Enovis Q2 Earnings Call Highlights

Second-quarter sales rose 3% to $583 million , with 5% organic growth led by 6% growth in Reconstruction, particularly U.S. hips and knees. Enovis reaffirmed its 2026 guidance and expects growth to accelerate in the fourth quarter as new products gain traction. Performance & Recovery grew 3% organically, while adjusted gross and EBITDA margins improved to 62% and 17.9%, respectively. However, Middle East disruptions, inflation and ongoing tariff costs are expected to create roughly a $10 million full-year headwind. Free cash flow improved to $31 million in the quarter, making first-half cash flow slightly positive, while leverage declined to 3.1 times. Enovis is targeting leverage below three times in 2026 and expects stronger contributions from ARVIS, Nebula, ARG and other product launches. Enovis NYSE: ENOV reported second-quarter 2026 sales of $583 million, up 3% on a reported basis and 5% organically, as growth in its Reconstruction business offset a slower but still expanding Performance & Recovery segment. Management said the company’s results reflected improved commercial execution, new-product adoption and operational productivity, while also noting pressure from Middle East-related disruptions and higher inflation. Chief Executive Officer Damien McDonald said the company delivered 6% organic growth in Reconstruction, or Recon, and 3% organic growth in Performance & Recovery, or P&R. Enovis reaffirmed its full-year 2026 guidance and said it expects sales growth to accelerate in the fourth quarter as product launches scale and market volumes improve. U.S. Recon grew 6% organically in the second quarter, with hips and knees increasing 8%. McDonald said growth was supported by commercial execution across hospitals and ambulatory surgery centers, or ASCs, as well as demand for the company’s Nebula, ARG and ARVIS offerings. Nebula remained a key growth contributor, with McDonald saying more than 80% of new instrumentation sets in the quarter went to users converting from competing products. International Recon sales also increased 6% organically, including double-digit shoulder growth, according to the company. ARVIS entered full commercial launch in the U.S. during the quarter. McDonald said early feedback from surgeons and commercial teams has been encouraging, citing the platform’s mobility, small footprint and versatility, particularly for shoulder procedures. The company plans to expand ARVIS in shoulders during the second half and begin its rollout in international markets. During the question-and-answer session, McDonald said U.S. extremities growth faced a difficult comparison with the prior-year ARG launch and an elevated number of medical-education events that temporarily took high-volume surgeons out of the field. Still, he pointed to 8% first-half growth in both hips and knees and extremities as a better reflection of the business’s overall momentum. P&R organic revenue increased 3% year over year. Global bracing grew 4%, including mid-single-digit growth in the U.S. driven by revenue-cycle management and spine bracing. Recovery Sciences and Bone Stim delivered mid- to high-single-digit growth, management said. McDonald also said the company was “meaningfully” gaining share in its regeneration business and that its foot-and-ankle operation grew above an estimated 4% to 6% market rate. New products are expected to contribute more meaningfully later in the year, including the planned launch of CT-RevitL for laser treatment in the companion market. Chief Financial Officer Ben Berry said the company’s international operations were affected by the conflict.