Xtant Medical at H.C. Wainwright: Strategic Growth and Market Expansion

On Friday, 05 September 2025, Xtant Medical Holdings Inc. (NYSE:XTNT) presented at the H.C. Wainwright 27th Annual Global Investment Conference, showcasing a period of significant transformation and growth. Led by President and CEO Sean Browne, the company highlighted its strategic focus on regenerative biologics and spinal implant systems, alongside a shift towards broader market diversification. While Xtant has doubled its size since 2022, the company also faces challenges as it navigates asset sales and debt reduction.

Key Takeaways

• Xtant Medical has doubled in size since 2022, with a focus on regenerative biologics and spinal implant systems.
• The company expects 11% to 15% year-over-year growth, with raised guidance reflecting strong performance.
• Asset sales are projected to generate $19.2 million, aiding in debt reduction and cash position enhancement.
• Xtant is expanding into adjacent markets such as surgical repair, sports medicine, and chronic wound care.
• The company anticipates no need for additional capital raises, aiming for operational cash positivity.

Financial Results

• Revenue Growth: Xtant has more than doubled its size since 2022, with Q2 2025 showing positive net income, adjusted EBITDA, and operating cash flow.
• Guidance and Expectations: The company has raised its guidance twice this year, projecting 11% to 15% year-over-year growth.
• Cash Position: Post asset sales, cash is expected to exceed $20 million, strengthening the balance sheet.
• Debt Reduction: Proceeds from the sale of non-core assets, including Coflex and Paradigm systems, will be used to reduce long-term debt by half, with the remainder bolstering cash reserves.

Operational Updates

• Core Focus: Xtant is committed to regenerative biologics and spinal implant systems, with vertical integration enhancing its demineralized bone business.
• Distribution Network: The company boasts 450 IDN contracts and over 670 independent distributors, supporting its market reach.
• Product Pipeline: Recent launches include SimplyMax, SimplyGraph, OsteoVive Plus, Trivium, OsteoFactor Pro, and Fibrex, with more products expected in the coming years.

Future Outlook

• Growth Strategy: Xtant aims to control quality and margins through vertical integration while diversifying into surgical repair, sports medicine, and chronic wound care.
• Market Expansion: The company targets an $8.1 billion domestic market, with future product development focusing on hemostatic biologics and nerve regeneration products.
• Geographic Expansion: Xtant is eyeing a $10 billion adjacent market for further growth opportunities.

In conclusion, Xtant Medical is poised for significant growth and diversification, with strategic initiatives aimed at enhancing its market position. For a detailed review, please refer to the full transcript below.

Full transcript - H.C. Wainwright 27th Annual Global Investment Conference:

Vivian, Analyst, HC Wainwright: Hello everyone, and thank you for joining HC Wainwright’s 27th Annual Global Investment Conference. My name is Vivian, and I am an analyst on the Corporate Access team. HC Wainwright is a full-service investment bank dedicated to providing corporate finance, strategic advisory, and related services to public and private companies across multiple sectors and regions. We have a total of 19 publishing senior analysts in over 650 companies covering across all sectors. If you would like more information, please visit our website at hcwco.com. As a reminder, please reference your online conference portal that provides your individual links to your meetings and all company sessions. With that, I would like to introduce Sean Browne, the President and Chief Executive Officer of Xtant Medical Holdings Inc.

Sean Browne, President and Chief Executive Officer, Xtant Medical Holdings Inc.: Thank you, Vivian. Appreciate it. I’ll just, again, the cautionary statement regarding forward-looking statements, I’ll pause there. Also, we will be referencing EBITDA, a non-GAAP financial information product, so I want to make sure those disclosures are laid out. Okay, who are we? Xtant Medical is a global technology company focused on the design, manufacture, and commercialization of regenerative biologics in spinal implant systems. What does that mean? Our business right now is really at a terrific point in time. We’re at both an operational as well as a financial inflection point. When you look at the size of the markets we serve, our orthobiologics business alone is a $2.5 billion market. When you look at the adjacent markets we also serve, you’re looking at something well over $10 billion in size.

When you look at our growth over the course of the last couple of years, we’ve basically doubled in size since 2022, actually a little more than that. When you look at what we’ve done this last quarter, we’ve had our highest revenue, highest earnings, EBITDA, and cash flow positive. All the arrows are going in the right direction. When you look at our balance sheet, which is something we’re really excited about, we just announced the sale of two of our non-core businesses. I’ll get into them a little bit more about what that’s going to mean for us in way of helping us get focused on our core and how it improves our balance sheet. When you look at what we’ve been working on over the last 18 months in way of getting our business fully vertically integrated, I’ll spend some time talking about that as well.

Needless to say, when you’re vertically integrated, you control not just the margins that you can bring in, but also the supply chain and, more importantly, the quality of the products that you’re selling. When you look at our company as an emerging technology, an emerging company, we have a large distribution network of over 450 IDN contracts in every major GPO, as well as we have over 670 independent distributors that sell our product as well. From an innovation perspective, you’ll see that over the course of certainly the last couple of years, we’ve done a heck of a job in addressing both large and growing markets. The new products that were coming out in the years ahead are also something to get really excited about. With that said, let me spend a minute here talking about the sale of our Coflex and Paradigm systems.

