Q1 2026 Alphatec Holdings Inc Earnings Call

May 5, 2026

Paige: Good afternoon, everyone, and welcome to the webcast of ATEC's Q1 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. Reconciliation 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. Sell-side analysts planning to ask a question must be registered through the dedicated analyst link included in today's materials. If you have not yet registered, please do so now to be included in the Q&A queue.

Operator: Good afternoon, everyone, and welcome to the webcast of ATEC's Q1 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. Reconciliation 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. Sell-side analysts planning to ask a question must be registered through the dedicated analyst link included in today's materials. If you have not yet registered, please do so now to be included in the Q&A queue.

Speaker #1: 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.

Speaker #1: During this call, you may hear the company refer to non-GAAP or adjusted measures. Reconciliation of these measures to US 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.

Speaker #1: Sell-side analysts planning to ask a question must be registered through the dedicated analyst link included in today's materials. If you have not yet registered, please do so now to be included in the Q&A queue.

Speaker #1: Leading today's call will be ATEC's Chairman and CEO, Pat Miles, and CFO, Todd Koning. Now, I will turn the call over to Pat Miles.

Paige: Leading today's call will be the ATEC's Chairman and CEO, Pat Miles, and CFO, Todd Koning. Now, I will turn the call over to Pat Miles.

Operator: Leading today's call will be the ATEC's Chairman and CEO, Pat Miles, and CFO, Todd Koning. Now, I will turn the call over to Pat Miles.

Speaker #2: Thanks, Paige. Appreciate it. Welcome to the Q1 2026 financial results call from APEC. There will be some forward-looking statements, so please review at your leisure.

Pat Miles: Thanks, Paige. Appreciate it. Welcome to the Q1 2026 financial results call from ATEC. There will be some forward-looking statements. Please review at your leisure. With that, let me start simple. The business is working and it's scaling. We did $192 million in Q1. This was short of our internal expectation, primarily due to a shortfall in EOS sales performance. Surgical revenue was up 17%, mostly in line with consensus. What matters most is what is fueling that growth. Cases up 21%, surgeons up 23%. That's not only a utilization story, it's an adoption story. We are adding surgeons, and they're doing more with us. We have created a durable growth model. EOS revenue was $14 million for the quarter.

Speaker #2: With that, let me start simple. The business is working and it's scaling. We did 192 million in Q1. This was short of our internal expectation.

Speaker #2: Primarily due to a shortfall in EO sales performance. Surgical revenue was up 17%, mostly in line with consensus. What matters most is what is fueling that growth.

Speaker #2: Case is up 21%. Surgeon is up 23%. That's not only a utilization story. It's an adoption story. We are adding surgeons and they're doing more with us.

Speaker #2: We have created a durable growth model. EO's revenue was 14 million dollars for the quarter. As stated, this was short of our quarterly goal.

Pat Miles: As stated, this was short of our quarterly goal, and we have taken steps to bolster the team in sales, downstream marketing, and EOS support. However, the important thing we are seeing is EOS Insight is evolving into more than a product, but a platform. Growth and adoption of our EOS Insight platform is creating significant momentum. EOS has enabled us to gain access to prestigious institutions and a hunting license within those institutions, which is increasingly paying off for us. We generated $21 million of EBITDA, and yes, we used $11 million of cash, but that was a function of timing and intent. We are leaning into and investing in what's working. When you step back, ATEC has become a compounding engine. More surgeons, more cases, and more platform pull-through. We're still just at the beginning of what we know we can do.

Speaker #2: And we have taken steps to bolster the team—in sales, downstream marketing, and EO support. However, the important thing we are seeing is EO's insight is evolving into more than a product, but a platform.

Speaker #2: Growth and adoption of our EO's Insight Platform is creating significant momentum. EO's has enabled us to gain access to prestigious institutions and a hunting license within those institutions.

Speaker #2: Which is increasingly paying off for us. We generated $21 million of EBITDA, and yes, we used $11 million of cash. But that was a function of timing and intent.

Speaker #2: We're leaning into and investing in what's working. When you step back, APEC has become a compounding engine. More surgeons, more cases, and more platform pull-through.

Speaker #2: And we're still just at the beginning of what we know we can do. With that, I will turn it over to Todd.

Pat Miles: With that, I will turn it over to Todd.

Speaker #3: Well, thank you, Pat, and good afternoon, everyone. I'll start with the first quarter 2026 revenue. Total revenue was 192 million dollars. Up 14% year over year with surgical revenue of 178 million dollars, growing 17%.

Todd Koning: Well, thank you, Pat, and good afternoon, everyone. I'll start with the Q1 2026 revenue. Total revenue was $192 million, up 14% year-over-year, with surgical revenue of $178 million growing 17%. Sequentially, surgical revenue declined 6%, which was more pronounced than we have historically seen, primarily due to lower revenue per procedure contribution. Our strong year-over-year growth continues to be driven by the core elements of our model, which are 21% procedural volume growth, driven by 23% growth in new surgeon users and continued revenue per procedure expansion within our individual procedures. The consistent trends in net new surgeon additions and strong case volume, both above 20% again this quarter, speak to the ongoing momentum and durability in our surgical business.

Speaker #3: Sequentially, surgical revenue declined 6%, which was more pronounced than we have historically seen. Primarily due to lower revenue per procedure contribution. Our strong year over year growth continues to be driven by the core elements of our model, which are 21% procedural volume growth, driven by 23% growth in new surgeon users, and continued revenue per procedure expansion within our individual procedures.

Speaker #3: The consistent trends in net new surgeon additions and strong case volume both above 20% again this quarter speak to the ongoing momentum and durability in our surgical business.

Speaker #3: Revenue per case declined approximately 3% year over year, driven primarily by mixed impacts. In the US, we saw a higher mix of cervical procedures, which have a lower average revenue per case.

Todd Koning: Revenue per case declined approximately 3% year over year, driven primarily by mix impacts. In the US, we saw a higher mix of cervical procedures, which have a lower average revenue per case. In addition, our strong OUS performance reduced reported revenue per case by approximately 130 basis points. Finally, our overall biologic detachment rate was lower than expected. Importantly, and consistent with the prior periods, we are seeing strength in core individual procedural ASPs for lateral, ALIF, and cervical, which were up 2%, 4%, and 8% respectively year over year. Turning to EOS, revenue was $14 million, down $3 million year over year, as the number of system deliveries were lower than the prior year period, resulting in lower revenue recognition for the quarter.

Speaker #3: In addition, our strong OUS performance reduced reported revenue per case by approximately 130 basis points. Finally, our overall biologic detachment rate was lower than expected.

Speaker #3: Importantly, and consistent with a prior period, we are seeing strength in core individual procedural ASPs for lateral, ALIF, and cervical, which were up 2%, 4%, and 8%, respectively, year over year.

Speaker #3: Turning to EOs, revenue was 14 million dollars, down 3 million dollars year over year, as the number of system deliveries were lower than the prior year period, resulting in lower revenue recognition for the quarter.

Speaker #3: These results were below our expectations for the quarter. And we have taken steps to address this by strengthening our sales team and downstream marketing function.

Todd Koning: These results were below our expectations for the quarter. We have taken steps to address this by strengthening our sales team and downstream marketing function. The installed base of global EOS units increased by 7% year-over-year. In the US, the EOSedge installed base, which is a prerequisite for EOS Insight, grew by 39% year-over-year. The amount of EOS Insight accounts more than doubled. We continue to see strong utilization trends in these EOSedge accounts and increasing evidence of implant pull-through following EOS Insight adoption. Implant volumes at EOS Insight accounts are increasing meaningfully post-go-live, reinforcing the long-term strategic and financial value of the platform. Turning to the P&L, gross margin for the quarter was 71.6%, representing over 120 basis points of improvement year-over-year.

Speaker #3: The installed base of global EOs units increased by 7% year over year. In the US, the EOs edge installed base which is a prerequisite for EOs insight grew by 39% year over year.

Speaker #3: And the amount of EOs insight accounts more than doubled. We continued to see strong utilization trends in these EOs edge accounts and increasing evidence of implant pull-through following EOs insight adoption.

Speaker #3: Implant volumes at EOS Insight accounts are increasing meaningfully post–go-live, reinforcing the long-term strategic and financial value of the platform. Turning to the P&L, gross margin for the quarter was 71.6%, representing over 120 basis points of improvement year over year.

Speaker #3: This expansion was driven by continued asset efficiency improvements. Temporary mixed benefit from lower than expected EOs and biologics sales and ongoing cost improvements in operational discipline.

Todd Koning: This expansion was driven by continued asset efficiency improvements, temporary mix benefit from lower than expected EOS and biologic sales, and ongoing cost improvements in operational discipline. Non-GAAP operating expenses grew approximately 6% year-over-year, well below the revenue growth, reflecting continued operating leverage in the business and disciplined management of expenses. Q1 non-GAAP R&D was $14 million, or 7% of revenue, up slightly year-over-year as we continue to invest in innovation and launch new procedural solutions. Non-GAAP SG&A was $118 million, which grew 6% and was 62% of revenue, improving by 420 basis points year-over-year, which is primarily driven by improvements in our variable selling costs and slower depreciation growth.

Speaker #3: Non-GAAP operating expenses grew approximately 6% year over year, well below the revenue growth, reflecting continued operating leverage in the business and disciplined management of expenses.

Speaker #3: First quarter non-GAAP R&D was 14 million dollars, or 7% of revenue, up slightly year over year as we continue to invest in innovation and launch new procedural solutions.

Speaker #3: Non-GAAP SG&A was $118 million, which grew 6% and was 62% of revenue, improving by 420 basis points year over year. This was primarily driven by improvements in our variable selling costs and slower depreciation growth.

Speaker #3: As a result of the continued top-line revenue growth and disciplined management of expenses, we continued to see margin expansion and profitability improvements. Adjusted EBITDA was $21 million in the first quarter, representing 11% of revenue and growing 97% year over year.

Todd Koning: As a result of the continued top-line revenue growth and disciplined management of expenses, we continued to see margin expansion and profitability improvements. Adjusted EBITDA was $21 million in Q1, representing 11% of revenue and growing 97% year-over-year. Importantly, we delivered 45% drop through on incremental revenue, demonstrating the scalability of the business model. Overall, we continue to see meaningful operating leverage, consistent margin expansion, and improving profitability aligned with our long-term plan. Turning now to the balance sheet. We ended the quarter with approximately $140 million in cash. Free cash use for the quarter was approximately $11 million at the favorable end of our expected range.

