Alphatec Q3 2025 slides: 30% revenue growth with positive free cash flow

Introduction & Market Context

Alphatec Holdings Inc (NASDAQ:ATEC), a company focused exclusively on spine surgery technology, presented its third-quarter 2025 financial results on October 30, showcasing strong growth and improving profitability metrics. The company has positioned itself as "the preferred destination in spine" through its concentrated focus on advancing spine surgery procedures and technologies.

Following the earnings release, ATEC’s stock rose 1.21% in aftermarket trading to $16.69, reflecting positive investor sentiment about the company’s performance and outlook. The stock has traded within a 52-week range of $6.97 to $17.15.

Quarterly Performance Highlights

ATEC reported impressive financial results for Q3 2025, with total revenue reaching $197 million, representing a 30% year-over-year increase. The company’s surgical revenue grew 31% to $177 million, while EOS revenue increased 29% to $20 million.

As shown in the following chart of quarterly financial highlights, ATEC demonstrated strong performance across key metrics:

The company achieved significant profitability improvements, with Adjusted EBITDA of $26 million (13% of revenue), representing an 840 basis point improvement year-over-year. Additionally, ATEC reported positive free cash flow of $5 million, marking the second consecutive quarter of positive FCF.

A more comprehensive view of the company’s Q3 2025 performance is illustrated in this detailed breakdown:

Detailed Financial Analysis

ATEC’s financial performance showed improvements across multiple dimensions. The company reported a non-GAAP net income of $4 million, its second consecutive quarter of non-GAAP profitability. Gross margin expanded to 70%, an 80 basis point improvement, while operating margin reached 5%, representing a substantial 1,150 basis point enhancement.

The following slide provides a detailed breakdown of ATEC’s non-GAAP P&L highlights:

The company’s surgical volume grew 28% year-over-year, complemented by a 2% increase in average revenue per case. Operating expenses grew at a more modest 12% compared to revenue growth of 30%, demonstrating improving operational efficiency and scale benefits.

ATEC’s Adjusted EBITDA trend shows consistent improvement over time, as illustrated in this chart:

The company’s balance sheet remains strong, with $156 million in cash and $60 million in available borrowing capacity, bringing total cash and available cash to $216 million. This represents a slight discrepancy from the $260 million mentioned in the earnings call transcript, though the difference may be due to timing or classification differences.

Strategic Initiatives

ATEC’s strategy centers around three key pillars: creating clinical distinction, compelling surgeon adoption, and expanding and enabling its sales force. The company’s 100% focus on spine surgery allows it to concentrate its resources and expertise on innovations specific to this field.

The company’s strategic framework is outlined as follows:

ATEC is building a comprehensive ecosystem that spans pre-operative planning, intra-operative execution, and post-operative assessment. This integrated approach leverages technologies such as EOS imaging, SAFEOP neuromonitoring, and the VALENCE platform to improve surgical outcomes.

The company’s ecosystem strategy is illustrated in this comprehensive diagram:

A key component of ATEC’s technology portfolio is the VALENCE platform, which is designed to be procedurally integrated, optimize operating room footprint, and deliver proven efficiency:

Forward-Looking Statements

Looking ahead, ATEC provided a strong outlook for 2025, projecting total revenue of $760 million, Adjusted EBITDA of $91 million, and continued positive free cash flow.

The company expects its Adjusted EBITDA to continue improving, with a projected 41% drop-through of year-over-year revenue growth to Adjusted EBITDA:

ATEC’s long-term strategy focuses on leveraging its infrastructure investments, integrating data and informatics platforms into the surgical experience, expanding procedural approaches, implementing algorithm-based growth models, and growing in key international markets.

CEO Pat Miles emphasized the company’s commitment to innovation during the earnings call, stating, "We are creating value through creating clinical distinction, which compels surgeon adoption." This focus on clinical distinction and data-driven decision-making remains central to ATEC’s strategy as it works toward its target of $1 billion in revenue by 2027, along with 18% adjusted EBITDA and $65 million in free cash flow.

As ATEC continues to execute on its spine-focused strategy, upcoming product launches such as the Valence navigation system are expected to drive further growth and strengthen the company’s position in the spine surgery market.

Full presentation:

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