ATEC Reports Fourth Quarter and Full-Year 2023 Financial Results

Full year 2023 total revenue grew 37% to $482 million
Full year 2023 adjusted EBITDA margin improved ~890 basis points
Full year 2024 total revenue expected to approximate $595 million, enabling adjusted EBITDA margin expansion of approximately 560 basis points

CARLSBAD, Calif., February 27, 2024 Alphatec Holdings, Inc. (Nasdaq: ATEC), a provider of innovative solutions dedicated to revolutionizing the approach to spine surgery, today announced financial results for the quarter and full year ended December 31, 2023, and business highlights.

Fourth Quarter and Full Year 2023 Financial Results

Quarter Ended          

December 31, 2023

Year Ended          

December 31, 2023

Total revenue

$138 million

$482 million

GAAP gross margin



Non-GAAP gross margin (prior definition)*



Non-GAAP gross margin (updated definition)*



Operating expenses

$140 million

$484 million

Non-GAAP operating expenses

$106 million

$387 million

GAAP operating loss

($49) million

($187) million

Non-GAAP adjusted EBITDA (prior definition)*

$6 million

$4 million

Non-GAAP adjusted EBITDA (updated definition)*

$2 million

($9) million

Ending cash balance

$221 million

*Refer to discussion of updated non-GAAP financial definition. Numbers and percentages may not foot due to rounding.  

 Business Highlights

Portfolio-wide strength drove fourth quarter 2023 surgical revenue growth of 34% with an acceleration in volume growth to 29% compared to 24% in the prior quarter;
Expanded lateral platform with full launch of Lateral TransPsoas (LTPTM) + Midline ALIFapproaches and Calibrate LTXTM, a lateral expandable implant;
Elevated the procedural sophistication of comprehensive portfolio with launch of 15 new products and line extensions in 2023;
Trained over 500 surgeons in 2023, contributing to a 27% increase in surgeon users compared to 2022.


Pat Miles, Chairman and Chief Executive Officer, said, "The success weve achieved to date istestament: ATEC lateral sophistication, alone, is capable of building a good, profitable company.But we aspire for much more. We are building a spine monster, and the informatics and procedural innovation that our 100% spine-focused knowhow will unleash in the years ahead will further our mission to truly revolutionize spine care.  We are all systems go in the pursuit of ATEC’s best, which is yet to come."    

Non-GAAP Financial Definition Update

The Company is updating its non-GAAP financial measures to include the non-cash impact of the provision for excess and obsolete inventory (E&O) in the calculation of Cost of Goods Sold. With the majority of ATEC’s strategic portfolio transformation complete, the Company has determined that E&O charges are a normal and recurring aspect of operating the business and should be included in the assessment of operating performance.  For detail on the impact of this reporting change on previously reported periods and 2024 guidance, a reconciliation of non-GAAP financial measures under both the updated and prior definitions has been included in this release and on the Investor Relations Section of ATEC’s Corporate Website.

Financial Outlook for the Full Year 2024

The Company continues to expect total revenue for the fiscal year ended December 31, 2024, to approximate $595 million, reflecting growth of approximately 23% compared to 2023. This includes surgical revenue of $530 million and approximately $65 million of EOS revenue.  The Company expects full year 2024 non-GAAP adjusted EBITDA to approximate $22 million, which implies 560 basis points of improvement in adjusted EBITDA margin compared to full year 2023. Under the prior non-GAAP financial definition, adjusted EBITDA guidance would have approximated $40 million.

Financial Results Webcast

The Company will host a live webcast today at 1:30 p.m. PT / 4:30 p.m. ET.  To access the live webcast, please visit the Investor Relations Section of ATEC’s Corporate Website. To dial into the live webcast, please register at this link.  Access details will be shared via email. A replay of the webcast will be available beginning approximately two hours after the webcast’s completion through March 5, 2024. Access the replay by dialing (800) 770-2030 and referencing conference ID number 97241.

