Earnings call transcript: Bioventus Q2 2025 sees steady EPS, revenue beat

Bioventus Inc. reported its earnings for the second quarter of 2025, revealing earnings per share (EPS) of $0.21, aligning with market forecasts. The company’s revenue surpassed expectations slightly, reaching $147.7 million against a forecast of $146.28 million. Following the announcement, Bioventus’s stock rose by 6.68%, closing at $6.20 in pre-market trading. According to InvestingPro data, while the company wasn’t profitable in the last twelve months, analysts expect positive earnings for fiscal year 2025, with an EPS forecast of $0.79.

Key Takeaways

• Bioventus’s Q2 revenue exceeded forecasts, reaching $147.7 million.
• EPS met expectations at $0.21, marking a 31% increase from the previous year.
• The company saw significant growth in its Surgical Solutions and Restorative Therapies segments.
• Bioventus’s stock price increased by 6.68% following the earnings release.
• The company continues to project strong growth in the peripheral nerve stimulation market.

Company Performance

Bioventus demonstrated solid performance in Q2 2025, with revenue slightly surpassing expectations and a notable EPS increase compared to the previous year. The company reported a 6% organic growth rate, driven by strong performances in its Surgical Solutions and Restorative Therapies divisions. InvestingPro analysis reveals the company maintains a healthy gross profit margin of 67.45% and has achieved revenue growth of 8.6% over the last twelve months. For deeper insights into Bioventus’s financial health and growth potential, subscribers can access the comprehensive Pro Research Report, available exclusively on InvestingPro. Bioventus’s strategic focus on innovative product launches, such as StimTrial and Talisman for peripheral nerve stimulation, positions it well within a rapidly growing market.

Financial Highlights

• Revenue: $147.7 million, a 2% decrease from the previous year but above forecast.
• Earnings per share: $0.21, a 31% increase from the previous year.
• Adjusted EBITDA Margin: 23%
• Cash Flow from Operations: $26 million, up by $11 million.
• Cash on Hand: $33 million
• Outstanding Debt: $341 million

Earnings vs. Forecast

Bioventus’s EPS of $0.21 matched forecasts, while revenue slightly beat expectations with a $1.42 million positive surprise. This performance aligns with previous quarters, where the company has consistently met or slightly exceeded market expectations.

Market Reaction

Following the earnings announcement, Bioventus’s stock price increased by 6.68%, closing at $6.20 in pre-market trading. This movement reflects positive investor sentiment, driven by the company’s revenue beat and strong growth projections. The stock remains within its 52-week range, with a high of $14.38 and a low of $5.81. InvestingPro analysis indicates the stock is currently trading below its Fair Value, suggesting potential upside opportunity. The company maintains a GOOD Financial Health Score of 2.7, with particularly strong marks in profit potential and growth metrics. Discover more exclusive insights and real-time valuations for over 1,400 stocks with an InvestingPro subscription.

Outlook & Guidance

Bioventus maintains a positive outlook for 2025, projecting organic revenue growth of 6-8% and adjusted EBITDA between $112 million and $116 million. The company expects EPS to range from $0.64 to $0.68 and anticipates nearly doubling its cash flow from operations. The peripheral nerve stimulation portfolio is expected to contribute an additional 200 basis points of growth by 2026.

Executive Commentary

Rob Flapole, CEO, stated, "We are well positioned to accelerate revenue growth, profitability, and cash flow." CFO Mark Singleton added, "Our guidance incorporates the full year impact of $5 million of current expectation of tariffs." These comments underscore the company’s strategic direction and its focus on overcoming external challenges.

Risks and Challenges

• Tariff impacts and foreign exchange fluctuations could affect financial performance.
• Supply chain disruptions may pose risks to product availability and cost management.
• Market saturation in certain segments could limit growth potential.
• Increased competition in the peripheral nerve stimulation market may impact market share.

