Good morning, everybody. We are so excited to have OrthoFix here with us.

We have Massimo Califiori, CEO, Julie Andrews, CFO, and Julie Dewey, Chief Investor Relations and Communications Officer. As starting off high level, Massimo, you joined OrthoFix in 2024. Talk about what the company was like when you first joined and what has changed since then.

So when we joined in 2024, we found a company with a pretty solid portfolio across the vertical where we compete, but with a lot of challenges on the operating model. So if we need to divide the journey, let's say, in a lot of different phases, since we joined with Julie, step number one was stabilize the company. So we did a big thorough work to work on our balance sheet. We spent a good amount of time to build up the leadership team and start to understand the core pillar of the company where we need to be focused on. And step number two has been, okay, start to work on the innovation pillar that could drive the company forward in the future, and at the same time start to understand and realize what was the best commercial model for the organization. so we went so if you look at all of the vertical that we have spine, OTS and limb reconstruction we start to ask ourselves okay what is the best way to go to commercialize our product in the most efficient way so we start a journey in spine working on optimizing our distribution network a work on what we call now orthopedic therapeutic solution that was formerly known a BGT how we can leverage the expertise of the market leadership that we have there in order to keep expanding the market to grow even being a business leader and looking at orthopedics okay how can we rationalize the portfolio to give a real identity of what we do so then so then we focus on a specific segment and now we define it the market we compete at the limber construction so pretty

much a big rationalization in the in the company at every level right um so i guess looking forward from here where do you expect the company to be if you look out let's say three years in terms of end markets or what the revenue growth profile could look like and profitability.

Yeah, so starting this year and 27, 28 and beyond is now the moment to start to bear the fruit of all of the decisions that we make at the time. So from the innovation perspective, in Spine, we are pretty much gearing up to the biggest launch in the history of this organization with the Virada pedicle screw system. It's going to be a multi-year product launch that is going to address all of the different market segments. So we're going to be starting with the open DGEN segment is fine, and over time we're going to work in MIS and deformity. Keep investing in 7D, our enabling technology platform that is very highly differentiable in the marketplace. A lot of exciting innovation there. If you move into orthopedics or limb reconstruction, we keep investing on Trulock Elevate. It has been a great commercial success for us, addressing ulcer in the food for our patients. and in OTS keep thinking that we are investing a good amount of money and energy to optimize the back office that we have. So now we work very hard on our commercial model. We were very targeted on our investment in innovation and now is the moment to keep focusing on it.

Turning to recent results, How would you characterize the Q1 growth rate on a normalized basis, let's say, excluding selling day, headwind, and international stocking, tailwind? How did that compare to your internal expectations?

Yeah, so when you normalize in Q1 for the selling day and then also the CMS team's impact where there was a pilot program, our growth was approximately 5% in the quarter, which was in line with our expectations. We had about a $2 million international stocking. I wouldn't characterize that as like a real pull forward. It's just timing, which can be lumpy from quarter to quarter. And don't expect a clawback in the future quarter related to that.

You referenced CMS team. Can we talk a little bit about that pilot program? I think you had initially laid out the impact. It turned out to be a little less than that. Why was that? And how should we think about the impact from CMS teams?

So CMS teams was really a one-time change. So we don't expect an ongoing impact related to that. and it was a pilot program that CMS does from time to time for certain episodes of care, and it included BGT this time. And it was a small, very limited number of accounts, and so ultimately just the volume and the impact on those accounts, really the hospital kind of helps manage the timing of those orders, and it had a limited impact, so a little less than 0.5% impact, and I think we'd expected about 100 BIPs of impact. Got it.

On the topic of CMS, I think since you had last reported earnings, there was a change to CMS reimbursement for non-invasive bone growth stimulators. Can we walk through what changed?

