The Orthopedic industry paradox.

Ortho community, I need your help to make sense of this paradox.

There is a financial trend going on that defies all logic. Public orthopedic companies, despite reporting record-breaking revenue growth, are ruthlessly laying off employees in staggering numbers.

How can this be happening simultaneously?

Let’s examine the jaw-dropping Q1 2023 growth numbers (Q/Q gross sales figures):

  • 54% growth – Alphatec Spine
  • 45% growth – Treace Medical Concepts
  • 26% growth – Paragon 28
  • 38% growth – Xtant
  • 25% growth – OrthoPediatrics
  • 22% growth – Centinel Spine
  • 20% growth – Globus Medical
  • 17% growth – Conformis
  • 12% growth – Stryker
  • 9% growth – J&J

But hold on a second. Something doesn’t add up. How can these companies be achieving unprecedented revenue growth while simultaneously letting go of employees? This isn’t just a coincidence or a matter of timing. The sales growth trend is happening well before any financial impact from these layoffs.

If this trend continues at its current pace, the profitable orthopedic companies are poised to rake in record-breaking earnings in the coming quarters. But here’s the burning question: What exactly is going on here?

Could it be a delayed post-Covid boom in elective surgeries, causing an unexpected surge in revenue?

Are there more procedures now?

Are these companies simply executing their businesses extremely well?

Are could the orthopedic companies bracing themselves for a bleak late 2023 and 2024?