Speaker #3: Importantly, we delivered 45% drop-through on incremental revenue, demonstrating the scalability of the business model. Overall, we continued to see meaningful operating leverage, consistent margin expansion, and improving profitability aligned with our long-term plan.

Speaker #3: Turning now to the balance sheet, we ended the quarter with approximately $140 million in cash. Free cash used for the quarter was approximately $11 million.

Speaker #3: At the favorable end of our expected range. Our cash flow profile continues to reflect positive operating cash flow. With operating cash flow generating cash for the fourth consecutive quarter, while continuing to invest in instruments and inventory to support growth.

Todd Koning: Our cash flow profile continues to reflect positive operating cash flow, with operating cash flow generating cash for the fourth consecutive quarter while continuing to invest in instruments and inventory to support growth. Notably, we invested approximately $33 million in inventory and instruments this past quarter to support the demand we are seeing from our 20% plus growth in surgeon adoption and the corresponding growth in our sales team. Our consistent profitable growth, strong cash generation, and increasingly attractive EBITDA profile, now exceeding $100 million on a trailing twelve-month basis, have positioned us to mature our capital structure. As a result of our strong operating performance and continued progression to a more scaled and profitable financial profile, we were able to announce today that we recently entered into a new Term Loan A and revolving credit facility led by J.P.

Speaker #3: Notably, we invested approximately 33 million dollars in inventory and instruments this past quarter to support the demand we are seeing from our 20% plus growth in surgeon adoption in the corresponding growth in our sales team.

Speaker #3: Our consistent profitable growth, strong cash generation, and increasingly attractive EBITDA profile now exceeding 100 million dollars on a trailing 12-month basis have positioned us to mature our capital structure.

Speaker #3: As a result of our strong operating performance and continued progression to a more scaled and profitable financial profile, we were able to announce today that we recently entered into a new term loan A and revolving credit facility led by JPMorgan and TD Cowan.

Todd Koning: Morgan and TD Cowen. This new bank facility, which replaces our previous Term Loan A and asset-backed revolver, simplifies our capital structure. It extends maturities to 2031 and reduces interest expense by more than $6 million annually. We estimate this new facility will save the company as much as $35 million in interest over the life of the facility. At close, the new loan has a rate of SOFR plus 275 basis points. The new facility matures in May 2031. We are very pleased with the bank syndicate we partnered with in this new facility. This transaction reflects the continued maturation of the business and the continued improvement of our capital structure and credit profile. Turning to the revenue outlook.

Todd Koning: This new bank facility, which replaces our previous Term Loan A and asset-backed revolver, simplifies our capital structure. It extends maturities to 2031 and reduces interest expense by more than $6 million annually. We estimate this new facility will save the company as much as $35 million in interest over the life of the facility. At close, the new loan has a rate of SOFR plus 275 basis points. The new facility matures in May 2031. We are very pleased with the bank syndicate we partnered with in this new facility. This transaction reflects the continued maturation of the business and the continued improvement of our capital structure and credit profile. Turning to the revenue outlook.

Speaker #3: This new bank facility, which replaces our previous term loan and asset-backed revolver, simplifies our capital structure. It extends maturities to 2031 and reduces interest expense by more than 6 million dollars annually.

Speaker #3: We estimate this new facility will save the company as much as 35 million dollars in interest over the life of the facility. At close, the new loan has a rate of SOFR plus 275 basis points.

Speaker #3: The new facility matures in May 2031. We are very pleased with the bank syndicate we partnered with in this new facility. This transaction reflects the continued maturation of the business and the continued improvement of our capital structure and credit profile.

Speaker #3: Turning to the revenue outlook, we now expect total revenue for full year 2026 of approximately 882 million dollars, representing 15% growth year over year.

Todd Koning: We now expect total revenue for full year 2026 of approximately $882 million, representing 15% growth year-over-year. This includes surgical revenue of approximately $805 million, unchanged from our prior guidance, representing 17% growth or a $118 million increase year-over-year. We expect surgical case volume growth in the high teens and average revenue per case to be flat for the full year. We now expect EOS revenue of approximately $77 million, reflecting updated expectations for our EOS business. We take guidance very seriously, and this update reflects our current outlook and a clear, realistic view of near-term performance while reinforcing our confidence in the long-term opportunity. Importantly, we are maintaining our surgical revenue guidance, reflecting continued confidence in the underlying demand and growth drivers of the business.

Speaker #3: This includes surgical revenue of approximately 805 million, unchanged from our prior guidance, representing 17% growth, or a 118 million dollar increase year over year.

Speaker #3: We expect surgical case volume growth in the high teens, and average revenue per case to be flat for the full year. We now expect EOs revenue of approximately $77 million, reflecting updated expectations for our EOs business.

Speaker #3: We take guidance very seriously, and this update reflects our current outlook and a clear, realistic view of near-term performance, while reinforcing our confidence in the long-term opportunity.

Speaker #3: Importantly, we are maintaining our surgical revenue guidance, reflecting continued confidence in the underlying demand and growth drivers of the business. To recap our financial outlook, we expect revenue to grow 15% to 882 million dollars for the full year.

Todd Koning: To recap our financial outlook, we expect revenue to grow 15% to $882 million for the full year. We continue to expect adjusted EBITDA of approximately $134 million, even with the reduced revenue expectations, which reflect the confidence we have in our profitability progression. This is a 15% margin, representing approximately 35% drop through on the incremental revenue dollar year over year. For free cash flow, we continue to expect at least $20 million in free cash flow for the full year, with the Q2 expectations for free cash flow to approximate 0. We recognize adjusting our guidance is a significant decision, we believe that the updated guidance appropriately reflects our current outlook as we remain laser-focused on delivering the profitable sales growth implied in our 2026 guide.

Speaker #3: We continue to expect adjusted EBITDA of approximately 134 million dollars, even with a reduced revenue expectations. Which reflect the confidence we have in our profitability progression.

Speaker #3: This is a 15% margin, representing approximately 35% drop-through on the incremental revenue dollar year over year. For free cash flow, we continue to expect at least 20 million in free cash flow for the full year, with the second quarter expectations for free cash flow to approximate zero.

Speaker #3: We recognize that adjusting our guidance is a significant decision, and we believe that the updated guidance appropriately reflects our current outlook as we remain laser-focused on delivering the profitable sales growth implied in our 2026 guide.

Speaker #3: To put our first quarter financial performance in perspective, we drove 14% overall revenue growth and 17% surgical revenue growth at an annualized scale of approximately $800 million.

Todd Koning: To put our Q1 financial performance in perspective, we drove 14% overall revenue growth and 17% surgical revenue growth at an annualized scale of approximately $800 million, with strong operating leverage translating into significant profitability expansion while making material improvements to our balance sheet. While the quarter didn't live up to our growth expectations, we are confident in our ability to continue to grow at multiples of the market, translating that into profitability and cash flow. With that, I'll turn the call back to Pat.

Speaker #3: With strong operating leverage translating into significant profitability expansion, while making material improvements to our balance sheet. While the quarter didn't live up to our growth expectations, we are confident in our ability to continue to grow at multiples in the market, translating that into profitability and cash flow.

Speaker #3: With that, I'll turn the call back to Pat.

Speaker #1: Thanks, Todd. Our strategy hasn't changed because we know it works. We start with clinical distinction. If it doesn't matter in the OR, it doesn't matter.

Pat Miles: Thanks, Todd. Our strategy hasn't changed because we know it works. We start with clinical distinction. If it doesn't matter in the OR, it doesn't matter. If it makes surgery better in the OR, it matters to us greatly. This is how we have built the best procedural approaches in our industry. Second is surgeon adoption. We don't sell products. We develop approaches that improve surgery, elevate workflows, and build trust. We know this philosophy is effective because our surgeon demand remains very high. Third is the sales engine. We are continually assembling and improving upon a sales force that is disciplined, aligned, and energized and built to scale. Put that together, it's very straightforward. Do something clinically meaningful, surgeons adopt, and we scale it. We're not focused on widgets or, as we like to say, the currency of our business. We assemble procedures from the ground up.

Speaker #1: But if it makes surgery better in the OR, it matters to us greatly. This is how we have built the best procedural approaches in our industry.

Speaker #1: Second is surgeon adoption. We don't sell products; we develop approaches that improve surgery. Elevate workflows and philosophy is effective because our surgeon demand remains very high.

Speaker #1: Third is a sales engine. We are continually assembling and improving upon a sales force that is disciplined, aligned, and energized, and built to scale.

Speaker #1: Put that together, and it's very straightforward. Do something clinically meaningful, surgeons adopt, and we scale it. We're not focused on widgets, or as we like to say, the currency of our business.

Speaker #1: We assemble procedures from the ground up. Everything you see here is designed to work together. That's what has driven and will continue to drive our model.

Pat Miles: Everything you see here is designed to work together. That's what has driven and will continue to drive our model. We don't sell one thing, be it a screw, a plate, an implant, or a rod. We offer procedural approaches that make surgery better. Better procedures over time lead to expanded indications, greater complexity, and increased revenue. While we call that a convoyed sales effect, it's really just a result of designing procedures the right way, leading to better patient outcomes. We start in lateral for a reason, because it is where we have the greatest collection of know-how and how we most distinguish. The surgery works. It's reproducible, efficient, and surgeons feel comfortable with it very quickly. I was in a case last Friday, an L4-5 spondy. 15 minutes in, disc height was restored, under an hour the case was done with minimal blood loss and morbidity.

Speaker #1: We don't sell one thing via the screw, a plate, an implant, or a rod. We offer procedural approaches that make surgery better. And better procedures over time lead to expanded indications, greater complexity, and increased revenue.

Speaker #1: While we call that a convoyed sales effect, it's really just the result of designing procedures the right way, leading to better patient outcomes. We start in lateral for a reason.

Speaker #1: Because it is where we have the greatest collection of know-how, and how we most distinguish. The surgery works—it's reproducible, efficient, and surgeons feel comfortable with it very quickly.

Speaker #1: I was in a case last Friday, and L4-5 spotted me. 15 minutes in, this kite was restored, and under an hour, the case was done with minimal blood loss and morbidity.

Speaker #1: That same case used to take four hours and was a very different experience. Far less reproducible for the surgeon, far less predictable for the patient.

Pat Miles: That same case used to take 4 hours and was a very different experience. Far less reproducible for the surgeon, far less predictable for the patient. PTP has profoundly improved surgery for both surgeon and patient. That's what creates confidence. Once surgeons experience reproducible with success in lateral, they don't stay with just that procedure. They expand their utility into cervical, TLIF, and posterior fixation, all things across the board. Our growth isn't dependent on just adding incremental surgeons. It's expanding indications for procedures they adopt and moving them to other approaches, which is what happens after they trust you. That's what the model is really about, and that's how it compounds. EOS continues to be a big deal for us. While installation timing was a challenge in the quarter, the EOS experience is playing out exactly as we expected.

