Key Highlights

  • Third-quarter revenue rose 19% to $72.7 million from $61.2 million a year earlier.
  • 2026 revenue guidance was raised to $270.0 million to $273.0 million from $265.0 million to $269.0 million.
  • Adjusted EBITDA rose 12% to $6.9 million, and full-year adjusted EBITDA is still expected near $25.0 million.
  • GAAP net loss narrowed to $5.9 million, or $0.25 per share, from $11.8 million, or $0.50.
  • Free cash flow was positive at $1.6 million, against negative $3.4 million a year earlier.

OrthoPediatrics Earnings: Why Did Guidance Rise While the Loss Per Share Stayed Negative?

OrthoPediatrics (NASDAQ:KIDS) reported third-quarter results on Tuesday, October 27, with revenue of $72.7 million, up 19% from $61.2 million. Management raised full-year 2026 revenue guidance to $270.0 million to $273.0 million, from $265.0 million to $269.0 million, implying growth of 14% to 16% over 2025.

The company reported an adjusted diluted loss of $0.23 per share, compared with $0.24 a year earlier. As screened, the consensus loss was $0.21, which would put the adjusted result about 6.98% wider than the estimate. The GAAP loss was $0.25 per share, versus $0.50.

OrthoPediatrics designs and sells implants and instruments for children with orthopedic conditions. It offers more than 95 systems and distributes in the U.S. and over 75 other countries, and said it helped nearly 42,000 children in the quarter.

Trauma, Scoliosis and International: Where Did the 19% Revenue Growth Come From?

Trauma and deformity revenue rose 19% to $52.6 million from $44.1 million. Scoliosis revenue rose 18% to $19.2 million from $16.3 million, and sports medicine and other revenue was $0.9 million.

U.S. revenue was $57.9 million, or 80% of the total, up 19%. International revenue was $14.8 million, up 18%, on higher procedure volumes.

Management credited trauma and deformity products and the OPSB line, along with VerteGlide and Response in scoliosis, and described an innovation cycle of new products meant to improve capital efficiency.

Margins, Spending and Cash: Is Operating Leverage Showing Up?

Gross profit rose 19% to $54.0 million, and gross margin held at 74%. Total operating expenses rose 6% to $58.2 million, which is slower than revenue, and the operating loss narrowed to $4.2 million from $9.4 million.

Sales and marketing expense rose 24% to $23.1 million on commissions, volume and personnel for clinic expansion and small acquisitions. General and administrative expense rose 10% to $32.0 million, and research and development was $2.5 million. A $0.6 million intangible impairment related to ApiFix and MedTech trademarks was recorded.

Operating cash flow was $4.5 million, against negative $0.6 million, and capital expenditures were $2.9 million. Management tied the free cash flow gain to higher adjusted EBITDA, lower set deployment and better working capital.

Balance Sheet and Guidance: What Does the 2026 Outlook Require From Here?

Cash, short-term investments and restricted cash totaled $44.9 million at September 30, down from $62.9 million at year-end 2025. Debt included a $48.6 million term loan and a $49.0 million convertible note, and inventories were $141.9 million.

Management reiterated adjusted EBITDA of approximately $25.0 million and set deployment of approximately $10.0 million for 2026, and kept its expectation of breakeven free cash flow for the year. Nine-month adjusted EBITDA was $15.9 million, so the guide implies roughly $9.1 million in the fourth quarter, a calculated figure.

What to Watch Next for OrthoPediatrics After the Guidance Raise

Investors will watch fourth-quarter revenue against the implied range, whether adjusted EBITDA reaches about $25.0 million, and whether free cash flow reaches breakeven after a negative nine-month total of $6.6 million.