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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-52024

ALPHATEC HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Delaware	20-2463898
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1950 Camino Vida Roble, Carlsbad, CA	92008
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (760) 431-9286

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	ATEC	The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

As of April 28, 2026, there were 153,789,305 shares of the registrant’s common stock outstanding.

Table of Contents

ALPHATEC HOLDINGS, INC.

QUARTERLY REPORT ON FORM 10-Q

March 31, 2026

Table of Contents


		Page
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Operations	4

	Condensed Consolidated Statements of Comprehensive Loss	5

	Condensed Consolidated Statements of Stockholders’ (Deficit) Equity	6

	Condensed Consolidated Statements of Cash Flows	8

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 5.	Other Information	32

Item 6.	Exhibits	33

SIGNATURES		34

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for par value data)


	March 31, 2026			December 31, 2025
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	139,912		$	160,806
Accounts receivable, net of allowances of $10,059 and $12,685, respectively		106,379			97,304
Inventories		186,027			169,444
Prepaid expenses and other current assets		23,849			23,322
Total current assets		456,167			450,876
Property and equipment, net		138,045			135,324
Right-of-use assets		30,601			31,225
Goodwill		74,470			75,208
Intangible assets, net		90,023			93,454
Other assets		10,172			5,121
Total assets	$	799,478		$	791,208
Liabilities and Stockholders’ (Deficit) Equity
Current liabilities:
Accounts payable	$	46,044		$	40,893
Accrued expenses and other current liabilities		111,567			97,019
Contract liabilities		10,466			10,439
Short-term debt		65,522			64,526
Current portion of operating lease liabilities		6,645			6,298
Total current liabilities		240,244			219,175
Long-term debt		507,889			501,412
Operating lease liabilities, less current portion		23,004			23,856
Other long-term liabilities		10,085			10,736
Commitments and contingencies (Note 8)
Redeemable preferred stock, $0.0001 par value; 20,000 shares authorized at March 31, 2026 and December 31, 2025; 3,319 shares issued and outstanding at March 31, 2026 and December 31, 2025		23,603			23,603
Stockholders' (deficit) equity:
Common stock, $0.0001 par value; 400,000 authorized; 153,794 shares issued and outstanding at March 31, 2026; and 150,257 shares issued and outstanding at December 31, 2025		16			15
Treasury stock, 1,808 shares, at cost at March 31, 2026 and December 31, 2025		(25,097	)		(25,097	)
Additional paid-in capital		1,484,529			1,466,377
Accumulated other comprehensive loss		(6,446	)		(4,426	)
Accumulated deficit		(1,458,349	)		(1,424,443	)
Total stockholders’ (deficit) equity		(5,347	)		12,426
Total liabilities and stockholders’ (deficit) equity	$	799,478		$	791,208

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands, except per share amounts)


	Three Months Ended
	March 31,
	2026			2025
Revenue from products and services	$	192,108		$	169,180
Cost of sales		55,632			53,184
Gross profit		136,476			115,996
Operating expenses:
Research and development		17,560			16,582
Sales, general and administrative		137,057			127,017
Litigation-related expenses		525			12,214
Amortization of acquired intangible assets		3,915			4,103
Restructuring expenses		—			371
Total operating expenses		159,057			160,287
Operating loss		(22,581	)		(44,291	)
Other expense, net:
Interest expense, net		(11,721	)		(7,841	)
Loss on debt extinguishment		—			(17,576	)
Gain on derivative liability		—			17,400
Other income, net		446			337
Total other expense, net		(11,275	)		(7,680	)
Net loss before taxes		(33,856	)		(51,971	)
Income tax provision (benefit)		50			(64	)
Net loss	$	(33,906	)	$	(51,907	)
Net loss per share, basic and diluted	$	(0.22	)	$	(0.35	)
Weighted average shares outstanding, basic and diluted		154,051			146,732

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(In thousands)


	Three Months Ended
	March 31,
	2026			2025
Net loss	$	(33,906	)	$	(51,907	)
Foreign currency translation adjustments		(2,020	)		3,215
Comprehensive loss	$	(35,926	)	$	(48,692	)

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(UNAUDITED)

(In thousands)


	Common stock				Additional paid-in			Treasury			Accumulated other comprehensive			Accumulated			Total stockholders’
	Shares		Par Value		capital			stock			loss			deficit			(deficit) equity
Balance at December 31, 2025		150,257	$	15	$	1,466,377		$	(25,097	)	$	(4,426	)	$	(1,424,443	)	$	12,426
Stock-based compensation		—		—		23,659			—			—			—			23,659
Common stock issued for stock option exercises		245		—		97			—			—			—			97
Common stock issued for vesting of performance and restricted stock awards, net of shares retained for tax liability		3,292		1		(5,604	)		—			—			—			(5,603	)
Foreign currency translation adjustments		—		—		—			—			(2,020	)		—			(2,020	)
Net loss		—		—		—			—			—			(33,906	)		(33,906	)
Balance at March 31, 2026		153,794	$	16	$	1,484,529		$	(25,097	)	$	(6,446	)	$	(1,458,349	)	$	(5,347	)

Table of Contents

ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(UNAUDITED)

(In thousands)


	Common stock				Additional paid-in			Treasury			Accumulated other comprehensive			Accumulated			Total stockholders’
	Shares		Par Value		capital			stock			loss			deficit			(deficit) equity

Balance at December 31, 2024		144,129	$	14	$	1,305,677		$	(25,097	)	$	(13,678	)	$	(1,281,085	)	$	(14,169	)
Stock-based compensation		—		—		22,318			—			—			—			22,318
Common stock issued for stock option exercises		150		—		505			—			—			—			505
Common stock issued for vesting of performance and restricted stock awards, net of shares retained for tax liability		2,627		1		(3,417	)		—			—			—			(3,416	)
Purchase of capped calls		—		—		(42,485	)		—			—			—			(42,485	)
Foreign currency translation adjustments		—		—					—			3,215			—			3,215
Net loss		—		—		—			—			—			(51,907	)		(51,907	)
Balance at March 31, 2025		146,906	$	15	$	1,282,598		$	(25,097	)	$	(10,463	)	$	(1,332,992	)	$	(85,939	)

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)


