third quarter of 2026
Filed Oct 27, 2026Record Third Quarter 2026 Revenue of $72.7 Million, Up 19% Year-over-Year; increases full-year 2026 revenue guidance to $270.0 million to $273.0 million.
Third-quarter revenue increased 19% to a record $72.7 million, adjusted EBITDA rose to $6.9 million, and free cash flow was positive at $1.6 million. The company raised revenue guidance while reiterating adjusted EBITDA and breakeven free-cash-flow objectives, although it remained GAAP loss-making and cash, cash equivalents, short-term investments and restricted cash declined from December 31, 2025.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenue, three months ended September 30GAAP | $72.66M | – | 19% |
| Net revenue, nine months ended September 30GAAP | $202.5M | – | – |
| Cost of revenue, three months ended September 30GAAP | 18.68M | – | – |
| Cost of revenue, nine months ended September 30GAAP | 52.80M | – | – |
| Gross profit, three months ended September 30GAAP | $53.98M | – | 19% |
| Gross profit margin, three months ended September 30GAAP | 74% | – | consistent with the same period last year |
| Sales and marketing expenses, three months ended September 30GAAP | $23.10M | – | 24% |
| Sales and marketing expenses, nine months ended September 30GAAP | $62.86M | – | – |
| General and administrative expenses, three months ended September 30GAAP | $32.03M | – | 10% |
| General and administrative expenses, nine months ended September 30GAAP | $95.87M | – | – |
| Intangible asset impairment, three months ended September 30GAAP | $611K | – | – |
| Intangible asset impairment, nine months ended September 30GAAP | $611K | – | – |
| Restructuring, three months ended September 30GAAP | — | – | – |
| Restructuring, nine months ended September 30GAAP | 1K | – | – |
| Research and development expenses, three months ended September 30GAAP | $2.46M | – | 6% |
| Research and development expenses, nine months ended September 30GAAP | $7.02M | – | – |
| Total operating expenses, three months ended September 30GAAP | $58.20M | – | 6% |
| Total operating expenses, nine months ended September 30GAAP | $166.4M | – | – |
| Operating loss, three months ended September 30GAAP | −$4.22M | – | – |
| Operating loss, nine months ended September 30GAAP | −$16.63M | – | – |
| Total other expense (income), net, three months ended September 30GAAP | 1.81M | – | – |
| Total other expense (income), net, nine months ended September 30GAAP | 7.20M | – | – |
| Net loss, three months ended September 30GAAP | −$5.93M | – | – |
| Net loss, nine months ended September 30GAAP | −$23.78M | – | – |
| Net loss per share, basic and diluted, three months ended September 30GAAP | $(0.25) | – | – |
| Net loss per share, basic and diluted, nine months ended September 30GAAP | $(0.99) | – | – |
| Loss per share, diluted, three months ended September 30non-GAAP | $(0.23) | – | – |
| Loss per share, diluted, nine months ended September 30non-GAAP | $(0.90) | – | – |
| Adjusted EBITDA, three months ended September 30non-GAAP | $6.95M | – | – |
| Adjusted EBITDA, nine months ended September 30non-GAAP | $15.89M | – | – |
| Net cash provided by (used in) operating activities, three months ended September 30GAAP | $4.51M | – | – |
| Net cash provided by (used in) operating activities, nine months ended September 30GAAP | $2.15M | – | – |
| Free cash flow, three months ended September 30non-GAAP | $1.59M | – | 147% improvement |
| Free cash flow, nine months ended September 30non-GAAP | −$6.57M | – | – |
| Cash, cash equivalents, short-term investments and restricted cash, as of September 30, 2026GAAP | $44.9M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| U.S. revenue, three months ended September 30The release cited growth in global Trauma and Deformity and OPSB products. | $57.89M | – | 19% |
| International revenue, three months ended September 30Growth was primarily driven by increased procedure volumes. | $14.77M | – | 18% |
| Trauma and deformity revenue, three months ended September 30Growth was driven primarily by Cannulated Screws, PNP Femur, PediPlates, the addition of 3P Hip, and continued OPSB growth. | $52.62M | – | 19% |
| Scoliosis revenue, three months ended September 30The increase was due to increased revenue generated from VerteGlide and Response. | $19.17M | – | 18% |
| Sports medicine/other revenue, three months ended September 30No specific driver was reported. | $866K | – | 2% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
full year 2026 outlook
- Revenue$270.0 million to $273.0 million
- Noteannual set deployment to be approximately $10.0 million
- Noteadjusted EBITDA of approximately $25.0 million
- Noteachieve breakeven free cash flow in 2026
- Noterepresenting growth of 14% to 16% over 2025 revenue
What drove it
- Total revenue growth was driven primarily by global Trauma and Deformity and OPSB products.
- International growth was primarily driven by increased procedure volumes.
- Gross profit increased 19% and gross profit margin was 74%, consistent with the same period last year.
- The company cited increased adjusted EBITDA, lower sets deployed and improved working capital metrics as contributors to the year-over-year free-cash-flow improvement.
- The company announced full market release of the 3P™ Pediatric Plating Platform® Hip System and the PediHip Rigid Brace, alongside limited launches of PNP Retrograde, OPSB® Knee 'TractorFIX, and 3P™ Pediatric Plating Platform® Small Mini.
Concerns
- The company reported a GAAP net loss of $(5,930) (In Thousands) and an operating loss of $(4,225) (In Thousands) for the third quarter.
- Total operating expenses increased 6% to $58,201 (In Thousands), including a 24% increase in sales and marketing expenses to $23,096 (In Thousands).
