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CONMED Corp (CNMD)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $342.3M (+3.1% YoY, +2.9% cc), with adjusted diluted EPS of $1.15 (+17.3% YoY); GAAP diluted EPS was $0.69. General Surgery grew 4.4% cc while Orthopedics grew 0.8% cc .
  • Results beat Wall Street consensus on revenue ($342.3M vs $338.4M*) and adjusted EPS ($1.15 vs $1.12*); EBITDA missed consensus ($56.3M vs $70.3M*) with adjusted EBITDA at $68.6M and margin 20.0%* .
    Values retrieved from S&P Global.
  • FY25 guidance: revenue narrowed to $1.356–$1.378B (bottom end up), adjusted EPS reported to $4.40–$4.55 (FX ~-$0.10, tariffs ~-$0.09). Organic constant-currency EPS (ex tariffs) raised to $4.59–$4.74 .
  • Management highlighted AirSeal adoption (10–20% of DV5 procedures; 35–40% attachment on XI), Buffalo Filter double-digit growth supported by smoke-free OR laws (19 U.S. states), and supply chain optimization expected to convert into a structural advantage; Orthopedics lost share near term due to constraints, but BioBrace/Foot & Ankle remain double-digit growth drivers .

What Went Well and What Went Wrong

What Went Well

  • Adjusted profitability outperformed: adjusted EPS rose to $1.15 (+17.3% YoY), adjusted EBITDA to $68.6M (20.0% margin), with adjusted gross margin at 56.5% (+120 bps YoY) .
  • Strategic growth drivers delivered: General Surgery +4.4% cc; Buffalo Filter had another quarter of double-digit growth, supported by legislative adoption (now 19 U.S. states), and AirSeal continues to gain attachment in robotic and complex procedures (“AirSeal being used in 10%–20% of DV5 procedures... AirSeal is used in 35%–40% of XI procedures”) .
  • Supply chain progress: back orders and SKUs on back order declined; CFO reiterated leverage at 3.1x and operating metrics trending in the right direction (inventory days down 10 Q/Q) .

What Went Wrong

  • Capital Products -15.5% YoY (-15.6% cc) on tough comps (2024 insufflation recall boosted demand and distributor ramp internationally) and lingering supply chain impact on capital flow .
  • Orthopedics undergrew the market and lost share near term due to supply constraints, despite continued innovation momentum from BioBrace and Foot & Ankle .
  • EBITDA missed consensus due to mix and elevated consulting/legal costs; GAAP margins compressed (gross margin 55.0%, operating margin 11.1%) vs prior year (55.3% and 14.2%), and cash from operations declined Q/Q .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$345.9 $321.3 $342.3
GAAP Diluted EPS ($)$1.08 $0.19 $0.69
Adjusted Diluted EPS ($)$1.34 $0.95 $1.15
Gross Margin % (GAAP)57.3% 55.3% 55.0%
Gross Margin % (Adjusted)57.6% 56.4% 56.5%
Operating Margin % (GAAP)15.2% 5.0% 11.1%
EBITDA ($USD Millions)$70.5 $34.2 $56.3
Adjusted EBITDA ($USD Millions)$80.0 $61.3 $68.6
EBITDA Margin %20.4% 10.6% 16.4%
Adjusted EBITDA Margin %23.1% 19.1% 20.0%
Segment/Product/RegionQ2 2024 ($M)Q2 2025 ($M)YoY (As Reported)YoY (Constant Currency)
Orthopedic Surgery$139.5 $140.7 0.9% 0.8%
General Surgery$192.6 $201.6 4.7% 4.4%
Single‑use Products$279.3 $297.8 6.6% 6.4%
Capital Products$52.8 $44.5 -15.5% -15.6%
Domestic$185.4 $190.6 2.8% 2.8%
International$146.7 $151.7 3.4% 2.9%
KPIsQ1 2025Q2 2025
Cash and Equivalents ($M)$35.5 $33.9
Accounts Receivable Days62 62
Inventory Days222 212
Long-Term Debt ($M)$891.4 $881.1
Leverage Ratio (x)3.2x 3.1x
Cash from Operations ($M)$41.5 $29.1
Capital Expenditures ($M)$3.8 $5.7
Estimate Comparison (Q2 2025)ActualConsensusSurprise
Revenue ($USD Millions)$342.3 $338.4*+$3.9M (+1.2%)*
Adjusted Diluted EPS ($)$1.15 $1.12*+$0.03 (+2.4%)*
EBITDA ($USD Millions)$56.3 $70.3*-$14.0M (-19.9%)*
Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($B)FY 2025$1.350–$1.378 $1.356–$1.378 Raised bottom end
Adjusted EPS (reported)FY 2025$4.45–$4.60 $4.40–$4.55 Narrowed/lowered range due to tariffs and FX
Adjusted EPS (organic cc, ex tariffs)FY 2025$4.45–$4.55 $4.59–$4.74 Raised
FX impact on EPSFY 2025-$0.10 to -$0.15 ~-$0.10 Improved
Tariff impact on EPSH2 2025~-$0.14 (Q3 $0.02, Q4 $0.12) ~-$0.09 (Q3 $0.02, Q4 $0.07) Reduced
Revenue ($M)Q3 2025$335–$340 (prior) $330–$337 Slightly lower midpoint
Adjusted EPS ($)Q3 2025$1.10–$1.15 $1.03–$1.08 Lowered
Gross Margin commentary2025 QuarterlyQ2 mid‑56%, Q3 mid‑55s, Q4 ~57 (ex tariffs) Q2 mid‑56%, Q3 mid‑55s, Q4 mid‑55s (incl tariffs) Q4 trimmed by tariffs

