CNMD Q1 Earnings Call: Supply Chain Progress, Growth Drivers, and Tariff Mitigation in Focus

Medical tech company CONMED (NYSE: CNMD) beat Wall Street’s revenue expectations in Q1 CY2025, with sales up 2.9% year on year to $321.3 million. The company expects the full year’s revenue to be around $1.36 billion, close to analysts’ estimates. Its non-GAAP profit of $0.95 per share was 17.1% above analysts’ consensus estimates.

Is now the time to buy CNMD? Find out in our full research report (it’s free).

StockStory’s Take

CONMED’s first quarter results reflected steady demand across its orthopedics and general surgery segments, with management attributing balanced sales growth to strong performance in its Foot & Ankle line and continued momentum for its BioBrace soft tissue repair product. CEO Pat Beyer highlighted that clinical adoption of newer offerings and product differentiation in both minimally invasive and robotic surgery contributed to the company’s ability to exceed Wall Street’s revenue expectations. Management acknowledged ongoing supply chain improvements but indicated that backorders have already started to decline, supporting better product availability for key hospital customers.

Looking forward, CONMED’s guidance incorporates a modest increase in revenue projections and a more notable uplift in non-GAAP profit expectations, largely due to a less severe currency headwind and early operational gains. While the company’s outlook remains constructive, CFO Todd Garner cautioned that tariff exposure, particularly from China, will require active mitigation later in the year. Management remains focused on executing supply chain initiatives and further building out its high-growth platforms, while closely monitoring shifts in hospital procurement and macroeconomic policy changes.

Key Insights from Management’s Remarks

CONMED’s leadership focused on operational execution and highlighted product-specific growth factors that shaped the quarter’s outcome. While the company outperformed Wall Street on key financial metrics, management outlined progress and challenges in several core areas.

• Orthopedics product momentum: Double-digit growth was seen in the Foot & Ankle product line, with BioBrace adoption expanding across more than 50 clinical procedures. Management noted that ongoing clinical studies and a new FDA-cleared delivery device for rotator cuff repair are expected to further support BioBrace’s uptake.
• General surgery driven by AirSeal: The AirSeal system and smoke evacuation products both experienced double-digit demand. Management cited AirSeal’s importance in robotic and laparoscopic surgeries, emphasizing its demonstrated clinical benefits for patient recovery and its growing use with robotic surgical platforms.
• Supply chain improvement initiatives: The company reported early progress in reducing backorders, specifically in implant products, and is working with external consultants to strengthen supplier relationships and production planning. Management expects more meaningful supply chain benefits to emerge by year-end.
• Tariff impact and mitigation: CFO Todd Garner explained that while tariffs, especially from China, will weigh on earnings in the second half of the year, the company is pursuing logistics adjustments and price mitigation to offset the impact. Regulatory complexity and the need for FDA compliance mean that vendor changes will take time to implement.
• Portfolio review and growth platforms: New CEO Pat Beyer disclosed that a comprehensive portfolio review is underway, but reiterated confidence in the durability of CONMED’s four key growth drivers: BioBrace, Foot & Ankle, AirSeal, and smoke evacuation. Customer engagement and internal team alignment were emphasized as positive developments supporting these platforms.

Drivers of Future Performance

Management’s outlook for the coming quarters is shaped by ongoing supply chain improvements, continued uptake of differentiated products, and external cost pressures such as tariffs.

• Supply chain stabilization: A key area of focus is achieving further reductions in backorders and optimizing manufacturing processes, which management believes will unlock higher sales and more predictable growth.
• Expansion of growth platforms: The company is prioritizing clinical adoption and expansion of its high-growth areas, particularly BioBrace and AirSeal, to drive mid- to high-single-digit revenue growth.
• Tariff and macroeconomic risks: Exposure to new tariffs, especially on products sourced from China, presents a risk to margins. Management outlined mitigation strategies but acknowledged the timing and degree of success remain uncertain.

Top Analyst Questions

• Phil Soran (Piper Sandler): Asked why the increase in full-year guidance was less than the quarterly revenue beat. Management explained that guidance only reflected currency improvements, not operational changes, and that no material softness was seen in hospital budgets.
• Robbie Marcus (JPMorgan): Sought clarification on the updated tariff impact and mitigation plans. CFO Todd Garner detailed logistics adjustments and pricing actions, noting that regulatory requirements slow down potential sourcing changes.
• Rick Wise (Stifel): Requested more detail on supply chain progress and the impact on BioBrace. Management reported declining backorders in key portfolios and highlighted positive feedback and new FDA clearance for BioBrace’s delivery device.
• Young Li (Jefferies): Inquired about the ongoing portfolio review and early findings. CEO Pat Beyer emphasized the strength of the four primary growth platforms and ongoing deep dives into adjacent product portfolios.
• Travis Steed (Bank of America): Pressed for clarity on the fourth quarter run rate for tariff impacts and whether mitigation would be enough for 2026. Management indicated that mitigation is ongoing and that full annual effects may depend on regulatory and market developments.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the pace and effectiveness of supply chain improvements, particularly the reduction of backorders in core product lines, (2) the continued market adoption of BioBrace and AirSeal, especially following new regulatory clearances, and (3) the company’s ability to mitigate the impact of tariffs through operational and pricing actions. The results of the ongoing portfolio review and the progression of clinical studies will also be important signposts for CONMED’s future trajectory.

CONMED currently trades at a forward P/E ratio of 13.4×. In the wake of earnings, is it a buy or sell? See for yourself in our free research report.

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