ORTHOPEDIATRICS CORP
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
KIDS$31.76-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001425450-25-000052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0001425450-25-000096
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 66 previous paragraphs and 71 current paragraphs.
42 unchanged; 22 reworded; 5 added; 2 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Our global inventory, which primarily consists of implants and instruments held in our warehouses, with third-party independent sales agencies or distributors, or consigned directly with hospitals, are
Current report
considered finished goods and are purchased from third parties. The majority of this inventory is non-sterile, metallic implants and instruments that do not have an expiration date or shelf life. We continuously monitor our global inventory for excess or obsolete items in relation to estimated forecasted product demand and product life cycles. Revenue is not recognized at the time of consignment, as we maintain control over the inventory. Revenue is recognized only upon implantation, at which point an invoice is issued. For the six months ended June 30, 2025, consignment sales accounted for approximately 68% of our total net sales. Inventory held on consignment at sales agencies, distributors, or other customers is 61% of gross inventory.
Current report
Cost of revenue increased $5.1 million, or 42%, from $12.0 million for the three months ended June 30, 2024 to $17.1 million for the three months ended June 30, 2025. Cost of revenue increased $6.7 million, or 27%, from $24.5 million for the six months ended June 30, 2024 to $31.2 million for the six months ended June 30, 2025. The increases were due primarily to sales volume as well as higher sales of 7D units and international set sales. Gross margin was 72% and 77% for the three months ended June 30, 2025 and June 30, 2024, respectively. Gross margin was 72% and 75% for the six months ended June 30, 2025 and June 30, 2024, respectively. The lower gross margin was driven by a higher percentage of sales of 7D units as well as international set sales.
Current report
Research and development expenses decreased $0.4 million, or 15%, from $2.5 million for the three months ended June 30, 2024 to $2.2 million for the three months ended June 30, 2025, and decreased
Current report
The Company has engaged in ongoing efforts to preserve cash. For example, the Board of Directors of the Company approved (i) the issuance of unregistered shares of the Company’s common stock representing an aggregate of approximately $3.8 million in value to the members of MedTech in lieu of the three remaining annual $1.3 million cash payments otherwise required under the MedTech Purchase Agreement on or about May 1st of each of 2025, 2026, and 2027; and (ii) an Amended and Restated Non-Employee Director Compensation Policy that increases the total director compensation from approximately $180 thousand to $207 thousand per year and provides for the payment of the remaining director compensation for 2025 in shares of restricted stock in lieu of cash.
Removed paragraphs (2)
Previous report
Cost of revenue increased $1.6 million, or 13%, from $12.5 million for the three months ended March 31, 2024 to $14.1 million for the three months ended March 31, 2025. The increases were due primarily to sales volume. Gross margin was 73% and 72% for the three months ended March 31, 2025 and March 31, 2024, respectively.
Previous report
Cash Used in Investing Activities
Reworded paragraphs (22)
Previous wording
We sell implants, instruments and specialized braces to our customers for use by pediatric orthopedic surgeons, orthotists or physical therapists to treat orthopedic conditions in children. We provide our implants in sets that consist of a range of implant sizes and include the instruments necessary to perform the surgical procedure. In the United States and a few selected international markets, our customers typically expect us to have full sets of implants and instruments on site at each hospital but do not purchase the implants until they are used in surgery. Accordingly, we must make an up-front investment in inventory of consigned implants and instruments before we can generate revenue from a particular hospital and we maintain substantial levels of inventory at any given time. We operate approximately 35 orthotic and prosthetic ("O&P") clinics in the United States serving children's hospitals in numerous states. In the international markets where we sell to stocking distributors or in the case of our braces, we transfer control of our products to the distributor or customer when title passes upon shipment.
Current wording
We sell implants, instruments and specialized braces to our customers for use by pediatric orthopedic surgeons, orthotists or physical therapists to treat orthopedic conditions in children. We provide our implants in sets that consist of a range of implant sizes and include the instruments necessary to perform the surgical procedure. In the United States and a few selected international markets, our customers typically expect us to have full sets of implants and instruments on site at each hospital but do not purchase the implants until they are used in surgery. Accordingly, we must make an up-front investment in inventory of consigned implants and instruments before we can generate revenue from a particular hospital and we maintain substantial levels of inventory at any given time. We operate approximately 40 orthotic and prosthetic ("O&P") clinics in the United States serving children's hospitals in numerous states. In the international markets where we sell to stocking distributors or in the case of our braces, we transfer control of our products to the distributor or customer when title passes upon shipment.
