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    CARL
    Earnings call· Jun 2026(Q2 FY26)

    CARLSMED Q2 FY26 earnings call CARL

    Aug 5, 2026 Source

    Executive summary

    Carlsmed Q2 FY26 — Strong Revenue Growth and Strategic Product Launches

    Carlsmed delivered a robust second quarter, driven by strong surgeon adoption and utilization of its personalized surgery platform, leading to significant revenue growth and an upward revision of full-year guidance. The company is strategically expanding its product portfolio with upcoming launches in both lumbar and cervical franchises, while also benefiting from favorable reimbursement changes for its core lumbar procedures. Management remains focused on leveraging its capital-light model to drive future profitability and market penetration.

    Highlights

    5

    • Strong revenue growth of 57% year-over-year, reaching $18.9 million in Q2 2026.

    • Full-year 2026 revenue guidance raised to $74 million - $78 million, representing over 50% growth at the midpoint.

    • Surgeon user base grew by more than 60% year-over-year.

    • Gross margin expanded by 340 basis points year-over-year to 76.8% in Q2 2026.

    • CMS issued new MS-DRG codes for Aprivo lumbar procedures, simplifying coding and enhancing reimbursement effective October 1, 2026.

    Concerns

    3

    • GAAP net loss increased to $10.5 million in Q2 2026 from $6.8 million in Q2 2025.

    • Adjusted EBITDA was negative $8.6 million in Q2 2026, compared to negative $6.2 million in Q2 2025.

    • Operating expenses increased significantly to $25.6 million in Q2 2026 from $15.4 million in Q2 2025.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $74 million - $78 million
    high materiality
    High
    Full-year 2026 Revenue Growth
    over 50%
    high materiality
    High
    Gross Margins
    high 70s
    medium materiality
    High
    Gross Margins
    higher end of 70s and even into the lower end of 80s
    medium materiality
    Medium
    Cervical Revenue Mix
    low double digits (11-12%)
    low materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Lumbar Franchise
    The lumbar franchise continues to drive the majority of revenue and growth, with significant market potential remaining. Clinical data shows a 74% reduction in reoperations for adult spinal deformity patients using Aprivo lumbar implants.
    Revenue mix: approximately 90%Estimated annual U.S. procedures: 445,000Average revenue per procedure (Q2 FY26): ~$29,000
    		————
    Cervical Franchise
    The cervical franchise, launched recently, is gaining strong traction and contributing to overall revenue. It is expected to grow to low double-digit revenue mix in H2 FY26. The CORA Cervical Plating System launch in Q4 is anticipated to further boost this segment.
    Revenue mix: approximately 10%Estimated annual U.S. procedures: 370,000Average revenue per procedure (Q2 FY26): ~$18,000
    		————

    Operational metrics

    24
    Revenue
    $18.9 millionup 57% YoY
    Q2 FY26
    Revenue
    $12.1 million
    Q2 FY25

    Included due to explicit instruction overriding general skip rule for GAAP statement lines.

    Gross margin
    76.8%up 340 bps YoY
    Q2 FY26
    Gross margin
    73.4%
    Q2 FY25

    Included due to explicit instruction overriding general skip rule for GAAP statement lines.

    Gross margin
    77%
    Q1 FY26

    Stated as 'both at the 77% level' for Q1 and Q2 2026, despite Q2 being 76.8% explicitly stated elsewhere. Capturing management's summary figure.

    R&D expenses
    $6 million
    Q2 FY26

    Included due to explicit instruction overriding general skip rule for GAAP statement lines. Primarily due to higher personnel costs for product development and AI initiatives.

    R&D expenses
    $4.2 million
    Q2 FY25

    Included due to explicit instruction overriding general skip rule for GAAP statement lines.

    Sales and marketing expenses
    $11.9 million
    Q2 FY26

    Included due to explicit instruction overriding general skip rule for GAAP statement lines. Driven by increased sales headcount, targeted marketing, and variable commissions.

    Sales and marketing expenses
    $7.9 million
    Q2 FY25

    Included due to explicit instruction overriding general skip rule for GAAP statement lines.

    General and administrative expenses
    $7.6 million
    Q2 FY26

    Included due to explicit instruction overriding general skip rule for GAAP statement lines. Primarily driven by personnel additions, professional services, and legal fees.

    General and administrative expenses
    $3.3 million
    Q2 FY25

    Included due to explicit instruction overriding general skip rule for GAAP statement lines.

    Adjusted EBITDA
    negative $8.6 millionvs negative $6.2 million in Q2 FY25
    Q2 FY26
    Adjusted EBITDA
    negative $6.2 million
    Q2 FY25

    Comparison value for Adjusted EBITDA.

    Cash and investments balance
    $89.3 million
    as of June 30, 2026
    Cash used in operating activities
    $7.4 million
    Q2 FY26

    Included due to explicit instruction overriding general skip rule for GAAP statement lines.

    Cash used in operating activities
    $8.2 million
    Q2 FY25

    Included due to explicit instruction overriding general skip rule for GAAP statement lines.

    Debt outstanding principal
    $15.6 million
    as of June 30, 2026

    Outstanding principal under the company's debt facility.

    Surgeon user base growth
    >60%
    YoY

    Growth in the number of surgeons using Carlsmed's platform.

