Free cash flow remains consistently negative, with a -8.5% margin in 2026Q1, exacerbated by capital-intensive instrument placements and inorganic growth outlays like the $8.5M acquisition in 2025Q3.
| Cash from Operations | -3.98M | -4.85M | -27.05M | -27.05M | -21.77M | -13.06M | -18.53M | -17.77M | -15.58M | -7.22M | -1.12M | -892K | -9.92M |
| Operating CF Margin % | - | -2.05% | -13.21% | -18.18% | -17.8% | -13.32% | -26.07% | -24.49% | -27.07% | -15.82% | -3% | -2.88% | -41.89% |
| Operating CF Growth % | 412.22% | 82.07% | -0.01% | -24.26% | -66.62% | 29.5% | -4.28% | -14.03% | -115.92% | -544.95% | -25.45% | 91.01% | - |
| Net Income | -39.68M | -39.65M | -37.82M | -20.97M | 1.26M | -16.26M | -32.94M | -13.73M | -12.03M | -8.93M | -6.57M | -7.89M | -9.55M |
| Depreciation & Amortization | 21.79M | 21.12M | 19.08M | 17.39M | 13.1M | 10.68M | 8.01M | 4.67M | 2.89M | 2.4M | 1.9M | 1.85M | 1.58M |
| Stock-Based Compensation | 17.9M | 17.78M | 13.55M | 10.53M | 6.68M | 5.84M | 6.2M | 2.6M | 3.19M | 3.48M | 1.25M | 1.23M | 706K |
| Deferred Taxes | -663K | -153K | -4.74M | -1.16M | -5.03M | -1.13M | -723K | -144K | 0 | 0 | 0 | -1.19M | -706K |
| Other Non-Cash Items | 4.66M | 6.84M | 5.82M | -623K | -20.01M | 354K | 5.92M | 210K | 19.09M | 12.25M | -889K | 1.23M | 706K |
| Working Capital Changes | -7.99M | -10.79M | -22.93M | -32.2M | -17.76M | -12.55M | -4.99M | -11.38M | -9.63M | -4.17M | 3.19M | 3.88M | -2.66M |
| Change in Receivables | -8.05M | -9.37M | -4.75M | -9.72M | -3.98M | -466K | -451K | -5.82M | -3.8M | -1.5M | -280K | -1.05M | 375K |
| Change in Inventory | -6.42M | -8.47M | -13.2M | -26.28M | -16.94M | -5.05M | -12.07M | -9.77M | -4.8M | -4.41M | 889K | 3.27M | -2.68M |
| Change in Payables | 3.66M | 8.17M | -4.28M | 1.49M | -209K | -567K | 3.07M | 2.4M | -1.52M | 1.95M | 1.54M | 1.35M | -445K |
| Cash from Investing | -41.43M | -43.63M | -13.16M | 41.68M | -113.37M | -7.41M | -69.69M | -61.92M | -5.96M | -6.54M | -4.75M | -1.71M | -3.28M |
| Capital Expenditures | -8.64M | -11.11M | -14.26M | -16.88M | -10.03M | -16.01M | -11.3M | -12.09M | -5.46M | -6.54M | -4.75M | -2.25M | -3.32M |
| CapEx % of Revenue | 3.55% | 4.7% | 6.97% | 11.35% | 8.2% | 16.33% | 15.9% | 16.66% | 9.49% | 14.34% | 12.75% | 7.26% | 14.01% |
| Acquisitions | -22.06M | -15.5M | -20.23M | -3.64M | -40.09M | 0 | -3.39M | -49.84M | 0 | 0 | 0 | 539K | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 1.29M | 0 | -2.88M | -2.11M | 0 | -650K | -796K | 0 | -502K | -1.34M | -406K | 539K | 42K |
| Cash from Financing | 23.49M | 23.98M | 53.13M | 7.3M | 135.97M | 6K | 46.73M | 91.02M | 39.66M | 54.73M | 3.6M | -98K | 19.72M |
| Debt Issued (Net) | 24.1M | 23.98M | 56.54M | 9.28M | -137K | -131K | -25.13M | 29.88M | -4.18M | 7.91M | 4.4M | -98K | 2.86M |
| Equity Issued (Net) | 0 | 0 | 0 | 21K | 139.28M | 137K | 70.21M | 60M | 43.42M | 52.78M | 0 | 0 | 16.86M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -5.96M | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -990K | 0 | 0 | 0 |
| Other Financing | -614K | 0 | -3.41M | -2M | -3.17M | 0 | 1.65M | 1.14M | 410K | 0 | -794K | 0 | 0 |
| Net Change in Cash | -21.18M | -24.16M | 12.75M | 22.57M | 1.46M | -21.13M | -41.9M | 11.34M | 18.11M | 40.97M | -2.27M | -2.7M | 6.52M |
| Free Cash Flow | -12.63M | -15.96M | -41.31M | -46.03M | -31.8M | -29.07M | -29.83M | -29.86M | -21.05M | -13.76M | -5.87M | -3.14M | -13.24M |
| FCF Margin % | -5.19% | -6.75% | -20.18% | -30.95% | -26% | -29.65% | -41.97% | -41.15% | -36.56% | -30.16% | -15.75% | -10.14% | -55.9% |
| FCF Growth % | 65.77% | 61.36% | 10.25% | -44.76% | -9.37% | 2.53% | 0.08% | -41.86% | -52.94% | -134.31% | -86.8% | 76.25% | - |
| FCF per Share | -0.53 | -0.68 | -1.79 | -2.03 | -1.52 | -1.51 | -1.65 | -2.04 | -1.67 | -2.86 | -0.78 | -0.42 | -1.78 |