	Three Months Ended March 31,
	2026			2025
Operating activities:
Net loss	$	(33,906	)	$	(51,907	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		19,135			19,907
Stock-based compensation		23,659			22,318
Amortization of debt discount and debt issuance costs		6,768			2,418
Amortization of right-of-use assets		1,321			1,271
Write-down for excess and obsolete inventories		3,616			3,571
Loss on disposal of assets		196			1,563
Loss on debt extinguishment		—			17,576
Gain on derivative liability		—			(17,400	)
Other		1,127			4,252
Changes in operating assets and liabilities:
Accounts receivable		(10,238	)		(10,282	)
Inventories		(20,570	)		1,243
Prepaid expenses and other current assets		(12	)		(807	)
Other assets		(138	)		107
Accounts payable		201			(11,918	)
Accrued expenses		11,203			13,938
Lease liabilities		(1,249	)		(1,349	)
Contract liabilities		57			761
Other long-term liabilities		121			(301	)
Net cash provided by (used in) operating activities		1,291			(5,039	)
Investing activities:
Purchase of property and equipment		(12,091	)		(9,934	)
Note receivable		(5,000	)		—
Purchase of intangible assets		(2,223	)		(1,678	)
Other		(580	)		—
Net cash used in investing activities		(19,894	)		(11,612	)
Financing activities:
Repayment of revolving credit facility		(2,994	)		(52,800	)
Proceeds from revolving credit facility		2,747			4,092
Payments related to tax witholdings for share-based compensation		(2,166	)		(3,003	)
Proceeds from issuance of convertible notes, net		—			392,850
Repurchase of convertible notes		—			(268,231	)
Purchase of capped calls		—			(42,485	)
Other		639			336
Net cash (used in) provided by financing activities		(1,774	)		30,759
Effect of exchange rate changes on cash		(517	)		296
Net change in cash and cash equivalents		(20,894	)		14,404
Cash and cash equivalents at beginning of period		160,806			138,840
Cash and cash equivalents at end of period	$	139,912		$	153,244
Supplemental disclosure of cash flow information:
Cash paid for interest	$	6,549		$	6,530
Supplemental disclosure of noncash activities:
Purchases of property and equipment in accounts payable and accrued expenses	$	13,293		$	277
Purchase of intangible assets in accrued expenses and other long-term liabilities	$	2,750		$	2,631
Financed insurance	$	1,020		$	1,347
Recognition of lease liability	$	966		$	—
Recognition of derivative liability	$	—		$	124,062

See accompanying notes to unaudited condensed consolidated financial statements.

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ALPHATEC HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Organization and Significant Accounting Policies

The Company

Alphatec Holdings, Inc. (the “Company”), through its wholly owned subsidiaries, Alphatec Spine, Inc. (“Alphatec Spine”), SafeOp Surgical, Inc. (“SafeOp”), and EOS imaging S.A.S. (“EOS”), is a medical technology company focused on the design, development, and advancement of technology for the better surgical treatment of spinal disorders. The Company, headquartered in Carlsbad, California, markets its products in the United States and internationally via a network of independent sales agents and direct sales representatives.

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company translates the financial statements of its foreign subsidiaries using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. All intercompany balances and transactions have been eliminated in consolidation.

The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnotes it normally includes in its annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The unaudited interim condensed consolidated financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2025, which are included in the Company’s Annual Report on Form 10-K that was filed with the SEC. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the full year or any other future periods.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Fair Value Measurements

The carrying amount of financial instruments consisting of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, other assets, accounts payable, accrued expenses, and short-term debt included in the Company’s condensed consolidated financial statements are reasonable estimates of fair value due to their short maturities.

Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active; or other inputs that can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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Excess and Obsolete Inventory

Most of the Company’s inventory is comprised of finished goods, which is primarily produced by third-party suppliers. Specialized implants, fixation products, biologics, and imaging equipment are determined by utilizing a standard cost method that includes capitalized variances which approximates the weighted average cost. Component parts related to the imaging equipment are valued at weighted average cost. Inventories are stated at the lower of cost or net realizable value. The Company reviews the components of its inventory on a periodic basis for excess and obsolescence and adjusts inventory to its net realizable value as necessary.

The Company records a lower of cost or net realizable value (“LCNRV”) inventory reserve for estimated excess and obsolete inventory based upon its expected use of inventory on hand. The Company’s inventory, which consists primarily of specialized implants, fixation products, and biologics is at risk of obsolescence due to the need to maintain substantial levels of inventory. In order to market its products effectively and meet the demands of interoperative product placement, the Company maintains and provides surgeons and hospitals with a variety of inventory products and sizes. For each surgery, fewer than all components will be consumed. The need to maintain and provide a wide variety of inventory causes inventory to be held that is not likely to be used.

The Company’s estimates and assumptions for excess and obsolete inventory are reviewed and updated on a quarterly basis. The estimates and assumptions are determined primarily based on current usage of inventory and the age of inventory quantities on hand. Additionally, the Company considers recent sales experience to develop assumptions about future demand for its products, while considering product life cycles and new product launches. Increases in the LCNRV reserve for excess and obsolete inventory result in a corresponding charge to cost of sales.

Revenue Recognition

The Company recognizes revenue from product sales in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ("ASC") Revenue from Contracts with Customers (“Topic 606”). This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

Sales are derived primarily from the sale of spinal implant products, imaging equipment, and related services to hospitals and medical centers. Revenue is recognized when obligations under the terms of a contract with customers are satisfied, which occurs with the transfer of control of products to customers, either upon shipment of the product or delivery of the product to the customer depending on the shipping terms, or when the products are used in a surgical procedure (implanted in a patient). Revenue from the sale of imaging equipment is recognized as each distinct performance obligation is fulfilled and control transfers to the customer, beginning with shipment or delivery, depending on the contract terms. Revenue from other distinct performance obligations, such as maintenance on imaging equipment and other imaging-related services, is recognized in the period the service is performed, and makes up less than 10% of the Company’s total revenue. In certain cases, the Company does offer the ability for customers to lease its imaging equipment, but such arrangements are immaterial to total revenue in the periods presented. The Company generally does not allow returns of products that have been delivered. Costs incurred by the Company associated directly with sales contracts with customers are deferred over the performance obligation period and recognized in the same period as the related revenue, except for contracts that complete within one year or less, in which case the associated costs are expensed as incurred. Payment terms for sales to customers may vary but are commensurate with the general business practices in the country of sale.

To the extent that the transaction price includes variable consideration, such as discounts, rebates, and customer payment penalties, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company's judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available, including historical, current, and forecasted information.

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The Company records a contract asset when one or more performance obligations have been completed and revenue has been recognized, but the customer's payment is contingent on the satisfaction of additional performance obligations. The Company records a contract liability, or deferred revenue, when it has an obligation to provide a product or service to the customer and payment is received in advance of its performance. When the Company sells a product or service with a future performance obligation, revenue is deferred on the unfulfilled performance obligation and recognized over the related performance period. Generally, the Company estimates the selling price of promised services included in the equipment sales price using an expected cost plus a margin approach and/or the separately observable price of such service, if available. The transaction price for a contract’s various performance obligations is allocated using the relative standalone selling price method. The use of alternative estimates could result in a different amount of revenue deferral.

Recently Adopted Accounting Pronouncements

In September 2025, the FASB issued Accounting Standards Update ("ASU") No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40). ASU 2025-06 removes references to prescriptive and sequential development stages, requiring companies to capitalize internal-use software costs when management commits to funding the software project and it is probable the project will be completed. ASU 2025-06 is effective for all entities for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods. Early adoption is permitted. The Company adopted the new accounting pronouncement on January 1, 2026 on a prospective basis. The adoption of ASU No. 2025-06 did not have a material impact on the Company's consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Topic 220-40). Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses. The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses, which includes purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. The Company is in the process of assessing the impact of this standard on its consolidated financial statements and related disclosures.