Speaker #1: PTP has profoundly improved surgery for both surgeon and patient. That's what creates confidence. And once surgeons experience reproducible success in lateral, they don't stay with just that procedure.

Speaker #1: They expand their utility into cervical, TLIF, posterior fixation, all things across the board. Our growth isn't dependent on just adding incremental surgeons. It's expanding indications for procedures they adopt.

Speaker #1: And moving them to other approaches, which is what happens after they trust you. That's what the model is really about, and that's how it compounds.

Speaker #1: EOs continue to be a big deal for us. And while installation timing was a challenge in the quarter, the EOs experience is playing out exactly as we expected.

Speaker #1: First, EOs edge gets us in the door with leading institutions that were hard to impossible for us to access previously. Places like Duke, NYU, HSS, Northwestern, University of Virginia, University of Maryland, just to name a few.

Pat Miles: EOSedge gets us in the door with leading institutions that were hard to impossible for us to access previously. Places like Duke, NYU, HSS, Northwestern, University of Virginia, University of Maryland, just to name a few. EOS becomes part of the workflow, pre-surgical planning, intraoperative reconciliation, and follow-up. It starts driving the case volume, insight, patient-specific rods, alignment, and over time, it builds something more valuable than any one product. It's data generation. That's the moat. We're already seeing EOS impact. About 30% revenue lift per surgeon after insight adoption. EOS isn't just additive, it's multiplicative. What's happening with insight right now is important. We're moving from imaging to intelligence, 3-D alignment, patient-specific planning, starting to predict outcomes, not just react to them. Every case makes the system better. That's how this compounds. We are creating a true structured data advantage.

Speaker #1: Then EOs becomes part of the workflow. Pre-surgical planning, interoperative reconciliation, and follow-up. Then it starts driving the case volume, insight, patient-specific rods, alignment, and over time, it builds something more valuable than any one product.

Speaker #1: It's data generation. That's the moat. We're already seeing EOs impact. About 30% revenue lift per surgeon after insight adoption. So EOs isn't just additive; it's multiplicative.

Speaker #1: What's happening with insight right now is important. We're moving from imaging to intelligence, 3D alignment, patient-specific planning, starting to predict outcomes, not just react to them.

Speaker #1: And every case makes the system better. That's how this compounds. We are creating a true structured data advantage. At the core of this is our ability to take EOs imaging and convert it into quantitative actionable intelligence.

Pat Miles: At the core of this is our ability to take EOS imaging and convert it into quantitative, actionable intelligence. It's becoming smarter, more predictive, and more embedded into clinical decision-making. That's how you build clinical distinction. This is where owning the image and translating into data matters. Valence is early, but it's doing exactly what we need it to do. It fits seamlessly into the surgical workflow. It doesn't get in the way. The footprint is very small. It actually makes the case cleaner, and that's everything. If it disrupts the surgeon's workflow, it doesn't get used. We're seeing strong utility, positive surgeon feedback, and real usage. The same pattern we've seen before, it works, surgeons trust it grows. That's how this is playing out. Japan looks very familiar in a good way. We're leading with lateral, building early confidence, and seeing surgeons engage.

Speaker #1: It's becoming smarter, more predictive, and more embedded into clinical decision-making. That's how you build clinical distinction. This is where owning the image and translating into data matters.

Speaker #1: Valence is early, but it's doing exactly what we need it to do. It fits seamlessly into the surgical workflow; it doesn't get in the way.

Speaker #1: The footprint is very small. It actually makes the case cleaner. And that's everything. If it disrupts the surgeon's workflow, it doesn't get used. We're seeing strong utility, positive surgeon feedback, and real usage.

Speaker #1: And the same pattern we've seen before. It works. Surgeons trust it. It grows. That's how this is playing out. Japan looks very familiar. In a good way.

Speaker #1: We're leading with lateral, building early confidence, and seeing surgeons engage. I have seen it firsthand. I was in the OR a couple of weeks ago, and the surgery was methodical, predictable, and reproducible.

Pat Miles: I have seen it firsthand. I was in the OR a couple of weeks ago, and the surgery was methodical, predictable, and reproducible. This is the same pattern. They adopt, they do more, they expand. It's early, but it's exactly what we wanted to see. In closing, when I think about ATEC, it's pretty straightforward. We're focused 100% in spine. We built real leadership in lateral. We're doing the same thing in deformity with EOS, and we've put the infrastructure in place to scale. Most importantly, we're growing and becoming more profitable at the same time. We've established a system and ecosystem that builds upon itself. Last point, why people are coming here, surgeons and reps, because we care about what they care about. We don't push widgets. We give them procedures and increasingly information. That improves predictability and patient outcomes.

Speaker #1: This is the same pattern. They adopt. They do more. They expand. It's early, but it's exactly what we wanted to see. In closing, when I think about AidTech, it's pretty straightforward.

Speaker #1: We're focused. 100% inspired. We built real leadership in lateral. We're doing the same thing in deformity with EOs. And we put the infrastructure in place to scale.

Speaker #1: Most importantly, we're growing and becoming more profitable at the same time. We've established a system and ecosystem that builds upon itself. Last point, why people are coming here.

Speaker #1: Surgeons and reps. Because we care about what they care about. We don't push widgets. We give them procedures. And increasingly, information. That improves predictability and patient outcomes.

Speaker #1: That drives surgeon interest and adoption. Leading to more cases. That, in turn, attracts sales agents and builds careers. And that's why AidTech is the preferred destination in spot.

Pat Miles: That drives surgeon interest and adoption, leading more cases. That in turn attracts sales agents and builds careers. That's why ATEC is the preferred destination in spine. With that, we will take questions.

Speaker #1: With that, we will take questions.

Speaker #2: As a reminder, cell site analysts planning to ask a question must be registered through the dedicated analyst link included in today's materials. If you have not yet registered, please do so now to be included in the Q&A queue.

Operator 2: As a reminder, sell-side analysts planning to ask a question must be registered through the dedicated analyst link included in today's materials. If you have not yet registered, please do so now to be included in the Q&A queue. We will now open the floor up for questions. In consideration of others, please limit yourself to 1 question. Our first question comes from the line of Mathew Blackman with TD Cowen. Your line is open. Please go ahead.

Operator: As a reminder, sell-side analysts planning to ask a question must be registered through the dedicated analyst link included in today's materials. If you have not yet registered, please do so now to be included in the Q&A queue. We will now open the floor up for questions. In consideration of others, please limit yourself to 1 question. Our first question comes from the line of Mathew Blackman with TD Cowen. Your line is open. Please go ahead.

Speaker #2: If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We will now open the floor up for questions.

Speaker #2: In consideration of others, please limit yourself to one question. Our first question comes from the line of Matthew Blackman, with TD Cowen. Your line is open.

Speaker #2: Please go ahead.

Mathew Blackman: good afternoon, everybody. Can you hear me okay? Hello?

Speaker #3: Good afternoon, everybody. Can you hear me okay? Hello?

Mathew Blackman: good afternoon, everybody. Can you hear me okay? Hello?

Speaker #2: We can hear you. Yes.

Operator 2: We can hear you, yes.

Operator: We can hear you, yes.

Mathew Blackman: You guys hear me? Okay.

Speaker #3: Okay.

Speaker #2: Yeah. Go ahead, Matthew. Thank you.

Operator 2: Yep. Go ahead, Matthew. Thank you.

Operator: Yep. Go ahead, Matthew. Thank you.

Speaker #3: Thank you. So I guess this is not really a fair question, but I do need to ask it. Just in the context of the LRP guys' 2027, do you feel confident, comfortable today reaffirming that billion-dollar revenue number?

Mathew Blackman: Thank you. I guess this is not really a fair question, but I do need to ask it. Just in the context of the LRP guide 2027, do you feel confident, comfortable today reaffirming that billion-dollar revenue number? Obviously, all the other pieces feel like they're in a good place. The billion-dollar top line, particularly in the context of, you know, I think consensus is at about 4% or 5% higher than that. Just any thoughts on that 2027 LRP number where consensus is relative to how things shook out here in Q1 and relative to the new guide, just the big step up that's implied to get to that 2027 number, particularly that consensus number. I'll leave it at that. That's my one question. Thank you. Hello?

Speaker #3: Obviously, all the other pieces feel like they're in a good place. But the billion-dollar top line, particularly in the context of—I think consensus is at about 4 or 5 percent higher than that—just any thoughts on that 2027 LRP number, where consensus is relative to how things shook out here in the first quarter and relative to the new guide?

Speaker #3: Just the big step up that's implied to get to that 2027 number, particularly of that consensus number. I'll leave it at that. That's my one question.

Speaker #3: Thank you. Hello?

Speaker #2: A reminder to unmute yourself locally.

Operator 2: A reminder to unmute yourself locally.

Operator: A reminder to unmute yourself locally.

Speaker #4: Matt, can you hear us? Matt, can you hear us? Matt, can you hear us?

Pat Miles: Matt, can you hear us?

Todd Koning: Matt, can you hear us?

Speaker #3: I can hear you. Now I can hear you. Now I can hear you.

Mathew Blackman: I can hear. Now I can hear you.

Pat Miles: Matt, can you hear us?

Todd Koning: Matt, can you hear us?

Speaker #5: I can hear you now.

Mathew Blackman: I can hear you now.

Speaker #4: Could you repeat your question for us, please?

Pat Miles: Could you repeat your question for us, please?

Todd Koning: Could you repeat your question for us, please?

Speaker #5: Sure. My one question was actually in regards to the 2027 LRP aside from all the margins sort of metrics, which are all tracking above plan, the revenue target, a billion dollars, more so just looking at in the context of where consensus is, which is about 4 to 5 percent higher than that, with the new guidance here for 2026, it's a pretty big incremental revenue step up to get to that number.

Mathew Blackman: Sure. My 1 question was actually in regards to the 2027 LRP. Aside from all the margins, sort of metrics, which are all tracking above plan, the revenue target, $1 billion. More so just looking at in the context of where consensus is, which is about 4% to 5% higher than that. With new guidance here for 2026, it's a pretty big incremental revenue step up to get to that number. Just your level of comfort here sitting today with that LRP revenue number for 2027. To the extent you're willing to comment on where consensus is sitting for 2027, just given some of these puts and takes that you're absorbing here early here in 2026. Thank you so much. Can you guys hear me? Anyone?

