Orthofix Reports Larger Than Expected Loss Per Share

Orthofix Medical Inc. reported $193.6 million in sales and $53,094 million in losses for the quarter ending March 31, 2025. The revenue came in slightly higher than analysts’ estimates, however the EPS was much lower than expected.

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Management Focused on Optimizing Spine Business

Orthofix President and CEO Massimo Calafiore and Chief Financial Officer Julie Andrews reported on first quarter 2025 earnings in a recent call with analysts.

Calafiore explained that the first quarter revenue of $193.6 million represents a constant currency growth of 6% from the same quarter the previous year. He added that they continue to make progress in adjusted EBITDA margin expansion.

Orthofix is also continuing to optimize its spine business, he said, acknowledging that this will take some time to feel its full effect and may affect growth in the short term.

Calafiore explained that they are also continuing to build its limb reconstruction business and find more selling opportunities for AccelStim which has been a significant driver of growth in Bone Growth Therapies.

The Food and Drug Administration approved the AccelStim 2.0 during the first quarter and the device is expected to be available later in the year.

Andrews gave an update on tariff exposure and full-year guidance.

She said, “First, regarding tariffs. Recognizing that this is still a fluid situation, we have exposure to tariffs in the European Union, Canada, China and Taiwan. We now estimate our annual exposure to be approximately $3 million to $4 million, which is better than our original estimate of $5 million. This estimate includes currently applicable tariffs as well as the additional tariffs that were announced on April 2 by the U.S. that would take effect following the 90-day pause assuming such tariffs remain in place.”

She explained that tariff exposure is reflected in the full-year guidance which estimates full-year net sales of $808 million to $816 million.

Analysts Ask Why Now Is the Perfect Time to Optimize the Spine Business

Iseult McMahon with BTIG asked for the rationale for the optimization within the spine channel and how long will it take?

Calafiore explained that the company’s balance sheet is very strong, and they are making a lot of progress on their EBITDA expansion, so it is a good time to focus on the spine business.

“We want to start to be much more deliberate and intentional,” he said, adding that the commercial pipeline is expected to deliver substantial revenue growth starting this year.

“It’s coming with some pain points short term. But again, we believe that we can create a higher growth business now investing in the right partner,” he added.

McMahon also asked how they are able to maintain their adjusted EBITDA while lowering the top line.

Andrews replied that they have been focusing on making sure that their investments have the highest return as possible while also looking for ways to cut costs.

Jeffrey Cohen with Ladenburg asked for more information about the functionality that will be available on the new AccelStim unit.

Calafiore explained that AccelStim 2.0 will do what all the other systems they sell do and there will be no change in functionality. The surgeon will be able to follow the patient during the utilization of the device.