Bioventus Inc.

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 BioVentus, Inc. second quarter, 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Dave Crawford, Vice President Investor Relations. Please go ahead.

Thanks Carly and good morning everyone. And thanks for joining us. My pleasure to welcome you to the BioVentus, 2025 second quarter earnings conference call. With me this morning are Rob Pueblo, 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&A. The presentation for today's call is available on the investor section of our website, bioventus.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 10K for the year ended December 31st, 2024. As such factors may be updated from time to time in the company's other filings made with the Securities and Exchange Commission. Your caution not to place undue reliance on 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 parts with US generally accepted accounting principles for GAAP. We generally refer to these as non-GAAP or adjusted financial measures. It's 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 investor section of our website at bioventus.com. Now I will turn the call over to Rob.

Thank you, Dave. Good morning, everyone, and thanks for joining our call today. I'm pleased to report that Bioventus 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 cashflow as we help patients recover so they can live life to the fullest. Second quarter revenue of $148 million was in line with our expectations and reflected the strength of our portfolio's diversity as we drove above market organic growth of 6%, even with challenging prior year comparisons and pain treatments. Adjusted earnings of 21 cents per share increased 31% compared to the prior year, while our adjusted EBITDA margin of 23% for the quarter exemplified the stability of our peer leading gross margin and disciplined investment and 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 cashflow 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 and 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, Exigen 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. We have a wide range of options, 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 HA 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 510K clearance of both stem trial and TOSMUN for peripheral nerve simulation 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 stem trial and TOSMUN represents a very attractive growth opportunity for Bioventis as we look to expand aggressively in the fast growing PNS market, which is currently estimated to be growing above 20% annually in the US with revenue expected to exceed $500 billion by 2029. With an expected total addressable market of approximately $2 billion, this represents an exciting expansion opportunity for Bioventis to advance non-opioid, mentally invasive solutions for chronic pain management. For those of you who are unfamiliar with our PNS business, our focus until now has centered on our R&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 stem 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 TOSMUN PNS system, which combines our patented electric field conduction technology with an integrated pulse generator to potentially reach 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&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 STIM Trial and TOSMUN in select U.S. markets starting in this third quarter, with a broader rollout expected in early 2026. For BioVentus, STIM Trial and TOSMUN represent an opportunity to accelerate our growth rate as we see a path to generating an estimated $100 million or more of revenue. And we expect the combination of our PNS portfolio with the double-digit growth of our market-leading ultrasonics platform to continue to shift our BioVentus 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 -single-digit growth for BioVentus. 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 510K clearance of STEM trial and talisman, which creates a very attractive long-term growth opportunity for Bioventus. 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 billion, 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.