So the key point is that CMS updated billing requirements and then also recalculated the reimbursement for bone growth stimulators following the FDA reclass from a class 3 to a class 2 device in April. The underlying coverage framework remains in place, but the reimbursement levels went down about 10% for the Medicare reimbursed portion of the business. And so this is updated and reflected in our updated guidance that were released May 21st. And we are engaging with CMS now on the process that they used to change that. It was kind of an atypical process that they went through to introduce that reimbursement change. But the reimbursement change does impact only the Medicare portion of our business because we have commercial payers and other businesses not impacting.

How did you go about establishing your new guidance? What parameters did you use? Just as an example, what percent of the Boone Growth Stimulator business is reimbursed by Medicare?

Yes, we don't break that out specifically. There's really three kind of primary revenue streams that will be somewhat impacted. Medicare, where Medicare is primary, of course, 100% of that population is impacted by the 10% reimbursement reduction. And then we have Medicare Advantage and commercial payer plans. A portion of those plans, we have contracts with all of those payers. A portion of those contracts use CMS as reimbursement rates as part of the calculation of their reimbursement, so those will be impacted, we believe, as well. So we basically looked at the volume we expect from all of the payers that would be impacted and kind of applied from May 18th is when we expected it for Medicare, it will be May 18th. For the commercial payers that have a contract that would be impacted, it could be longer, but we felt like it was prudent to expect that it may be starting May 18th. Got it.

As part of this guidance change, you also pulled your LRP. Should we be looking for a new set of LRP targets? How are you thinking about your long-range plan?

Yeah, I mean, I think we're right now in the process of assessing what this means long-term. We're, of course, looking at our cost structure as well. We did update our EBITDA guidance. But if you think about the revenue impact at $12 million with our revenue impact, it is pricing. So it is, you know, basically a full, you would expect a full drop through. You know, our EBITDA guidance, we changed at $5 million at the midpoint. And so we're doing a lot internally in terms of operating discipline and, of course, the near-term things that you do, hiring, freeze, travel reduction, those types of things. But as we think about the longer-term plan, we're really thinking about how we can, you know, use AI and automation and those types of things to really address our cost structure in a different way. Got it.

I guess looking at your new guidance, what are the key areas of upside and downside on both top and bottom lines?

Yes, I mean, I think upside, one, I've said, you know, we did build in basically the price reduction starting from May 18th for all of the impacted when we have a price increase, which has been the normal Medicare contracts and Medicare Advantage plans that, you know, are calculated based on the CMS reimbursement rate. It can take one to three quarters to update their pricing. I assume that if it's a decrease, they may be a little faster to update their pricing. So that could be some upside. And then, you know, we have launches this year with the Verrata launch on the Spine side. And, you know, we believe we baked in the appropriate number, but, you know, potentially there could be some upside with our launches.

Got it. I guess turning to the businesses now. In Spine, it seems like there's a pretty significant commercial transition. Can you talk about that being mostly behind you? What percent of U.S. Spine revenue would you say is now flowing through the larger and more targeted distributors that you were targeting?

Yeah, so as I said, at the beginning of the journey, the goal was to build a sustainable company. So if you see in MedTech, especially in companies that compete in the market will we compete the utilization of resources can be very daring this is why I think we were ready to support even the changes that we got from the CMS as Julie pointed out we've been very efficient on managing our organization and one of the thing that we did you know when we joined we found a special on the spine, a commercial organization that's very fragmented. And what was the direct outcome of this fragmentation is where a pure utilization of our assets. So in order to have a much higher return on the investment capital in our assets, the idea was, okay, let's start to analyze all of the partners that we have, and let's start to identify the one that can scale the one that can create density the one that actually can have can commercialize more efficiently our products so when we join so now you know after a couple of years of work we have a 75% of our revenue now is managed by our larger shop and and we're very excited to have done to went through this journey because fast forward today we're going to have a partner that can really start to work on all our technology, they can start to commercialize 7D with our hardware so you know we said since day one that we want to create a sustainable business and I think that you know like how we reacted how we absorbed this impact with the change of reimbursement. It's just a testament of the good stuff.

