Bioventus, Inc. ((BVS)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Bioventus, Inc. recently held its third-quarter earnings call, which was marked by a positive sentiment overall. The company reported significant organic growth, improvements in profitability, and strategic advancements in new markets. Additionally, Bioventus demonstrated effective cash and debt management. However, the company faced challenges due to prior divestitures and foreign exchange losses.
Organic Revenue Growth
Bioventus reported an impressive 8% increase in third-quarter revenue on an organic basis. This growth was observed across all business segments, achieving mid-single-digit to low double-digit increases. The company’s ability to outperform the market in these segments highlights its strong competitive position and effective growth strategies.
Adjusted EBITDA and Margin Expansion
The company saw a 13% rise in adjusted EBITDA, accompanied by a margin expansion of over 200 basis points. This improvement underscores Bioventus’s operational efficiencies and its ability to enhance profitability through strategic initiatives.
Free Cash Flow Acceleration
Bioventus experienced a significant acceleration in free cash flow, with cash from operations nearly tripling in the third quarter compared to the previous year. The company achieved a cash conversion ratio of over 100%, indicating strong financial health and effective cash management practices.
Peripheral Nerve Stimulation and PRP Development
The launch of StimTrial and TalisMann, following FDA clearance, received positive feedback, as did the new PRP system, Excel. Bioventus anticipates these innovations will contribute to a 200 basis point increase in profitable growth by 2026, highlighting the company’s commitment to advancing its product offerings.
Debt Reduction
During the quarter, Bioventus successfully reduced its debt by $19 million and plans to decrease net leverage below 2.5x by the end of the year. This focus on debt reduction reflects the company’s strategic approach to strengthening its balance sheet and enhancing financial stability.
Impact of Divestiture and Foreign Exchange
Despite the positive growth, Bioventus’s revenue remained unchanged compared to the prior year due to the divestiture of its advanced rehabilitation business. Additionally, foreign currency exchange rates had an unfavorable impact, resulting in a $0.5 million unplanned loss, posing a challenge to the company’s financial performance.
Forward-Looking Guidance
Bioventus reiterated its full-year guidance, emphasizing its robust third-quarter performance. The company reported a third-quarter revenue of $139 million, reflecting 8% organic growth. Adjusted EBITDA rose by 13% to $27 million, with a margin expansion of over 200 basis points. Adjusted earnings per share surged by 200% to $0.15. Bioventus remains on track to achieve a full-year adjusted EBITDA margin expansion of 100 basis points and aims for adjusted EPS between $0.64 to $0.68. The company also highlighted strategic growth opportunities in its pain treatments business, projecting a 200 basis point boost in profitable growth for 2026.
In summary, Bioventus’s third-quarter earnings call reflected a positive sentiment, driven by significant organic growth, profitability improvements, and strategic advancements. Despite challenges from divestitures and foreign exchange losses, the company demonstrated effective cash and debt management. Looking forward, Bioventus remains optimistic about its growth prospects and financial performance, with a focus on strategic opportunities in its core business segments.