Xtant Medical (XTNT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 12% year-over-year to $27.9 million and 36% year-to-date to $85.8 million, reaffirming full-year revenue guidance of $116–$120 million, representing 27–31% annual growth over 2023.

• Net loss in Q3 2024 was $5.0 million ($0.04/share), compared to net income of $9.2 million in Q3 2023, which included an $11.0 million bargain purchase gain.

• Product launch delays (OsteoVive Plus and Corterra) impacted Q3 sales, but both products launched in late September and are well received.

• Signed licensing agreements in October 2024, securing $1.5 million upfront and a minimum of $3.75 million in royalty revenue for 2025, with high-margin contribution.

• Three major acquisitions in 2023 (Surgalign SPV, Surgalign Holdings' hardware/biologics, and RTI's nanOss production) expanded the product portfolio and commercial footprint.

Financial highlights

• Q3 2024 revenue was $27.9 million, up from $25 million in Q3 2023, primarily due to Surgalign hardware and biologics sales.

• Gross margin for Q3 2024 was 58.4%, down from 61.3% in Q3 2023; year-to-date gross margin was 60.9%.

• Q3 2024 operating expenses were $20.1 million (71.9% of revenue), up 7% year-over-year, mainly due to higher sales, marketing, and compensation costs.

• Adjusted EBITDA for Q3 2024 was a loss of $193,000 to $196,000, compared to a gain of $440,000–$458,000 in Q3 2023; year-to-date Adjusted EBITDA remains positive at $435,000.

• Cash and equivalents at quarter-end were $6.6–$7.1 million, with $3.8 million available under a revolving credit facility.

Outlook and guidance

• Full-year 2024 revenue guidance reaffirmed at $116–$120 million, with expectations for a strong Q4 driven by new product launches and OEM business.

• Anticipates being Adjusted EBITDA positive in Q4 2024 and expects continued profitability focus.

• For 2025, expects double-digit revenue growth, 3–4 points of gross margin improvement, and further operating leverage.

• Licensing agreement to contribute a minimum of $3.75 million in high-margin royalty revenue in 2025, with potential upside.

• Management expects current cash, anticipated operating cash flows, and credit facilities to be sufficient through at least November 2025, but may seek additional capital if needed.