Q&A

During the earnings call, analysts inquired about the company’s growth in Duralane volume, the impact of tariffs and foreign exchange, and Bioventus’s research and development investment strategy. Executives also detailed commercialization plans for new peripheral nerve stimulation products, highlighting the company’s commitment to innovation and market expansion.

Full transcript - Bioventus Inc (BVS) Q2 2025:

Carly, Conference Operator: Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the BioVentis Inc. Second Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

After the speakers’ remarks, there will be a question and answer session. Thank you. I would now like to turn the call over to Dave Crawford, Vice President, Investor Relations. Please go ahead.

Dave Crawford, Vice President, Investor Relations, BioVentis: Thanks, Carly, and good morning, everyone, and thanks for joining us. My pleasure to welcome you to the BioVentis twenty twenty five second quarter earnings conference call. With me this morning are Rob Flapole, President and CEO and Mark Singleton, Senior Vice President and CFO. Rob will begin his remarks with an update on our business and our 2025 priorities. Then Mark will review our second quarter results and discuss our outlook, including our 2025 financial guidance.

We will finish the call with Q and A. A presentation for today’s call is available on the Investors section of our website, bioventis.com. But before we begin, I would like to remind everyone that our remarks today contain forward looking statements that are based on the current market expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including the risks and uncertainties described in the company’s filings with the Securities and Exchange Commission, including Item 1A Risk Factors of the company’s Form 10 ks for the year ended 12/31/2024. As such factors may be updated from time to time in the company’s other filings made with the Securities and Exchange Commission. You are cautioned not to place undue reliance upon any forward looking statements, which speak only as of the date made.

Although the company may voluntarily do so from time to time, it undertakes no commitment to update or revise the forward looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. This call will also include reference to certain financial measures that are not calculated in accordance with U. S. Generally Accepted Accounting Principles or GAAP. We generally refer to these as non GAAP or adjusted financial measures.

Important disclosures about and definitions and reconciliations of those non GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release on the Investors section of our website at bioventis.com. And now, I will turn the call over to Raul.

Rob Flapole, President and CEO, BioVentis: Thank you, Dave. Good morning, everyone, and thanks for joining our call today. I’m pleased to report that BioVentis delivered another quarter of solid financial results, driven by our team’s disciplined execution. As we move into the second half of the year, we are well positioned to accelerate revenue growth, profitability and cash flow as we help patients recover so they can live life to the fullest. Second quarter revenue of $148,000,000 was in line with our expectations reflected the strength of our portfolio’s diversity as we drove above market organic growth of 6% even with challenging prior year comparisons in pain treatments.

Adjusted earnings of $0.21 per share increased 31% compared to the prior year, while our adjusted EBITDA margin of 23% for the quarter exemplifies the stability of our peer leading gross margin and disciplined investment in key growth strategies. As a result of a solid first half and strong outlook for the remainder of the year, we are reiterating our full year revenue, adjusted EBITDA and adjusted earnings per share guidance. Now let’s take a closer look at our second quarter highlights and provide an update on our business across the three priorities I introduced at the start of the year. Driving above market revenue growth, continuing to expand our profitability and accelerating free cash flow generation. With respect to our first priority, driving above market revenue growth, let me share a few highlights starting with our surgical solutions business, where we delivered strong double digit growth in ultrasonics.

We are well positioned for sustained above market revenue growth as we continue to broaden awareness in the market of our ultrasonics value proposition of enhanced precision and control for surgeons, reduced patient blood loss, and increased operating room efficiency. Switching to our restorative therapies business, Exogen accelerated and achieved double digit growth for the quarter. This performance validates our approach to drive success across all of our product categories at BioVentis. Tighter focus, right strategy, targeted investments and disciplined commercial execution, which we believe will enable us to deliver strong above market growth. And in our pain treatments business, as expected, growth temporarily slowed as a result of difficult comparisons to the prior year period.

