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Alphatec Holdings Inc (NASDAQ:ATEC) presented its second quarter 2025 financial results on July 31, showcasing a significant milestone as the company achieved profitability while maintaining robust revenue growth. The spine-focused medical technology company reported total revenue of $186 million, up 27% year-over-year, with its core surgical segment growing at 29%.
Quarterly Performance Highlights
ATEC’s Q2 2025 results marked a pivotal turning point for the company, with three key achievements highlighted in its presentation: revenue growth leadership at approximately six times the market rate, substantial Adjusted EBITDA improvement, and the company’s first quarter of positive free cash flow.
"We’re just getting started. Our best is yet to come," stated the company in its closing remarks, emphasizing the momentum behind its current performance trajectory.
As shown in the following financial highlights chart, ATEC achieved 29% surgical revenue growth while delivering significant profitability improvements:
The company’s surgical revenue reached $168 million, representing a 29% increase year-over-year, while EOS imaging revenue grew 11% to $17 million. This performance builds on the momentum seen in Q1 2025, when the company reported total revenue of $169 million with a 22% year-over-year increase.
ATEC also reported significant user growth, with surgeon adoption increasing by 21% compared to the same period last year, helping to cement its position as the third-largest player in the U.S. spine market.
Detailed Financial Analysis
The second quarter marked ATEC’s inflection to profitability, with the company reporting $3 million in Non-GAAP net income. This represents a significant improvement from Q1 2025, when the company reported an earnings per share of -$0.35.
The company’s detailed profit and loss statement reveals substantial operational leverage, with operating expenses growing only 7% year-over-year despite the 27% revenue growth:
Adjusted EBITDA reached $23 million or 13% of revenue, representing an 880 basis point improvement compared to the same period last year. This significant margin expansion demonstrates the company’s ability to scale efficiently while continuing to invest in growth.
As illustrated in the following chart, ATEC has shown consistent improvement in its Adjusted EBITDA performance over the past three years:
The company attributed this EBITDA leverage to three key factors: durable top-line growth, variable rate improvement, and infrastructure leverage. This operational efficiency has translated into positive free cash flow of $5 million for the quarter, marking an important financial milestone.
ATEC’s balance sheet remains strong, with $157 million in cash and $60 million in available borrowing capacity, bringing total cash and access to cash to $217 million. This represents a slight increase from the $213 million reported at the end of Q1 2025.
The company’s trailing 12-month free cash flow has improved to -$22 million, with management confirming they are on track to achieve positive free cash flow for the full year 2025.
Strategic Initiatives & Competitive Position
ATEC’s presentation emphasized its strategic focus on creating clinical distinction through procedural solutions, compelling surgeon adoption, and expanding its sales force. The company highlighted that it is addressing the spine market’s "most pervasive challenge" - the high rate of revision surgeries, which it estimates at 25-30% for adult deformity procedures.
The company’s ecosystem spans pre-operative, intra-operative, and post-operative phases, with early investments in informatics fueling long-term growth and profitability:
ATEC’s product portfolio includes EOS imaging technology, SafeOp neurophysiology monitoring, and the Valence robotic navigation system, creating what the company describes as "objective measure enables variable mitigation and automation that others can’t replicate."
The company’s focus on spine-specific solutions appears to be resonating in the market, as evidenced by its continued market share gains and strong surgeon adoption rates.
Forward-Looking Statements & 2025 Outlook
Following the strong Q2 performance, ATEC raised its full-year 2025 guidance across all key metrics. The company now projects total revenue of $742 million, up from the $734 million forecast provided after Q1 results. Adjusted EBITDA guidance was increased to $83 million, compared to the previous $78 million target.
The updated outlook represents continued strong growth and profitability expansion, with the company projecting positive free cash flow for the full year. ATEC’s AEBITDA projection shows continued margin improvement, with approximately 40% of year-over-year revenue growth dollars expected to flow through to AEBITDA:
In after-hours trading following the presentation, ATEC shares rose 1.96% to $10.94, building on a modest decline of 1.35% during the regular session. The stock has traded between $4.88 and $13.14 over the past 52 weeks, according to available market data.
The company’s achievement of profitability, combined with its continued strong revenue growth and raised guidance, suggests ATEC is successfully executing on its strategy to disrupt the spine surgery market through clinical innovation and focused execution.
Full presentation:
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