That Paradigm business is all OUS. The transaction itself will be about $19.2 million. The business itself is one that makes up roughly about 16% of our revenue, but unfortunately takes up anywhere from 40% to 50% of our management time. This transaction allows us to get a lot more focused on our core business, while also about half of the proceeds will be done to reduce our outstanding debt, and the other half will actually be going on to strengthen our cash position. This cash position is something that we have run fairly tight over the last few years, given what we finished in the second quarter of $7 million of cash on hand, plus you throw in the royalty dollars that we’ll be getting that come in after the quarter, that’s another $4 to $5 million.

When you look at the proceeds of this, when this gets closed, whether it be in the third or even early in the fourth quarter, we’ll have over $20 million of cash in the bank, plus operating cash positive. We will not be looking to raise any additional capital to fund operations. Who are we and what do we do? First and foremost, the world that we work in is both in the world of orthobiologics as well as fixation. In the biologics, which is really kind of our knitting, the things that we’re known for, we manufacture all the five major orthopedic or orthobiologic categories, plus we added a sixth one, which is the Amnio world, which is really more in the surgical repair and chronic wound care markets.

From a fixation perspective, we have a very, very nice offering that is very complementary to our biologics business, which is a very strong adult degenerative spine fixation business. When you look at the size of the markets that we serve overall domestically, it’s about an $8.1 billion market, and that’s broken out by about $5.6 billion being in the spinal implants, another $2.5 billion being in orthobiologics. When you break out the orthobiologics, again, the area that we are particularly strong in, there’s five major categories. We are really the only company out there today that is actually manufacturing our own products in each of these, and I do mean manufacturing from donor to final product with our brand on it. We are covering all five of those major markets.

When you look at what we’ve been able to do from a growth perspective over the course, as I mentioned, since really 2022, we’ve more than doubled in size. Our business, as we see it today, will be growing at least in this, what we’ve given guidance to, of which we’ve raised guidance twice this year. We will grow between 11% and 15% year over year. From a business perspective, the business is growing, it’s more profitable, and quite frankly, we are able to get more of the leverage on our cost basis, of course, the higher we go. When we look at our focus from an Xtant perspective, there’s really three things: biologics, diversification, and profitability. From a biologics perspective, you’ll see me leaning into this. It doesn’t mean that we’re not going to continue to at least service and manage our hardware line.

It’s just that you got to lean into your strength, and this is what we do best. From a diversification perspective, our business, if you looked at where we were, say, in 2020 or 2021, over 90% of our revenue came from the spine market. Where we are today is more like low 70%. As you’ll see, as I get into how we are expanding into adjacent markets, that number is going to continue to go down. From my end, this is something I get really excited about because the spine world is one that has taken some hits, certainly from a stock perspective. When I think about what our business could be and where it’s trending to be, I think that we are looking at a very nice multiple over the course of time. Last but not least, profitability.

You know, for a number of years, we were told to grow, grow, grow, and grow and do what it took to get to scale. I think we’ve gotten to that point, and now our focus is really on profitability. We’ll talk a little bit about the efforts we make to drive that home. When you look at what we’ve been doing, and really this has been something that we’ve been focused on over the last 18 months, is this vertical integration. We were, when you look at the bottom of these balloons, we were a company that only made demineralized bone and allograft products. Meanwhile, we are buying from others: Viable Bone Matrix, Synthetics, Growth Factor, and Amnio. We were buying that from other guys. There’s kind of three big challenges with that. One, we didn’t get to control the quality.

A, we have the highest quality products that are out there today. Two, we didn’t own the supply chain. With Viable Bone Matrix in particular, this is a product line that we were stocked out three different times over three years. It just was something that was hard to stop and start your fastest growing product lines. Also, when you look at the kind of margins that we make, when we make it and sell it with our brand on it, it’s substantially more profitable. More importantly, as we talk about this vertical integration, is now how do we upgrade that core demineralization business or demineralized bone business, which makes up even today about 59% of our biologics revenue. Our focus now is getting our customers to start taking on some of our new enhanced DBM products. I’ll talk about that in our product pipeline.

These DBM products are ones that give our surgeons and our distributors in hospitals the opportunity to buy good, better, best type products. When I look at what we’ve been able to do from a product pipeline perspective, there’s been four points to our overarching strategy. First and foremost, develop best-in-class orthobiologics. Two, expand margins through vertical integration, again, taking what we were once buying. Three, control the supply chain. Four, selectively expand distribution network. This is something that allows us in many ways to control our own destiny, where in some of the deals that we cut when we were distributing it, there were certain parts of the country we couldn’t sell into, or there’s pricing that we couldn’t do. We own all of that. We’re fully self-sustained when it comes to that.