In the second half of this year, we expect pain treatments growth to accelerate as comparisons normalize and we drive traction with our focused strategy on large accounts, including IDNs. Powered by Duralane, we have a solid platform for sustained above market growth in with our clinical differentiation, dedicated commercial team, strength of our private payer coverage and significant opportunities for geographic expansion. Let me take a moment to discuss a key development within our pain treatment business. Our recent five ten clearance of both StimTrial and Talisman for peripheral nerve stimulation, or PNS, for the treatment of chronic peripheral pain. In many cases, patients suffer from debilitating chronic pain that limits their life or work activities on a daily basis.

This therapy uses PNS products to deliver electrical pulses to specific peripheral nerves to provide non opioid relief from chronic pain. The clearance of both STIM trial and Talisman represents a very attractive growth opportunity for BioVentis. As we look to expand aggressively in the fast growing P and S market, which is currently estimated to be growing above 20% annually in The US, with revenue expected to exceed $500,000,000,000 by 2029. With an expected total addressable market of approximately $2,000,000,000 this represents an exciting expansion opportunity for BioVentis to advance non opioid, minimally invasive solutions for chronic pain management. For those of you who are unfamiliar with our P and S business, our focus until now has centered on our R and D efforts to bring this new technology to market.

We’ve had limited investment and commercial focus for this business, with only a few million dollars in annual revenue from its legacy product offering. With STIM trial, we bring to market our first ever trial lead, designed to allow physicians the ability to evaluate a patient’s response to PNS therapy. The lack of a trial lead in our portfolio has significantly limited adoption by physicians historically, because physicians often prefer to validate the effectiveness of the treatment before considering a permanent implant. And because a trial assessment is required by some payers for reimbursement. And this is complemented by our new Telesman PNS system, which combines our patented electric field conduction technology with an integrated pulse generator to potentially breach deeper, larger nerves.

This combination is designed to provide long term relief from chronic nerve pain for patients, potentially increasing the number of patients who respond to neuromodulation therapy. From a physician’s perspective, the increase in power allows for easier lead placement and potentially broadens addressable nerves. Our innovative technology also has a user friendly interface for both clinicians and patients. This technology reflects our team’s world class R and D capabilities as we bring leapfrog innovation to the market. Over the past few years, we have had a small direct sales force for PNS, which we plan to invest in more over the second half of this year and going forward.

We plan a limited commercial release of StimTrial and Telesmen in select US markets starting in this third quarter, with a broader rollout expected in early twenty twenty six. For BioVentis, StimTrial and Telesmen represent an opportunity to accelerate our growth rate. As we see a path to generating an estimated $100,000,000 or more of revenue. And we expect the combination of our P and S portfolio with the double digit growth of our market leading ultrasonics platform to continue to shift our BioVentis portfolio to higher growth end markets where we can sustainably grow our revenues at above market rates with differentiated proprietary technology platforms. Before I shift from discussing revenue growth, I’ll mention that this was the seventh quarter in a row of at least mid single digit growth for BioVentis.

And while our aspiration and our expectation is much higher, this consistent performance demonstrates the stability and strength of our diverse portfolio. Turning to our second focus area, expanding profitability. We continue to strongly believe that our peer leading gross margin combined with acceleration of revenue growth in the second half of the year will enable us to achieve 100 basis points of adjusted EBITDA margin expansion for the year, despite the negative impact from foreign exchange that Mark will discuss. And with respect to our third focus area, as anticipated, we generated a significant acceleration in cash flow this quarter. We expect this performance to continue into the second half of the year as we benefit from our deleveraging, greater business efficiencies and reduced extraordinary expenditures to nearly double cash flow from operations compared to the prior year.

In conclusion, we made significant progress this quarter to deliver on our three priorities and we achieved an important milestone with the five ten clearance of StimTrial and Talisman, which creates a very attractive long term growth opportunity for BioVentis. I’ll also mention that we were recently recognized by US News and World Report as one of the top 10 companies to work for in North Carolina. The combination of very positive employee engagement and improved business performance demonstrates the exciting advancement of our company and that with the right focus, prioritization and disciplined execution, we will continue marching toward becoming a 1,000,000,000 high growth, high margin, high cash flow company that generates significant value for all of our stakeholders. Now I’ll turn the call over to Mark.

