ORTHOPEDIATRICS CORP
For the period ended Sep 30, 2025. Filed Oct 29, 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.
Sep 30, 2025 · Filed Oct 29, 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 2025-06-30; filed 2025-08-06.
0001425450-25-000096
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-29.
0001425450-25-000114
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 71 previous paragraphs and 70 current paragraphs.
43 unchanged; 22 reworded; 5 added; 5 removed; 1 previous and 0 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
Intangible Asset Impairment
Current report
During 2025, management completed a quantitative analysis as part of our annual impairment test, and determined the fair value of our ApiFix, MedTech, and Telos trademark assets were below their respective carrying values. Additionally, in connection with our decision to exit our Telos regulatory consulting business, we wrote off the remaining carrying value of its customer relationship intangible asset. We recorded an impairment charge of $2.3 million for the nine months ended September 30, 2025 compared to $0 for the nine months ended September 30, 2024.
Current report
Total Other Expenses (Income)
Current report
Cash Used in Investing Activities
Current report
Cash Provided by Financing Activities
Removed paragraphs (5)
Previous report
In 2023 and 2022, there was a significant and unprecedented increase in cases of respiratory syncytial virus, or RSV, and other respiratory illnesses. RSV is a common respiratory virus that follows a seasonal pattern. The typical season shows an increase in mid-September, peaks in late December and drops around mid-April; however, in 2022 the United States experienced a significant increase during the summer and fall months and in 2023 the United States experienced a significant increase in January and February as well as October through December. The volume of elective procedures utilizing our products were negatively impacted as a significant percent of hospital capacity was absorbed to cover the increase in RSV-related hospitalizations. This had a negative impact on our sales volume in 2022 and 2023 and may continue to do so into the future. We are unable to accurately determine exactly how this will impact us in the future, but we will continue to monitor this dynamic as we get closer to the traditional peak of RSV season.
Previous 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
Previous report
Total Other (Income) Expenses
Previous report
Cash (Used in) Provided by Investing Activities
Previous report
Cash Provided by (Used in) Financing Activities
Reworded paragraphs (22)
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 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.
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 235 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.
Previous wording
We market and sell our products internationally in over 75 countries, through independent stocking distributors and sales agencies. Our independent distributors manage the billing relationship with each hospital in their respective territories and are responsible for servicing the product needs of their surgeon customers. In 2017, we began to supplement our international stocking distributors with sales agencies using direct sales programs in the United Kingdom, Ireland, Australia and New Zealand where we sell directly to the hospitals. We began selling direct to Canada in September 2018, Belgium and the Netherlands in January 2019, Italy in March 2020 and Germany, Switzerland and Austria in January 2021. In order to further enhance our operations in Europe, we established operating companies in the Netherlands and Germany in March 2019 and April 2022, respectively. In 2023 and 2024, we hired operating and sales representatives in Germany as salaried employees to better serve our customers and opened warehouses in Germany and Australia in 2024. These arrangements have generated an increase in revenue and gross margin.
Current wording
We market and sell our products internationally in over 75 countries, through independent stocking distributors and sales agencies. Our independent distributors manage the billing relationship with each hospital in their respective territories and are responsible for servicing the product needs of their surgeon customers. In 2017, we began to supplement our international stocking distributors with sales agencies using direct sales programs in the United Kingdom, Ireland, Australia and New Zealand where we sell directly to the hospitals. We began selling direct to Canada in September 2018, Belgium and the Netherlands in January 2019, Italy in March 2020 and Germany, Switzerland and Austria in January 2021. In order to further enhance our operations in Europe, we established operating companies in the Netherlands and Germany in March 2019 and April 2022, respectively. In 2023 and 2024, we hired operating and sales representatives in Germany as salaried employees to better serve our customers and opened warehouses in Germany and Australia in 2024 and the Netherlands in 2025. These arrangements have generated an increase in revenue and gross margin.
Previous wording
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 wording
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 thenine months ended September 30, 2025, consignment sales accounted for approximately 70% of our total net sales. Inventory held on consignment at sales agencies, distributors, or other customers is approximately 60% of gross inventory.
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 1,217,000 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.