In December 2025, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2025-11 Interim Reporting (Topic 270). ASU No. 2025-11 clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. This ASU clarifies the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements in accordance with U.S. GAAP. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, and early adoption is permitted. Entities may apply the guidance prospectively or retrospectively. The Company is currently evaluating the impact the standard will have on its interim consolidated financial statements and related disclosures.

2. Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis include the following as of March 31, 2026, and December 31, 2025 (in thousands):


	March 31, 2026
Assets:	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	26,602		—		—	$	26,602
Total cash equivalents	$	26,602	$	—	$	—	$	26,602

	December 31, 2025
Assets:	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	23,625		—		—	$	23,625
Total cash equivalents	$	23,625		—		—	$	23,625

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The Company did not have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the periods presented.

Fair Value of Convertible Debt

The fair value, based on a quoted market price (Level 1), of the Company’s outstanding 0.75% Convertible Senior Notes due 2026 (the "2026 Notes") was approximately $63.9 million at March 31, 2026 and approximately $79.0 million at December 31, 2025.

The fair value, based on a quoted market price (Level 1), of the Company’s outstanding 0.75% Convertible Senior Notes due 2030 (the "2030 Notes") was approximately $424.24 million at March 31, 2026 and approximately $618.0 million at December 31, 2025.

3. Inventories

Inventories reported at the lower of cost or net realizable value consist of the following (in thousands):


	March 31, 2026		December 31, 2025
Raw materials	$	13,674	$	11,958
Finished goods		172,353		157,486
Inventories	$	186,027	$	169,444

4. Property and Equipment, net

Property and equipment, net consist of the following (in thousands, except as indicated):


	Useful lives (in years)	March 31, 2026			December 31, 2025
Surgical instruments	4	$	325,432		$	311,517
Machinery and equipment	7		13,208			13,123
Computer equipment	3		32,687			32,434
Office furniture and equipment	5		6,264			6,548
Leasehold improvements	various		4,421			4,402
Construction in progress	n/a		1,331			646
			383,343			368,670
Less: accumulated depreciation and amortization			(245,298	)		(233,346	)
Property and equipment, net		$	138,045		$	135,324

Total depreciation and amortization expense was $14.6 million and $15.8 million, respectively, for the three months ended March 31, 2026 and 2025. Construction in progress is not depreciated until placed in service. Property and equipment, net includes assets under financing leases and the related amortization of assets under financing leases is included in depreciation expense.

5. Goodwill and Intangible Assets

Goodwill

The change in the carrying amount of goodwill during the period ended March 31, 2026, includes the following (in thousands):


December 31, 2025	$	75,208
Foreign currency fluctuation		(738	)
March 31, 2026	$	74,470

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Intangible assets, net

Intangible assets, net consist of the following (in thousands, except as indicated):


	Remaining Avg. Useful lives	Gross		Accumulated			Intangible
March 31, 2026:	(in years)	Amount		Amortization			Assets, net
Developed product technology	4	$	109,135	$	(57,224	)	$	51,911
Internally developed software	6		18,015		(4,930	)		13,085
Trademarks and trade names	5		5,821		(2,846	)		2,975
Customer relationships	2		14,872		(12,172	)		2,700
Distribution network	–		2,413		(2,413	)		—
Total amortized intangible assets			150,256		(79,585	)		70,671

Software in development	n/a		7,782		—			7,782
In-process research and development	n/a		11,570		—			11,570
Total intangible assets		$	169,608	$	(79,585	)	$	90,023

	Remaining Avg. Useful lives	Gross		Accumulated			Intangible
December 31, 2025:	(in years)	Amount		Amortization			Assets, net
Developed product technology	4	$	109,336	$	(54,264	)	$	55,071
Internally developed software	6		16,402		(4,429	)		11,973
Trademarks and trade names	5		5,938		(2,757	)		3,181
Customer relationships	2		15,057		(11,973	)		3,084
Distribution network	–		2,413		(2,413	)		—
Total amortized intangible assets			149,146		(75,836	)		73,309

Software in development	n/a		7,675		—			7,675
In-process research and development	n/a		12,470		—			12,470
Total intangible assets		$	169,291	$	(75,836	)	$	93,454

Total amortization expense attributed to intangible assets was $4.5 million and $4.2 million for the three months ended March 31, 2026 and 2025, respectively. Software in development is amortized when the projects are completed and the assets are ready for their intended use. In-process research and development assets begin amortizing when the relevant products reach full commercial launch.

Future amortization expense related to intangible assets is as follows (in thousands):


Remainder of 2026	$	13,721
2027		17,924
2028		12,852
2029		12,467
2030		8,799
Thereafter		4,908
	$	70,671

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6. Contract Assets and Contract Liabilities

Contract assets included within prepaid expenses and other current assets in the condensed consolidated balance sheets are as follows (in thousands):


	March 31, 2026		December 31, 2025
Contract assets	$	6,411	$	8,585

The non-current contract liabilities balance is included in other long-term liabilities on the condensed consolidated balance sheets. The Company’s contract liabilities are as follows (in thousands):


	March 31, 2026		December 31, 2025
Contract liabilities	$	12,277	$	12,620
Less: Non-current portion of contract liabilities		1,811		2,181
Current portion of contract liabilities	$	10,466	$	10,439

The Company recognized $4.3 million of revenue from the opening contract liabilities balance for the three months ended March 31, 2026.

7. Debt

0.75% Convertible Senior Notes due 2030

In March 2025, the Company issued $405.0 million aggregate principal amount of senior unsecured 2030 Notes with a stated interest rate of 0.75% and a maturity date of March 15, 2030. The 2030 Notes began accruing interest immediately and are payable semi-annually in arrears on March 15 and September 15 of each year. The net proceeds from the sale of the 2030 Notes were approximately $392.9 million after deducting the initial purchasers’ offering expenses and before cash use for the 2030 Capped Call Transactions, as described below, and the repayment of 80% of the 2026 Notes, as described below. The 2030 Notes do not contain any financial covenants.

The 2030 Notes are convertible into shares of the Company’s common stock based upon an initial conversion rate of 64.3407 shares of the Company’s common stock per $1,000 principal amount of 2030 Notes (equivalent to an initial conversion price of approximately $15.54 per share). The conversion rate will be subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company’s common stock. Based on the terms of the 2030 Notes, when a conversion notice is received, the Company has the option to pay or deliver cash, shares of the Company’s common stock, or a combination thereof.

