Carlsmed Lifts Full-Year Guidance After Q2 Revenue Climbs 57%

Carlsmed (NASDAQ:CARL) kept its growth streak intact in the second quarter, as revenue jumped 57% year over year to $18.9 million and management raised its full-year revenue guidance. The company said momentum came from continued uptake of the aprevo lumbar platform and the early contribution of its newer cervical system, with procedure volumes climbing across both categories.

Chairman and CEO Mike Cordonnier said the surgeon user base expanded by more than 60% compared with a year earlier. He pointed to new surgeon onboarding, higher utilization among existing customers, and growing use of aprevo in more complex lumbar and cervical fusion procedures as the main drivers.

“We had a really great quarter and really great year with new surgeon adds,” Cordonnier said on the company’s earnings call. He noted that some surgeons had adopted both the lumbar and cervical offerings for the first time, which helped accelerate new-user growth.

Carlsmed now expects full-year 2026 revenue of $74 million to $78 million. At the midpoint, management said that would represent growth of more than 50% from 2025.

CFO Leo Greenstein said the updated outlook reflects first-half volume growth and anticipated second-half expansion in both aprevo lumbar and aprevo Cervical. He stressed that the guidance does not include incremental revenue from a recently finalized Medicare reimbursement rule, which management sees as more relevant to 2027 and beyond.

“We view the guidance as prudent,” Greenstein said. “First-half revenue grew 57% year over year, while the midpoint of our full-year guidance implies 45% growth in the second half compared with the same period of 2025.”

On July 31, the Centers for Medicare & Medicaid Services issued its final FY 2027 Inpatient Prospective Payment System rule. The rule creates three new Medicare Severity Diagnosis-Related Group codes—523, 524, and 525—for aprevo lumbar procedures, replacing 11 codes that had previously applied. The new reimbursement structure is effective Oct. 1, 2026.

Cordonnier said the change simplifies coding and improves hospital reimbursement for aprevo lumbar cases, a combination the company believes could broaden hospital and patient access over time. Even so, management does not expect a material revenue impact in the second half of 2026.

“We see this as beneficial for hospital partnerships and procedure access over the long term,” Cordonnier said. Greenstein added that hospitals will need time to review the rule and complete coverage processes before the benefit shows up in utilization.

Growth from the Medicare change is expected to come mostly from procedure volume rather than higher pricing. Lumbar average revenue per procedure was around $29,000 in the second quarter, while cervical average revenue per procedure was about $18,000. Management said those levels should hold in the coming quarters.

Gross margin widened by 340 basis points to 76.8% in the second quarter, up from 73.4% in the prior-year quarter. Greenstein attributed the gain to lower per-unit costs from contract manufacturers and efficiency improvements in the digital production system, which he said more than offset product-mix effects. Carlsmed expects gross margin to remain in the high-70% range during the second half and sees a path to the low-80% level over the next 24 months.

Operating expenses climbed to $25.6 million from $15.4 million a year earlier. Research and development spending rose to $6 million, largely tied to personnel costs and product-development work, including AI initiatives. Sales and marketing expense reached $11.9 million as Carlsmed added sales headcount, expanded targeted marketing, and paid higher variable commissions on revenue growth. General and administrative expense increased to $7.6 million from $3.3 million, reflecting personnel additions, professional services, legal fees, and compliance costs.

The company posted a GAAP net loss of $10.5 million, compared with a loss of $6.8 million a year earlier. Adjusted EBITDA was negative $8.6 million versus negative $6.2 million in the same period of 2025.

Carlsmed ended the quarter with $89.3 million in cash and investments and total liabilities of $34 million. That included $15.6 million of outstanding principal under a $50 million debt facility maturing in October 2030. Operating cash use narrowed slightly to $7.4 million from $8.2 million in the prior-year quarter.

Lumbar procedures generated roughly 90% of second-quarter revenue, with cervical procedures contributing about 10%. Management expects cervical to account for 11% to 12% of revenue in the second half as adoption continues to build.

On the product front, Carlsmed remains on track to launch the aprevo Bilateral system commercially in the fourth quarter. The lumbar product is currently in a limited market release, and early surgeon feedback has centered on its preoperative 3D planning, visualization capabilities, and integration with posterior bilateral techniques.

The company also plans a fourth-quarter commercial launch for the Corra Cervical Plating System, which is being evaluated in a limited market setting. The full launch is expected to align with a fall medical society meeting. Cordonnier said Corra could provide a modest increase in cervical average revenue per procedure.

Carlsmed additionally received institutional review board approval for its aprevo Cervical Effectiveness (ACE) multicenter registry. The company expects enrollment to start in the fourth quarter, with more than a dozen sites and over 300 patients planned. The registry will collect real-world outcome data at six months, one year, and two years.

Cordonnier also highlighted a retrospective cohort study published in the Global Spine Journal that reported a 74% reduction in reoperations among adult spinal deformity patients treated with aprevo personalized lumbar implants.

Carlsmed describes itself as a commercial-stage medical technology company focused on AI-enabled, personalized spine surgery. Its aprevo platform combines AI-based software, custom-designed interbody implants, and single-use surgical instruments. With the latest results, the company is betting that the combination of clinical evidence, new product launches, and a clearer reimbursement path will keep procedure growth on an upward trajectory.