Enovis Corporation

Good day and welcome to the ANOVA's fourth quarter 2025 earnings conference call. All participants will be in a 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 touch-tone phone. 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 Kyle Rose, Vice President of Investor Relations. Please go ahead.

Good morning, everyone. Thank you for joining us today for our fourth quarter 2025 results conference call. I'm Kyle Rose, Vice President of Investor Relations. Joining me on the call today are Damian McDonald, Chief Executive Officer, and Ben Berry, Chief Financial Officer. Our earnings release was issued earlier this morning and is available in the investor section of our website, Inovus.com. We also posted a slide presentation in relation to today's call, which can also be found on our website. Both the audio and slide presentation of this call will be archived on the website later today. During the call, we'll be making some forward-looking statements about our beliefs and estimates regarding future events and results. These forward-looking statements are subject to risks and uncertainties, including those set forth in the safe harbor language in today's earnings release and in our filings with the SEC. Actual results might differ materially from any forward-looking statements that we make today. The forward-looking statements speak only as of today, and we do not assume any obligation or intend to update them except as required by law. For further details regarding any non-GAAP financial measures referenced during the call today, the accompanying reconciliation information relating to those measures can be found in our earnings press release and in the appendix of today's slide presentation. With that, let me turn it over to Damian. Damian?

Hey, thanks, Kyle. Good morning, everyone, and thank you for joining us today for our fourth quarter and full year 2025 earnings call. Our results reflect strong performance across our global organization. It was a year of meaningful change and progress for the Inovus family, and I'm encouraged by our increasingly focused execution and the opportunities in front of us. We've transformed and reshaped our portfolio in a short amount of time. And 2025 was a pivotal year in moving from integration to execution. Since I joined in May, we've leaned into three key priorities, commercial execution, operational excellence, and financial discipline. They have guided our strategy and remain the foundation of how we are building a more profitable, capital efficient growth engine. As part of this work, we are embracing a one and novice operating mindset, working collaboratively across the company to improve performance, standardise commercial processes, and embed our EGX business system more deeply into our daily work. This shift is foundational to both our growth trajectory and margin expansion. Our highlights for the year include organic revenue growth of 6%, with 8% organic growth in recon, reflecting above-market performance across anatomies. Prevention and recovery accelerated to 4% organic growth in a market we believe is growing closer to 2%. We also had a solid year operationally. We maintained adjusted EBITDA margins at 18% despite the dynamic global operating environment and the impact of tariffs. As planned, we returned a positive free cash flow of $20 million in 2025, which places us firmly on our path towards our long-term free cash flow conversion targets. Fourth quarter revenue grew 3% on a reported basis and 2% organically. Recon grew 3% and prevention and recovery was flat. It's also important to note our fourth quarter had four fewer selling days than the prior year, which represented a headwind of 400 basis points to organic growth. In US recon, We grew 6% on an organic basis in 2025, led by double-digit growth in extremities. Our augmented reverse glenoid system, ARG, continued to gain traction and was key to driving double-digit growth in shoulders. What's exciting here is we have a robust pipeline to support a multi-year cadence of innovation in extremities, and we expect sustained growth in this area. In hips and knees, We grew 6% in implants, adjusting for the prior year sales of enabling technology, and we continue to reinforce our portfolio to compete across hospital and ASC settings. In 2025, we launched a Nebula stem and the OrthoDrive impactor, and they are performing well early in the adoption cycle. Over 60% of Nebula sales in 2025 were to competitive users, and we expect to more than double the installed base of OrthoDrive in 2026. Internationally, we grew 10% in recon on an organic basis, including high single-digit growth in hips and knees and double-digit growth in extremities. We're executing across the cross-selling synergies we targeted in each anatomy and a position for sustained above-market growth rates in 2026 and beyond. Innovation remains key to our strategy. In 2025, we had 50% more 510K clearances than our best prior year. Looking ahead, we have a robust pipeline of new product introductions planned for the next 24 months. We'll showcase many of these innovations, including ARVIS, at the AAOS conference next week in New Orleans. We plan to deploy ARVIS through a flexible business model, purchase, lease, per procedure or implant commitment, with the primary goal of driving implant utilisation. Now, moving to P&R, which on an organic basis grew 4% year over year in 2025. Global bracing grew 3%, driven by revenue cycle management, upper extremity, and spine bracing. Bonestim was another source of strength for the year, delivering double-digit growth. With the sale of Dr. Comfort in the fourth quarter, 50% of our revenues in P&R are growing higher than mid-single digits. So there's a lot to be excited about across the portfolio, and I'll now turn it over to Ben to walk through the financial details. Thanks, Damien.