Holders of the 2030 Notes have the right to convert their notes in certain circumstances and during specified periods. Prior to the close of business on the business day immediately preceding September 17, 2029, holders may convert all or a portion of their 2030 Notes only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter) if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than 130% of the conversion price on each applicable trading day; (2) during the 5 consecutive business days immediately after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2030 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events or the calling of the 2030 Notes for Redemption. From and after September 17, 2029, holders of the 2030 Notes may convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. As of March 31, 2026, the condition described in clause (1) above was satisfied and the 2030 Notes were convertible during the first quarter of 2026 at the option of the holders thereof. The 2030 Notes are classified as long-term debt on the condensed consolidated balance sheets as of March 31, 2026.

The 2030 Notes are redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after March 20, 2028 and on or before the 60th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for a specified period of time. In addition, calling any of the 2030 Notes for redemption will constitute a “make-whole fundamental change” with respect to the redeemable note, in which case the conversion rate applicable to the conversion of the redeemed note will be increased in certain circumstances if such note is converted after it is called for redemption.

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If a fundamental change occurs prior to the maturity date, holders may require the Company to repurchase all or a portion of their 2030 Notes for cash at a price equal to 100% of the principal amount of the 2030 Notes plus accrued and unpaid interest. No principal payments are otherwise due on the 2030 Notes prior to maturity.

At the time of issuance, the Company determined that the 2030 Notes had an embedded conversion option that met the criteria to be bifurcated and accounted for separately from the 2030 Notes. The Company initially recorded the fair value of the embedded conversion option as a derivative liability and the principal amount of the 2030 Notes as a long-term liability, net of debt discount and deferred issuance costs. In June 2025, conditions necessary for separate accounting of the conversion option as a derivative liability were not met. Accordingly, the conversion option derivative liability was remeasured as of the date of the change and subsequently reclassified to additional paid-in capital on the Company’s condensed consolidated statements of shareholders’ (deficit) equity. The annual effective interest rate for the 2030 Notes is 9.1%. During the three months ended March 31, 2026, the Company recognized interest expense on the 2030 Notes of $6.5 million, which includes $5.7 million for the amortization of debt discount costs. During the three months ended March 31, 2025, the Company recognized interest expense on the 2030 Notes of $1.6 million, which includes $1.4 million for the amortization of debt discount costs. The Company uses the if-converted method for assumed conversion of the 2030 Notes to compute the weighted-average shares of common stock outstanding for diluted earnings per share, if applicable.

The outstanding principal amount and carrying value of the 2030 Notes consists of the following (in thousands):


	March 31, 2026
Principal	$	405,000
Unamortized debt discount and debt issuance costs		(112,692	)
Net carrying value	$	292,308

2030 Capped Call Transactions

In connection with the offering of the 2030 Notes, the Company entered into privately negotiated capped call transactions (the “2030 Capped Call Transactions”) with certain financial institutions. The 2030 Capped Call Transactions are expected generally to reduce the potential dilution and/or offset the cash payments the Company is required to make in excess of the principal amount of the 2030 Notes upon conversion of the 2030 Notes in the event that the market price per share of the Company’s common stock is greater than the strike price of the 2030 Capped Call Transactions with such reduction and/or offset subject to a cap. The 2030 Capped Call Transactions have an initial cap price of $23.46 per share of the Company’s common stock, which represents a premium of 100% over the last reported sale price of the Company’s common stock on March 4, 2025, and is subject to certain adjustments under the terms of the 2030 Capped Call Transactions. Collectively, the 2030 Capped Call Transactions cover, initially, the number of shares of the Company’s common stock underlying the 2030 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2030 Notes. The cost of the 2030 Capped Call Transactions was approximately $42.5 million.

The 2030 Capped Call Transactions are separate transactions and are not part of the terms of the 2030 Notes and will not affect any holder’s rights under the 2030 Notes. Holders of the 2030 Notes will not have any rights with respect to the 2030 Capped Call Transactions.

The 2030 Capped Call Transactions meet all of the applicable criteria for equity classification, and as a result, the related $42.5 million cost was recorded as a reduction to additional paid-in capital on the Company’s condensed consolidated statements of shareholders’ (deficit) equity.

Term Loan

On January 6, 2023, the Company entered into a $150.0 million term loan credit facility with Braidwell Transaction Holdings, LLC (the “Braidwell Term Loan”). The Braidwell Term Loan provides for an initial term loan of $100.0 million which was funded on the closing date. On September 28, 2023, the Company drew an additional $50.0 million (the “delayed draw term loan(s)” or the “DDTL”). On October 29, 2024, the Company entered into an amendment of the Braidwell Term Loan, which provides for an additional term loan of $50.0 million, subject to the terms of the original term loan credit facility. The Braidwell Term Loan matures on January 6, 2028. As of March 31, 2026, the outstanding balance under the Braidwell Term Loan was $200 million.

In conjunction with the issuance of the Braidwell Term Loan, the Company incurred $3.6 million in debt issuance costs and $3.5 million in commitment fees. Commitment fees paid to the lender were accounted for as a debt discount. The debt issuance costs and debt discount were recorded as a direct reduction of the carrying amount of the loan on the condensed consolidated balance sheets and are being amortized over the life of the loan. As of March 31, 2026, debt issuance costs and debt discount, net of accumulated amortization, associated with the Braidwell Term Loan were both $1.7 million.

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Borrowings under the Braidwell Term Loan bear interest at a rate per annum equal to the Term Secured Overnight Financing Rate for such SOFR business day ("SOFR") subject to a 3% floor, plus 5.75%. The applicable interest rate as of March 31, 2026 was 9.53%. The loan agreement includes an undrawn commitment fee, which is calculated as 1% per annum of the average daily undrawn portion of the DDTL. Interest and undrawn commitment fees incurred are due quarterly. The Company is also required to pay fees on any prepayment of the Braidwell Term Loan, ranging from 3.0% to 1.0% depending on the date of prepayment, and a final payment fee equal to 3.25% of the principal amount of the loans drawn. The effective interest rate as of March 31, 2026 was 10.45%. During the three months ended March 31, 2026, the Company recognized interest expense on the Braidwell Term Loan of $5.2 million, which includes $0.2 million for both the amortization of debt issuance costs and debt discount. During the three months ended March 31, 2025, the Company recognized interest expense on the Braidwell Term Loan of $5.3 million, which includes an immaterial amount for the amortization of debt issuance costs and $0.2 million for the debt discount. Upon the Braidwell Term Loan’s maturity, any outstanding principal balance, unpaid accrued interest, and all other obligations under the Braidwell Term Loan will be due and payable.

The Braidwell Term Loan is secured by substantially all of the Company’s assets with the priority interest of the lenders in the Braidwell Term Loan and the Revolving Credit Facility, as defined below, subject to terms of a customary intercreditor agreement, which provides that the lenders under the Revolving Credit Facility have a priority with respect to the Company's accounts receivable, inventory, medical instruments, and items related to the foregoing, and the lenders under the Braidwell Term Loan have priority with respect to the remainder of the Company's assets. The loan agreement contains customary representations and warranties and affirmative and negative covenants. Under the loan agreement, the Company is required to maintain a minimum level of liquidity. The loan agreement also includes certain events of default, and upon the occurrence of such events of default, all outstanding loans under the Braidwell Term Loan may be accelerated and/or the lenders’ commitments terminated. The Company is in compliance with all required financial covenants as of March 31, 2026.

