Key Highlights

  • Third quarter Revenue grew 13% to $221.2 million from $196.5 million.
  • Revenue for the nine months rose 14% to $626.8 million.
  • Cost of sales increased 6% to $62.9 million, a slower pace than revenue.
  • Litigation-related expenses totaled $6.5 million, compared with a $5.9 million Credit a year earlier.
  • Calculated Operating Income reached $3.2 million, against a calculated loss of $15.9 million.

Spine sales up 13% as the surgeon base widens

Alphatec (NASDAQ:ATEC) operates from Carlsbad, California and concentrates entirely on spine surgery. Its portfolio includes spinal implants such as pedicle screws, interbody devices and plates, plus medical imaging equipment that surgeons use for planning procedures and assessing patients after surgery.

Its quarterly filing for the period ended September 30, 2026 shows third quarter revenue of $221.2 million, a rise of $24.7 million, or 13%, from $196.5 million a year earlier. Over nine months, revenue reached $626.8 million, up $75.6 million, or 14%, from $551.2 million.

Management linked the growth mainly to greater product Volume from an expanding base of surgeon users, wider adoption of its newer product lineup and gains in adjacent areas.

Cost of sales rises more slowly than revenue

Cost of sales came to $62.9 million for the quarter, up $3.7 million, or 6%, from $59.2 million. The filing attributes the increase to higher product volume. For the nine months, cost of sales climbed $9.1 million, or 5%, to $178.0 million from $168.8 million.

On a calculated basis, third quarter Gross Profit was $158.2 million, about 71.5% of revenue, versus $137.3 million, or roughly 69.9%, a year earlier. Revenue growth of 13% against cost growth of 6% explains the wider margin.

The company relies on independent sales agents and direct representatives, and it plans to keep adding exclusive sales team members to reach additional surgeons and hospitals.

Expenses and the swing in litigation costs

Total operating expenses reached $155.0 million, up $1.8 million from $153.2 million. Selling, general and administrative costs increased $8.2 million, or 7%, to $132.5 million, driven by higher compensation and variable selling costs tied to the larger surgeon base.

Research and development spending dropped 4% to $18.0 million, largely because of lower stock-based compensation. Amortization of acquired intangibles came to $3.9 million, compared with $3.7 million.

Litigation expenses were $6.5 million, versus a credit of $5.9 million in the prior year quarter. On a calculated basis, that is a swing of roughly $12.4 million. For the nine months, litigation costs fell 95% to $1.0 million, which the filing ties to a settlement reached in the first nine months of 2025. Restructuring expenses were nil in both periods.

Operating result moves about $19 million into positive territory

Deducting cost of sales and operating expenses from revenue leaves calculated operating income of about $3.2 million for the third quarter, against a calculated operating loss of about $15.9 million a year earlier. The roughly $19.2 million swing reflects revenue growth, slower cost growth and expense items that did not recur.

The nine-month calculated result also improved. Revenue of $626.8 million, less cost of sales of $178.0 million and operating expenses of $470.1 million, produces a calculated operating loss of about $21.2 million, compared with about $73.3 million a year earlier.

The company said it will keep investing in its surgeon base, sales force and newer procedural products. Observers will likely track whether revenue keeps outpacing selling costs and whether litigation expenses stay contained following the earlier settlement.