ATEC - Earnings call 3 2023 | Alphatec Holdings, Inc.

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Operator

Good afternoon, everyone, and welcome to the webcast of ATEC's third quarter financial results. We would like to remind everyone that participants on the call will make forward-looking statements. These statements are based on current expectations and are subject to uncertainties that could cause actual results to differ materially. These uncertainties are detailed in documents filed regularly with the SEC.

During this call, you may hear the company refer to non-GAAP pro forma or adjusted measures. to measures non-GAAP of U.S. Reconciliations view found GAAP included excluded supplemental information management's tables the today's can items useful press investors. provide all be in quantify release, financial and this in which to why of and is identify be will and Chairman Todd call and CEO, today's Miles; CFO, ATEC's Leading Pat Koning.

the to will Pat Now turn I Miles. call over

Patrick Miles

forward-looking XXXX is going There Regina, welcome, statements. Thanks, results. and everybody, financial to be the some QX to

appreciated. if that greatly So would would at read leisure, your you that be

spine-focused continues. our so And momentum

for also revenue [ EBITDA ] a So quarter the $XXX surgical adjusted million, was The growth. revenue XX% of positive XX% revenue $X million. growth was and

quarter that basis We LTX accelerate expansion, so growth just adjusted a cash delivered positive per with million nice implant procedure, EBITDA enhanced of an flow game, few revenue-generating commitments in highlights. growth investment $XXX XXX revenue XX%, the volume $XX expandable with to raised procedures, of in prowess. rate while and calibrate assets launched achieved growth second profitability disposable deep So ], for of [ Directors Board revenue to executing X% and and margin lateral drove of in a million consecutive our EOS be points XX% in spine to

So a super to BOD Dave excited from about adding the perspective. team Keith and

to super So to adoption. do our to going is clinical compel focus, to surgeon important commitments work. we're continue think haven't deeper changed. we create going We're That still to spine applying our better which XXX% continue We're distinction. and means

and would patients surgeons better, market to opportunity work. it clearly, distinctive for just apply the from great to love perspective. to a that do their disruption a more We continue improved care And

to distribution to continue want better solutions. we elevate and So continue to deliver

rate see rate, XX% results predictable. commoditized. revision not many think that markets you adult in commoditized, any and in XX% And you are is nor to deformity revision way the a when degenerative, see XX% When think are a spine, in predictable of spine I commoditized. about usually, so And is

in And spine something so we variables very a is better. clinical part making proceduralization big through think that minimizing the of

and And surgery, so the which each and to approach. to we alignment address design goals integrate stabilization of technology is develop specific decompression, spine

the And we efficiency's if things elements like for is with a sake. less is designed that surgical less anesthesia immediately. work And tokenized value we money believe goals time to together PTP that fulfills under the patient so creation in time,

so and their And you you you earn predictability, when do time confidence. back give is surgeons what

expand ATEC so more earn the And we when what in product conventional procedures. utilization their is to happens confidence,

in to So plif and in more you common much be start in way. TLIF, see posterocervical ALIF utilized and ACDF a

begun just predictability And so and our have we reproducibility. to really increase pursuit

surgery And spine are so our advanced palpable. commitments to

is we're long-term create And through about quantifying standardized we which a is what so when which to we start think that, objectivity informatics, think, do correlative big outcome. about is of greatest imaging, think global imaging to great standardizing doing, part you you how opportunity to the of a the or really alignment,

automated tools with We we'll We're in release to year, we going mid-XXXX. the that's widely surgery this full workflow and CalibrateLTX. is about much NASS precision of which and all excited We're in At the enhance integrate radiation. our can navigation into think it very spine reducing procedures, to seeing robotic better inform system. while going launched and of surgical start Valence, much we more that also

restoration. lordosis and of are enable discount precise lateral expanding we designed with approach lateral So the our control implant expandable a to sophistication

perspective And we're surgical from around automated We've to system so informatics the relevant gotten you lot's can on. we as planning a doing ]. a see it going about And And influence, be well you think a patient-specific think [ clearances and in we spine. to most great several as Rob in design when think going our FDA catalyst. about or what about start EOs really from is

to planning congrats to our automated start room experience XD that continues knowing elements to reports models it. and and operating that the or alignment then pre-op team really integration. preoperatively the in surgeons furthers predictability again, is the and like change who spine integrate a against our surgery we're evaluating So the automated think operative to crush way about to understand regulatory then before to assessing into that through think experience, But and the what that that going things preoperative do we interoperative ability going post-op

We're next and running. going off that excited year and be about more evaluate stuff to we ecosystem. on late so our this And with can't going to start early are and what's

is truly it end to So end.

our automation inform preoperatively, and next next the the provide integrate that experience to understand plan. So interoperative what's to surgeon, to into regard ability preoperative with then the

that distinction of surgeon feel compel So like adoption. we type continues to multifacet

of quarter. QX And in surges of greater XXX We so trained had we than a this had through 'XX. here ton

to surgeries. continue We of more surgeon's earn each

so love. whole march which continues proceduralization the And the continues up. convoy surgeon the way we And up right, utilization in back sales the XXXX into to go from all of to terms

think what's so I regard perspective, with a from we're the And to going on bullish us space. for demographic in totally

