Alphatec Holdings, Inc.

Good afternoon, everyone, and welcome to the webcast of HHEC's fourth quarter and full year 2025 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 or adjusted measures. Reconciliations of these measures to U.S. GAAP can be found in the supplemental financial tables included in today's press release, which identify and quantify all excluded items and provide management's view of why this information is useful to investors. Leading today's call will be ATEX Chairman and CEO Pat Miles and CFO Todd Koning. Now I will turn the call over to Pat Miles.

Thank you much, Tiffany, and welcome everybody to the Q4 2025 financial results call. You will realize that there will be some forward-looking statements, so please read this at your leisure. Clearly, some very good things are going on at ATEC, and we're doing some special things. I would call that uniquely positioned. And I'd say uniquely positioned in a market that remains disrupted. And I think we're benefiting significantly from 100% spine focus. I think there's no question about it. We're leading in lateral and advancing it, clearly, in more complex things. Deformity leadership is in our midst. EOS Insight is out and available and wreaking havoc, meaning it's providing information. We built an infrastructure for a long run. And I would tell you that we have durable and profitable sales growth for as far as the eye can see. And so when we talk about profitable growth, 2,425 highlights are $213 million in revenue, which is a 20% revenue growth. 21 surgical revenue growth in two four twenty percent revenue uh growth in established territories that's uh same store sales um 23 percent uh new surgeons uh 33 million dollars in adjusted ebitda and eight million dollars in free cash flow so for the full year um it's 764 million which is 153 million year-over-year growth which is fantastic and congratulations to the ATEC faithful, which is 25% total revenue growth, which gave us an adjusted EBITDA of $93 million, which is 12% of revenue. And we had free cash flow of $3 million, improving significantly, I shall say. From a key procedural advancement, we continue to evolve our technology and cannot be more proud of the team. So in 2025, we saw the release of our bone mineral density test out of EOS. A lot of EOS Insight pediatric tools. A lot of work in cervical with regard to the retractor and with regard to the segmental plating system, SPS. We have a full line of 3D printed implants which have been released. We have a corpectomy device which has been released and a number of different biologics. I would say a productive year, and with that, I'll have Todd review some of the financial metrics.

All right. Well, thank you, Pat, and good afternoon, everyone. I'll begin with fourth quarter revenue performance. Total revenue in the fourth quarter was $213 million, up $36 million, or 20% year over year, and up $16 million sequentially from the third quarter. Revenue was comprised of $190 million in surgical revenue and $23 million in EOS revenue. Fourth quarter surgical revenue grew 21% year-over-year and 7% sequentially, representing $33 million of incremental revenue. Procedural volume growth of 21% was driven by continued surgeon adoption, with net new surgeon users increasing 23% in the quarter. Average revenue per procedure was flat, consistent with expectations. In the U.S., revenue per case increased 1.4%, with lateral and cervical both up 6%. partially offset by procedural mix towards cervical cases. U.S. growth was offset by 120 basis points of mixed headwind from the international business, which carries a lower average revenue per case. Same-store sales in the U.S. grew 20% year-over-year, demonstrating strong growth within established territories. EOS revenue increased 23 million, up 14% year-over-year. As we exit 2025 and begin 2026, I've never felt better about the sustainability of our top line growth. First, we continue to dominate the lateral space with increasing clinical relevance of our integrated ecosystem supported by disciplined expansion of the sales channel. Not only are we taking share in lateral, more importantly, we are expanding the addressable markets as we train and develop more surgeons who previously treated patients primarily from a posterior approach. We see this phenomenon clearly in statistics that track surgeon utilization over time. which I will address later in this presentation. Secondly, 2025 showed burgeoning influence in deformity. Once again, it is our strategy of increasing clinical relevance with an integrated ecosystem that is driving adoption. EOS is the unparalleled gold standard in deformity imaging. The growth in our installed base of EOS Edge systems has given us access to accounts that we previously had no access to. In addition to that, we are seeing implant usage within six months of adoption of EOS Insight grow at almost double our average growth rate. The EOS Insight opportunity is significant, as it is currently installed on only a small percentage of the EOS Edge installed base. All of this comes together when you see the accelerating momentum in surge in user growth. The last two quarters of 2025 show the highest level of surge in growth in the last two years. One consequence of our growth and deformity is that it caused a shift in the seasonality of our business. We've all gotten used to the dramatic sequential increase in fourth quarter. This year's impact was less pronounced as both second and third quarters were marked by strong deformity volumes. What initially looks like deceleration is masking underlying momentum. Similarly, year over year growth in Q4 was less than year over year growth in Q2 and Q3, partially due to the seasonality of the deformity business and partially due to the variation in quarter by quarter contribution of commercial expansion in the 2024 comparable year. You can see from the chart on the left that we've grown consistently over time. And the chart on the right shows that our $33 million in surgical revenue dollar growth in Q4 was strong and consistent with our historical contribution. When you step back and look at the annual growth in dollars,