Mark Singleton, Senior Vice President and CFO, BioVentis: Thanks Rob and good morning everyone. Let me begin by saying that I am pleased with our results and progress through the first half of the year as we work to constantly improve and strengthen our company and our performance. Turning to our headline results for the second quarter, revenue of $148,000,000 was 2% lower than 2024, reflecting the impact of our Advanced Rehabilitation divestiture at the end of last year. Adjusting for the divestiture, organic growth was 6%, highlighted by strong performance across surgical solutions and restorative therapies. Adjusted EBITDA of nearly $34,000,000 was $1,000,000 higher than the prior year due to the divestiture and $1,000,000 of foreign currency expense due to the U.

S. Dollar weakening. Similar to last quarter, the majority of this FX loss resulted from the settlement of payables on our balance sheet. On a year to date basis, we’ve now absorbed more than $2,000,000,000 in impacts from unplanned foreign currency exchange rate movements. Now let me provide some additional commentary on our quarterly revenue.

Surgical Solutions revenue grew by 11%, driven by strong double digit growth in Ultrasonics. We are also encouraged by the acceleration in growth in bone graft substitutes, which we expect to continue into the second half of the year as new distributors ramp up and existing ones continue to access new customers. In pain treatments, revenue increased 1% as we lapped challenging comparisons to the prior year period. Excluding these items, pain treatments grew an estimated 4% to 5%. Shifting to restorative therapies, the divestiture of Advanced Rehabilitation business resulted in a 32% decrease in revenue.

Excluding the impact of the divestiture, organic growth was 11%, as we accelerated growth in Exagen, which demonstrated improvement in commercial effectiveness and sales force execution, along with the timing of international distributor orders. We are optimistic we will be able to deliver high single to double digit organic growth for the remainder of the year. Finally, revenue from our International segment increased 12% compared to the prior year, while organic growth climbed 24%. Organic growth was fueled by double digit growth across surgical solutions and pain treatments. Moving down the income statement, adjusted gross margin of 76% was 50 basis points higher than last year, driven by improved product mix.

Adjusted total operating expenses declined $4,000,000 as increased investment in our growth initiatives was more than offset by direct expense savings related to the Advanced Rehabilitation divestiture. Now for the additional detail on our bottom line financial metrics. Adjusted operating income increased $2,000,000 compared to the prior year to $31,000,000 Adjusted net income of $18,000,000 increased 45% compared to $13,000,000 in the prior year. The growth is a result of our lower interest expense as we continue to pay down debt and benefited from the reduced employee equity based compensation. And finally, earnings of $0.21 per share for the quarter, an increase of $05 compared to the prior year.

Now shifting to the balance sheet and cash flow statement. We ended the quarter with $33,000,000 in cash on hand and $341,000,000 in outstanding debt, which included $5,000,000 drawn on our revolving credit facility. Consistent with our planning assumptions, we realized a significant acceleration in cash flow. Cash flow from operations totaled $26,000,000 representing an increase of $11,000,000 compared to the prior year. The stronger cash flow was driven by lower interest expense and a reduction in one time cash costs.

We are confident in our ability to generate significant cash from operations for the remainder of the year, and we continue to expect cash from operations in 2025 to nearly double compared to 2024. Given the projected strong cash flow and increase in adjusted EBITDA, we expect our net leverage to fall to below 2.5 times by the 2025. Our strong financial performance and growing cash flow enabled us to recently refinance our credit facility. We entered into a new 300,000,000 five year term loan agreement and $100,000,000 revolving credit facility with our lenders. We realized several benefits as a result of this refinancing.

