Carlsmed Earnings Call Highlights Rapid Growth, Rising Costs

Carlsmed, Inc. ((CARL)) has held its Q4 earnings call. Read on for the main highlights of the call.

Carlsmed, Inc. struck an upbeat tone on its earnings call, underscoring rapid revenue growth, expanding gross margins, and strong clinical validation for its personalized spine implants. Management acknowledged heavier losses and rising cash burn, but framed these as deliberate investments in commercialization and innovation that, supported by a solid cash runway, are intended to drive durable, high‑margin growth.

Explosive Revenue Growth Signals Strong Market Traction

Carlsmed reported full‑year 2025 revenue of $50.5 million, an 86% jump from $27.2 million in 2024, highlighting powerful demand momentum. Fourth‑quarter revenue rose 61% year over year to $15.2 million, indicating that growth remained robust exiting the year and helping support the company’s aggressive expansion plans.

Mid‑70s Gross Margins Continue to Expand

Profitability at the gross level remains a key strength, with full‑year gross margin reaching 75.3%, a 151‑basis‑point increase versus 2024. Fourth‑quarter gross margin improved to 76.5% from 74.7%, driven by lower contract manufacturing costs and internal efficiencies that support the scalability of Carlsmed’s custom implant model.

IPO Proceeds Bolster a Fortified Balance Sheet

The company completed an IPO in July 2025, raising over $100 million and materially strengthening its financial position for growth investments. Carlsmed ended the year with $109.9 million in cash and investments and just $15.6 million drawn on a $50 million debt facility, giving it substantial flexibility to fund expansion.

Clinical Outcomes Underscore Competitive Differentiation

Management highlighted new two‑year retrospective cohort data showing a 74% reduction in reoperation rates for aprevo lumbar patients versus a separate cohort receiving conventional stock implants. These results support the clinical and economic rationale for personalized implants and may help drive broader surgeon adoption and payer support over time.

Reimbursement Tailwinds Support Revenue Per Procedure

Carlsmed secured an important win with CMS NTAP for aprevo cervical, providing up to $21,125 in additional reimbursement per inpatient cervical procedure. The company also emphasized that the lumbar reimbursement framework remains anchored in three MSDRG codes, helping underpin attractive economics even as the mix shifts.

Operational Excellence Drives Faster Turnaround

The company has cut production lead time to six business days, a 25% reduction from eight days in the prior‑year quarter and down sharply from 20 days a year earlier. Management said this faster turnaround supports higher case throughput and makes it easier for new surgeons to adopt the platform without workflow disruption.

Surgeon Adoption and Commercial Footprint Expand Rapidly

In 2025 Carlsmed added 101 new fully trained surgeon users, a key driver of future case volume growth. The company also doubled its U.S. sales regions and now works with over 100 contracted sales agents, aiming to broaden geographic coverage and improve service levels in high‑potential markets.

Innovation Pipeline Extends the Personalized Spine Platform

Carlsmed launched its Myaprevo ecosystem across mobile and web, enhancing the digital experience for planning and case management. It also commercialized aprevo cervical in December 2025 and announced first‑in‑human procedures for bilateral posterior aprevo and the corra personalized cervical plate, both targeted for commercialization in the second half of 2026.

Operating Expenses Surge as Carlsmed Scales Up

Total operating expenses climbed to $68.6 million in 2025 from $44.2 million in 2024, reflecting aggressive investment across R&D, sales and marketing, and G&A. Fourth‑quarter operating expenses increased to $20.9 million from $11.7 million, underscoring the cost of building out the commercial infrastructure and innovation pipeline.

GAAP Losses Widen with Growth Investments

The company’s GAAP net loss widened to $29.6 million for 2025, compared with $24.3 million a year earlier, as spending outpaced revenue gains. In the fourth quarter, GAAP net loss expanded to $8.6 million from $4.7 million, highlighting that profitability remains a longer‑term objective rather than a near‑term focus.

Adjusted EBITDA and Cash Burn Remain in the Red

Adjusted EBITDA, excluding stock‑based compensation, came in at negative $28.4 million for 2025, deeper than the negative $23.7 million recorded in 2024. Cash used in operating activities increased to $29.0 million from $25.5 million, pointing to higher near‑term cash consumption even as management emphasizes a future return to operating leverage.

Pricing Mix Headwinds from Cervical Adoption

Management cautioned that average revenue per procedure is expected to be slightly lower in 2026 as cervical volumes grow, even though pricing should remain in the mid‑ to high‑$20,000 range. This mix shift could modestly pressure ARP versus 2025, though the company expects total revenue growth to more than offset the impact.

Utilization Depth Lags Surgeon Count Growth

While the addition of 101 new surgeons is a positive leading indicator, many are still early in their adoption curve with relatively low procedure counts. Carlsmed noted it must continue training and education efforts to deepen utilization per surgeon, which will be critical to achieving the operating leverage investors are watching for.

Profitability Timing Hinges on Operating Leverage

Despite sustaining mid‑70s gross margins, management acknowledged that rising operating expenses are delaying the path to profitability. The return to breakeven will depend on maintaining strong revenue growth and improving operating efficiency so that incremental sales fall more heavily to the bottom line, especially at the EBITDA level.

Execution Risks Around New Launches and Expansion

The company faces execution risk as it prepares to launch corra personalized cervical plates and expand the bilateral posterior approach alongside ongoing surgeon education. These initiatives will require additional spending ahead of material revenue contribution, leaving little room for missteps as Carlsmed seeks to convert its innovation pipeline into profitable growth.

2026 Outlook: Strong Growth with Improving Efficiency

For 2026 management guided revenue to $70 million to $75 million, implying about 44% growth at the midpoint versus 2025, with the business remaining primarily lumbar‑weighted and ARP in the mid‑ to high‑$20,000s despite a modest cervical‑driven decline. Gross margins are expected to stay in the mid‑70% range, and the company anticipates improving adjusted EBITDA and a clear path toward cash‑flow breakeven as its expanded surgeon base, six‑day lead time, and favorable reimbursement backdrop translate into higher utilization.

Carlsmed’s earnings call painted the picture of a fast‑growing, clinically differentiated spine company leaning hard into its opportunity, accepting near‑term losses in exchange for scale and market share. For investors comfortable with growth‑stage risk, the combination of accelerating revenue, resilient gross margins, and ample liquidity positions the company as a compelling, if still volatile, medtech growth story.