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Date

Tuesday, May 5, 2026 at 4:30 p.m. ET

Call participants

  • Chairman and Chief Executive Officer — Patrick S. Miles
  • Chief Financial Officer — J. Todd Koning

Takeaways

  • Total revenue -- $192 million, up 14% year over year, but below internal targets due to underperformance in the EOS segment.
  • Surgical revenue -- $178 million, up 17%, with a 6% sequential decline from the prior quarter, driven by lower revenue-per-procedure mix.
  • Case volume -- Procedures increased 21%, outpacing revenue-per-procedure expansion and reflecting higher adoption rates.
  • Surgeon adoption -- 23% increase in new surgeon users, indicating accelerating procedural adoption.
  • Revenue per case -- Decreased approximately 3% year over year due to a greater mix of cervical procedures and international growth.
  • Biologics attachment rate -- 38%, with management expecting a slight increase in coming quarters from improvement initiatives.
  • Core procedural ASPs -- Year-over-year pricing rose 2% for lateral, 4% for ALIF, and 8% for cervical procedures.
  • EOS revenue -- $14 million, down $3 million year over year, citing lower deliveries and installation timing as primary factors.
  • EOS installed base -- Global units expanded by 7%, while U.S. EOS Edge units increased 39% year over year.
  • EOS Insight accounts -- More than doubled, leading to notable increases in implant volume upon account activation.
  • Gross margin -- 71.6%, up over 120 basis points from the prior year, attributed to asset efficiency and favorable mix.
  • Operating expenses -- Grew 6%, significantly below revenue growth, improving operating leverage.
  • Non-GAAP R&D expense -- $14 million, or 7% of revenue, up slightly to support new product launches and innovation.
  • Non-GAAP SG&A expense -- $118 million, up 6%, now representing 62% of revenue and a 420 basis point improvement year over year.
  • Adjusted EBITDA -- $21 million, up 97% year over year, representing 11% of revenue and 45% drop-through on incremental revenue.
  • Cash position -- $140 million on hand at quarter end; $11 million of free cash used, at the favorable end of projected range.
  • Inventory and instrument investment -- $33 million invested to support growth in surgeon adoption and sales team expansion.
  • New debt facility -- Entered a Term Loan A and revolving credit facility led by JPMorgan and TD Cowen, replacing existing loans, extending maturities to 2031, and expected to cut annual interest expense by over $6 million and total interest by up to $35 million.
  • Full-year 2026 revenue guidance -- Set at $882 million, up 15%, with $805 million surgical revenue (17% growth), and $77 million EOS revenue reflecting revised expectations.
  • Adjusted EBITDA guidance -- Maintained at $134 million for the year, representing a 15% margin and 35% incremental revenue drop-through.
  • Free cash flow guidance -- Management expects at least $20 million for the year, with free cash flow in the second quarter expected to approximate zero.

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Risks

  • Management explicitly cited EOS sales and installation delays as the main reason for missing internal and external revenue expectations, leading to reduced EOS revenue guidance and acknowledgment that "installation timing was a challenge in the quarter."
  • Revenue per case declined 3%, driven by an unfavorable mix from growth in lower-priced cervical and international procedures, as well as a "overall biologics attachment rate was lower than expected."
  • Sequential surgical revenue declined 6% from the prior quarter, more than in previous quarters, attributed to mix-driven revenue-per-procedure pressure and softer March performance.
  • CEO Patrick S. Miles acknowledged, "Missing by a few units can impact a quarter’s revenue, but it does not impede belief in the field," highlighting ongoing capital-installation execution risk for EOS.