X the grower. of not been or have we fastest so X fastest them, the of fastest grower, And the growers

come. an demographically And always at yet driving clinical look to we're best on, start going unique. when that dynamics we really the what's to distinction, that you think we but market believe the But only not is avails where really opportunity profoundly stuff we that is our think

very, our And very so our opportunity apparent. to the of create is distinction within elements distribution

expand going to to that continue third geographies going we're is we're to address the footprint. or we're un do of do thing We're underpenetrated. first going going And things. the to And are our so to X

are market We less X% than shareholder. a

to solid in we our where approximately and we our so distribution to areas. is And very expand have share. XX% market opportunity continue have significant distribution, Places share focal

we to We I that market gaps think can opportunity. we our Where a footprint. some across And have that always readily. quality more do the market we've in and more opportunities. greenfield -- committed, have quantity demanded are us markets the fill significant on fill improve talked uncertainties we've So and and capitalize provides strategically focal of we believe share. that having major country gaps, grown about environment a that funnel, still to us

we So feel great about it.

not team. only increase of footprint, So existing to are going to we're expand our going we the contribution

If XX% you they're look -- the at same-store in sales, there range.

for profile the a growth who the love of you have while. with been So us people

adjacent going territories, team's So further users. we're to continue of surgeon aptitude existing and within advanced markets share clinical to earn existing penetrate

opportunity, the market disruption. served a to positioned on and the spine so up us capitalize are industry And has we of heck an

the have ultimately I 'XX, in who Orthofix. regard Orthofix think of with since capitalize the Clovis all you January to the the those think We market of at Nuva us disruption things on. assembly, followed I've assembly, to are these for leadership change SeaSpine opportunities seen

will team. already and professionals, to as we relates we've XX disrupted so And it expansion added more the continue to be a informed of

lean we unprecedented so will And an opportunity. boldly into

wanted very market, X of little terms used by to bit to just X. was of conventional in a a gradual was a a compete of it provide And of have a onboarding. X more historically more in and by clarity sales I talent to It linear how we

opportunity this really revenue-generating an both in now linear investment was talent is it us we well then opportunity. a nonlinear, With as and onboarding -- unbelievable from And and so profile assets. revenue-generating completely the up it's investment perspective as disruption, market of think And different, an a served assets. it

the cannot be is palpable. So opportunity We more excited.

over I hand to And Todd. it with will that,

J. Koning

you We joining everybody. Well, appreciate and today. us good thanks, afternoon, Pat, the call on

I'll So with begin revenue.

in prior the quarter revenue compared EOS $XX X% revenue XX% million million to million and third was The was of million, and of over comprised revenue. previous The year in $XXX quarter. up the $XXX revenue $XXX surgical up

million day quarter compared year $XXX surgical the period $X.X compared X and to to compared of XXXX less of and to sequentially increased up Third QX prior revenue QX selling of XXXX. million with was XX%

year-over-year year-over-year in strong XX% Procedural the in surgeons in of XX% XX%. a on grew last reflecting the utilizing QX continued and volume third our Average of revenue in lateral complexity. of attach growth volume due to revenue our increase procedural case case be to mix procedural quarter, continued of from Additionally, the solutions revenue surgeon year. an comparison adoption, of momentum X% strong number of the per and continued is rate performance biologics the both per Lateral our up XX% franchise, increase with growth in growth expanded and surgical case. benefit increases top drove

contributed also recent to our growth. offering, cervical significantly revenue procedural the to With cervical update

installations. Working third last headwind P&L. solid have lower case revenue a the was in our of cervical per remainder with revenue EOS million, slight up to quarter growth deliveries cases XX% ASP this execution on was and $XX year, overall to average, case. Given in the the compared through than

basis was the of needs by prior The we benefiting points place. non-GAAP put compared to the XXX driven EOS which in addressing and margin, quarter XX%, in primarily pricing strong is Third execution to gross backlog addition margin gross increase initiatives service the the year. from was up year-over-year

absolute to compared April prior of by million is points leverage sales R&D approximately on and year. approximately dollar $XX improvement XX% in non-GAAP to driven and the investment of to year. million in That the was quarter. $X year-over-year. was continued period. of in quarter prior $XX as prior achieved gains approximately Third and third including leverage of quarter an and in including delivered the we of with the last we begin year lack XXX of associated navigation basis $XX XX% Non-GAAP this robotic increase $XX Valence, SG&A in innovation, sales the was million acquired The points compared platform organic significant year investment year, SG&A of We XX% sales million XXX basis XX% sales in million the of noteworthy

third presence. points international sales quarter majority expense points in by to the of to investment our in demonstrating continued with establishing third million selling driven and basis the million XX approximately expense efforts prior non-GAAP compared balance of infrastructure and was Total and sales of XX% improvement to about of by of related The leverage net XXXX the quarter year-over-year. the of variable the basis of driven XXX year, $XX operating $XX operating XX% in amounted leverage

significant represents of XXX quarter compared to year negative period. $X was and million points the of prior X% third in the This in loss approximately million EBITDA sales of margin X% Adjusted sales $X approximately and over It drop-through and expansion. of noting began sales year-over-year see that last dollars. growth in to year is we QX the margin expansion of that it worth was of EBITDA the adjusted in XX%

this our expand sustain strong on operating that and quarter's ability both progress. to performance So demonstrates

reinforces we goals have to profitability We consecutive committed performance achieved are positive that quarter our the EBITDA confidence have adjusted long-term to. achieving second the of pleased in

