Oct 29, 2026 earnings call — Procedural growth, biologics weakness, EOS adoption
Company reported revenue of $221 million and adjusted EBITDA of $38 million, driven by 20% procedure volume growth but weak biologics.
Revenue $0.2B (est $0.2B) · EPS $0.09 (est $0.10) · Next-quarter revenue outlook $0.9B
Key quotes
"We are not satisfied with our biologics performance and are taking action through greater focus and disciplined execution."
"Behind that growth are 2 elements of our model that continue to deliver: approximately 25% growth in surgeon adoption and 20% growth in procedural volume."
"EOS remains a pivotal part of our strategy because it changes where and how we engage with surgeons."
Analyst Q&A 13
biologics usage and who it affects
Q (Young Li · Jefferies): Analyst asked why biologics attachment rates are weak and whether the issue affects all surgeons or mainly newer converted surgeons.
A: Management said leakage in biologics reduces the value of an entire procedure. They are increasing sales discipline, using incentives and contract steps, and giving early adopters access to address the problem.
"When you get leakage in a biologic, it starts to undermine the entire selling of the procedure." — Patrick Miles (CEO·CHAIR)
ortho market softness and guidance impact
Q (K. Gong · JPMorgan): Analyst asked how much current orthopedic softness is in the updated guidance and how confident management is about the market into 2027.
A: Management said market growth slowed to low single-digits and they saw slower thoracolumbar volumes offset by strong cervical volumes. They explained about $20 million of the guide reduction year-over-year, with roughly $12 million tied to surgical volume and $4 million to EOS.
"When we came into the year, our expectation was that market growth would be in the mid-single digits." — J. Koning (CFO)
confidence in 2027 long-range plan
Q (Mathew Blackman · TD Cowen): Analyst asked how comfortable management is with the 2027 LRP targets given 2026 uncertainty, and whether existing surgeon cohorts could sustain growth without new surgeons.
A: Management said procedural growth and hardware adoption are strong and encouraging, but biologics timing is uncertain so they will be cautious. They agreed conceptually that existing cohorts could drive continued procedure growth, but market dynamics remain a variable to watch.
"First, we continue to see strong procedural growth, and I think that's encouraging." — J. Koning (CFO)
what 'own and address' biologics means
Q (Vikramjeet Chopra · BMO): Analyst asked what specific actions "own and address" on biologics entails (bag changes, pricing, training, sales leadership).
A: Management said they are very frustrated and will respond with strong sales discipline using both carrots and sticks. They will enforce exclusivity in distributor agreements, hold sales management accountable, and take contractual and financial steps to regain share.
"Own it means I'm profoundly irritated by it, and it's a lack of discipline that we're going to respond to." — Patrick Miles (CEO·CHAIR)
thoracolumbar weakness and durability
Q (Thomas Stephan · Stifel): Analyst asked whether thoracolumbar softness is a durable headwind, if it's isolated to the quarter, and whether competition is a factor.
A: Management said the softness likely continues into the fourth quarter and they will closely monitor it. They noted the softness is not driven by competition but tied to market demand and cohort dynamics among surgeons.
"Our assumption is that, that continues and perpetuates into the fourth quarter, and we're going to pay close attention to it." — J. Koning (CFO)
Valence integration and Medtronic coexistence
Q (Ross Osborn · Wells Fargo): Analyst asked about Valence adoption, coexistence with Medtronic in the same channel, and how many cases used StealthStation versus ATEC's robot.
A: Management declined to give Medtronic comparison numbers but said Valence is being integrated into the PTP workflow and is highly differentiated. They said Valence creates predictability in surgery and they are very positive about its future translation into revenue.
"What we're doing with Valence is we're integrating it into the workflow of PTP." — Patrick Miles (CEO·CHAIR)
procedure mix: lateral, cervical, thoracolumbar
Q (David Saxon · Needham & Company): Analyst asked where thoracolumbar softness shows up and how lateral and cervical approaches are holding up across procedures.
A: Management said cervical demand is strong and lateral remains a proxy for success with outsized demand. They noted procedural growth was above guidance driven by cervical gains, while thoracolumbar underperformed but remains multiple times market growth.
"the 20% procedural volume growth was probably a tick higher than our guidance implied in the quarter, yet we're talking about lower market demand." — J. Koning (CFO)
EOS delivery timing and lumpy placements
Q (Stephens): Analyst asked average time from EOS order to delivery and how much of Q4 EOS placements were already booked entering the quarter.
A: Management said placement timing varies widely by site build-out and room readiness, so there is no representative average. They emphasized demand is strong but placements are lumpy and rarely does the majority of orders deliver in the same quarter.
"From a placement timing perspective, candidly, it's all over the board, based upon the build-out of the room and all of the other elements that drive placement acceptance." — Patrick Miles (CEO·CHAIR)
EBITDA margin expectations and drop-through
Q (Nakul Desai · Freedom): Analyst asked if margins can stay near the 18% and whether the 40%-ish EBITDA conversion seen will persist into next year.
A: Management said they typically assume a mid-30s percent drop-through from revenue to EBITDA and cautioned some recent gross margin gains were mix-related. They noted Q4 EBITDA guide implies about 18% and that helps frame expectations for next year.
"I think kind of a mid-30s percent drop-through is a good way to think about it going into next year." — J. Koning (CFO)
international supply issue in Japan
Q (Caitlin Cronin · Canaccord Genuity): Analyst asked for more color on the international supply challenge and steps to remedy it.
A: Management said a packaging sterilization defect affected screws in Japan and slowed adoption, but the quality team audited and resealed packages and replenished affected implants. They called it an all-hands effort and said the issue is resolved but it impacted Q4 adoption.
"So we provide screws, they're sterile or implant sterile and saw a packaging defect." — Patrick Miles (CEO·CHAIR)
biologics outlook into 2027
Q (Samantha Munoz · Piper Sandler): Analyst asked how to think about biologics in 2027 and what it would take for a rebound from flat performance.
A: Management said biologics has challenges they have directly addressed but timing and effectiveness are hard to predict, so they will be cautious. They will monitor progress in Q4 and provide specifics when they give formal guidance.
"I think my comment specific to the biologics is we have some challenges there." — J. Koning (CFO)
Valence rollout and ASC use
Q (Benjamin Haynor · Lake Street): Analyst asked if the Valence rollout experience is going well and whether the ASC (ambulatory surgery center) use case is emerging as expected.
A: Management said Valence is performing as intended and was designed for PTP; they expanded use to TLIF and it is doing exactly what they intended. They described prior acquisitions where product development continued post-acquisition and said Valence will be a tailwind next year.
"We've already gone on to TLIF, and it's doing exactly what we intended." — Patrick Miles (CEO·CHAIR)
competitors adopting prone procedure
Q (Xun Lee · H.C. Wainwright): Analyst asked whether competitors entering prone procedures expands the market or creates account pushback and pricing pressure.
A: Management said competitor attention is positive because it highlights a technique ATEC invented and executes well. They believe competitors copying the technique will not match the original and that more attention will drive customers to ATEC's PTP approach.
"And the reason I think it's awesome is because it brings more attention to something that we do unbelievably well and unbelievably better." — Patrick Miles (CEO·CHAIR)