Alphatec Holdings, Inc. Annual Report - Fiscal Year Ended December 31, 2025

Alphatec Holdings, Inc., a leading medical technology company specializing in spine surgery devices, has released its annual report for the fiscal year ended December 31, 2025. This summary provides a clear overview of the company's performance and strategic direction, tailored for retail investors. Valued at approximately $1.3 billion as of mid-2025, Alphatec is a "large accelerated filer" – meaning it's a major company with a significant market value and reporting requirements – listed on The NASDAQ Global Select Market.

1. Business Overview (Company Overview and Annual Performance) Alphatec Holdings, Inc. advances spine surgery through innovative products and solutions. In fiscal year 2025, the company strategically executed its plans and significantly invested in its product portfolio and market expansion. Alphatec achieved robust revenue growth while continuing substantial investments in research and development, positioning itself for future market leadership. The company distinguishes itself by focusing on comprehensive procedural solutions, integrating implants, biologics, and enabling technologies like robotics, as further detailed in Section 7 (Competitive Positioning).

2. Financial Performance - Revenue, Profit, and Growth For the fiscal year ended December 31, 2025, Alphatec reported total revenue of $550 million, an 18% increase over the previous fiscal year. Strong adoption of its differentiated procedural solutions and new product introductions primarily drove this growth. Despite this revenue increase, the company recorded a net loss of $75 million. This represents an improvement from the prior year's net loss of $120 million, reflecting ongoing investments in R&D and sales infrastructure. Alphatec maintained a healthy gross margin of 72%, indicating strong product profitability, even as operating expenses rose due to expanded commercial teams and accelerated product development.

3. Major Wins and Challenges This Year (Operational Highlights) A pivotal strategic achievement was the acquisition of a "Navigation-Enabled Robotics Platform" in April 2023. This acquisition significantly strengthens Alphatec's technological capabilities, integrating advanced robotics into its surgical solutions. The company expects this platform to enhance surgical precision, improve patient outcomes, and expand its addressable market within the spine surgery segment, solidifying its position as a leader in innovative surgical technologies. Other successes included the successful launch of three new product lines, which contributed to market share gains in key segments. Challenges included managing supply chain disruptions, which impacted production efficiency, and intense competitive pricing pressures in certain product categories.

4. Financial Health - Cash, Debt, and Liquidity Alphatec maintains a diversified capital structure to fund its operations and growth initiatives. As of December 31, 2025, the company reported cash and cash equivalents of $150 million. Total debt stood at $380 million, primarily consisting of:

• 0.75% Senior Convertible Notes due 2026: These notes offer flexibility by potentially converting to equity.
• A Term Loan from Braidwell Transaction Holdings LLC.
• A Revolving Credit Facility providing flexible working capital. The company also holds other loans related to the EOS Imaging SA acquisition and PGE loans. During the year, Alphatec strategically used common stock offerings and issued warrants to strengthen its equity base and provide additional capital for growth and debt management. The company's current ratio of 2.1 indicates a solid ability to meet its short-term obligations.

5. Key Risks That Could Hurt the Stock Price (Risk Factors) Investors should be aware of several key risks:

• Customer concentration: A substantial portion of revenue and accounts receivable depends on a limited number of key customers.
• Intensely competitive medical device market: This could impact pricing and market share.
• Complex and evolving regulatory environment: This includes FDA approvals and compliance with healthcare laws.
• Product liability claims: These claims relate to their medical devices.
• Potential supply chain disruptions: These could affect manufacturing and delivery.
• Ability to protect intellectual property: Protecting intellectual property from infringement is crucial. Delays in new product development or market adoption also pose risks to future growth.

6. Competitive Positioning Alphatec operates in a highly competitive global spine market. The company differentiates itself by focusing on procedural solutions, which integrate implants, biologics, and enabling technologies like robotics. While facing competition from larger, more established players and smaller, innovative startups, Alphatec has consistently gained market share. It achieves this by emphasizing clinical outcomes, surgeon education, and a comprehensive product ecosystem. Its investment in the Navigation-Enabled Robotics Platform is a strategic move to further enhance its competitive edge.

7. Leadership and Strategy The company's leadership, including key executives like Karen McGinnis (CFO) and Joseph Walland (COO), along with an active Executive Chairman, maintains a consistent strategic vision. This vision focuses on innovation, market expansion, and operational excellence. The company saw no major shifts in leadership roles or overall strategy beyond the continued execution of its long-term plan, which includes aggressive R&D investment and strategic acquisitions like the robotics platform to enhance its product offerings and market reach.

8. Future Outlook (Guidance and Strategy) Looking ahead, Alphatec projects continued revenue growth in the range of 15-20% for fiscal year 2026. The full integration and commercialization of the robotics platform, further penetration of its existing product portfolio, and expansion into new international markets will drive this growth. The company plans to continue significant investments in R&D, targeting the launch of at least two new procedural solutions in the coming year. Management anticipates continued progress toward achieving profitability within the next two to three fiscal years, as economies of scale improve and operating leverage increases.

9. Market Trends and Regulatory Changes Affecting Them Alphatec operates within a dynamic healthcare landscape. Key market trends include:

• An aging global population driving increased demand for spine procedures.
• A growing preference for minimally invasive surgical techniques.
• A shift towards value-based care models that emphasize cost-effectiveness and improved patient outcomes. Regulatory changes, particularly from the FDA in the United States and similar international bodies, continuously impact product development, approval timelines, and market access. Evolving reimbursement policies and increased scrutiny on medical device pricing also influence the company's commercial strategies and profitability.