Paragon 28 Reports 18% Revenue Growth to $256.2 Million in 2024

Paragon 28, Inc. (P28) reported net revenue of $256.2 million for the year ended December 31, 2024, an 18% increase compared to the $216.4 million reported in 2023. This growth stemmed from increased surgical volume driven by U.S. sales force expansion (to an estimated 275 producing sales representatives), growth in key international markets (contributing approximately 17% of revenue), and new product launches in fracture fixation, forefoot, and ankle segments. The company launched 13 new products in 2024, expanding its total product lines to over 80 since 2011. Currently, P28 has over 30 products and systems under development.

Gross profit margin decreased to 74.7% in 2024 from 76.0% in 2023, primarily due to higher non-cash charges for excess and obsolete inventory adjustments, partially offset by lower freight expenses. Adjusted EBITDA improved to a negative $8.0 million in 2024 from a negative $18.1 million in 2023, reflecting increased gross profit from higher revenue, partially offset by increased operating expenses. Research and development expenses decreased by 10% to $27.1 million in 2024, while selling, general, and administrative expenses increased by 14% to $205.2 million. The company's net loss for 2024 was $54.6 million, compared to $57.5 million in 2023.

Significant developments during the year included the January 28, 2025, announcement of a merger agreement with Zimmer, Inc., a wholly-owned subsidiary of Zimmer Biomet Holdings, Inc. Under the agreement, each outstanding share of P28 common stock will be converted into $13.00 in cash and one contingent value right (CVR) potentially worth up to an additional $1.00. The merger is subject to stockholder approval, regulatory approvals, and other customary closing conditions and is expected to close in the first half of 2025. The company also completed acquisitions of Additive Orthopaedics and Disior Oy during the reporting period.

As of December 31, 2024, P28 had 525 employees worldwide, with approximately 390 in the U.S. and 135 internationally. The company's cash and cash equivalents totaled $34.6 million at the end of 2024. The company's total debt aggregated to $114.3 million, with $110.0 million classified as long-term debt. P28's operations are subject to extensive regulation by the FDA and other U.S. and international authorities. The company identified material weaknesses in its internal control over financial reporting as of December 31, 2023 and 2024, which are currently under remediation.

The company's outlook is tied to the successful completion of the merger with Zimmer, Inc. The filing includes numerous forward-looking statements regarding the merger, future financial performance, product development, market growth, and regulatory approvals, all subject to various risks and uncertainties detailed in the filing's risk factors section. The company's long-term growth strategy includes continued investment in research and development, expansion of its commercial infrastructure globally, advancement of medical education, and pursuit of business development opportunities.