OrthoPediatrics (KIDS) Investor Day 2024 summary

Strategic vision and growth drivers

• Aims to increase the number of children helped annually to 1 million, with a 2024 goal of 122,000 children and a long-term target of 31% global market share and 100% product coverage.

• Maintains a dominant market share in pediatric orthopedics, now serving every major children's hospital in the US and Canada, and 90%+ in the developed world, with global market share rising from 3% in 2016 to 16%.

• Growth driven by trauma & deformity, scoliosis, specialty bracing, enabling technologies, aggressive R&D, and targeted M&A.

• Strategic investments in clinical education, sales force expansion, and digital health platforms support long-term growth.

• Large runway for growth remains, with consistent 22% CAGR since 2016 and positive adjusted EBITDA achieved.

Product innovation and pipeline

• Over 70 unique pediatric systems launched, with 42 products in the last 6 years and 26 more in the pipeline, including robust trauma, deformity, and scoliosis portfolios.

• Launching six new P3 systems over five years, including the third-generation pediatric/adolescent plate and screw platform.

• Scoliosis business focuses on early-onset solutions (VertiGlide, ELLI) and next-gen fusion systems, with FDA breakthrough designation for ELLI and launches expected through 2025.

• Specialty bracing business leverages Boston O&P acquisition, with rapid clinic and product expansion, including compliance-tracking sensors and four product launches in 2024.

• Enabling technologies include Playbook (surgical workflow software) and iotaMOTION (robotic cochlear implant insertion), with launches expected in the next 6-12 months.

Financial outlook and operational efficiency

• Revenue expected to grow in the high teens percent annually, with Adjusted EBITDA margin expanding by 300 bps per year, reaching 13%-14% by 2027.

• Cash flow positivity targeted for 2026, with ~$90 million in cash and $25 million in available credit.

• Gross margins to remain at 74%-75%, with higher contribution from specialty bracing and SaaS products over time.

• Capital deployment for implant sets will moderate, focusing on higher ROI and shifting investment to bracing clinics and digital health.

• M&A will be opportunistic, with no major deals planned in the near term; focus remains on organic growth and tuck-in acquisitions for clinics.