Carlsmed, Inc. (Nasdaq: CARL) Q2 2025 Earnings Call | 08/29/2025

Carlsmed, Inc. Q2 2025 Earnings Call Summary

Date: August 29, 2025 Participants:

• Caroline Corner, Investor Relations
• Mike Cardanier, CEO and Chairman
• Leo Greenstein, CFO

Overview: Carlsmed, Inc., a newly public medical technology company, reported strong Q2 2025 results during its first earnings call as a public company, following a successful IPO raising over $100 million. The company focuses on personalized spine surgery solutions through its Aprivo technology platform, aiming to improve patient outcomes and reduce healthcare costs.

Financial Highlights (Q2 2025):

• Revenue: $12.1 million, up 99% year-over-year from $6.1 million in Q2 2024, driven by increased procedure volumes.
• Gross Margin: 73.4%, slightly down from 75% in Q2 2024 due to expedited production fees and material costs.
• Operating Expenses: $15.4 million, up from $10.9 million in Q2 2024, reflecting higher sales, marketing, and administrative costs related to growth and public company transition.
• Net Loss: $6.8 million, compared to $6.3 million in Q2 2024.
• Adjusted EBITDA: Negative $6.2 million, unchanged from Q2 2024.
• Cash Position: $33.5 million as of June 30, 2025, bolstered by $100.5 million in IPO proceeds in July.
• Cash Burn: $15.2 million for the first half of 2025, averaging $2.5 million monthly.
• Debt: $15.6 million, maturing in October 2029, with interest-only payments until August 2027.
• Full-Year 2025 Guidance: Revenue projected at $45.5–$47.5 million, representing 67–75% growth over 2024, driven by increased procedure volume with stable pricing (~$30,000 per procedure).

Business Highlights:

• Surgeon Adoption: 199 surgeons used the Aprivo platform by Q2 end, a 72% increase from the prior year, with 47 new surgeons added in H1 2025. The U.S. market includes ~4,000 spine surgeons, with a $13 billion addressable market for Aprivo lumbar fusions.
• Aprivo Technology: Offers personalized surgical plans and 3D-printed interbody implants tailored to individual patient anatomy, reducing re-operation rates by 82.6% per a recent study.
• Reimbursement Wins:
  • CMS issued three new MS-DRGs effective October 1, 2024, increasing hospital reimbursement for Aprivo procedures ($20,000–$50,000 incremental).
  • NTAP approved for Aprivo cervical spine fusion, effective October 1, 2025, adding up to $21,125 per procedure.
• Operational Efficiency: Proprietary digital production system reduced implant delivery time from over four weeks to 10 business days or less.
• Cervical Expansion: First personalized cervical fusion completed, with a commercial launch planned for H1 2026, targeting 370,000 U.S. procedures annually.
• Business Model: Capital-light, on-demand manufacturing eliminates the need for surgical trays or stock implants, enabling efficient scaling.

Analyst Q&A Highlights:

• Utilization Trends: Strong surgeon adoption and utilization outpaced internal plans, with growth in both new and existing accounts. Short construct fusions are driving recent growth.
• Guidance Drivers: Revenue growth is supported by CMS reimbursement enhancements, faster delivery times, and cervical expansion, though Q3 seasonality may align with industry trends.
• Surgeon Training: Carlsmed added 47 surgeons in H1 2025 and launched a fellows training program and a center of excellence with UCSB to support future growth.
• Cervical Launch Preparation: Lessons from the lumbar launch, 510(k) clearances, and reimbursement approvals position Carlsmed for a successful 2026 cervical launch.
• AI Costs: Investments in AI for case design are expected to scale with procedure volume, offsetting long-term labor costs without significant P&L impact.