OrthoPediatrics (KIDS) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue rose 17% year-over-year to $52.4 million, with U.S. revenue up 19% and international revenue up 11%, driven by strong performance in trauma, deformity, scoliosis, and specialty bracing.

• Supported treatment of nearly 39,000 children in Q1 2025, with over 1.175 million helped since inception; launched the VerteGlide System for Early Onset Scoliosis, expanding the portfolio to 80 systems.

• Adjusted EBITDA loss narrowed to $0.4 million from $1.1 million in Q1 2024; free cash flow usage reduced by 35% year-over-year.

• Net loss increased to $10.7 million ($0.46 per share) from $7.8 million ($0.34 per share) in Q1 2024, reflecting higher operating expenses and investment in personnel and acquisitions.

• Gross margin improved to 73% from 72% year-over-year, supported by sales growth and product mix.

Financial highlights

• Q1 2025 worldwide revenue was $52.4 million, up 17% year-over-year; U.S. revenue grew to $40.9 million and international revenue to $11.5 million.

• Trauma and deformity global revenue rose 14% to $37.9 million; scoliosis global revenue increased 34% to $13.7 million; sports medicine/other declined 25% to $0.9 million.

• Gross profit increased 19% to $38.3 million; gross profit margin improved to 73%.

• Operating expenses increased 18% to $49.2 million, mainly due to personnel and OPSB expansion.

• Adjusted EBITDA loss was $0.4 million, a 50%+ improvement from Q1 2024; free cash flow usage was $8.4 million, down 36% year-over-year.

Outlook and guidance

• Full-year 2025 revenue guidance raised to $236–$242 million, representing 15–18% annual growth.

• Expect full-year gross margin of 72–73% and adjusted EBITDA of $15–$17 million.

• Anticipate positive free cash flow in Q4 2025 and breakeven for full-year 2026.

• Guidance absorbs potential tariff impacts; minimal exposure to tariffs and macroeconomic risks.

• Management expects continued losses in the near term as investments in product expansion and consigned inventory continue.