Full year 2024 total revenue grew 27% to $612 million, enabling significant profit margin expansion
Full year 2025 total revenue expected to approximate $732 million and fuel free cash flow
CARLSBAD, Calif., February 26, 2025--(BUSINESS WIRE)--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 and year ended December 31, 2024, and business highlights.
FourthQuarter and Full Year 2024FinancialResults
Quarter Ended December 31, 2024
Year Ended December 31, 2024
Total revenue
$177 million
$612 million
GAAP gross margin
69%
69%
Non-GAAP gross margin
70%
70%
Operating expenses
$145 million
$560 million
Non-GAAP operating expenses
$119 million
$461 million
GAAP net loss
($33) million
($162) million
Non-GAAP adjusted EBITDA
$21 million
$31 million
Non-GAAP adjusted EBITDA margin
12%
5%
Ending cash balance
$139 million
Numbers and percentages may not foot due to rounding.
Fourth Quarter 2024 Business Highlights
Grew surgical revenue by 28%, with 19% surgical volume growth and a 7% increase in average revenue per surgery
Increased new surgeon users by 20%
Entered Japan with first surgery
Generated $9 million of free cash flow
"As many in the industry are choosing to capitulate, ATEC, the largest pure-play spine company, remains focused on revolutionizing spine care," asserted Pat Miles, Chairman and Chief Executive Officer. "The coming years will be our best yet. We are expanding our influence in deformity through EOS-integrated, procedure-specific technologies. We are thrilled to have performed our first surgeries in Japan, the world’s second-largest spine market. The durable revenue growth that we are driving, combined with sharpened operational discipline, position us for self-funded growth in 2025 and beyond."
Financial Outlookfor the Full Year 2025
The Company continues to expect total revenue for the fiscal year ended December 31, 2025, to approximate $732 million, reflecting growth of approximately 20% compared to full year 2024. This includes surgical revenue of approximately $657 million and approximately $75 million of EOS revenue. The Company also continues to anticipate adjusted EBITDA of approximately $75 million, which will contribute to positive free cash flow for the full year 2025.
Financial Results Webcast
The Company will host a live webcast today at 1:30 p.m. PT / 4:30 p.m. ET. To access the live webcast, please visit the Investor Relations Section of ATEC’s Corporate Website.
To dial into the live webcast, please register at this link. Access details will be shared via email.
Non-GAAP Financial Information
To supplement the Company’s financial statements presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"), the Company reports certain non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating loss, and non-GAAP adjusted EBITDA. The Company believes that these non-GAAP financial measures provide investors with an additional tool for evaluating the Company's core performance, which management uses in its own evaluation of continuing operating performance, and a baseline for assessing the future earnings potential of the Company. The Company’s non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. Non-GAAP financial results should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Included below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measures and a discussion of the Company’s non-GAAP definitions. We have not reconciled our adjusted operating expenses and adjusted EBITDA estimates for full year 2025 because certain items that impact these figures are uncertain or out of our control and cannot be reasonably predicted. Accordingly, a reconciliation of 2025 adjusted operating expenses and adjusted EBITDA estimates is not available without unreasonable effort.
AboutAlphatec Holdings, Inc.
ATEC, through its wholly owned subsidiaries, Alphatec Spine, Inc., EOS imaging S.A.S. and SafeOp Surgical, Inc., is a medical device company dedicated to revolutionizing the approach to spine surgery through clinical distinction. ATEC’s Organic Innovation MachineTM is focused on developing new approaches that integrate seamlessly with the Company’s expanding AlphaInformatiX Platform to better inform surgery and more safely and reproducibly achieve the goals of spine surgery. ATEC’s vision is to become the Standard Bearer in Spine. For more information, visit us at www.atecspine.com.
Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The Company cautions investors that there can be no assurance that actual results will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward-looking statements include, but are not limited to: references to the Company’s revenue, balance sheet, growth and financial outlook; planned product launches, introductions, regulatory submissions or clearances and territory penetration; efforts to transform sales and distribution channels; the Company’s ability to compel surgeon adoption; and the Company’s future ability to finance its operations and sufficiency of its cash runway. Important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to: the uncertainty of success in developing new products or products currently in the pipeline; the uncertainties in the Company’s ability to execute upon its strategic operating plan; the uncertainties regarding the ability to successfully license or acquire new products, and the commercial success of such products; failure to achieve acceptance of the Company’s products by the surgeon community; failure to obtain FDA or other regulatory clearance or approval or unexpected or prolonged delays in the process; continuation of favorable third-party reimbursement; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to achieve profitability; uncertainty of additional funding; the Company’s ability to compete with other products or with emerging technologies; product liability exposure; an unsuccessful outcome in any litigation; patent infringement claims; claims related to the Company’s intellectual property; and the Company’s ability to meet its financial obligations. A further list and description of these and other factors, risks and uncertainties can be found in the Company's most recent annual report, and any subsequent quarterly and current reports, filed with the Securities and Exchange Commission. ATEC disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.