First, we lowered the interest rate on our debt by 75 basis points, generating annual interest expense savings of over 2,000,000 Second, we improved our liquidity and financial flexibility by extending the maturity of our loan to 2030 and increasing the size of our revolver by $60,000,000 Finally, the annual amortization on the term loan was reduced from 10% to 5% per year for the tenor of the loan. This reduces our annual debt repayment by $15,000,000 enabling greater opportunity for capital deployment moving forward. To complete the refinancing, we initially drew $30,000,000 on the new revolver and plan to use cash generated in the second half of the year to repay the borrowing on the revolver. By borrowing $30,000,000 on our revolver, we reduced our net debt by an additional $11,000,000 since the end of the second quarter. We believe these are all positive developments for our long term strategy.

Finally, as Rob mentioned, we are pleased to reaffirm our 2025 financial guidance, which we initially provided on March 11. This includes organic revenue growth of 6% to 8%, adjusted EBITDA of $112,000,000 to $116,000,000 and EPS of zero six four dollars to $0.68 Our guidance incorporates the full year impact of $5,000,000 of the current expectation of tariffs in 2025 and the year to date impact related to foreign exchange. We now expect the impact of current tariffs to be approximately $3,000,000 in 2025. In addition, we have been successfully in offsetting over $2,000,000 related to foreign exchange expense through the first half of the year and our guidance does not assume additional impact from the U. S.

Dollar fluctuation in the second half of the year. In closing, we continue to execute our business plan and believe we are well positioned to create shareholder value through strengthening our growth, profitability and cash flow over the coming quarters in the long term. Operator, please open the line for questions.

Carly, Conference Operator: Your first question comes from Chase Knickerbocker with Craig Hallum.

Chase Knickerbocker, Analyst, Craig Hallum: Good morning. Congrats on the solid quarter and thanks for the questions. I wanted to start on pain. Can you I might have missed this, I’m sorry. But can you remind us what growth would have been year over year on an organic basis if not for that favorable rebate adjustment in 2Q twenty twenty four?

And then along those same lines, just can you kind of walk through the pluses and minuses in pain in the quarter? It sounds like Duralane volume was a plus. What was the volume growth there for Duralane? And then you had mentioned kind of price being a bit of a distractor. Was that for Duralane?

Or was that the multi shot portfolio? And then if you could just kind of give us your overall thoughts on kind of Gelsund and SUParts and kind of the competitive environment for those products as well. Thanks.

Mark Singleton, Senior Vice President and CFO, BioVentis: Thanks, Chase. That was a lot of questions. So we’ll try to get through. Start with the first one and hand it over to Rob. I think when you look at our normalized growth, I talked about that in the script and essentially it’d be four percent to 5% the 1% that we reported.

Rob Flapole, President and CEO, BioVentis: And Chase for the business overall, and feel free to elaborate on your question if this doesn’t touch on it. But I think it’s important just keep in mind last year grew about forex the market. And so we shared at the beginning of this year, didn’t expect that to continue, but really confident that we can grow above the market given the factors we talked about before with our clinical differentiation, large dedicated commercial team and our private payer contract strength. And as it relates to the competition, this market has been competitive for a long time and we’ve been driving above market growth in that environment and expect to continue to do so. So in terms of across the portfolio, naturally Duralink continues to be the strongest driver in that portfolio, both our focus on that and our clinical differentiation and also as the category continues to shift to single injection.

Let us know which aspects of your question we didn’t cover there.

Chase Knickerbocker, Analyst, Craig Hallum: Yes, threw a lot of it. Sorry. Maybe just specifically on Duralane volume growth, if you could elaborate what that was in the quarter? Then basically what I’m trying to get at is, in the back half of the year here, you will have to kind of step up organic growth on a year over year basis even from kind of that four to 5% range, call it certainly in the high single digits in pain, at least kind of in my model to get to the guidance. Can you just kind of elaborate on kind of the drivers of that acceleration?

Mark Singleton, Senior Vice President and CFO, BioVentis: Yes. Chase, when you think about volume, we just talk about above market growth from our business and you think about the market growth from a single injection for GERLAND, which I think is what you’re asking about. We think that market grows in the mid single digits. We were slightly above that for our performance in second quarter. And when you look at the back half of the year, I mean, really, I guess, from a pain, but overall perspective, when normalize for the kind of the first half unfavorable compares, we’re going to make up half of that, more than half of that growth just with the kind of the one time compares.