XX% offering secondary ended million, us We positions in sheet cover moment. $XXX growing with recent use launches. the that approximately balance investments totaled $XXX with full growth, which Operating I'll support new cash. more in the of $XX was our primarily the That, from million proceeds to and to inventory third related take the ahead, and on to advantage quarter a with along of facilitate over opportunities footprint cash our product distribution instruments million which

are into demonstrates that and year inventory slide Adjusted the through we've the cash EBITDA and to use, of to that continue this for inflected improvements expect use the this benefiting instruments. free on we adjusted of shared and a now cash next EBITDA. We chart as operating positive percentage balance bottom of

growth. portion assets will As on loan we larger on draw term million going a carrying as we've us is achieve facility. our expansion that of value of communicated The used inclusive $XXX revenue-generating Debt the plan. profit investment margins Bradwell long-range a at to enable expanded toward cash margins, of cash sales in in schedule support ] the million, flow [ $XX breakeven was profit

the outlook Now quarter turning when XXXX third our weeks conference we guidance year ago. full We of a preannounced XXXX. few NASS for to revenue the raised the ahead

of full XXXX million That total approximately revenue million. revenue expect XXXX to XX% million. $XXX We of and year growth XX% approximately surgical approximately $XXX XX% EOS to to $XX revenue includes growth of growth

points to continue line across guidance, progress As raising in increased EBITDA business, to expansion. to top full drives we million, of representing this leverage growth EBITDA basis conjunction $X guidance with margin we significant adjusted are sales year achieve adjusted XXX our expect year

slide and upside next by about updated provides long-term drive revenue growth. sharing start The is The to through the specifically top our balance line guidance. adjusted for line XXXX to I'll surgery be while to context average for per growth how expectations procedural additional revenue with anticipate surgical shaped framework guidance. shared, EBITDA, flow volume relative of the we in guidance increased previous revenue we've reinvested will to that XX% guide

We loyalty continue work to both curve, utilization. enables which surgeons adoption train complexity builds up the which of surgeons increased and at training and a both drives procedural to surgeon utilization, robust rate, surgeons

In mix our the compared rate towards biologics as products LTP than the surgeries to shift expandable our Average attach the gradual per for have mid-XXs our dynamics, of to that of the surgery, momentum expect growth The to middle feature increasing expected cohorts demonstrated testament TTP year. per of these for also which implants grows towards like and that revenue more now utilization chart complexity, surgery require contributing. and XXs surgeon volume addition with average. is procedure Due growth procedures ramp consistent greater a revenue all higher our overall low are and portfolio strong percent volume full to and each year previously. XXXX procedural we

but to continued to full upgraded revenue course surgery the degree cervical financial the outperformance Collectively, in of rate continue leverage feature procedures. year. of With as than revenue year average to last respect to not just revenue part cases the price drive in high solid has we offsets for per to we to commitments offerings surgery the the our growth over profitability procedure as feel expect single-digit shared P&L, have long-range some other meaningful these May. a at relative of growth lower introduced we rest percent the plan selling per the dynamics last our the operating reception growth also cervical Strong to

that for the $X related has acquiring after from year the increased million this and $X adjusted flow path That Valence technology our positive million in points investment growth. sales net made of the to that at year-over-year approximately EBITDA increasingly of to Guidance full EBITDA $X start expectations year, cash adjusted breakeven on of basis the EBITDA is for XX% of million the we and R&D implies adjusted added clear. of approximately The drop-through April. XXX dollar inflection breakeven has improvement to

contribution long-range implies, are The time, there our about us basis that X,XXX another sales the what X,XXX we plan. of selling points of from variable XXXX. profitability margin, variable At components R&D improvement our leverage. last commitments. we to delivering leverage the rate XXXX from the of and The have with by XXXX several And XXX leverage. confidence guidance points selling infrastructure our SG&A to continue contribution X,XXX XXXX horizon in rate basis while achieving halfway operating are time in and consistent improving points points related over been investing to growth leverage over basis in that committed to infrastructure quarters The and about described X,XXX basis great we basis points give that entails has about enabled growth

our some ATAC of most walked onboard success. unlocked country's has the territories, secondary to seasoned over we X/X much disruption disrupted spine. sales our terms highly under we extraordinary just I'll by for that sales new ago. opportunity tenured professionals productivity through teams week to expect and U.S. representation. entire next These an to ramp are on new the of professional continued companies, than more or Industry to from surgery quickly of lateral covered footprint, stand including or in roughly of professionals toward areas recruitment where turn offering closed Pat a distribution where populated us

