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Orthofix Medical Inc. (OFIX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered pro forma net sales of $200.7M (+3.5% YoY CC) and reported net sales of $203.1M, with six consecutive quarters of adjusted EBITDA margin expansion (pro forma adjusted EBITDA $20.6M, 10.3% margin) .
  • Versus Wall Street (S&P Global) consensus, OFIX posted a clear beat: revenue $203.1M vs $197.1M* and adjusted EPS $0.13 vs -$0.49*, driven by BGT strength, U.S. Orthopedics outperformance, and margin gains from mix and the M6 discontinuation .
  • Guidance reaffirmed: FY25 pro forma net sales $808–$816M, pro forma adjusted EBITDA $82–$86M, and positive free cash flow; management reiterated gross margin ~72% for the remainder of 2025 and Opex improvement of ~200 bps vs 2024 .
  • Near-term catalysts: U.S. limited launch of VIRATA spinal fixation, global launch of TrueLok Elevate TBT, full U.S. launch of Reef L, and 7D FLASH navigation placements (+66% YoY in U.S.) supporting hardware pull-through and share gains .

Note: Values marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Pro forma adjusted gross margin expanded to 72.7% (vs 71.3% in Q2 2024), with pro forma adjusted EBITDA up to $20.6M (10.3% of sales) as mix improved and M6 discontinuation removed a profitability drag .
  • BGT net sales reached $62.6M (+6% YoY) with fracture channel growth +7%, reflecting effective investments and new surgeon conversions; U.S. Orthopedics +28% led by TrueLok Elevate TBT and FITBONE launches .
  • CEO tone confident: “Strategic initiatives… are gaining traction… creating a powerful foundation for a more scalable commercial organization… I am confident the Company is well positioned to deliver sustainable, long-term shareholder value” .

What Went Wrong

  • Price decrease at a major U.S. spine account remained a headwind, offsetting 7% procedure volume growth in U.S. Spine Fixation; management expects impact to persist through year-end .
  • Targeted distributor transitions in Spine created short-term disruption, muting growth in Spinal Implants & Biologics (Q2 pro forma +2% YoY) despite portfolio wins in ALIF and cervical .
  • International Orthopedics -2% YoY due to prior-year NGO orders not repeating; variability in tender/stocking orders to continue quarter-to-quarter .

Financial Results

Core P&L vs prior year, prior quarter, and estimates

MetricQ2 2024Q1 2025Q2 2025
Reported Net Sales ($USD Millions)$198.6 $193.6 $203.1
Pro Forma Net Sales ($USD Millions)$192.8 $189.2 $200.7
GAAP Diluted EPS ($USD)$(0.88) $(1.35) $(0.36)
Adjusted Gross Margin % (pro forma)72.0% 70.3% 72.7%
Adjusted EBITDA ($USD Millions, pro forma)$18.4 $11.4 $20.6
Adjusted EBITDA Margin % (pro forma)9.6% 6.0% 10.3%

Estimates comparison (S&P Global):

MetricConsensus (Q2 2025)Actual (Q2 2025)
Revenue ($USD Millions)197.1*203.1
Primary EPS ($USD)-0.49*0.13
# of EPS Estimates4*—
# of Revenue Estimates4*—

Note: Values retrieved from S&P Global.
Bold beats: revenue and adjusted EPS significantly above consensus.

Segment net sales (pro forma, constant currency)

Segment ($USD Millions)Q2 2024Q2 2025YoY CC Change
Bone Growth Therapies$59.1 $62.6 +5.8%
Spinal Implants, Biologics & Enabling Tech$103.1 $104.8 +1.6%
Global Spine$162.2 $167.4 +3.2%
Global Orthopedics$30.6 $33.3 +5.3%
Pro Forma Net Sales$192.8 $200.7 +3.5%

KPIs

KPIQ2 2025Detail
U.S. Spine Fixation net sales growth+5% YoY Procedure volume +7%
BGT Fracture growth+7% YoY Investments in fracture channel drove conversions
U.S. Orthopedics net sales growth+28% YoY TrueLok Elevate TBT & FITBONE launches
7D FLASH placements (U.S.)+66% YoY in 2025 YTD Earn-out customers >50% above contracted HW/biologics commitments
Free Cash Flow$4.5M Q2 2025 Positive in Q2; FY positive expected ex-M6 restructuring

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Pro Forma Net SalesFY 2025$818–$826M (Q4 2024 guide) $808–$816M (updated in Q1; reaffirmed Q2) Lowered in Q1; Maintained in Q2
Pro Forma Adjusted EBITDAFY 2025$82–$86M (Q4 2024 guide) $82–$86M (reaffirmed Q1 & Q2) Maintained
Free Cash FlowFY 2025Positive (ex-M6 restructuring) Positive (ex-M6 restructuring) Maintained
Gross Margin (non-GAAP)2H 2025~71% (Q1 commentary) ~72% for remainder of year (Q2) Raised
Operating ExpensesFY 2025 vs 2024-100 bps (Q4 commentary) -200 bps (Q2) Raised improvement
Interest & OtherFY 2025~$5M/quarter ~$5M/quarter Maintained
Tariffs ExposureFY 2025$3–$4M (Q1) $3–$4M, manageable, reflected in guidance (Q2) Maintained

