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 for 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 expected to drive Q4 and 2025 growth.

• Signed licensing agreements in October 2024, securing $1.5 million upfront and at least $3.75 million in 2025 royalty revenue, with total licensing and royalty fees of at least $5.25 million.

• 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%.

• 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, cash equivalents, and restricted cash were $6.6–$7.1 million as of September 30, 2024, with $3.8 million available under the 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 double-digit revenue growth and 3–4 points of gross margin improvement in 2025.

• 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.

• Expects biologics to increase as a share of revenue mix in future years as in-house manufacturing expands.

• Ongoing focus on integrating acquisitions, launching new products, and expanding distribution to drive future growth.