Yeah, I think to follow on to that, just a couple of stats. So our top 30 distributors in the U.S. grew 27% in Q1 and 24% on a trailing 12-month basis. So again, they now have greater than 75% of our revenue in spine up from less than 50% in Q1 of 2024 when we joined.

Are those new distributors or more just shifting more of the revenue towards us?

I think that it's a mix. So we started to consolidate revenue to, as I said, to the partner we believe that we could scale. But we've been very focused also on converting and attracting new distributors. We have been pretty successful in bringing new revenue in areas that were not underserved by the current team. And I was very pleased to see the interest that there is around our entire portfolio. It speaks very loudly about the quality of the product that we have and across the world.

So throughout this buying commercial transition, how do you realign incentives as it relates to quotas, rebates, and bundling? I think this is something your competitors do a lot of, so it will be interesting to hear about.

Yeah, I mean, we don't really talk about the specifics of our quota, but we have realigned incentives to support higher growth and profitable growth and stronger execution. And I think it's modeled now aligned with our strategic accounts, our high-performing distributors, an integrated portfolio versus just looking at, you know, specifically pure volume. So we are really focused on kind of that profitable growth model, and so that's what we're using to kind of make decisions to thrive off of, not just revenue growth at all costs.

Got it. Okay, turning to 70Flash, can you describe the importance of this product launch and then also what are the placements year to date and how is this tracking against your internal plan?

Yeah, so we plan to do our 7D metrics kind of on an annual or biannual basis. So our last metrics we disclosed was in our Q4 call in 2025, and we're really focused on our Voyager earn-out placements rather than the capital sale model because we believe that the strength that that can bring to our spine hardware portfolio and that synergy there is really strong, that pull through. But in 2025, our Voyager earn-out placements grew 30%. And then as a Q4, what we're really seeing and what's exciting for us in terms of its ability to pull through is that those earn-out customers collectively exceeded their purchase volume commitments by more than 50%. So to us, that's the real key metric that we're looking at in terms of what we're able to pull through on the spine hardware side to continue to drive deeper account penetration.

Yeah, and for us, 7-D was one of the main pillars of our strategy. This is why we decided, okay, in order to really take advantage on enabling technology, you need to create pull-through. If you see within the ecosystem on competitors that work in orthopedics and spine, they've been successful creating this direct relationship between placement of enabling tech and utilization of hardware. We believe on the quality of the hardware product that we have. We believe on the strength of 7D and the metrics that Julie provided before. It's just a testament of the strength that we're seeing there. And all of this is always, if you think about everything, every decision that we make, you just bring what I said before, or a business that is very sustainable because you create density, you create a higher utilization, and you can optimize the cash that you need in order to buy something like that.

Great. Sticking with 7D for a second, what do you think are the gating factors to broader adoption? Is it just the changing workflow, urgent interest, sales reps, or competition?

No, for us, it's just we need to strengthen the collaboration. We are doing that, strengthen the collaboration between the capital team and our commercial team. One thing that we did a few months ago was kind of reshuffle a little bit the leadership around 7D. We put in charge a person that has been a leader in Spine for many years, that has a very deep connection within our distribution network. And all of this is helping us to keep opening up more doors. At the same time, what is very important is that everybody is seeing within my network that having a 7d placement in an account help for growth so it's little by little I think that we are making very substantial progress on commercialization at the same time we change the strategy about how we were approaching our medical community one thing that we start to be focused on is the Residence Fellowship Big Institution, something that originally the organization was not doing. And all of this, you know, entering within, keep showing the 7D flash technology to residents and fellow, placing the 7D flash technology in a big institution. It just starts to create this direct relationship between us, the technology, and the medical community. so now we start to bear the fruit because we start to see fellow they move from the institution now they go to work it often happens that the first thing that they ask is for 70 in the hospital so I think that we're doing the right stuff, it's just for us keep investing on the commercial infrastructure, keep investing on the evolution of the technology because we believe that we have a winning horse.