Alphatec Holdings, Inc. Consolidated Statements of Operations (in thousands, except per share amounts)
Three Months Ended
Year Ended
December 31,
December 31,
2024
2023
2024
2023
(unaudited)
Revenue from products and services
$
176,793
$
137,970
$
611,562
$
482,262
Cost of sales
55,205
42,780
187,300
172,059
Gross profit
121,588
95,190
424,262
310,203
Operating expenses:
Research and development
23,244
22,284
80,718
70,115
Sales, general and administrative
114,541
104,120
450,199
374,080
Litigation-related expenses
1,188
9,472
9,799
22,287
Amortization expense
4,720
3,823
16,258
14,284
Transaction-related expenses
327
(65
)
210
2,113
Restructuring expenses
1,386
386
3,247
719
Total operating expenses
145,406
140,020
560,431
483,598
Operating loss
(23,818
)
(44,830
)
(136,169
)
(173,395
)
Other expense, net:
Interest expense, net
(7,151
)
(4,416
)
(24,879
)
(16,641
)
Other (expense) income, net
(1,922
)
44
(1,025
)
3,121
Total other expense, net
(9,073
)
(4,372
)
(25,904
)
(13,520
)
Net loss before taxes
(32,891
)
(49,202
)
(162,073
)
(186,915
)
Income tax benefit
441
(124
)
50
(277
)
Net loss
$
(33,332
)
$
(49,078
)
$
(162,123
)
$
(186,638
)
Net loss per share, basic and diluted
$
(0.23
)
$
(0.37
)
$
(1.13
)
$
(1.54
)
Weighted average shares outstanding, basic and diluted
144,583
133,750
142,946
121,242
Stock-based compensation included in:
Cost of sales
$
2,485
$
481
$
4,961
$
25,082
Research and development
9,894
9,154
27,030
18,741
Sales, general and administrative
9,154
10,880
41,286
37,421
$
21,533
$
20,515
$
73,277
$
81,244
Alphatec Holdings, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
December 31, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
138,840
$
220,970
Accounts receivable, net
82,987
72,613
Inventories
175,264
136,842
Prepaid expenses and other current assets
20,308
20,666
Total current assets
417,399
451,091
Property and equipment, net
156,394
149,835
Right-of-use assets
34,701
26,410
Goodwill
70,976
73,003
Intangible assets, net
93,518
102,451
Other assets
2,722
2,418
Total assets
$
775,710
$
805,208
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
52,984
$
48,985
Accrued expenses and other current liabilities
81,466
87,712
Contract liabilities
10,467
13,910
Short-term debt
1,656
1,808
Current portion of operating lease liabilities
6,453
5,159
Total current liabilities
153,026
157,574
Total long-term liabilities
613,250
545,915
Redeemable preferred stock
23,603
23,603
Stockholders' equity
(14,169
)
78,116
Total liabilities and stockholders' equity
$
775,710
$
805,208
Alphatec Holdings, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three Months Ended
Year Ended
December 31,
December 31,
2024
2023
2024
2023
(unaudited)
Gross profit, GAAP
$
121,588
$
95,190
$
424,262
$
310,203
Add: amortization of intangible assets
(814
)
278
108
939
Add: stock-based compensation
2,485
481
4,961
25,082
Add: purchase accounting adjustments on acquisitions
—
198
197
393
Non-GAAP gross profit
$
123,259
$
96,147
$
429,528
$
336,617
Gross margin, GAAP
68.8
%
69.0
%
69.4
%
64.3
%
Add: amortization of intangible assets
-0.5
%
0.2
%
0.0
%
0.2
%
Add: stock-based compensation
1.4
%
0.3
%
0.8
%
5.2
%
Add: purchase accounting adjustments on acquisitions
0.0
%
0.1
%
0.0
%
0.1
%
Non-GAAP gross margin
69.7
%
69.7
%
70.2
%
69.8
%
Three Months Ended
Year Ended
December 31,
December 31,
2024
2023
2024
2023
(unaudited)
Operating expenses, GAAP
$
145,406
$
140,020
$
560,431
$
483,598
Adjustments:
Stock-based compensation
(19,048
)
(20,034
)
(68,316
)
(56,162
)
Litigation-related expenses
(1,188
)
(9,472
)
(9,799
)
(22,287
)
Amortization expense
(4,720
)
(3,823
)
(16,258
)
(14,284
)
Transaction-related expenses
(327
)
65
(210
)
(2,113
)
Restructuring expenses
(1,386
)
(386
)
(3,247
)
(719
)
Other non-recurring expenses1, 2
—
—
(1,608
)
(1,349
)
Non-GAAP operating expenses
$
118,737
$
106,370
$
460,993
$
386,684
Three Months Ended
Year Ended
December 31,
December 31,
2024
2023
2024
2023
(unaudited)
Net loss, GAAP
$
(33,332
)
$
(49,078
)
$
(162,123
)
$
(186,638
)
Interest expense, net
$
7,151
$
4,416
$
24,879
$
16,641
Other expense (income), net
1,922
(44
)
1,025
(3,121
)
Income tax benefit
441
(124
)
50
(277
)
Depreciation
16,102
11,918
62,052
40,916
