Conmed Corp (CNMD) 2025 Q4 法說會逐字稿

Thank you for standing by. Welcome to Conmed's fourth quarter fiscal 2025 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.

Before the conference call begins, let me remind you that during this call, management will be making comments and statements regarding its financial outlook, its plans, and objectives. These statements represent the forward-looking statements that involve risk and uncertainties as those terms are defined under the federal securities laws.

Investors are cautioned that any such forward-looking statements are not guarantees of future events, performance, or results. The company's actual results may differ materially from its current expectations. Please refer to the risk and other uncertainties disclosed under the forward-looking information and today's press release, as well as the company's SEC filings for more details on the risk and uncertainties that may cause actual results of differ materially.

The company disclaims any obligation to update any forward-looking statements that may be discussed during the call, except as may be required by applicable law. You will also hear management referred to non-GAAP or adjusted measurements during this discussion. While figures are not a substitute for GAAP measurements, management uses these figures at in monitoring the company's ongoing financial performance from quarter to quarter and year to year on a regular basis and for benchmarking against other medical technology companies.

Adjusted net income and adjusted earnings per share measure the income of the company, excluding credits or charges that are considered by the company to be special or outside its normal ongoing operations. These adjusting items are specified in the reconciliation supporting the company's earnings releases posted to the company's website.

With these required announcements completed, I will turn the call over to Pat Beyer, President and Chief Executive Officer, for opening remarks. Mr. Beyer?

Good afternoon, and thank you for joining us for Conmed's fourth quarter 2025 earnings call. With me today is Todd Garner, our Executive Vice President and Chief Financial Officer. I'll start and provide you with an overview of our fourth quarter and full year results and then share updates on our strategic priorities. Todd will then take you through the financials and our 2026 guidance in more detail before we open up the call for your questions. Before I dive into the quarter, I'd like to recognize the continued dedication of our global team, their commitment to our mission to our customers, and to one another is evident in every part of our company.

I'll start by briefly reviewing our fourth quarter and full year results. Total sales for the quarter were $373.2 million, representing a year over year increase of 7.9% as reported and 7.1% in constant currency. For the full year, sales were $1.375 billion, representing year over year growth of 5.2% as reported and 5.1% in constant currency. Orthopedic sales increased 12.1% in the fourth quarter and 5.5% for the full year on a constant currency basis. In general surgery, sales increased 3.8% in the fourth quarter and 4.7% for the full year in constant currency.

Fourth quarter adjusted earnings per share of $1.43 grew 6.7%, while full year adjusted EPS of $4.59 grew 10.1%. Earlier this month marked my first anniversary as CEO of Conmed. Over the past year, due to extensive discussions with internal and external stakeholders that culminated in a comprehensive portfolio review, my conviction in where Conmed can win has only strengthened. We win where innovation and minimally invasive surgery converge in robotic and laparoscopic surgery and smoke evacuation and an orthopedic soft tissue repair. These are high-growth, high-margin markets where we are uniquely positioned to lead with our differentiated products and strong commercial teams.

As part of that portfolio review, in December, we announced the decision to exit our gastroenterology product lines. While this creates some near-term earnings dilution, the move aligns with our resources tightly to our strongest growth drivers and is expected to improve our long-term consolidated growth margin profile by approximately 80 basis points once complete. This was a thoughtful and strategic decision that positions Conmed to deploy capital and talent where we create the most value.

When I stepped into the CEO role, it was clear that we needed to resolve the supply chain constraints in sports medicine that had weighed on the growth of our Orthopedics portfolio. We put the right focus and resources in place people, planning, and production. We engaged a top-tier outside consultant, invested in infrastructure, and are building out a strong operations team.

We made meaningful progress in 2025, culminating in our strongest growth quarter of the year in the fourth quarter. We ended the year with our backorder value and number of SKUs on back order at a 3-year low, and we continue to make additional progress in the first quarter.

We are not yet at our goal of operating a world-class supply chain but we have made significant progress and are at a point where our sales force can once again be proactive with our growth drivers. Looking forward, we view the work ahead across two primary objectives. The first is to stabilize the scale, build reliable, repeatable processes that give a sustainable supply resiliency, and enable our teams to be on offense. We have made meaningful progress here.

The second longer term, objective is to build a high-performance supply chain that is agile, data-driven and capable of supporting sustained nation. Completing the second objective is what we believe will allow us to deliver sustained above-market growth in our Orthopedic portfolio over time.

Now turning to our three high-growth platforms. I'll start with AirSeal, our clinical insufflation system used in robotic and laparoscopic surgery. AirSeal was used in approximately 1.6 million procedures in 2025 and reflecting its established role in complex surgical cases with a clinical benefit of stable, low pressure in inflation are modes pronounced.

Utilization and robotic surgery remains in line with expectations with consistent engagement from surgeons who value its clinical profile. The expansion of the robotics market outside the US and into lower-cost settings, such as ambulatory surgery centers, represents an additional opportunity for AirSeal. These environments are well aligned with the clinical and economic benefits AirSeal delivers, and we expect them to play an increasingly important role in our long-term growth. We continue to see meaningful white space and traditional laparoscopy.