Revolving Credit Facility

In September 2022, the Company entered into a revolving credit facility (the “Revolving Credit Facility”) with entities affiliated with MidCap Financial Trust (“MidCap”). The Revolving Credit Facility originally provided up to $50.0 million in borrowing capacity to the Company with an accordion feature up to $75.0 million in borrowing capacity, based on a defined borrowing base. The borrowing base is calculated based on certain accounts receivable and inventory assets. The Company subsequently exercised the accordion feature and increased the borrowing capacity by $25.0 million up to the full $75.0 million borrowing capacity. The Revolving Credit Facility matures on September 29, 2027. As of March 31, 2026, the outstanding balance under the Revolving Credit Facility was $15.1 million.

In conjunction with obtaining the Revolving Credit Facility, the Company incurred $1.4 million in debt issuance costs. These costs were capitalized to other assets on the condensed consolidated balance sheets and are being amortized over the life of the Revolving Credit Facility. As of March 31, 2026, debt issuance costs, net of accumulated amortization, associated with the Revolving Credit Facility were $0.4 million.

The outstanding loans under the Revolving Credit Facility bear interest at the sum of Term SOFR plus 3.5% per annum. The applicable interest rate as of March 31, 2026 was 7.3%. The loan agreements include an unused line fee, which is calculated as 0.5% per annum of either the unused Revolving Credit Facility or a minimum balance. Interest and unused line fees incurred are due and capitalized to the outstanding principal balance monthly. During the three months ended March 31, 2026, the Company recognized interest expense on the Revolving Credit Facility of $0.4 million, which includes approximately $0.1 million for the amortization of debt issuance costs. During the three months ended March 31, 2025, the Company recognized interest expense on the Revolving Credit Facility of $0.5 million, which includes approximately $.01 million for the amortization of debt issuance costs. Upon the Revolving Credit Facility’s maturity, any outstanding principal balance, unpaid accrued interest, and all other obligations under the Revolving Credit Facility will be due and payable.

The Revolving Credit Facility contains a lockbox arrangement clause requiring the Company to maintain a lockbox bank account. If the revolving loan availability is less than 30% of the revolving loan limit for five consecutive business days, or the Company is in default, MidCap will apply funds collected from the Company's lockbox account to reduce the outstanding balance of the Revolving Credit Facility. As of March 31, 2026, the Company's loan availability level has not activated lockbox deductions, nor is it expected to for the next 12 months; therefore, the Company has determined that the outstanding balance under the Revolving Credit Facility is long-term debt on the condensed consolidated balance sheets.

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The Revolving Credit Facility is secured by substantially all of the Company’s assets with the priority interest of the lenders subject to terms of a customary intercreditor agreement in connection with the Braidwell Term Loan, as described above. The loan agreements and other ancillary documents contain customary representations and warranties and affirmative and negative covenants. Under the loan agreements, the Company is required to maintain a minimum level of liquidity. The loan agreements also include certain events of default, and upon the occurrence of such events of default, all outstanding loans under the Revolving Credit Facility may be accelerated and/or the lenders’ commitments terminated. The Company is in compliance with all required financial covenants as of March 31, 2026.

0.75% Convertible Senior Notes due 2026

In August 2021, the Company issued $316.3 million aggregate principal amount of unsecured 2026 Notes with a stated interest rate of 0.75% and a maturity date of August 1, 2026. Interest on the 2026 Notes is payable semi-annually in arrears on February 1 and August 1 of each year, beginning on February 1, 2022. The net proceeds from the sale of the 2026 Notes were approximately $306.2 million after deducting the initial purchasers’ offering expenses. The 2026 Notes do not contain any financial covenants.

The 2026 Notes are convertible into shares of the Company’s common stock based upon an initial conversion rate of 54.5316 shares of the Company’s common stock per $1,000 principal amount of 2026 Notes (equivalent to an initial conversion price of approximately $18.34 per share). The conversion rate will be subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company’s common stock. Based on the terms of the 2026 Notes, when a conversion notice is received, the Company has the option to pay or deliver cash, shares of the Company’s common stock, or a combination thereof.

Holders of the 2026 Notes have the right to convert their notes in certain circumstances and during specified periods. Prior to the close of business on the business day immediately preceding February 2, 2026, holders may convert all or a portion of their 2026 Notes only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter) if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the 5 consecutive business days immediately after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. From and after February 2, 2026, holders of the 2026 Notes may convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The 2026 Notes are classified as current debt on the condensed consolidated balances sheet as of March 31, 2026.

The 2026 Notes are redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after August 6, 2024 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for a specified period of time. In addition, calling any of the 2026 Notes for redemption will constitute a “make-whole fundamental change” with respect to the redeemable note, in which case the conversion rate applicable to the conversion of the redeemed note will be increased in certain circumstances if such note is converted after it is called for redemption. In March 2025, the Company repurchased 80% of the 2026 Notes for $268.4 million. The Company determined that the redemption of the 2026 Notes should be accounted for as a partial extinguishment of the 2026 Notes. As a result of the partial extinguishment, the Company wrote off $2.3 million of the unamortized debt issuance costs and debt discount. The Company recorded a loss on debt extinguishment of $17.6 million during the three months ended March 31, 2025.

If a fundamental change occurs prior to the maturity date, holders may require the Company to repurchase all or a portion of their 2026 Notes for cash at a price equal to 100% of the principal amount of the 2026 Notes plus accrued and unpaid interest. No principal payments are otherwise due on the 2026 Notes prior to maturity.

The 2026 Notes, net of unamortized debt issuance costs, are classified as short-term debt on the consolidated balance sheets as of March 31, 2026. The annual effective interest rate for the 2026 Notes is 1.4%. The Company recognized interest expense on the 2026 Notes of $0.2 million and $0.8 million during the three months ended March 31, 2026 and 2025, respectively, which includes $0.1 million and $0.4 million for the amortization of debt issuance costs, respectively. The Company uses the if-converted method for assumed conversion of the 2026 Notes to compute the weighted-average shares of common stock outstanding for diluted earnings per share, if applicable.

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The outstanding principal amount and carrying value of the 2026 Notes consists of the following (in thousands):


	March 31, 2026			December 31, 2025
Principal	$	63,250		$	63,250
Unamortized debt issuance costs		(137	)		(237	)
Net carrying value	$	63,113		$	63,013

2026 Capped Call Transactions

In connection with the offering of the 2026 Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain financial institutions. The Capped Call Transactions are expected generally to reduce the potential dilution and/or offset the cash payments the Company is required to make in excess of the principal amount of the 2026 Notes upon conversion of the 2026 Notes in the event that the market price per share of the Company’s common stock is greater than the strike price of the Capped Call Transactions with such reduction and/or offset subject to a cap. The Capped Call Transactions have an initial cap price of $27.68 per share of the Company’s common stock, which represents a premium of 100% over the last reported sale price of the Company’s common stock on August 5, 2021, and is subject to certain adjustments under the terms of the Capped Call Transactions. Collectively, the Capped Call Transactions cover, initially, the number of shares of the Company’s common stock underlying the 2026 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2026 Notes. The cost of the Capped Call Transactions was approximately $39.9 million.

