Medical tech company CONMED (NYSE: CNMD) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 2.9% year on year to $321.3 million. The company expects the full year’s revenue to be around $1.36 billion, close to analysts’ estimates. Its non-GAAP profit of $0.95 per share was 17.1% above analysts’ consensus estimates.
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CONMED (CNMD) Q1 CY2025 Highlights:
- Revenue: $321.3 million vs analyst estimates of $313.1 million (2.9% year-on-year growth, 2.6% beat)
- Adjusted EPS: $0.95 vs analyst estimates of $0.81 (17.1% beat)
- Adjusted EBITDA: $61.3 million vs analyst estimates of $56.77 million (19.1% margin, 8% beat)
- The company slightly lifted its revenue guidance for the full year to $1.36 billion at the midpoint from $1.36 billion
- Management raised its full-year Adjusted EPS guidance to $4.53 at the midpoint, a 4.6% increase
- Operating Margin: 5%, down from 11.2% in the same quarter last year
- Constant Currency Revenue rose 3.8% year on year (5.9% in the same quarter last year)
- Market Capitalization: $1.58 billion
“We had a good start to 2025, which positions us well to achieve our full-year guidance,” commented Patrick J. Beyer, CONMED’s President and Chief Executive Officer.
Company Overview
With over five decades of experience in surgical innovation since its founding in 1970, CONMED (NYSE: CNMD) develops and manufactures medical devices and equipment for surgical procedures, specializing in orthopedic and general surgery products.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, CONMED’s sales grew at a mediocre 6.7% compounded annual growth rate over the last five years. This fell short of our benchmark for the healthcare sector and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. CONMED’s annualized revenue growth of 9.4% over the last two years is above its five-year trend, suggesting some bright spots. 
CONMED also reports sales performance excluding currency movements, which are outside the company’s control and not indicative of demand. Over the last two years, its constant currency sales averaged 10.6% year-on-year growth. Because this number aligns with its normal revenue growth, we can see that CONMED has properly hedged its foreign currency exposure. 
This quarter, CONMED reported modest year-on-year revenue growth of 2.9% but beat Wall Street’s estimates by 2.6%.
Looking ahead, sell-side analysts expect revenue to grow 4.2% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will see some demand headwinds.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
CONMED was profitable over the last five years but held back by its large cost base. Its average operating margin of 9.9% was weak for a healthcare business.
On the plus side, CONMED’s operating margin rose by 7.8 percentage points over the last five years, as its sales growth gave it operating leverage. The company’s two-year trajectory shows its performance was mostly driven by its recent improvements.
In Q1, CONMED generated an operating profit margin of 5%, down 6.2 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
CONMED’s EPS grew at a remarkable 10.8% compounded annual growth rate over the last five years, higher than its 6.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into the nuances of CONMED’s earnings can give us a better understanding of its performance. As we mentioned earlier, CONMED’s operating margin declined this quarter but expanded by 7.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.
In Q1, CONMED reported EPS at $0.95, up from $0.79 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects CONMED’s full-year EPS of $4.32 to grow 3.6%.
Key Takeaways from CONMED’s Q1 Results
We enjoyed seeing CONMED beat analysts’ full-year EPS guidance expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a solid quarter. The stock traded up 5.3% to $51.64 immediately after reporting.
CONMED put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
