ATEC Q3 Revenue Rises 13% as Surgical Volume Drives EBITDA Growth

ATEC reported double-digit third-quarter revenue growth as expanding surgical volumes offset lower revenue per case, while operating leverage helped adjusted EBITDA rise 46%. The spine technology company also maintained its 2026 adjusted EBITDA outlook despite what it described as a lower revenue outlook, signaling that margin expansion and cash generation remain central to its financial plan.

Surgical volume drives revenue growth

Total revenue for the third quarter of 2026 increased 13% year over year to $221 million. Surgical revenue rose 14% to $202 million, adding $25 million from the prior-year period, while EOS revenue declined 1% to $20 million.

ATEC said surgical case volume grew 20%, supported by adoption of its procedural approach, while surgeon users increased 25%. Those gains were partly offset by a 5% decline in revenue per case, primarily due to lower biologics attachment and, to a lesser extent, a softer market-related procedure mix.

The company’s non-GAAP gross margin expanded 180 basis points to 71.9%, reflecting inventory efficiency, cost improvements and product mix. Operating expenses increased 8%, below the pace of revenue growth, and fell to 62.0% of revenue from a year earlier.

Non-GAAP operating profit margin improved 430 basis points to 9.8%. Adjusted EBITDA climbed 46% to $38 million, representing 17.3% of sales, up 400 basis points year over year. ATEC reported a 49% year-over-year drop-through rate, highlighting the operating leverage generated from incremental revenue.

Cash generation and balance sheet

ATEC generated $6 million of free cash flow during the quarter, based on its definition of operating cash flow less purchases of property, plant and equipment. The company reported $34 million of operating cash flow under the measure presented and $29 million of inventory and capital spending.

The quarter marked ATEC’s fifth consecutive period of positive trailing 12-month free cash flow. The company ended the period with $80 million in cash and $55 million of undrawn revolving credit capacity, for total available liquidity of $135 million.

Gross debt stood at $649 million, comprising $405 million of 2030 convertible notes and $244 million under its 2031 Term Loan A and revolving credit facility. ATEC also said it simplified its capital structure by repaying its 2026 convertible notes.

2026 outlook emphasizes profitability

For full-year 2026, ATEC expects total revenue of $862 million, representing 13% growth. Surgical revenue is projected at $789 million, up 15%, while EOS revenue is expected to decline 5% to $73 million.

The surgical outlook assumes high-teens case-volume growth and a low-single-digit decline in revenue per case. The company expects full-year adjusted EBITDA of $137 million, up 47%, with an adjusted EBITDA margin of 16%. Free cash flow is projected at $10 million.

ATEC said it is maintaining a strong adjusted EBITDA outlook despite lower expected revenue, while continuing to invest in growth. Its strategy remains focused on developing differentiated procedural solutions, increasing surgeon adoption through training and technology, and expanding a sales force designed to support scale. The company also highlighted EOS as a source of access to academic institutions and as a platform for developing clinical data and operating-room intelligence.

Execution remains subject to risks including surgeon acceptance, biologics performance, product mix, competition, regulatory clearances, reimbursement conditions and the commercial success of new products. ATEC also identified potential pressure from unexpected expenses, funding needs, litigation, product liability, intellectual-property claims and its ability to meet financial obligations.