The Capped Call Transactions are separate transactions and are not part of the terms of the 2026 Notes and will not affect any holder’s rights under the 2026 Notes. Holders of the 2026 Notes will not have any rights with respect to the Capped Call Transactions.

Other Debt Agreements

The Company has two loan agreements under French government sponsored COVID-19 relief initiatives (“PGE” loans) which mature in 2027. Monthly and quarterly installments of principal and interest under each PGE loan agreement is due until the original principal amounts and applicable interest is fully repaid in 2027. The outstanding obligation under each PGE loan as of March 31, 2026 was $1.1 million and $0.5 million at weighted average interest rates of 0.98% and 1.25%, respectively, and weighted average costs of the state guaranty of 0.69% and 1.0%, respectively.

Total Indebtedness

Principal payments remaining on the Company's debt are as follows as of March 31, 2026 (in thousands):


Remainder of 2026	$	65,277
2027		15,669
2028		206,500
2029		—
2030		405,000
Thereafter		—
Total		692,446
Less: unamortized debt discount and debt issuance costs		(119,035	)
Total		573,411
Less: current portion of long-term debt		(65,522	)
Long-term debt	$	507,889

8. Commitments and Contingencies

Leases

The Company determines if an arrangement is a lease at inception by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company records the associated lease liability and corresponding right-of-use asset (“ROU asset”) upon commencement of the lease using a discount rate based on the incremental borrowing rate of interest that the Company would borrow on a collateralized basis for an amount equal to the lease payments in a similar economic environment. Any short-term leases defined as twelve months or less or month-to-month leases are excluded and are expensed each month. Total costs associated with these short-term leases are immaterial to all periods presented.

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The Company leases office and storage facilities and equipment under various operating and financing lease agreements. The initial terms of these leases range from 1 to 10 years and generally provide for periodic rent increases. The Company’s lease agreements do not contain any material variable lease payments, residual value guarantees or material restrictive covenants. The Company aggregates all lease and non-lease components for each class of underlying assets into a single lease component and variable charges for common area maintenance and other variable costs are recognized as expense as incurred. Total variable costs associated with leases for the three months ended March 31, 2026 were immaterial. The Company had an immaterial amount of financing leases as of March 31, 2026, which is included in property and equipment, net, accrued expenses and other current liabilities, and other long-term liabilities, on the condensed consolidated balance sheets.

Future minimum annual lease payments for all operating leases of the Company are as follows as of March 31, 2026 (in thousands):


Remainder of 2026	$	5,591
2027		7,051
2028		6,275
2029		6,193
2030		6,305
Thereafter		4,404
Total undiscounted lease payments		35,819
Less: imputed interest		(6,170	)
Operating lease liabilities		29,649
Less: current portion of operating lease liabilities		(6,645	)
Operating lease liabilities, less current portion	$	23,004

The Company’s weighted average remaining lease term and weighted average discount rate as of March 31, 2026 and December 31, 2025 are as follows:


	March 31, 2026			December 31, 2025
Weighted-average remaining lease term (years)		5.2			5.5
Weighted-average discount rate		7.0	%		7.0	%

Information related to the Company’s operating leases is as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
Rent expense	$	1,963	$	1,825
Cash paid for amounts included in measurement of lease liabilities	$	1,834	$	1,781

Purchase Commitments

The Company is obligated to meet certain minimum purchase commitment requirements with a third-party supplier through December 2026. As of March 31, 2026, the remaining minimum purchase commitment required by the Company under the agreement is $3.7 million.

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Litigation

The Company is and may become involved in various legal proceedings arising from its business activities. While management is not aware of any litigation matter that in and of itself would have a material adverse impact on the Company’s condensed consolidated results of operations, cash flows or financial position, litigation is inherently unpredictable, and depending on the nature and timing of a proceeding, an unfavorable resolution could materially affect the Company’s future consolidated results of operations, cash flows or financial position in a particular period. The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual or disclosure in the Company’s condensed consolidated financial statements. An estimated loss contingency is accrued in the Company’s condensed consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against the Company may be unsupported, exaggerated or unrelated to reasonably possible outcomes, and as such are not meaningful indicators of the Company’s potential liability.

Indemnifications

In the normal course of business, the Company enters into agreements under which it occasionally indemnifies third-parties for intellectual property infringement claims or claims arising from breaches of representations or warranties. In addition, from time to time, the Company provides indemnity protection to third-parties for claims relating to past performance arising from undisclosed liabilities, product liabilities, environmental obligations, representations and warranties, and other claims. In these agreements, the scope and amount of remedy, or the period in which claims can be made, may be limited. It is not possible to determine the maximum potential amount of future payments, if any, due under these indemnities due to the conditional nature of the obligations and the unique facts and circumstances involved in each agreement.

In October 2017, NuVasive, Inc. filed a lawsuit in Delaware Chancery Court against Mr. Miles, the Company’s Chairman and CEO, who was a former officer and board member of NuVasive. The Company itself was not initially a named defendant in this lawsuit; however, in June 2018, NuVasive amended its complaint to add the Company as a defendant. In October 2018, the Delaware Court ordered that NuVasive advance legal fees for Mr. Miles’ defense in the lawsuit, as well as Mr. Miles’ legal fees incurred in pursuing advancement of his fees, pursuant to an indemnification agreement between NuVasive and Mr. Miles. In February 2025, the Delaware Chancery Court entered final judgment in favor of both Mr. Miles and the Company on all remaining claims, which the Delaware Supreme Court affirmed on January 16, 2026. As of March 31, 2026, no liability related to this matter has been recorded. The Company considers the matter terminated.

Royalties

The Company has entered into various intellectual property agreements requiring the payment of royalties based on the sale of products that utilize such intellectual property. These royalties primarily relate to products sold by Alphatec Spine and are based on fixed fees or calculated either as a percentage of net sales or on a per-unit sold basis. Royalties are included on the accompanying condensed consolidated statements of operations as a component of cost of sales.

9. Stock-Benefit Plans and Equity Transactions

Stock-Based Compensation

The Company has stock-based compensation plans under which it grants stock options, restricted stock units ("RSUs"), and performance restricted stock units ("PRSUs") to officers, directors and third parties. Total stock-based compensation for the periods presented is as follows (in thousands):


	Three Months Ended
	March 31,
	2026		2025
Cost of sales	$	970	$	3,043
Research and development		4,001		3,644
Sales, general and administrative		18,688		15,631
Total	$	23,659	$	22,318

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As of March 31, 2026, there was $115.3 million of unrecognized compensation expense for RSUs and PRSUs to be recognized over a weighted average period of 2.2 years.