And then we get into the growth drivers in the back half is going to be and BGS. And I know your question is just about specifically, but we have clear line of sight to some new account wins that are coming on board over the last few months and then some new IDN accounts as well that we’re looking to accelerate So we feel confident about it and just remind you in that, we from an EBITDA perspective, again, just about pain, but we’ve absorbed $5,000,000 of cost and headwinds between foreign exchange and our tariffs. And so that’s all absorbed in the guidance and feel good about where we are.

Rob Flapole, President and CEO, BioVentis: And Chase, this is Rob. I’ll just elaborate on that a bit to specify a few points to your question. So first, when you look at the first half of the year, we grew about 5.5%. And to your point, when you look at our full year guidance, it implies an acceleration of about 300 basis points in the second half versus the first half. And as Mark touched on, more than half of that, at least half will come from just getting past the unfavorable comps that we’ve been talking about.

And then also as he touched on, we have BGS both in bone graft substitute and acceleration happening in the second half with new business that we already have visibility to in our pipeline. So just from that combination, let alone the momentum across the rest of our business, that’s why we’re confident in our revenue guidance for the back half.

Chase Knickerbocker, Analyst, Craig Hallum: That was really helpful guys. Thanks. And then maybe just one more on Surgical. Can you what was BGS growth in the quarter? And then kind of piecing all this commentary together with Ultrasonics that continuing to do very well and BGS expected to accelerate, should we be expecting accelerating year over year growth from Surgical franchise as a whole as we look at the Q3 and Q4 year over year growth number compared to Q2?

Mark Singleton, Senior Vice President and CFO, BioVentis: Yes, Chase, I’ll just look at your VGS question that you had. I think in the first quarter, we had really low single digits. And then when we look at the second quarter, we had pretty much a high single digit growth in second quarter for BGS. And we look for that business to continue to accelerate as we’ve been talking about since the beginning of the year and still on track for that. From an overall surgical portfolio as well, overall, we feel confident in the growth.

I mean, ultrasonics, great portfolio, as you’ve heard us talk about before. So with BGS accelerating and overall, we feel good about the second half of the year for that business.

Rob Flapole, President and CEO, BioVentis: And Chase, I’ll also touch on this one, just make sure that you remind you that it’s in line with expectations. We’re seeing that nice acceleration in bone graft substitutes that we expected, that we’ve been talking about for a couple of quarters now and expect that to continue again in the second half as we bring new customers online. Ultrasonics, important to say, it was another very strong quarter of growth. We have this world class technology and we believe we can change the standard of care in this space. So we’re seeing excellent capital placements again, which is a leading indicator of market development as you know.

And we expect our momentum to continue in the second half and then ramp from there in 2026 and beyond. So expect surgical to continue to be a very

Mark Singleton, Senior Vice President and CFO, BioVentis: attractive growth driver for us.

Chase Knickerbocker, Analyst, Craig Hallum: Very helpful. Congrats again on the execution here guys.

Rob Flapole, President and CEO, BioVentis: Thanks, Chase.

Carly, Conference Operator: Your next question comes from Ross Osborne with Cantor Fitzgerald.

Matthew Park, Analyst, Cantor Fitzgerald: Hey guys, this is Matthew Park on for Ross today. Thanks for taking the questions. I guess maybe starting with Exagen, I was hoping to get some more color on what drove strength in the quarter and I guess your confidence in your ability to sustain growth levels there.

Rob Flapole, President and CEO, BioVentis: Thanks Matthew. Yes, well, in Exagen and our restorative therapies business as mentioned, we generated double digit growth for restorative therapies in the second quarter. So we’re very excited about that. That’s from a combination of the focus that we’re putting on the business, fantastic leadership and team, can’t say enough about that team. The right strategy, smart investments and really stronger commercial execution.

