Xtant Medical (XTNT) Q3 Earnings call transcript Nov 12, 2024

Xtant Medical Holdings, Inc. recently held its third-quarter 2024 earnings call, highlighting a solid growth trajectory despite facing challenges in the launch of two new products. The company's management team, led by Sean Browne, President and CEO, and Scott Neils, CFO, provided insights into the company's financial performance and strategic initiatives.

Financial Highlights and Challenges

The company reported a 12% growth for the quarter and 36% growth year-to-date, with revenues on track to meet the full-year guidance of $116 million to $120 million. This represents a significant expansion from the company's $58 million revenue size at the end of fiscal year 2022. Despite these positive figures, the company faced challenges in the launch of its new products, OsteoVive Plus and Cortera, due to validation delays and supplier issues. These challenges impacted the third-quarter results, with adjusted EBITDA reflecting the effects of these delays.

Product Innovation and Strategic Shifts

Xtant Medical Holdings is focusing on product innovation and strategic shifts to drive growth and profitability. The company has made significant strides in bringing manufacturing in-house, which will not only control the supply chain but also substantially increase profitability. This move is expected to position Xtant as a larger and more diverse producer of biologics in the market.

Moreover, the company has signed a licensing agreement with a significant player in the advanced wound care market, which will bring in incremental revenue with minimal incremental costs and high margins. This licensing deal is expected to contribute significantly to the company's revenue and profitability in the coming year.

Looking Ahead

Management is optimistic about the company's future prospects, with expectations of achieving adjusted EBITDA positivity in Q4 2024. Operating expenses have been reduced, and the company is focusing on operational leverage to improve profitability. The fourth quarter is expected to be a breakout period, with the launch of new products and the ramp-up of in-house manufacturing contributing to higher revenues and profitability.

Investor and Analyst Insights

During the earnings call, investors and analysts asked questions about the company's revenue mix, profitability, and the impact of product delays on the fourth quarter. Management provided reassurance about the company's financial health and the potential for growth, citing the successful launch of new products and the strategic shift towards in-house manufacturing.

Conclusion

Xtant Medical Holdings, Inc.'s third-quarter 2024 earnings call painted a picture of a company on the right track towards growth and profitability. Despite facing challenges in the launch of new products, the company remains optimistic about its future prospects, with a focus on product innovation, operational efficiency, and strategic acquisitions. The successful execution of these strategies is expected to position Xtant as a major player in the biologics and medical device market.