Restricted Stock Units and Performance Based Restricted Stock Units Awards

The Company issued approximately 4,324,680 and 3,521,532 shares of common stock, before net share settlement, upon vesting of RSUs and PRSUs during the three months ended March 31, 2026 and 2025, respectively.

Employee Stock Purchase Plan

Employees are eligible to participate in the Employee Stock Purchase Plan ("ESPP") approved by its shareholders. During the three months ended March 31, 2026 and 2025, there were no shares issued under the ESPP.

The Company estimates the fair value of shares issued to employees under the ESPP using the Black-Scholes option-pricing model. The assumptions used to estimate the fair value of stock options granted and stock purchase rights under the ESPP are as follows:


	Three Months Ended
	March 31,
	2026			2025
Risk-free interest rate		3.81	%	4.44%
Expected dividend yield		—			—
Expected term (years)		0.50			0.50
Volatility		55.85	%		91.91	%

Warrants Outstanding

Squadron Medical Warrants

In connection with debt financing entered into with Squadron Medical Finance Solutions, LLC ("Squadron Medical") in 2018, and amended in 2019 and 2020, the Company issued common stock warrants to Squadron Medical and a participant lender (the “Squadron Medical Warrants”). The Squadron Medical Warrants expire in May 2027 and are exercisable by cash or cashless exercise. No Squadron Medical Warrants have been exercised as of March 31, 2026.

Executive Warrants

The Company issued warrants to its Chairman and Chief Executive Officer (the “Executive Warrants”). The Executive Warrants had a nine-year term and are exercisable by cash or cashless exercise. No Executive Warrants have been exercised as of March 31, 2026.

A summary of all outstanding warrants for common stock as of March 31, 2026, is as follows (in thousands, except for strike price data):


	Number of Warrants		Strike Price		Expiration
2018 Squadron Medical Warrants		845	$	3.15	May 2027
2019 Squadron Medical Warrants		4,839	$	2.17	May 2027
2020 Squadron Medical Warrants		1,076	$	4.88	May 2027
Executive Warrants		1,327	$	5.00	December 2026
Other1		90	$	12.15	Various through December 2030
Total		8,177

(1)

Weighted-average strike price.

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All outstanding warrants were deemed to qualify for equity classification under authoritative accounting guidance.

10. Business Segment and Geographic Information

The Company operates in one segment based upon the Company’s organizational structure, the way in which the operations and investments are managed and evaluated by the chief operating decision maker (“CODM”) as well as the lack of available discrete financial information at a level lower than the consolidated level. The CODM is the Chief Executive Officer. The Company shares common, centralized support functions which report directly to the CODM and decision-making regarding the Company’s overall operating performance and allocation of Company resources is assessed on a consolidated basis. Significant segment expenses regularly provided to the CODM are consolidated research and development expenses and consolidated sales, general and administrative expenses. Refer to the consolidated statements of operations for consolidated research and development expenses and consolidated sales, general and administrative expenses. The Company determined that consolidated net loss is the Company’s measure of segment profit or loss.

Net revenue and property and equipment, net, by geographic region are as follows (in thousands):


	Revenue				Property and equipment, net
	Three Months Ended March 31,				March 31,		December 31,
(in thousands)	2026		2025		2026		2025
United States	$	180,362	$	159,112	$	136,840	$	134,007
International		11,746		10,068		1,205		1,317
Total	$	192,108	$	169,180	$	138,045	$	135,324

11. Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss available to common stockholders by the weighted-average number of common shares outstanding for the period. If applicable, diluted net loss per share attributable to common stockholders is calculated by dividing net loss available to common stockholders by the diluted weighted-average number of common shares outstanding for the period, determined using the treasury-stock method and the if-converted method for convertible debt. For purposes of this calculation, common stock subject to repurchase by the Company, common stock issuable upon conversion or exercise of convertible notes, preferred shares, options, and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive. Due to the Company’s net loss position, the effect of including common stock equivalents in the earnings per share calculation is anti-dilutive, and therefore not included.

The following table presents the computation of basic and diluted net loss per share (in thousands, except per share amounts):


	Three Months Ended March 31,
	2026			2025
Numerator:
Net loss	$	(33,906	)	$	(51,907	)
Denominator:
Weighted average common shares outstanding		154,051			146,732
Net loss per share, basic and diluted:	$	(0.22	)	$	(0.35	)

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The following potentially dilutive shares of common stock were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented (in thousands):


	As of March 31,
	2026		2025
Options to purchase common stock and employee stock purchase plan		1,746		2,196
Unvested restricted stock unit awards		11,250		7,894
Warrants to purchase common stock		8,177		9,316
2026 Notes		3,449		3,449
2030 Notes		34,527		34,527
Total		59,149		57,382

12. Income Taxes

To calculate its interim tax provision, at the end of each interim period the Company estimates the annual effective tax rate, adjusted for discrete items arising in that quarter. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the estimated annual taxable income or loss for the year and projections of the proportion of income earned and taxed in foreign jurisdictions. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained, or the tax environment changes.

The Company’s effective tax rate from operations was 0.15% and 0.12% for the three months ended March 31, 2026 and 2025, respectively. The Company’s effective tax rate differs from the federal statutory rate of 21% in each period primarily due to the Company’s net loss position and valuation allowance.

13. Related Party Transactions

The Company purchases inventory from an affiliate of Squadron Capital, LLC (the “Squadron Supplier Affiliate”). David Pelizzon, President and Director of Squadron Capital, LLC, currently serves on the Company’s Board of Directors. For the three months ended March 31, 2026 and 2025, the Company purchased inventory in the amounts of $5.6 million and $2.8 million, respectively, from the Squadron Supplier Affiliate. As of March 31, 2026, and December 31, 2025, the Company had $5.1 million and $2.6 million, respectively, due to the Squadron Supplier Affiliate, for inventory purchases.

14. Subsequent Event

On May 1, 2026, the Company entered into a credit agreement with JP Morgan Chase Bank, consisting of (i) a senior secured term loan in an aggregate principal amount of $175.0 million and (ii) a senior secured revolving credit facility with aggregate commitments of $125.0 million. The senior secured term loan and the revolving credit facility both bear interest at SOFR plus 275 basis points and mature on April 30, 2031. Both facilities are secured by substantially all assets of the Company. The credit agreement also provides for an incremental accordion feature that permits the Company to incur additional term loans or increase revolving commitments in an aggregate amount up to the greater of $150.0 million and 1.0x Adjusted EBITDA, subject to customary conditions. Proceeds from the term loan were used to repay in full the Company’s existing Braidwell Term Loan and Revolving Credit Agreement, as described in Note 7, “Debt,” which were terminated concurrently.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following management's discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto that appear elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). In addition to historical information, the following management’s discussion and analysis of our financial condition and results of operations includes forward-looking information that involves risks, uncertainties, and assumptions. Our actual results and the timing of events could differ materially from those anticipated by these forward-looking statements as a result of many factors, such as those set forth under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, and any updates to those risk factors filed from time to time in our subsequent periodic and current reports filed with the SEC.

