OrthoPediatrics (KIDS) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $52.8 million, up 33% year-over-year, with domestic revenue up 39% and international up 16%.

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

• Helped over 32,000 children in Q2 2024, a 52% increase year-over-year.

• Strong growth driven by Trauma & Deformity, Scoliosis, and Specialty Bracing (OPSB), including Boston O&P acquisition.

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

Financial highlights

• U.S. revenue grew 39% to $41.2 million; international revenue rose 16% to $11.6 million.

• Global Trauma & Deformity revenue reached $37.8 million, up 37% year-over-year; Scoliosis revenue was $13.7 million, up 26%; Sports Medicine/Other up 17% to $1.3 million.

• Gross profit margin improved to 77% from 76% in Q2 2023; Q2 gross profit was $40.8 million, up 36% year-over-year.

• 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 acquisition and personnel growth.

Outlook and guidance

• Reaffirmed full-year 2024 revenue guidance of $200–$203 million, representing 34%–36% growth.

• Projected $8–$9 million in adjusted EBITDA for 2024; expects a significant step-up in 2025.

• Targeting cash flow breakeven by 2026, with adjusted EBITDA in 2025 expected to offset set deployment investments.

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

• Annual set deployment expected to be less than $20 million.