Alphatec (ATEC) investor relations material

Financial performance and outlook

• Sustained revenue growth and expanded profitability have been key highlights, with cash flow coming in as expected and ahead of initial plans for the first half of the year.

• Free cash flow is projected to be positive for the full year, with Q3 expected to generate $1–5M and high single-digit millions in Q4, supporting a positive annual outlook.

• Guidance was raised to 21% top-line growth for the year, with consistent $130M annual revenue growth projected through 2025.

• Investments in sets and inventory are planned at $50M for the year, with a forward investment benefit expected to support growth through 2025 and self-funding status by 2026.

• Profitability expansion is expected to allow for continued investment in R&D and sales while meeting financial commitments, with drop-through rates improving toward mid-thirty percent by 2027.

Market strategy and sales force development

• New surgeon adds have consistently hovered around 20% per quarter, with strong demand from both surgeons and sales reps due to a focused, long-term approach to spine.

• Growth is driven by both new and existing territories, with existing territories growing 29% in Q2, and ongoing hiring focused on areas with high demand.

• Sales rep productivity typically ramps up over three years, with revenue per procedure about 30% higher than industry average, supporting income stability and growth for reps.

• Investment in sales infrastructure peaked in 2021–2023, with 2024–2025 focused on profitable sales growth and improved bottom-line contribution.

Product innovation and robotics

• The Valence robot is on track for a late Q4 launch, with integration into the PTP procedure and a focus on solving clinical challenges in lateral spine surgery.

• Differentiators include ease of use, small footprint, sub-$500K cost, and integration with proprietary procedures, targeting a broader range of surgical settings.

• The robot offers both freehand navigation and robotic application with a unified instrumentation set, distinguishing it from competitors.

• Market adoption is expected to reflect the clinical value delivered, with optimism for increased uptake and utilization rates.