Carlsmed (NASDAQ:CARL) raised its full-year revenue outlook after third-quarter sales climbed 65%, as more surgeons adopted its personalized spine surgery products and procedure volume increased.
The company reported revenue of $21.6 million for the quarter, up from $13.1 million a year earlier. Procedure volume rose 76%, while its trained surgeon user base grew more than 60% year over year, Chairman and CEO Mike Cordonnier said on the earnings call.
Carlsmed now expects 2026 revenue of $78 million to $80 million, up from its previous forecast of $74 million to $78 million. The midpoint of the new range represents more than 56% annual growth, CFO Rich Heppenstall said.
Cervical Sales Grow as Lumbar Remains Core Business
Carlsmed’s aprevo platform uses patient data to develop surgeon-specific 3D surgical plans and personalized implants for spinal fusion procedures. Cordonnier said growth came from adding surgeons, increasing use among existing customers and building on the late-2025 launch of aprevo Cervical.
Lumbar fusion accounted for 88% of third-quarter revenue, with cervical contributing 12%, Heppenstall said. Cervical’s share has increased by roughly three percentage points over the last few quarters, he added.
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.
Carlsmed is preparing to enroll patients in a multicenter registry for aprevo Cervical during the fourth quarter. The planned registry will collect real-world evidence at six months, one year and two years after treatment.
Reimbursement and Product Launches
Management expects a change in inpatient reimbursement coding 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 enhancing reimbursement for hospitals.
In response to an analyst’s question, Cordonnier said Carlsmed saw an increase in new hospitals going on contract toward the end of the third quarter, continuing into the fourth quarter. The company expects the reimbursement change to contribute to lumbar volumes in the fourth quarter.
Carlsmed also commercially launched its aprevo posterior bilateral procedure in mid-October. Cordonnier said the offering expands the platform to a direct posterior approach and addresses an estimated 30,000 U.S. procedures annually.
The company plans to launch its FDA-cleared corra cervical plating system in the coming weeks. Management expects both product launches to support growth in 2027, although it did not provide a revenue forecast for that year.
On clinical evidence, 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. The reported reductions versus published literature in similar populations were based on unadjusted cross-study comparisons, he said.
Margins Improve, but Losses Continue
Third-quarter gross margin rose to 77.3% from 75.9% a year earlier. Heppenstall attributed the improvement largely to lower per-unit contract manufacturing costs and efficiencies in the 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 rose to $13 million from $9.6 million, while research and development expenses increased to $6.4 million from $4.4 million. General and administrative expenses were $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 its business and was being prudent with guidance.
About Carlsmed (NASDAQ:CARL)
Carlsmed, Inc. is a medical technology company focused on personalized solutions for spine surgery. The company combines patient-specific planning, advanced imaging, software and additive manufacturing to develop implants designed to address the anatomical needs of individual patients. Its products include the aprevo® patient-specific interbody implant system, which is designed for use in spinal fusion procedures. Carlsmed’s technology is intended to support surgeons in planning procedures and selecting or creating implants that may help restore spinal alignment and improve surgical precision.
