Orthofix Medical 2025 Q1 Earnings Misses Targets as Net Income Worsens 47%

Orthofix Medical (OFIX) reported its fiscal 2025 Q1 earnings on May 06th, 2025. The company fell short of analysts' expectations with revenue reaching $193.65 million, slightly above the consensus estimate of $191.10 million. EPS, however, was disappointing at -$1.35 per share compared to the expected -$0.53 per share. Orthofix adjusted its guidance, projecting full-year net sales of $808 million to $816 million, down from the previous guidance of $818 million to $826 million due to the impact of distributor transitions in the U.S. spine market. The company reaffirmed its full-year adjusted EBITDA and positive free cash flow guidance.

Revenue

Orthofix Medical's revenue grew by 2.7% in 2025 Q1, totaling $193.65 million, compared to $188.61 million in 2024 Q1.

Earnings/Net Income

Orthofix Medical's losses widened to $1.35 per share in 2025 Q1 from $0.95 per share in 2024 Q1, marking a 47.4% increase in net loss from $36.02 million in 2024 Q1 to $53.09 million in 2025 Q1. The EPS results indicate a challenging financial performance.

Price Action

Orthofix Medical's stock price rose 4.51% during the latest trading day but declined 14.65% over the past week and fell 22.39% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Orthofix Medical shares after a revenue increase quarter-over-quarter and holding for 30 days has performed poorly over the past five years, yielding a return of -3.23%, which significantly underperformed the benchmark return of 83.12%. This resulted in an excess return of -86.35%, with a compound annual growth rate (CAGR) of -0.66%, indicating substantial losses. The strategy also experienced a maximum drawdown of -10.58% and a Sharpe ratio of -0.09, reflecting high risk and negative returns.

CEO Commentary

"We are continuing to execute the priorities that we outlined in our three-year plan to transform our business and deliver on our commitment to drive disciplined, profitable growth," said Massimo Calafiore, President and Chief Executive Officer. Calafiore acknowledged excellent progress in adjusted EBITDA despite some incremental softness in Biologics and Spine Fixation due to ongoing optimization efforts. He emphasized the importance of these changes for future growth and noted that the ongoing optimization will take time to fully realize, ultimately resulting in a stronger commercial organization aligned with strategic goals.

Guidance

The company has adjusted its guidance to reflect the short-term impact of targeted distributor transitions in the U.S. spine market, which are expected to complete later this year. Calafiore stated, "we expect growth to return to historical levels" following these changes. Looking ahead, the focus remains on enhancing commercial execution, improving gross margins, and ensuring disciplined capital allocation to generate long-term shareholder value in 2025 and beyond.

Additional News

Orthofix Medical recently announced the receipt of 510(k) clearance and CE Mark for its TrueLok™ Elevate Transverse Bone Transport (TBT) System. This innovative device is the first FDA-cleared system for TBT, designed to correct non-unions and bony or soft tissue deformities or defects. Additionally, the company has been actively optimizing its spine commercial channel and accelerating targeted distributor transitions in select U.S. territories. These efforts aim to maximize growth opportunities and align more closely with strategic goals. While these transitions will take time to complete, they are expected to enhance the scalability of the commercial organization and prepare Orthofix for its next growth phase.