Alphatec (NASDAQ:ATEC) reported fourth-quarter and full-year 2025 results that management said reflect continued share gains in spine surgery, improving profitability, and the company’s first full year of positive free cash flow. Chairman and CEO Pat Miles and CFO Todd Koning also issued 2026 guidance calling for continued double-digit revenue growth, further margin expansion, and higher cash generation.
Fourth-quarter revenue rose 20% with higher procedural volumes
Total fourth-quarter revenue was $213 million, up 20% year-over-year and up sequentially from the third quarter, according to Koning. Revenue included $190 million in surgical revenue and $23 million in EOS revenue.
In the U.S., same-store sales in established territories grew 20% year-over-year. EOS revenue grew 14% year-over-year to $23 million.
Management also addressed an apparent shift in quarterly patterns. Koning said momentum in deformity contributed to stronger volumes in the second and third quarters of 2025, which reduced the typical sequential jump in the fourth quarter. “What initially looks like deceleration is masking underlying momentum,” he said.
Margin expansion drove strong Adjusted EBITDA in Q4
For the fourth quarter, Alphatec reported non-GAAP gross margin of 70.5%, flat sequentially and up 80 basis points year-over-year, which Koning attributed to mix, volume leverage, and improving asset efficiency.
Non-GAAP R&D expense was $14 million, or about 6.5% of sales, and non-GAAP SG&A expense was $118 million, or about 55% of sales. SG&A rose 12% year-over-year versus the company’s 20% revenue growth, which Koning said generated more than 400 basis points of operating margin expansion. He attributed about half of the improvement to better variable selling expense, and the remainder to leveraging depreciation tied to prior-year instrument investments.
Adjusted EBITDA in the quarter was $33 million, up 61% year-over-year, and management highlighted a fourth-quarter exit rate of 16% Adjusted EBITDA margin. Free cash flow was $8 million in the quarter.
Full-year 2025: 25% revenue growth and first full year of positive free cash flow
For full-year 2025, Alphatec reported total revenue of $764 million, up 25% year-over-year. Surgical revenue was $687 million (up 26%), and EOS revenue was $77 million (up 15%).
Koning said full-year surgical growth was driven by 22% procedural volume growth and 3% growth in average revenue per procedure. Non-GAAP gross margin for the year was 70.2%, flat versus the prior year.
Adjusted EBITDA for 2025 was $93 million, or about 12% of sales, representing a year-over-year improvement of $63 million and 720 basis points. Koning said incremental revenue drop-through to Adjusted EBITDA was 41% for the year, up from 31% in 2024.
On cash flow, Alphatec generated $45 million of cash from operations during 2025 and invested $42 million back into the business, resulting in $3 million of free cash flow for the year. Koning said 2025 marked the company’s first full year of positive free cash flow and “a clear transition to a business that generates cash.” The company ended the quarter with $161 million in cash and access to $60 million on an undrawn revolving credit line.
Strategy and product updates: lateral leadership, deformity momentum, and ecosystem integration
Miles emphasized the company’s “100% spine focus” and described leadership in lateral procedures as Alphatec’s “growth engine.” He highlighted the company’s SafeOp neuromonitoring platform, calling it “best in class” and a competitive moat because it provides automated monitoring of both nerve location and nerve health.
Miles also discussed Valence, which he described as a fully integrated platform providing navigation and robotically controlled precision, designed to fit into Alphatec’s workflow for spine procedures. He said the company expects a controlled release of Valence “throughout 26” and intends to compete as replacement cycles occur for other navigation systems.
In deformity, management highlighted the role of EOS imaging and EOS Insight. Koning said growth in the installed base of EOS Edge systems has improved account access, and that implant usage within six months of adopting EOS Insight is “almost double” the company’s average growth rate. He added that EOS Insight is installed on only a small percentage of the EOS Edge installed base.
Management also reviewed a range of 2025 product releases, including a bone mineral density test within EOS, EOS Insight pediatric tools, cervical products (including a retractor and the Segmental Plating System), a full line of 3D-printed implants, a corpectomy system, and biologics.
Miles further said Alphatec signed an exclusive distribution partnership with Theradaptive, stating that the company expects to have “the next BMP” in the spine market in several years. He cited company expectations for performance and safety characteristics of the product, but did not provide timing beyond “several years.”
2026 outlook: revenue of about $890 million and higher Adjusted EBITDA guidance
For 2026, Alphatec guided for revenue growth of 17% to approximately $890 million, including surgical revenue of about $805 million and EOS revenue of about $85 million. Koning said the surgical outlook assumes mid-teens volume growth and low single-digit revenue per surgery growth.
The company raised full-year 2026 Adjusted EBITDA guidance to $134 million, which Koning said implies an Adjusted EBITDA margin of about 15%. Management also said it expects non-GAAP gross margin to “approach 71% as we exit 2026,” while operating expenses grow around 11% versus the 17% revenue growth assumption, driving “nearly 400 basis points” of operating margin improvement compared to 2025.
On cash flow, Koning said the company expects to generate at least $20 million of free cash flow in 2026, after funding continued investment in instruments and inventory to support growth.
During the Q&A, Koning provided context on expected quarterly seasonality, referencing 2025’s revenue mix by quarter (about 22.1% in Q1, 24.5% in Q2, and 25.5% in Q3) as a “starting point” for thinking about 2026. Miles said sales hiring is tracking to the company’s “clear hiring algorithm,” adding that there is “great demand” for the portfolio from both surgeons and sales talent.
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.
