Key Highlights

  • Third quarter Revenue rose 13% to $221.2 million from $196.5 million.
  • Nine-month revenue increased 14% to $626.8 million.
  • Cost of sales grew 6% to $62.9 million, below the pace of revenue.
  • Litigation-related expenses were $6.5 million, against a $5.9 million Credit a year ago.
  • Calculated Operating Income was $3.2 million, versus a calculated loss of $15.9 million.

Spine revenue climbs 13% on a larger surgeon base

Alphatec (NASDAQ:ATEC) is a Carlsbad, California medical technology company focused solely on spine surgery. It sells spinal implants such as pedicle screws, interbody devices and plates, along with medical imaging equipment used for surgical planning and post-operative assessment.

In its quarterly filing for the period ended September 30, 2026, the company reported revenue of $221.2 million, up $24.7 million, or 13%, from $196.5 million a year earlier. For the nine months, revenue was $626.8 million, up $75.6 million, or 14%, from $551.2 million.

The company attributed the increase primarily to higher product Volume tied to growth in its surgeon user base, continued expansion of its newer product portfolio and growth in related areas.

Cost of sales grows slower than revenue

Cost of sales was $62.9 million in the quarter, up $3.7 million, or 6%, from $59.2 million, and the filing credits higher product volume. For the nine months, cost of sales rose $9.1 million, or 5%, to $178.0 million from $168.8 million.

On a calculated basis, third quarter Gross Profit was $158.2 million, or about 71.5% of revenue, compared with $137.3 million, or about 69.9%, a year earlier. Revenue growth of 13% against cost growth of 6% accounts for that widening.

The company's Business model relies on independent sales agents and direct representatives, and it said it intends to keep adding exclusive sales team members to reach more surgeons and hospitals.

Operating expenses and the litigation swing

Total operating expenses were $155.0 million, up $1.8 million from $153.2 million. Sales, general and administrative expenses rose $8.2 million, or 7%, to $132.5 million on higher compensation and variable selling costs linked to the larger surgeon base.

Research and development expenses fell 4% to $18.0 million, mainly on lower stock-based compensation. Amortization of acquired intangibles was $3.9 million against $3.7 million.

Litigation-related expenses were $6.5 million, compared with a credit of $5.9 million in the prior year quarter, a swing of roughly $12.4 million on a calculated basis. For the nine months, litigation expenses fell 95% to $1.0 million, which the filing links to a litigation settlement in the first nine months of 2025. Restructuring expenses were nil in both quarters.

Operating result swings positive by about $19 million

Subtracting cost of sales and operating expenses from revenue gives calculated operating income of about $3.2 million for the third quarter, compared with a calculated operating loss of about $15.9 million a year earlier. That is a swing of roughly $19.2 million, driven by revenue growth, slower cost growth and expense items that did not repeat.

The nine-month calculated result also improved. Revenue of $626.8 million less cost of sales of $178.0 million and operating expenses of $470.1 million leaves a calculated operating loss of about $21.2 million, against about $73.3 million a year earlier.

The company said it continues to invest in its surgeon base, sales force and newer procedural products. Readers tracking the name will likely follow whether revenue growth stays ahead of selling costs and whether litigation expenses remain low after the prior settlement.