Summary

Alphatec Holdings (ATEC 0.97%) delivered strong procedural and surgeon adoption, with case and surgeon growth surpassing 20%, but revenue performance missed internal goals due to underperformance in the capital-intensive EOS segment. Management took direct action to enhance EOS execution by expanding sales and marketing resources, reiterating that procedural volume, core pricing, and operating leverage remain strong drivers for profitability. A revamped capital structure led by JPMorgan and TD Cowen is expected to reduce interest expense and extend maturities to 2031, reflecting a maturing credit profile. Updated revenue guidance for 2026 now incorporates a lower outlook for EOS while maintaining confidence in surgical demand and profitability progression.

  • Management stated EOS Insight adoption is generating "about 30% revenue lift per surgeon after Insight adoption," positioning EOS as a strategic platform for institutional access and structured clinical data.
  • International expansion is increasingly contributing to surgeon adoption and revenue, indicating further global opportunity for procedural platforms.
  • The Valence platform is performing to internal expectations with "strong utility, positive surgeon feedback, and real usage," supporting a diversified innovation pipeline.
  • Investments in instruments and inventory are outpacing doctor growth, which may indicate further near-term market share capture potential.
  • Operating cash flow remained positive for the fourth consecutive quarter, supporting ongoing investments in growth despite some short-term free cash use.

Industry glossary

  • EOS Edge: An advanced imaging platform for preoperative, intraoperative, and postoperative spine procedure planning and data capture, necessary for adoption of EOS Insight.
  • EOS Insight: A software platform layering intelligence and analytics onto EOS imaging, enabling data-driven planning and post-surgical evaluation.
  • ALIF: Anterior Lumbar Interbody Fusion—a type of spine surgery performed from the front of the body to treat lumbar disorders.
  • PTP: Prone TransPsoas—a procedural approach for minimally invasive lateral access spine surgery, highlighted as a key differentiator for Alphatec Holdings.
  • Valence: A workflow and imaging integration platform developed by Alphatec Holdings to streamline surgical procedures and improve intraoperative decision-making.
  • Biologics attachment rate: The percentage of spine procedures in which Alphatec Holdings' biologic augmentation products are utilized, driving per-case revenue and margin.

Full Conference Call Transcript

Patrick S. Miles: Thanks, Paige. Appreciate it. Welcome to the Q1 2026 financial results call from Alphatec Holdings, Inc. There will be some forward-looking statements, so please review at your leisure. With that, let me start simple. The business is working and it is scaling. We did $192 million in Q1, which 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 is not only a utilization story, it is an adoption story. We are adding surgeons, they are doing more with us. We have created a durable growth model.

EOS revenue was $14 million for the quarter. 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; look, a platform. Growth and adoption of our EOS Insight platform is creating significant momentum. EOS has enabled us to gain access to prestigious institutions; a hunting license within those institutions is increasingly paying off for us. We generated $21 million of EBITDA and, yes, used $11 million of cash, but that was a function of timing and intent. We are leaning into and investing in what is working.

When you step back, Alphatec Holdings, Inc. has become a compounding engine. More surgeons, more cases, and more platform pull-through. We are still just at the beginning of what we know we can do. With that, I will turn it over to Todd.

J. Todd Koning: Well, thank you, Pat, and good afternoon, everyone. I will start with first quarter 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.

Revenue per case declined approximately 3% year over year, driven primarily by mix impacts. In the U.S., we saw a higher mix of cervical procedures, which have a lower average revenue per case. In addition, our strong international growth contributed mix pressure, and finally, our overall biologics attachment rate was lower than expected. Importantly and consistent with 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.

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. The installed base of global EOS units increased by 7% year over year. In the U.S., the EOS Edge installed base is a prerequisite for EOS Insight adoption; Edge installed base grew 39% year over year, and the amount of EOS Insight accounts more than doubled. We continue to see strong utilization trends in these EOS Edge 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. This expansion was driven by continued asset efficiency improvements and temporary mix benefit from lower-than-expected EOS revenue. 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. First quarter 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, primarily driven by improvements in our variable selling costs and slower depreciation growth. As a result of 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. 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 used for the quarter was approximately $11 million, 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. 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 announced today we recently entered into a new Term Loan A and revolving credit facility led by JPMorgan and TD Cowen. This new bank facility, which replaces our previous term loan and asset-backed revolver, simplifies our capital structure, 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. 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, 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 for the full year. We continue to expect adjusted EBITDA of approximately $134 million even with the reduced revenue expectations, which reflects 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 second quarter expectations for free cash flow to approximate zero.