Previous wording
We currently market 80 surgical and specialized bracing systems that serve three of the largest categories within the pediatric orthopedic market: (i) trauma and deformity correction, (ii) scoliosis and (iii) sports medicine. We manufacture the majority of our orthopedic bracing products and we rely on a broad network of third parties to manufacture the components of our surgical products, which we then inspect and package. We believe our innovative products promote improved surgical accuracy, increase consistency of outcomes and enhance surgeon confidence in achieving high standards of care. In the future, we expect to expand our product offering within these categories, as well as to address additional categories of the pediatric orthopedic market.
Current wording
We currently market 82 surgical and specialized bracing systems that serve three of the largest categories within the pediatric orthopedic market: (i) trauma and deformity correction, (ii) scoliosis and (iii) sports medicine. We manufacture the majority of our orthopedic bracing products and we rely on a broad network of third parties to manufacture the components of our surgical products, which we then inspect and package. We believe our innovative products promote improved surgical accuracy, increase consistency of outcomes and enhance surgeon confidence in achieving high standards of care. In the future, we expect to expand our product offering within these categories, as well as to address additional categories of the pediatric orthopedic market.
Previous wording
The majority of our revenue from implants, instruments, and specialized braces has been generated in the United States. Our global sales management organization leads a network of sales agencies, stocking distributors as well as direct sales representatives. We sell our implants and instruments through a network of multiple direct sales representatives as well as over 40 independent sales agencies employing 227 sales representatives specifically focused on pediatrics. These independent sales agents are trained by us, distribute our products and are compensated through sales-based commissions and performance bonuses. We do not sell our products through or participate in physician-owned distributorships, or PODs. The revenue generated in the United States is from selling our bracing products directly to orthopedic surgeons, orthotists, physical therapists or, at certain times, directly to the end customer.
Current wording
The majority of our revenue from implants, instruments, and specialized braces has been generated in the United States. Our global sales management organization leads a network of sales agencies, stocking distributors as well as direct sales representatives. We sell our implants and instruments through a network of multiple direct sales representatives as well as over 40 independent sales agencies employing 234 sales representatives specifically focused on pediatrics. These independent sales agents are trained by us, distribute our products and are compensated through sales-based commissions and performance bonuses. We do not sell our products through or participate in physician-owned distributorships, or PODs.
Previous wording
OrthoPediatrics was founded on the cause of impacting the lives of children with orthopedic conditions. Since inception we have impacted the lives of 1,179,000 children, when including those served by our acquired companies. We believe we should continue to expand our social impact, create an inclusive culture, and ensure good corporate governance practices.
Current wording
OrthoPediatrics was founded on the cause of impacting the lives of children with orthopedic conditions. Since inception we have impacted the lives of 1,217,000 children, when including those served by our acquired companies. We believe we should continue to expand our social impact, create an inclusive culture, and ensure good corporate governance practices.
Previous wording
Summary of Statements of Operations for the Three Months Ended March 31, 2025 and 2024
Current wording
Summary of Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024
Previous wording
The following table sets forth our results of operations for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Current wording
The following table sets forth our results of operations for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):
Previous wording
The following tables set forth our net revenue by geography and product category for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Current wording
The following tables set forth our net revenue by geography and product category for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):
Previous wording
Net revenue increased $7.7 million, or 17%, from $44.7 million for the three months ended March 31, 2024 to $52.4 million for the three months ended March 31, 2025. The increase during the three months ended March 31, 2025 was primarily driven by strong performance across global Trauma and Deformity, Scoliosis and OP Specialty Bracing.
Current wording
Net revenue increased $8.3 million, or 16%, from $52.8 million for the three months ended June 30, 2024 to $61.1 million for the three months ended June 30, 2025. Net revenue increased $16.0 million, or 16%, from $97.5 million for the six months ended June 30, 2024 to $113.5 million for the six months ended June 30, 2025. The increase during the three and six months ended June 30, 2025 was primarily driven by strong performance across global Trauma and Deformity, Scoliosis and OP Specialty Bracing.
