OrthoPediatrics Reports 38% Revenue Growth to $204.7 Million, Net Loss of $37.8 Million for 2024

OrthoPediatrics Corp. (KIDS) reported net revenue of $204.7 million for the year ended December 31, 2024, a 38% increase from $148.7 million in 2023. This growth was driven by the acquisition of Boston O&P, contributing $30 million in revenue, and strong performance across Trauma and Deformity, Scoliosis, and OP Specialty Bracing product lines. Trauma and deformity revenue increased 36% to $145.1 million, scoliosis revenue rose 45% to $55.2 million, and sports medicine/other revenue saw an 11% increase to $4.4 million. The company's gross margin remained relatively consistent at 73% in 2024 compared to 75% in 2023.

Operating expenses increased significantly, with sales and marketing expenses rising 22% to $64.3 million, and general and administrative expenses increasing 40% to $102.8 million, largely due to the Boston O&P acquisition. Research and development expenses saw a minor increase of 1% to $11.0 million. The company recorded a $1.8 million trademark impairment charge related to the ApiFix asset and $3.7 million in restructuring expenses. These factors, along with increased other expenses, resulted in a net loss of $37.8 million for 2024, compared to a net loss of $20.9 million in 2023.

During 2024, OrthoPediatrics Corp. completed several significant acquisitions. The company acquired Boston O&P, a manufacturer of pediatric orthotic and prosthetic devices, and also acquired multiple orthotic and prosthetic clinics throughout the United States. In 2023, the company acquired MedTech Concepts LLC, a digital healthcare technology company, and assets from Rhino Pediatric Orthopedic Designs, Inc. The company also expanded its international presence, opening warehouses in Germany and Australia and hiring additional sales representatives in those regions. The company also entered into a license and supply agreement with Innovation Lab to bring the Move-Dtm brace to market.

As of December 31, 2024, OrthoPediatrics Corp. had 562 full-time equivalent employees and consolidated total assets of $473.2 million, total liabilities of $118.6 million, and stockholders' equity of $354.6 million. The company's accumulated deficit was $235.6 million. The company replaced its existing credit agreement with an $80 million credit agreement with MidCap Financial with a $100 million term loan and private placement arrangement with Braidwell LP, which includes a $50 million term loan and $50 million of convertible notes.

The company anticipates continued losses in the near term due to ongoing investments in product development, expansion into new markets, and increased inventory levels. The company's outlook is contingent upon several factors, including successful commercialization of new products, maintaining strong relationships with distributors and sales agencies, and navigating potential challenges related to healthcare regulations and economic conditions. The company also noted the impact of widespread health emergencies, such as COVID-19 and RSV, on its business and financial results.