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. 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, with strong operating leverage translating into significant profitability expansion, while making material improvements to our balance sheet. While the quarter did not 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 will turn the call back to Pat.

Patrick S. Miles: Thanks, Todd. Our strategy has not changed because we know it works. Start with clinical distinction. If it does not matter in the OR, it does not 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. Do not 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, energized, and built to scale. Put that together, and it is very straightforward.

Do something clinically meaningful, surgeons adopt, and we scale it. We are not focused on widgets or, as we like to say, the currency of our business. We assemble procedures from the ground up. Everything you see here is designed to work together. That is what has driven and will continue to drive our model. Do not sell one thing, be it a screw, a plate, 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. While we call that a convoyed sales effect, it is 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 where we most distinguish. The surgery works. It is reproducible, efficient, and surgeons feel comfortable with it very quickly. I was in a case last Friday, L4-5 spondy. Fifteen minutes in, disk height was restored, and under an hour, the case was done with minimal blood loss and morbidity. 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. PTP has profoundly improved surgery, for both surgeon and patient. That is what creates confidence.

And once surgeons experience reproducible success in lateral, they do not stay with just that procedure. They expand their utility into cervical, TLIF, posterior fixation—across the board. Our growth is not dependent on just adding incremental surgeons; it is expanding indications for procedures they adopt and moving them to other approaches, which is what happens after they trust you. That is what the model is really about, and that is how it compounds. EOS continues 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.

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. 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 is data generation. That is the moat. We are already seeing EOS impact—about 30% revenue lift per surgeon after Insight adoption. So EOS is not just additive; it is multiplicative. What is happening with Insight right now is important.

We are moving from imaging to intelligence—3D alignment, patient-specific planning—starting to predict outcomes, not just react to them. And every case makes the system better. That is 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. It is becoming smarter, more predictive, and more embedded into clinical decision-making. That is how you build clinical distinction. This is where owning the image and translating it into data matters. Valence is early, but it is doing exactly what we need it to do. It fits seamlessly into the surgical workflow, does not get in the way.

The footprint is very small, actually makes the case cleaner. And that is everything. If it disrupts the surgeon's workflow, it does not get used. We are seeing strong utility, positive surgeon feedback, and real usage. And the same pattern we have seen before: it works, surgeons trust it, it grows. How this is playing out. Japan looks very familiar—in a good way. We are 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. This is the same pattern. They adopt, they do more, they expand.

It is early, but it is exactly what we wanted to see. In closing, when I think about Alphatec Holdings, Inc., it is pretty straightforward. We are focused 100% in spine. We built real leadership in lateral. We are doing the same thing in deformity with EOS. We put the infrastructure in place to scale. Most importantly, we are growing and becoming more profitable at the same time. We have 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. No push widgets. We give them procedures, and increasingly information, that improves predictability and patient outcomes.

That drives surgeon interest and adoption, leading to more cases. That in turn attracts sales agents and builds careers. And that is why Alphatec Holdings, Inc. is the preferred destination in spine. We will now open the call for questions.

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. If you would like to ask a question, please follow the instructions from your conferencing system. To withdraw your question, press 1 again. We will now open the floor for questions. In consideration of others, please limit yourself to one question. Our first question comes from the line of Mathew Blackman with TD Cowen. Your line is open. Please go ahead.

Mathew Blackman: Thank you. In the context of the 2027 LRP, do you feel confident reaffirming the $1 billion revenue target? Consensus is about 4% to 5% higher than that. Given how Q1 shook out and the new 2026 guide, there is a big step-up implied to get to 2027, particularly versus consensus. Your level of comfort today with that 2027 LRP revenue number and any comment on where consensus sits would be helpful. Thank you.

