KIDS — OrthoPediatrics Corp.

Summary of OrthoPediatrics Corporation Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenue: $59.4 million, a 13% increase year-over-year.
• U.S. Revenue: $45.3 million (11% increase), representing 76% of total revenue.
• International Revenue: $14.1 million (22% increase), accounting for 24% of total revenue.
• Gross Profit Margin: 73%, consistent year-over-year.
• Operating Expenses: Increased by $2.5 million (5%) to $51.7 million.
• GAAP Net Loss per Share: $0.45, slightly improved from $0.46 year-over-year.
• Non-GAAP Net Loss per Share: $0.42, compared to $0.39 last year.
• Adjusted EBITDA: $2.2 million, a significant improvement from a loss of $0.4 million in Q1 2025.
• Free Cash Flow: Used $5.0 million, a 40% improvement from $8.4 million in Q1 2025.
• Cash Position: Ended the quarter with $50.9 million in cash and investments.

2. Strategic Updates and Business Highlights

• Patient Impact: Supported treatment for a record 45,000 children, totaling nearly 1.4 million children helped cumulatively.
• Product Launches: Initiated beta launches for 3P Hip and VerteGlide, with strong early demand noted.
• OPSB Growth: Specialty bracing business (OPSB) grew over 20%, driven by new product introductions and clinic expansions.
• International Growth: Strong performance in EMEA and Brazil, with expectations for continued growth as new products launch.
• Innovation Cycle: Entering a multiyear innovation super cycle with advanced product launches expected to drive future growth.

3. Forward Guidance and Outlook

• Revenue Guidance: Raised to $263 million to $267 million for 2026, reflecting 11% to 13% growth.
• Adjusted EBITDA: Expected to be approximately $25 million for the full year.
• Free Cash Flow: Targeting breakeven in 2026, with quarterly seasonality expected similar to 2025.

4. Bad News, Challenges, or Points of Concern

• Weather Impact: January and February weather-related shutdowns affected clinic operations, though recovery was noted in March.
• Conservative Guidance: Despite strong performance, management opted for cautious guidance, indicating a preference to wait for product deployments to reflect in revenue before adjusting expectations further.
• Set Deployment: Lower set deployment compared to historical levels, though expected to improve in the second half of 2026.
• Competition: The pediatric spinal fusion market is highly competitive, with ongoing pressure from established players.

5. Notable Q&A Insights

• Weather Impact on Revenue: Management confirmed that weather-related disruptions led to rescheduled appointments, which were largely cleared by March.
• 3P Platform Expectations: Anticipated that the ramp-up of the 3P platform will positively impact T&D growth in the latter half of 2026 and into 2027.
• International Growth: Management expressed optimism about international growth continuing to outpace domestic growth, driven by new product launches and improved distribution.
• TRAXIO Launch: High demand for the TRAXIO halo gravity traction system was noted, with plans for further integration into existing product lines.
• Future Expansion: Discussions about potential expansion into markets like India and China were mentioned, with no immediate plans but recognition of demand.

Overall, OrthoPediatrics demonstrated strong growth in Q1 2026, driven by innovative product launches and strategic expansions, while maintaining a cautious outlook amidst competitive pressures and operational challenges.