with today, just teams to those need sets their assets to for And Armed the would ahead over opportunity and transition as will expand investment I customers. inventory The have $XXX funding ROI. support sustainably we revenue-generating we capital, raised need we're fund share. we on for but that surgeon attractive expect to serve like will highlight fully can we teams the their million not market onboarding year. into ATEC they we this to an with to asset and lean this the the also next bring investment are in

the in its years. in next $XX annual $XX in and generally cash each about million revenues million flow X That of upfront delivers free inventory sets invested the year, supports ] in $XXX return in million Conservatively investment. investment a assets million first X to following circulation free are implies for $XX in X of on Xx assuming of followed years. about each years [ flow cash by the in

growing very clear I spine share the we capital plan while remain fully of returns scale be want So market in in that profitability May in at intensive, are of is the to to the shared very strong. we committed long-range conjunction with walk our XXXX. release

ahead in of net navigation [ to million EBITDA of at have achieved of investment we raised our This have year ] the full robotic and adjusted the the today, breakeven $X year plan from platform. guidance start year, Valence zero

communicated a of that construct guidance revenue revenue outperformance will to adjusted and through to EBITDA. operating drop we've are any to Additionally, XX% compared

of For example, year million, revenue has in adjusted $XX the we by to today, Valence. the net of have start and $X guidance conjunction, guidance million from increased in the investment by EBITDA increased

investment we We infrastructure that enable change, don't Accelerated our committed a of some to leverage. made larger basis expected confident driven supports will growth points to faster achieve commitments Increased X,XXX facilitating achieving depicted leverage. continue enables by spine for fuel are will that XXXX. most I'll capital that breakeven are us revenue of been will in cash that growth margin infrastructure expansion to our to to expansion and slide be has raise. lever revenue the operating company. previous our profitability that the us into infrastructure to The inflection than profitability we and provide this additional context flow X,XXX in why recent expect

years, been have operate seeing agencies X,XXX the we the variable committed is respect selling organization, where for to profile cost leverage margin as that the variable to points over now. With of time. operating and we expansion predominantly we contractual X exclusive sales past Another quarters with our cost from basis a

Additionally, in expansion long-range profitability always we contemplated would commitments. assumed Therefore, as distribution plan grow. our our the expand footprint in our we sales was investment

unborrowed at new sales over works variable a agencies, time. lower we As the spend related and that rate is contractually

with competitive ATEC their on We have step new contracts commission their structuring structured grow segue downs slide. contracts like a their sales improving to. incents time. with business and the contractual sum, to that to support the sales to over will In infrastructure we the are them the we've increasing and always a business next rate supports an profile basis improvements committed profitability both variable cost good selling leveraging of transition That's

the will XXXX. assured, will add an update business to with you growth to long-range the funding host We performance. long-range plan We save increasingly is went recognize the join City, becoming more to for due shared will XX, We'll date be hope plan that rest plan finalize our share we year, to We as New cash March business event cannot which will will last X years to XXXX. that ATEC stale attend. York update free The you which plan be on us. plan those hope strong profitable in who out for be webcasted in-person We increasingly to clear. but about the intent details event is we flow

I'd you for thank sincerely in like support. continued Now to closing, your

business EBITDA both This to momentum eventful quarter. good continued outperformance, business. testament surgery was and is belief revenue our good an that a adjusted Exceptional drove

ground arm very market power share Our with new running. unfold assets years in and The sales they capital that will the have hit disruption, to exploit profitable need onboard the and enable to we come. us raise revenue-generating them we be expansion to the long-term unprecedented will to truly growth expect sticky and will professionals begun to industry

connect an next you to of over We active calendar in months, IR the person. hope I with few many have and

are turn the Pat. back to I'll that, call With

Patrick Miles

Todd. Thanks,

we best only spine leading surgeons but and not XXX% guessing. our as And compelling focus sales yet So is always talent. come, we're not to say, is

to So over the questions. with that, we'll for turn it operator

Operator

[Operator Instructions]

first Lake comes O'Neil from The question with of Markets. the line Capital Brooks Street

Brooks O'Neil

accelerate things be would incremental risk taking all be as growth the you guess of -- dimensions. you update you appreciate really various your guys in up? assessment helpful on I might that trip are for do successfully. you would increase on investment. ahead I tracks you to you Do about what talk might the there it's the be and things that feel tree you might you speed down rumbling -- full are -- are think pretty and like are Or and

Patrick Miles

Yes.

reflective has got disruption see take qualified any me on Let that I bold availed the think been that we've to being from leaning reflective you, I and familiar onboarding the demographic experience type jump X could our Todd other more are as a really for terms I it expediently. then and the more to real the in translate that And tell is the in. to strong opportunity of things developmental is apparent. have done let been suit of disruption of relates a as that -- of of part perspective surgically opportunities what being of has that with I the portfolio see aggressively And it. always they regard people

that's of think about how the I so kind business. the of And core our

candidly, that I there different of feel perfect success, still are others. that very bullish. If many about not one, we're great I think the very, drivers I'm on so

it I tailwind And of I these a think a becomes things where a whereby more think it's of there's multifaceted so headwind. that than opportunity X

has have And I last think would and think these I said, tell over the there's high that. the what to execution. guys they of history look say, you been company correlation the that that And you done of so X X I years you if a

most they sure the the of verification devices you're are. terms performance so of paranoid in And with of the again, what that the making are

very very, a We but sales sit just of expansion based alphas aggressive we reflective for performance intend. the upon you makes hiring make [ opportunity continue think But an the methodical, going sure tell to tons we're is opportunity. that we what to -- do where of ] that always from I would I that to sense be

So.

