OrthoPediatrics Corp.

What they do

OrthoPediatrics designs, develops and markets implants, instruments and specialized braces for children with orthopedic conditions, selling to hospitals and medical facilities in the U.S. and international markets. It markets over 90 surgical and specialized bracing systems across trauma and deformity correction, scoliosis, and sports medicine, using a contract manufacturing model for implants while typically making bracing products in-house. The company also operates over 50 orthotic and prosthetic clinics in the U.S. through its Boston O&P business.

Revenue drivers

• Trauma and Deformity — Largest product line; Q2 2026 revenue was $52.6 million, up 26% year-over-year, driven by Cannulated Screws, PNP Femur, PediPlates, Pega systems, the addition of 3P Hip, and OPSB growth.
• Scoliosis — Q2 2026 revenue was $16.9 million, down 9% year-over-year, due to lower 7D Technology revenue and fewer international set sales, partly offset by Response fusion and Verteglide.
• Sports Medicine and Other — Smallest reported line; Q2 2026 revenue was $1.0 million, up 10% year-over-year.
• O&P Clinics (OPSB) — Consolidated orthotic and prosthetic clinic operations, including Boston O&P and acquired clinics; management cites OPSB growth as a contributor within Trauma and Deformity and overall revenue.

Recent performance

Second quarter 2026 total revenue was a record $70.5 million, up 15% from $61.1 million in Q2 2025. U.S. revenue was $54.8 million, up 14%, and international revenue was $15.7 million, up 22%. Trauma and Deformity grew 26% to $52.6 million, while Scoliosis declined 9% to $16.9 million and Sports Medicine and Other rose 10% to $1.0 million. Gross margin improved to 74% from 72%, and adjusted EBITDA was a record $6.8 million versus $4.1 million a year earlier. Free cash flow usage improved by $10.8 million, or 78%, compared with the prior-year quarter.

Strategy

Management describes an 'innovation super cycle' of higher-value, more capital-efficient products planned over coming years. The company continues acquiring complementary assets, notably expanding its Boston O&P clinic footprint with 2025 acquisitions in North Carolina, Colorado, New York, Florida, Connecticut, and Ireland. International direct-selling expansion continued with a Netherlands warehouse opened in July 2025 and a Brazilian legal entity established in November 2025. OrthoPediatrics announced an exclusive U.S. distribution agreement with OSSIO for a bio-integrative, metal-free fixation technology. Management targets cash-flow breakeven in 2026.

Risks

• Persistent net losses — Net income was negative $39.6 million in 2025 and diluted EPS was negative $1.69, following a negative $37.8 million in 2024.
• Scoliosis and set-sale volatility — Q2 2026 Scoliosis revenue fell 9% on lower 7D Technology revenue and reduced international set sales, and management said capital placements and international set sale timing hurt scoliosis growth.
• Elective procedure and health emergency exposure — The 10-K states that because a majority of products are used in elective surgeries, deferrals such as those seen during COVID-19 and RSV surges had a significant negative impact and may continue to.
• Consigned inventory and capital intensity — The company must invest up front in consigned implant and instrument sets before generating hospital revenue, maintaining substantial inventory; long-term debt was $99.5 million and cash $17.0 million as of June 30, 2026.

Outlook

Management increased full year 2026 revenue guidance to $265.0 million to $269.0 million from a prior range of $263.0 million to $267.0 million, representing growth of 12% to 14% versus prior year. The company expects to achieve cash-flow breakeven in 2026. Management said it expects revenue growth, profitability, and free cash flow metrics to continue improving, citing an innovation super cycle and share gains in Trauma and Deformity.