OrthoPediatrics (KIDS -1.66%), a specialist in pediatric orthopedic medical devices, reported its financial results for the second quarter on August 5, 2025. OrthoPediatrics reported GAAP revenue of $61.1 million in the second quarter but slightly below Wall Street’s $61.47 million GAAP estimate. The adjusted loss per share (Non-GAAP) narrowed to ($0.11), beating analyst expectations by $0.18 (non-GAAP). Year-over-year growth persisted across core segments, though higher operating expenses kept the company in a net loss position. Overall, the first quarter demonstrated strong revenue expansion, improving operational efficiency, and continued margin initiatives, even as investments in growth limited bottom-line progress.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | ($0.11) | ($0.29) | ($0.23) | 52.2 % |
| Revenue | $61.1 million | $61.47 million | $52.8 million | 15.7 % |
| Gross Profit | $44.0 million | $40.8 million | 7.8% | |
| Adjusted EBITDA | $4.1 million | $2.6 million | 57.7 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Core Focus
OrthoPediatrics is uniquely focused on designing and marketing orthopedic devices specifically for children. Its suite spans trauma and deformity correction products, scoliosis (spinal curvature) solutions, and sports medicine devices. This specialized approach addresses a market gap where adult devices are often less suitable for pediatric use, aiming to improve outcomes for young patients.
Recently, the company has emphasized innovation through rapid product development, introducing new systems such as the Verteglide spinal implant and the 3P Pediatric Plating Platform Hip System. Strategic acquisitions, particularly in specialty bracing, have expanded its portfolio and opened growth opportunities. The key to OrthoPediatrics’ strategy is continued product innovation, disciplined integration of acquisitions, and investment in a global sales force to drive penetration in the pediatric orthopedic market.
Quarterly Highlights and Financial Performance
OrthoPediatrics saw GAAP revenue climb to $61.1 million in the second quarter.
While this missed the GAAP revenue estimate by less than $0.4 million, it points to continued demand for specialized pediatric devices.
The U.S. business drove growth, contributing $48.1 million in the second quarter.
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International revenue was $13.0 million in the second quarter, compared to $11.6 million a year earlier.
Management indicated that international growth was partially offset by slower set sales in Latin America.
By product family, trauma and deformity correction led with $41.7 million (GAAP) in the second quarter, followed by scoliosis at $18.5 million. Scoliosis sales grew rapidly, up 34% year-over-year, benefitting from expanded enabling technologies such as the 7D Navigation system (a surgical imaging platform) and new product launches. Specialty bracing under the OPSB division was another highlight, expanding into new territories and growing more than 20% year-over-year. Meanwhile, sports medicine and other product revenue (GAAP) decreased 25% year over year, reflecting the early stage of these lines within the company’s mix.
Gross profit (GAAP) increased 33% to $148.6 million in fiscal 2024 from fiscal 2023.
At the same time, operating expenses (GAAP) grew 17.6% to $54.7 million in the second quarter compared to the same period last year, outpacing gross profit growth.
As a result, OrthoPediatrics reported an operating loss of $10.6 million in the second quarter versus $5.7 million a year earlier, and a net loss (GAAP) of $7.1 million in the second quarter compared to $6.0 million a year earlier.
Adjusted EBITDA, a metric tracking earnings before interest, taxes, depreciation, and amortization, improved to $4.1 million in the second quarter, nearly 58% higher than a year earlier.
Adjusted loss per share (non-GAAP) dropped to ($0.11) in the second quarter, ahead of analyst expectations and compared to ($0.23) a year earlier. The company ended the second quarter with $72.2 million in cash and short-term investments and $97.1 million in debt
Operational highlights included multiple U.S. Food and Drug Administration (FDA) approvals in the first quarter and in April 2025, such as the Verteglide system (for complex scoliosis) and the 3P Hip Plating System (for pediatric hip fractures). The company also rolled out experimental launches of hip plating, expanded its bracing business with additional territories in the U.S, and continued to integrate the Boston Orthotics & Prosthetics acquisition. OrthoPediatrics made early progress toward compliance with new European Union Medical Device Regulations, which is required for further international expansion. Across its portfolio, more than 80 specialty pediatric systems are currently marketed,
serving over 75 countries and all of the top U.S. children’s hospitals.
Operating expenses continued to increase, driven mainly by global sales force expansion and new clinic launches within OPSB. Inventory stood at $125.3 million (GAAP) as of June 30, 2025, reflecting investments in set deployment and product launches The company also flagged ongoing net losses
In product innovation, FDA clearance of next-generation implants and expansion of bracing products are expected to drive revenue in coming periods. The upcoming 3P Hip System marks the beginning of a suite intended to modernize the entire plating and screw portfolio for pediatric surgeons. The eLLi device, a mechanical implant for early-onset scoliosis, is on track for regulatory submission by late 2025 or early 2026. OrthoPediatrics positions its product launches to address specific pediatric needs that are generally underserved by adult device makers.
Outlook and Guidance
Management raised its full-year 2025 revenue guidance to $236 to $242 million.
, implying 16% to 18% revenue growth for the year. The company reaffirmed its gross margin range of 72% to 73% for the year and an adjusted EBITDA target of $15 to $17 million. Management plans call for about $15 million in instrument deployment investment this year and the achievement of positive free cash flow in the fourth quarter, with a goal of breakeven for 2026. No further quantitative guidance was provided on profitability or net income milestones.
In the quarters ahead, investors should monitor the scalability of the specialty bracing business, management of inventory levels, and effectiveness in controlling operating expenses. Other focal points include the success of EU product approvals, ramping new product launches, and the ability to gain further traction in international markets. The company continues to prioritize cash discipline as it advances toward sustainable profitability, backed by recent improvements in adjusted EBITDA (non-GAAP) and liquidity.
KIDS does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