Also noted: Quarterly dividend declared at $0.20 per share payable July 3, 2025 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Supply chainPersistent supply challenges in 2024; focus on operational improvements; inventory days up; consultants engaged; expect FY margins similar to 2024 Back order and SKUs on back order down; inventory days -10 Q/Q; goal to make supply chain a strategic asset; target ≥$20M annual savings Improving; execution focus into H2
Tariffs/macroInitial H2 EPS impact ~$0.14 (Q3 $0.02, Q4 $0.12); Mexico exempt via USMCA; dynamic policy backdrop Finalized 2025 EPS impact ~$0.09 (Q3 $0.02, Q4 $0.07); mitigation via logistics/pricing; FX headwind eased Headwind reduced; mitigation underway
Product performance (AirSeal)AirSeal critical in complex laparoscopy/robotics; robot-only SKU grew double digits; working to disclose attachment metrics AirSeal used in 10–20% of DV5 procedures; XI attachment 35–40%; non-robotic use projected to grow 10–15% annually Adoption rising with robotic and complex use
Buffalo FilterDouble-digit growth; expanding legislative tailwinds Another double-digit quarter; 19 states now smoke-free OR laws; PX5 launched for ASC/outpatient Structural tailwinds, product innovation
Orthopedics (BioBrace, Foot & Ankle)Foot & Ankle double-digit; BioBrace 50+ procedures; FDA clearance for BioBrace RC; supply issues in U.S. orthopedics BioBrace across 52 procedures; BioBrace RC full U.S. market release; Orthopedics growth 0.8% cc; share loss near term acknowledged Innovation strong; supply headwinds persisting
Capital productsQ1 capital down 5.6% (U.S. -10%); demand otherwise healthy Q2 capital -15.5% YoY; tough comps (2024 recall, distributor ramp); some supply chain impact Headwinds from comps and operations