And that stronger execution is in turn demonstrating a favorable ROI on the investments that we’ve made in the business. And that growth is coming from a combination of previous customers that we had lost, existing customers driving more volume and from new customers. And looking forward to keeping this going. Think it’s helpful for everybody online to remind them that as we look forward, this market has an extremely large TAM or total available market. And so it’s up to us to go help the unaware and the non believers so that they can help their patients with what we consider to be remarkable non invasive technology.

And so we plan on continuing to drive that. We may not be counting on double digit growth in this business by the quarter, but we do believe we can generate sustained growth in the mid single digit range or above, while always aiming for higher. And then last, Matthew, for your perspective, as you may know, this business used to be over $100,000,000 in size and we believe we can get it back over 100,000,000 in size with the momentum that we have.

Matthew Park, Analyst, Cantor Fitzgerald: Super helpful. Then maybe one more from me. I guess, should we think about OpEx then in the back half of the year, especially as you begin to roll out Tosman and Subtral and build a Salesforce?

Mark Singleton, Senior Vice President and CFO, BioVentis: Yes, thanks for question. When you look at the back half of the year, we’ll see a slight increase in spend on commissions as our BGS revenue ramps and then we’re going to start to do some additional investing in P and S and PRP in the second half of the year. So it’ll slightly increase, but I think, if you look at our P and L going from 1Q to 2Q, it’s really about delivering on the revenue as Rob and myself walked you through that and our confidence in that when the revenue grows, EBITDA will come and we’ve historically done a good job of being disciplined in managing our spending and we’ll continue to do so.

Matthew Park, Analyst, Cantor Fitzgerald: Got it. Super helpful. Congrats on the quarter guys.

Rob Flapole, President and CEO, BioVentis: Thanks, Matthew.

Carly, Conference Operator: Your next question comes from Robbie Marcus with JPMorgan.

Robbie Marcus, Analyst, JPMorgan: Great. Good morning and thanks for taking the questions. First for me, I want to ask on R and D, both the absolute dollar spend and percentage of sales and how you’re thinking about that over the future as you start adding more innovative products?

Rob Flapole, President and CEO, BioVentis: Hey Robbie, it’s Rob. Yeah, we have moderate investment, I’d say, from an R and D standpoint that’s ramping up with what we’ve been doing both within our Ultrasonics platform and with P and S. For those two businesses, we have what we believe are the best world class R and D teams internally. And that’s why while we’re excited about the existing platforms for both of those, we have strong capabilities to continue to expand those platforms organically. And that’s where the majority of our R and D dollars are going right now.

And we expect in both of those businesses for that to increase because even though we’ve now launched this very exciting technology with StimTrial and Telesman and PNS, we still have the opportunity to significantly expand that portfolio. We’re very committed to that business. And Ultrasonics, we’ve made a number of changes both in terms of our growth aspirations, what our strategy is to get there and how our portfolio plays into that. And that’s included putting stronger resources from upstream marketing standpoint that are developing our long term portfolio strategy coming from our overall growth strategy and that leads to an increase in the R and D spend that we’re putting against that business. So moderate so far, but it has been ramping and expected to go up from here as we continue to drive those high growth businesses.

Mark Singleton, Senior Vice President and CFO, BioVentis: And I’d just add, I agree with Rob’s comments. If you really, but if you break it down, as you look at R and D in total, it might seem on the lower end, but or to the moderate, but when you break down P and S and Ultrasonics portfolio and the amount we’re investing in those as a percentage of revenue in the individual portfolios, it’s much more material amount of what you would expect from a med device investment.

Robbie Marcus, Analyst, JPMorgan: Great. Just another question on OpEx. It’s a little difficult to tease out what’s underlying given the sale of the business. You grew about 6% organic. How should we think about what second quarter and 2025 OpEx growth looks like on an underlying organic basis?

Thanks a lot.