Non-GAAP Financial Information

To supplement the Company’s financial statements presented in accordance with generally accepted accounting principles in the United States of America (GAAP), the Company reports certain non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating loss, and non-GAAP adjusted EBITDA. The Company believes that these non-GAAP financial measures provide investors with an additional tool for evaluating the Company's core performance, which management uses in its own evaluation of continuing operating performance, and a baseline for assessing the future earnings potential of the Company. The Company’s non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. Non-GAAP financial results should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Included below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measures and a discussion of the Company’s non-GAAP definitions. We have not reconciled our adjusted operating expenses and adjusted EBITDA estimates for full year 2024 because certain items that impact these figures are uncertain or out of our control and cannot be reasonably predicted. Accordingly, a reconciliation of 2024 adjusted operating expenses and adjusted EBITDA estimates is not available without unreasonable effort.

Inducement Awards Granted

As an inducement material to accepting employment with the Company, and in accordance with Nasdaq Listing Rule 5635(c)(4), ATEC today announced that the independent Compensation Committee of the Board of Directors has approved aggregate grants to 22 new employees (who are not executive officers) of, collectively, 31,780 restricted stock units (“RSUs”) under the Company’s 2016 Employment Inducement Award Plan. The RSUs will vest in equal annual installments on each of the first four anniversaries of the grant date, provided that the recipient remains continuously employed by ATEC as of such vesting date. In addition, the RSUs will vest fully upon a change of control of ATEC.

About Alphatec Holdings, Inc.

ATEC, through its wholly owned subsidiaries, Alphatec Spine, Inc., EOS imaging S.A.S. and SafeOpSurgical, Inc., is a medical device company dedicated to revolutionizing the approach to spine surgery through clinical distinction. ATEC’s Organic Innovation MachineTM is focused on developing new approaches that integrate seamlessly with the Company’s expanding AlphaInformatiXPlatform to better inform surgery and more safely and reproducibly achieve the goals of spine surgery. ATEC’s vision is to become the Standard Bearer in Spine. For more information, visit us at

Forward Looking Statements 

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The Company cautions investors that there can be no assurance that actual results will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward-looking statements include, but are not limited to: references to the Company’s revenue, balance sheet, growth and financial outlook; planned product launches, introductions, regulatory submissions or clearances; efforts to transform sales and distribution channels; the Company’s ability to compel surgeon adoption; and the Company’s future ability to finance its operations and sufficiency of its cash runway. Important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to: the uncertainty of success in developing new products or products currently in the pipeline; the uncertainties in the Company’s ability to execute upon its strategic operating plan; the uncertainties regarding the ability to successfully license or acquire new products, and the commercial success of such products; failure to achieve acceptance of the Company’s products by the surgeon community; failure to obtain FDA or other regulatory clearance or approval or unexpected or prolonged delays in the process; continuation of favorable third-party reimbursement; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to achieve profitability; uncertainty of additional funding; the Company’s ability to compete with other products or with emerging technologies; product liability exposure; an unsuccessful outcome in any litigation; patent infringement claims; claims related to the Company’s intellectual property; and the Company’s ability to meet its financial obligations. A further list and description of these and other factors, risks and uncertainties can be found in the Company's most recent annual report, and any subsequent quarterly and current reports, filed with the Securities and Exchange Commission. ATEC disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.

Alphatec Holdings, Inc.

