Xtant Medical’s Earnings Call: Mixed Outlook with Growth Plans

Xtant Medical Holdings Inc ((XTNT)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for Xtant Medical Holdings Inc. reflected a mixed sentiment, showcasing strong revenue growth and effective cost reductions, yet facing challenges with declining gross margins and hardware sales. The company remains optimistic about future growth, particularly in its Biologics segment, and anticipates overall revenue growth by 2025, despite ongoing challenges in optimizing hardware lines and enhancing profitability.

Record Fourth-Quarter Revenue

Xtant Medical Holdings Inc. achieved a record fourth-quarter revenue of $31.5 million, marking a significant 12% growth quarter-over-quarter and an impressive 28% increase year-over-year. This milestone underscores the company’s robust performance and strategic efforts to enhance its revenue streams.

Positive Adjusted EBITDA

The company reported a positive adjusted EBITDA of $438,000 for the fourth quarter, a notable improvement from a loss of $695,000 in the same period in 2023. This positive shift highlights Xtant’s successful cost management and operational efficiency.

Biologics Business Growth

Xtant’s Biologics business experienced a 21% growth for the year, driven by the introduction of new products such as OsteoVide Plus and Ambion. This segment’s growth is a key focus for the company, contributing significantly to its overall positive outlook.

Cost Reduction Achievements

The company successfully reduced operating expenses by approximately $5 million and achieved a headcount reduction of more than 13%. These cost-saving measures are part of Xtant’s strategy to enhance profitability and achieve sustainable cash flow.

2025 Revenue Guidance

Xtant Medical Holdings Inc. provided guidance for 2025, projecting total revenue between $126 million and $130 million, representing an 8% to 11% growth. The company emphasized mid-double-digit growth in its Biologics segment, while expecting hardware revenue to remain consistent or slightly decline year over year. Xtant aims to achieve sustainable cash flow by the end of 2025, leveraging cost-saving measures and new product introductions.

Gross Margin Decline

The gross margin for the fourth quarter of 2024 was 50.8%, down from 61% in the same period in 2023, primarily due to inventory write-offs and reduced yields. This decline poses a challenge for the company, which is actively working to improve margins through strategic initiatives.

Hardware Revenue Decline

Hardware sales saw a 10% year-over-year decline, attributed to strong previous year comparisons and supply chain issues in the EU. This segment remains a challenge for Xtant, requiring focused efforts to stabilize and potentially grow in the future.

Net Loss for Fourth Quarter

Xtant reported a net loss of $3.2 million, or $0.02 per share, in the fourth quarter of 2024. Despite this loss, the company is committed to improving its financial health through strategic initiatives and cost management.

In conclusion, the earnings call for Xtant Medical Holdings Inc. highlighted a mixed yet promising outlook. While the company faces challenges with declining gross margins and hardware sales, its strong revenue growth and successful cost reductions provide a solid foundation for future growth. The focus on expanding the Biologics segment and achieving sustainable cash flow by 2025 remains central to Xtant’s strategic vision.