OrthoPediatrics at Canaccord Conference: Pioneering Pediatric Orthopedics

On Wednesday, 13 August 2025, OrthoPediatrics (NASDAQ:KIDS) showcased its strategic initiatives at Canaccord Genuity’s 45th Annual Growth Conference. The company, uniquely focused on pediatric orthopedics, highlighted both its ambitious growth strategies and the challenges it faces in expanding its market presence. Despite competition in the medical device industry, OrthoPediatrics remains committed to innovation and clinical education.

Key Takeaways

• OrthoPediatrics is the only company exclusively focused on pediatric orthopedics, having assisted over 1.2 million children.
• The company projects 2025 revenue between $237 million and $242 million, with a growth rate of 16% to 18%.
• The acquisition of Boston OMP aims to enhance their specialty bracing segment, targeting a $500 million market.
• OrthoPediatrics plans to achieve free cash flow breakeven by the end of 2025.
• The launch of the Vertaglyde system is expected to bolster their Early Onset Scoliosis portfolio.

Financial Results

• Revenue: Projected to reach $237 million to $242 million in 2025, with a record $61 million in Q2, marking a $6.5 million increase from previous records. Scoliosis revenue grew over 34% year-over-year in Q2.
• EBITDA: Adjusted EBITDA for 2025 is expected to be $15 million to $17 million, up from $8.5 million in 2024.
• Cash Flow: The company anticipates reaching free cash flow breakeven in Q4 2025 and maintaining this for the full year 2026.
• Set Deployment: $15 million is projected for set deployment in 2025.

Operational Updates

• Product Portfolio: Over 80 unique pediatric systems are offered. The acquisition of Boston OMP expands their reach into specialty bracing.
• Market Expansion: OPSB is expanding into new territories, surpassing its goals by entering six new markets.
• Partnerships and Acquisitions: Technologies from Medtronic, including the Vertaglyde system, are licensed. Recent acquisitions include MD Orthopaedics, Pega Medical, and Apafix.
• Clinical Education: Nearly 3% of top-line revenue is dedicated to training programs for pediatric orthopedic surgeons.
• 7D Navigation System: Exclusively provided in children’s hospitals through a partnership with Orthofix, expected to boost implant usage by $500,000 over three to five years.

Future Outlook

• Growth Catalysts: Focus on trauma and limb deformity solutions, scoliosis, and enabling technologies such as the 7D spinal navigation system.
• Early Onset Scoliosis (EOS): The Vertaglyde system launch and anticipated FDA approval for ELE technology next year. EOS represents a $50 million to $100 million market opportunity.
• OrthoPediatrics Specialty Bracing (OPSB): Plans to launch four to five new products annually, with aspirations to grow the segment to several hundred million dollars.

Q&A Highlights

• 7D System: The radiation-free navigation system is beneficial to children. Hospitals lease or buy it with rebate contracts, leading to increased implant usage.

For a detailed review of OrthoPediatrics’ strategic plans and financial projections, readers are encouraged to refer to the full transcript below.

Full transcript - Canaccord Genuity’s 45th Annual Growth Conference:

Caitlin Cronin, Medical Device Team, Canaccord Genuity: Good morning, everyone, and thank you for joining us at this year’s Canaccord Genuity Global Growth Conference. My name is Caitlin Cronin, and I’m on the medical device team here at Canaccord Genuity. I’m joined today by OrthoPediatrics, a medical device company dedicated to developing orthopedic solutions exclusively for the pediatric population. And with me today are Dave Bailey, CEO, and Fred Hite, CFO. And before we begin, I want to remind everyone of any relevant disclosures which can be found on our conference and our firm website.

And with that, I will hand it over to management.

David Bailey, President and CEO, OrthoPediatrics: Great. Thank you very much. Really appreciate the opportunity to be here. And I’m going to go through a few slides that just outline the business. My colleague Fred will close with a few financial slides and then hopefully there’ll be some good questions from the audience.

But my name is David Bailey. I’m the President and CEO of OrthoPediatrics. OrthoPediatrics is a company that’s founded on the cause of improving the lives of children with orthopedic conditions. We’re the only such company that exists, the only company that focuses exclusively in pediatric orthopedics. And since our founding, I’m proud to report that we’ve helped over 1,200,000 children with our devices.

