ATEC Reports Fourth Quarter and Full Year 2024 Financial Results

Rhea-AI Summary

Alphatec Holdings (ATEC) reported strong financial results for Q4 and full year 2024, with total revenue growing 27% to $612 million. The company demonstrated robust Q4 performance with 28% surgical revenue growth, driven by 19% surgical volume growth and a 7% increase in average revenue per surgery. New surgeon users increased by 20%.

ATEC expanded internationally by entering the Japanese market, marking its presence in the world's second-largest spine market. Looking ahead to 2025, the company projects total revenue of approximately $732 million, representing 20% growth, with $657 million from surgical revenue and $75 million from EOS revenue. The company expects adjusted EBITDA of about $75 million and anticipates positive free cash flow for 2025.

Positive

• 27% revenue growth to $612M in 2024
• 28% surgical revenue growth in Q4
• 20% increase in new surgeon users
• Entry into Japanese market
• Projected 20% revenue growth for 2025
• Expected positive free cash flow in 2025
• $75M projected adjusted EBITDA for 2025

Negative

• None.

Insights

Financial Analyst

ATEC's Q4 and full-year 2024 results demonstrate exceptional momentum in the spine surgery market, with 27% annual revenue growth to $612 million. The company's Q4 performance was particularly strong, featuring 28% surgical revenue growth driven by both 19% higher surgical volume and a 7% increase in average revenue per procedure - indicating both market share gains and improved pricing power or case complexity.

The company's profit margins expanded significantly throughout 2024, culminating in $9 million of free cash flow generation in Q4 alone. This rapid progression toward sustainable profitability positions ATEC well ahead of many competitors in the spine sector, where capital efficiency has become increasingly critical.

ATEC's 2025 guidance of $732 million in revenue (20% growth) with $75 million in adjusted EBITDA represents a pivotal transition to self-funded growth. This inflection point typically triggers valuation multiple expansion for medical technology companies as they demonstrate business model sustainability.

Two strategic developments warrant particular attention: First, ATEC's entry into Japan (the world's second-largest spine market at approximately $400 million annually) opens a substantial growth vector beyond domestic expansion. Second, the company's integration of EOS imaging technology into procedure-specific solutions for spinal deformity addresses higher-complexity, higher-reimbursement procedures that typically command premium pricing.

The 20% increase in new surgeon users indicates ATEC's competitive positioning remains strong, likely benefiting from market share gains as smaller competitors struggle with rising costs of innovation and commercialization. As the largest pure-play spine company in a fragmented market, ATEC appears well-positioned to capitalize on potential industry consolidation while maintaining above-market growth rates.

• 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.--(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.

Fourth Quarter and Full Year 2024 Financial Results

	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 Outlook for 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.

About Alphatec 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 Machine^TM 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250226053646/en/

Investor/Media Contact:

Tina Jacobsen, CFA

Investor Relations

(760) 494-6790

investorrelations@atecspine.com

Company Contact:

J. Todd Koning

Chief Financial Officer

investorrelations@atecspine.com

Source: Alphatec Holdings, Inc.

FAQ

What was ATEC's revenue growth in 2024 and what are the projections for 2025?

ATEC's revenue grew 27% to $612 million in 2024, with projected revenue of $732 million for 2025, representing 20% growth.

How did ATEC's surgical metrics perform in Q4 2024?

Q4 2024 saw 28% surgical revenue growth, with 19% surgical volume growth and a 7% increase in average revenue per surgery.

What is ATEC's expected adjusted EBITDA for 2025?

ATEC expects adjusted EBITDA of approximately $75 million for 2025.

What significant market expansion did ATEC achieve in 2024?

ATEC entered the Japanese market, which is the world's second-largest spine market, with its first surgery completed.

What is ATEC's projected surgical revenue for 2025?

ATEC projects surgical revenue of approximately $657 million for 2025.