Xtant reported modest Q4 revenue growth to $32.4 million (+3% YoY) with improved gross margin, and for full-year 2025 revenue rose 14% to $133.9 million, producing a swing to net income of $5.0 million and adjusted EBITDA of $16.3 million.

The company completed a transformational divestiture of Coflex and international Paradigm Spine assets to Companion Spine for about $21.4 million, using proceeds to reduce borrowings and bolster cash (year-end cash of $17.3 million plus $10.7 million received post-year-end).

Xtant guided 2026 revenue of $95–99 million—reflecting the divestiture and expired license revenue—but expects sequential quarterly growth as an expanded salesforce and new biologics launches (eg, nanOss Strata and CollagenX) ramp, while maintaining positive free cash flow and no near-term external capital need.

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Xtant Medical (NYSEAMERICAN:XTNT) reported fourth-quarter and full-year 2025 results highlighting modest quarterly revenue growth, improved profitability, and a sharper strategic focus following the sale of non-core assets to Companion Spine.

President and CEO Sean Browne said the company delivered “solid financial performance” in the fourth quarter, with revenue of $32.4 million, up 3% from $31.5 million in the prior-year quarter. Browne noted, however, that the closing of the Companion Spine transaction in early December—roughly one month earlier than the company expected—reduced fourth-quarter revenue by about $2 million.

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Chief Financial Officer Scott Neils said the quarter’s revenue increase was “attributed mainly to higher license revenue” and was “partially offset by declines in biologics and hardware.”

Gross margin in the fourth quarter rose to 54.9% from 50.8% a year earlier. Neils attributed the improvement primarily to favorable sales mix and greater scale, partially offset by a $1.3 million inventory charge associated with the launch of the Cortera fixation system.

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Operating expenses in the quarter were $18.7 million versus $17.9 million in the comparable 2024 period. General and administrative expense increased to $7.3 million from $5.7 million, driven mainly by $1.4 million of additional expense tied to various compensation plans, Neils said. Sales and marketing expense declined to $10.9 million from $11.7 million, largely due to a $0.9 million reduction in commissions. R&D expense fell to $459,000 from $522,000.

Xtant posted fourth-quarter net income of $57,000, or $0.00 per share on a fully diluted basis, compared to a net loss of $3.2 million, or $0.02 per share, in the year-ago quarter. Adjusted EBITDA improved to $1.9 million from approximately $0.4 million.

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For the full year 2025, Xtant reported revenue of $133.9 million, near the upper end of its previously stated guidance range of $131 million to $135 million. Browne emphasized that the guidance assumed a full month of Coflex and Paradigm Spine revenue, and that the earlier-than-expected divestiture timing affected results.

Neils said full-year revenue rose 14% from $117.3 million in 2024, despite the December closing of the sale of the Coflex assets and international hardware business. He added that the divested businesses had been generating roughly $2 million of revenue per month.

Full-year gross margin increased to 62.9% from 58.2% in 2024. Neils said about 530 basis points of the improvement came from sales mix and greater scale, partially offset by a 260 basis point reduction due to increased charges for excess and obsolete inventory.

Total operating expenses for 2025 were $77.0 million, down from $80.3 million in 2024. General and administrative expense rose to $29.5 million from $28.7 million, primarily due to $2.4 million of additional compensation-plan costs, partially offset by a $1.2 million reduction in stock-based compensation. Sales and marketing expense fell to $45.5 million from $49.2 million, reflecting lower commissions and reduced compensation expense tied to headcount, partially offset by increased consulting fees. R&D spending decreased to $2.1 million from $2.4 million.

Net income for the year was $5.0 million, or $0.03 per diluted share, compared with a net loss of $16.5 million, or $0.12 per share, in 2024. Adjusted EBITDA was $16.3 million, compared with an adjusted EBITDA loss of approximately $2.3 million in 2024.

Browne described the sale of the company’s non-core Coflex interlaminar stabilization assets and International Paradigm Spine entities to Companion Spine as “transformational,” saying it “further sharpened our focus on our core high-margin biologics business.” He reported the final purchase price was approximately $21.4 million and said the transaction is “now fully closed and settled.”

According to Browne, proceeds were used to reduce borrowings and strengthen cash, and the company does not anticipate raising outside capital “in the foreseeable future.”

