Workflow
Alphatec (ATEC) - 2024 Q2 - Earnings Call Transcript
ATECAlphatec (ATEC)2024-08-01 00:13
Filings

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was 146million,reflectinga25146 million, reflecting a 25% year-over-year growth, with surgical revenue growth at 27% [3][22] - Adjusted EBITDA was 5.6 million, compared to a loss of 3.1millionintheprioryear,markinga650basispointimprovement[26]−Non−GAAPgrossmarginincreasedto71.23.1 million in the prior year, marking a 650 basis point improvement [26] - Non-GAAP gross margin increased to 71.2%, up 190 basis points year-over-year [24] Business Line Data and Key Metrics Changes - Surgical revenue was 130 million, up 27% year-over-year, with significant growth in lateral and expandable implants [22] - EOS revenue reached 15.5million,a615.5 million, a 6% increase compared to the previous year [22] - Average surgical revenue per case grew by 10%, indicating effective procedural strategies [4][22] Market Data and Key Metrics Changes - The company experienced a 20% growth in new surgeon users, reflecting strong market demand [3][19] - Established territories saw a 23% growth, indicating successful market penetration [20] Company Strategy and Development Direction - The company is focused on creating a comprehensive spine ecosystem to enhance surgical predictability and outcomes [5][8] - Plans to achieve 1 billion in revenue by 2027, with an adjusted EBITDA target of 180million[21]−ThelaunchofEOSInsightisakeystrategicinitiativeaimedatimprovingsurgicalplanningandexecution[4][11]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinachievingcashflowbreakevenby2025,supportedbyanticipatedrevenuegrowth[28][80]−Thecompanyisaddressingsupplyconstraintsandexpectstoresolvetheseissues,whichwillpositivelyimpactfuturerevenue[72]−Thecompetitivelandscaperemainsfavorable,withongoingrecruitmenteffortstoenhancethesalesforce[19][38]OtherImportantInformation−ThecompanyendedQ2with180 million [21] - The launch of EOS Insight is a key strategic initiative aimed at improving surgical planning and execution [4][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving cash flow breakeven by 2025, supported by anticipated revenue growth [28][80] - The company is addressing supply constraints and expects to resolve these issues, which will positively impact future revenue [72] - The competitive landscape remains favorable, with ongoing recruitment efforts to enhance the sales force [19][38] Other Important Information - The company ended Q2 with 100 million in cash and 531millionindebt,withaprojectedcashburnof531 million in debt, with a projected cash burn of 125 million to 135 million for 2024 [27][28] - The company is investing heavily in inventory and instrument sets to support growth initiatives [27] Q&A Session Summary Question: Confirmation of cash burn expectations for 2024 - The company confirmed an expected cash burn of 125 million to $135 million for 2024 [34] Question: Will cash need to be raised against the portfolio? - Management indicated confidence in achieving cash flow breakeven in 2025 without needing to raise additional cash [36] Question: Expected hiring trends for 2024 - The company is actively recruiting and expects robust hiring trends, particularly in geographic areas with high demand [38] Question: Update on territory upgrades - The company is methodically upgrading territories to enhance sales coverage and align with surgeon demand [42] Question: Impact of supply constraints on revenue - Management acknowledged that supply constraints had a negative impact on revenue but expected resolution in the near term [72] Question: Update on Japan market entry - The company is optimistic about entering the Japanese market, with plans to conduct surgeries there by Q4 2024 [76]