Speaker #5: Just your level of comfort here sitting today with that LRP revenue number for 2027 and to the extent you're willing to comment on where consensus is sitting for 2027, just given some of these puts and takes that you're absorbing here early here in 2026.

Speaker #5: Thank you so much. Can you guys hear me? Anyone?

Speaker #2: Hi, Matthew. I can hear you. I think we might be having some technical difficulties with the main speaker line room. Please just hold them momentarily.

Operator 2: Hi, Matthew. I can hear you. I think we might be having some technical difficulties with the main speaker line room. Please just hold momentarily.

Operator: Hi, Matthew. I can hear you. I think we might be having some technical difficulties with the main speaker line room. Please just hold momentarily.

Speaker #5: Okay.

Mathew Blackman: Okay.

Speaker #6: If they can hear you.

Operator 2: They can hear you.

Operator: They can hear you.

Speaker #4: Okay. Can you hear me? Okay. Okay.

Pat Miles: Okay. Can you?

Todd Koning: Okay. Can you?

Speaker #5: Are you guys back? Yes.

Mathew Blackman: You guys back?

Speaker #4: Matt? I'm going to give a shot here. Answering your question. So I think your question ultimately is, given the fact that we've adjusted our guidance to reflect current expectations around our EOs number, I would tell you that the guide in terms of where we are on EOs and the adjustment that we've made is really to reflect some very near-term execution issues that we believe that we've addressed through adding incremental sales talent and downstream marketing resources to the organization.

Todd Koning: Matt?

Mathew Blackman: Yes.

Todd Koning: I'm gonna give a shot here, answering your question. I think your question ultimately is, given the fact that we've adjusted our guidance to reflect our current expectations around our EOS number. I would tell you that the guide in terms of where we are on EOS and the adjustment that we've made is really to reflect some very near-term execution issues that we believe that we've addressed through adding incremental sales talent and downstream marketing resources to the organization. We fundamentally believe that that's gonna address the issues that we have. I think the guidance would suggest that as ultimately, we believe that we've addressed the foundational issues that are execution-related.

Speaker #4: And so we've fundamentally believed that that's going to adjust the issues that we have. And I think the guidance would suggest that as ultimately we believe that we've addressed the foundational issues that our execution-related.

Speaker #4: So as we would expect to exit this year more in line with what our original guide would have assumed, and therefore believe that we are on track to accomplish the goals that we laid out in the context of our long-range plan.

Todd Koning: As we would expect to exit this year more in line with what our original guide would have assumed, and therefore believe that we are on track to accomplish the goals that we laid out in the context of our long-range plan.

Speaker #5: Okay. I'll leave it at that. I'll get back in queue that. Appreciate it.

Mathew Blackman: Okay. I'll leave it at that. I'll get back in queue. Appreciate it.

Speaker #2: Our next question comes from the line of Alan Gong with JP Morgan. Your line is open. Please go ahead.

Operator 2: Our next question comes from the line of Allen Gong with J.P. Morgan. Your line is open. Please go ahead.

Operator: Our next question comes from the line of Allen Gong with J.P. Morgan. Your line is open. Please go ahead.

Speaker #4: Thanks for the question. Mine is kind of on the four trajectory, and specifically the price per case headwind that you saw this quarter. It was good to see volume tick back up to 20% plus, but it sounds like that price per case headwind could be sticking around, especially as cervical and some of your faster-growing businesses sound like they're going to continue to put pressure on that.

Allen Gong: Thanks for the question. Mine is kind of on the pricing per case headwind that you saw this quarter. You know, it was good to see volume tick back up to 20% plus. It sounds like that price per case headwind could be, you know, sticking around, especially as cervical and, you know, some of your faster-growing businesses sound like they're gonna continue to put pressure onto that. Is that the right way to think about it going forward? That, you know, maybe for this year we should be forecasting continued, you know, revenue per case headwinds offset by volume growth?

Speaker #4: Is that the right way to think about it going forward? Is that maybe for this year, we should be forecasting continued revenue per case headwinds offset by volume growth?

Speaker #4: Yeah, Alan. I think that our guidance implies at a high teens volume growth with kind of flattish revenue per procedure growth or essentially no growth on the revenue per procedure.

Todd Koning: Yeah, Allen, I think that, our guidance implies kinda high teens volume growth with kind of flattish revenue per procedure growth or essentially no growth on the revenue per procedure. Your commentary and your understanding, I think, is correct in the sense that, as I called out in my prepared comments, our revenue per procedure growth or the score of the decline this quarter was really a function of mix attributed to both strong cervical procedures, because cervical procedures have a lower revenue per procedure contribution, as well as a strong performance in our international business, which does, currently have a lower revenue per procedure profile as well. Then the third piece is a little bit more execution related associated with our biologics attachment rate.

Speaker #4: And your commentary and your understanding, I think, is correct in the sense that, as I called out in my prepared comments, our revenue per procedure growth, or the score of the decline this quarter, was really a function of mix attributed to both strong cervical procedures—because cervical procedures have a lower revenue per procedure contribution—as well as a strong performance in our international business, which does currently have a lower revenue per procedure profile as well.

Speaker #4: And then the third piece is a little bit more execution-related, associated with our biologics attachment rate. And so again, there, we believe that we've got some upcoming product launches and improvements in our execution associated with that part of the business as well.

Todd Koning: Again, there we believe that we've got some upcoming product launches and improvements in our execution associated with that part of the business as well. As we think about how to model our revenue per procedure for the balance of the year, we're thinking about that to be flat on a year-over-year basis.

Speaker #4: And so, as we think about how to model our revenue per procedure for the balance of the year, we're thinking about that to be flat on a year-over-year basis.

Pat Miles: I would just add, you know, if you look at the places where we make investments, we get a response. You know, if you look across lateral, it grew, ASP grew, it was reflective of exactly what we intended from the build perspective. To me, it's like, you know, frustrating to see the, you know, the mix impact the overall, but, you know, where we're investing and where we're distinguishing ourselves, I think we're prospering.

Speaker #6: I would just add, if you look at the places where we make investments we get a response. And if you look across lateral it grew, ASB grew, it was reflective of exactly what we intended from the build perspective.

Speaker #6: And so to me, it's like frustrating to see that the mix impact the overall, but where we're investing and where we're distinguishing ourselves, I think we're prospering.

Speaker #4: Yeah. I think that's a good point, Pat, in the context of the prepared remarks we said. Lateral grew 2%, revenue per procedure, ALIF grew, I think, 4%, and ultimately cervical grew 8%.

Todd Koning: Yeah, I think that's a good point, Pat. In the context of the prepared remarks, we said lateral grew 2% revenue per procedure, ALIF grew, I think 4%, and ultimately cervical grew 8%. We've made significant investments in those areas.

Speaker #4: We've made significant investments in those areas.

Speaker #6: Right.

Pat Miles: Right.

Speaker #4: Got it. And then, I guess a question on your ability to reiterate adjusted EBITDA—it's definitely good to see you able to kind of keep costs under control, but it seems as though there are some areas where you potentially may need to increase investment, such as what you had talked about for EOs Insight.

Allen Gong: Got it. I guess a question on, you know, your ability to like reiterate, adjust the EBITDA. You know, it's definitely good to see you able to, you know, kind of keep costs under control. You know, seems as though, you know, there are some root areas where you potentially may need to increase investment, you know, such as what you had talked about for EOS Insight. How should we think about, you know, balancing potential need for increased investment and, you know, driving revenue growth? How do you kind of balance those two things? Where are your priorities? Thank you.

Speaker #4: So how should we think about balancing potential need for increased investment and driving revenue growth? How do you kind of balance those two things where your priorities?

Speaker #4: Thank you.

Speaker #6: Yeah. I think it's an interesting question. And one of the things that I feel great about is the infrastructure is in place. And what's interesting is when you grow 39% year over year in EOs edge base, just the opportunity for you to exploit that base is very, very evident.

Pat Miles: Yeah, you know, I think it's an interesting question. You know, one of the things that I feel great about is the infrastructure's in place. You know, what's interesting is when you grow 39% year over year in EOSedge base, just the opportunity for you to exploit that base is very evident. What's maddening about this business is the installation element. What happens is there's always a build-out with regard to installation. It makes some of the installation choppy, which the revenue recognition reflects the installation. I don't see it as an investment requirement for us to grow. You know, we're growing 30% by surgeon in accounts that have EOS.

Speaker #6: What's maddening about this business is the installation element. And what happens is there's always a buildout with regard to installation. So it makes some of the installation choppy, which the revenue reflects the installation.

Speaker #6: And so I don't see it as an investment requirement for us to grow. We're growing 30% by surgeon in accounts that have EOs. The thesis is totally intact.

Pat Miles: The thesis is totally intact, like, to me, I'm thrilled about the reflection of the demand profile around those places where we have systems installed, and we have the EOS Insight software installed. To me, this is just, you know, the quarter-by-quarter dynamics of a long-term execution. I'm totally thrilled about the EOS business in general, irritated by the lumpiness, but don't see some new investment profile required at all.

Speaker #6: And that's to me, I'm thrilled about the reflection of the demand profile around those places where we have systems installed and we have the EOs insight software installed.

Speaker #6: And so to me, this is just the quarter-by-quarter dynamics of a long-term execution. And so I'm totally thrilled about the EOs business in general.

Speaker #6: Irritated by the lumpiness, but don't see some new investment profile required at all.

Speaker #2: Okay. Our next question comes from the line of Matt Mixick with Barclays. Your line is open. Please go ahead.

Operator 2: Okay. Our next question comes from the line of Matt Miksic with Barclays. Your line is open. Please go ahead.

Operator: Okay. Our next question comes from the line of Matt Miksic with Barclays. Your line is open. Please go ahead.

Speaker #5: Hey, can you hear me okay?

Matt Miksic: Hey, can you hear me okay?

Speaker #4: Yeah, we can hear you.

Pat Miles: Yeah, we can hear you.

Todd Koning: Yeah, we can hear you.

Matt Miksic: Oh, excellent. Thank you. I know this call seems to be moving a little bit, a little bit slow here with the audio thing, so I'll try to keep this tight and to 1. Maybe just, obviously the numbers in surgical, putting the aside for a sec, came in a little bit later than expected. You know, we didn't hear or see anything in the quarter that would suggest there was kind of anything quote like wrong with spine or anything tripping up companies in spine. You know, can you maybe talk a little bit about if there was some phasing in Q1, if there was some, I don't know, new territories catching up, difficult comps like regional? I don't know if there was storms. Not many companies have said much about storms, but was there anything that you'd say, "You know what?