- The company recorded $611 (In Thousands) of intangible asset impairment related to the ApiFix and MedTech trademark assets.
- Cash, cash equivalents, short-term investments and restricted cash were $44.9 million as of September 30, 2026, compared with $62.9 million as of December 31, 2025.
- Nine-month free cash flow remained negative at $(6,569) (In Thousands).
What to watch
- Execution against full-year revenue guidance of $270.0 million to $273.0 million.
- Progress toward adjusted EBITDA of approximately $25.0 million and breakeven free cash flow in 2026.
- Annual set deployment expected to be approximately $10.0 million.
- Growth contribution from OPSB and newly released or limited-launch products.
- Operating expense growth, including sales commissions and personnel supporting clinic expansions and small-scale acquisitions.
Balance sheet and cash flow
- Cash: $17,141 (In Thousands) as of September 30, 2026, compared with $19,556 (In Thousands) as of December 31, 2025.
- Restricted cash: $710 (In Thousands) as of September 30, 2026, compared with $2,064 (In Thousands) as of December 31, 2025.
- Short-term investments: $27,088 (In Thousands) as of September 30, 2026, compared with $41,295 (In Thousands) as of December 31, 2025.
- Long-term term loan: $48,560 (In Thousands) as of September 30, 2026, compared with $48,189 (In Thousands) as of December 31, 2025.
- Long-term convertible note: $48,961 (In Thousands) as of September 30, 2026, compared with $48,486 (In Thousands) as of December 31, 2025.
- Accounts receivable, trade: $59,543 (In Thousands) as of September 30, 2026, compared with $53,838 (In Thousands) as of December 31, 2025.
- Inventories, net: $141,864 (In Thousands) as of September 30, 2026, compared with $133,790 (In Thousands) as of December 31, 2025.
- Net cash provided by operating activities for the nine months ended September 30, 2026: $2,147 (In Thousands), compared with $(15,199) (In Thousands).
- Purchases of property and equipment for the nine months ended September 30, 2026: $(8,716) (In Thousands), compared with $(10,511) (In Thousands).
- Other acquisitions, including clinics, net of cash acquired for the nine months ended September 30, 2026: $(8,410) (In Thousands), compared with $(8,852) (In Thousands).
Analysis
OrthoPediatrics delivered record third-quarter revenue of $72.7 million, up 19% from $61.2 million. U.S. revenue rose 19% to $57.9 million and international revenue increased 18% to $14.8 million. Trauma and Deformity revenue grew 19% to $52.6 million, led by Cannulated Screws, PNP Femur, PediPlates, 3P Hip and OPSB growth. Scoliosis revenue increased 18% to $19.2 million on VerteGlide and Response, while Sports Medicine/Other revenue rose 2% to $0.9 million.
Gross profit increased 19% to $54.0 million and gross profit margin was 74%, consistent with the same period last year. Total operating expenses increased 6% to $58.2 million, a slower reported rate than revenue growth. Sales and marketing expense rose 24% to $23.1 million due to sales commissions and higher unit volume, while general and administrative expense rose 10% to $32.0 million due to personnel supporting clinic expansions and small-scale acquisitions. The company also recorded a $0.6 million impairment of ApiFix and MedTech trademark assets.
The GAAP net loss narrowed to $5.9 million from $11.8 million, and GAAP diluted loss per share improved to $0.25 from $0.50. Adjusted EBITDA increased to $6.9 million from $6.2 million. Third-quarter operating cash flow was $4.5 million and free cash flow was $1.6 million, compared with free-cash-flow usage of $3.4 million in the prior-year period. For the nine months, however, free cash flow was $(6.6) million despite $2.1 million of operating cash flow and $8.7 million of property-and-equipment purchases.
Liquidity included $44.9 million of cash, cash equivalents, short-term investments and restricted cash as of September 30, 2026, compared with $62.9 million as of December 31, 2025. The balance sheet also reported $48.6 million of long-term term loan and $49.0 million of long-term convertible note. The company raised full-year revenue guidance to $270.0 million to $273.0 million from $265.0 million to $269.0 million, while reiterating approximately $25.0 million of adjusted EBITDA, approximately $10.0 million of annual set deployment, and breakeven free cash flow for 2026.
Management, verbatim
In the third quarter, we continued to build on the momentum in our business, gaining share in Trauma and Deformity and Scoliosis globally, and continued substantial progress with our OPSB strategy. This quarter, we not only drove revenue growth, but we continued to improve profitability, and generated positive free cash flow. We remain confident in our ability to continue to drive these metrics forward.
David Bailey, President & CEO of OrthoPediatrics
Our innovation super cycle is an important part of that opportunity, with a strong pipeline of new products coming over the next several years that are expected to deliver higher value and improved capital efficiency.
David Bailey, President & CEO of OrthoPediatrics
Our focus remains on growing the business, improving our operating performance, and achieving breakeven or better free cash flow on an annual basis in 2026 and beyond while continuing to deliver innovative solutions for children.
David Bailey, President & CEO of OrthoPediatrics
Not in the filing
stated, not guessed- Prior-quarter comparisons for revenue, segments, profitability, EPS, cash flow and balance-sheet metrics were not reported.
- Full-year 2026 guidance for gross margin, operating expenses and tax rate was not reported.
- Capital returns, including share repurchases and dividends, were not reported.
- A previous-release outlook was not provided, so actual results cannot be assessed against prior-release guidance.
- Third-quarter operating cash flow and free cash flow changes were reported, but no prior-quarter values were reported.
- No segment operating income or segment margin metrics were reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.