Orthofix Medical (NASDAQ:OFIX) reported fourth-quarter 2025 results that management said capped a year of “meaningful operational progress,” highlighted by continued momentum in Bone Growth Therapies and U.S. Limb Reconstruction, improving performance in global spine fixation, and the company’s eighth consecutive quarter of adjusted EBITDA growth.
Fourth-quarter performance and segment trends
Chief Executive Officer Massimo Calafiore said Orthofix delivered “strong, consistent performance” in Bone Growth Therapies (BGT) and U.S. Limb Reconstruction, while efforts to finalize its spine commercial channel supported double-digit net sales growth in global spine fixation. Calafiore noted distributor transitions implemented earlier in 2025 created “temporary pressure” in the quarter, but said performance improved meaningfully exiting Q4 and that the transition is now largely behind the company.
- Global spinal implants, biologics, and enabling technologies: Q4 net sales of $112.3 million. Andrews said results were supported by targeted distributor transitions in key geographies, partially offset by softness in biologics and a strategic shift from 7D capital sales to the Voyager earn-out program. She also noted Orthofix is still annualizing the impact of a previously disclosed price decrease at a major account.
- Bone Growth Therapies: Q4 net sales of $68.3 million, up 7%. Andrews said the business significantly outperformed the market and benefited from increased utilization and higher prescribing velocity across spine fusion and fracture management.
- Global limb reconstruction: Q4 net sales of $38.0 million, driven by 8% U.S. growth. Andrews said the performance reflects Orthofix’s focus on core limb reconstruction “pillars” and a deliberate de-emphasis of products not aligned with the strategy.
Spine channel optimization and 7D navigation
Management repeatedly emphasized changes to the spine distributor network. Calafiore said Orthofix’s top 30 U.S. distributor partners grew net sales 25% year-over-year in Q4 and 27% on a trailing 12-month basis, which he described as validation of the channel strategy. He also said that as of Q4 2025, more than 75% of U.S. net sales were driven by the top 30 distributor partners, compared with “less than a half” at the start of 2024.
On enabling technologies, Calafiore highlighted the 7D FLASH navigation platform as a differentiator. Andrews said Voyager earn-out placements grew 30% in 2025, and earn-out customers exceeded purchase commitments by more than 50%, which she said supports the shift from capital sales to an earn-out model. The company did not disclose the size of the installed base.
Product pipeline: VIRATA and limb reconstruction launches
Orthofix previewed several upcoming product milestones. Calafiore said the company expects a full market release of the VIRATA Spinal Fixation System in the second half of 2026, positioning it for the U.S. pedicle screw market and integrating it with the 7D navigation platform. In closing remarks, he added the company expects the full market launch of the VIRATA Open System and an alpha launch of the VIRATA MIS system in the second half of 2026.
In the orthopedics business, Orthofix said it has rebranded the segment as Limb Reconstruction to reflect a focus on limb preservation, limb lengthening, complex fracture management, and extremity deformity correction. Calafiore said U.S. Limb Reconstruction grew 8% in Q4 and 16% for the full year, driven by launches including TrueLok Elevate, Fitbone bone transport, and Fitbone trochanteric lengthening nails.
Calafiore also said Orthofix expects to introduce “over a dozen” products over the next 18 months, including automation enhancements for key limb reconstruction systems and technology-enabled advancements within the BGT portfolio aimed at strengthening surgeon engagement and patient adherence.
Margins, cash flow, and balance sheet
Andrews reported a Q4 pro forma non-GAAP adjusted gross margin of 71.4%, citing the impact of the M6 discontinuation and productivity improvements, partially offset by unfavorable geographic mix from increased international sales in spinal implants, biologics, and enabling technologies.
Fourth-quarter pro forma non-GAAP adjusted EBITDA was $29.2 million, or 13.4% of net sales, representing approximately 230 basis points of year-over-year margin expansion. Free cash flow was $16.8 million in Q4. For the full year, Andrews said free cash flow was $3.1 million excluding restructuring charges tied to the M6 discontinuation, while reported free cash flow was “nearly break even.” Orthofix ended the quarter with $85.1 million in total cash, including restricted cash.
2026 guidance and updated long-range targets
For 2026, Orthofix guided to net sales of $850 million to $860 million (midpoint $855 million), implying approximately 5.5% pro forma constant-currency growth at the midpoint. The company guided to non-GAAP adjusted EBITDA of $95 million to $98 million and said it expects positive free cash flow for the year, excluding the impact of any potential legal settlements.
Andrews also provided modeling considerations, including expectations for approximately 5% net sales growth in the first half and about 6% in the second half, with selling-day impacts in Q1 and Q2. She said the CMS TEAM pilot program beginning at some hospitals in January 2026 is expected to be immaterial for the year but a one-time headwind to Q1 BGT revenue growth of about 1%. She also said Orthofix expects an adjusted gross margin of approximately 72.5% in 2026, capital expenditures of $45 million to $50 million, and interest and other expense of about $6 million per quarter. Tariffs are included in guidance, with an expected $1 million to $2 million impact in 2026.
Management also said Orthofix is extending the timeline for its three-year financial targets by one year to reflect the timing of benefits from spine commercial channel optimization. The refreshed 2026–2028 targets include:
- 6.5%–7.5% net sales CAGR from 2026 through 2028
- Mid-teens non-GAAP adjusted EBITDA as a percentage of net sales for full-year 2028
- Positive free cash flow generation from 2026 through 2028, excluding the impact of any potential legal settlements
On biologics, Calafiore said the company made internal leadership shifts to give the portfolio a “clear and important central focus,” noting 2025 declines were primarily related to distributor transitions. He said Orthofix expects U.S. biologics performance to return to “market pace” as it scales its commercial network and executes on channel changes.
About Orthofix Medical (NASDAQ:OFIX)
Orthofix Medical Inc (NASDAQ: OFIX) is a global medical device company focused on the design and development of innovative orthopedic and spinal solutions. The company’s core business is divided into two segments: spine and orthopedics. In the spine segment, Orthofix offers a range of titanium implants, biologics and portable bone growth stimulation devices designed to support spinal fusion, deformity correction and minimally invasive procedures. Its orthopedic segment encompasses products for fracture fixation, external fixation systems, trauma care and sports medicine, providing surgeons with implantable devices and instruments for complex bone reconstruction and healing.
Orthofix’s product portfolio includes strut systems, bone growth stimulators, interbody fusion devices and fixation hardware that address various indications such as degenerative disc disease, spinal deformities, non-unions and long-bone fractures.