Speaker #5: Excellent. Thank you. So I know this call is going to be moving a little bit slow here with the audio thing. So I'll try to keep this tight and to one.

Speaker #5: Maybe just obviously, the numbers in surgical, putting EOs aside for a sec, came in a little bit later than expected. We didn't hear or see anything in the quarter that would suggest there was kind of anything "wrong with spine" or anything tripping up companies in spine.

Matt Miksic: aside for a sec, came in a little bit later than expected. You know, we didn't hear or see anything in the quarter that would suggest there was kind of anything quote like wrong with spine or anything tripping up companies in spine. You know, can you maybe talk a little bit about if there was some phasing in Q1, if there was some, I don't know, new territories catching up, difficult comps like regional? I don't know if there was storms. Not many companies have said much about storms, but was there anything that you'd say, "You know what?

Speaker #5: Can you maybe talk a little bit about if there was some phasing in Q1, if there was some - I don't know - new territories catching up, difficult comps, like regional?

Speaker #5: I don't know if there were storms—not many companies would say much about storms—but was that a factor? Was there anything that you'd say, 'You know what?'

Speaker #5: There's really no better quarter if this"? Any kind of color and maybe confidence of sequential performance, either up sequentially, acceleration sequentially, or anything you can help us understand about the sequence from here to get to your new full year number?

Matt Miksic: This would've been a better quarter if, you know, this, any kind of color and maybe confidence of sequential, you know, performance, either, you know, up sequentially, acceleration sequentially, anything you can help us understand about the sequence from here to get to your new full year number? Thanks so much.

Speaker #5: And thanks so much.

Speaker #6: Yeah. Matt, I'll start with just a little bit of color and then let Todd jump in. But I would say the most comforting part is that the momentum reflected in the business where we most distinguish continues to be profoundly robust.

Pat Miles: Yeah. Matt, I'll start with just a little bit of color and then let Todd jump in. I, you know, I would say, you know, the most comforting part is that the momentum reflected in the business where we most distinguished continues to be profoundly robust. That's the part that I think we find most comforting. You know, clearly the surgeon additions up over 20%, it speaks to a business in demand. It was kind of a goofy quarter. I'll let Todd provide his view, but it's like, you know, we're seeing strength, you know, right out of the gate in Q2.

Speaker #6: And so that's the part that I think we find most comforting. And clearly, the surge in additions up over 20%, it speaks to a business in demand.

Speaker #6: And so it was kind of a goofy quarter. I'll let Todd provide his view, but it's like we're seeing strength right out of the gate in Q2.

Speaker #6: And so it's to me, this is quarter-by-quarter lumpiness.

Pat Miles: It's, to me it's, this is, quarter by quarter lumpiness.

Speaker #4: And Matt, maybe just to put a little bit more finer point on that or add to that, I think your question about the Q1 in total, I mean, clearly, there's been some there was some weather in kind of late January I think FedEx was restrained for almost an entire week I think the Northeast had two storms.

Todd Koning: Matt, maybe just to put a little bit more finer point on that or add to that. You know, I think your question about like the Q1 in total, I mean, clearly there was some weather in kind of late January. You know, I think FedEx was restrained for almost an entire week. I think the Northeast had 2 storms. Now there's weather every year, so how much of that is discrete impact here? Probably some amount, given the fact I think there was more weather this year than historically is normal. I think there's that consideration.

Speaker #4: Now, there's weather every year. So how much of that is discrete impact here? Probably some amount given the fact that I think there was more weather this year than historically is normal.

Speaker #4: So I think there's that consideration. I think the question of, really, just at the end of the day, where we exited March was probably a bit softer than we had expected it to end.

Todd Koning: you know, I think the question of really just, you know, at the end of the day, where we exited March was probably a bit softer than we had expected it to end. you know, I think we attribute that to just some of the growth that we didn't see in our traditional posterior kind of open procedures, and some bio attachment along with that. I think to Pat's point, though, the good news is, you know, you started to see definitely a sequential improvement in April, which ultimately gives us confidence as we grow into the second quarter and the seasonality we see from Q1 to Q2. I think it's important to kind of keep in context that historically, the seasonality between kind of April and March and all that, it's a little bit hard to predict.

Speaker #4: And I think we attribute that to just some of the growth that we didn't see in our traditional posterior kind of open procedures. And some bioattachment along with that.

Speaker #4: I think to Pat's point, though, the good news is you started to see definitely a sequential improvement in April, which ultimately gives us confidence as we grow into the second quarter and the seasonality we see from Q1 to Q2.

Speaker #4: And so I think it's important to kind of keep in context that historically, the seasonality between kind of April and March and all of that's a little bit hard to predict.

Speaker #4: And so fundamentally, I think we believe that we're in a good spot relative to our guidance. And our guidance philosophy hasn't changed. And so I think the other thing just more structurally going from Q1 to Q2, you obviously have the deformity season that comes up, starts in kind of late May and into June.

Todd Koning: Fundamentally, I think we believe that we're in a good spot relative to our guidance, and our guidance philosophy hasn't changed. You know, I think the other thing, just more structurally going from Q1 to Q2, you obviously have the deformity season that comes up, starts in kinda late May and into June. That will ultimately drive some improvement there. When you think about our overall demand profile and the investment we've made in sets and inventory to support that increased demand, that's there.

Speaker #4: And so that will ultimately drive some improvement there. When you think about our overall demand profile and the investment we've made in sets and inventory to support that increased demand, that's there.

Speaker #4: And again, I think we take a step back and we look at the overall volume growth and the surge in adoption and that is really what gives us a level of confidence that we're in the same spot relative to where we expected to be coming into the year on a full-year growth basis expectation.

Todd Koning: you know, again, I think we take a step back and we look at the overall, volume growth and the surgeon adoption, and that is really what gives us a level of confidence that, you know, we're in the same spot relative to where we expected to be coming into the year on a full year growth basis expectation. you know, I think we ultimately hang our hat on the strong surgeon adoption and the volumetric components of the business.

Speaker #4: And so I think we ultimately hang our hat on the strong surge in adoption, and the volumetric components of the business.

Speaker #6: It's a history you don't see.

Pat Miles: History will see.

Speaker #5: And thank you, Pete. Maybe just one I don't know if you can still hear me, but just I noticed that surge in adoption was up year over year.

Matt Miksic: I guess just.

Todd Koning: Yeah.

Matt Miksic: Maybe just I don't know if you can still hear me, but just, you know, I noticed that surgeon adoption was up year-over-year. I mean, it was obviously up 23%, but, you know, it's faster than a year ago, surgeon adoption growth. Anything just on the same thematic question of like acceleration or trends or momentum. Is that, you know, how much of a leading indicator is that, the fact that it's growing faster now? You know, what would we attribute that to? Does that, does that, you know, tell us anything about what to expect in the coming quarters as well? The fact that that's, I guess, accelerating instead of slowing. Thanks again for taking the question.

Speaker #5: I mean, it was obviously up 23%, but it's faster than a year ago surge in adoption growth. And anything just on the same thematic question of acceleration of trends or momentum and is that how much of a leading indicator is that?

Speaker #5: The fact that it's growing faster now, what would you attribute that to? And does that tell us anything about what to expect in the coming quarters?

Speaker #5: As well, the fact that that's, I guess, accelerating instead of slowing? And thanks again for taking the question.

Speaker #6: Yeah. Again, my general sense is the volume of people adopting our lateral portfolio is growing. And it's growing at an expedient rate. And so the frustrating part is, I think, to Todd's point, it's like you see the growth profile, you see the price surgery, with regard to the lateral contribution, and then the stuff where I think is more conventional, I would say short-segment surgery that's open, that is like everybody else's, just seem flat.

Pat Miles: Yeah. I, you know, my, again, my, my general sense is the volume of people adopting our lateral portfolio is growing and is growing at an expedient rate. The frustrating part is, I think to Todd's point, is it's like, you know, you see the growth profile, you see the price per surgery with regard to the lateral contribution. Then it, the stuff where I think is more conventional, I would say short segment surgery that's open, that is like everybody else's, just seem flat. The biologic impact I think was bad. You know, Theradaptive can't come fast enough. It's one of those things where it's like, you know, again, I think the procedural strategy has been well adopted.

Speaker #6: And so and then the biologic impact, I think, was bad. Thyroidactive can't come fast enough. And so it's one of those things where it's like again, I think the procedural strategy has been well adopted.

Speaker #6: I think the EO stuff is working as planned. The clearly distinguishing in lateral but when we're not profoundly different than somebody else, we don't do profoundly better than everybody else.

Pat Miles: I think the EOS stuff is working as planned, the clearly distinguishing and lateral. You know, when we're not profoundly different than somebody else, we don't do profoundly better than everybody else.

Speaker #4: I think the only thing I'd add there, Matt, would just be the continuing growing contribution from our international business. I think that both is a surge in adoption story as well as a revenue contributor and a growing revenue contributor as we grow through the rest of the year.

Todd Koning: I think the only thing I'd add there, Matt, would just be the continuing growing contribution from our international business. I think that both is a surgeon adoption story as well as a revenue contributor, and a growing revenue contributor as we grow through the rest of the year.

Speaker #6: Yeah. And the beauty of that thing is it's completely reflective of the lateral thesis that the company's been built on. And we're seeing the same type of adoption dynamics happen internationally.

Pat Miles: Yeah. The beauty of that thing is it's completely reflective of the lateral thesis that the company's been built on, and we're seeing the same type of adoption dynamics happen internationally. To me, that's a great reflection.

Speaker #6: So to me, that's a great reflection.

Speaker #2: Our next question comes from the line of Matthew O'Brien. With Piper Sandler. Your line is open. Please go ahead.

Operator 2: Our next question comes from the line of Matthew O'Brien with Piper Sandler. Your line is open. Please go ahead.

Operator: Our next question comes from the line of Matthew O'Brien with Piper Sandler. Your line is open. Please go ahead.

Speaker #7: Good afternoon. This is Ana. I forgot—thanks for taking our question. I wanted to ask about the cadence for the rest of the year.

Anna: Good afternoon. This is Anna. I'm forgot. Thanks for taking our question. I wanted to ask on sort of the cadence for the rest of the year. You know, it sounds like the majority of work has been done here in terms of realigning the sales team for EOS, you know, new reps coming on board, some investment and additional marketing resources. I presume it'll take some time for these new reps to ramp, though. Just as we look at the cadence for the rest of the year, you know, when would you anticipate things in the EOS franchise getting back on track for foreseeable future? Thanks.

