Orthofix Medical Inc.

Orthofix reported Q2 2026 pro forma constant-currency net sales growth of 5% year over year. By segment, Global Spinal Implants, Biologics and Enabling Technologies generated $109 million in net sales, up 4%; Therapeutic Solutions generated $64.2 million, up 3%; and Global Limb Reconstruction delivered $37.7 million, up 11%. Non-GAAP adjusted gross margin was 71.7%, and adjusted EBITDA was $20.1 million. Full-year 2026 net sales guidance was raised to $845 million to $855 million, implying approximately 5% pro forma constant-currency growth at the midpoint, and adjusted EBITDA guidance increased to $95 million to $98 million. Management also said the European distributor/MDR arrangement should add approximately $15 million of incremental 2026 net sales, mostly in Q4, while creating an approximately $22 million net sales headwind in 2027.

Massimo Calafiore framed Q2 as evidence that Orthofix’s operational actions are starting to show up in the business, while emphasizing that the transformation is still in progress. He repeatedly stressed disciplined capital allocation, better commercial productivity, and a preference for profitable, high-quality growth over growth at any cost. He also pointed to new product innovation, including VIRATA in spine, investment in Biologics evidence generation, and a diabetic foot ulcer IDE submission as part of a broader long-term growth strategy.

Julie Andrews said profitability improved in line with better revenue trends, but was pressured by unfavorable geographic mix, credit losses in certain international markets, and continued investment in launches. She cited a 71.7% adjusted gross margin, $20.1 million of adjusted EBITDA, and $104.4 million in total cash including restricted cash. On guidance, she outlined the $12 million Medicare reimbursement benefit, the $15 million European distributor/MDR revenue contribution, and the expectation that the MDR deal will create a temporary free cash flow timing headwind in 2026 because cash receipts will partly occur in 2027. She also said the company is not reinstating full free cash flow guidance.

Analysts focused mainly on why guidance rose only modestly despite CMS reimbursement restoration and on the revenue drag from smaller spine distributors. Management said the updated outlook reflects both the reimbursement recovery and the European distributor/MDR deal, but also ongoing weakness in smaller U.S. spine distributors that remains below expectations. On the distributor issue, Massimo said Orthofix is willing to consolidate or exit weaker relationships and is prioritizing channel quality and asset utilization rather than supporting low-return revenue. When asked about an LRP, Julie said the company is still assessing the impact of smaller distributor actions before reinstating longer-term targets.