Alphatec Holdings, Inc. (ATEC) Q1 2025 Earnings Call Transcript

2025-05-01 23:19:04 ET

Alphatec Holdings, Inc. (ATEC)

Q1 2025 Earnings Conference Call

May 1, 2025 04:30 PM ET

Company Participants

Pat Miles - Chairman and CEO

Todd Koning - CFO

Conference Call Participants

Brooks O'Neil - Lake Street Capital Markets

Vik Chopra - Wells Fargo

Matt Miksic - Barclays

Mathew Blackman - Stifel

Young Li - Jefferies

Eric Anderson - TD Cowen

David Saxon - Needham

Sean Lee - H.C. Wainwright

Presentation

Operator

Good afternoon, everyone, and welcome to the webcast of ATEC's First Quarter Financial Results. We would like to remind everyone that participants on the call will make forward-looking statements. These statements are based on current expectations and are subject to uncertainties that could cause actual results to differ materially. These uncertainties are detailed in documents filed regularly with the SEC.

During this call, you may hear the company refer to non-GAAP or adjusted measures. Reconciliations of these measures to U.S. GAAP can be found in the supplemental financial tables included in today's press release, which identify and quantify all excluded items and provide management's view of why this information is useful to investors. Leading today's call will be ATEC's Chairman and CEO, Pat Miles and CFO, Todd Koning.

Now, I will turn the call over to Pat Miles. Please go ahead.

Pat Miles

Thanks much, Greg and welcome, everybody, to the Q1 2025 financial results ATEC earnings call. There will be a few forward-looking statements, which I would ask for you to review at your leisure.

So, really a great start to 2025, enjoyed revenue growth of 22% with surgical growth at 24%, that's about 4 times the market, if you're keeping track. This is really a phenomenal result for the largest pure-play spine company in ATEC. So Q1 is always a little challenging seasonally when it comes to profitability and cash flow. as cash flow or case volume slows compared to Q4, taxes reset, we see a disproportionate share of meetings and events.

But in spite of all of that, we delivered $11 million of adjusted EBITDA, which is our second best quarter ever and above expectations. And from a cash flow perspective, our cash burn in Q1 was at the low end of the range at $15 million. So profitability and cash flow performance in Q1 has really put us in a great position to meet or exceed our 2025 goals.

And I think if we harken back, the changes we made last year have resulted in a much more cash-efficient organization. And so we are 100% committed to continuing to operate the company in a deliberate manner and deliver growth, profitability and cash flow commitments as stated.

So, the revenue came in at $169 million. Really, the key thing I'd like to highlight is the strength of the surgical growth, where we saw 24% year-over-year growth. Underpinning this growth was an 18% increase in the number of surgeons utilizing ATEC procedures. The fact that revenue grew 23% in established territories demonstrates how we continue to gain surgeon and territory penetration where we have established representation.

And so what I would tell you is our thesis is working and where we have representation that's been established, we continue to compel adoption. And so the durable revenue growth drives profitability and cash flow, clearly. EOS order growth was also a record for which we're very, very encouraged. It's a foundation of our strategy....

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