Summary of Bioventus (BVS) FY Conference Call - August 12, 2025 Company Overview - **Company**: Bioventus (BVS) - **Industry**: Medical Device - **Focus**: Innovations for active healing in orthopedics - **Revenue**: Over $550 million annually - **Market Opportunity**: Over $6 billion across product categories [5][6] Core Business Segments 1. **Pain Treatments** - Flagship product: Duralane (hyaluronic acid therapy) - New addition: Xcel PRP system through a distribution agreement with Apex Biologics - Recent FDA clearances for STIM trial and Telesman, enhancing growth potential [12][14][24] 2. **Surgical Solutions** - Ultrasonics platform aimed at spinal surgery and bone cutting - Significant time savings for surgeons (up to 45 minutes per case) - Product: OsteoAmp, a bone graft substitute with clinical and economic value [16][18] 3. **Restorative Therapies** - Focus on fracture care technology (Exagen) - Restored growth after five years of decline, achieving double-digit growth recently [19][20] Financial Performance - **Revenue Growth**: Organic revenue growth of over 14% last year; expected to grow nearly 2x the market this year [7][8] - **Profitability**: Guidance suggests a margin just over 20%, with a 100 basis point improvement [8][26] - **Cash Flow**: Expected to nearly double this year, with a cash flow yield of approximately 60% and net leverage dropping below 2.5 times [29] Strategic Initiatives - **Emerging Businesses**: - PRP and PNS expected to contribute about 200 basis points of growth by 2026 [39] - PNS market projected to exceed $500 million by 2029 [24] - **International Expansion**: - Currently less than $100 million in international revenue; significant untapped potential identified [46] - New leadership brought in to enhance international strategy and execution [47] Market Dynamics - **Second Half Expectations**: Anticipated growth rate improvement of about 300 basis points due to easier comparables and increased growth in core businesses [32][33] - **Sales Strategy**: Existing sales force will distribute new products, with plans to ramp up the team for PNS significantly in 2026 and 2027 [38][45] Conclusion - Bioventus is positioned for sustained growth through a diversified portfolio, strong gross margins, and strategic initiatives aimed at expanding both domestic and international markets. The company aims to become a $1 billion high-growth, high-profit entity while helping patients recover effectively [30].

Financial Data and Key Metrics Changes - First quarter revenue was $124 million, reflecting a 5% organic growth, which was in line with internal expectations despite a 4% decline due to the divestiture of the Advanced Rehabilitation business [7][16] - Adjusted earnings per share increased by 33% to $0.08, supported by a strong gross margin and lower interest expenses [8][20] - Adjusted EBITDA was over $19 million, a decrease of $3 million from the prior year, primarily due to the divestiture and a foreign currency loss [17][19] Business Line Data and Key Metrics Changes - Surgical solutions revenue grew by 7%, driven by double-digit growth in ultrasonics, with capital sales in the US up by more than 50% compared to the prior year [9][17] - Pain treatments revenue increased by 4%, impacted by lower distributor purchases following higher orders in the previous quarter [18] - Restorative therapies experienced a 35% decline in revenue due to the divestiture, but organic growth was 4% [18] Market Data and Key Metrics Changes - International segment revenue declined by 12%, with organic growth at 1% [18] - The company noted that the macroeconomic environment has become more dynamic, but does not foresee a material impact from tariffs at this time [13][22] Company Strategy and Development Direction - The company aims to drive above-market revenue growth, expand profitability, and accelerate free cash flow generation [9][12] - A new platelet-rich plasma (PRP) system was added to the pain treatments portfolio, expected to enhance competitive advantage [10][11] - The company is focused on maintaining a strong clinical value proposition and leveraging its dedicated sales force to drive growth [26][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth despite macroeconomic uncertainties, with a strong focus on disciplined execution [8][14] - The company expects to nearly double cash from operations in 2025 compared to 2024, with a significant acceleration in cash flow anticipated starting in the second quarter [13][21] - Full-year 2025 guidance includes organic revenue growth of 6% to 8%, adjusted EBITDA of $112 million to $116 million, and EPS of $0.64 to $0.68 [22] Other Important Information - The company has enhanced its financial liquidity and cash flow generation, positioning