Xtant Medical reported third‑quarter 2025 results that marked a clear turnaround, with revenue rising to $33.3 million – a 19% year‑over‑year increase – and net income of $1.3 million, translating to earnings per share of $0.01. Adjusted EBITDA turned positive at $4.5 million, compared with a $1.0 million loss in the same quarter a year earlier. Gross margin expanded to 66.1% from 58.4% in Q3 2024, while operating expenses fell to $19.5 million from $20.1 million, reflecting disciplined cost management. The company also posted positive free cash flow, underscoring progress toward sustainable cash‑generating operations.
Revenue growth was driven largely by a $5.5 million increase in licensing revenue, which offset a decline in hardware product sales. The biologics segment, bolstered by the launch of CollagenX™, contributed a significant portion of the margin expansion, while the vertical integration of the biologics lines helped reduce manufacturing costs. The decline in hardware revenue was partially counterbalanced by higher pricing power in the biologics and licensing categories, resulting in an overall revenue increase.
Gross margin improvement can be attributed to a more favorable product mix and the benefits of full vertical integration. The higher proportion of high‑margin biologics and licensing revenue, combined with lower variable costs from in‑house manufacturing, lifted the margin from 58.4% to 66.1%. Operating expenses were trimmed through reduced professional fees and a focus on cost discipline, which helped maintain profitability even as revenue grew.
The earnings per share beat analyst consensus by $0.02, moving from a forecasted loss of $0.01 to an actual $0.01. The beat was driven by the combination of higher licensing revenue, improved gross margin, and disciplined operating costs. The revenue beat of $0.6 million (1.7% above the $32.7 million consensus) further underscored the strength of the company’s growth strategy.
Management reaffirmed its full‑year 2025 revenue guidance of $131 million to $135 million, unchanged from the prior guidance. The company also confirmed that the sale of certain Coflex® and CoFix® assets and its international hardware business to Companion Spine is expected to close by year‑end, sharpening focus on the core biologics business. The launch of CollagenX™ is positioned to drive future growth in the orthobiologics market.
The market reacted positively to the results, with analysts noting the EPS and revenue beats as evidence of effective execution. The company’s return to profitability, margin expansion, and reaffirmed guidance were highlighted as key factors supporting the favorable reception.
CEO Sean Browne emphasized that the quarter’s performance “reflects the company’s disciplined execution and the strength of its biologics platform.” He added that the asset sale would “sharpen our focus on the core biologics business” and that the company remains “well positioned to deliver meaningful innovation for surgeons and long‑term value for shareholders.”
While the hardware segment experienced a decline, the company’s strategic focus on biologics and licensing revenue provides a buffer against this headwind. The continued investment in the biologics pipeline, coupled with the divestiture of non‑core assets, signals a long‑term commitment to higher‑margin growth.
Overall, Xtant Medical’s Q3 2025 results demonstrate a successful turnaround, driven by a strong licensing portfolio, efficient cost management, and a strategic shift toward biologics. The company’s guidance and asset‑sale plans reinforce confidence in sustained growth and profitability moving forward.
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