Previous wording
Trauma and deformity sales increased $4.6 million, or 14%, from $33.3 million during the three months ended March 31, 2024, to $37.9 million for the three months ended March 31, 2025. The increase for the three month period ended March 31, 2025 was primarily driven by strong growth across numerous product lines, specifically our Cannulated Screws, PNP Femur, PediPlate, external fixation and Pega systems. Scoliosis sales increased $3.5 million, or 34%, from $10.2 million during the three months ended
Current wording
Trauma and deformity sales increased $3.9 million, or 10%, from $37.8 million during the three months ended June 30, 2024, to $41.7 million for the three months ended June 30, 2025, and sales increased $8.4 million, or 12%, from $71.1 million for the six months ended June 30, 2024 to $79.5 million for the six months ended June 30, 2025. The increase for the three and six month periods ended June 30, 2025 was primarily driven by strong growth across numerous product lines, specifically our Cannulated Screws, PNP Femur, PNP Tibia, DF2, and OPSB. Scoliosis sales increased $4.8 million, or 35%, from $13.7 million during the three months ended June 30, 2024, to $18.5 million for the three months ended June 30, 2025, and sales increased $8.3 million, or 35%, from $23.9 million for the six months ended
Previous wording
March 31, 2024, to $13.7 million for the three months ended March 31, 2025. The increase for three month period ended March 31, 2025 was primarily driven by increased sales of our RESPONSE 5.5/6.0 and ApiFix systems and revenue generated from 7D Technology. Sports medicine / other decreased $0.3 million, or 25%, during the three months ended March 31, 2025. Nearly all the change in each category was due to an increase or decrease in the unit volume sold and not a result of price changes.
Current wording
June 30, 2024 to $32.2 million for the six months ended June 30, 2025. The increase for the three and six month periods ended June 30, 2025 was primarily driven by increased sales of our RESPONSE 5.5/6.0 and revenue generated from 7D Technology. Sports medicine / other decreased $0.4 million, or 33%, during the three months ended June 30, 2025, and $0.7 million, or 29%, during the six months ended June 30, 2025. Nearly all the change in each category was due to an increase or decrease in the unit volume sold and not a result of price changes.
Previous wording
Sales and marketing expenses increased $2.4 million, or 17%, to $16.6 million for the three months ended March 31, 2025 from $14.2 million for the three months ended March 31, 2024. The increase in the three months ended March 31, 2025 was due primarily to increased sales commission expenses and an overall increase in volume of units sold.
Current wording
Sales and marketing expenses increased $2.5 million, or 15%, to $19.1 million for the three months ended June 30, 2025 from $16.6 million for the three months ended June 30, 2024. Sales and marketing expenses increased $4.9 million, or 16%, to $35.7 million for the six months ended June 30, 2025 from $30.8 million for the six months ended June 30, 2024.The increase in the three and six months ended June 30, 2025 was due primarily to increased sales commission expenses and an overall increase in volume of units sold.
Previous wording
General and administrative expenses increased $5.6 million, or 22%, from $24.7 million for the three months ended March 31, 2024 to $30.3 million for the three months ended March 31, 2025. The increase for the three months ended March 31, 2025 was due primarily to the additional personnel though clinic acquisitions. Stock compensation increased $1.0 millionfor the three months ended March 31, 2025 due to the increase in personnel.
Current wording
General and administrative expenses increased $3.1 million, or 11%, from $27.3 million for the three months ended June 30, 2024 to $30.4 million for the three months ended June 30, 2025, and increased $8.7 million, or 17%, from $52.1 million for the six months ended June 30, 2024 to $60.7 million for the six months ended June 30, 2025. The increase for the three and six months ended June 30, 2025 was due primarily to the additional personnel though clinic acquisitions and increased lease expense. Stock compensation increased $2.4 millionfor the six months ended June 30, 2025 due to the increase in personnel.
Previous wording
Depreciation and amortization expenses decreased $0.2 million, or 5% from $5.0 million for the three months ended March 31, 2024 to $4.8 million for the three months ended March 31, 2025.
