Xtant Medical Holdings, Inc. 2026 Q2 Earnings Call

Please go ahead. Thank you, operator, and welcome to Xtant Medical's Second Quarter 2026 Financial Results Call.

Joining me today are Sean Browne, President and Chief Executive Officer, and Scott Neils, Chief Financial Officer. Today's call is being webcast and will be posted on the company's website for playback. During the course of this call, management may make certain forward-looking statements regarding future events and the company's expected future performance. These forward-looking statements reflect Xtant's current perspective on existing trends and information and can be identified by such words as "expect," "plan," "will," "may," "anticipate," "believe," "should," "intends," and other words with similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the Risk Factor section of the company's annual report on Form 10-K filed with the SEC and in subsequent SEC reports and press releases. Actual results may differ materially.

The company's financial results press release and today's discussion include certain non-GAAP financial measures. Please refer to the non-GAAP to GAAP reconciliations, which appear in our press release and are otherwise available on our website. Note that the Form 8-K that we file with our financial results press releases provide detailed narratives that describe our use of such measures. For the benefit of those of you who may be listening to a replay of this call, it was held and recorded on August 11th, 2026, at approximately 8:30 A.M. Eastern Time. The company declines any obligation to update its forward-looking statements except as required by applicable law. Now I'd like to turn the call over to Sean Browne, CEO.

Sean? Thank you, Kevin, and good morning, everyone.

Thank you for joining our second quarter update call. As has been our practice, I will begin with a few prepared remarks about our operations, and Scott will provide a deeper dive into the financials. We will then open the call to your questions. Okay. During the second quarter, we achieved meaningful progress across several aspects of our business. We integrated the new Dilon sales reps into our own commercial organization, and we addressed a significant unmet need among surgeons with the launch of Trivium™ Shaped.

While our reported revenue continues to face challenging year-over-year comps due to the sale of certain assets and businesses to Companion Spine last year, as well as the cessation of certain license revenue due to changes in reimbursements that took effect January 1, we are building a solid, resilient foundation that we believe will support sustained, predictable, and profitable growth in the future. Turning to the Dilon Technologies distribution agreement that we announced in April. Recall that through this agreement, we acquired exclusive U.S. distribution rights to Dilon's HEMOBLAST® Bellows product for high-performance hemostasis following certain surgical procedures. This agreement adds a highly complementary hemostatic technology to our portfolio and gives us entry into an estimated $1 billion global addressable market for hemostatic products.

As part of that agreement, we hired Dilon's U.S. team of 17 salespeople and two their regional managers that have been integrated into our own commercial organization and are being trained on our entire portfolio. This is in addition to our own investments that we have been making in our commercial organization, including, as we stated previously, doubling the number of regional sales reps in the field. In 2026, we've been adding significant resources to our marketing and national accounts teams, and these professionals have had an immediate impact driving institutional adoption of our portfolio at scale across hospital systems and large practice groups. As a side note, the training and integration of these new reps consumed a significant amount of our time and resources and played a role in our soft Q2 sales.

However, I'm more than excited than ever about Xtant's future with this significantly larger commercial team. As for HEMOBLAST®, HEMOBLAST® orders during the quarter were in line with our expectations, but our recognition of this revenue from sales is lower than we expected since we didn't transition purchase orders for HEMOBLAST® to Xtant until after the end of the second quarter, and our transition of certain customers to Xtant contracts remains ongoing. Accordingly, we are unable to fully recognize the revenue on orders submitted to Dilon during the quarter. As we look out into the remainder of the year, we see significant sales synergies as our legacy commercial organization and the new specialty reps share very few overlapping call points in the field.

As the specialty reps continue to get comfortable selling our other product lines, we anticipate that this will translate into accelerating biologics growth in Q3 and beyond. At this point, while we are very pleased with the speed with which they are coming up the learning curve, we see significant untapped potential that we expect to penetrate once these additional sales resources are fully deployed. We view the newly integrated sales force as a foundational part of our future commercial strategy. Turning to Trivium™ Shaped. We are seeing strong early sales traction since the product's launch in May, joining Collagen X and OsteoFactor Pro™ as recent product launches that are key drivers to our overall biologics growth. Trivium™ Shaped is an extension of our Trivium™ bone graft portfolio, available in pre-shaped configurations designed to support handling, preparation, and placement across a range of surgical applications.

Trivium™ is a composite allograft that combines cortical fibers, cancellous bone, and demineralized bone matrix into a single connected bone graft matrix. Trivium™ Shaped builds on the Trivium™'s sculptable format, which we launched in 2025, by offering surgeons ready-to-use graft forms, including boats and strips that are designed to improve consistency and handling in the operating room. Surgeons tell us that these pre-shaped formats reduce preparation time and support more predictable placement, and that feedback is translating directly into the sales momentum we are seeing since launch. Innovations such as Trivium™ Shaped, a demineralized bone matrix, together with our amnio and Collagen X product lines, also position us to move into adjacent high-value markets, including chronic wound care and surgical repair, a combined TAM of approximately $6.5 billion.

Now with the addition of Hemostatic Biologic, we gain access to an additional $1 billion of TAM, and we are uniquely positioned to be a partner of choice that can address a very broad range of surgeon and hospital needs in regenerative medicine. We believe that breadth of our portfolio, together with the quality control that comes with in-house manufacturing, sets us apart from nearly everyone else in the field. Now, from a guidance perspective, reflecting lower than expected biologics revenue in the second quarter, as well as the ongoing headwinds related to our amnio product line directly tied to the advanced wound care market that are expected to persist through the back half of the year. We are today modestly reducing our full-year revenue guidance to a range of $99 million to $103 million, and that was from $101 million to $105 million previously.

Notwithstanding this change, however, we continue to believe that our enhanced commercial presence and expanded product portfolio position us well to drive top-line growth throughout 2026 and beyond. With that, I'll turn the call over to Scott for a more detailed review of our financial results.

Scott? Thank you, Sean, and good morning, everyone.