The following is a summary of the Alphatec Holdings, Inc. (ATEC) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Alphatec reported a strong financial performance for Q3 2024 with total revenue of $151 million, marking a 27% year-over-year growth.

• Surgical revenue grew by 30%, driven by a 20% increase in procedural volume and a 9% increase in revenue per procedure.

• Adjusted EBITDA was $7.4 million, with a solid year-over-year improvement and a greater than 50% sequential reduction in cash burn.

• Operating expenses remained flat for the third consecutive quarter, contributing to a positive adjusted EBITDA that exceeded expectations.

• Operating leverage and efficiency improvements in asset and inventory management contributed to profitability.

Business Progress:

• Alphatec achieved significant milestones with the launch of EOS Insight, which recorded a strong number of orders year-to-date.

• The company has been on a trajectory of organic growth, with continuous expansion of its sales force and sustained investments in cloud infrastructure to support future growth.

• Record EOS orders year-to-date reflect strong market adoption and the potential for increased market penetration.

• Implemented strategic partnerships with Braidwell and Pharmakon which provided financial flexibility with a $50 million expansion in term loan capacity.

Opportunities:

• Alphatec is positioning itself to capitalize on significant market opportunities by integrating EOS Insight across its operations for enhanced decision-making and clinical outcomes.

• The company anticipates additional market share capture through the continued rollout and adoption of innovative spine surgery technologies and procedural strategies, bolstering its surgical volume and revenue growth.

• Investments in sales force expansion and inventory are set to drive further revenue growth, supported by a strong pipeline of surgeon training which facilitates adoption of Alphatec's procedures.

Risks:

• The gradual growth and scale-up of new technologies like EOS Insight and the newly mentioned AI services pose challenges in market adoption and operational scaling.

• Potential impact from economic fluctuations or shifts in healthcare policy that could affect procedural volumes or cost structures, particularly in new markets and international operations.

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