OrthoPediatrics(US:KIDS)2025-10-29 17:03Financial Performance - Net revenue for Q3 2025 was $61,250,000, representing a 12.3% increase from $54,573,000 in Q3 2024[15] - Gross profit for Q3 2025 was $45,274,000, up from $40,060,000 in Q3 2024, indicating a gross margin improvement[15] - Operating loss for Q3 2025 was $(9,428,000), compared to $(5,566,000) in Q3 2024, reflecting increased operating expenses[15] - The company reported a net loss of $(11,773,000) for Q3 2025, compared to $(7,919,000) in Q3 2024[17] - For the nine months ended September 30, 2025, the net loss was $29,545,000, compared to a net loss of $21,753,000 for the same period in 2024, representing an increase in losses of approximately 35.5%[24] - Product sales for the three months ended September 30, 2025, totaled $61,250, an increase from $54,573 in 2024, representing a growth of 30.8%[103] - U.S. product sales for the nine months ended September 30, 2025, were $137,757, up from $118,269 in 2024, reflecting a growth of 16.5%[103] Assets and Liabilities - Total current assets increased to $245,852,000 as of September 30, 2025, from $237,173,000 at the end of 2024[13] - Total assets grew to $493,486,000 as of September 30, 2025, compared to $473,209,000 at December 31, 2024[13] - Total liabilities rose to $144,177,000 as of September 30, 2025, compared to $118,643,000 at December 31, 2024[13] - The accumulated deficit increased to $(265,109,000) as of September 30, 2025, from $(235,564,000) at the end of 2024[13] - The company’s cash position decreased to $16,826,000 as of September 30, 2025, from $43,820,000 at the end of 2024[13] Cash Flow - The company reported cash used in operating activities of $15,199,000 for the nine months ended September 30, 2025, a decrease from $23,061,000 in the same period of 2024[24] - Cash, cash equivalents, and restricted cash at the end of the period were $18,884,000, down from $45,777,000 at the beginning of the year[24] - Net cash used in investing activities increased to $36.4 million for the nine months ended September 30, 2025, compared to $10.8 million for the same period in 2024[151] - Net cash provided by financing activities was $24.4 million for the nine months ended September 30, 2025, compared to $53.7 million for the same period in 2024[152] Expenses - Research and development expenses for Q3 2025 were $2,333,000, down from $2,577,000 in Q3 2024[15] - Sales and marketing expenses increased by $1.9 million, or 11%, to $18.7 million for the three months ended September 30, 2025, and by $6.8 million, or 14%, to $54.3 million for the nine months ended September 30, 2025[140] - General and administrative expenses rose by $2.9 million, or 11%, to $29.2 million for the three months ended September 30, 2025, and by $11.5 million, or 15%, to $89.9 million for the nine months ended September 30, 2025[141] - The company incurred stock-based compensation expenses of $13,362,000 for the nine months ended September 30, 2025, compared to $9,660,000 for the same period in 2024, reflecting a 38.0% increase[24] Acquisitions and Goodwill - The Company acquired Medtech Concepts, LLC for approximately $15,274, consisting of $3,000 in cash, $2,274 in common stock, and future payments totaling $2,500 over four anniversaries[40] - The Company purchased Boston Brace International, Inc. for a total consideration of $21,535 in cash and $233 in common stock[46] - Goodwill increased from $93,844 at January 1, 2025, to $103,613 by September 30, 2025, after accounting for acquisitions and impairments[52] - The Company recorded an impairment charge of $1,874 for goodwill and $0.4 million for customer relationship intangible assets due to exiting the regulatory consulting business[55] Debt and Financing - As of September 30, 2025, total debt increased to $105,311 million from $77,483 million as of December 31, 2024, representing a 35.8% increase[65] - The Company issued $50,000 million in 4.75% Convertible Senior Notes due February 15, 2030, for an aggregate purchase price of $49,500 million[73] - The Company signed a $100 million term loan and private placement arrangement, consisting of a $50 million term loan and $50 million of convertible notes[153] - The term loan has an interest rate of SOFR + 6.50%, with payments being interest-only until maturity in August 2029[153] Market and Operational Insights - The company estimates the pediatric orthopedic market represents a $6.2 billion opportunity globally, including over $2.8 billion in the United States[122] - Revenue is typically higher in summer months and holiday periods due to increased pediatric surgeries[160] - The company operates approximately 40 orthotic and prosthetic clinics in the United States[123] - The company has expanded its international operations by establishing operating companies in the Netherlands and Germany in 2019 and 2022, respectively[126] Regulatory and Compliance - The company continues to evaluate the impact of recent accounting standards updates on its financial statements and disclosures[38] - Certifications of the Chief Executive Officer and Chief Financial Officer were filed in compliance with the Sarbanes-Oxley Act of 2002[193] - The company has committed to furnish omitted schedules from agreements to the SEC upon request[194]