Alphatec Holdings, Inc. (NASDAQ:ATEC) Q3 2022 Earnings Conference Call November 3, 2022 4:30 PM ET

Company Participants

Pat Miles - Chairman and Chief Executive Officer

Todd Koning - Chief Financial Officer

Conference Call Participants

Phillip Dantoin - Piper Sandler

Young Li - Jefferies

Brooks O’Neil - Lake Street Capital Markets

Drew Ranieri - Morgan Stanley

Eric Anderson - Cowen

Caitlin Cronin - Canaccord Genuity

David Saxon - Needham & Company

Jason Wittes - Loop Capital

Operator

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

During this call, you may hear the company refer to reported amounts, which are in accordance with U.S. GAAP as well as non-GAAP or pro forma measures. Reconciliations of non-GAAP measures to U.S. GAAP can be found in the supplemental financial tables included in the press release, which identify and quantify all excluded items and provide management’s view of why this information is useful to investors.

Leading today’s call will be ATEC’s Chairman and CEO, Pat Miles and CFO, Todd Koning.

Now, I will turn the call over to Pat Miles.

Pat Miles

Thanks very much, Michelle and thanks everybody for joining the Q3 2022 financial results call. As you would expect, there will be some forward-looking statements. So if you would review the small print at your leisure that would be great. So celebrating my fifth year here and recollecting back to the first full year of 2018, we finished with U.S. revenue that approximated $84 million. It’s nice 5 years later to be generating $90 million for the quarter, which is a 43% year-over-year growth rate. And the thesis clearly is working. So what we are doing is scaling top line growth toward positive adjusted EBITDA in 2023, advancing lateral sophistication with innovation, improving the predictability and reproducibility of core elements of spine surgery, reflecting our information-based competitive advantage and extending EOS’ influence while leveraging new hospital access.

So taking a quick look at the Q3 2022 scorecard, I do believe it to be a validation of what we’re doing. So 43% year-over-year growth as stated. It’s really 53% in terms of surgical revenue growth. And so the growth is very strong. It’s our 14th consecutive quarter of greater than 20% U.S. revenue growth, excluding the 11% in the pandemic-ridden Q2 2020, 32% year-over-year growth in procedure volume, 15% year-over-year growth in average revenue per case, $11 million in EOS revenue, with a significant opportunity pipeline up 45% year-over-year, and we’ll get into the blended average of product categories per case with that and the 2.3 and continues to grow.