Carlsmed lifts 2026 outlook as spine surgery sales surge 65%

By Grace Kim

Carlsmed reported $21.6 million in third-quarter revenue, up 65% from $13.1 million a year earlier, and raised its 2026 revenue outlook to $78 million to $80 million from $74 million to $78 million. Procedure volume rose 76%, while the trained surgeon user base grew more than 60% year over year, Chairman and CEO Mike Cordonnier said.

Carlsmed develops solutions for spine surgery by combining patient-specific planning, advanced imaging, software and additive manufacturing to create implants designed for individual anatomy. Its aprevo patient-specific interbody implant system is designed for spinal fusion; the broader technology is intended to aid procedure planning, implant selection or creation, spinal alignment and surgical precision.

What drove the 65% revenue increase?

Carlsmed (NASDAQ: CARL) pointed to three drivers:

• New surgeon adoption.
• Increased use among existing customers.
• Buildout following the late-2025 launch of aprevo Cervical.

CFO Rich Heppenstall said the new 2026 range has a midpoint representing more than 56% annual growth. The raised forecast extends the revenue acceleration signaled by third-quarter procedure and surgeon growth.

Takeaway: More surgeons and greater use among existing customers are driving the revenue acceleration.

Where is growth coming from?

Lumbar fusion generated 88% of third-quarter revenue, while cervical procedures contributed 12%. Cervical’s share has increased by roughly three percentage points over the last few quarters, Heppenstall said.

Cordonnier said cervical adoption was “running ahead of the company’s initial expectations.” About 20% of new surgeon users start with cervical procedures only, he said.

Takeaway: Cervical is gaining revenue mix, but lumbar still generated 88% of third-quarter revenue.

What do reimbursement and launches mean?

Management expects an inpatient reimbursement-coding change that took effect October 1 to support lumbar procedure growth. Cordonnier said the federal rule consolidated 11 codes previously applicable to aprevo inpatient lumbar procedures into three, simplifying coding and improving hospital reimbursement.

The company saw an increase in new hospitals going on contract late in the third quarter, and that increase continued into the fourth quarter. Management expects the reimbursement change to contribute to lumbar volumes during the fourth quarter.

Carlsmed commercially launched the aprevo posterior bilateral procedure in mid-October. The direct posterior approach addresses an estimated 30,000 U.S. procedures annually.

The company plans to launch the FDA-cleared corra cervical plating system in the coming weeks. Both launches are expected to support growth in 2027, although management provided no revenue forecast for that year.

Takeaway: New coding may lift fourth-quarter lumbar volume, while two product launches are expected to support 2027 growth.

What does the clinical evidence show?

Cordonnier cited two-year data presented in September on 378 lumbar fusion patients with low vertebral bone density. Patients treated with aprevo had an approximately 6% reoperation rate; he said reductions versus published literature in similar populations relied on unadjusted cross-study comparisons.

During the fourth quarter, Carlsmed plans to enroll patients in a multicenter registry for aprevo Cervical. The registry will collect real-world evidence at six months, one year and two years after treatment.

Takeaway: The registry adds longer follow-up, while the reported comparison remains unadjusted.

How are margins, spending and cash changing?

Gross margin rose to 77.3% from 75.9% a year earlier. Heppenstall attributed the improvement mainly to lower per-unit contract manufacturing costs and efficiencies in Carlsmed’s digital production system, partly offset by product mix.

Adjusted EBITDA was negative $7.3 million, compared with negative $8.2 million a year earlier. Heppenstall said the quarter marked the first in which sales growth and gross margins generated positive operating leverage on profitability.

Adjusted net loss was $0.34 per share.

• Sales and marketing expenses increased to $13 million from $9.6 million.
• Research and development expenses rose to $6.4 million from $4.4 million.
• General and administrative expenses reached $10 million, including $2.3 million related to executive transition costs and the expected resolution of certain legal matters.

Carlsmed ended September with $80.3 million in cash, restricted cash and investments. Quarterly cash burn was $9 million, and term loan debt stood at $15.6 million under a $50 million facility maturing in October 2030.

Management expects gross margin to remain in the high 70s. Asked about the implied sequential revenue increase in the fourth-quarter outlook, Cordonnier said the company “felt good about our business” and was “being prudent with guidance.”

Takeaway: Margins improved and losses narrowed, but Carlsmed still burned $9 million during the quarter.