Xtant Medical Holdings Reports 28% Revenue Growth to $117.3 Million for Fiscal Year 2024

Xtant Medical Holdings, Inc. reported a significant increase in total revenue for the fiscal year ended December 31, 2024, reaching $117.3 million, a 28% rise from $91.3 million in the previous year. This growth was primarily driven by the acquisition of Surgalign Holdings’ hardware and biologics business, increased sales through independent agents, and $1.5 million in upfront licensing revenue from a new agreement for the SimpliMax™ product. However, the company also faced challenges, including a net loss of $16.4 million compared to a net income of $660,000 in 2023, largely due to the absence of a prior year gain on bargain purchase of $11.7 million.

The cost of sales increased by 37% to $49.1 million, reflecting higher production costs associated with the increased revenue and a $1.5 million write-off of inventory from the acquired business. Consequently, gross profit as a percentage of revenue decreased to 58.2% from 60.8% in the prior year. Operating expenses rose to $80.3 million, driven by higher sales commissions and increased general and administrative costs, which included additional stock-based compensation and severance expenses.

In terms of strategic developments, Xtant Medical made several acquisitions in 2023, including the Coflex and CoFix product lines, which are FDA-approved for treating lumbar spinal stenosis. The company also acquired the nanOss production operations from RTI Surgical, enhancing its product offerings in the orthobiologics and spinal implant markets. These acquisitions are part of Xtant's strategy to expand its portfolio and market presence, particularly in the U.S. and international markets, where approximately 90% of its revenue was generated in 2024.

Operationally, Xtant Medical had over 670 independent sales agents and distributors as of December 31, 2024, and reported a workforce of 232 employees, with a significant portion involved in sales and marketing. The company is focusing on four key growth initiatives: introducing new biologics products, leveraging its distribution network, penetrating adjacent markets, and pursuing strategic acquisitions. However, the company acknowledged potential risks, including changes in reimbursement policies from the Centers for Medicare and Medicaid Services (CMS) that could impact future revenues from its new products.

Looking ahead, Xtant Medical anticipates continued challenges in achieving profitability, with a focus on managing its debt and operational costs. The company has approximately $6.2 million in cash and cash equivalents and expects this, along with anticipated operating cash flows, will be sufficient to meet its needs through at least March 2026. However, it may seek additional financing to support its growth initiatives, which could lead to further dilution of existing shareholders. The company remains committed to navigating the complexities of the medical device market while addressing regulatory and operational challenges.