Bioventus Inc.

Good day and welcome to the BioVentus, Inc. Third Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Dave Crawford, Vice President, Investor Relations. Please go ahead.

Thanks, Megan, and good morning, everyone, and thanks for joining us. It is my pleasure to welcome you to the BioVentus 2025 Third Quarter Earnings Conference Call. With me this morning are Rob Claypool, 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, and then Mark will review the third quarter results and discuss our 2025 financial guidance. We'll finish the call with Q&A. The presentation for today's call is available on the investor section of our website, bioventus.com. Before we begin, I'd like to remind everyone that our remarks today contain forward-looking statements that are based on the current 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-K for the year ended December 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. Your caution 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 a result of new information, future events, or otherwise, except as required by applicable securities laws. This call will also include references 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 importance of GAAP are available in the earnings release on the investor section of our website, bioventus.com. Now, I will turn the call over to Rob.

Thank you, Dave. Good morning, everyone, and thanks for joining our call today. BioVentus delivered another solid quarter as we continue to make significant progress with our strategic priorities while helping patients recover so they can live life to the fullest. With strong third quarter results and solid growth expected for the fourth quarter, we are reiterating our four-year guidance on all metrics while continuing to offset $5 million of tariffs and foreign exchange impacts. Let's take a closer look at our third quarter and 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. First, third quarter revenue of $139 million advanced 8% on an organic basis, which represents an acceleration of more than 200 basis points compared to our organic growth for the first half of the year. Our team generated above market growth across each business, achieving mid-single digit to low double digit organic growth, which reflects the strength and the breadth of our portfolio. I'll briefly share a few highlights with respect to our progress and momentum. You may recall that we projected that growth in our pain treatments and surgical solutions businesses would accelerate in the third quarter, which is clearly reflected by our results. With pain treatments, our leading HA therapies continued to outpace market growth as recent account wins gain traction, powered by Duralane's clinical differentiation, the effectiveness of our dedicated commercial team, robust private payer coverage, and significant opportunities for geographic expansion. And our surgical solutions business delivered another solid quarter with growing momentum in bone graft substitutes, as we increased awareness with both existing and prospective customers of our strong clinical and health economic value proposition. We expect this positive trend to continue into 2026 as we continue to execute our growth strategy. In addition, Restorative Therapy's organic revenue grew double digits again thanks to the focus and commercial execution by our great Exogen team. It's important to note that our performance across HA, BGS, and Exogen, our three largest products, demonstrates the strength of our portfolio, which helps fuel investment for our mid- and long-term growth drivers. Let me provide a little more detail on the exciting developments for two of these growth drivers within our pain treatments business, peripheral nerve stimulation, or PNS, and platelet-rich plasma, or PRP. I'll start with PNS. As a quick reminder, peripheral nerve stimulation helps patients who suffer from chronic peripheral pain, and we believe it represents a very attractive growth opportunity for BioVentus. The U.S. market of approximately $200 million is expected to exceed $500 million by 2029 and grow above 20% annually. And we believe that the recent acquisition of NALU by Boston Scientific clearly validates the potential value of the P&S market, and could accelerate awareness and adoption. As you know, at the end of the third quarter, we began our limited launch of STIM trial and TELUSMEN following the successful FDA 510K clearance, and we look to expand aggressively. Although it's early, we're tracking ahead of our expectations on the projected number of STIM trial procedures and the conversion rate to our permanent TELUSMEN solution. This confirms our hypothesis about the strategic importance of adding a trial lead to our P&S portfolio. Equally important, we are receiving very encouraging feedback from physicians and patients regarding our differentiated technological design, including the power, size, and ease of use. It's an exciting time for BioVentus to be launching this game-changing technology, and we're just getting started with expanding our commercial organization, educating physicians, and increasing our overall presence in this rapidly growing segment. So while it's early, we're looking forward to the significant growth opportunity ahead of us. And with respect to our new PRP system, Excel, we have also received positive customer feedback about this addition to our portfolio. As you may recall, the Excel system reduces procedural time and provides a customizable treatment solution for different patient applications. We recently progressed from our limited launch to training our entire HA sales team. And consequently, we expect sales to steadily increase over the remainder of this year and throughout 2026. We believe the combination of PNS and PRP is a significant expansion for BioVentis, and will provide at least 200 basis points of profitable growth in 2026, and shifts our overall portfolio towards markets with higher growth potential. Longer term, we believe both of these innovative technologies will deliver sustainable growth and become meaningful drivers of significant value for BioVentus. Turning to our second focus area, expanding profitability, our third quarter adjusted EBITDA increased by 13%. with our adjusted EBITDA margin expanding by over 200 basis points. This performance further demonstrates the powerful combination of our above-market organic revenue growth, peer-leading gross margins, and operational efficiencies, a combination that enables us to not only drive operating leverage, but also simultaneously invest in our future growth. We remain on target to achieve our previously communicated 100 basis points of adjusted EBITDA margin expansion for the year, and the increased profitability in Q3 combined with our reduced interest expense generated a 200% increase in adjusted earnings per diluted share as we delivered $0.15 per diluted share in Q3. And with respect to our third focus area, we continued to significantly accelerate cash flow, as cash from operations in the third quarter nearly tripled versus the same period last year. And we drove a cash conversion ratio of over 100% in the quarter. Year-to-date, cash from operations is up 88%, and we are on pace for a full-year cash from operations to nearly double compared to last year. In conclusion, thanks to our highly engaged team members across the globe, we made significant progress this quarter to deliver on our three priorities, and we're primed to close out a strong 2025. BioVentus has entered a new phase of our transformation, and we are well-positioned to drive above-market profitable revenue growth along with strong, consistent cash flow on an annual basis. as we aim to become a $1 billion high growth, high margin, high cash flow company that creates significant value for our shareholders. I'll turn the call over to Mark.