Alphatec Holdings Inc (NASDAQ:ATEC) reported financial results for the fourth quarter and full year of 2025, delivering a significant bottom-line beat on adjusted profitability while revenue came in slightly below Wall Street expectations. The market's immediate reaction was sharply negative, with shares falling over 11% in after-hours trading.
Earnings and Revenue Versus Estimates
The company's performance presented a mixed picture when measured against analyst forecasts. While revenue growth remained robust, it narrowly missed consensus, whereas profitability on a non-GAAP basis far exceeded expectations.
- Q4 2025 Revenue: Reported at $213.0 million, representing a 20% year-over-year increase. This figure came in just below the analyst consensus estimate of approximately $215.6 million.
- Q4 2025 Non-GAAP EPS: Reported at $0.06 per share. This result was a substantial positive surprise compared to the analyst estimate for a loss of ($0.13) per share.
- Full-Year 2025 Revenue: Totaled $764.2 million, a 25% increase over the prior year.
The divergence between the top-line slight miss and the strong bottom-line beat, driven by expanding margins, appears to be the core dynamic influencing the initial negative market reaction.
Financial Performance and Business Highlights
Beyond the headline numbers, the fourth quarter demonstrated several signs of operational strength and strategic progress for the spine technology company.
Revenue and Profitability Drivers:
- Surgical revenue, a key growth metric, reached $190 million, growing 21% year-over-year.
- The company continued to expand its surgeon base, with net new surgeon users increasing 23% in the quarter and 20% for the full year.
- Adjusted EBITDA was $33 million, or 16% of revenue, expanding 390 basis points compared to the fourth quarter of 2024.
- A pivotal milestone was achieved with the generation of positive free cash flow—$8 million in the fourth quarter and $3 million for the full year—marking a transition toward self-sustaining growth.
Strategic Developments: The quarter also featured the clearance and commercial release of the Valence® intraoperative platform, a key component of the company's expanding surgical ecosystem. Chairman and CEO Pat Miles described 2025 as a "defining year," emphasizing the company's transition to cash generation and its goal to become "the Standard Bearer in Spine."
Forward Guidance and Analyst Expectations
Management provided an updated financial outlook for the full year 2026, which offers a point of comparison against existing analyst models.
- ATEC's 2026 Revenue Guidance: The company expects total revenue to approximate $890 million, representing 17% growth over 2025. This outlook includes approximately $805 million in surgical revenue and $85 million from its EOS imaging systems.
- Analyst Sales Estimate for 2026: The current consensus sales estimate for FY 2026 stands at approximately $907.7 million.
- ATEC's 2026 Profitability Guidance: The company raised its adjusted EBITDA guidance to approximately $134 million (or 15% of revenue), up from a previous forecast of $130 million. It also expects to generate at least $20 million in free cash flow.
The company's revenue guidance for 2026 sits slightly below the current analyst consensus, which may be contributing to the negative investor sentiment post-earnings.
Market Reaction and Context
The steep after-hours decline of over 11% suggests investors are focusing on the revenue miss against estimates for Q4 and the company's 2026 revenue outlook that trails the Street's forecast. This reaction overshadows the strong progress on profitability, margin expansion, and the achievement of positive free cash flow. The market appears to be penalizing the stock for growth that, while still strong in absolute terms, did not meet elevated expectations.
For a detailed look at historical earnings, future estimates, and analyst projections, you can review the data on the ATEC earnings and estimates page.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, an endorsement, or a recommendation to buy, sell, or hold any security. Investing involves risk, including the potential loss of principal.