itself as a market leader in large growing markets [14] - The management team is focused on reducing leverage to below 2.5 times by the end of 2025 [44] Q&A Session Summary Question: Update on the pain market and competition - Management noted a shift from multi-injection to single-injection treatments, with Duralane showing strong growth and profitability [26][27] Question: Tougher Q2 comparisons for pain treatments - Management indicated that unfavorable comparisons from the previous year would ease in the second half, supporting growth acceleration [30][42] Question: Confidence in organic growth and EBITDA acceleration - Management expressed confidence in revenue and EBITDA growth in the second half, driven by recent account wins and improved sales execution [39][42] Question: Plans for M&A opportunities - The company is focused on reducing leverage and pursuing synergistic opportunities that align with its growth strategy [47][49] Question: Initiatives from the new OUS business manager - The new manager is expected to drive a focused growth strategy in international markets, prioritizing specific countries and products [51][52]

Financial Data and Key Metrics Changes - First quarter revenue was $124 million, reflecting a 4% decline due to the divestiture of the Advanced Rehabilitation business, but organic growth was 5% [16][18] - Adjusted earnings per share increased by 33% to $0.08, supported by strong gross margins and lower interest expenses [7][20] - Adjusted EBITDA was over $19 million, down $3 million from the prior year, primarily due to the divestiture and a foreign currency loss [17][20] Business Line Data and Key Metrics Changes - Surgical solutions revenue grew by 7%, driven by double-digit growth in ultrasonics, with capital sales in the US up over 50% compared to the prior year [17][18] - Pain treatments revenue increased by 4%, impacted by lower distributor purchases following higher orders at the end of the previous year [18] - Restorative therapies revenue declined by 35% due to the divestiture, but organic growth was 4% [18] Market Data and Key Metrics Changes - International segment revenue declined by 12%, with organic growth at 1% [18] - The company noted a significant opportunity in the PRP market, which is expected to synergize with existing sales channels [11][12] Company Strategy and Development Direction - The company aims to drive above-market revenue growth, expand profitability, and accelerate free cash flow generation [8][12] - A focus on enhancing the pain treatments portfolio with the addition of a PRP system is part of the growth strategy [10][11] - The company is committed to maintaining a strong cash flow and reducing leverage, targeting below 2.5 times by the end of 2025 [21][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth despite macroeconomic uncertainties, with no material impact from tariffs anticipated at this time [13][22] - The company expects a significant acceleration in cash flow starting in the second quarter, with a projected doubling of cash from operations compared to 2024 [21][22] - Management highlighted the importance of agility and resilience in navigating challenges and emphasized the potential for distinguishing the company from competitors [14][15] Other Important Information - The company reaffirmed its 2025 financial guidance, including organic revenue growth of 6% to 8% and adjusted EBITDA of $112 million to $116 million [22] - The company has established a solid foundation for growth, with a diverse portfolio of short, mid, and long-term growth drivers [14] Q&A Session Summary Question: Update on the pain market and competition - Management noted a shift from multi-injection to single-injection treatments, with strong clinical value propositions supporting growth [24][25] Question: Tougher Q2 comparisons for pain treatments - Management explained that last year's competitor supply challenges led to additional volume, which will not be present this year [28][29] Question: Exposure to pharmaceutical tariffs - Management stated that current pharmaceutical products are excluded from tariffs and emphasized vigilance in monitoring the situation [32] Question: Confidence in organic growth and EBITDA acceleration - Management expressed confidence in the second half of the year, expecting significant growth as unfavorable comparisons are cleared [37][42] Question: Plans for M&A opportunities - Management indicated a focus on reducing leverage while remaining open to synergistic M&A opportunities that align with growth goals [46][48] Question: Initiatives from the new OUS business manager - The new manager is expected to drive a focused growth strategy and improve commercial execution in international markets [52][53]