Financial Data and Key Metrics Changes - In Q1 2025, worldwide revenue reached $52.4 million, a 17% increase compared to Q1 2024 [31] - U.S. revenue was $40.9 million, reflecting a 19% increase and accounting for 78% of total revenue [32] - Adjusted EBITDA loss was reduced to $400,000, over 50% improvement from a loss of $1.1 million in Q1 2024 [37] - Free cash flow usage decreased by 36% to $8.4 million compared to the same period last year [37] - Cash, short-term investments, and restricted cash at the end of Q1 2025 totaled $60.8 million [37] Business Line Data and Key Metrics Changes - Trauma and Deformity (T&D) global revenue was $37.9 million, a 14% increase year-over-year [33] - Scoliosis global revenue reached $13.7 million, a 34% increase compared to the prior period [33] - The OPSB business showed strong growth, contributing to overall revenue growth and market share gains [8][21] Market Data and Key Metrics Changes - International revenue was $11.5 million, an 11% increase year-over-year, driven by increased procedure volumes [32] - Trauma replenishment growth was nearly 20%, while scoliosis grew greater than 20% in international markets [26] - The company has minimal exposure to tariff-related impacts, with 95% of COGS from domestic suppliers [11] Company Strategy and Development Direction - The company aims to support the treatment of 1 million children annually, focusing on profitable growth and cash generation [41] - Expansion of OPSB is a key growth driver, with plans for territory expansion and new product launches [17][20] - The company is committed to innovative product development, with several FDA approvals and new product launches planned [8][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth and profitability despite broader economic conditions [12] - The company anticipates increased momentum throughout 2025, driven by successful scaling of OPSB and innovative product launches [12] - Management remains cautious about summer months, traditionally strong for the business, and is focused on cash collection in international markets [48][49] Other Important Information - The company received FDA approval for multiple products, including the Vertiglyde system and the 3P Pediatric Plating Platform Hip System [8][16] - The company hosted 172 training experiences for over 2,245 healthcare professionals in Q1 2025 [29] - OrthoPediatrics was named one of the best places to work in Indiana for 2025, marking the ninth time on this list [30] Q&A Session Summary Question: Can you discuss the strong performance in the spine business and the impact of Vertiglyde? - Management noted strong growth in scoliosis, driven by high adoption rates and new accounts, with Vertiglyde expected to contribute positively [44][45] Question: Why is the revenue guidance conservative despite strong performance? - Management indicated caution due to the upcoming summer months and a focus on cash collection in international markets [48][49] Question: How does the 7D technology impact the adoption of scoliosis products? - Management confirmed that accounts with 7D technology are seeing increased adoption of scoliosis products, contributing to overall growth [56][57] Question: What are the plans for clinic expansion in Florida and Colorado? - Management expressed optimism about ongoing clinic performance and plans for further expansion in the U.S. and internationally [72][75] Question: Can you provide updates on the LE device submission and EU MDR products? - Management indicated positive discussions with the FDA regarding LE and plans to launch trauma and deformity products in Europe once EU MDR approval is secured [82][88]

Financial Data and Key Metrics Changes - The company reported Healthcare revenue of $371 million, reflecting a 10% growth on a constant currency basis, with operating margin expansion of 750 basis points [9][18] - Non-GAAP earnings per share (EPS) was $1.36, representing a 56% growth year-over-year, while GAAP net income from continuing operations was $47 million or $0.86 per share [19][20] - The net loss from discontinued operations was $218 million or $4.4 per share, including an impairment charge of $295 million related to the Audio business [20] Business Line Data and Key Metrics Changes - Consumable and service revenue grew by 8%, while capital equipment and other revenue surged by 32% due to the timing of shipments related to a large tender contract renewal [18] - The company shipped over 72,000 technology boards and monitors during the quarter, exceeding expected ranges [18] Market Data and Key Metrics Changes - The company anticipates revenue growth for fiscal 2025 to be in the range of $1.5 billion to $1.53 billion, reflecting an 8% to 11% constant currency growth compared to the previous year [20][21] - The updated guidance for operating margins is set at 28% to 28.5% excluding new tariffs, with EPS guidance of $5.3 to $5.6 [21] Company Strategy and Development Direction - The company plans to invest in its core Healthcare business to accelerate revenue growth beyond the long-standing target of 7% to 10% [13] - Strategic initiatives include upgrading existing sensors, leveraging leadership in pulse oximetry, and restructuring sales forces to be regionally focused [14] - The divestiture of the Consumer Audio business is aimed at refocusing on the Professional Healthcare business and enhancing shareholder value [10][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong performance and the ability to navigate macro uncertainties, highlighting the high recurring revenue and durable growth profile [16] - The CEO emphasized the commitment to innovation and the potential for improvement in commercial excellence [8][9] Other Important Information - The company is actively assessing the impact of potential tariffs and has developed mitigation plans to address these challenges [15][22] - A new Chief Human Resources Officer has joined the team to enhance company culture and talent development [11] Q&A Session Summary Question: Impact of large tender on revenues and margins - Management indicated that excluding the large tender, the rest of the business is performing well, with double-digit growth in consumables and services [29][30] Question: Future sales expectations - Management expects normal seasonality, with Q2 typically being flat to slightly down sequentially [32] Question: Long-term operating margin goals amid tariffs - Management remains confident in achieving long-term margin goals despite tariff impacts, with ongoing plans to mitigate these effects [42][43] Question: Use of proceeds from the sale of Sound United - The company plans to prioritize share repurchases with the proceeds from the sale, reflecting a focus on returning value to shareholders [47] Question: Hospital CapEx spending and demand - Management noted strong underlying demand and no signs of softness in the market, emphasizing the low dependency on capital equipment revenue [52] Question: Mitigation options for tariffs - Management is evaluating near-term and long-term mitigation strategies, including altering product sourcing and pricing opportunities [56][58] Question: Hemodynamic monitoring market potential - The company aims to enhance its presence in the hemodynamic monitoring market with new product launches planned for 2026 [66][68]