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OrthoPediatrics Corp. (Nasdaq: KIDS), a company focused exclusively on advancing the field of pediatric orthopedics, announced today its financial results for the fourth quarter and full year ended December 31, 2024.
Fourth Quarter and Full Year 2024 & Recent Business Highlights
- Helped a new record of over 34,000 children in the fourth quarter 2024 and approximately 138,000 for full year 2024, bringing the total to over 1.14 million since the inception of OrthoPediatrics
- Generated total revenue of $52.7 million for fourth quarter 2024, up 40% from $37.6 million in fourth quarter 2023; domestic revenue increased 52% and international revenue increased 5% in the quarter
- Achieved adjusted EBITDA of $3.0 million in the fourth quarter of 2024, compared to $1.3 million in the fourth quarter of 2023
- Generated record total annual revenue of $204.7 million for full year 2024, up 38% from $148.7 million in 2023; domestic revenue increased 45% and international revenue increased 15% in 2024
- Achieved record full year adjusted EBITDA of $8.5 million in 2024, compared to $5.0 million in 2023
- Reduced fourth quarter 2024 free cash flow usage by 70% as compared to the third quarter 2024 year to date average, and reduced fourth quarter 2024 free cash flow usage by 67% as compared to the same period in the prior year. Anticipate first full quarter of positive free cash flow in fourth quarter 2025
- Reiterated full year 2025 revenue guidance to be in a range of $235.0 million to $242.0 million, representing growth of 15% to 18% compared to 2024
“2024 was yet another year that OrthoPediatrics delivered strong results, successfully executed on our strategy, and further solidified our market leading position as we surround the pediatric orthopedic surgeon with all of the technology they need. With an extremely diverse business we have multiple levers that drive growth and we saw strength across all segments as Trauma and Deformity, Scoliosis, and OPSB continue to capture market share,” commented David Bailey, President & CEO of OrthoPediatrics. “Looking ahead, we are positioned well to further build on our past success and achieve our long-term goal of helping one million kids per year. We will help more children than ever, capture more share across the entire business as we continue to break revenue records, grow our adjusted EBITDA, and improve cash usage in 2025 and beyond, and we look forward to driving our Company through this next phase of growth."
Fourth Quarter and Full Year 2024 Financial Results
Total revenue for the fourth quarter of 2024 was $52.7 million, a 40% increase compared to $37.6 million for the same period last year. The increase in revenue in the fourth quarter of 2024 was driven primarily by growth across Global Trauma and Deformity, Scoliosis, and OPSB, plus the addition of Boston O&P, partially offset by lower growth in international revenue. U.S. revenue for the fourth quarter of 2024 was $42.9 million, a 52% increase compared to $28.3 million for the same period last year, representing 81% of total revenue. International revenue for the fourth quarter of 2024 was $9.8 million, a 5% increase compared to $9.4 million for the same period last year, representing 19% of total revenue. Growth in the quarter was primarily driven by Scoliosis sales.
Total revenue for the full year 2024 was $204.7 million, a 38% increase compared to $148.7 million in 2023. Full year U.S. revenue was $161.2 million, a 45% increase compared to $111.0 million in 2023, representing 79% of total revenue. International revenue for the full year 2024 was $43.6 million, a 15% increase compared to $37.7 million in 2023, representing 21% of total revenue.
Trauma and Deformity revenue for the fourth quarter of 2024 was $36.4 million, a 35% increase compared to $27.1 million for the same period last year. Revenue was driven by growth from Trauma, Pega products, Ex-Fix, and OPSB, as well as the addition of Boston O&P. Scoliosis revenue was $15.6 million, a 62% increase compared to $9.7 million for the fourth quarter of 2023. Scoliosis growth was driven primarily by increased U.S. growth across the Response and ApiFix non-fusion system, as well as the addition of Boston O&P. Sports Medicine/Other revenue for the fourth quarter of 2024 was $0.6 million, compared to $0.9 million for the same period last year.
Trauma and Deformity revenue for the full year 2024 was $145.1 million, a 36% increase compared to $106.8 million in 2023. Scoliosis revenue for the full year 2024 was $55.2 million, a 45% increase compared to $37.9 million in 2023. Sports Medicine/Other revenue for the full year 2024 was $4.4 million, an 11% increase compared to $4.0 million in 2023.