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
Enabling Tech (7D FLASH)Record placements; 30% YoY growth; strategic earn-outs Continued focus on earn-outs; strong performance U.S. placements +66% YTD; earn-out pull-through >50% Strengthening adoption and pull-through
Spine Commercial ChannelStrengthened distributor network Accelerating targeted distributor transitions; short-term softness Transitions gaining traction; expect normalized growth Transition pain easing; foundation strengthening
Pricing HeadwindsN/APricing at major Midwest account Persistent pressure at large account through year-end Ongoing, quantifiable headwind
Orthopedics (Limb Reconstruction)Record Q4; TrueLok Elevate announced Preparing full launch of TrueLok Elevate; >90 cases US Ortho +28%; >200 TBT procedures; market expansion Rapid ramp and share gains
BGT / Fracture#1 market position; double-digit growth 7% BGT growth; AccelStim 2.0 FDA approval 6% BGT growth; fracture +7%; AccelStim 2.0 launch planned H2 Consistent above-market growth
Tariffs/MacroN/A$3–$4M exposure; manageable Reaffirmed $3–$4M; included in COGS and guidance Known/contained
Regulatory/LegalM6 discontinuation; post-market obligations M6 exit headwind removed; restructuring charges Benefits to margins; recast historical metrics Margin accretive cleanup

Management Commentary

  • CEO: “Strategic initiatives, like accelerating distributor transitions in certain underpenetrated U.S. territories, are gaining traction… Looking ahead, we expect to benefit from our recent product launches… I am confident the Company is well positioned to deliver sustainable, long-term shareholder value” .
  • CFO: “Pro forma adjusted EBITDA margin expanded ~190 bps vs 2024; roughly half from M6 discontinuation and half from mix and shared services optimization” .
  • CEO on VIRATA: “Designed to seamlessly integrate with the 7D FLASH navigation system… early traction with over 80% of surgeons representing new or incremental business” .

Q&A Highlights

  • U.S. Orthopedics growth drivers: both deeper utilization and new account adds; TrueLok Elevate opens access to a ~$1.2B diabetic wound market; >200 procedures to date .
  • Spine distributor transitions: on track; expected to support above-market CAGR (6.5–7.5%) embedded in 3-year plan; near-term Q3 similar to Q2 given seasonality and new partners .
  • 7D geography/pricing: focus on U.S. earn-outs; majority of placements outperform contracted commitments; strong pull-through to hardware/biologics .
  • Pricing: no broad changes in Q2 beyond the single large-account headwind acknowledged in Q1; effect persists through year-end .

Estimates Context

  • Revenue: Beat — Actual $203.1M vs $197.1M* consensus.
  • EPS (Primary/adjusted): Beat — Actual $0.13 vs -$0.49* consensus.
  • Implication: Street likely revises up adjusted EPS and revenue trajectories; margin expansion and product launches provide upside to medium-term estimates.

Note: Values retrieved from S&P Global.

Key Takeaways for Investors

  • Beat and margin expansion: Strong Q2 beat vs consensus on revenue and adjusted EPS with pro forma adjusted gross margin at 72.7% and EBITDA margin at 10.3% — supports near-term multiple stabilization/expansion .
  • Guidance intact, quality improving: FY25 net sales and EBITDA reaffirmed; gross margin guide raised to ~72%, Opex improvement doubled to ~200 bps — indicating improving earnings power .
  • Spine channel reset nearing inflection: Distributor transitions and 7D earn-outs are building a scalable platform; expect improved growth profile as pricing headwind anniversaries in 2026 .
  • Orthopedics as growth engine: U.S. Orthopedics +28% with TrueLok Elevate expanding into diabetic limb preservation; unique full internal/external reconstruction suite drives durable share gains .
  • BGT consistency: Continued above-market growth in Spine and Fracture; AccelStim 2.0 H2 launch adds incremental demand; cross-selling with Ortho/Spine accelerates .
  • Cash and FCF: Q2 positive FCF ($4.5M) and cash/investment discipline sustained; FY positive FCF targeted ex-M6 restructuring — reduces financing risk .
  • Watch items: Large-account pricing pressure and tender/NGO variability can create quarterly noise; net effect embedded in guidance and manageable .

Source Index

  • Q2 2025 press release and embedded financials:
  • Q2 2025 call transcript:
  • Q2 2025 earnings slides:
  • Q2 2025 8-K (Item 2.02):
  • Q1 2025 press release/call:
  • Q4 2024 press release/call:

Note: S&P Global consensus/actual estimates used for comparisons where indicated.