Orthofix Medical Inc. Q2 FY2025 earnings call

• Discontinued the M6 artificial disc product lines and posted a pro forma P&L excluding M6 on the website. - Prioritized investment in Spine and Biologics distribution expansion and surgeon-driven innovation. - Accelerated spine distributor transition in certain underpenetrated U.S.A. territories. - Launched Reef L Lateral Lumbar Interbody System and VIRATA Spinal Fixation System. - Strong adoption of 7D FLASH navigation system with total U.S. unit placements in the first half of 2025 growing by 66%. - Bone Growth Therapies continued strong growth exceeding market performance.

Global Spinal Implants, Biologics and Enabling Technologies: Second quarter pro forma net sales were $104.8 million, with year-over-year growth of 2%. U.S. Spine Fixation: Procedure volume increased by 7%, but was partially offset by a price decrease at a major account. Bone Growth Therapies (BGT): Total net sales reached $62.6 million, reflecting 6% growth, with 7% growth in the fracture channel. Global Orthopedics: Grew 5% to $33.3 million in the second quarter, led by 28% growth in the U.S. due to the limited market release of TrueLok Elevate and the full market launch of the FITBONE Bone Transport Nail; international Orthopedics declined 2% due to several large NGO orders in 2024 not repeating in 2025.

• Full year 2025 pro forma net sales expected between $808 million and $816 million. - Pro forma non-GAAP adjusted EBITDA expected $82 million to $86 million, representing 190 basis points of EBITDA margin expansion at the midpoint compared to 2024. - Positive free cash flow expected for the full year 2025 and second half. - Gross margins expected to be approximately 72% for the remainder of the year. - Operating expenses expected to improve by approximately 200 basis points this year versus 2024.

• Factors causing actual results to differ materially discussed in most recent SEC filings. - Exposure to tariffs in EU, Canada, China and Taiwan, estimated annual exposure $3 million to $4 million, manageable and reflected in cost of goods sold.

Q: Mike Petusky asked about the driver of U.S. Orthopedic's result, whether it's deeper utilization of products among existing customers or adding new accounts/surgeons.

A: Massimo Calafiore said it's both, with deeper utilization in existing accounts and the introduction of TrueLok Elevate helping enter new markets like the $1.7 billion diabetes foot market.

Q: Caitlin Cronin inquired about the U.S. Spine distributor transition, changes to strategy or timing.

A: Massimo Calafiore mentioned confidence in commercial execution and innovation, with VIRATA and 7D contributing to growth.

Q: Jeffrey Cohen asked about 7D traction geographically and pricing in the second quarter.

A: Massimo Calafiore discussed 7D unit placements growth and Julie Andrews stated no pricing changes in the quarter other than a prior impact from a major account.

Q: Jason Wittes asked about specialized ortho growth and Bone Growth Therapies.

A: Massimo Calafiore talked about Orthopedics growth redefining the limb reconstruction category and BGT growth due to commercial execution and cross-selling opportunities.