Current wording
Depreciation and amortization expenses increased $0.1 million, or 3%, from $4.8 million for the three months ended June 30, 2024 to $4.9 million for the three months ended June 30, 2025, and decreased $0.1 million, or 1%, from $9.8 million for the six months ended June 30, 2024 to $9.7 million for the six months ended June 30, 2025.
Previous wording
In 2024, the Company initiated a global restructuring plan aimed at improving operational efficiency, reducing costs by integrating the ApiFix product into the broader OP Scoliosis portfolio, and reducing staff across all of OrthoPediatrics Corp (the "2024 Restructuring Plan"). In connection with the 2024 Restructuring Plan, the Company recorded restructuring expenses of less than $0.1 million forthe three months ended March 31, 2025 compared to $0 for thethree months ended March 31, 2024.
Current wording
In 2024, the Company initiated a global restructuring plan aimed at improving operational efficiency, reducing costs by integrating the ApiFix product into the broader OP Scoliosis portfolio, and reducing staff across all of OrthoPediatrics Corp (the "2024 Restructuring Plan"). In connection with the 2024 Restructuring Plan, the Company recorded restructuring expenses of$3.0 million forthe three and six months ended June 30, 2025 compared to $0 for thethree and six months ended June 30, 2024.
Previous wording
Research and development expenses decreased $0.6 million, or 22%, from $3.0 million for the three months ended March 31, 2024 to $2.4 million for the three months ended March 31, 2025. The decrease for the three months ended March 31, 2025 was primarily due to the timing of product development during the first quarter of 2024 compared to the first quarter of 2025.
Current wording
$1.0 million, or 19%, from $5.5 million for the six months ended June 30, 2024 to $4.5 million for the six months ended June 30, 2025. The decrease for the three and six months ended June 30, 2025 was primarily due to the timing of product development during the first and second quarters of 2024 compared to the first and second quarters of 2025.
Previous wording
Other income was $0.5 million for the three months ended March 31, 2025 compared to other expense of $0.6 million for the three months ended March 31, 2024, a change of $1.1 million or 185%. The change for the three months ended March 31, 2025 was primarily driven by an increase in foreign exchange gain.
Current wording
Other income was $3.6 million for the three months ended June 30, 2025 compared to other expense of $0.4 million for the three months ended June 30, 2024, a change of $4.0 million or 1,043%, and other income was $4.1 million for the six months ended June 30, 2025 compared to other expense of $1.0 million for the six months ended June 30, 2024, a change of $5.1 million, or 514%. The change for the three and six months ended June 30, 2025 was primarily driven by an increase in foreign exchange gain.
Previous wording
We have incurred operating losses since inception which resulted in negative cash flows used in operating activities of $4.2 million and $6.7 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $246.2 million. We anticipate that our losses will continue in the near term as we continue to expand our product portfolio and invest in additional consigned implant and instrument sets to support our expansion into existing and new markets. Since inception, we have funded our operations primarily with proceeds from the sales of our common and preferred stock, convertible securities and debt, as well as through sales of our products. At March 31, 2025, we had cash and cash equivalents, restricted cash and short-term investments of $60.8 million.
Current wording
We have incurred operating losses since inception which resulted in negative cash flows used in operating activities of $14.6 million and $12.8 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had an accumulated deficit of $253.3 million. We anticipate that our losses will continue in the near term as we continue to expand our product portfolio and invest in additional consigned implant and instrument sets to support our expansion into existing and new markets. Since inception, we have funded our operations primarily with proceeds from the sales of our common and preferred stock, convertible securities and debt, as well as through sales of our products. At June 30, 2025, we had cash and cash equivalents, restricted cash and short-term investments of $72.2 million.
Previous wording
Net cash used in operating activities was $4.2 million and $6.7 million for the three months ended March 31, 2025 and 2024, respectively. The primary use of this cash was to fund our operations related to the development and commercialization of our products in each of these periods. Net cash used for working capital was $1.2 million for the three months ended March 31, 2025 compared to $4.9 million for the three months ended March 31, 2024. The increase in cash used in operating activities was primarily driven by inventory purchases to support sales growth as well as changes in accounts receivable and accounts payable associated with the increased sales and acquired inventory, respectively.