J. Todd Koning: Matt, given the fact that we have adjusted our guidance to reflect current expectations around EOS, I would tell you the guide on EOS reflects very near-term execution issues that we believe we have addressed through adding incremental sales talent and downstream marketing resources. We fundamentally believe that addresses the issues. Our guidance suggests we expect to exit this year more in line with what our original guide assumed, and therefore we believe we are on track to accomplish the goals we laid out in the context of our long-range plan.

Operator: Our next question comes from the line of Analyst with JPMorgan. Your line is open. Please go ahead.

Analyst: Thanks for the question. On the trajectory and specifically the pricing per case headwind you saw this quarter, volumes picked back up to 20% plus, but it sounds like the price-per-case headwind could stick around as cervical and some faster-growing businesses continue to put pressure on that. Is that the right way to think about it—continued revenue-per-case headwinds offset by volume growth this year? And then a follow-up on your ability to reiterate adjusted EBITDA given potential needs to invest in EOS Insight—how do you balance potential increased investment and driving revenue growth?

J. Todd Koning: Yes, that understanding is correct. Our guidance implies high-teens volume growth with flattish revenue per procedure for the year. The decline this quarter was largely mix—strong cervical procedures, which have a lower revenue-per-procedure contribution, and strong international performance, which also has a lower revenue-per-procedure profile. Third, we had lower biologics attachment. We believe upcoming product launches and improved execution will help there. As you model the balance of the year, we are thinking flat revenue per procedure year over year.

Patrick S. Miles: I would just add, where we make investments, we get a response. In lateral, ASP grew as intended. While mix impacted the overall average, where we are distinguishing ourselves, we are prospering.

J. Todd Koning: That is a good point. As noted, lateral grew 2% revenue per procedure, ALIF 4%, and cervical 8% year over year. We have made significant investments in those areas.

Patrick S. Miles: On EBITDA versus investment needs, the infrastructure is in place. With 39% year-over-year growth in the EOS Edge base, the opportunity to exploit that base is very evident. The challenge has been installation timing and construction-related buildouts that make installations choppy, and revenue recognition reflects installations. I do not see a new investment requirement to grow. We are growing about 30% per surgeon in accounts that have EOS. The thesis is intact. I am thrilled with the demand profile where systems and EOS Insight are installed. This is quarter-by-quarter lumpiness in a long-term execution story, and I am totally thrilled about the EOS business in general—irritated by lumpiness, but no new investment profile required.

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

Matthew Stephan Miksic: Thanks. On surgical, results came in a bit lighter than expected. Was there any phasing in Q1—new territories catching up, difficult comps, regional impacts, weather—that impacted results? And any color on sequential performance from here to reach the full-year number?

Patrick S. Miles: The most comforting part is that momentum where we most distinguish continues to be profoundly robust. Surgeon additions up over 20% speaks to a business in demand. It was kind of a goofy quarter. We are seeing strength right out of the gate in Q2. This is quarter-by-quarter lumpiness.

J. Todd Koning: To add specifics, there was weather in late January—FedEx was restrained for almost an entire week, and the Northeast had two storms. There is weather every year, but there was likely more this year than normal. We also exited March a bit softer than expected, largely due to less growth in traditional posterior open procedures and lower biologics attachment. The good news is a sequential improvement in April, which gives us confidence into Q2 and the typical Q1-to-Q2 seasonality. Structurally, deformity season starts in late May into June, which should help. We have invested in sets and inventory to support increased demand. We hang our hat on strong surgeon adoption and volumetric components of the business.

Matthew Stephan Miksic: One follow-up. Instrument investment is up year over year and faster than doctor growth. Is that a leading indicator, and what does it suggest for coming quarters?