Gross profit for the fourth quarter of 2024 was $35.6 million, an $8.9 million increase compared to $26.7 million for the same period last year. Gross profit margin for the fourth quarter of 2024 was 67.5%, compared to 71.0% for the same period last year. The decrease in gross profit margin was primarily driven by an approximately $3.0 million, full year, adjustment from the reclassification of certain labor and overhead expenses previously recorded in general and administrative expenses into cost of revenue related to our Boston O&P manufacturing business. For the full year 2024, gross profit margin was 72.6%, compared to 74.8% in 2023. The decrease in gross profit margin was primarily driven by an approximately $3.0 million, full year, adjustment from the reclassification of certain labor and overhead expenses previously recorded in general and administrative expenses into cost of revenue related to our Boston O&P manufacturing business. This reclassification does not impact our total operating loss, net loss or Adjusted EBITDA.
Total operating expenses for the fourth quarter of 2024 were $49.6 million, a $14.8 million increase compared to $34.8 million for the same period last year. Full year operating expenses were $183.6 million, a 33.0% increase compared to $138.0 million in 2023. The increase was mainly driven by volume of units sold, and increased volume related commission, as well as the addition of Boston O&P.
Sales and marketing expenses increased $4.0 million, or 31.1%, to $16.8 million in the fourth quarter of 2024. For the full year 2024, sales and marketing expense increased $11.5 million, or 21.7%, to $64.3 million. The increase was primarily driven by increased sales commission expenses.
General and administrative expenses increased $5.4 million, or 28.2%, to $24.4 million in the fourth quarter of 2024. For the full year 2024, general and administrative expense increased $29.5 million, or 40.2%, to $102.8 million. The fourth quarter and full year increases were driven primarily by the addition of personnel and resources to support the continued expansion of the business, the addition of Boston O&P, and increases in non-cash items such as stock compensation, depreciation and amortization.
One-time charges for the fourth quarter 2024 included a $3.7 million restructuring charge associated with the closure of our Israel office and included severance, inventory write off, lease exit fees, and other expenses. In addition, we recorded an impairment charge related to one of our tradenames of $1.8 million compared to $1.0 million during the third quarter in 2023.
Total other expense was $2.4 million for the fourth quarter of 2024, compared to other income of $1.2 million for the same period last year, and other expense was $6.9 million for 2024 compared to other income of $5.4 million for 2023. For 2024, there was no fair value adjustment of contingent consideration compared to a $3.0 million benefit for 2023, and in 2024 we incurred a one-time refinancing expense of $3.2 million.
Net loss for the fourth quarter of 2024 was $16.1 million, compared to $6.7 million for the same period last year. Net loss per share for the period was $0.69 per basic share and diluted share, compared to $0.29 per basic and diluted share for the same period last year. Adjusted EBITDA for the fourth quarter of 2024 was $3.0 million as compared to $1.3 million for the fourth quarter of 2023.
Net loss for the full year 2024 was $37.8 million, compared to a net loss of $21.0 million last year. There was no fair value adjustment of contingent consideration for year 2024, the sales performance period associated with our ApiFix system sales milestone ended, and no additional amounts were owed to the sellers. This is compared to a favorable $3.0 million fair value adjustment in 2023. Net loss per share for the period was $1.64 per basic and diluted share, compared to net income of $0.92 per basic and diluted share for the same period last year. Adjusted EBITDA for the full year 2024 was $8.5 million compared to $5.0 million for the full year 2023. See below for additional information and a reconciliation of non-GAAP financial information.
Weighted average diluted shares outstanding for the three months ended December 31, 2024 was 23,171,662 shares.
As of December 31, 2024, cash and cash equivalents, short-term investments and restricted cash were $70.8 million compared to $78.1 million and $82.3 million as of September 30, 2024 and December 31, 2023, respectively. We also have an additional $25.0 million available on our term loan.
Full Year 2025 Financial Guidance
For full year 2025, the Company expects its revenue to be in the range of $235.0 million to $242.0 million, representing growth of 15% to 18% over 2024 revenue. The Company also expects its annual set deployment to be approximately $15.0 million and expects to generate $15.0 million to $17.0 million of adjusted EBITDA for full year 2025.