Got it. I should also just say, if anyone in the audience has questions, feel free to raise your hand. Otherwise, we can keep going, but feel free to cut me off. Turning to Virata a little bit, can you talk about some of the feedback from the limited market release? What types of accounts did you specifically target while you were in limited market release? And how are you planning to expand this as you're entering full market release in the second half of the year?

Yeah, so Virata is important for us as a Canadian. because his spine, at the end, vertical screws are the product that are most utilized in the OR, and within the portfolio that we found, our mariner, the tower system, was the oldest. So we embraced this journey of development, and you can imagine that we were able to bring within a system years and years of experiences within the spine market. So a lot to focus on the efficiency in the OR, on the ergonomics of the system. We start to think about all of the, you know, what the surgery will need to start to address everything, all of the challenges that can happen during the surgery. But at the same time, we have a system which was designed from the get-go with 7D in mind. We saw we are creating a great synergy and a great experience of utilization of Virata with 7D. The feedback that we are getting on the limited release on both when it was for the open procedure, open DGEM procedure, and now for minimally invasive procedure, being stellar, and all of this motivated to make a very sizable investment on capital, and there is a lot of excitement about the product coming in to the marketplace. From the commercial point of view, we are being very dogmatic how we're going to approach the market. The company has been leading historically using our cervical portfolio, So there is a lot of room, a lot of accounts where there is still a limited use of our product. So we are seeing a lot of low-hanging fruit where we can go because, again, we are replacing a product that was now at the end of the useful life. So it's going to be a great vector of growth.

Got it. Can you talk about what it means that 7D and Verado were designed to be used together, what does that actually mean in practice for surgeons? And then also, how much incremental revenue do you get for a case using both of these?

The first part of your question was how they work together.

Yeah, what does it mean in practice that they're designed to work together, and how does that influence surgeons?

Okay, so what we do is pretty much all of the enabling technology are open system by definition, so you can use it with all of the different products, but what we had in mind how can we create a much better experience utility utilizing very rather with 70 so 70 flash we call him flash because he creates so you imagine that right now when you go in the water you need to spend the 20 25 minutes with competitive product in order to just to start the procedure you can flush in less than 60 seconds so you can measure ready the efficiency that you have in the system per se now when you're joining with virada there is a lot of little nuances between our our instruments are designed out our instruments are recognized by the system so there is a lot of efficiencies that we want to bring to the surgeon on being able to to go through that they put the procedure taking advantage of the core of its efficiency the 70s with additional efficiency on the on pairing the instrumentation with the enabling technology platform so a lot of a lot of excitement a lot of around what we are doing because now surgeon can even go beyond, you know, what they learn during their journey in the OR, applying now with Virata. Got it.

How much incremental revenue per case do you get for using 7D and Virata? And how much of this is included in your current guidance?

Yeah, so our guidance incorporates Virata. We don't break that out specifically. Our 2026 guidance incorporates a late year launch of Vrata. And then, of course, Vrata will be a foundational system for us, as Massimo talked about. We have the open DGEN and MIS and deformity launches that will be multi-year. And so we expect it to continue to contribute to our revenue growth in 2027 and beyond and be a strong Got it.

Turning to biologics for a bit, you've talked about the improvements you've seen in SPINE as kind of the blueprint for improving growth in biologics.

I guess, what is the cause for the softness of biologics historically, and how are you planning to stabilize the So, one thing that we did, we tried to, you know, we had within the organization a leader with a lot of experience in biologic, so we started to see some softness within the segment and we decided to change leadership in order to get a new focus within the vertical that was very important to us we are like market second, third position in most of the categories where we participate but the synthetic market so we said okay it's time to it's time to and what we are doing first of all we start to try to expand the market and start to focus on the utilization of the biological and also in orthopedics so start to use the limb reconstruction network that we have to start to commercialize our biologic product at the same time we start to open up our commercial model to so let's say that in the areas where we have a pretty large distributor, we tend to concentrate the distribution of hardware and biologic within one single partner. In other areas, we start to see a lot of traction also utilizing a commercial network that has also competitive hardware. So, a more let's say consultative model around biologic so with Patrick now we are looking at how we can spend commercially within segment how can we be more thoughtful about how we go market to market and finally we start to see the vertical turn the corner I think that we are having Month over month, you can see, let's say, a pretty steady progress on the biologic side. So I'm very pleased to see the direct impact that the decision that we made is having, and we see biologic to be a good contributor moving forward.