J. Koning

want the I accelerate sales our probably is their reinforce I'd these of point lateral people customers sales are surgery, think I significant of lateral And opportunity through think surgery, acquisition Pat said, to who reps. what -- understand competitive the lateral understand which surgery. the is

relative historical acquisition I competitive think think portfolio the is our the our setup that quite of into so opportunity I reps, plays nicely to sales favorable.

Patrick Miles

would surgical add the from into EOS thing application what ourselves to lateral, we're integrating is and is anything whereby planning we've an and operating I into room. yet integration from Yes. see in X distinguished we've a doing

think And to perspective. from opportunity so only so with from deformity a there's also I a expansion much from not lateral regard selling but perspective a a

And so leaning many again, Brooks, probably things anyway, before, bullish, I be think very you've to there's reasons but heard we're and that's in. why

Operator

next Matt come with Your will question from line Blackman Stifel. the of

Mathew Blackman

plan bit Can reflect we more drive with accelerated new you're what, and reps. just evening, LRP Todd, it I appreciate more changed all, be little hiring customer have growth prepared thinking a about how and us raise your you address think, sets if for ability and be through could would following set to anything, walk to on you more and the may same-store with should not investment. sales the fully this for the but if I acquisitions helpful

on out free there. I want said in another throw Can just in was I'm that? slides, still see And then X confirm it And profitability, then you XXXX. going to I think cash just positive the you you to confirm,

Just front assuming help on drop-through I like number. of XX% that sort an talked think appreciated. that raw XXXX you is right base to upside laid model that some Depending about for revenue out? XXXX, the be LRP, would you've in your EBITDA on that something revenues, what that wanted on we're the that extent million still in any adjusted of add we to $XX

J. Koning

out in Yes, by our here. XXXX. long-range where start Matt, of maybe to start $XXX try let revenue plan saying, and I'll assumed me figure just million But kind in

think you and [ if $XXX-ish use I next $XXX I ]. at year Street XXXX, -- assumptions ], the [ in is around today, it's think think Street the I

XXXX, about, $XXX in debt. the has what of big I just us north had So our long-range million think, strength plan

of plan in long-range XXXX. assumes EBITDA Our $XX about million adjusted

delta $XXX line XX% Street to And expect of that laid XXXX million the so would if bottom out, use the through construct top on drop you the we've to you the in LRP line.

investment. $XX less add about Valence $XX to the million. gets million $XX That million you that's the So to

as So $XX Street million today is probably numbers on is. XXXX your bogey

I communicated in revenue think to way we've about to so of plan on beats we drop-through and consistent is the And at. as relative our long-range where to that's how where were the a think Street kind compared at

we've of relative overperformed Street clearly, kind relative been. where plan to where has the -- to long-range our And so

also evidenced that's us year, not [ has fact ] XXXX. $XXX probably next think so the And I by that at Street the in

have And a of breakeven so XXXX. the positive us well, I we adjusted achieved line. bit here execution, outsized execution -- EBITDA We've territory top schedule in adjusted think ahead on as driven giving in

I XXXX. to other the thing in so And on think free flow was wanted me cash you comment

the growth in EBITDA And funds, then your important in adjusted think assets point on so that I XXXX. the the EBITDA really the adjusted investment is an X because ultimately it's

we why we to have XXXX flow business cash say because us the And a in free confidence enables ultimately, we'll do of fundamentally the profitability that's be of level that. that to breakeven do

hangs laid we're where that consistent in at. of another we there Matt. what with there, all together think question with and is I Was so consistent nicely out is And and

Operator

next our Sandler. O'Brien from line take the with question Matthew Piper We'll of

Matthew O'Brien

surprised be a two Pat, capital to the going multi-parter But me. are It's so the room by the of people a is [ ], raise here and I it. forgive lot elephant guess in

what a of And and of sudden why just were as messaging a sales as X little like, specific And yes, sense. from be then do decided But for do and we're all little on not going this you ago bit can then to more you far maybe to kind a to can when expectation you give you not bit do hiring? more so did it. rep going it a changed We're your it. little a talked you've or you bit it month makes about

just of mentioned Or sets way, million I amount Or $XXX maybe because the an going Is to to guess incremental that this of hundred additions kind $XX imply forward it raise? Todd, asked of of extra of million new million next $XXX over expecting you way of up? sets any couple couple that in That kind equals terms you're of a would bucks. another raise revenue. years frame of the color of million