Overview

We are a medical technology company, headquartered in Carlsbad, California, focused on the design, development, and advancement of technology for better surgical treatment of spine disorders. By applying our unique, 100% spine focus and deep, collective industry know-how, we aim to revolutionize the approach to spine surgery through clinical distinction. The sophisticated approaches that we create from the ground up are designed to integrate with our expanding InformatiX™ product platform to objectively inform surgery and achieve the goals of spine surgery more predictably and more reproducibly. We have a comprehensive product portfolio designed to address the spine’s various pathologies, and are perpetually innovating to accomplish our ultimate vision, which is to be the standard bearer in spine.

The application of our team’s deep spine know-how, coupled with a willingness to invest holistically in the technologies integrated into our procedural approaches continues to increasingly compel surgeons and sales talent to partner with us. That adoption-driven validation has been the source of industry-leading market share expansion, which has delivered an approximately 35% revenue compound annual growth rate since our transformation commenced in 2018.

We market and sell our products through a network of independent sales agents and direct sales representatives. To deliver consistent, predictable growth, we have added, and intend to continue to add, clinically astute and exclusive sales team members to reach untapped surgeons, hospitals, and national accounts and better penetrate existing accounts and territories.

Revenue and Expense Components

The following is a description of the primary components of our revenue and expenses:

Revenue. We derive our revenue primarily from the sale of spinal surgery implants used in the treatment of spine disorders as well as the sale of medical imaging equipment which is used for surgical planning and post-operative assessment. Spinal implant products include pedicle screws and complementary implants, interbody devices, plates, and tissue-based materials. Medical imaging equipment includes our EOS full-body and weight-bearing x-ray imaging devices, and related services. Our revenue is generated by our direct sales force and independent sales agents. Our products are shipped and invoiced to hospitals and surgical centers. Currently, most of our business is conducted with customers within markets in which we have experience and with payment terms that are customary to our business. We may defer revenue until the time of collection if circumstances related to payment terms, regional market risk or customer history indicate that collectability is not certain.

Cost of sales. Cost of sales consists primarily of direct product costs, royalties, service labor hours, and parts. Our product costs consist primarily of raw materials, component parts, direct labor, and overhead. The product costs of certain of our biologics products include the cost of procuring and processing human tissue. We incur royalties related to the technologies that we license from others and the products that are developed in part by surgeons with whom we collaborate in the product development process.

Research and development expenses. Research and development expenses consist of costs associated with the design, development, testing, and enhancement of our products. Research and development expenses also include salaries and related employee benefits, research-related overhead expenses, and fees paid to external service providers and development consultants in the form of both cash and equity.

Sales, general and administrative expenses. Sales, general and administrative expenses consist primarily of salaries and related employee benefits, sales commissions and other variable costs, depreciation of our surgical instruments, regulatory affairs, quality assurance costs, professional service fees, travel, medical education, trade show and marketing costs, and insurance expenses.

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Litigation-related expenses. Litigation-related expenses consist of costs incurred for our ongoing and settled litigation.

Amortization of acquired intangible assets. Amortization of acquired intangible assets consists of intangible assets acquired in business combinations and asset acquisitions.

Restructuring expenses. Restructuring expenses are primarily associated with the realignment of our operations and geographical footprint to achieve synergies, in which we incur one-time costs related to exiting and/or relocating our facilities, and personnel related expenses including severance and other costs.

Total interest expense and other expense, net. Total interest expense and other expense, net includes interest income, interest expense, gains and losses from foreign currency exchanges, loss on debt extinguishment, gain on derivative liability, and other non-operating gains and losses.

Income tax provision (benefit). Income tax provision (benefit) primarily consists of an estimate of federal, state, and foreign income taxes based on enacted state and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. On an on-going basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowances for accounts receivable, inventories, intangible assets, stock-based compensation, and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumption conditions.

Critical accounting policies are those that, in management’s view, are most important in the portrayal of our financial condition and results of operations. Management believes there have been no material changes during the three months ended March 31, 2026, to the critical accounting policies discussed in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC.

Results of Operations

Total revenue


	Three Months Ended March 31,				Change
(in thousands, except %)	2026		2025		$		%
Revenue from products and services	$	192,108	$	169,180	$	22,928		14	%

Revenue from products and services increased $22.9 million, or 14%, during the three months ended March 31, 2026, compared to the same period in 2025. The increase was primarily due to an increase in product volume that was due to the increase in our surgeon user base, continued expansion of our new product portfolio, and increasing adoption of our technology.

Cost of sales


	Three Months Ended March 31,				Change
(in thousands, except %)	2026		2025		$		%
Cost of sales	$	55,632	$	53,184	$	2,448		5	%

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Cost of sales increased $2.4 million, or 5%, for the three months ended March 31, 2026, compared to the same period in 2025. The increase was primarily due to an increase in product volume offset by a decrease in stock-based compensation.

Operating expenses


	Three Months Ended March 31,				Change
(in thousands, except %)	2026		2025		$			%
Operating expenses:
Research and development	$	17,560	$	16,582	$	978			6	%
Sales, general and administrative		137,057		127,017		10,040			8	%
Litigation-related expenses		525		12,214		(11,689	)		(96	)%
Amortization of acquired intangible assets		3,915		4,103		(188	)		(5	)%
Restructuring expenses	—			371		(371	)		(100	)%
Total operating expenses	$	159,057	$	160,287	$	(1,230	)		(1	)%

Research and development expenses. Research and development expenses increased $1.0 million, or 6%, for the three months ended March 31, 2026, compared to the same period in 2025. The increase was primarily due to an increase in compensation expense.

Sales, general and administrative expenses. Sales, general and administrative expenses increased $10.0 million, or 8%, during the three months ended March 31, 2026, compared to the same period in 2025. The increase was primarily due to higher compensation-related costs and variable selling expenses associated with the increase in revenue, and our continued investment in building our strategic distribution channel.

Litigation-related expenses. Litigation-related expenses decreased $11.7 million, or 96%, for the three months ended March 31, 2026, compared to the same period in 2025. The decrease was primarily related to a litigation settlement during the three months ended March 31, 2025.

Amortization of acquired intangible assets. Amortization of acquired intangible assets remained consistent for the three months ended March 31, 2026, compared to the same period in 2025.

Restructuring expenses. Restructuring expenses decreased $0.4 million, or 100%, during the three months ended March 31, 2026, compared to the same period in 2025. The decrease in restructuring expenses is primarily due to personnel related expenses in the prior period that did not recur.

Total interest expense and other expense, net


	Three Months Ended March 31,						Change
(in thousands, except %)	2026			2025			$			%
Other expense, net:
Interest expense, net	$	(11,721	)	$	(7,841	)	$	(3,880	)		49	%
Loss on debt extinguishment		—

Alphatec Holdings, Inc. 10-Q