Mark Singleton, Senior Vice President and CFO, BioVentis: Yes, I think our revenues growing faster than our OpEx overall. When you think about the OpEx that we had with our rehabilitation business is about $6,000,000 overall from a quarter perspective. So that comes down and then other expenses ramp up. But overall, we’re continuing to bring OpEx down overall from an operational perspective. And driving back to our commitment on the 100 basis points margin expansion, it’s obviously both the revenue growth with the pure leading gross margin that we’re driving and then scaling our OpEx and making sure that the revenue is growing faster than the expense.

Robbie Marcus, Analyst, JPMorgan: Great, thanks a lot.

Mark Singleton, Senior Vice President and CFO, BioVentis: Thanks Robbie.

Carly, Conference Operator: Your next question comes from Caitlin Cronin with Canaccord.

Caitlin Cronin, Analyst, Canaccord: Great. Thanks for taking the questions. Just on TALFEMIN’s STIM trial, any more color on the launch and early commercialization strategy? And then when do you expect kind of this P and S portfolio to become a more significant contributor to revenue?

Rob Flapole, President and CEO, BioVentis: Hi, Caitlin. Thanks for the question. Yeah, we’re really excited about this business. And a reminder that it’s a very fast growing market. And our new platform that you’re referring to there, it’s going to help patients who are coping with this unbearable chronic peripheral pain.

I think it’s important to keep in mind. And why? Because we have patented electric field conduction technology with the integrated pulse generator that potentially reaches those deeper larger nerves which could be easier for the doctor and beneficial for the patient. So to your question, in the back half of this year we’ll do a limited launch and then we’ll rapidly ramp in 2026. And while we’re not giving guidance on next year, broaden it a little bit.

Our initial thoughts are that this business combined with our new PRP platform that those two alone have the potential to generate 200 basis points of growth next year for the company overall and ramp from there. So that gives you a feel for when we believe this will start being a more meaningful contributor to our growth profile. And of course, we’ll update you and set expectations as we learn more in the early stages of both of those launches.

Caitlin Cronin, Analyst, Canaccord: That’s great, thanks. And then updates to the tariff expectations. I mean, what drove the increase? Any updates to any potential impacts to

Mark Singleton, Senior Vice President and CFO, BioVentis: Yeah, thanks Caitlin. I think when we talked about this in the first quarter, it was roughly like $1,000,000 of tariff impacts. Today, as we said in the prepared remarks, we see about $3,000,000 of an impact and that with all of the news that we know through yesterday, obviously this is a very volatile situation and changes day to day. So overall between tariffs and FX, we’ve absorbed $5,000,000 of those headwinds and maintained our guidance. And so we’ll continue to honor this and be responsible with engaging and managing the P and L accordingly.

But again, 3,000,000 is what we expect and that’s really going to be coming in the back half of the year. We’ve had a little bit in the first half, but most of the tariff headwinds will be in the back half of the year and the FX headwind is already behind us year to date of about $2,000,000 that we’ve all contained within the guidance that we’ve provided.

Rob Flapole, President and CEO, BioVentis: And Caitlin, I’ll just add that I think this speaks to the power of our P and L of the strength and agility that we have. As Mark mentioned, FX and tariffs combined have created that $5,000,000 headwind, but we believe we can manage through that and deliver on our goals, which again speaks to the power of our P L.

Caitlin Cronin, Analyst, Canaccord: Great, thanks for taking the questions.

Rob Flapole, President and CEO, BioVentis: Thank you, Caitlin.

Carly, Conference Operator: That concludes our Q and A session. I’ll now turn the conference back over to Rob Claypool for closing remarks.

Rob Flapole, President and CEO, BioVentis: All right. Thanks everyone for your interest in BioVentis. Once again, we delivered a solid performance throughout our business in the second quarter and we are confident in our ability to build on our momentum to deliver above market revenue growth, improve profitability and accelerate our cash flow to create significant shareholder value. Thanks for joining the call.

Carly, Conference Operator: This concludes today’s conference call. You may now disconnect.

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