Neils said cash, cash equivalents, and restricted cash totaled $17.3 million at Dec. 31, 2025, compared with $6.2 million a year earlier. He added that the year-end cash balance excluded $10.7 million received after year-end from Companion Spine, related to an $8.2 million unsecured promissory note plus accrued interest and purchase-price-related adjustments. Xtant also reported net accounts receivable of $17.8 million, inventory of $30.3 million, and $3.8 million available under a revolving credit facility as of year-end.

Neils also provided details on the disposed businesses and license revenue. Revenue from the businesses sold to Companion Spine was $20.3 million for the 11 months ended Nov. 30, 2025, with cost of sales of $6.6 million and operating expenses of $15.4 million over that same period. In addition, the company recognized $18.7 million of license revenue during 2025, with related sales and marketing expense of $3.7 million.

Browne said Xtant’s emphasis in recent periods—self-sustainability, positive cash flow, tighter operating discipline, and in-house manufacturing—was “intentional,” and that those goals have now been achieved. With that foundation, he said management is “turning our full attention to driving top-line growth.”

On the commercial side, Browne said the company has doubled the number of regional sales representatives in 2025 and into 2026, and those reps are now deployed and ramping. He also said Xtant plans to add significant resources to its national accounts team in 2026 to drive institutional adoption across hospital systems and large practice groups.

The company highlighted two product launches:

nanOss Strata, a next-generation synthetic bone graft made from hydroxycarbonate apatite, which Browne said has “higher solubility than traditional hydroxyapatite,” improving bioactivity and integration. Browne said early surgeon feedback has been “excellent.”

CollagenX, a bovine collagen particulate for surgical wound closure designed to promote healing and help mitigate surgical site infection risk. Browne said it could be an add-on to “virtually every case type” in the existing biologics portfolio, creating attach-rate opportunities and expanding into adjacent surgical disciplines.

In response to analyst questions about which products could drive growth, Browne pointed to advanced biologics offerings including OsteoVive Plus, OsteoFactor Pro, CollagenX, and Trivium. He also said the company’s opportunity set has broadened, citing increased opportunities in areas such as trauma and foot and ankle.

On channel mix, Browne said the OEM channel represents about 20% to 22% of the biologics business, with growth expected to be driven largely by Xtant-branded products through its independent agent networks as the expanded sales force ramps.

Xtant guided to full-year 2026 revenue of $95 million to $99 million. Browne said the outlook reflects the impact of the Companion Spine divestiture and the expiration of license revenue from its Q-Code and amniotic membrane agreements, which he described as non-recurring items. He said these headwinds are expected to be offset by organic growth in core biologics as the expanded commercial team becomes fully productive and new products gain traction.

Neils said the company expects sequential quarter-over-quarter growth through 2026, while noting seasonality—particularly weaker sequential growth in the third quarter. He also provided early-year expectations: biologics in the first quarter of 2026 is expected to be down “low double digits” compared to the first quarter of 2025, mainly due to “lost amnio product,” while hardware is expected to be down approximately “mid-teens” after adjusting for divestiture-related revenue.

Regarding the Q-Code license revenue, Browne said “the Q-Code revenue all goes away,” but added that Xtant still manufactures products used in advanced wound care and expects business to ramp as distributors use Xtant’s contracts and sell under the Xtant brand, with pickup more likely “sometime in the late second quarter to the second half of the year.”

On hardware, Browne said he expects a “slow decline throughout the year,” while Neils said the company anticipates a continued decline in remaining hardware revenue at a “reasonably steady rate,” approaching “high teens%” in 2026. Browne said the company continues to evaluate the long-term strategic role of hardware, noting it currently helps support biologics adoption but remains under review as a potential distraction if the drag becomes too large.

Neils said the company expects gross margin in 2026 to be in the low 60% range, citing positive impacts from higher-margin biologics launches offset in part by non-product hardware costs such as excess and obsolete charges.

Browne reiterated management’s expectation to maintain positive free cash flow at the guided revenue levels and said the company does not anticipate the need for additional outside capital.

Xtant Medical, Inc is a medical technology company focused on the development, manufacturing and distribution of bone graft, spine biologics and related implantable medical devices. The company's product portfolio is designed to address critical needs in spinal fusion, orthopedics and trauma surgery by providing a range of solutions that promote bone growth, structural support and patient recovery.

The company's offerings include an array of bone graft substitutes – such as demineralized bone matrix putties and fibers – interbody fusion devices, spinal fixation systems and biologic agents.

The article "Xtant Medical Q4 Earnings Call Highlights" was originally published by MarketBeat.