KIDS — OrthoPediatrics Corp.

Summary of OrthoPediatrics Corporation Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenue: Q1 2026 revenue was $59.4 million, a 13% increase year-over-year.
• U.S. Revenue: $45.3 million (11% growth), representing 76% of total revenue.
• International Revenue: $14.1 million (22% growth), accounting for 24% of total revenue.
• Adjusted EBITDA: $2.2 million, a significant improvement from a loss of $0.4 million in Q1 2025.
• Net Loss: GAAP net loss per share was $0.45, slightly improved from $0.46 in the prior year.
• Cash Position: Ended the quarter with $50.9 million in cash and short-term investments.
• Free Cash Flow: Used $5.0 million, a 40% improvement from $8.4 million in Q1 2025.

2. Strategic Updates and Business Highlights

• Patient Impact: Supported the treatment of a record 45,000 children, bringing cumulative impact to nearly 1.4 million.
• Product Innovation: Entering a multiyear innovation super cycle with significant product launches, including 3P Hip and VerteGlide.
• OPSB Growth: The OPSB business grew over 20%, driven by clinic expansion and new product introductions.
• Trauma & Deformity (T&D): Grew 14%, with strong performance from trauma and deformity systems.
• Scoliosis Segment: Experienced 13% growth, bolstered by RESPONSE and VerteGlide systems.
• International Markets: Strong growth in EMEA and Brazil, with EU MDR approval enhancing product availability.

3. Forward Guidance and Outlook

• Revenue Guidance: Raised full-year 2026 revenue guidance to $263 million - $267 million (11% to 13% growth).
• Adjusted EBITDA: Expected to be approximately $25 million for the year.
• Free Cash Flow: Anticipated to reach breakeven in 2026.
• Set Deployment: Approximately $10 million planned for set deployment, with expectations for improved cash flow and profitability in the latter half of the year.

4. Bad News, Challenges, or Points of Concern

• Weather Impact: Q1 faced headwinds due to weather-related clinic shutdowns, particularly in January and February, though recovery was noted in March.
• Conservative Guidance: Despite strong performance, management maintained cautious revenue guidance, suggesting a careful approach to growth amidst ongoing product rollouts.
• Set Availability: Limited availability of new product sets could constrain growth in the short term, with potential impacts on T&D revenue.
• Competitive Landscape: The pediatric spinal deformity market remains competitive, with ongoing pressure from established players.

5. Notable Q&A Insights

• Weather Impact Clarification: Management indicated that most appointments lost due to weather were rescheduled, with recovery noted in subsequent months.
• Product Launch Expectations: Anticipated that the full market release of new products like 3P Hip and TRAXIO will drive growth, but full impact may not be realized until 2027.
• International Growth Potential: Management expressed optimism about continued international growth, particularly in EMEA, but refrained from overcommitting to specific growth rates.
• Strategic Focus on Cash Flow: Emphasis on balancing revenue growth with achieving free cash flow breakeven, indicating a cautious approach to capital deployment.
• Surgeon Engagement: High interest in new products like VerteGlide and TRAXIO, with significant surgeon training already underway, indicating strong future demand.

Overall, OrthoPediatrics demonstrated solid growth in Q1 2026, driven by strategic product launches and international expansion, while maintaining a cautious outlook amid competitive pressures and operational challenges.