Bioventus Highlights PNS, PRP Growth as Cash Flow Improves and Debt Falls

Key Points

• Bioventus said its financial profile has improved materially, with EBITDA margins rising above 20% in 2025, free cash flow turning positive, and leverage falling to just over 2x after significant debt repayment.
• PNS and PRP are the company’s main growth priorities; management sees PNS as a fast-growing $250 million market and expects PNS plus PRP to add 200 basis points to full-year growth.
• Debt reduction remains the top capital allocation focus, while M&A is secondary and share buybacks could be considered if leverage drops below two turns later this year.

Bioventus NASDAQ: BVS executives outlined the company’s portfolio strategy, growth priorities and capital allocation plans during a Goldman Sachs event hosted by Jenny Rabinowitz, an analyst covering U.S. medtech and healthcare IT.

Mark Singleton, Bioventus’ senior vice president and chief financial officer, described the company as a $568 million revenue business as of 2025, with 2026 guidance of $605 million. He said Bioventus participates in markets totaling more than $6 billion and has improved its financial profile over the past several years.

Singleton said the company has expanded EBITDA margins from 13% in early 2022 to more than 20% in 2025, while moving revenue growth from low single digits to a consistent mid- to high-single-digit pace. He also said Bioventus has shifted from negative cash flow to positive free cash flow, producing $100 million over the last 12 months and doubling free cash flow from 2024 to 2025.

Portfolio Built Around Core, Expansion and Emerging Products

Singleton said Bioventus organizes its portfolio across core, expansion and emerging products. Its core products include hyaluronic acid, or HA, products; bone graft substitutes; and EXOGEN. He said those products generate cash and profit that help fund growth areas.

The company’s operating segments include:

• Pain: PRP, peripheral nerve stimulation, or PNS, and HA products.
• Surgical: Ultrasonics and bone graft substitutes.
• Restorative Therapies: EXOGEN.

Asked about the company’s portfolio following acquisitions after its 2021 IPO and subsequent divestitures, Singleton said management is “really excited” about the current portfolio and is focused on bringing existing growth opportunities to life.

PNS and PRP Identified as Key Growth Drivers

Singleton highlighted PNS as a product receiving increased attention after recent acquisitions of competitors by Boston Scientific and Medtronic. He said Bioventus’ PNS product was designed specifically for peripheral nerves, unlike competing products originally designed for spinal cord stimulation. He also said the device can generate more power to reach deeper and larger nerves and is a smaller wearable device for patients.

Singleton characterized the PNS market as a $250 million opportunity growing at nearly 25% annually. He said the technology is intended for patients with debilitating pain and described field experiences in which patients saw improved mobility after receiving the device.

Bioventus is also investing in PRP. Singleton said the company’s PRP product benefits from the existing HA sales force, which already calls on orthopedic offices. He said the product requires limited incremental investment and is expected to be accretive to the bottom line through sales-force synergies. An unidentified company representative also cited the system’s benchtop processor, which allows physicians to customize leukocyte-rich or leukocyte-poor preparations using one system.

Singleton said PNS and PRP together are expected to contribute 200 basis points to growth for the full year. He said first-half expectations were below that level, with the company expecting stronger contribution in the second half. Internally, the company is tracking sales pipelines, physician training, adoption rates, trial-to-permanent conversions for PNS and capital placements for PRP.

Capital Allocation Focused on Debt Reduction

Singleton said Bioventus has significantly reduced leverage, from nearly six turns to slightly more than two turns at the end of the first quarter. He said debt stood near $250 million at the end of the quarter.

Debt repayment remains the company’s primary capital allocation priority, Singleton said. While management will continue to evaluate M&A, he said acquisitions are not the first priority because Bioventus sees substantial opportunity in its current portfolio. He added that stock buybacks may become a consideration if leverage falls below two turns, which the company expects in the second half of the year.

First-Quarter Results and Guidance

Discussing recent performance, Singleton said first-quarter revenue growth of 7% was in line with expectations, while the company’s underlying growth excluding a rebate would have been in the 3% to 4% range. He said the Surgical business grew about 7% in the quarter and is expected to accelerate through the year.

Profitability outpaced revenue growth in the quarter, according to Singleton. He said EBITDA increased nearly 25% year over year, while EPS doubled. He attributed the earnings improvement to expense management and lower interest expense from debt reduction. Bioventus raised its EPS and free cash flow guidance while maintaining its organic revenue growth outlook.

On reimbursement, Singleton said recent CMS-related news affecting bone growth stimulators had an immaterial full-year impact on Bioventus’ business. He said the company is less exposed than competitors and that only part of the EXOGEN business is affected. He also said HA reimbursement has been stable since changes in 2022, and management has no information suggesting future negative changes at this time.

International Expansion and Margins

Singleton said Bioventus sees international markets as another growth driver, noting that approximately 10% of the company’s business is international and 90% is in the U.S. He said the company is evaluating opportunities through a return-on-invested-capital lens.

Areas of focus include Asia-Pacific, particularly China and Japan, where Bioventus has limited current penetration; Germany, where the company is investing in a direct sales approach; and the Middle East, especially Saudi Arabia.

On margins, Singleton said Bioventus has a corporate gross margin of about 75%. He said PNS and PRP currently carry gross margins below the corporate average, while Ultrasonics is above the corporate average. He said the company expects to maintain its gross margin range over time as growth drivers scale and cost structures improve.

Singleton closed by saying Bioventus is “a very different company today than it was a few years ago,” citing improved revenue growth, margin expansion and positive cash flow. He said management believes the company has a stronger foundation and that its four growth drivers can accelerate growth over time.

About Bioventus NASDAQ: BVS

Bioventus, headquartered in Durham, North Carolina, is a global medical device company specializing in orthobiologic solutions aimed at accelerating healing and improving patient outcomes in musculoskeletal conditions. The company develops and commercializes a portfolio of non‐surgical therapies designed to address bone healing, osteoarthritis pain management and soft tissue repair. Its flagship EXOGEN® Ultrasound Bone Healing System utilizes low‐intensity pulsed ultrasound technology to stimulate bone growth and has been widely used in the management of delayed fractures and nonunions.

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