Amortization expense
3,906
4,101
16,366
15,223
EBITDA
(3,810
)
(28,811
)
(57,751
)
(117,256
)
Add back significant items:
Stock-based compensation
21,533
20,515
73,277
81,244
Purchase accounting adjustments on acquisitions
—
198
197
393
Litigation-related expenses
1,188
9,472
9,799
22,287
Transaction-related expenses
327
(65
)
210
2,113
Restructuring expenses
1,386
386
3,247
719
Other non-recurring expenses1, 2
—
—
1,608
1,349
Adjusted EBITDA
$
20,624
$
1,695
$
30,587
$
(9,151
)
Adjusted EBITDA margin
11.7
%
1.2
%
5.0
%
(1.9
%)
Adjusted EBITDA margin expansion
1,050 bps
1
Non-recurring net charges on assets and liabilities associated with customer plan of reorganization
2
Non-recurring consulting fees associated with the implementation of our state tax-planning strategy
Non-GAAP Definitions
Amortization of intangible assets: Represents amortization expense associated with intangible assets including, but not limited to customer relationships, intellectual property, and trade names acquired in business combinations and asset acquisitions.
Litigation-related expenses: We are involved in various litigation matters that from time-to-time result in settlements. Litigation matters can vary in their characteristics, frequency and significance to our operating results and core business operations. We review litigation matters from both a qualitative and quantitative perspective to determine whether such matters are a normal and recurring part of our business. We include in our GAAP financial statements litigation fees and settlement expenses that we determine to be normal, recurring and routine to our business. When we determine that certain litigation matters are not normal and recurring to our core business operations, we believe excluding these expenses will provide our management and investors with useful incremental information. Litigation fees and settlement expenses excluded from our non-GAAP financial measures in the periods presented relate primarily to patent litigation and other litigation matters that relate directly to the business transformation that we started in 2018 and are discussed more fully in our periodic reports filed with the Securities Exchange Commission.
Other non-recurring expenses: These expenses represent non-recurring expenses that we consider to be one-time in nature.
Purchase accounting adjustments on acquisitions: Includes non-cash expenses incurred as a result of fair value asset step-ups associated with tangible assets acquired from business combinations or asset acquisitions.
Restructuring expenses: From time-to-time, in order to realign the Company’s operations or to achieve synergies associated with an acquisition, the Company may eliminate roles or restructure its operations and footprint. In such cases the Company may incur one-time severance and personnel costs associated with workforce reductions, or costs associated with exiting and/or relocating facilities. We exclude these costs as we do not consider such amounts to be part of the ongoing operations.
Stock-based compensation: Stock-based compensation is charged to cost of revenue and operating expenses. We exclude stock-based compensation from certain of our non-GAAP financial measures because we believe that excluding these non-cash expenses provides meaningful supplemental information regarding operational performance. Because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, the subjective assumptions involved in those determinations, and the volatility in valuations that can be driven by market conditions outside the Company’s control, the Company believes excluding stock-based compensation expense enhances the ability of management and investors to understand and assess the underlying performance of its business over time.
Transaction-related expenses: These expenses represent one-time costs associated with business combinations, asset acquisitions, and financings. These items may include but are not limited to consulting and legal fees, contract termination costs and other related deal costs.
Adjusted EBITDA: Represents earnings before non-operating income/expense, taxes, depreciation and amortization, as adjusted for the applicable non-GAAP adjustments previously described.