Patrick S. Miles: The volume of people adopting our lateral portfolio is growing quickly. The frustrating part is that conventional short-segment open surgery, where we are not profoundly different, seems flat, and biologics impact was not great. TheraDaptive cannot come fast enough. The procedural strategy is well adopted, EOS is working as planned, and we clearly distinguish in lateral. Where we are not different, we do not outperform.

J. Todd Koning: I would add the continuing growing contribution from international, both as a surgeon adoption story and a revenue contributor, as we grow through the year.

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

Analyst: Good afternoon. On the cadence for the rest of the year for EOS, it sounds like most of the work is done—realigning the sales team, new reps, additional marketing resources. It will take time for new reps to ramp. When do you anticipate the EOS franchise getting back on track?

J. Todd Koning: Our expectation is that EOS contributes in a more full way in the second half. We think overall growth in Q2 should be similar to Q1 at about 14%, and our guide implies approximately 17% overall revenue growth in the second half as EOS contributes more meaningfully.

Patrick S. Miles: The cadence of adding surgical sales reps has been totally consistent, with talent coming from all players. That has not slowed. The focal frustration is around EOS placements. We must continue to improve as a capital equipment provider. Missing by a few units can impact a quarter’s revenue, but it does not impede belief in the field. Once in place, utility expands.

Operator: Our next question comes from the line of David Joshua Saxon with Needham. Your line is open. Please go ahead.

David Joshua Saxon: Great. First, to clarify, when you said “14” for the second quarter, was that $14 million for EOS or 14% overall growth? And then my question: on revenue per case in guidance, what is embedded for U.S. case mix and biologics attachment? If cervical remains strong and biologics does not change, what is the risk to flat revenue per case?

J. Todd Koning: The “14” comment referred to 14% overall growth. On revenue per case, we expect continued strong cervical contribution to the overall business, as we have seen. We saw about a 38% biologics attachment rate; we would expect that to go up a couple of points, driven by greater salesforce execution and entering deformity season, where cases tend to be longer constructs with higher biologics utilization. That is how we constructed the revenue-per-procedure math for the balance of the year.

Operator: Our next question comes from the line of Caitlin Roberts with Canaccord Genuity. Your line is open. Please go ahead.

Caitlin Roberts: Turning back to EOS, you noted the weakness was execution-related. Any more color on that specifically and whether any of the weakness related to capital environment or facility appetite? Do those hurdles translate into Valence and Navigation?

Patrick S. Miles: EOS issues do not bleed into Valence. One challenge with EOS has always been structural buildout—the construction required due to unit size. More EOS units that require more buildout lowers predictability of installation timing, and revenue recognition follows installation. We are improving on sales, downstream marketing, and support, especially aligning on installation timing. Those challenges are execution-related and have nothing to do with Valence. On capital appetite generally, it is tough to read across. We are irritated over lack of execution—committed to a number of units and did not fulfill. The demand profile is phenomenal and the thesis is great; construction and installation are the issues. This is an execution flaw, not a thesis issue.

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

Analyst: Thanks. On the 2026 surgical outlook, surgical was up 17% in the quarter, full-year guidance is also 17%. Comps get more difficult, March was below expectations, April came back. What gives you confidence maintaining the surgical outlook when you decelerated again in Q1 and guidance implies reacceleration? Are there incremental drivers?

Patrick S. Miles: Confidence comes from the demand profile around procedures that most distinguish us and the volume of surgeons continuing to join. Historical growth in surgeon count and their utilization gives us confidence. Looking at the mix, what we were losing was more conventional stuff. Q2 and Q3 are the conventional “fest,” with more long reconstruction. EOS impact gives us confidence. So even as comps get harder, when the procedural mix and surgeon additions are as expected, we feel very good.

