Alan

Alan, on behalf of Robbie Marcus, asked about the growth assumptions for both the CSS and Tissue Technologies segments for Q4 2025 and the full year 2026, in the context of the overall company guidance. He also questioned the health of underlying markets and demand for procedures and capital products at the start of the year, and assumptions for the rest of 2026.

Answer

EVP and CFO Lea Knight highlighted strong Q4 performance with a $33 million sequential revenue increase. She noted CSS delivered low single-digit growth despite a tough prior-year comparison, while Tissue Technologies saw declines due to MediHoney remediation and strong Integra Skin backorder clearance in Q4 2024. For 2026, she guided below-market growth for both segments (flat to low single-digit for CSS, low to mid single-digit for Tissue Tech), attributing it to supply constraints rather than demand, and confirmed strong underlying demand across both businesses.

Alan asked about the assumptions behind growth for both the CSS and Tissue Technologies segments for Q4 2025 and the full year 2026, in the context of the overall company guidance. He followed up by asking about the health of underlying markets and demand (procedure and capital) at the start of the year, and assumptions for the balance of 2026.

Answer

Lea Knight, Chief Financial Officer, highlighted the Q4 sequential revenue step-up of $33 million as evidence of strong underlying demand. She noted that CSS delivered low single-digit growth despite a tough prior-year comparison (due to backorder clearance in Q4 2024), with double-digit growth in CereLink, MAYFIELD Capital, and AURORA. Tissue Technologies declined due to MediHoney remediation and a strong Integra Skin comp from Q4 2024. For 2026, guidance reflects a measured ramp and supply layering, with growth expectations below market due to supply, not demand: flat to low single-digit for CSS and low to mid single-digit for Tissue Technologies. She reiterated strong demand across both businesses, with strong momentum in Integra Skin expected to drive full-year growth.

Alan asked about the underlying market health for LALs and LDDs, how LAL performance in Q4 2025 impacts the 2026 guidance, and the long-term gross margin outlook beyond 2026, specifically regarding the potential to return to high 70s despite near-term manufacturing pressures.

Answer

President and CEO Dr. Ron Kurtz noted a Q4 uptick and hoped for its continuation. CFO Mark Wilterding confirmed the guide accounts for year-to-date trends and difficult Q1 2025 comparisons. For gross margin, Mr. Wilterding stated that high 70s are still believed to be achievable long-term, depending on LAL mix and international ramp-up.

Alan, on behalf of Robbie Marcus from JPMorgan Chase & Co., inquired about the underlying market health for LALs and LDDs, how LAL performance is expected to progress through 2026, and what is contemplated in the 2026 guidance. He also followed up on the potential for gross margin to return to the high 70s in 2027 and beyond, given near-term manufacturing pressures.

Answer

Ron Kurtz, President and CEO, noted a slight uptick in Q4 LALs and hoped for its continuation. Mark Wilterding, CFO, confirmed the guide factors in year-to-date trends and acknowledged difficult comparisons to Q1 2025. Regarding gross margin, Mark Wilterding stated that high 70s are still believed to be achievable long-term, depending on the business's mix profile, especially LALs, and the ramp-up of international sales.

Alan from Morgan Stanley inquired about the unusual or exceptional costs to consider for the 2026 EBITDA bridge, specifically mentioning U.S. tariff costs and Mexico stoppages. He also asked about ArcelorMittal's ability to flex European production and achievable blue sky shipments if new safeguards significantly reduce imports.

Answer

Genuino Christino (CFO) and Daniel Fairclough (Head of Investor Relations) clarified that Mexico's operational issues, which had a $200 million impact, are not expected to recur in 2026. They also highlighted an anticipated $800 million contribution from strategic projects and a potentially improved demand outlook. For Europe, Mr. Christino stated that ArcelorMittal's capacity is well in excess of current production (31 million tons) and they are comfortable supplying the market if imports decline, leveraging existing fixed costs but expecting increased variable costs, including CO2.