Consolidated Statements of Operations

(in thousands, except per share amounts)

Three Months Ended Year Ended
December 31, December 31,
2023 2022 2023 2022
Revenue from products and services  $137,970  $105,944  $482,262  $350,852
Revenue from international supply agreement  15
Total revenue 137,970 105,944 482,262 350,867
Cost of sales 42,780 37,093 72,059  117,808
Gross profit 95,190 68,851 310,203 233,059
Operating expenses:
Research and development 22,284 11,604 70,115 44,033
Sales, general and administrative  104,120 81,920 374,080 300,013
Litigation-related expenses 9,472 7,314 22,287 23,943
Amortization of acquired intangible assets 3,823 2,934 14,284 10,115
Transaction-related expenses (65) 113  120
Restructuring expenses 386 106 719 1,810
Total operating expenses 140,020 103,878 483,598 380,034
Operating loss (44,830) (35,027) (173,395) (146,975)
Interest expense and other expense, net:
Interest expense, net (4,416) (1,329) (16,641) (5,505)
Other income (expense), net 44 1,049 3,121 471
Total interest expense and other expense, net (4,372) (280) (13,520) (5,034)
Net loss before taxes (49,202) (35,307) (186,915) (152,009)
Income tax benefit (124) (524) (277) (716)
Net loss $(49,078) $(34,783) $(186,638) $(151,293)
Net loss per share, basic and diluted $(0.37) $(0.33) $(1.54) $(1.46)
Weighted average shares outstanding, basic and diluted 133,750 105,858 121,242 103,373
Stock-based compensation included in:
Cost of sales $481 $1,157 $25,082 $2,597
Research and development 9,154 1,029 18,741 5,016
Sales, general and administrative 10,880 906 37,421 32,943
$20,515 $10,092 $81,244 $40,556

Alphatec Holdings, Inc.

Consolidated Balance Sheets

(in thousands)

December 31,
December 31,
Current assets:
 Cash and cash equivalents $220,970 $84,696
 Accounts receivable, net 72,613 60,060
 Inventories 136,842 101,521
 Prepaid expenses and other current assets 20,666 9,357
Total current assets 451,091 255,634
Property and equipment, net 149,835 101,952
Right-of-use assets 26,410 28,360
Goodwill 73,003 47,367
Intangible assets, net 102,451 82,781
Other assets 2,418 4,874
Total assets $805,208 $520,968
Current liabilities:
 Accounts payable $48,985 $34,742
 Accrued expenses and other current liabilities 87,712 72,382
 Contract liabilities 13,910  11,956
 Short-term debt 1,808 14,948
 Current portion of operating lease liabilities 5,159 4,842
Total current liabilities 157,574 138,870
 Total long-term liabilities 545,915 393,162
 Redeemable preferred stock 23,603 23,603
 Stockholders' deficit 78,116 (34,667)
Total liabilities and stockholders' deficit $805,208 $520,968

Alphatec Holdings, Inc.

Reconciliation of Non-GAAP Financial Measures

(in thousands)

Three Months Ended Year Ended
December 31, December 31,
2023 2022 2023 2022
Gross profit, GAAP $95,190 $68,851  $310,203  $233,059
Add: amortization of intangible assets 278 27 939 64
Add: stock-based compensation 481 1,157 25,082 2,597
Add: purchase accounting adjustments on acquisitions 198 565 393 1,349
Non-GAAP gross profit $96,147 $70,600 $336,617 $237,069
Add: excess and obsolete write-down 4,420 2,769 13,608 9,792
Non-GAAP gross profit adjusted for excess and obsolete write-down $100,567 $73,369 $350,225 $246,861
Gross margin, GAAP 69.0% 65.0% 64.3% 66.4%
Add: amortization of intangible assets 0.2% 0.0% 0.2% 0.0%
Add: stock-based compensation 0.3% 1.1% 5.2% 0.7%
Add: purchase accounting adjustments on acquisitions 0.1% 0.5% 0.1% 0.4%
Non-GAAP gross margin 69.7% 66.6% 69.8% 67.6%
Add: excess and obsolete write-down 3.2% 2.6% 2.8% 2.8%
Non-GAAP gross margin adjusted for excess and obsolete write-down 72.9% 69.3% 72.6% 70.4%
Three Months Ended Year Ended
December 31, December 31,
2023 2022 2023 2022
Operating expenses, GAAP $140,020 $103,878 $483,598 $380,034
Stock-based compensation (20,034) (8,935) (56,162) (37,959)
Litigation-related expenses (9,472) (7,314) (22,287) (23,943)
Amortization of intangible assets (3,823) (2,934) (14,284) (10,115)
Transaction-related expenses 65 (2,113) (120)
Restructuring expenses (386) (106) (719) (1,810)
Other non-recurring expenses1 (1,349)
Non-GAAP operating expenses $106,370 $84,589 $386,684 $306,087
Three Months Ended Year Ended
December 31, December 31,
2023 2022 2023 2022
Operating loss, GAAP $(44,830) $(35,027) $(173,395) $(146,975)
  Depreciation 11,918 8,388 40,916 30,989
  Amortization of intangible assets 4,101 2,961 15,223 10,179
EBITDA (28,811) (23,678) (117,256) (105,807)
Add back significant items:
Stock-based compensation 20,515 10,092 81,244 40,556
Purchase accounting adjustments on acquisitions 198 565 393 1,349
Litigation-related expenses 9,472 7,314 22,287 23,943
Transaction-related expenses (65) 2,113 120
Restructuring expenses 386 106 719 1,810
Other non-recurring expenses1 1,349
Adjusted EBITDA $1,695 $(5,601) $(9,151) $(38,029)
Excess & obsolete write-down 4,420 2,769 13,608 9,792
Adjusted EBITDA adjusted for excess & obsolete write-down $6,115 $(2,832) $4,457 $(28,237)

