OrthoPediatrics Corp. Q4 FY2025 earnings call

• Supported treatment of over 37,500 children in Q4, total impact to ~1.3 million kids' health.
• 17% Q4 revenue growth, improved adjusted EBITDA, $10M Q4 free cash flow (first positive).
• Full year 2025: 15% revenue growth, nearly 75% adjusted EBITDA increase, cash usage improved to $15M from $41M.
• 2026 goals: continued share-taking, OPSB expansion, execution of multi-year new product super cycle for stronger EBITDA margin and improved free cash flow.
• Reiterated 2026 revenue guidance $262M - $266M (11%-13% growth), expect ~$25M adjusted EBITDA and free cash flow break-even.
• T&D business: 17% Q4 growth, continued full commercial launch of PMP Tibia, beta launch of 3P pediatric plating platform, 3P HIP system exceeding expectations, FDA approval for 3P Small Mini.
• OPSB business: strategic growth catalyst, strong same-store sales, clinic expansion ahead of schedule, new product launches including DF2 brace and trio of bracing products for hip deformities.
• Scoliosis business: 13% Q4 growth, successful EOS product launches like VertiGlide, completion of first surgical cases with VertiGlide, nearing completion of Ellie device, expect beta launch of next-gen scoliosis fusion system in H2 2026.
• International business: OUS growth rebounded, structural improvements in Brazil, EUMDR approvals for T&D and scoliosis products.
• Outside traditional segments: building on 7D experience, kicking off launch of digital surgical platform Playbook, first Iota Motion unit placed at Cincinnati Children's Hospitals.

In the fourth quarter of 2025, worldwide revenue was $61.6 million, up 17% y-o-y. Trauma and deformity global revenue was $42.6 million, up 17% y-o-y. Scoliosis global revenue was $17.6 million, up 13% y-o-y. OUS growth rebounded with 33% growth in international revenue. Trauma and deformity was driven by strong performance across numerous product lines. Scoliosis growth was due to increased international implant growth and OPSB. OPSB continued as a strategic growth catalyst with strong same-store sales growth and new product launches. International business saw solid demand in EU and Australia, and structural improvements in Brazil. Sports medicine other revenue included iota motion robotic sales. Full year 2025 had 15% revenue growth, nearly 75% increase in adjusted EBITDA, and cash usage improved to $15 million from $41 million in 2024. Fourth quarter free cash flow was $10 million, first positive in company history. Revenue contribution: U.S. revenue $48.6 million (79% of total), international revenue $13.0 million (21% of total).

• Reiterated 2026 revenue guidance: $262 million to $266 million, representing annual growth of 11% to 13%.
• Expect to generate approximately $25 million of adjusted EBITDA in 2026.
• Aim to achieve free cash flow break-even in 2026.
• EBITDA and free cash flow expected to exhibit similar quarterly seasonality patterns as 2025, with some periods negative and others positive but cumulatively tracking to annual guidance metrics.

Q: Matthew O'Brien from Piper Sandler asked about scoliosis performance and outlook, and margin progression.

A: Dave mentioned scoliosis growth driven by EOS product launches, early usage of VertiGlide, EUMDR approval boosting international business. Fred said gross margin expected to be similar 73% range in 2026, adjusted EBITDA to increase from $15M in 2025 to $25M in 2026 due to leverage in sales and marketing and cash portion of G&A.

Q: Matthew Blackman from TD Cowan asked about exploring options to increase shareholder value and top line cadence.

A: Dave said infrastructure built, interested in expanding commercial footprint into other pediatric subspecialties. Fred said 2025 is a good proxy for top line, revenue softest in first quarter, strongest in third quarter, first and second half of 2026 expected to have negative and positive free cash flow respectively to reach break-even.

Q: Caitlin Roberts from Connacord Genuity asked about 7D updates and Playbook/Iota Motion launches.

A: Caitlin was told 7D had normal quarter, some unit placements, optimistic for 2026. Dave said Playbook is first foray into digital health, very early days, Iota Motion first unit placed, but not baked into guidance yet.

Q: Lake Street Capital Market asked about Playbook and subspecialties.

A: Dave explained Playbook helps streamline surgical procedures and capture data, first of its kind in pediatric orthopedics. He mentioned potential subspecialties like ENT and cardiovascular, leveraging commercial position and infrastructure.

Q: Mike Mattson from Needham & Company asked about R&D and Ellie.

A: Dave said R&D efficient, pipeline credible, some timing issues in 2025 but pipeline strong. Ellie expected first in human later in 2026, with data collection and expected approval thereafter.

Q: Rivi Mizra from Truist Securities asked about pricing/margin impact of new product cycle, MDR strategy impact on OUS market, and cardio margin profile.

A: Dave said new technologies have higher premiums, positive impact on profitability. EUMDR approval allows full product portfolio in Europe, helping convert surgeons. Cardio business has higher gross margin profile than implant business.