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 1,254,000 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
From time to time we acquire, make investments in or license other technologies, products and business that may enhance our capabilities, complement our current products or expand the breadth of our markets or customer base. As a result of these transactions, we may record certain intangible assets, including goodwill and trademarks, which are subject to annual impairment testing. Fair value is based on our current assessment of the expected future cash flows based on recent results and other specific market factors. During 2024, 2023, and 2022, we determined that a triggering event had occurred indicating it was more likely than not the fair value of the ApiFix trademark was less than the associated carrying value. Subsequently, the Company completed a quantitative analysis and concluded that the fair value was in fact less than the carrying value and partial impairment losses of $1.8 million, $1.0 million and $3.6 million were recorded in 2024, 2023, and 2022, respectively. We believe that the expected future cash flows in the most recent calculations represent management’s best estimate; however, if actual results differ materially from these estimates, we could record an additional impairment charge which could be material to our consolidated financial statements and have an adverse impact on our results of operations.
Current wording
From time to time we acquire, make investments in or license other technologies, products and business that may enhance our capabilities, complement our current products or expand the breadth of our markets or customer base. As a result of these transactions, we may record certain intangible assets, including goodwill and trademarks, which are subject to annual impairment testing. Fair value is based on our current assessment of the expected future cash flows based on recent results and other specific market factors. During 2025, 2024, 2023 and 2022, we determined that a triggering event had occurred indicating it was more likely than not the fair value of certain of our trademarks was less than the associated carrying value. Subsequently, the Company completed a quantitative analysis and concluded that the fair value was in fact less than the carrying value and impairment losses of $1.9 million, $1.8 million, $1.0 million, and $3.6 million were recorded in 2025, 2024, 2023, and 2022, respectively. We believe that the expected future cash flows in the most recent calculations represent management’s best estimate; however, if actual results differ materially from these estimates, we could record an additional impairment charge which could be material to our consolidated financial statements and have an adverse impact on our results of operations.
Previous wording
Summary of Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024
Current wording
Summary of Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024
Previous 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):
Current wording
The following table sets forth our results of operations for the three and nine months ended September 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 and six months ended June 30, 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 nine months ended September 30, 2025 and 2024 (dollars in thousands):
Previous 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.
Current wording
Net revenue increased $6.7 million, or 12%, from $54.6 million for the three months ended September 30, 2024 to $61.2 million for the three months ended September 30, 2025. Net revenue increased $22.7 million, or 15%, from $152.1 million for the nine months ended September 30, 2024 to $174.7 million for the nine months ended September 30, 2025. The increase during the three and nine months ended September 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 $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
Current wording
Trauma and deformity sales increased $6.5 million, or 17%, from $37.6 million during the three months ended September 30, 2024, to $44.1 million for the three months ended September 30, 2025, and sales increased $15.0 million, or 14%, from $108.7 million for the nine months ended September 30, 2024 to $123.7 million for the nine months ended September 30, 2025. The increase for the three and nine month periods ended September 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
Previous 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.
Current wording
$0.6 million, or 4%, from $15.6 million during the three months ended September 30, 2024, to $16.3 million for the three months ended September 30, 2025, and sales increased $8.9 million, or 23%, from $39.5 million for the nine months ended September 30, 2024 to $48.4 million for the nine months ended September 30, 2025. The increase for the three and nine month periods ended September 30, 2025 was primarily driven by increased sales of our RESPONSE 5.5/6.0 and revenue generated from FIREFLY. Sports medicine / other decreased $0.5 million, or 35%, during the three months ended September 30, 2025, and $1.2 million, or 31%, during the nine months ended September 30, 2025 due to a reduction of Telos revenue related to its closure. 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
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 wording
Cost of revenue increased $1.5 million, or 10%, from $14.5 million for the three months ended September 30, 2024 to $16.0 million for the three months ended September 30, 2025. Cost of revenue increased $8.2 million, or 21%, from $39.0 million for the nine months ended September 30, 2024 to $47.2 million for the nine months ended September 30, 2025. The increases were due primarily to sales volume. Gross margin was 74% and 73% for the three months ended September 30, 2025 and September 30, 2024, respectively. Gross margin was 73% and 74% for the nine months ended September 30, 2025 and September 30, 2024, respectively. The lower gross margin was driven by a higher percentage of sales of international set sales and 7D units sold with a lower gross margin profit.
