Michaela Smith

Representing Caitlin Cronin, Michaela Smith asked for more color on where the impact of the raised full-year guidance would be seen in the second half and for any updates to free cash flow expectations.

Answer

CFO Todd Koning clarified that the guidance increase would primarily be reflected in Q3 results. He reiterated the free cash flow forecast, expecting a positive $1 million to $5 million in Q3 and positive cash flow for the full year 2025, stating that the company's performance continues to give them confidence in delivering on their commitments.

Michaela Smith, on for Caitlin Cronin, asked if ATEC has plans to address the interventionalist call point, noting recent M&A activity in that space by other companies.

Answer

Executive Patrick Miles gave a definitive 'no,' stating that ATEC's business is exclusively focused on the spine surgeon. He expressed a strong conviction that expanding into the interventionalist or pain management space would be a 'huge mistake' and a distraction from the company's core mission and aligned interests with its surgeon customers and sales force.

Michaela Smith, on behalf of Caitlin Cronin, inquired about the expected business impacts from tariffs on manufacturing, supply chain costs, and the international business.

Answer

CFO Tom Adams stated that the impact is relatively immaterial as production is in the U.S. and Nicaragua. He noted a slight impact from some components procured from Mainland China, which has been factored into guidance. He quantified this impact as an approximate 0.5 percentage point headwind on the full-year gross margin.