Patrick Miles

it start, at of would pipe the at as I start the Matt, you -- Yes. and the to the you Todd and [ then look ask in. time closing to of demographics look marketplace Med well. But to to G I doing And it as not being was thing, completed ] been have that anything was assured think found it through. would that upon Nuva go prior going

the closed, the just when seeing And terms I of SeaSpine. disruption being so I leadership think other in disruption, think that Orthofix

type those creating think I And when unique the we I sales to time start are coming about us portfolio see teams that reflective taken clinical Northeast. teams over. getting presented the create to XX teams you over, and distinction compelling ultimately now the people, And join sales we the of in I do a would back the sales had look of it's at nonlinear be over that today. us coming of talk is in when time. what themselves of the if company, tried history the presentation think reflect I to a And -- to regard with you elements things

on it's the the implants, significant. and you when to so that start look at required has And influence instruments what

going not? lean us look to we so in. forward And are "Hey, said, say, to on or this opportunity let's start for and capitalize to growth We

Our been of X history execution. has

great now. and about ourselves the that time And opportunity so thought to is we felt

upon we build aggressive to because going the what back us is made. a all look historically, we've perspectives you're of based as that this forget type of aggressive I And of about are think see kind to people so that going previously efforts behemoth

stretch again, any imagination. is and my created so money, no be the market on That's of is we've now every the the value, time us. sense different. raised again, But we've perfect was by not And to lost going time this not

felt in. opportunity. we is so And like let's lean This an

J. Koning

$X.XX Matt, And an you're thinking we where kind we're million. way you're the million in say mean, of I above $XXX incremental totally every $XXX think at. the right for about that implies dollar of if I

relative revenue to And opportunity expectations. adjusted totally incremental the through creating the about which to that's sooner this I think so is of incremental think raise, EBITDA and way value

competitive It's to that's And profitability got point do Gap] ensuring think is, [Audio how opportunity so more is growing by And component the sooner. the that you value asset attracting delivering I that? faster they do and a key be of -- it. creation reps and the

driving that's fundamentally we're And here. so what

Operator

come from with of next Cowen. the will line Jennings TD Joshua Your question

Joshua Jennings

I launch for Congratulations LTP strong results there in And also raise. the the the the any full just and the share on year. check earlier and since in ATEC trends coming just products PTP wanted ramp And see if to adopters? can you they LTP surgeons to wanted LTP and to used is case in? bringing is previous those -- per it just per adding that from ATEC revenue metrics? new confirm adoption Are case on

Patrick Miles

why great demographics the we've been marketplace. to fortunate like, I yes, And gosh, the of Josh, feel this is never question. Yes, regard with more

we the expected. you our had so very demographics positioned LTP -- a it's the a And you then its that yes, surgery. price launch see to average ala utility. that see company business, significant then And per expanding patient reflecting selling XLIF, opportunity It's position laterally what and expand and

And so a addition contemplated assembly. ability with sales the demographics do to regard convoy very patient of associated to were [ X:X], that the biologic positioner with the a the

Like that all the a way a a to dynamics. reflective then elements love groups are in an coming expertise force in those perspective growth you of ultimately And fruition and you bring rate. in of from is sales

accepted. you would is It's well against that bed. the taking I someone and yes so a happening -- expanding We're as things being And Like yes. the ASP expected. tell and yes, competing are accepted to

And in chances been has that somebody dominated you dynamics by historically the the else. love are a those so competitive when space

Operator

Your Genuity. will Canaccord with next come Plovanic the of line from question Bill

Unknown Analyst

for on Bill. George is This

actually. additions. been you first of appointment. a a couple how is, about question a what of value have that talk made any you before their long-term kind of these Can recent made Board the point maybe lacking just And bring an then we will have specifics impact? of clarification, they So And one, just quick additions already has

of the about investments. that Xx X-year you're in. in disruption from talking shorter than you your ROI bringing competitive reps plan being were the mention number You how terms industry Did the

J. Koning

last Could just you repeat I got. question? the

Unknown Analyst

Yes.

Really line more these accelerated cash about year guys you time something talking an saying your would conversions that, -- the nice investments. I what thought disruptions? said of chart but you caught more provided [ competitive about you the Xx return just for from a flow be the of So X], of in about rep guys I free that getting

J. Koning

it. independent answer I that can which directors that is, just Xx back it of using to pass maybe Well, made. The are additions really X and quickly then sales reps to I of Pat we think, speak

of $XX investment make this in million. it's ultimately, your you case, a So function initially in

about year. get about the you rates and you COGS first the million. for full for sales years and in you afterwards, year -- that pay then dropped drop that variable You $XXX the pay on $X.XX on dollar, you $X.XX then commission And in

there's so expense of [ XX and that XX COGS are you the there. of regardless And XXX is you not ]. roughly your And ], variation sales of the [ their [ of it's at ultimately, kind at on [ some look sales while your economics what different. look ]. XX much look individual selling And at that's which And agents your ] and whole, rep drops revenue between at

