Business Context and Reporting Period
Company: CARLSMED, INC. (CARL)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Carlsmed is a commercial-stage medical technology company developing the aprevo Technology Platform, an AI-enabled solution for personalized spine fusion surgery. The platform utilizes patient-specific 3D-printed interbody implants and surgical planning software to address degenerative disc disease (DDD) and adult spinal deformity (ASD). The company completed its Initial Public Offering (IPO) on July 24, 2025, listing on the Nasdaq Global Select Market.
Key Financial Metrics
| Metric | 2025 (in millions) | 2024 (in millions) |
|---|---|---|
| Revenue | $50.5 | $27.2 |
| Gross Profit | $38.0 | $20.0 |
| Gross Margin | 75.3% | 73.8% |
| Net Loss | $(29.6) | $(24.3) |
| Operating Expenses | $68.6 | $44.2 |
| Cash & Equivalents (Year End) | $85.8 | $40.1 |
| Short-term Investments | $24.0 | $0.0 |
| Total Debt Outstanding | $15.6 | $15.4 |
Liquidity: As of December 31, 2025, the company held $109.9 million in cash, cash equivalents, restricted cash, and short-term investments. The company maintains a credit facility with Customers Bank with $15.6 million outstanding and $26.9 million remaining available for borrowing.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 85.9% year-over-year, driven by increased adoption of the aprevo lumbar platform and the commercial launch of the cervical platform in December 2025.
- Expense Expansion: Total operating expenses rose 55.3% to $68.6 million. Sales and marketing expenses increased 63.1% due to headcount growth and commissions. General and administrative expenses nearly doubled (97.4%) primarily due to IPO-related legal and professional fees.
- Capital Structure: The company completed its IPO in July 2025, raising approximately $93.5 million in net proceeds. All convertible preferred stock was converted to common stock upon the IPO closing.
- Product Portfolio: Received FDA 510(k) clearance for cervical interbody implants (Nov 2024) and cervical plating systems (Dec 2025). Completed the first in-human cervical procedure in July 2025.
Guidance, Outlook, and Risks
Outlook: Management expects to continue incurring losses as it scales commercial operations and invests in R&D. The company plans to broadly commercialize the cervical platform in 2026 and launch the aprevo PLIF (posterior lumbar interbody fusion) system in the first half of 2026. The company believes its current cash and credit facility are sufficient to fund operations for at least the next 12 months.
Key Risks:
- Reimbursement: Commercial success depends on third-party payor coverage. While lumbar procedures have premium reimbursement, the requested Transitional Pass-Through (TPT) payment for outpatient cervical procedures was not approved by CMS in November 2025.
- Manufacturing: The company relies exclusively on a limited number of Contract Manufacturing Organizations (CMOs). Disruptions could delay the delivery of patient-specific implants.
- Profitability: The company has an accumulated deficit of $100.8 million and expects to incur additional substantial losses in the foreseeable future.
- Regulatory: Ongoing FDA oversight and potential changes in healthcare regulations could impact operations.
Investor Verification Checklist
- Reimbursement Status: Verify the impact of the denied TPT payment for outpatient cervical procedures on future cervical revenue projections.
- CMO Capacity: Assess the company's ability to maintain its 6-day delivery lead time as volume scales, given reliance on third-party manufacturers.
- Debt Covenants: Review the Customers Loan Agreement covenants, specifically the requirement to maintain $20.0 million in unrestricted cash and minimum revenue thresholds.
- Stock-Based Compensation: Monitor the impact of the 2025 Equity Incentive Plan on future operating expenses and dilution.
- Clinical Data: Track the release of final data from the COMPASS Registry (expected H1 2027) to validate long-term clinical outcomes and revision rates.