Conmed (CNMD 2.23%), a medical technology company specializing in surgical devices, reported its financial results on July 30, 2025. The headline news from the release was that both GAAP revenue and adjusted earnings per share (non-GAAP) topped analyst projections, with GAAP revenue reaching $342.3 million (versus an expected $338.35 million) and non-GAAP EPS at $1.15 (beating the $1.12 estimate). These results reflected a combination of solid underlying demand for core consumable products and progress in supply chain improvements. However, the company also noted hurdles, including a drop in Capital Products sales (GAAP) and new tariff costs that will impact profit margins in the second half of the year. Overall, the quarter demonstrated selective strength but also signaled important risks to monitor in coming periods.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.15 | $1.12 | $0.98 | 17.3% |
| Revenue (GAAP) | $342.3 million | $338.35 million | $332.1 million | 3.1% |
| Gross Profit Margin (Non-GAAP) | 56.5% | 55.3% | 1.2 pp | |
| Operating Income (Non-GAAP) | $53.8 million | $48.4 million | 11.2% | |
| Adjusted EBITDA Margin | 20.0% | 19.4% | 0.6 pp |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategic Focus
Conmed is a developer and manufacturer of medical technology, focusing on surgical instruments and devices used in operating rooms worldwide. Its core offerings include devices for minimally invasive procedures, with a substantial part of its business stemming from reusable and single-use surgical products.
Recently, Conmed has concentrated on several key areas: launching new products, pursuing select acquisitions, increasing manufacturing efficiencies, expanding into international markets, and maintaining strict regulatory compliance. Success depends on its ability to release innovative products, manage operations efficiently, and adapt to surgical trends favoring minimally invasive and disposable solutions.
Quarterly Highlights: Growth, Segment Performance, and Key Developments
During the second quarter, revenue increased by 3.1%, surpassing expectations. Sales in the Single-use Products category climbed 6.6% to $297.8 million.
General Surgery products, which include instruments and devices for minimally invasive and open surgical procedures, generated $201.6 million, a 4.7% increase compared to Q2 2024. Declines in Orthopedics were linked to lower domestic sales but were partially offset by small gains internationally.
Capital Products—large, reusable equipment such as insufflation systems or visualization towers—experienced a significant year-over-year drop, with revenue contracting by 15.5% to $44.5 million (GAAP). This decrease was particularly pronounced in international markets, where sales fell 21.8%.
Margins improved on an adjusted basis, with gross profit margin rising to 56.5%. However, these improvements were not evident in reported GAAP margins, which remained flat, as the company absorbed special items, including $7.6 million in consulting fees linked to operational restructuring. Selling and administrative costs (GAAP) rose 11% compared to Q2 2024.
One of Conmed's ongoing priorities is developing new products and enhancements. In the quarter, it advanced usage and won new United States Food and Drug Administration (FDA) clearance for its BioBrace platform -- a soft tissue repair medical implant used in sports medicine. However, no major new product launches were cited for the period. The company also continued its focus on supply chain stability, reporting a reduction in the number of items on back order and improved inventory reliability.
International sales accounted for 44.3% of total revenue, compared to 44.2% in Q2 2024. Currency fluctuations were less of a factor, contributing little to overall performance during the period.
Outlook and Guidance
Management updated its full-year outlook, raising the lower end of expected reported revenue to a range of $1.356 billion to $1.378 billion. Adjusted diluted earnings per share guidance was also increased to $4.40 to $4.55. Leaders estimate that recently announced tariffs, especially those affecting products sourced from China, will reduce earnings per share by about $0.09 in the second half. This estimate is based on adjusted (non-GAAP) diluted net earnings per share. The company expects to mitigate some of this impact through logistics changes and possible price adjustments, though these efforts may take time to show results. The updated guidance incorporates this expected headwind, and management described the guidance changes as reflecting currency effects more than organic acceleration.
For investors, risks to monitor over the next few quarters include the pace of recovery in Capital Products sales, the lasting impact of tariffs, and the effectiveness of ongoing operational improvements. The company highlighted continued investment in four strategic growth areas: AirSeal (a surgical insufflator), Buffalo Filter (surgical smoke evacuation), BioBrace (the implant mentioned above), and Foot & Ankle product lines.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