    Lumbar fusion procedures (U.S.)
    445,000
    annually

    Estimated total addressable market for lumbar fusion procedures in the U.S.

    Cervical fusion procedures (U.S.)
    370,000
    annually

    Estimated total addressable market for cervical fusion procedures in the U.S.

    Aprivo bilateral system procedures (U.S.)
    30,000
    annually

    Estimated addressable market for the Aprivo bilateral system in the U.S.

    Cervical ACDF procedures using fixation plates (U.S.)
    60%
    annually

    Percentage of cervical ACDF procedures in the U.S. that utilize fixation plates, indicating market potential for CORA.

    Average revenue per procedure
    $29,000
    Q2 FY26
    Average revenue per procedure
    $18,000
    Q2 FY26

    Industry KPIs

    10
    MetricValueDetails
    System utilization—
    Pricing realized price—
    New product launch ramp—
    Procedure volume growth—
    FCF conversion leverage guidance$15.6 millionUSD
    Installed base system placements>60%%
    Segment franchise organic growth57%%
    Sales force commercial capacity build—
    Indicated addressable patient population445,000procedures
    Pivotal trial clinical evidence milestones74%%

    Product announcements

    2
    ProductTypeDetails
    Aprivo bilateral systemlaunch
    CORA Cervical Plating Systemlaunch

    Risks & headwinds

    1
    Reimbursement complexity and accessEffective October 1, 2026

    CMS issued new MS-DRG codes (523, 524, 525) replacing 11 codes for Aprivo lumbar procedures.

    Mitigation: The new structure simplifies coding and enhances reimbursement for hospitals, which is expected to expand hospital and patient access to the APRIVO procedure. Management is committed to training surgeons and expanding partner networks.

    What to watch in Q3 FY26

    5

    Aprivo bilateral system launch

    Q4
    CurrentLimited market evaluation complete
    TargetFull commercial launch

    Why it matters

    Successful launch will expand the lumbar franchise into an estimated 30,000 annual U.S. procedures, contributing to future revenue growth.

    We remain on track for a Q4 commercial launch.

    Q&A highlights

    7

    Why does the H2 guidance imply a deceleration in growth despite a strong Q2, and is it due to conservatism or specific concerns like surgical volume slowdowns?

    Management confirmed the guidance reflects a prudent approach, emphasizing continued high confidence in near and long-term growth. They noted Q2 FY26 revenue growth was 57% YoY, and the midpoint of H2 guidance implies 45% growth over H2 FY25, indicating continued strong performance.

    “this does reflect our continued approach of providing prudent guidance As Mike pointed out, we had 57% revenue growth in the first half of 26 relative to the first half of 25. And the midpoint of our guidance implies a 45% level of growth over the second half of 25.”

    asked by Matthew O'Brien · answered by Unknown Speaker

    2 min read5 chapters

    Detailed Narrative

    01

    Reimbursement Enhancements for Aprivo Lumbar Procedures

    CMS issued the FY27 Inpatient Prospective Payment System (IPPPS) final rule on July 31, 2026, creating three new MS-DRG codes (523, 524, 525) specifically for Aprivo lumbar procedures. These new codes, effective October 1, 2026, replace 11 existing codes, simplifying coding and enhancing reimbursement for hospitals. Management believes this policy will expand hospital and patient access to the APRIVO procedure, acting as a tailwind for 2027 and beyond by accelerating VAC committee processes and deepening penetration.

    02

    Clinical Evidence and Product Expansion in Lumbar Franchise

    Peer-reviewed data published in the Global Spine Journal showed a 74% reduction in reoperations for adult spinal deformity patients treated with Aprivo personalized lumbar implants. This significant clinical advancement supports the platform's efficacy. The company is also expanding its lumbar franchise with the limited market evaluation of the Aprivo bilateral system, which addresses an estimated 30,000 procedures annually in the U.S. and is on track for a Q4 commercial launch.

    03

    Momentum and Expansion in Cervical Franchise

    Aprivo Cervical completed its second full quarter of commercialization, receiving excellent reception from surgeons and contributing approximately 10% of Q2 revenue. The procedure provides precise implant fit and maximized implant coverage, potentially benefiting patients with low vertebral bone density. To further expand, the CORA Cervical Plating System is progressing for a Q4 commercial launch, targeting approximately 60% of cervical ACDF procedures in the US that utilize fixation plates.

    04

    Medical Education and Surgeon Adoption

    Carlsmed's medical education program, including residents and fellows programs and the Aprivo Power Forum, continues to expand, with the Power Forum anticipating more than double the surgeon attendees compared to 2025. This focus on training early and mid-career surgeons, who are eager to adopt 3D planning and personalized surgery, is central to the company's long-term growth strategy and drives new surgeon onboarding and utilization.

    05

    Operational Efficiency and Capital-Light Model

    The company's proprietary digital platform enables efficient delivery of patient-specific surgical kits in about a week, without the heavy capital investments of traditional medtech. This capital-light, digital-first business model contributed to a 340 basis point gross margin expansion year-over-year and is expected to enable contribution margin dollars to grow faster than fixed costs, underpinning future adjusted EBITDA improvement and a visible pathway to cash flow breakeven.

    AI-generated summary of the company’s earnings call. Not investment advice.