Enovis (ENOV) Q3 2024 earnings summary

Executive summary

• Achieved 21% year-over-year reported revenue growth and 6% on a comparable basis for Q3 2024, driven by the Lima acquisition and organic growth in both segments.

• Reconstructive segment delivered 57% reported global revenue growth (9% comparable), with strong U.S. and international performance; Prevention & Recovery (P&R) segment grew 1% reported and 3% comparable.

• Adjusted EBITDA margin expanded by 220 basis points to 17.9%, with adjusted EBITDA up 38% to $90 million, driven by product mix, operational leverage, and Lima integration.

• Adjusted EPS rose 30% year-over-year to $0.73, while GAAP net loss from continuing operations was $33.5 million, reflecting higher interest and transaction costs.

• Strategic objectives and integration milestones remain on track, with growth fundamentals positioned to accelerate in 2025.

Financial highlights

• Q3 2024 net sales reached $505 million, up 21% year-over-year and 6% on a comparable basis, with $68.4 million contributed by Lima.

• Adjusted gross margin was 58.9%, up 70 basis points year-over-year; GAAP gross margin was 56.7%, impacted by inventory step-up charges.

• Adjusted EBITDA was $90 million (17.9% margin), up from $65.4 million (15.7% margin) in Q3 2023.

• Adjusted net income margin was 8.1% in Q3 2024; effective tax rate for adjusted net income was 19.7%.

• Interest expense for Q3 was $11 million, up from $6 million last year, reflecting increased debt for the Lima acquisition.

Outlook and guidance

• Full-year 2024 revenue guidance narrowed to approximately $2.1 billion, with comparable revenue growth expected at 5% to 5.5%.

• Adjusted EBITDA guidance narrowed to $373–378 million, representing over 200 basis points of margin expansion.

• Adjusted EPS guidance raised to $2.75–2.80, reflecting strong double-digit earnings growth.

• Integration headwinds expected to clear in 2025, setting up for acceleration next year.

• Recon segment expected to deliver high-single to low-double-digit growth in Q4; P&R segment to remain stable.