Enovis Q1 Earnings Call Highlights
Enovis (NYSE:ENOV) reported a solid start to 2026, with management pointing to share gains in its reconstructive surgery business, stable growth in prevention and recovery, and continued investment in new products including ARVIS and Nebula.
On the company’s first-quarter earnings call, Chief Executive Officer Damien McDonald said Enovis delivered 3% organic revenue growth in the quarter despite fewer selling days, which he said created an approximately 240-basis-point headwind. On a days-adjusted basis, organic growth was 6% at the company level.
“We’re encouraged by our start to 2026, with the first quarter results reflecting solid execution and continued progress advancing our innovation-led strategy,” McDonald said.
Recon Leads Growth as Extremities and U.S. Performance Stand Out
Enovis reported first-quarter sales of $589 million, up 5% from the prior year on a reported basis, according to Chief Financial Officer Ben Berry. Reported growth included a 420-basis-point tailwind from foreign currency, a 240-basis-point headwind from selling days and a 210-basis-point headwind primarily related to the divestiture of Dr. Comfort.
The company’s Recon segment posted 6% organic growth, or 8% on a days-adjusted basis. McDonald said U.S. Recon grew 8% organically in the quarter, led by 10% organic growth in extremities. Shoulders delivered double-digit growth, helped by continued traction for the company’s Augmented Reverse Glenoid System, or ARG.
In hips and knees, Enovis grew 6% organically in the U.S. McDonald said Nebula remains a growth driver, with most new instrumentation sets going to competitive users. He described Nebula as still in the early stages of rollout and said it opens a meaningful segment of the U.S. hip market to Enovis sales teams.
International Recon grew 3% organically, including double-digit growth in extremities. McDonald said the company is strengthening its global portfolio through cross-compatibility of implant systems and remains positioned for “sustained above-market growth rates in 2026 and beyond.”
ARVIS Rollout Gains Early Attention
Management emphasized Enovis’ innovation pipeline, including ARVIS, which the company showcased at the AAOS conference in New Orleans in March. McDonald said Enovis has begun deploying ARVIS through a flexible business model aimed primarily at driving implant utilization.
“ARVIS shoulder cases have started and are encouraged by the early feedback,” McDonald said. He added that commercial teams are using the launch to target new customers and that the company expects continued adoption in shoulders throughout 2026. Enovis also completed its first out-of-U.S. shoulder case using the technology in South Africa.
During the question-and-answer session, McDonald said the initial focus for ARVIS is shoulder and then knee. He said the technology gives Enovis an opportunity to speak with competitive surgeons and pursue conversions, while offering purchase, lease and fee-per-case models with volume commitments.
Berry cautioned that Enovis did not see material revenue from ARVIS in the first quarter, but said management expects momentum to build as the launch progresses.
Prevention Recovery Posts Modest Growth
The Prevention Recovery segment grew 1% organically, or 3% on a days-adjusted basis. McDonald said global bracing grew 3% on a days-adjusted basis, driven by revenue cycle management and upper extremity bracing. Bone stimulation was also a source of strength, delivering high-single-digit growth.
McDonald said he was encouraged by execution in the P business, noting that the company has reshaped the portfolio and has been growing above market in both the U.S. and internationally. He pointed to opportunities in cold therapy, the NOPAIN Act and osteoarthritis-related offerings as potential growth drivers.
“The opportunity, I think, is really for us to take,” McDonald said, adding that the company is working account by account to educate customers around cold therapy and related opportunities.
Margins, Cash Flow and Tariffs
Berry said adjusted gross margin was 62% in the first quarter, reflecting 40 basis points of underlying improvement from favorable mix, productivity and realized synergies in manufacturing and supply chain operations. He said the improvement was partially diluted by tariff impacts, as Enovis paid roughly $4 million in tariffs during the quarter.
Adjusted EBITDA margin was 17.6%, down 10 basis points year over year on an underlying basis, which Berry attributed mostly to increased research and development investment and the timing of expenses. Adjusted earnings per share were $0.89, representing 10% underlying growth from the prior year. The first-quarter effective tax rate was 21%, while interest expense was $9 million, flat from the prior year.
Berry also said Enovis revised its definition of adjusted EBITDA beginning in the first quarter of 2026 to no longer adjust for inventory step-up charges associated with acquired businesses. He said the change followed the conclusion of a previously disclosed SEC comment letter process, even though the company continued to believe its prior presentation provided meaningful comparability.
Free cash flow improved by $16 million from the prior year. Berry said Enovis still expects free cash flow conversion of more than 25% in 2026. He noted that free cash flow typically builds over the course of the year because the first quarter includes bonus payments and expenses tied to sales meetings and AAOS.
Guidance Reaffirmed Despite Macro Volatility
Enovis reaffirmed its 2026 guidance. Berry said the company expects revenue to be split evenly between the first and second halves of the year and said commercial execution remains critical to delivering the full-year outlook.
Management cited several moving pieces, including international market volatility, Middle East exposure and tariffs. Berry said Middle East revenue exposure is about $1 million to $2 million per month and that Enovis expects to absorb that headwind and related supply-chain inflation without changing its original guidance.
In response to analyst questions about why the company did not raise guidance after a strong Recon quarter, McDonald pointed to the broader macro environment.
“It’s a very dynamic macro environment,” McDonald said. “We just want to make sure we keep the team focused on executing what we committed to for the full year.”
Management said underlying procedure demand remains stable and healthy. Kyle Rose, vice president of investor relations, said Enovis sees U.S. hips growing in the 3% to 4% range, U.S. knees in the 4% to 5% range, shoulders in the 5% to 7% range, and international Recon markets growing 4% to 6% over the last several years.
McDonald closed the call by emphasizing disciplined execution amid macroeconomic and geopolitical uncertainty, saying the company must continue focusing on daily improvement and long-term opportunities.
About Enovis (NYSE:ENOV)
Enovis is a global medical technology company focused on advancing the field of musculoskeletal health. Formed through the separation of the MedTech business from Colfax Corporation in 2021, Enovis brings together a portfolio of specialized products and services designed to address conditions affecting the foot and ankle, hand and wrist, sports medicine, joint repair, biologics and rehabilitation.
The company’s flagship offerings include minimally invasive implants and instrumentation for foot and ankle surgery under the Treace Medical Concepts brand, focal joint resurfacing implants through Arthrosurface, and synthetic bone graft substitutes marketed as NovaBone.
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