Therapeutic solutions grew around 5% in Q1, which I think is around double the market growth that you guys characterized. Can you talk through what is driving this outperformance and whether you think you can keep up this growth rate for the rest of the year?

Yeah, on OTS, one of the things that we did since we joined is really, okay, how can we leverage the network that we have in order to have a deeper penetration? So we start to work very hard on creating much more synergies between all our different commercial channels, not be disjointed anymore, but be much more collaborative. And there was a direct impact on all of this strategy on just looking at the number. In the steam business, we are the market leader, and since we joined, we experienced a bone market growth quarter over quarter, which has been pretty rewarding and fantastic if you see where we are with our vertical there. But at the same time, being the market leader, we start to do a lot of work to keep expanding the reach and the understanding of what this technology brings to patients. So similar to what I said is fine, a great focus on resident fellows and teaching institution, a lot of focus on creating more a synergistic approach with the surgeon community. And at the same time, keep investing on what we believe is a very differentiating factor for us, which is the customer experience that we give. And when, say, customer is a patient level, but also on how the patient interacts with surgeons. I think the STEAM Connect has been very important for us. Now, towards all of our vertical spine and what we call fracture, we can create a more direct connection experience between the patient and the surgeons. And so bringing innovation at the same time, keep leveraging the commercial network that we have. And frankly, the fact that we experience the classification now from Class 3 for Class 2 in the vertical is actually bringing new opportunities because if you think and if you follow the story, we never talk much about innovation within the vertical, but now I think that we're going to have the opportunity to start to explore how to utilize the commercial infrastructure infrastructure and the commercial leadership that expanding outside what is the, what was the base business. So another good level for us of growth in the foreseeable future.

In the prior guidance, it included exceptions for first half versus second half constant currency growth. I guess in light of the new guide, I want to talk to you guys. Do you have any updated expectations for the cadence of constant currency throughout the rest of the year and updated expectations?

I mean, just from a currency standpoint, you know, we're not assuming any changes to current rates. Our implied guidance for the rest of the year would be about a 4% back half revenue growth when you adjust for the CMS reimbursement change.

I think you guys have talked about greater consistency and execution. I guess, what does this look like in practice? What are the causes for some of the inconsistency in the past?

I think that one of the, at the end, when you go through all of the changes that I described in the last hour, in the last 40 minutes where we talk, it's kind of a natural effect that sometimes you have, like, check balances between everything that we did. So maybe the growth trajectory has not been, for some, as strong as was expected. But at the same time, we always said since day one that our goal was to deliver great technology, but with profitability in mind. Our EBITDA improved. Since we moved, we always improved the wealth of the organization. We also improved the return to our shareholders. so minimize one with the other with faster yes but it's going to be a detriment of something else this is why I believe that the company right now is clearly undervalued and underestimated because needs to be you know our story saying that if you see we can be profitable and make great progress in markets that normally can drive a utilization of resources that is higher than other markets. We were able to absorb, as I said, a pretty sizable market change without making a sudden move to, let's say, to address the challenge that we had in front of us. So we were steady on our strategy. We never deviate, and we arrive in the second part of 26, entering 27. As I said before, we're expecting to bear the fruit of all our decisions. We kept investing in technology. The technology is getting released. We were steady on how we want to optimize our commercial network in order to have a better utilization of our resources, and we are investing now in order to support an higher growth moving forward. So I think that there is an underestimation about all of the stuff that we've done internally in order to create a company that is much more solid, maybe more solid than many in the market where we compete.

I think that's a great place to wrap up since we're out of time. Thank you guys for being here. Thank you very much.