Management Commentary

  • “We are encouraged by our second quarter performance as we focused on building a stronger operational foundation… We continue to strengthen our supply chain operations with a focus on turning this into an area of strength within CONMED” — Patrick J. Beyer, CEO .
  • “AirSeal being used in 10%–20% of DV5 procedures… AirSeal is used in 35%–40% of those [XI] procedures” — Patrick Beyer .
  • “Adjusted gross margin for the second quarter was 56.5%… We continue to make progress on back order… leverage ratio on June 30th was 3.1x” — Todd Garner, CFO .
  • “We now expect currency to be a headwind of approximately $0.10 and tariffs to be approximately $0.09, resulting in reported adjusted EPS between $4.40 and $4.55” — Todd Garner .
  • “From a pure numbers standpoint… we’ve lost market share [in orthopedics]… our BioBrace platform continues to put us in a good position going forward” — Patrick Beyer .

Q&A Highlights

  • Buffalo Filter competition: No new major entrants; market growth supported by expanding smoke-free OR legislation (North Carolina became the 19th state) .
  • Capacity/salesforce: Supply chain stabilization remains priority; back orders trending down; sales rep additions typically in H2 and dynamically throughout the year .
  • Capital softness: Not a broad hospital demand issue; Q2 headwinds from tough comps (2024 insufflation recall, international distributor ramp) and some supply chain impacts .
  • Orthopedics share: Management acknowledged share loss vs market growth; expects improvement as supply constraints ease; innovation (BioBrace) remains a positive offset .
  • Guidance components: FY adjusted EPS range raised vs prior quarter on FX, tariffs reduction, and operational performance (~$0.03 each); Q3 EPS guided to $1.03–$1.08 .

Estimates Context

  • Q2 2025 vs consensus: Revenue $342.3M vs $338.4M*; Adjusted EPS $1.15 vs $1.12*; EBITDA $56.3M vs $70.3M* — revenue/EPS beat, EBITDA miss.
    Values retrieved from S&P Global.
  • Forward consensus (near-term):
    • Q3 2025 revenue $334.8M*, EPS $1.05*; Q4 2025 revenue $366.8M*, EPS $1.32*; Q1 2026 revenue $339.2M*, EPS $1.02* (CFO guided Q3 revenue $330–$337M and EPS $1.03–$1.08) .
    Values retrieved from S&P Global.
  • Implication: Street may revisit EBITDA assumptions and Q3–Q4 margin trajectory to incorporate tariff run-rate and capital segment dynamics; revenue assumptions remain broadly aligned with management’s narrowed range .
Near-term Consensus (USD)Q3 2025Q4 2025Q1 2026
Revenue Consensus Mean$334.8M*$366.8M*$339.2M*
Primary EPS Consensus Mean$1.05*$1.32*$1.02*
Values retrieved from S&P Global.

Key Takeaways for Investors

  • Mix-driven profitability strength: Adjusted gross margin 56.5% and adjusted EBITDA margin 20.0% underscore resilient profitability even amid capital headwinds; watch margin cadence (Q3 mid‑55s, Q4 mid‑55s including tariffs) .
  • Growth drivers durable: AirSeal and Buffalo Filter continue double-digit trajectories supported by robotics adoption and legislation; BioBrace and Foot & Ankle sustain momentum and underpin medium-term growth .
  • Near-term orthopedics share pressure: Orthopedics undergrew the market due to supply constraints; effectiveness of supply chain remediation in H2 will be pivotal for returning to above-market growth .
  • Tariff risk moderating: 2025 EPS headwind reduced to ~$0.09 vs ~$0.14 previously; logistics and pricing mitigation planned; monitor policy updates and Q4 run-rate .
  • Guidance quality: Revenue range tightened; organic EPS (ex tariffs) raised; Q3 guide reflects tariff/FX dynamics — sets realistic bar for H2 .
  • Capital demand vs comps: Weak capital sales are largely comp-driven; any normalization, alongside supply chain stabilization, would be a positive H2 catalyst .
  • Balance sheet improving: Leverage 3.1x with long-term debt down Q/Q; inventory days fell 10; progress on working capital supports cash conversion .
Note: All consensus values denoted with * are retrieved from S&P Global.