[Analyst] (Piper Sandler): Good afternoon. This is Anna. I'm forgot. Thanks for taking our question. I wanted to ask on sort of the cadence for the rest of the year. You know, it sounds like the majority of work has been done here in terms of realigning the sales team for EOS, you know, new reps coming on board, some investment and additional marketing resources. I presume it'll take some time for these new reps to ramp, though. Just as we look at the cadence for the rest of the year, you know, when would you anticipate things in the EOS franchise getting back on track for foreseeable future? Thanks.

Speaker #7: It sounds like the majority of work has been done here in terms of realigning the sales team. For EOs, new reps coming on board.

Speaker #7: Some investment and additional marketing resources. So I presume it'll take some time for these new reps to ramp those. So just as we look at the cadence for the rest of the year, when would you anticipate things in the EOs for enterprise getting back on track for foreseeable future?

Speaker #7: Thanks.

Todd Koning: Yeah. This is Todd. I think our expectation is that begins to contribute in a more full way in the H2. That's really how we're thinking about it. We think the overall growth in the Q2 should be similar to our Q1 results at about 14%. I think our guide implies essentially 17% overall revenue growth in the H2 as EOS contributes more meaningfully.

Speaker #4: Yeah. This is Todd. I think our expectation is that begins to contribute in a more full way in the second half. And so that's really how we're thinking about it.

Speaker #4: We think the overall growth in the second quarter should be similar to our first quarter results at about 14%. And I think our guide implies essentially 17% overall revenue growth in the second half as EOs contribute to more meaningfully.

Pat Miles: You know, just to make sure that I appreciate the question too. It's like, you know, the cadence of adding surgical sales rep has been totally consistent, and they're coming from all players. You know, what you're getting is just the consistency of the reflection of attracting more salespeople. That, that's going on as it has in the same cadence and has not slowed at all. It's, you know, that part I think is just continuing. If anything, really the focal part of the frustration is around EOS placements. The dynamic is we got to continue to improve as a capital equipment provider.

Speaker #6: Just to make sure that I appreciate the question too. It's like the cadence of adding surgical sales rep has been totally consistent. And they're coming from all players.

Speaker #6: And so what you're getting is just the consistency of the reflection of attracting more salespeople. So that's going on as it has in the same cadence and is not slowed at all.

Speaker #6: And so that part, I think, is just continuing. If anything, really, the focal part of the frustration is around EOs placements. And the dynamic is we've got to continue to improve as a capital equipment provider.

Pat Miles: You know, when you miss by 3 units or whatever, what are 5 units, it like in the grand scheme of things, what it doesn't do is impede the belief in being or what's going on in the field. What's going on in the field is absolute expansion of the utility of the device once you get in place.

Speaker #6: But when you miss by three units or whatever what are five units, in the grand scheme of things, what it doesn't do is impede the belief in being or what's going on in the field.

Speaker #6: And what's going on in the field is absolute expansion of the utility of the device once you get in place.

Speaker #2: Our next question comes from the line of David Saxon. With Nida. Your line is open. Please go ahead.

Operator 2: Our next question comes from the line of David Saxon with Needham & Company. Your line is open.

Operator: Our next question comes from the line of David Saxon with Needham & Company. Your line is open.

David Saxon: Hey.

Operator 2: Please go ahead.

Operator: Please go ahead.

Speaker #8: Yeah. Great. Good afternoon. Thanks for taking my questions. Maybe to start, I just want to clarify Todd, the comment you just made about second quarter.

David Saxon: Yeah, great. Good afternoon. Thanks for taking my questions. Maybe to start, I just want to clarify, Todd, the comment you just made about Q2. You said something about 14. Can you clarify, is that $14 million for EOS for Q2 or 14% overall growth for Q2?

Speaker #8: You said something about 14. Can you clarify, is that 14 million for EOs for the second quarter or 14% overall growth for the second quarter?

Speaker #4: My commentary David was that we would expect the overall growth to mirror first quarter's overall growth at 14%.

Todd Koning: My commentary, David, was that we would expect the overall growth to mirror Q1's overall growth at 14%.

Speaker #8: Okay, great. And then my one question is just a follow-up on the revenue per case assumption in the guidance. So, specifically, what's embedded in that in terms of how U.S. case mix trends over the balance of the year and the biologics attachment rate?

David Saxon: Okay, great. My one question is just on a follow-up on the revenue per case assumption in the guidance. Like, specifically, what's embedded in that in terms of how US case mix trends over the balance of the year and biologics attachment rate? Like, really just trying to understand if cervical mix continues to be strong and, you know, no change to the biologics attachment rate, like, kind of what's the risk to the flat revenue per case assumption? Thanks so much.

Speaker #8: Really just trying to understand if cervical mix continues to be strong and no change to the biologics attachment rate kind of what's the risk to the flat revenue per case assumption?

Speaker #8: Thanks so much.

Speaker #4: Yeah, David. I think the idea here is that we would continue to see a relative contribution of cervical to the overall business as we've seen the strength of its growth over the last really number of quarters.

Todd Koning: Yeah, David. I think the idea here is that we would continue to see a relative contribution of cervical to the overall business as we've seen the strength of its growth over the last really number of quarters. That business continues to grow and we continue to drive adoption through that procedural mix. You know, we saw about 38% biologics attachment rate. We would expect that to go up a couple points. You know, I think things that would make sense there or why we believe that is, 1, just a greater sales force execution and focus on that front, as well as the fact that you enter deformity season. Those deformity season cases tend to be longer constructs.

Speaker #4: That business continues to grow and we continue to drive adoption through that procedural mix. We saw about 38% biologics attachment rate. We would expect that to go up a couple of points.

Speaker #4: I think things that would make sense there are why we believe that is, one, just a greater Salesforce execution and focus on that front, as well as the fact that you entered deformity season.

Speaker #4: And those deformity season cases tend to be longer, longer constructs. So one, you get just more revenue per case on average from that. Plus, they tend to have a higher utilization of biologics as well.

Todd Koning: One, you get just more revenue per case on average from that, plus they tend to have a higher utilization of biologics as well. That's more or less where we believe that the growth in, or excuse me, that is how I constructed the revenue per procedure math for the balance of the year.

Speaker #4: And so that's more or less where we believe that the growth in or excuse me, the that is how I constructed the revenue for procedure math for the balance of the year.

Speaker #8: Great. Thank you.

David Saxon: Great. Thank you.

Speaker #2: Our next question comes from the line of Caitlin Roberts. With Canaccord Genuity. Your line is open. Please go ahead.

Operator 2: Question comes from the line of Caitlin Cronin with Canaccord Genuity. Your line is open. Please go ahead.

Operator: Question comes from the line of Caitlin Cronin with Canaccord Genuity. Your line is open. Please go ahead.

Speaker #9: Hi, thanks for taking the question. Maybe just to turn back to EOs, and I think you noted the weakness was execution-related. If you could provide any more color on that specifically.

Caitlin Cronin: Hi. Thanks for taking the question. Maybe just to turn back to EOS, and I think you noted the weakness was, you know, execution related. If you could provide any more color on that specifically, and if any of the weakness was related to, you know, more the capital environment or appetite by facilities. Just following on from that, do any of those hurdles translate into, you know, the other capital parts of your business with Valence and Navigation?

Caitlin Robert: Hi. Thanks for taking the question. Maybe just to turn back to EOS, and I think you noted the weakness was, you know, execution related. If you could provide any more color on that specifically, and if any of the weakness was related to, you know, more the capital environment or appetite by facilities. Just following on from that, do any of those hurdles translate into, you know, the other capital parts of your business with Valence and Navigation?

Speaker #9: And if any of the weakness was related to more the capital environment or appetite by facilities. And then just following on from that, do any of those hurdles translate into the other capital parts of your business with Valence and Navigation?

Speaker #4: Yeah. Thanks for the question. I would say that the EOs thing bleeding into the Valence thing is really a non-starter. One of the challenges associated with EOs has always been the structural build-out.

Pat Miles: Yeah. Thanks for the question. I would say that the EOS thing bleeding into the Valence thing is really a non-starter. You know, one of the challenges associated with EOS has always been the structural build-out. It's like, literally you're doing construction on a room just based upon the size of the unit. What happens is if you have more EOS unit that requires more build-out, the predictability associated with the delivery becomes or the installation becomes less.

Speaker #4: It's literally you're doing construction on a room just based upon the size of the unit. And so what happens is if you have more EOs unit that requires more build-out, the predictability associated with the delivery becomes or the installation becomes less.

Speaker #4: And it's one of the things where it's like when we said, "Hey, we're going to get better with regard to the sales piece. We're going to get better with regard to the downstream marketing piece.

Pat Miles: It's one of those things where it's like when we said, Hey, we're going to get better with regard to the sales piece, we're going to get better with regard to the downstream marketing piece, and we're going to get better with regard to the support piece. The support piece really is making sure that we're aligned with regard to the timing associated with the installation. Those things are somewhat challenging. They have nothing to do with Valence. You know, I always hate, you know, to suggest that we're a proxy for anything. You know, with regard to understanding the capital equipment environment, it's just tough to tell. We're irritated over the lack of execution. We committed to a number of units, we didn't fulfill the number of units.

Speaker #4: And we're going to get better with regard to the support piece." The support piece really is making sure that we're aligned with regard to the timing associated with the installation.

Speaker #4: And so those things are somewhat challenging. They have nothing to do with Valence. And I always hate to suggest that we're a proxy for anything.

Speaker #4: With regard to understanding the capital equipment environment, it's just tough to tell. And so we're irritated over the lack of execution. We committed to a number of units.

Speaker #4: We didn't fulfill the number of units. I got to tell you, the demand profile is phenomenal. And the thesis of it is great. The construction and installation is less good.

Pat Miles: I gotta tell you, the demand profile is phenomenal and the thesis of it is great. The construction and installation is less good. That's kind of the way I think about the business. I don't see it bleeding into anything else. I just see it as an execution flaw.

Speaker #4: And so that's kind of the way I think about the business. But I don't see it bleeding into anything else. I just see it as an execution flaw.

Speaker #2: Thank you. Our next question comes from the line of Tom Steffen with Stifel. Your line is open. Please go ahead.

Caitlin Cronin: Thank you.

Caitlin Robert: Thank you.

Operator 2: Our next question comes from the line of Thomas Stephan with Stifel. Your line is open. Please go ahead.

Operator: Our next question comes from the line of Thomas Stephan with Stifel. Your line is open. Please go ahead.

Speaker #8: Great. Hey, guys. Thanks for taking the questions. I wanted to ask about the 2026 surgical outlook. Hopefully, I have some of these numbers correct.

