CONMED Corporation

CONMED reported second-quarter 2026 net sales of $343.5 million, up 0.3% year over year on an as-reported basis and down 0.5% constant currency; organic net sales grew 6%. Adjusted diluted EPS was $1.38 versus $1.15 last year, with a $0.21 benefit from tariff refunds. Adjusted gross profit increased 5.6% and adjusted gross margin was 59.5%, up 300 basis points; excluding the tariff refund benefit, gross margin was up 50 basis points year over year. Adjusted operating margin was 18.2% versus 15.7% a year ago, and adjusted free cash flow was $34.2 million, up 46% year over year. For 2026, the company now expects organic constant-currency sales growth of 5% to 6%, adjusted EPS of $4.48 to $4.60, adjusted gross margin of about 57.5% to 58%, adjusted interest expense of about $33 million, an adjusted tax rate of about 25%, free cash flow of about $115 million, and third-quarter GAAP net sales of $334 million to $339 million with adjusted EPS of $0.98 to $1.03.

Pat Beyer said the quarter showed “real progress,” highlighting stronger execution, the GI portfolio exit, debt refinancing and added leadership talent. He emphasized that the company is focused on its core opportunities in minimally invasive robotic and laparoscopic surgery, smoke evacuation, and orthopedic soft-tissue repair. On growth drivers, he said AirSeal remains a long-term high single-digit to low double-digit grower, while Buffalo Filter and BioBrace continue to underpin the broader portfolio.

John Gallagher said gross margin expansion was driven mainly by an $8.5 million tariff-refund benefit, while excluding that item gross margin still improved 50 bps from favorable mix and FX. He cited adjusted operating expenses up 1.5%, adjusted operating margin of 18.2%, adjusted net income of $41.7 million, and $34.2 million of free cash flow. On the balance sheet, he noted cash of $37.3 million, total debt of $834.2 million, available borrowing capacity of $455.5 million, and leverage of 2.9x; he also described the refinancing as reducing exposure to convertible debt ahead of the 2027 maturity. He said the company repurchased about 1 million shares for $43.7 million in the first half and still expects about $61.8 million of repurchases in 2026.

Analysts focused on why AirSeal came in below expectations, how the new DV5 compatibility affects growth, and whether the company was seeing any volume weakness from ACA enrollment trends. Management said AirSeal trends improved sequentially but the quarter was below expectations, and reaffirmed the long-term high single-digit to low double-digit growth outlook. On DV5 compatibility, management said the expanded indication was already included in guidance and should help the franchise, but did not quantify the revenue impact. On volumes, Pat Beyer said the company is not seeing changes in procedure or patient volumes, and John Gallagher clarified that the tariff refund was separate from the ongoing $0.35 full-year tariff headwind.