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy

Non-GAAP Definitions

Amortization of intangible assets:

Represents amortization expense in connection with business combinations or asset acquisitions associated with acquired intangible assets including, but not limited to customer relationships, intellectual property and trade names.

Litigation-related expenses:

We are involved in various litigation matters that from time-to-time result in settlements. Litigation matters can vary in their characteristics, frequency and significance to our operating results and core business operations. We review litigation matters from both a qualitative and quantitative perspective to determine whether such matters are a normal and recurring part of our business. We include in our GAAP financial statements litigation fees and settlement expenses that we determine to be normal, recurring and routine to our business. When we determine that certain litigation matters are not normal and recurring to our core business operations, we believe excluding these expenses will provide our management and investors with useful incremental information. Litigation fees and settlement expenses excluded from our non-GAAP financial measures in the periods presented relate primarily to patent litigation and other litigation matters that relate directly to the business transformation that we started in 2018 and are discussed more fully in our periodic reports filed with the Securities Exchange Commission.

Other non-recurring expenses:

These expenses represent non-recurring expenses that we consider to be one-time in nature.

Purchase accounting adjustments on acquisitions:

Includes non-cash expenses incurred as a result of fair value asset step-ups associated with tangible assets acquired from business combinations or asset acquisitions.

Restructuring expenses:

From time-to-time, in order to realign the Company’s operations or to achieve synergies associated with an acquisition, the Company may eliminate roles or restructure its operations and footprint. In such cases the Company may incur one-time severance and personnel costs associated with workforce reductions, or costs associated with exiting and/or relocating facilities. We exclude these costs as we do not consider such amounts to be part of the ongoing operations.

Stock-based compensation:

Stock-based compensation is charged to cost of revenue and operating expenses. We exclude stock-based compensation from certain of our non-GAAP financial measures because we believe that excluding these non-cash expenses provides meaningful supplemental information regarding operational performance. Because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, the subjective assumptions involved in those determinations, and the volatility in valuations that can be driven by market conditions outside the Company’s control, the Company believes excluding stock-based compensation expense enhances the ability of management and investors to understand and assess the underlying performance of its business over time.

Transaction-related expenses:

These expenses represent one-time costs associated with business combinations and asset acquisitions. These items may include but are not limited to consulting and legal fees, contract termination costs and other related deal costs.

Adjusted EBITDA:

Represents earnings before non-operating income/expense, taxes, depreciation and amortization, as adjusted for the applicable non-GAAP adjustments previously described.

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