And so the be entity showed it. we what selling is same be would selling of I which would think regardless

directors. speak You want the to to

Patrick Miles

a ] garner day that of I think people the goal, George, of to Keith specific the of I'm take type as if that we are standpoint that a think and [ have, Yes. companies the to -- from of going -- so question it's committed opportunity always the Valentine and goal assemblies Dave good every committed specific I'm and have to to Demski I a of week. expertise

about experience who to candidly reach so of years as if I XX field, someone in think start competencies, the think absolutely you has he's got And outstanding. Keith

this know experience. than a a there's also, things of companies. that Keith at that we're it's person And -- I I doesn't I didn't we so industry is, again, industry a not other in that And Dave, think, think them. think has up ton the but The not have. in of favorably Maven doesn't guess and trying to shore

way things effort I is to augment think the into. ultimate any

leverage Dave force. a clear expand to think terms I job sales business. need businesses need has great our we clear It's our in of leveraging it's So to we that done

those table effort. the bring I of think both to that our all of guys things to So is these valuable

thrilled I'm decided Dave Keith and death with to they've with that have join and that us. So association thrill to the

Operator

Your next question will come from Stanley. the line of Morgan Drew Ranieri with

Andrew Ranieri

earlier Just of reps? hires. win this typical of would productivity if the ] you're the love Can onboarding I'd maybe be bringing hear I new about your thoughts apologize the some and a you're just kind your expectations rep about ramps I over talk a bit hire? you this sales rep why about maybe of wanted missed force that for recent onboarded more with these rate remarks, of than but some thinking [ kind maybe greenfield to what and in that

Patrick Miles

the employment. helps buy there XX the I buy when known thesis people you into build do a quantify, years previous relationship. it that I'll a think qualifying that happens if place that a for him with Yes. can, And -- into. What I've the creates surgical their special customers these I ultimately, becomes someone, market to guys know candidly, at you candidly, of is,

opportunity. what more this and we insert of Gap] but We we into so felt those could of our of it's our happens guys, it's I of company that the people of the the foundation apparent. the acceptance that is can company tailwind. get a building people such those the just is went raises. really, that's [Audio think not it's dramatic is more the an It's we just like for that expedient because And did -- lateral and of why such And

is a [indiscernible] town. this small like so is And

going with us opportunity. And prioritizing very to where affect again, geographies ultimately us, to hospital methodical that access, context will just and is for positively so those benefit have knowing apparent greenfields an regard that that the such be are geographies most people us within of which we we're

And we've want you Todd And taken. do so -- that's the or... to approach further, comment

J. Koning

Yes.

are the these attracting folks results aligned given these that portfolio, think, kind as be well much and the think this than the given we point they business of the higher as business our all have in the in really would through surgeon reps the familiarity confidence of for I product out. fact interval with base I so to their the Pat pointed scenario both, reasons achieving sales demographics the our history real essentially customers, in it is, confidence is sales the

Patrick Miles

Yes.

in walk we're I with going confidence to great and think part history is a walk. now less a were the confidence we nonlinear on linear a going more with

And is so think, we believe apparent. be us, the I to for opportunity,

Andrew Ranieri

technology you ahead, lines us milestones. to a are starting -- robotic And or the normal. questions recent as I innovation going -- on actually to mean, and And pipeline. couple more forward just product remind look But just R&D be there's in conference. time the think your from maybe of like you the looking pipeline on you at pathway developing looking here incorporating NASS are of enabling sorry, R&D our you to when and kind highlighted more and then commercializing

Patrick Miles

Yes. Thanks for the question.

Our opportunity. run plate over us with

we're to last made about we've interoperatively and that effectuate do to not It's EOS toward preoperatively like opportunities and to what postoperatively. commitments enough -- you while. the think start so have all of ultimately the to doing, And technology good with as a have only us we

which all with will postoperative that all just of the the all elements, done the cannot goods, catalyst 'XX, a regard more in integration, the to automated a of the excited an to And the as things analytics years of rod is lot planning, automation, be be really, of of to about next, customized going perspective, so QX middle it launch integrating interoperative 'XX. in that the from the of we're to X portfolio EOS relates whole the

Following stabilization to quality decompression, do from relates alignment, elements. it material starting as to become And tissue then stabilization immediately an starts and perspective. the what's to is to underlying we're now with we for gosh, us and quantified spine of bone understand that the start underlying stabilization alignment to

playing years to the that in with go to have We regard marketplace. out

And doing so I it's EOS I opportune. love from so an think perspective, we're what

a from of do execution the we integration apparent. do very I create level surgical element of this get the layer How think And very, then perspective. workflow how when to navigation And more in, you robotic gosh, with precise? Valence the start is we

And robot. a of doing screws at better the into bore. things don't ultimately it's will so we create that's year, be the a integrating We through Candidly, to our that We fixation elements that kind of this with end by think is endpoint of with the think opportunity these placing pedicle cases workflow. all. an surgery

be engagement in to that's our 'XX And is that. what going

of a So you'll launching marketplace in more that integrated but fully really 'XX, in procedures. start 'XX and see to LTP the PTP, those precise

excitement is, with of and regard PTP value. to cash, heck we conduit created our how so LTP. a the a reflect do And We've

see in to garnering You start procedures greater through we're putting us alignment a way devices the precision that absolutely those expandable element. to regard with

and It's just perspective. the from going -- informed to sophistication with we're more you're what be and it's interoperative regard greater to a more to element, postop and by doing just a starting see pre

to in much so for us anyway, to drone sorry to so do momentum much the much work And think that business. do I so there's and so but

what think created. that fill I to already surgery the conduit do we to of we've is need continue