So historically, when we started the business, there’s been five major challenges for pediatric orthopedic surgeons. Kids that we treat have unique clinical conditions. Oftentimes our customers have had to use repurposed adult implants, cutting, bending different devices to make them work in children. There had been historically very limited new product development, new technologies that have gone through the FDA specifically for kids. There had been no specialized sales force, so no one who is standing in the Operating Room with pediatric orthopedic surgeons.

And certainly a very substantial lack of industry support. And that got worse actually before it got better with consolidation of some of the major adult players that have defocused in pediatric orthopedics. So since we built the company, we have now over 80 unique pediatric systems, so focused heavily on product development and innovation. We continue to make robust investments in our R and D and have scaled many different small acquisitions and partnerships. We now serve 100% of the top children’s hospitals in The United States and in Canada.

And we would estimate that probably 95% of children’s hospitals in the developed world are customers of our products. We have two thirty domestic salespeople and we sell in 75 countries around the world. And as mentioned, we are the leading provider of clinical education and training for pediatric orthopedic surgeons on every continent. All of this has produced year over year growth of 20% nearly 20% for the last nearly two decades. The market is sizable, although certainly I think the larger competitors are not focused here.

We estimate the marketplace at about $6,200,000,000 globally and The U. S. Addressable market with our products at about $2,600,000,000 And as I’ve said, this is a very benign competitive marketplace. Generally speaking, we compete with ourselves, particularly in many product categories where there’s no products like ours, there’s no competitor at all. But we feel like it requires a special commercial channel.

And ultimately there’s a very substantial lack of focus on these pediatric conditions that are unique to our patient population. We have five strategic pillars that have guided our strategy for a number of years and continue to do so. We have a laser focus on high volume children’s hospitals. So we are not out calling on community physicians who may dabble in pediatric orthopedics. We’re calling on Boston Children’s for example, or Children’s Hospital of Philadelphia.

That’s where we spend our time. We aspire to surround the pediatric orthopedic surgeon with literally all the products they could use. So there would be never a reason to have to go to any other company. We think that’s a huge value proposition that we offer. We have been working very hard post IPO in 2017 to deploy instrument sets, making sure that our customers have access to our products and providing fantastic sales support, not just a warm body in the room, but somebody who understands the clinical conditions that our surgeons treat.

We expand our addressable market through substantial investment in R and D. And we’ve made a number of very successful acquisitions over the course of the last several years. And then lastly, our investment in clinical education aspires to train the next generation of pediatric orthopedic surgeon. And at this stage, nearly every fellowship, every fellow in pediatric orthopedics goes through at least one, if not multiple, pediatric orthopedic sponsored fellowships that are fellowships that are or training and education fellowships that are funded exclusively by OP. Our target market, we focus on again these high volume children’s hospitals where about 1,500 to 1,600 pediatric orthopedic surgeons treat about sixty two percent of the patient population.

And we believe that market opportunity is about $1,600,000,000 So a highly concentrated market opportunity in about 300 children’s hospitals in The United States. We see a similar market opportunity outside of The United States where there’s a very focused children’s group of hospitals that treat the majority of these patients. We have a very broad portfolio starting back to our earliest days in 2008 where we sold simple products like cannulated screws. PD plates is a product that designed to aid children in having to have major surgery to correct limb deformities. And as we’ve progressed up to the IPO, we would argue that our earlier products moved to become more clinically significant.

And again, now we have nearly 80 or over 80 products that treat this patient population. Post IPO, I would argue we’ve made more investments in, I would say, clinically significant to disruptive technologies. I think our product portfolio has become dramatically more impactful to the patient population and to our customer base, while we’ve made investments in areas of great complexity like external fixation where you see our Orthex device as well as our PMP products that are now market leaders in fracture fixation for femurs and tibias. Now moving into scoliosis and we’ll talk a little bit more about our investment in early onset scoliosis, which is one of the great catalysts for growth in the future. We’ve also been successful in many acquisitions and partnerships.

OrthoPediatrics has aspired to really create ecosystem around our business. I believe we are viewed by the marketplace as the good guys. We’re doing things that generally the large ortho and med tech players aren’t interested or aren’t focused on. And we like it that way. We like the fact that those people would want to partner with us.

