• Total Revenue (Q4 2024): $177 million, up 28% year-over-year and 17% sequentially.
• Surgical Revenue (Q4 2024): $157 million, up 28% year-over-year.
• EOS Revenue (Q4 2024): $20 million, up 32% year-over-year.
• Non-GAAP Gross Margin (Q4 2024): 70%, flat year-over-year.
• Non-GAAP R&D (Q4 2024): $13 million, approximately 8% of sales.
• Non-GAAP SG&A (Q4 2024): $105 million, approximately 60% of sales.
• Adjusted EBITDA (Q4 2024): $21 million, 12% margin, over 1,000 basis points improvement year-over-year.
• Free Cash Flow (Q4 2024): $9 million.
• Cash (End of Q4 2024): $139 million.
• Debt (End of Q4 2024): $590 million at face value.
• Total Revenue (Full Year 2024): $612 million, up 27% year-over-year.
• Surgical Revenue (Full Year 2024): $545 million, up 29% year-over-year.
• EOS Revenue (Full Year 2024): $67 million, up 13% year-over-year.
• Non-GAAP Gross Margin (Full Year 2024): 70%, up 40 basis points year-over-year.
• Adjusted EBITDA (Full Year 2024): $31 million, approximately 5% of sales, $40 million improvement year-over-year.
• Cash Use (Full Year 2024): $128 million, $31 million improvement compared to 2023.
• 2025 Revenue Outlook: Approximately $732 million, 20% growth expected.
• 2025 Adjusted EBITDA Outlook: $75 million.

• Warning! GuruFocus has detected 9 Warning Signs with ATEC.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Alphatec Holdings Inc (NASDAQ:ATEC) reported a 28% total revenue growth in Q4 2024, significantly outperforming the market.
• The company achieved a positive cash flow of $9 million for the first time since its transformation.
• Surgeon adoption and procedural volume have shown strong growth, with a 19% increase in surgeon adoption and a 25% increase in procedural volume over a five-year CAGR.
• The company launched the EOS Insight software and reported a record EOS order book, indicating strong demand and future growth potential.
• Alphatec Holdings Inc (NASDAQ:ATEC) is expanding its international presence, having completed its first surgeries in Japan, the second largest market in the world.

Negative Points

• Despite strong revenue growth, the company still faces significant debt, with $590 million in debt at face value.
• Non-GAAP gross margin remained flat at 70% compared to the previous year, indicating challenges in improving profitability margins.
• The company is still in the early stages of penetrating the lateral surgery market, with only a 15% market share in a $1 billion market.
• Alphatec Holdings Inc (NASDAQ:ATEC) is underpenetrated in the pediatric surgery market, despite having foundational tools like EOS in pediatric hospitals.
• The company faces challenges in expanding its influence in academic centers and certain geographies, indicating room for growth but also highlighting current limitations.

Q & A Highlights

Q: What assurance can you give that Alphatec won't elevate spending in 2025 despite industry disruptions? A: Patrick Miles, CEO, assured that the company has already accounted for potential disruptions in their plan. Previous investments were made with a bullish outlook on market dynamics, and current efforts include expanding the sales force without undermining the financial thesis.

Q: Do you expect any market share benefits from a competitor's sale of its US spinal implants business? A: Patrick Miles, CEO, sees disruption as an opportunity. Alphatec is well-positioned with its unique informatics platform, which could attract talent from competitors like Stryker, who are leaving the spine market.

Q: Can you discuss Alphatec's international plans for 2025, particularly in Japan? A: Patrick Miles, CEO, highlighted Japan as a significant market with similarities to the US and Australia. Alphatec is focusing on lateral surgery to establish a strong presence and plans to play long-term in this market.

Q: What inning are you in with the PTP and LTP offerings, and how much penetration have these procedures achieved? A: Patrick Miles, CEO, stated that they are in the early innings for both PTP and LTP. The market opportunity is much larger than current sales reflect, and there's significant potential for growth in these procedures.

Q: How have the efficiencies in SG&A impacted the bottom line, and are these savings fully realized? A: J. Todd Koning, CFO, explained that the company took a deliberate approach to reduce organizational size and discretionary spending. These efficiencies will continue to benefit the company throughout 2025, contributing to operational improvements and financial commitments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.