Operator

Wainright. H.C. from the Sean will come Lee line next of Your question with

Xun Lee

upon seen set less or So for the tables whether EOS, the pulling of spend so. on was tenant wondering for remarks we've the more kind or I year the expand last or revenue yields with portfolio? just the to reflected yields? of that off that benefit growth rest the on in Catalyst be a is going more the of is XXXX, for of going Or to -- period growth in Catalyst

Patrick Miles

Yes, to think on long-term will near-term the great a be is it's the revenue And question to I capital. Sean, be ultimately the see reflection implant. going we placing revenue the of impact question. is The the be going And where on revenue.

ultimately to from their it acquire be understand will creating like true to we're into take the integrate people you what it respective catalyst to to start perspective, the value hate start to as much practice. a of period when to as think the capital capital I realize

an implant over impact. reflection the of of you'll And reflection the more capital, start so to see see X next immediate but you'll years, increasing a EOS'

the I I you're going opportunity And fronts. is it And see think think both so and. but to an -- on

the to both for is enthusiasm capital. so our how from terms influences Todd, anything of add? And it in technology as an as well the perspective interoperative

J. Koning

I kind the back a you has think been acquired if like we And CAGR you'd XX% consistent look been see on to growth. revenue. that's what full EOS I feel our around mean go I year in I a Yes. XXXX company, growth the and you since at of think EOS good

it's what been Pat But it has CAGR talked be should we solid about ultimately doesn't I do basis. can think what think be. and reflect and a I think will and it growth multiyear be on

Patrick Miles

second. required because to it brings Yes. that's presented just to it is value unique. X is it's are EOS ultimately to to It and the us have reflect by the profoundly value that EOS marketplace. that the think people it's And to going we done opportunity underestimated brings. I And where And work the I'm like, unique But for do willing the unique to us.

so And be Absolutely. financially? will reflected it

more And excited can't we about SPX. it. be so

Operator

will Jason line of Wittes question ROTH. next from come the with Your

Jason Wittes

some clarifications. Maybe

a up the that? lot be a it's lot that little going Or thinking to I than there's should that deal about harder off, gestation push you normally, also, talk obviously, be a a maybe just noncompete line a lot this? of And to Does sales before how saying talking could get And harder. quicker. up also we I we on growth, about? if pick you little you when there's to nonlinear are are a First you can guys just If a fully Are time you're you going push -- would? normally mean period. business more even Because more what and running. with about these

Patrick Miles

The have and guy Yes. to pragmatic it you'll -- X which I way to as at really growing Jason. the of we've experienced we're us it, on X Thanks, is on. XX opposed about guess linear come in thinking that the X is that to way kind the coming dynamic,

how things the all significant. state considerations. kinds X But by provides by they can volume pragmatic Are associated the their or reflection is to, so to variables X noncompete be going kinds effectuate to agreements preparation upon I that X a more of don't is And There's the they required that with that these opposed of and is the just X all as noncompete And is a there's depending X, dynamics. think, so significant. territories of for seeing by managed. most we're by XX. But switch

by from. seeing as they've talked thesis And our so -- we ultimately company come and where that a is of the we're by reflective in companies what of -- more the XX X X disruptive about

on not And it's of experience had already understanding a case, them or in. X that compelling me it's so lateral surgery, matter when they've that's the

Jason Wittes

XXXX, you're immediate correct that have So quarter. fourth hires this potentially even should the on making now, and impact right

Patrick Miles

support required are a any them way coverage, such the education them long. I surgeon and well group program the sure can such a first level impact I'm on provide and that in through for It's going we create education we versed that the have that make that the to search is are of prepared whip is great comfort prepare and great whatever in they candidly, make education. a in surgeons that hope our products they XXXX. and program. sure does well and

lot know think these years I of past. other a each from guys

excellent opportunity that get dynamic. a -- in them in can to when just so the PTP trained him they perpetuates from trained such if met on and [indiscernible], And on favorable it's they he so

J. Koning

'XX really this meaningful large, 'XX kind by us. a to of Jason, and meaningful opportunity think ultimately I for becomes

Jason Wittes

answer this on And anyway. going if I who's Todd, could that, push to

said which your comfortable that's I XXX Or now around what X- hires. to of think I X-year I because correctly? plan, original ahead is, ]. you're about And [ pretty hear with am these year consensus is of that is kind math. a you of which largely Did

J. Koning

consensus I all has has think this of before transpired. before mean -- I we been consensus

but I far, think based where have set relative I at. at on I thus and experienced -- will to where that up we're that we've think into we So opportunity success next going to the and we tell you, the consensus year like

Jason Wittes

should be there So upside then.

J. Koning

like where we're at. Well, we

it that way. put Let's

Operator

closing back for conference I'd now over the to any Pat like remarks. to hand

Patrick Miles

thanks, at We what's ATEC. getting and excited more in truly for about interest can't attention. is everybody, remark be happening Well, closing going. are I the thank your just for everybody company my your

So thanks very much.

Operator

That you joining. for will meeting. thank all conclude We today's

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Alphatec (ATEC) 6 Nov 232023 Q3 Earnings call transcript