Thomas Stephan: Great. Hey, guys. Thanks for taking the questions. Wanted to ask about the 2026 surgical outlook. Hopefully, I have some of these numbers correct. I think surgical up 17% in the quarter, full year guidance also 17%. Comps get much more difficult. You talked about March below expectations, April came back. Business seemingly has become a little unpredictable, I feel like, in the last couple quarters. Todd or Pat, you know, what gives you the confidence in maintaining the outlook for surgical when you deselled again in Q1, and with guidance implying the stacks re-accelerate? Is it April? Are there incremental drivers, you know, that can continue to support growth? Thanks.

Tom Stephan: Great. Hey, guys. Thanks for taking the questions. Wanted to ask about the 2026 surgical outlook. Hopefully, I have some of these numbers correct. I think surgical up 17% in the quarter, full year guidance also 17%. Comps get much more difficult. You talked about March below expectations, April came back. Business seemingly has become a little unpredictable, I feel like, in the last couple quarters. Todd or Pat, you know, what gives you the confidence in maintaining the outlook for surgical when you deselled again in Q1, and with guidance implying the stacks re-accelerate? Is it April? Are there incremental drivers, you know, that can continue to support growth? Thanks.

Speaker #8: I think surgical up 17% in the quarter. Full year guidance also 17%. Comps get much more difficult. You talked about March below expectations, but April came back.

Speaker #8: Business seemingly has become a little unpredictable, I feel like, in the last couple of quarters. So Todd or Pat, what gives you the confidence in maintaining the outlook for surgical when you deselled again in 1Q and with guidance implying the stacks re-accelerate?

Speaker #8: Is it April? Are there incremental drivers? That can continue to support growth. Thanks.

Speaker #4: Yeah. This is Pat. It's like I'll always provide the color and all that. Todd, make me right or not based upon the numbers. The thing that gives us confidence is just the demand profile around the procedures that most distinguish us and the volume of surgeons that continue to flock toward us.

Pat Miles: Yeah, this is Pat. I, you know, it's like, I'll always provide the color and I'll let Todd, you know, make me right or not based upon the numbers. The thing that gives us confidence is just the demand profile around the procedures that most distinguish us and the volume of surgeons that continue to flock toward us. Like, to see a historical growth rate in the volume of surgeons and then to see historically what they've done from a utilization perspective, gives us a lot of confidence. Like, looking at kind of the demographics of the types of surgery and seeing, you know, that, you know, what we were losing more, is some conventional stuff.

Speaker #4: To see a historical growth rate and the volume of surgeons and then to see historically what they've done from a utilization perspective gives us a lot of confidence.

Speaker #4: Looking at kind of the demographics of the types of surgery and seeing that what we were losing more is some conventional stuff. Q2 and Q3 are conventional fests, if you will.

Pat Miles: Q2 and Q3 are conventional sets, if you will. It's a lot of long reconstruction stuff. The way that EOS is impacting our business, I would say that gives us a lot of confidence. As I look at just the demographics of how the revenue was reflected, I remain totally bullish. Clearly, the comps get harder, but it's one of those things where it's like when the business is coming in as you expected it from a procedural type standpoint and you see the surgeons joining, for me, it just gives me, it feels like a tailwind.

Speaker #4: It's a lot of long reconstruction stuff. The way that EOs is impacting our business, I would say that gives us a lot of confidence.

Speaker #4: And so, as I look at just the demographics of how the revenue was reflected, I remain totally bullish. And so clearly, the comps get harder, but it's one of those things where it's like, when the business is coming in as you expected it from a procedural-type standpoint and you see the surgeons joining, for me, it just gives me—it feels like a tailwind.

Speaker #8: And Tom, I think your question is totally a fair one in terms of the deceleration that we've seen and how do we think about Q2 onwards in light of our Q1 performance.

Todd Koning: Thomas Stephan, I think your question's totally a fair one in terms of, you know, the deceleration that we've seen and how do we think about Q2 onwards in light of our Q1 performance. I would point to a couple things. One, you know, I made the comment about March was not as good as we had expected, although April has rebounded and feel like that gives us a good platform into Q2. I think fundamentally, a lot of this is where do you start? I think the April start is a confidence builder there. Second point I'd make is just the structural increase from Q1 to Q2 in terms of the deformity season.

Speaker #8: And so I would point to a couple of things. One, I've made the comment about March was not as good as we had expected.

Speaker #8: Although April has rebounded and feel like that gives us a good platform into Q2. And so I think fundamentally, a lot of this is where do you start.

Speaker #8: And so I think the April start is a confidence builder there. Second point I'd make is just the structural increase from Q1 to Q2 in terms of the deformity season.

Todd Koning: We've invested in incremental assets, whether that be small stature sets or, and/or rather, patient positioners. Like, we know that demand is there, and so we have invested to fulfill the expectation of that demand to come. That happens both in Q2 and Q3. I think we talked about our ability to drive increased biologics attach rate through focused sales execution efforts. The international contribution continues to get better as we walk through the year, and I think that has been demonstrated as we've gone, and so our confidence there is high as well.

Speaker #8: We've invested in incremental assets, whether that be small stature sets or and/or rather patient positioners. And so we know that demand is there. And so we have invested to fulfill the expectation of that demand to come.

Speaker #8: And that happens both in Q2 and Q3. I think we talked about our ability to drive increased biologics attachment rate through focused sales execution efforts.

Speaker #8: The international contribution continues to get better as we walk through the year. And I think that has been demonstrated as we've gone. And so our confidence there is high as well.

Speaker #8: And so I think for all those reasons, we believe that the path from Q1 to Q2 and onwards is very much intact. And then I think just if you look at the total surgeon adoption, again, I think it's just a great leading indicator.

Todd Koning: I think for all those reasons, we believe that the path from, you know, Q1 to Q2 and onwards, is very much intact. Then I think just if you look at the total surgeon adoption, again, I think it's just a great leading indicator. It historically has been. I think, you know, to have sales, you got to have customers, and the customers are growing at 20% plus.

Speaker #8: It historically has been and I think to have sales, you got to have customers. And the customers are growing at 20% plus. Got it.

Thomas Stephan: Got it. Thanks, guys.

Tom Stephan: Got it. Thanks, guys.

Speaker #8: Thanks, guys.

Speaker #2: Our next question comes from the line of Ross Osborne with Wells Fargo. Your line is open. Please go ahead.

Operator 2: Our next question comes from the line of Ross Osborn with Wells Fargo. Your line is open. Please go ahead.

Operator: Our next question comes from the line of Ross Osborn with Wells Fargo. Your line is open. Please go ahead.

Speaker #9: Hi. Thanks for taking our questions. So maybe moving on to Valence, would you discuss placements to date and what early pull-through numbers look like?

Ross Osborn: Hi. Thanks for taking our questions. Maybe moving on to Valence, would you discuss placements to date and what early pull-through numbers look like?

Speaker #4: Yeah. Not going to speak to the specific numbers. And I think what we at least how we characterize this year was one of let's get as much experience as we can.

Pat Miles: Yeah. Not gonna speak to the specific numbers, you know, I think what we or at least how we characterized this year was one of let's get as much experience as we can. Let's make sure the product is absolutely perfect. It is doing everything that we've expected. I would tell you that, you know, these are things that you won't appreciate is my presumption. Clearly not trying to be insulting, there's an infield camera that is hugely elegant, and just the ability to have the surgeon control the elements in the room, is exactly what you want. You also don't want a huge piece of capital. It's not a huge piece of capital. It's doing everything that we've expected. It's been utilized in PTP mostly.

Speaker #4: Let's make sure the product is absolutely perfect. It is doing everything that we've expected. And so I would tell you that and these are things that you won't appreciate is my presumption clearly not trying to be insulting, but there's an infield camera that is hugely elegant.

Speaker #4: And just the ability to have the surgeon control the elements in the room is exactly what you want. You also don't want a huge piece of capital.

Speaker #4: It's not a huge piece of capital. And so it's doing everything that we've expected. It's been utilized in PTP mostly. It's trending toward more than the numbers that we've provided for the year as a target.

Pat Miles: You know, it's trending toward more than the numbers that we provided for the year as a target. We're totally bullish on it. Yeah, super excited about just the type of clinical impact it can have and the workflow that's been initiated with its design. Again, hugely confident, hugely bullish. The ability to integrate the best neurophysiology in class with the most elegant, seamlessly effective workflow will increase the volume of PTP users. There's no question in my mind. It's going as planned.

Speaker #4: And so we're totally bullish on it. Super excited about just the type of clinical impact it can have and the workflow that's been initiated with its design.

Speaker #4: And so again, hugely confident, hugely bullish. The ability to integrate the best neurophysiology in class with the most elegant seamlessly effective workflow will increase the volume of PTP users.

Speaker #4: There's no question in my mind. So it's going as planned.

Speaker #9: Thank you.

Ross Osborn: Thank you.

Speaker #2: Our next question comes from the line of Keith Hinton. With Freedom Capital Markets, your line is open. Please go ahead.

Operator 2: Our next question comes from the line of Keith Hinton with Freedom Capital Markets. Your line is open. Please go ahead.

Operator: Our next question comes from the line of Keith Hinton with Freedom Capital Markets. Your line is open. Please go ahead.

Speaker #10: Oh, hey guys. Good afternoon. This is Nakul on for Keith. First of all, thank you for taking our questions. We have two questions. The first one being, the revenue per procedure appears to be down approximately 4% year over year.

Nakul: Hey, guys. Good afternoon. This is Nakul, one for Keith. First of all, thank you for taking our questions. We have two questions. The first one being the revenue per procedure appearing to be down approximately 4% year-over-year. We think that's the first case of down year-over-year since at least 2021 or maybe earlier. What are the drivers there, and how are you thinking about revenue per procedures for the rest of 2026 and in the out years?

[Analyst] (Freedom Capital Markets): Hey, guys. Good afternoon. This is Nakul, one for Keith. First of all, thank you for taking our questions. We have two questions. The first one being the revenue per procedure appearing to be down approximately 4% year-over-year. We think that's the first case of down year-over-year since at least 2021 or maybe earlier. What are the drivers there, and how are you thinking about revenue per procedures for the rest of 2026 and in the out years?

Speaker #10: We think that's the first case of down year over year since at least 2021 or maybe earlier. What are the drivers there and how are you thinking about revenue per procedures for the rest of 2026?

Speaker #10: And in the out years?

Speaker #4: Yeah. So as I shared my prepared remarks, you've got about a clearly a mixed impact from a stronger growth in our cervical procedures. Cervical procedures carry a lower revenue per procedure profile than our overall average.

