OrthoPediatrics(KIDS) - 2025 Q1 - Quarterly Results

First Quarter 2025 and Business Highlights OrthoPediatrics reported strong Q1 2025 results with 17% revenue growth, improved Adjusted EBITDA, and raised full-year guidance Q1 2025 Key Performance Indicators (in millions) | Metric | Q1 2025 | Change vs. Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $52.4 | +17% | | U.S. Revenue | $40.9 | +19% | | International Revenue | $11.5 | +11% | | Trauma & Deformity Revenue | $37.9 | +14% | | Scoliosis Revenue | $13.7 | +34% | | Adjusted EBITDA | ($0.4) | Improved from ($1.1) | | Free Cash Flow Usage | N/A | Reduced by 35% YoY | - The company helped a record of nearly 39,000 children in the first quarter of 2025[6] - Expanded the scoliosis portfolio with the launch of the VerteGlide™ System for Early Onset Scoliosis, marking the company's 80th system launch[6] - CEO David Bailey highlighted strong execution, progress in scaling OPSB, gaining market share, and successful product launches as key drivers, confident in continued growth due to U.S. manufacturing and the non-elective nature of its procedures[4] First Quarter 2025 Financial Performance Q1 2025 revenue grew 17% to $52.4 million with improved gross margin, but increased operating expenses led to a wider net loss despite improved Adjusted EBITDA Revenue Analysis Revenue grew robustly across geographies and product lines, with U.S. up 19% and Scoliosis up 34%, offsetting a 25% decline in Sports Medicine/Other Q1 2025 Revenue by Geography (in millions) | Geography | Q1 2025 Revenue | Q1 2024 Revenue | Growth | | :--- | :--- | :--- | :--- | | U.S. | $40.9 | $34.3 | 19% | | International | $11.5 | $10.4 | 11% | | Total | $52.4 | $44.7 | 17% | Q1 2025 Revenue by Product Category (in millions) | Product Category | Q1 2025 Revenue | Q1 2024 Revenue | Growth | | :--- | :--- | :--- | :--- | | Trauma and Deformity | $37.9 | $33.3 | 14% | | Scoliosis | $13.7 | $10.2 | 34% | | Sports Medicine/Other | $0.9 | $1.2 | -25% | Profitability and Expenses Gross profit rose 19% to $38.3 million, with margin at 73%, but increased operating expenses led to a wider net loss, though Adjusted EBITDA loss narrowed - Gross profit margin improved to 73% in Q1 2025 from 72% in Q1 2024, primarily due to higher domestic growth and lower international set sales[8] - Operating expenses increased mainly due to: - General and administrative: +22% to $30.3M, driven by personnel additions and increased non-cash stock compensation[9] - Sales and marketing: +17% to $16.6M, due to higher sales commissions and volume[10] - Research and development: -22% to $2.4M, due to timing of third-party invoices[11] Q1 2025 Profitability Metrics (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Loss | ($10.7) | ($7.8) | | Net Loss per Share | ($0.46) | ($0.34) | | Adjusted EBITDA | ($0.4) | ($1.1) | Balance Sheet and Cash Flow Q1 2025 cash balance decreased to $60.8 million, but free cash flow usage improved by 35%, with positive free cash flow anticipated in Q4 2025 - Cash, cash equivalents, short-term investments, and restricted cash totaled $60.8 million as of March 31, 2025, down from $70.8 million as of December 31, 2024[14] - The company reduced its first quarter 2025 free cash flow usage by 35% compared to Q1 2024 and expects to be free cash flow positive in Q4 2025[6] Full Year 2025 Financial Guidance OrthoPediatrics raised its full-year 2025 revenue guidance to $236.0-$242.0 million (15-18% growth) and reiterated Adjusted EBITDA guidance Updated Full Year 2025 Guidance (in millions) | Metric | Previous Guidance | Updated Guidance | Implied Growth (YoY) | | :--- | :--- | :--- | :--- | | Revenue | $235.0 - $242.0 | $236.0 - $242.0 | 15% to 18% | | Adjusted EBITDA | $15.0 - $17.0 | $15.0 - $17.0 (Reiterated) | N/A | - The company reiterated its plan for annual set deployment of $15.0 million[15] Financial Statements This section presents the unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, Cash Flows, and revenue breakdowns Condensed Consolidated Balance Sheets As of March 31, 2025, total assets were $470.3 million, liabilities increased to $123.1 million, and stockholders' equity decreased to $347.1 million Key Balance Sheet Items (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash, Restricted Cash & Short-term Investments | $60,762 | $70,790 | | Inventories, net | $119,752 | $117,005 | | Total Assets | $470,250 | $473,209 | | Total Liabilities | $123,104 | $118,643 | | Total Stockholders' Equity | $347,146 | $354,566 | Condensed Consolidated Statements of Operations Q1 2025 net revenue was $52.4 million, but operating loss widened to $11.0 million and net loss increased to $10.7 million, or $0.46 per share Q1 Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Revenue | $52,411 | $44,685 | | Gross Profit | $38,262 | $32,174 | | Total Operating Expenses | $49,243 | $41,897 | | Operating Loss | $(10,981) | $(9,723) | | Net Loss | $(10,659) | $(7,805) | | Net Loss Per Share | $(0.46) | $(0.34) | Condensed Consolidated Statements of Cash Flows Q1 2025 net cash used in operating activities improved to $4.2 million, while net cash used in investing activities was $6.0 million, resulting in a $10.3 million net cash decrease Q1 Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,156) | $(6,690) | | Net cash used in investing activities | $(5,987) | $(3,679) | | Net cash used in financing activities | $(126) | $(573) | | Net Decrease in Cash | $(10,348) | $(9,463) | Net Revenue by Geography and Product Category Q1 2025 revenue breakdown shows U.S. contributing $40.9 million (78%) and International $11.5 million (22%), with Trauma and Deformity as the largest product segment Q1 2025 vs Q1 2024 Revenue Breakdown (in thousands) | Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | By Geography | | | | U.S. | $40,891 | $34,305 | | International | $11,520 | $10,380 | | By Product | | | | Trauma and deformity | $37,867 | $33,302 | | Scoliosis | $13,664 | $10,203 | | Sports medicine/other | $880 | $1,180 | | Total | $52,411 | $44,685 | Non-GAAP Financial Measures Reconciliation This section reconciles GAAP to non-GAAP measures, adjusting Q1 2025 net loss of $10.7 million to an Adjusted EBITDA loss of $0.4 million and GAAP diluted loss per share to $0.39 Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss (GAAP) | $(10,659) | $(7,805) | | Adjustments (Depreciation, Stock Comp, etc.) | $10,280 | $6,097 | | Adjusted EBITDA (Non-GAAP) | $(379) | $(1,108) | Reconciliation of Diluted Loss Per Share to Non-GAAP Adjusted Diluted Loss Per Share | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Loss per share, diluted (GAAP) | $(0.46) | $(0.34) | | Adjustments (Acquisition costs, etc.) | $0.07 | $0.04 | | Loss per share, diluted (Non-GAAP) | $(0.39) | $(0.30) | Other Information This section provides investor logistical details, forward-looking statements disclaimer, and a corporate overview of OrthoPediatrics' exclusive focus on pediatric orthopedics - A conference call to discuss the results was scheduled for May 7, 2025, with a webcast available for replay on the company's investor relations website[16] - The company identifies itself as being exclusively focused on pediatric orthopedics, marketing 80 systems across trauma and deformity, scoliosis, and sports medicine in the U.S. and over 75 other countries[20] - The press release contains forward-looking statements that involve risks and uncertainties, and the company directs investors to its SEC filings for a full list of risk factors[17]