We’re often approached by large medtech as well as small medtech to acquire their smaller devices where they have very limited focus, but know there’s a major unmet need for pediatric orthopedics. And so we are not anyone’s direct competitor. We’re not in a bare knuckle struggle necessarily for market share with companies like Medtronic. And so we’ve been fortunate to be able to license technologies from Medtronic, one such technology included with our Vertiglyde system that we will launch here next week. And I think that’s also led companies like you see on the slide here, MD Orthopaedics, Pega Medical, Apafix, these types of companies to be willingly acquired by OrthoPediatrics.

Generally focused on small companies with interesting technologies that benefit children, but that would benefit from the scale of the commercial engine and the fact that we sell in 75 markets outside of The United States. More recently, and you’ve heard us probably talk about this on our calls, we’ve launched into the specialty bracing business where about 80% of the time pediatric orthopedic surgeons spend their time not in the Operating Room but in clinic. And within the last year and a half we acquired a business called Boston OMP right here in Boston. Boston OMP is really the model for what we aspire to see around The United States. Boston had the was the pioneer of scoliosis brace called the Boston Scoliosis Brace.

I would say almost every child who has scoliosis before they have surgery has a Boston brace. We have a custom manufacturing center here in Boston where we make these custom devices and ship these devices all over the world. Boston actually owns and now we own at the time of the acquisition we own 26 specialty clinics. And those specialty clinics were primarily focused around the Boston, Massachusetts area as well as Children’s Hospital of Philadelphia. So very isolated to the Eastern Seaboard.

And our aspiration has been to scale the Boston business, both the clinic as well as the products that Boston and we are developing around The United States as well as to around the world. We believe this is a very large untapped market in pediatric orthopedics, represents about $500,000,000 opportunity. And as I mentioned earlier, we think about 80% of our surgeons’ time is spent outside of the Operating Room focused on avoiding taking our children to the Operating Room. So it’s a very different dynamic, our customer, than maybe some of the adult orthopedists who generally are surgeons first trying to take people to the OR. Most of the time our surgeons are trying to avoid taking kids to the OR.

And so this represents a great strategic opportunity for the business to continue to build a bigger moat around the company, expands our TAM. It’s a very capital friendly section of our business. And frankly since the acquisition, it’s probably been the thing that our customers have been the most excited about because we’re treating kids before they may need our products or may need our implant products which has developed a nice halo around the rest of our product portfolio. Devices, we believe this business is at minimum inside the children’s hospital, 500,000,000. We think there are in the future opportunities to potentially expand in the motion assist devices.

We’re in fact currently working on a spine halo traction device, casting fracture fixation devices. There’s a number of areas that we think within the specialty bracing we can continue to expand. The last of our five pillars is our focus on clinical education and training. I would argue that nearly all of the pediatric orthopedic surgeons that exist that are under the age of 45 or 50 have now gone through very specific non commercial training provided by orthopaediatrics or our KOLs or supported by OrthoPediatrics. And we have historically given nearly 3% of our top line revenue in support of clinical education and training.

And we believe that if we establish this that commitment with the younger pediatric orthopedic surgeons that that’s the right thing to do to advance the entire industry. And certainly it’s paying off as our younger surgeons now become chiefs at major institutions. We are also the largest supporter of every major surgical society in pediatric orthopedics on every continent. The Pediatric Orthopedic Society in North America, which we recently attended, European, the International Pediatric Orthopedic Society. And in fact, we helped found the Middle Eastern Pediatric Orthopedic Society.

So we are very well recognized by the Chiefs and the KOLs in pediatric orthopedics as their partner to help educate the next generation of pediatric orthopedists. Just to name a few catalysts and then we’re going to go back and talk briefly about OPSB as well as the EOS portfolio. Within trauma and limb deformity, which is generally speaking our largest business, trauma and limb deformity we continue to have success and expand our intramedullary nailing platform. If you listen to our calls you’ll often hear me talking about PMP tibia, PMP femur. We are the market leader in pediatric nailing and we still have a ways to go.