Todd Koning: Yeah. As I shared my prepared remarks, you know, clearly a mixed impact from a stronger growth in our cervical procedures. Cervical procedures carry a lower revenue per procedure profile than our overall average. Since that led the growth, that pulled the overall average revenue per procedure down. The second is our strong performance outside the US. They also have a lower revenue per procedure profile than our overall average. Really, the two primary drivers there are mix related. Then the final driver is just lower biologics attachment rates, and so that had an impact. I would just tell you, though, is when you look at our anterior column, so think about lateral and ALIF. Laterals revenue per procedure grew 2%.

Speaker #4: And so, since that led the growth, that pulled the overall average revenue per procedure down. The second is our strong performance outside the US.

Speaker #4: They also have a lower revenue per procedure profile than our overall average. And so really, the two primary drivers there are mixed related. And then the final driver is just lower biologics attachment rate.

Speaker #4: And so that had an impact. I would just tell you, though, is when you look at our anterior column, so think about lateral and ALIF.

Speaker #4: Lateral's revenue per procedure grew 2%. ALIF's revenue per procedure grew 4%. Cervical's revenue per procedure grew 8%. And so I think the revenue per procedure growth or our ability to capture the revenue opportunity in a procedure continues to expand and that's the important piece of this.

Todd Koning: ALIF's revenue per procedure grew 4%. Cervical's revenue per procedure grew 8%. I think the revenue per procedure growth or our ability to capture the revenue opportunity in a procedure continues to expand. That's the important piece to this, and I think that is also a fulfillment of the investment thesis that we've laid forth.

Speaker #4: And I think that is also a fulfillment of the investment thesis that we've laid forth.

Speaker #10: Great. Just the last one. So in 2025, growth in surgeon users was in line with procedure growth, which seems to imply procedures for surgeon was around flat year over year.

Nakul: Great. Just the last one. In 2025, growth in surgeon users was in line with procedure growth, which seems to imply procedures for surgeon was around flat year-over-year. Where are you today in terms of penetration rate with active US spine surgeons? Going forward, how should we think about the balance between increasing breadth and depth in terms of driving volume growth? Also, once again, thanks for taking the questions.

[Analyst] (Freedom Capital Markets): Great. Just the last one. In 2025, growth in surgeon users was in line with procedure growth, which seems to imply procedures for surgeon was around flat year-over-year. Where are you today in terms of penetration rate with active US spine surgeons? Going forward, how should we think about the balance between increasing breadth and depth in terms of driving volume growth? Also, once again, thanks for taking the questions.

Speaker #10: Where are you today in terms of penetration rate with active US spine surgeons? And going forward, how should we think about the balance between increasing breadth and depth in terms of driving volume growth?

Speaker #10: Also, once again, thanks for taking your questions.

Speaker #4: Yeah. I mean, we obviously saw another strong quarter of surgeon adoption. I think your question on utilization rates, I think if you go back to 2022, we saw utilization rates or we've seen utilization rates grow on average about 3% a year in the US.

Todd Koning: Yeah. I mean, we obviously saw another strong quarter of surgeon adoption. I think your question on utilization rates, I think if you go back to 2022, we saw utilization rates, or we've seen utilization rates grow on average about 3% a year in the US. Clearly, on average, we're seeing greater utilization. That utilization number is obviously pulled down by the strong adoption numbers that we see. The averaged out at about 3%. You know, we continue to feel good about that. I think going back to some of the themes of this call in terms of why we have confidence in our full-year guide on the surgical revenue piece is fundamentally related to the fact that we see strong demand for new surgeons to come here.

Speaker #4: And so, clearly, on average, we're seeing greater utilization. That utilization number is obviously pulled down by the strong adoption numbers that we see. And so that averaged out at about 3%.

Speaker #4: And we continue to feel good about that. And I think going back to some of the themes of this call in terms of why we have confidence in our full-year guide on the surgical revenue piece is a fundamentally related to the fact that we see strong demand for new surgeons to come here.

Speaker #4: And have always seen that demand translate into procedural adoption. And so we expect to continue to see that throughout the balance of this year, which gives us kind of confidence in our overall guide.

Todd Koning: Have always seen that demand translate into procedural adoption. You know, we expect to continue to see that throughout the balance of this year, which gives us, you know, confidence in our overall guide.

Speaker #10: Okay. Got it. Thanks.

Nakul: Okay. Got it. Thanks.

[Analyst] (Freedom Capital Markets): Okay. Got it. Thanks.

Speaker #2: Our next question comes from the line of Sean Lee. With HC Wainwright, your line is open. Please go ahead.

Operator 2: Our next question comes from the line of Sean Lee with H.C. Wainwright. Your line is open. Please go ahead.

Operator: Our next question comes from the line of Sean Lee with H.C. Wainwright. Your line is open. Please go ahead.

Speaker #11: Hey. Good afternoon, guys. And thanks for taking our questions. I just have a bit of a higher-level one. So with the EOS revenue and the guidance staying at a low growth this year, I was wondering does the strategic case of where EOS sits inside the procedure ecosystem where the platform is a door knocker of a sort as well as for a driver for surgeon pull-through, does that case still hold?

Sean Lee: Hey, good afternoon, guys, and thanks for taking our questions. I just have a bit of a higher level one. With the EOS revenue and the guidance staying at a low growth this year, I was wondering, does the strategic case of where EOS sits inside the procedure ecosystem, where, you know, as the platform as a door knocker of a sort, as well as for a driver for surgeon pull-through, does that case still hold? Do you think it maybe makes sense to rethink some of the software and monetization model as well?

Speaker #11: And do you think it maybe makes sense to rethink some of the hardware monetization model as well?

Speaker #4: Sean? It doesn't make me think it makes me so enthusiastic about what we're doing. Imagine from where we've come. It's AlphaTec Spine getting access to the institutions like HSS, NYU, Duke, Northwestern, University of Virginia, University of Maryland.

Pat Miles: Sean, it doesn't make me think it makes me so enthusiastic about what we're doing. You know, imagine from where we've come. You know, it's Alphatec Spine getting access to the institutions like HSS, NYU, Duke, Northwestern, University of Virginia, University of Maryland. It is unbelievable the type of access that EOS has given us. You know, probably the thing that I am most kind of disappointed in myself in is enabling you guys to understand the uniqueness of this informatic tool. There is nobody in the business that has a tool that ultimately provides for a preoperative image, a plan integrated into the intraoperative experience, and then evaluated postoperatively. It's all the same image. That provides you what's called a structured data set.

Speaker #4: It is unbelievable the type of access that EOS has given us. And probably the thing that I am most kind of disappointed in myself in is enabling you guys to understand the uniqueness of this informatic business that has a tool that ultimately provides for a preoperative image, a plan, integrated into the interoperative experience, and then evaluated postoperatively.

Speaker #4: It's all the same image, and so that provides you what's called a structured data set. And your ability to translate a structured data set is unlike anything anybody else has.

Pat Miles: Your ability to transmit a structured data set is unlike anything anybody else has, and it's all automated. The nemesis of spine surgery historically has been a lack of data. For us to have these structured data sets that automatically fuels information into a depot that we could translate to mitigate variables. We've talked in previous calls about the revision rate in spine and how, you know, mitigating variables is the route to greater predictability. You know, the fact that we've missed on a few installations and then to suggest that we're gonna rethink the thesis is not even a consideration. I would tell you that I just got back from the American Association of Neurological Surgeons. You know who the big players are? Medtronic, Globus, and ourselves. You know who the most promising player is? ATEC Spine.

Speaker #4: And it's all automated. The nemesis of spine surgery historically has been a lack of data. And so for us to have these structured data sets that automatically fuels information into a depot that we could translate to mitigate variables, we've talked in previous calls about the revision rate in spine and how mitigating variables is the route to greater predictability.

Speaker #4: The fact that we've missed on a few installations and then to suggest that we're going to rethink the thesis is not even a consideration.

Speaker #4: I would tell you that I just got back from the American Academy of Neurosurgery. You know who the big players are? It's Medtronic, Globus, and ourselves.

Speaker #4: You know who the most promising player is? Apex Spine. And so it's one of these things for us to translate this tool in five years; it's going to be the father-son game.

Pat Miles: It's one of these things for us to translate this tool. In 5 years, it's gonna be the father-son game. It's any inference that there is any blinking with regard to the thesis is misdirected. Sorry for the diatribe, but I gotta tell you, it's like this has the run the size of Texas. You have a team that's committed to the size of Texas and, you know, the, you miss on the construction on a few placements of EOS and people questioning it is a word I would choose not to use. Anyway, appreciate the question.

Speaker #4: And so it's any inference that there is any blinking with regard to the thesis is misdirected. And so sorry for the diatribe, but I got to tell you, it's like this has the run the size of Texas, you have a team that's committed to the size of Texas, and the miss on the construction on a few placements of EOS and people questioning it is a word I would choose not to use.

Speaker #4: So anyway, appreciate the question.

Speaker #10: Yeah. Thanks for that. And thanks again for taking our question.

Sean Lee: Yeah. Thanks for that. Thanks again for taking our question.

Speaker #2: We have reached the end of the question-and-answer session. I will now hand the call back to Pat Miles for closing remarks.

Operator 2: We have reached the end of the question and answer session. I will now hand the call back to Pat Miles for closing remarks.

Operator: We have reached the end of the question and answer session. I will now hand the call back to Pat Miles for closing remarks.

Speaker #4: Just a quick comment. I just want to thank everybody for dialing in. I've never been more bullish and more enthusiastic with regard to the build of Apex Spine.

Pat Miles: Just a quick comment. I just wanna thank everybody for dialing in. I've never been more bullish and more enthusiastic with regard to the build of ATEC Spine. I'm thrilled about the volume of people coming over here from competitive companies that are supporting the effort. It's like our best days are out in front of us. The strategic thesis is such the right one. We're gonna be the data source in this business. Just wanna share my enthusiasm for where we are and look forward to discussions as the year progresses, because we will continue to prosper as we have for the last eight years. Thanks very much for your interest and look forward to more.

Speaker #4: I'm thrilled about the volume of people coming over here from competitive companies that are supporting the effort. It's like our best days are out in front of us.

Speaker #4: The strategic thesis is such the right one. We're going to be the data source in this business. And so just want to share my enthusiasm for where we are and look forward to discussions as the year progresses because we will continue to prosper as we have for the last eight years.

Speaker #4: So anyway, thanks very much for your interest. And look forward to more.

Operator 2: This concludes today's call. Thank you for attending. You may now disconnect.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

Speaker #2: disconnect.

Operator 1: This event has now concluded. Thank you for joining ATEC Spine Q1 2026 finance results webcast. The line will disconnect automatically.