Current wording
Net cash used in operating activities was $14.6 million and $12.8 million for the six months ended June 30, 2025 and 2024, respectively. The primary use of this cash was to fund our operations related to the development and commercialization of our products in each of these periods. Net cash used for working capital was $14.6 million for the six months ended June 30, 2025 compared to $10.3 million for the six months ended June 30, 2024. The increase in cash used in operating activities was primarily driven by inventory purchases to support sales growth as well as changes in accounts receivable and accounts payable associated with the increased sales and acquired inventory, respectively.
Previous wording
Net cash provided by investing activities for the three months ended March 31, 2025 was $6.0 million compared to $3.7 million for the three months ended March 31, 2024. Net cash used in investing activities for the three months ended March 31, 2025 consisted primarily of the purchases of property, plant and equipment of $4.2 million, along with the investment in private companies. The increase in cash related to investing activities is primarily driven by no longer having cash provided by the sale of short term marketable securities to offset cash used in business combinations.
Current wording
Net cash used in investing activities for the six months ended June 30, 2025 was $9.5 million compared to cash provided by investing activities of $16.0 million for the six months ended June 30, 2024. Net cash used in investing activities for the six months ended June 30, 2025 consisted primarily of the purchases of property, plant and equipment of $7.7 million, along with the investment in private companies. The increase in cash used in investing activities was primarily driven by no longer having cash provided by the sale of short term marketable securities to offset cash used in business combinations.
Previous wording
Cash Used in Financing Activities
Current wording
Cash Provided by (Used in) Financing Activities
Previous wording
Net cash used in financing activities for the three months ended March 31, 2025 was $0.1 million compared to $0.6 million for the three months ended March 31, 2024. Net cash for the three months ended March 31, 2025 consisted of payments on clinic acquisition notes and mortgage notes.
Current wording
Net cash provided by financing activities for the six months ended June 30, 2025 was $24.7 million compared to cash used in financing activities of $4.8 million for the six months ended June 30, 2024. Net cash for the six months ended June 30, 2025 consisted of proceeds from a draw on debt, offset by payments on clinic acquisition notes and installment payments.
Previous wording
On August 05, 2024, the Company signed an $100 million term loan and private placement arrangement with Braidwell LP by and among (i) the Company and other borrowers party to the Credit Agreement, (ii) Braidwell LP, and (iii) the financial institutions or other entities from time to time party thereto as Lenders. Terms of the financing include a $50 million term loan and $50 million of convertible notes. The term loan consists of an initial term loan of $25 million and access to a delayed draw term loan facility for an additional $25 million, subject to certain terms and conditions. The interest rate on the term loan is SOFR + 6.50% with the Company having the option to make a payment-in-kind interest payment equal to 1.00% per annum of the rate. Payments are interest only until the maturity date in August 2029. Included in the term loan are financial covenants to maintain cash in certain pledged accounts of at least 25% of the outstanding principal amount of the loan and to maintain certain minimum net product sales during the loan period.
Current wording
On August 5, 2024, the Company signed a $100 million term loan and private placement arrangement with Braidwell LP by and among (i) the Company and other borrowers party to the Credit Agreement, (ii) Braidwell LP, and (iii) the financial institutions or other entities from time to time party thereto as Lenders. Terms of the financing include a $50 million term loan and $50 million of convertible notes. The term loan consists of an initial term loan of $25 million and access to a delayed draw term loan facility for an additional $25 million, subject to certain terms and conditions. The interest rate on the term loan is SOFR + 6.50% with the Company having the option to make a payment-in-kind interest payment equal to 1.00% per annum of the rate. Payments are interest only until the maturity date in August 2029. Included in the term loan are financial covenants to maintain cash in certain pledged accounts of at least 25% of the outstanding principal amount of the loan and to maintain certain minimum net product sales during the loan period. On June 27, 2025, the Company withdrew the delayed draw on the term loan in the amount of $25.0 million.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The revenue generated in the United States is from selling our bracing products directly to orthopedic surgeons, orthotists, physical therapists or, at certain times, directly to the end customer.
Current report — wording carried from elsewhere
Cash (Used in) Provided by Investing Activities