So there’s additional iterations and more PMP tibia coming. And hopefully there will be an expanding intramedullary device which would be a new thing for us and rapidly expand that business. We’re also investing in a number of solutions for rare bone diseases, which we’re already a market leader in with our Fossier Duval telescopic nail, but making further investments there. And as we’ll talk more, we’re expanding specialty bracing portfolio with heavy R and D in this area. One such product that you hear often from us is a product called DF2, which is growing very rapidly and changing the standard of care for children with femur fractures under the age of eight.

On the scoliosis side, we continue to advance in scoliosis fusion surgery. We continue to advance on the non fusion side of scoliosis surgery with Apafix and different iterations of Apafix that make it more applicable to more patients. And more recently, we’ve invested heavily in early onset scoliosis, which at the end of the presentation we’ll have a few slides on. Lastly, we’ve made heavy investments and have nice partnerships enabling technology side. We get the question often, are robotic is robotics the future in pediatric surgery?

The answer to that at this stage is no. We don’t see that quite often yet. But we do see navigation solutions and OR based solutions that improve care and capture data is critical to the future of pediatric scoliosis surgery and pediatric orthopedic surgery in general. And so we have worked on technology for three-dimensional deformity correction with Orthex as well as the 7D spinal navigation solution that is included in our Scoliosis franchise and continues to help us take share within that business. So we’ve made nice advancements there and continue to invest there.

It’s a big reason why we’re driving growth across the entire portfolio. Talked a little bit about the EOS products, but I just want to spend a little more time defining what that marketplace really looks like. So early onset scoliosis is a section of our scoliosis business that is children who are generally under the age of eight years old. These are children that are treated by probably the most elite pediatric orthopedic surgeons in the world. Their pathologies are frankly horrible.

And oftentimes it compresses their heart and lungs. And so the work that we are doing and no other company in this space is doing is working with the top KOL surgeons to develop solutions that can hopefully not only help straighten kids’ minds, but save lives for pediatric patients. And I’m extremely proud to report that after the successful launch of our ribbon pelvic fixation system last year, With any luck we will do our first surgery with the Vertaglyde system. Again a system technology launched by Medtronic or licensed from Medtronic. FDA approved in April.

We aspire to do our first surgery on Monday. And so it’s a big catalyst for our scoliosis fusion business. It’s driving demand in our fusion franchise because it’s being used by physicians that may not have had a great or had a relationship with our scoliosis business in the past. And so Vertaglyde is certainly a catalyst. On the heels of our Vertaglyde launch, we have a product that has we’re working for approval with the FDA right now called ELE.

ELE is an electromechanical growing technology that you an intramed or a rod that goes into the child’s spine that is fixated on the child’s spine and then has a tiny microminiaturized electronic motor. Utilizes a radio frequency transmitter that also communicates with an antenna that drives growth in a child’s spine. Again, opening the chest wall, opening up the chest cavity so that the child can develop normal heart lung function. This was last year. We received breakthrough device designation by the FDA.

And we’re back and forth in communication with FDA hoping for FDA approval and first surgeries next year. This represents in The United States a 50,000,000 to $100,000,000 market opportunity for us with extremely limited competitors. Surgeons are literally having to MacGyver their way through these surgeries, cobbling together multiple systems to make this work. So a big blue ocean opportunity for us here and a real win for the pediatric patient population. Lastly, you hear us talk a lot about OPSB.

We think OPSB is an incredibly strong way for us to grow in a much more capital efficient manner. And that business is growing very rapidly. In the last few quarters we’ve seen it grow well in excess of 20%. We have a very aggressive plan to expand multiple markets. So when we acquired Boston LMP, like I’d mentioned, they had about 26 clinics.

At this stage I think we’re up to well over 40 clinics and looking to expand further throughout the balance of the year. We’ve also accelerated R and D. Not only do we need clinics and clinicians who can help the surgeons, but we also need new products. And this is an area that has been wildly under invested in by industry. And so we’re working with another a number of surgeons to hopefully launch four to five new products every year for the next several years.

And then we have been scaling our sales channel. Previous to OrthoPediatrics and LPSB, there really hadn’t been anyone selling to the clinics or selling these services to pediatric orthopedic surgeons. And you can imagine through our commercial channel, we’ve been very successful at that. So we said at our Investor Day last year in September that our aspiration in 2025 was to expand into four new markets, four new territories. We announced in our Q2 earnings call that we had now expanded into six and that you could probably expect us to continue on a rapid pace of expansion.

