Oct 28, 2026 earnings call — AirSeal, Buffalo Filter and BioBrace drove Q3 growth
Company updated 2026 non GAAP adjusted diluted EPS guidance to $4.54 to $4.61.
Revenue $0.3B (est $0.3B) · EPS $1.04 (est $1.00)
Key quotes
"In late July, we announced a new expanded US clinical indication for our AirSeal robotic solution, which is now indicated for use with Intuitive's 8 millimeter hex cannulas."
"As I mentioned earlier, we saw strong contributions in the third quarter from sales of our direct smoke evacuation portfolio, with year over year growth within the high single digit to low double digit range, we expect annually over the long term."
"As a reminder, Biobrace has clinically demonstrated a 94% healing rate when used in."
Analyst Q&A 7
Why Q4 sales guide moved lower
Q (Anton Hellbent · BMO): Analyst asked management to bridge why the full-year midpoint moved lower by $2.5 million versus the $800k Q3 shortfall, and what changed versus expectations. He also asked about visibility into OEM smoke evacuation ordering and whether US general surgery has hit a trough.
A: Management said two items changed guidance: an FX update (now a $9 million tailwind) and GI (now $20 million). Excluding those, they remain confident of at least 5% organic constant currency revenue growth and reduced the high-end Q4 implication to be more in line with Q3 performance. On US general surgery, the softness reflected OEM Buffalo Filter variability; the company is focusing on higher-margin direct business and will work with OEM partners, but OEM volumes are more variable.
"I have very high confidence in achieving at least 5% organic constant currency revenue growth." — John E. Gallagher (CFO)
US ortho recovery timing
Q (Ross Osborn · Wells Fargo): Analyst asked what stage the company is in getting US ortho sales productivity back to normal and how domestic ortho growth should look exiting this year and into next. He also asked how ConMed chooses which procedures to target next to expand AirSeal beyond 6%–7%.
A: Management said US ortho declined a bit in Q3 because of changes to the commercial organization, but they have made progress and are focused on onboarding and operationalizing distributors to drive growth. They expect to exit the year positioned to drive growth in the first half of next year. For AirSeal, they are targeting complex, high-acuity, longer robotic procedures (colorectal, urology, gynecology, bariatrics) and are selectively expanding into laparoscopic opportunities where they are currently underpenetrated.
"We believe we will exit this year in a position where in first half next year, for driving growth in the United States back in line and what we should be doing." — Patrick J. Beyer (CEO)
Why high-end guide lowered
Q (Matthew O'Brien · Piper Sandler): Analyst asked whether the 50 basis point cut in the high end of the guide was driven more by OEM Buffalo Filter issues or by ortho franchise slowness, and whether there is evidence the commercial adjustments are working versus strong competitors.
A: Management said they tightened the high end from 6% to 5.5% because Q3 was aided by stronger international distributor timing that they are not underwriting to repeat in Q4. They also noted Buffalo Filter direct and AirSeal performed well, and Biobrace is strong; the US ortho portfolio should improve as commercial changes are fully operationalized. They emphasized improving trends and accountability for returning to US growth.
"Some of that was a benefit, and we know that our international business is largely a distribution oriented business." — John E. Gallagher (CFO)
Biobrace approvals and AirSeal growth
Q (Mike Matson · Needham and Company): Analyst asked in which countries Biobrace is sold, how international labeling and marketing compare to the US, and whether pricing is lower outside the US. He also asked if AirSeal grew in the high single-digit to low double-digit target range this quarter.
A: Management said Biobrace international approval is by indication and they are running studies for rotator cuff, knee, and Achilles; it is approved in Canada, parts of Eastern Europe, the Middle East, Korea, China, India, and Brazil and shows strong uptake where approved. Pricing varies by market. For AirSeal, they said Q3 accelerated as expected, with both disposables and capital growing, and it did grow in the high single-digit to low double-digit range.
"it is approved in Canada, and some of our Eastern European and our Middle East markets, in Korea, in China, in India, and in Brazil." — Patrick J. Beyer (CEO)
Strategic review and M&A plans
Q (Robert Marcus · JP Morgan): Analyst asked for an update on the strategic review and interest in potential strategic actions. He also asked whether an upper mid-single-digit organic exit rate is a reasonable run rate into 2027 and what puts and takes should be considered.
A: Management said they do not comment on rumors but outlined a two-step focus: choose where to play (three markets) and refine a multiyear plan including M&A and profitability actions. They highlighted the three growth drivers—AirSeal, Buffalo Filter, and Biobrace—and said they are refining execution and M&A thinking; they did not provide a 2027 revenue guidance but noted interest expense and a GI-related EPS headwind are important P&L considerations.
"So we are focused on 3 markets, and we are executing strongly around 3 growth drivers. AirSeal Buffalo Filter, and Biobrace." — Patrick J. Beyer (CEO)
Gross margin drivers and order timing
Q (Travis Steed · BofA): Analyst asked the puts and takes on gross margin that led to a slight miss and guide tick lower, and whether the company can quantify the Q3 distributor order timing benefit and comment on tariffs (Section 301).
A: Management said two gross-margin drivers were a stronger international mix (distributor-oriented, slightly lower margin) and discrete operations and inventory items in Q3; despite the Q3 impact, full-year guidance still implies 50 to 100 basis points of gross margin expansion. They said tariffs remain a $0.35 impact (ignoring refunds) and quantified that they beat the low end of Q3 organic constant currency revenue guidance by $1.5 million, which was not carried into the Q4 guide.
"In Q3, we are impacted by some discrete operations and inventory items." — John E. Gallagher (CFO)
OUS growth split and capital allocation
Q (Young Li · Jefferies): Analyst asked if the company can break out the international timing benefit between ortho and general surgery. He also asked for updated thoughts on capital allocation, deleveraging, buybacks, and when the company would consider M&A.
A: Management said they have not broken out the order-timing impact by ortho versus general surgery, but both businesses grew well into the mid-single to high-single digit range internationally. On capital allocation, they noted ConMed is a historically strong free cash flow generator, net leverage is 2.7x (below 3x), they have repurchased about $50 million of shares year-to-date and expect $62 million for the year, see opportunities in inventory and working capital, and have appetite for revenue-accretive M&A while they will give more specifics on the Q4 call.
"We have done, as we mentioned in the prepared remarks, we bought back about $50 million of shares year to date." — John E. Gallagher (CFO)