OrthoPediatrics (KIDS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached a record $52.8 million, up 33% year-over-year, driven by strong growth in Trauma & Deformity, Scoliosis, and OPSB, with significant contribution from the Boston O&P acquisition.

• Over 32,000 children were treated in Q2, a 52% increase year-over-year, reflecting expanding market impact.

• Net loss widened to $6.0 million for Q2 2024 from $2.9 million in Q2 2023, mainly due to higher operating expenses from acquisitions and growth investments.

• Integration of OPSB and Boston O&P is progressing well, with synergies realized and clinic expansion plans underway.

• Announced up to $100 million in new financing and a $5 million stock repurchase program.

Financial highlights

• U.S. revenue was $41.2 million, up 39% year-over-year; international revenue was $11.6 million, up 16%.

• Trauma & Deformity revenue grew 37% to $37.8 million; Scoliosis revenue rose 26% to $13.7 million; Sports Medicine/Other up 17% to $1.3 million.

• Gross margin improved to 77% from 76% in Q2 2023, driven by higher domestic growth and favorable purchase price variance.

• Adjusted EBITDA was $2.6 million, up from $2.3 million in Q2 2023.

• Operating expenses increased 30%–31% to $46.5 million, mainly due to Boston O&P, commissions, and personnel.

Outlook and guidance

• Full-year 2024 revenue guidance reaffirmed at $200–$203 million, representing 34–36% growth.

• Adjusted EBITDA expected between $8–$9 million for 2024; cash flow breakeven targeted by 2026.

• Organic growth (excluding Boston O&P) is in the high teens, around 18%.

• Guidance remains conservative due to potential RSV/flu season impacts in Q4.

• Management expects continued near-term losses as investments in product portfolio and market expansion continue.