OrthoPediatrics (NASDAQ:KIDS) reported fourth-quarter 2025 results that management said capped a strong year of growth and improving profitability, highlighted by the company’s first quarter of positive free cash flow in its history. Executives also outlined a multi-year cycle of product launches they believe will support continued market share gains across pediatric orthopedics and expand the company’s presence in adjacent pediatric subspecialties.
Fourth-quarter results and cash flow milestone
Chief Executive Officer David Bailey said the company supported the treatment of more than 37,500 children in the fourth quarter, bringing total impact to about 1.3 million children helped. Financially, OrthoPediatrics posted 17% revenue growth in the quarter and generated $10 million of free cash flow, which Bailey described as the first quarter of positive free cash flow in company history.
Hite said gross profit margin was 73% in the quarter, up from 68% a year earlier. Adjusted EBITDA was $4.8 million, a 59% improvement from $3.0 million in the fourth quarter of 2024. GAAP net loss per share was $0.43, compared with a loss of $0.69 a year earlier; non-GAAP net loss per share was $0.30, compared with $0.29 in the prior-year period.
Operating expenses totaled $53.3 million, up 7% year-over-year. Sales and marketing expense increased 10% to $18.4 million, while general and administrative expense increased 23% to $30.0 million, which Hite attributed primarily to personnel and resources supporting OPSB expansion and higher non-cash items such as stock-based compensation, depreciation, and amortization. Research and development expense declined $0.7 million due to timing of third-party services. The company ended the quarter with $62.9 million in cash, short-term investments, and restricted cash.
Segment performance: Trauma and deformity, scoliosis, and OPSB
OrthoPediatrics’ Trauma and Deformity (T&D) business grew 17% in the quarter. Hite reported T&D global revenue of $42.6 million, up 17%, driven by growth across multiple product lines including Pega products, eZ-Fix, PNP Tibia, and contributions from OPSB.
Bailey highlighted continued rollout of the company’s pediatric tibial nail (PNP Tibia) and the beta launch of the 3P Pediatric Plating Platform Hip System. He said early performance of 3P Hip has exceeded expectations, with a full commercial launch expected in the first half of 2026. The company also received FDA approval for 3P Small-Mini, described as the second system in the 3P plating family, with a beta launch planned in 2026. Bailey also referenced upcoming launches including PNP Retro, which he called the first and only pediatric retrograde IM nail system, as well as a next-generation FD rod in telescopic nailing for rare bone diseases.
In scoliosis, the company reported 13% growth in the fourth quarter, with Hite citing scoliosis global revenue of $17.6 million, up 13%, driven by increased international implant growth as well as OPSB. Bailey pointed to 2025 launches in early-onset scoliosis (EOS), including the full launch of RESPONSE Rib and Pelvic and the beta launch of the VerteGlide system. He said first surgical cases with VerteGlide were completed in the second half of 2025 and that early usage in limited release has been “solid,” with plans to move to full market release in the coming months.
On OPSB (the company’s specialty bracing business), Bailey said the segment continues to be a “strategic growth catalyst” supporting revenue growth and profitability, with clinic expansion ahead of schedule and same-store sales growth remaining strong. He noted OPSB expanded its footprint in Connecticut during the quarter and continues to pursue a mix of greenfield and acqui-hire expansion, while remaining open to acquisitions that fit its strategy. Bailey cited several 2025 product launches, including expanded indications for the DF2 brace, and said three hip deformity bracing products beta-launched in 2025 are expected to move to full commercial release in 2026. He added that the company is targeting four to five new OPSB product launches annually, including the Traxio Halo Gravity Traction System (in partnership with Syntech Group) and the Knee and Ankle TrakFix braces for treating contractures following excision surgery.
International trends and EU MDR progress
Bailey said international (OUS) growth “rebounded” in the fourth quarter, supported by demand in direct markets in the EU and Australia, higher surgeon usage, and replenishment orders in Latin America. He also said EMEA and APAC revenue was solid, reflecting higher-margin replenishment revenue through sales agencies.
Strategically, the company purchased Brazilian distributor Folomed in late November, which Bailey said should improve cash collection and help normalize ordering patterns over several quarters, supporting additional growth and market penetration in Brazil. Bailey also highlighted EU MDR approvals for several T&D and scoliosis products and an approval for X-Fix devices, stating that efforts are underway to provide EU markets with products they have been waiting for and that the company expects a positive impact on EU growth in 2026.
During Q&A, management emphasized that EU MDR approvals allow the company to offer a fuller range of sizes in Europe, which they said helps surgeon conversion because surgeons can adopt the portfolio more completely rather than relying on a limited set of sizes.
Pipeline and new platforms: Product “super cycle,” Playbook, and IOTA Motion
Bailey said 2025 marked the start of what he called the company’s most substantial and technologically advanced set of product launches, initiating a multi-year “super cycle” of innovation. He listed notable launches and programs including 3P Hip, VerteGlide, new OPSB products, Halo Gravity Traction, Playbook, and the eLLi electromechanical growing rod system. Bailey said eLLi is a next-generation smart electromechanical lengthening spine implant designed to deliver consistent and reliable power through RF power transmission, and he later noted the company expects first implantations of eLLi in late 2026.
Outside traditional segments, Bailey said the company is building on its 7D experience and beginning the launch of a comprehensive digital surgical platform called Playbook, intended to support preoperative planning, intraoperative execution, and post-procedural performance analysis. In Q&A, Bailey described Playbook as a digital workflow tool intended to streamline procedures, capture step-by-step data, and help hospitals improve efficiency and quality, noting it is “very, very early days” with beta launches planned at a few accounts and limited revenue currently expected.
Bailey also said that following FDA approval of key pediatric indications in the fourth quarter, OrthoPediatrics placed its first IOTA Motion unit at Cincinnati Children’s Hospital under an exclusive partnership. Management said the IOTA Motion and Playbook contributions are “extremely small” in the 2026 guidance at this stage, though they noted inbound interest in IOTA Motion.
2026 outlook: Growth with improving profitability
Management reiterated 2026 revenue guidance of $262 million to $266 million, implying 11% to 13% annual growth. The company expects approximately $25 million of adjusted EBITDA and aims for free cash flow breakeven for the full year. Hite said the company expects gross margin to remain around 73% for full-year 2026.
Hite also discussed expected seasonality, stating that 2025 is a good proxy for quarterly patterns in 2026: revenue is typically lowest in the first quarter and strongest in the third quarter. He said the company expects to deploy set inventory primarily in the first half of the year, which should result in negative free cash flow in the first half and positive free cash flow in the second half, cumulatively reaching breakeven for the year.
In response to questions about profitability scaling, Hite said the expected improvement in adjusted EBITDA in 2026 will come from leverage in sales and marketing—partly because OPSB is growing faster than the overall business and carries a lower sales-and-marketing expense as a percentage of sales—and from continued leverage in the cash portion of G&A.
About OrthoPediatrics (NASDAQ:KIDS)
OrthoPediatrics Corp., founded in 2007 and headquartered in Warsaw, Indiana, is a medical device company dedicated exclusively to providing orthopedic solutions for children. The company focuses on developing, manufacturing and marketing a broad portfolio of implants and instruments designed to address a wide range of pediatric conditions, including trauma, deformity correction, spine disorders and sports injuries.
The company’s product lines include locking plates and screws for upper and lower extremity reconstruction, intramedullary nails for femur and tibia stabilization, and specialized systems such as the MAGEC Magnetic Growth Rod for treatment of early-onset scoliosis.