Previous 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.
Current wording
Sales and marketing expenses increased $1.9 million, or 11%, to $18.7 million for the three months ended September 30, 2025 from $16.8 million for the three months ended September 30, 2024. Sales and marketing expenses increased $6.8 million, or 14%, to $54.3 million for the nine months ended September 30, 2025 from $47.5 million for the nine months ended September 30, 2024.The increase in the three and nine months ended September 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 $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.
Current wording
General and administrative expenses increased $2.9 million, or 11%, from $26.3 million for the three months ended September 30, 2024 to $29.2 million for the three months ended September 30, 2025, and increased $11.5 million, or 15%, from $78.4 million for the nine months ended September 30, 2024 to $89.9 million for the nine months ended September 30, 2025. The increase for the three and nine months ended September 30, 2025 was due primarily to the additional personnel though clinic acquisitions and increased lease expense. Stock compensation increased $1.9 millionfor the nine months ended September 30, 2025 due to the increase in personnel.
Previous 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.
Current wording
Depreciation and amortization expenses decreased $0.2 million, or 4%, from $5.1 million for the three months ended September 30, 2024 to $4.9 million for the three months ended September 30, 2025, and decreased $0.5 million, or 3%, from $15.1 million for the nine months ended September 30, 2024 to $14.6 million for the nine months ended September 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$3.0 million forthe three and six months ended June 30, 2025 compared to $0 for thethree and six months ended June 30, 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 2025, the Company made the decision to restructure Telos by dissolving the local operation and continuing staff reductions across the Company. Restructuring expense increased from$0.0 million for thethree and nine months ended September 30, 2024 to$2.3 million for the three months ended September 30, 2025, and$5.3 million for thenine months ended September 30, 2025. The increase for thethree and nine months ended September 30, 2025 was due primarily to the Telos goodwill write-off of $1.9 million and additional severance expenses.
Previous 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.
Current wording
Research and development expenses decreased $0.2 million, or 9%, from $2.6 million for the three months ended September 30, 2024 to $2.3 million for the three months ended September 30, 2025, and decreased $1.3 million, or 16%, from $8.1 million for the nine months ended September 30, 2024 to $6.8 million for the nine months ended September 30, 2025. The decrease for the three and nine months ended September 30, 2025 was primarily due to the timing of product development during the first, second, and third quarters of 2024 compared to the first, second, and third quarters of 2025.
Previous 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.
Current wording
Other expense was $2.5 million for the three months ended September 30, 2025 compared to other expense of $3.6 million for the three months ended September 30, 2024, a reduction of $1.1 million or 31%, and other income was $1.6 million for the nine months ended September 30, 2025 compared to other expense of $4.6 million for the nine months ended September 30, 2024, a reduction of $6.2 million, or 136%. The change for the three and nine months ended September 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 $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.
Current wording
We have incurred operating losses since inception which resulted in negative cash flows used in operating activities of $15.2 million and $23.1 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $265.1 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 September 30, 2025, we had cash and cash equivalents, restricted cash and short-term investments of $59.8 million.
Previous 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.
Current wording
Net cash used in operating activities was $15.2 million and $23.1 million for the nine months ended September 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 $17.2 million for the nine months ended September 30, 2025 compared to $26.0 million for the nine months ended September 30, 2024. The decrease in cash used in operating activities was primarily driven by fewer inventory purchases during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Previous 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.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2025 was $36.4 million compared to $10.8 million for the nine months ended September 30, 2024. Net cash used in investing activities for the nine months ended September 30, 2025 consisted primarily of the purchases of property, plant and equipment of $10.5 million, the purchase of short-term marketable securities of $15.0 million, and the investment in private companies and clinic and other acquisitions. The increase in cash used in investing activities was primarily driven by a reduction in the cash provided by the sale of short term marketable securities to offset cash used in business combinations.
Previous 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.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2025 was $24.4 million compared to $53.7 million for the nine months ended September 30, 2024. Net cash for the nine months ended September 30, 2025 consisted of proceeds from a draw on debt, offset by payments on clinic acquisition notes and installment payments.
Rearranged previous paragraphs (1)
Previous report — wording carried 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.