When you look at what we’ve been able to accomplish really in the last 18 months, we’ve done quite a bit. We’ve done quite a bit to actually completely change the trajectory of our company. First and foremost, in Q1 of 2024, we rolled out SimplyMax and SimplyGraph. That’s our Amnio product offering. That was just within our own business, a relatively small business, about a $1 million product line for us. This now is one because we do it both for ourselves, which is growing that product or that Xtant branded one, but also we do a lot on the OEM side in that world. Secondly, in Q3 of 2024, we rolled out our own OsteoVive Plus, which is our own Viable Bone Matrix product, which we really love. The handling on it is outstanding. The product itself is getting great reviews from the customers who use it.

We’re very, very excited about that product. In the first half of this year, we rolled out three new products that have really helped change our business in a big way. Trivium is our premium allograft. That’s the DBM product that I mentioned, our demineralized bone product. That is the highest level product in way of both the quality that we’re creating, as well as the pricing, as well as the margins. Most importantly, it helped us in many ways improve the production for the rest of our DBM product lines. We expect better operating margins from the core business overall because of what we’ve been able to do on Trivium. Secondarily, we rolled out OsteoFactor Pro. This is our growth factor product, our own homegrown one. We’re really, really excited about this particular product.

We’ve been distributing in other companies, and we think that we’ve got a new solution or a new product line that we think is going to be a real winner for us. Last but not least, we completed Fibrex. Fibrex is about a $2 million product line for us. It’s a product line that we acquired during the Surgiline acquisition. This is one that we had another group, outside group manufacturing, and we’ve just brought that in-house. Again, helping us with, from our end, higher quality, higher margins, and greater operational efficiencies as well. When you look at our pipeline overall, as I mentioned, you know I rattled off those really five product lines that we’ve been working on, but there’s other ones that’ll be coming out in the second half of this year.

When we look at what we’re doing with our molded Trivium, which is really something that’s going to come out later, eMatrix bone graft is another one that we’re going to be rolling out. Our eMatrix wound graft and particular collagen are things that we see coming out in the second half of 2025. We’ve got a lot going on in these next couple of quarters, never mind when we start pushing it into 2026. With that said, let me move on to what we’re doing in way of diversification. As we think about the diversification of our business today, you know, we already serve the orthobiologics market, as we already said, but we do surgical repair, and we also do serve the sports medicine market and chronic wound care market. Over the course of time, we will have our own hemostatic biologic.

Actually, by the end of this year, we’ll be rolling out our own collagen-based product. In the years to come, we hope to do more in our Amnio world within the sports medicine side, as well as in the nerve regen. Later on in the years to come, we also see ourselves doing an antimicrobial biologic. All in all, when you look at the diversification of where our revenue is coming from, as I mentioned, we are trying to work harder, becoming more of that pure play regenerative biologics company. Getting to our third thing, profitability. You know, when you think about profitability, it comes in many ways. What we’ve been able to do in way of creating greater operating leverage by really watching our expenses. This is something that we’ll continue to do over time. It’s the one thing you can control.

Two, drive greater penetration of distributor and IDN contracts. That’s essentially, you know, if there’s one thing that our business needs to do a better job on, it’s getting more of that share that we have of those independent agents that are out there today. Get them to sell another product line, get them to sell more of what we’re doing. Third, drive sales of Xtant branded products. Needless to say, those are substantially more profitable for us, but also it helps drive the brand. Last but not least, monetize any excess capacity through any OEM and/or contract manufacturing deals that we might have. That gives you a sense as to what we’re focused on. When you look at our improving financials, when you look at Q2 2025, you’ll see this is a continuation of the trends of positive net income, positive adjusted EBITDA, and positive operating cash positive.

When you look at also what’s happening from our balance sheet perspective, as I mentioned, the $19.2 million proceeds from the sale of our non-core lines, this is not built into where our cash will be, nor is the royalty dollars that we received at the end, or I should say because of what happened in Q2. We’ve got $4 to $5 million that would go into that cash balance already. On top of whenever the business closes, we will be splitting half of that going towards long-term debt and the other half going towards our cash position. As I mentioned earlier, we will not be looking to raise any capital. We don’t need to, which is something I know that investors in the past had worried about our tight cash position. This is something to say resoundingly, we will not need to do that.

With that said, let me go back to where we started. I see we’re at a great, and hopefully by the end of this presentation, you’re convinced that we’re hitting on really all cylinders right now, both operationally and financially. We’ve got a large market opportunity to go after. We’re vertically integrated. We’ve got high growth, and we’re profitable today. We’ve got a broad commercial reach in way of a platform by which we can leverage and really get greater penetration in. We have a balance sheet that’s got significantly more strength. We’ve got an innovative product line, or at least product pipeline of products that are coming and hitting in those growing markets, addressing a growing set of surgeon and patient needs. That is my presentation today. I look forward to catching up with those of you who have set up one-on-one meetings.

Unidentified speaker: Sean, thank you for leading a productive and informative presentation on behalf of Xtant Medical Holdings Inc. We appreciate the time that went into putting this together and are grateful for the team’s participation at our conference this year.

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