Alphatec NASDAQ: ATEC reported first-quarter 2026 revenue of $192 million, up 14% year-over-year, but results came in below the company’s internal expectations due largely to weaker-than-planned EOS performance, according to Chairman and CEO Pat Miles. Surgical revenue grew 17% to $178 million, which Miles said was “mostly in line with consensus,” while the company emphasized continued momentum in surgeon adoption and procedural volume.
“The business is working, and it’s scaling,” Miles said, pointing to 21% growth in cases and 23% growth in surgeons during the quarter. He described the company’s growth as driven not only by utilization but also by adoption, adding that the model is compounding as new surgeons join and expand into additional procedures.
Quarter results: surgical growth offset by EOS shortfall
CFO Todd Koning said surgical revenue declined 6% sequentially, which he attributed primarily to lower revenue per procedure contribution. Revenue per case declined about 3% year-over-year, driven by mix and execution factors. Koning cited:
- A higher mix of cervical procedures in the U.S., which carry lower average revenue per case.
- Strong international performance, which reduced reported revenue per case by about 130 basis points due to a lower revenue-per-procedure profile outside the U.S.
- A biologics attachment rate that was lower than expected.
Even with the overall revenue-per-case decline, Koning said Alphatec saw strength in core procedural average selling prices, with lateral, ALIF, and cervical ASPs up 2%, 4%, and 8% year-over-year, respectively.
EOS revenue was $14 million, down $3 million year-over-year, as system deliveries were lower than the prior-year period, resulting in lower revenue recognition. Koning said the quarter’s EOS results were below expectations and the company has taken steps to strengthen its sales team and downstream marketing function.
EOS Insight platform and implant pull-through
Management repeatedly framed EOS Insight as evolving from a product into a platform. Koning said the global EOS installed base increased 7% year-over-year, while the U.S. EOSedge installed base—described as a prerequisite for EOS Insight—grew 39% year-over-year. He added that EOS Insight accounts more than doubled, and that the company is seeing “increasing evidence of implant pull-through following EOS Insight adoption.”
Miles said EOS has helped Alphatec gain access to “prestigious institutions” and provided what he called a “hunting license” within those systems. He listed Duke, NYU, Hospital for Special Surgery (HSS), Northwestern, University of Virginia, and University of Maryland as examples of institutions where EOSedge has opened doors.
Miles also said that after EOS Insight adoption, the company is seeing about a “30% revenue lift per surgeon,” describing EOS as “not just additive, it’s multiplicative.” While installation timing was a challenge during the quarter, Miles said the broader EOS strategy and demand profile remain intact, emphasizing that installation involves facility build-outs that can make timing choppy.
Margins, profitability, and cash flow
Gross margin was 71.6%, up more than 120 basis points year-over-year, driven by asset efficiency improvements, temporary mix benefit from lower-than-expected EOS and biologics sales, and cost improvements, according to Koning.
Non-GAAP operating expenses rose about 6% year-over-year, below revenue growth, which Koning said reflected operating leverage and disciplined expense management. Non-GAAP R&D was $14 million, or 7% of revenue, while non-GAAP SG&A was $118 million, up 6% and 62% of revenue—an improvement of 420 basis points year-over-year.
Adjusted EBITDA was $21 million, representing 11% of revenue and up 97% year-over-year. Koning said Alphatec delivered 45% “drop through” on incremental revenue, which he said demonstrated scalability. The company used $11 million of free cash flow in the quarter, which Miles said was a function of “timing and intent,” as Alphatec invests in what is working.
Koning said Alphatec ended the quarter with about $140 million in cash. He also noted the company invested roughly $33 million in inventory and instruments to support growth tied to 20%+ surgeon adoption and sales team expansion.
Financing update and revised 2026 outlook
Koning said Alphatec entered into a new term loan A and revolving credit facility led by J.P. Morgan and TD Cowen. The new facility replaces the prior term loan and asset-backed revolver, extends maturities to 2031, and reduces interest expense by more than $6 million annually. Koning estimated the new facility could save as much as $35 million in interest over its life and said the rate at close is SOFR plus 275 basis points, with maturity in May 2031.
For full-year 2026, Alphatec now expects total revenue of approximately $882 million, representing 15% growth year-over-year. The outlook includes surgical revenue of about $805 million, unchanged from prior guidance, representing 17% growth, as well as EOS revenue of about $77 million, reflecting updated expectations for the EOS business.
Koning said the company expects surgical case volume growth in the high teens and average revenue per case to be flat for the year. He added that the company is maintaining adjusted EBITDA guidance of approximately $134 million, implying a 15% margin, even with reduced revenue expectations. The company also reiterated its expectation for at least $20 million in free cash flow for the year, with second-quarter free cash flow expected to be around zero.
On the call, management attributed the lower EOS outlook to near-term execution issues that it believes have been addressed through additional sales talent and downstream marketing resources. Koning said the company expects EOS to contribute more meaningfully in the second half, and that overall revenue growth in the second quarter should be similar to the first quarter’s 14%, with roughly 17% overall growth in the second half implied by the guide.
During Q&A, management also discussed factors impacting Q1 performance in surgical, citing late-January weather disruptions, including FedEx being “restrained for almost an entire week,” and softness exiting March in more traditional posterior open procedures and biologics attachment. Both Miles and Koning said April showed sequential improvement, which supported their confidence in the company’s full-year surgical guidance.
About Alphatec NASDAQ: ATEC
Alphatec Holdings, Inc NASDAQ: ATEC is a medical technology company focused on the design, development and commercialization of products for the surgical correction of degenerative spinal conditions. The company's portfolio centers on interbody implants, biologics, fixation devices and surgical planning tools intended to improve patient outcomes in spinal fusion procedures. Alphatec's flagship offerings include customizable interbody cages, bone graft materials and specialized instrumentation designed for minimally invasive and open spinal surgeries.
Founded as Alphatec Spine in 1985 and rebranded as Alphatec Holdings in 2018, the company has grown from a single-product organization into a multi-platform innovator in the spine market.
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