J. Todd Koning: Fair question. March was not as good as expected, but April rebounded and gives us a good platform into Q2. Deformity season is a structural step-up from Q1 to Q2. We have invested in small stature sets and patient positioners to fulfill that demand in Q2 and Q3. We expect to drive increased biologics attachment through focused sales execution. International contribution continues to improve. For all these reasons, we believe the path from Q1 to Q2 and onward is intact. Total surgeon adoption at 20% plus remains a great leading indicator.

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

Analyst: Thanks. On Valence, would you discuss placements to date and what early pull-through numbers look like?

Patrick S. Miles: We are not going to speak to specific numbers. This year is about maximizing experience and ensuring the product is perfect. It is doing everything we expected. There is an in-field camera that is hugely elegant, letting the surgeon control room elements. It is not a huge piece of capital. It has been utilized mostly in PTP and is trending above the targets we provided for the year. We are bullish on the clinical impact and the seamless workflow. Integrating best-in-class neurophysiology with an elegant, effective workflow will increase PTP users. It is going as planned.

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

Analyst: Good afternoon. Two questions. First, revenue per procedure appears down approximately 4% year over year, perhaps the first down year since at least 2021. What are the key drivers in 2026 and in the out years? Second, in 2025, growth in surgeon users was in line with procedure growth, implying procedures per surgeon around flat. Where are you today in terms of penetration with active U.S. spine surgeons, and how should we think about breadth versus depth going forward?

J. Todd Koning: On revenue per procedure, the drivers this quarter were mix—strong growth in cervical, which carries a lower revenue-per-procedure profile, and strong performance outside the U.S., which also has a lower revenue-per-procedure profile—plus lower biologics attachment. Importantly, when you look at our anterior column, lateral revenue per procedure grew 2%, ALIF 4%, and cervical 8%. Our ability to capture revenue opportunity in a procedure continues to expand, which supports the investment thesis. On penetration and utilization, we saw another strong quarter of surgeon adoption. If you go back to 2022, we have seen average utilization per surgeon in the U.S. grow about 3% a year. That average is pulled down by strong waves of new adopters.

We continue to feel good about that, and strong demand from new surgeons has historically translated into procedural adoption. We expect that to continue throughout the year.

Analyst: Where your EOS Insight platform serves as a door knocker and a driver for surgeon pull-through, does that case still hold? And does it make sense to rethink some of the hardware monetization model?

Patrick S. Miles: Sean, it does not make me think we should rethink anything; it makes me enthusiastic about what we are doing. Imagine from where we have come—Alphatec Holdings, Inc. getting access to institutions like HSS, NYU, Duke, Northwestern, University of Virginia, University of Maryland. It is unbelievable access that EOS has given us. Probably the thing I am most disappointed in myself about is enabling you to understand the uniqueness of this informatics tool. There is nobody in the business with a tool that provides a preoperative image, a plan integrated into the intraoperative experience, and then a postoperative evaluation—it is all the same image. That provides a structured dataset.

Your ability to translate a structured dataset is unlike anything anybody else has, and it is all automated. The nemesis of spine surgery historically has been a lack of data. Having a structured dataset that automatically fuels information into a depot we can translate to mitigate variables is transformative. We have talked about revision rates in spine and how mitigating variables is the route to greater predictability. Missing a few installations and suggesting we rethink the thesis is not even a consideration. At the American Association of Neurological Surgeons, the big players are Medtronic, Globus, and ourselves; the most promising player is Alphatec Holdings, Inc. Translating this tool—five years from now it will be the father, son, deed.

Any inference that there is any blinking on the thesis is misdirected. We are committed to this at the size of Texas. Missing a few EOS construction timelines and having people question us is, frankly, [inaudible]. Appreciate the question.

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

Patrick S. Miles: Just a quick comment. I want to thank everybody for dialing in. I have never been more bullish and enthusiastic about the build of Alphatec Holdings, Inc. I am thrilled about the volume of people coming here from competitive companies to support the effort. Our best days are in front of us. The strategic thesis is the right one. We are going to be the data source in this business. I 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. Thanks very much for your interest and we look forward to more.

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