As I had mentioned, the interest in this is extremely high for surgeons. We expect to be in 26 of 80 territories here within the next three years. And we view this entire thing as an opportunity for to grow a business to several $100,000,000 over the course of the next few years. With that, I’ll turn it over to Fred.

Fred Hite, CFO, OrthoPediatrics: Thanks, Dave. This slide shows our sales starting back in 2008 when we sold our first implant. You can see across the time period aggressive growth, both on the blue bar, which is the domestic sales as well as the green, which is international. International sales started in 2011, 2012, and today is as big as the entire company was when we went public back in 2016. So for the year 2025, we have around $240,000,000 of revenue as projected in the third in the second quarter of this year.

We just generated a record revenue of over $61,000,000 That was $6,500,000 higher than our previous quarter high revenue. So the growth of the business with all of the products and all of the growth drivers that Dave explains continues to advance nicely. We look at the full year of 2025. I mentioned guidance is $237,000,000 to $242,000,000 on the top line. Adjusted EBITDA is 15,000,000 to $17,000,000 That is on top of 2024 adjusted EBITDA of 8,500,000 And for the first time, we are now projecting to be cash flow breakeven.

So free cash flow breakeven in the fourth quarter of this year and also free cash flow breakeven for the full year of 2026. So making improvements on both the profit side of the business as well as the cash side of the business. And right now, the total growth for 2025, as you can see, is 16,000,000 to $18,000,000 We also are predicting about $15,000,000 of set deployment. So we have consigned sets that we put on the field to improve the utilization of our inventory and our products in the field. And historically, we’ve done 15,000,000 to $20,000,000 in 2025.

That’s going to be a $15,000,000 number for us. So with that, just a quick summary. Only diversified company specifically focused on pediatric orthopedics. And that’s not just on the implant side but also on the services side. Large, underpenetrated market, very, very broad, over 80 products that we offer.

So we’re surrounding that surgeon with everything they need. We’re the only provider that’s really committed to clinic education. And with that comes surgeons that are committed to us and supporting us in the future. And we have a proven commercial execution. We’re the only channel to market in this space in orthopedics.

And we have a very attractive financial profile that is improving every quarter as we move forward. Thank you very much.

David Bailey, President and CEO, OrthoPediatrics: Questions? I had aspired to give us more time but I think I took too much time. But any questions about the business we could help you with? Then we must have given you too much detail.

Fred Hite, CFO, OrthoPediatrics: Yes. So in the second quarter, as I mentioned, revenue over $61,000,000 It was a record quarter for us. Gross margin, positive adjusted EBITDA, so very strong scoliosis. Revenue in the quarter was over 34% growth for us, second quarter of this year, second quarter of last year. So overall revenue was 16%, 17% in the first half.

Our guidance is 16% to 18%. So the growth is going to pick up a little bit in the second half of the year. We think the Scoliosis business will continue that revenue growth, strong revenue growth, followed by the T and D business. And as I mentioned before, getting to free cash flow positive in the fourth quarter will be the first time the business has been able to do that. So we’re very much looking forward to the fourth quarter.

Caitlin Cronin, Medical Device Team, Canaccord Genuity: Can you elaborate a little bit more about the 7D system placements ASP? And would it have to have the patient beyond the active orthopedics?

David Bailey, President and CEO, OrthoPediatrics: Yes. So the 7D system, we actually licensed with we have access to the children’s hospitals through a partnership with Orthofix. And so we’re the exclusive go to market provider of that product into all the children’s hospitals in The United States. So it certainly does have application well beyond pediatric orthopedics into adult spine surgery, given our focus only on pediatric spine surgery for the device. That’s why that partnership works really well.

But I think the unit economics there generally, we deploy these, either sell or lease these units to hospitals, and there’s normally on some type of rebate contract. So the technology is the enabling technology because it’s radiation free navigation It’s very specifically helpful to children who are much more susceptible to disease long term related to radiation. And so we have high demand for that type of navigation solution. And then that exposes our customers to our implant systems that they use in conjunction with that. Generally, see in accounts where 7D navigation is applied a $500,000 or so implant usage uplift across the three to five year period of time.

So the economics work great and it certainly drives share gain for us.

Fred Hite, CFO, OrthoPediatrics: Okay, thank you very much.

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