| FCF Conversion (FCF/Net Income) | 0.32x | 0.12x | 0.72x | 1.29x | -17.30x | 0.80x | 0.56x | 1.29x | 1.30x | 0.81x | 0.17x | 0.11x | 1.04x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Liquidity and cash burn
According to the provided quarterly data, the relationship between net income and operating cash flow remains highly volatile, with the OCF/NI ratio fluctuating significantly from 0.31 in 2026Q1 to 1.47 in 2025Q2, indicating a lack of consistent conversion of accounting profits into actual cash generation.
The persistent gap between net losses and operating cash flow suggests that non-cash charges, particularly depreciation and stock-based compensation, are masking the underlying cash burn. Investors should monitor this divergence, as the inability to generate positive operating cash flow despite high gross margins implies that the company's operational structure remains inefficient.
As reported in financial statements, OrthoPediatrics has struggled to achieve positive free cash flow, with the FCF margin reaching a low of -35.9% in 2023Q4 and remaining largely negative, highlighting the company's ongoing reliance on external capital to fund its operations and growth initiatives.
The consistent negative FCF trajectory suggests that the company's capital-intensive business model, which requires significant upfront investment in surgical instrument sets, is not yet self-sustaining. This trend warrants further investigation into whether the company can reach a cash-flow-positive state before its current liquidity reserves are exhausted.
Based on KIDS' reported figures, capital expenditures have remained a significant drag on cash flow, with CapEx/Revenue ratios peaking at 14.5% in 2024Q1, reflecting the heavy upfront investment required to place surgical instrument sets in hospitals to drive future recurring implant revenue.
The high capital intensity appears to be a structural necessity of the company's 'razor-blade' business model, but it creates a persistent hurdle for achieving free cash flow neutrality. Analysts should evaluate whether the return on these instrument placements is sufficient to justify the ongoing capital outlay given the current negative operating margins.
Analysis of the cash flow statements reveals erratic working capital movements, with quarterly changes ranging from a $12.1M inflow in 2024Q3 to a $13.6M outflow in 2025Q2, suggesting that inventory management and collection cycles are not yet optimized for stable cash flow generation.
These swings in working capital appear to be driven by the timing of inventory builds and the logistical demands of the consignment model. Such volatility complicates cash flow forecasting and may indicate that the company is struggling to balance its inventory availability with the need to preserve cash.
As indicated by recent financial filings, the company has prioritized inorganic growth through acquisitions, such as the $8.5M outlay in 2025Q3, which has further pressured the company's limited cash position and increased the urgency for achieving operational self-sufficiency.
While these acquisitions may expand the product portfolio, they appear to be consuming precious liquidity at a time when the core business is still burning cash. Investors should monitor whether these investments provide the expected revenue synergies or if they merely accelerate the need for dilutive capital raises.
Quick answers to the most common questions about buying KIDS stock.
OrthoPediatrics Corp. (KIDS) generated $-4.9M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
OrthoPediatrics Corp. (KIDS) reported negative free cash flow of $16.0M in 2025, indicating capital requirements exceeded cash from operations.
OrthoPediatrics Corp. (KIDS) spent $11.1M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.