Alphatec Holdings, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the quarter ended September 30, 2026, was $221 million, representing a 13% increase year-over-year compared to $196.5 million.
• Surgical revenue reached $202 million, an increase of 14% year-over-year, driven by a $25 million growth contribution.
• GAAP gross margin was 71.5%, while Non-GAAP gross margin was 71.9%, compared to 69.9% and 70.1% respectively in the prior year quarter.
• GAAP operating expenses were $155 million, compared to $153.2 million in the prior year quarter; Non-GAAP operating expenses were $137 million.
• GAAP net loss was $5 million, whereas Non-GAAP net income was $15 million.
• Non-GAAP adjusted EBITDA was $38 million, with a margin of 17.3%, expanding 400 basis points year-over-year from 13.3%.
• The company generated $6 million in free cash flow for the quarter, maintaining positive trailing twelve-month free cash flow.
• Ending cash balance was $80 million as of September 30, 2026.
• GAAP net loss per share was $0.03, while Non-GAAP net income per share was $0.09.

Guidance and Future Outlook:

• Full-year 2026 total revenue guidance is approximately $862 million, including $789 million in surgical revenue and $73 million in EOS revenue.
• The updated full-year outlook implies approximately 13% total revenue growth and 15% surgical revenue growth for the year.
• Full-year 2026 adjusted EBITDA guidance is approximately $137 million, reflecting continued year-over-year profitability expansion.
• Full-year 2026 free cash flow guidance is approximately $10 million.
• Management identified improving biologics performance as a clear priority to address lower biologics attachment in the quarter.
• The company remains focused on realizing full procedural revenue translation and building the foundation for the longer-term opportunity with OsteoAdapt (Theradaptive).

Business Segments and Product Lines:

• Surgical hardware revenue increased 17% year-over-year, contributing $26 million to surgical growth.
• Case volumes grew approximately 20% year-over-year.
• Net new surgeon users increased 25% year-over-year.
• Tommy Carls joined the senior leadership team as Executive Vice President of Data Intelligence & Strategy.
• The company continues to execute a procedure-focused strategy supported by its InformatiXTM platform.

Management Commentary and Tone:

• Pat Miles, Chairman and CEO, stated that third-quarter revenue fell short of expectations primarily due to lower biologics attachment but emphasized that the company owns and is addressing this shortfall.
• Management expressed confidence in the procedure-focused strategy and the clinical value of the ecosystem, citing strong demand for procedural solutions.
• Despite the revenue miss, management described the results as reinforcing confidence in the business and stated they remain "bullish" on the ability to achieve increasingly profitable growth.
• Management noted that disciplined execution of biologics is required to realize full procedural revenue translation.

Other Key Points:

• The company hosts a live webcast for the quarter results at 1:30 p.m. PT / 4:30 p.m. ET, with a replay available for twelve months.
• Non-GAAP financial measures are provided to supplement GAAP results, excluding items such as stock-based compensation, litigation-related expenses, amortization of acquired intangibles, restructuring expenses, and non-cash interest.
• A reconciliation of forward-looking non-GAAP financial measures for the full year 2026 is not available due to uncertainty regarding certain impacting items.
• The company utilizes a structural long-term projected non-GAAP income tax rate of 26%.
• Litigation-related expenses in the quarter were $593,000, down significantly from $6.5 million in the prior year quarter.
• Restructuring expenses were $0 in the quarter, compared to $378,000 in the prior year quarter.