Xtant Medical’s Earnings Call Highlights Growth and Optimism

Xtant Medical Holdings Inc ((XTNT)) has held its Q1 earnings call. Read on for the main highlights of the call.

Xtant Medical Holdings Inc. recently held an earnings call that exuded a generally positive sentiment, underscored by robust revenue growth and enhanced financial performance. The company highlighted strategic advancements through vertical integration and new product launches. Despite challenges such as a decline in spinal implant sales and gross margin pressures, the overall outlook remains optimistic.

Strong Revenue Growth

Xtant Medical reported an impressive 18% year-over-year revenue growth, reaching $32.9 million for the first quarter of 2025. This growth underscores the company’s ability to expand its market presence and capitalize on new opportunities.

Improved Financial Performance

The company achieved a positive net income of $58,000, a significant turnaround from a net loss of $4.4 million in the same period last year. Additionally, adjusted EBITDA improved to $3 million from a $1 million loss in Q1 2024, highlighting a strong recovery in financial health.

Termination of Restrictive Agreement

Xtant Medical marked a new chapter by terminating a restrictive investor rights agreement with OrbiMed. This move is expected to provide the company with greater operational flexibility and strategic freedom.

Vertical Integration Completed

The completion of full vertical integration of its biologics products signifies a major strategic advancement for Xtant. By manufacturing all major biologics product categories in-house, the company aims to enhance product quality and reduce costs.

Launch of New Products

Xtant introduced two innovative products, Trivium and FibreX, to rejuvenate its core demineralized bone offerings. These launches are expected to bolster the company’s product portfolio and drive future growth.

Increased Revenue Guidance

The company raised its full-year 2025 revenue guidance to a range of $127 million to $131 million, representing an 8% to 11% growth. This optimistic outlook reflects confidence in continued market expansion and product success.

Decline in Spinal Implant Sales

Despite overall growth, Xtant faced a 10% year-over-year decline in spinal implant sales, resulting in a $1.2 million reduction. This area remains a challenge that the company needs to address.

Gross Margin Pressure

Gross margin for Q1 2025 decreased slightly to 61.5% from 62.1% in Q1 2024. The decline was primarily due to increased charges related to inventory disposal and provision for excess and obsolete inventory.

Ongoing CMS Policy Uncertainty

Xtant remains cautious about ongoing changes to CMS policy and other governmental cost-saving initiatives, which could impact future royalty income and cash generation. This uncertainty poses a potential risk to the company’s financial stability.

Forward-Looking Guidance

Xtant Medical provided forward-looking guidance, anticipating total revenue for fiscal year 2025 to be in the range of $127 million to $131 million, indicating an 8% to 11% growth. The company expects mid-double-digit revenue growth in its biologics product family, while hardware revenue is expected to remain flat or modestly down year-over-year.

In summary, Xtant Medical’s earnings call highlighted a positive trajectory with strong revenue growth and improved financial performance. While challenges such as declining spinal implant sales and gross margin pressures exist, the company’s strategic advancements and increased revenue guidance suggest a promising future.