Carlsmed, Inc.

What they do

Carlsmed designs and sells AI-enabled software and custom interbody implants, along with single-use surgical instruments, under the aprevo Technology Platform. The company's products are used in lumbar and cervical spine procedures, with a cervical plating system (corra Cervical Plating System) in commercialization.

Revenue drivers

• aprevo lumbar procedures — Primary revenue source; CMS has finalized new MS-DRG codes for inpatient reimbursement effective October 1, 2026, expected to expand Medicare access.
• aprevo cervical procedures — Completed second full quarter of commercialization; represents approximately 10% of quarterly revenue as of Q2 2026.
• Surgeon adoption — Trained surgeon user base grew over 60% year-over-year, driving procedure volume growth.

Recent performance

Q2 2026 revenue was $18.9 million, up 57% year-over-year from $12.1 million. Gross margin improved to 76.8% from 73.4%. Net loss widened to $10.5 million from $6.8 million. Operating expenses increased to $25.6 million from $15.4 million, with notable increases in G&A ($7.6M vs $3.3M). Cash, equivalents, restricted cash, short-term investments, and marketable securities totaled $89.3 million as of June 30, 2026.

Strategy

Management focuses on scaling the aprevo platform across lumbar and cervical procedures, leveraging a proprietary digital production system to improve scalability. They are expanding surgeon training and adoption, particularly among early-career and post-fellowship surgeons. The recent CMS reimbursement ruling for inpatient aprevo lumbar procedures is a key strategic milestone to increase Medicare patient access. Full-year 2026 revenue guidance was raised to $74–$78 million, reflecting over 50% growth at the midpoint.

Risks

• Reimbursement dependence — Revenue growth is closely tied to Medicare and third-party payer reimbursement, with recent CMS changes only for inpatient lumbar procedures.
• Limited commercial history for cervical — aprevo cervical is early in commercialization and represents only ~10% of revenue, with adoption still scaling.
• Persistent operating losses — The company continues to generate significant net losses and negative operating cash flow, with a net loss of $10.5 million in Q2 2026 alone.
• Reliance on contract manufacturing — The company depends on a limited number of CMOs, which could pose supply and quality risks.

Outlook

Management raised full-year 2026 revenue guidance to $74–$78 million, up from prior $72–$77 million. They expect continued volume growth in lumbar and cervical procedures, supported by the CMS reimbursement rule effective October 1, 2026. Gross margin expansion and scalability of the digital production system are cited as progress toward profitability.