025, the company had total cash of $17.3 million, up from $6.2 million at the end of 2024, with an additional $10.5 million received in early 2026 related to divestiture [1][11] - Net cash provided by operations for the full year 2025 was $12.5 million, compared to net cash used in operations of $11.9 million in 2024 [3][11] Strategic Developments - The company completed the sale of its non-core Coflex® and CoFix assets and international hardware businesses to Companion Spine for $21.4 million in cash, allowing it to focus on developing advanced biologics product lines [3][4] - Xtant Medical launched new products in 2025, including the next-generation synthetic bone graft, Strata™, and CollagenX™, a bovine collagen particulate product for surgical wound closure [3][4] 2026 Outlook - The company anticipates full-year 2026 revenue to be in the range of $95 million to $99 million, reflecting expected organic growth in its core higher-margin biologics business [12]