In the US alone, there are more than 3 million laparoscopic procedures performed annually, and AirSeal today is utilized in only about 6% to 7% of cases. As we scale our commercial efforts and drive greater awareness of the clinical and economic benefits that mirror what we've demonstrated in robotics, we believe that laparoscopy represents a substantial long-term growth lever. Taken together, these dynamics reinforce our confidence that AirSeal can deliver high single digits to low double-digit rate growth over the long term, which is what we saw in both the fourth quarter and the full year 2025.

Next, I'd like to turn to Buffalo Filter, which remains one of our most compelling long-term opportunities. Surgical smoke evacuation is now recognized as a $1 billion-plus potential global market yet is still in the early stages of adoption. Today, 20 US states representing approximately 1% of the population have enacted smoke-free operating room legislation, and we continue to see steady progress internationally, including early momentum across the Nordic countries and Canada.

We are also leading the market with product innovation, our next-generation Ploom Safe X5 launched in the first half of 2025 delivers significantly enhanced performance, quieter operation, and faster, more efficient smoke clearance, strengthening our competitive position, and expanding the clinical and economic value we bring to customers.

Our third high-growth platform is BioBrace, which has become a signature element of our sports medicine strategy. BioBrace is now used across more than 70 unique procedures, demonstrating both the breadth of the surgical adoption and the versatility of the technology. Our BioBrace RC delivery system launched last year has further strengthened this momentum by making rotator cuff repair more reproducible and expanding our access to a broader set of surgeons.

Clinically, the BioBrace platform is backed by a growing body of evidence. Our 268 patient randomized controlled trial remains on track to complete enrollment in 2026 with publication expected in 2027. And as of 2025, The American Academy of Orthopedic Surgery Guidelines recommended augmentation for rotator cuff repair. We are also seeing increasing utilization of BioBrace and foot and ankle procedures where surgeons are recognizing the same benefits in strength, hemin, support, and workflow efficiency. We expect this trend to continue as BioBrace becomes further embedded across a wider range of soft tissue repairs, reducing revision rates, and promoting faster healing. Turning to the balance sheet. Our strong cash engine brought leverage to 2.9 times in the fourth quarter giving us the flexibility to lean into innovation, growth, and capital returns.

As we announced in the third quarter, our Board suspended our dividend and approved $150 million share repurchase authorization. Historically, the dividend represented roughly $25 million annually and deploying at least that level into repurchases, it creates to approximately $0.07 of EPS in 2026. We importantly, we view this as a minimum, not a ceiling.

Taken together, our financial strength, our operational progress and the potential of our growth platforms gives us confidence in the path forward. Our focus remains clear: getting Conmed back to above market growth.

We will do this by leaning into our core strength, continuing to normalize supply and sports medicine operating with discipline and focus and investing in high-growth, high-margin platforms. I'm part of our progress in 2025 and energized by the opportunity ahead.

Before I turn the call over to Todd, I want to briefly address the CFO transition we announced earlier this month. Todd and I have been discussing long-term leadership structure and alignment for some time. And together, we concluded this is the right moment for both him and for CONMED.

Todd will remain CFO through the transition and will then move into an advisory role, ensuring continuity while we complete a comprehensive search for our next CFO. He has been instrumental in strengthening Conmed's financial foundation over the past eight years. And on behalf of our Board and our entire leadership team, I want to thank him for his partnership, contributions, and unwavering commitment to CONMED. With that, I'll turn the call over to Todd, who will provide a more detailed analysis of our financial performance and discuss our 2026 financial guidance. Todd?

Thank you, Pat. It's been an honor to be Conmed's CFO and working with you focused on delivering for our shareholders. I'm committed to a smooth transition with a continued focus on what is best for Conmed and our shareholders. All sales growth numbers I reference today will be given in constant currency. The reconciliation to GAAP numbers is included in our press release. As usual, we have included an investor deck on our website that summarizes the results of the quarter, the year, and our financial guidance. For the fourth quarter of 2025, our total sales increased 7.1%.

For Q4, our sales in the US increased 1.4% versus the prior year quarter, our international sales grew 15.4%. Total worldwide Orthopedic sales grew 12.1% in the fourth quarter. In the US, Orthopedic sales grew 6.6% and and internationally, Orthopedic sales increased 15.7%. Total worldwide general surgery sales increased 3.8% in the quarter.

US general surgery sales declined 0.4%, while internationally, general surgery sales increased 14.8%. The decline in the US was driven by our OEM smoke evacuation SKUs, which we've been clear as a nonfocus area for us. The second biggest decline in the US general surgery in Q4 was related to strategic portfolio management within our energy platforms. As you've heard from us, we're increasing focus on our growth drivers, and as Pat said, AirSeal grew globally within our exited range with positive demand in the US

For the full year 2025, our total sales increased 5.1%. For the full year, our US sales grew 3.5%, and international sales grew 7.1% versus the prior year. Total worldwide Orthopedic sales increased 5.5% for the full year 2025. In the US, Orthopedic sales grew 2.3% and internationally, Orthopedic sales increased 7.6%. Total worldwide general surgery sales increased 4.7% for the full year 2025. US general surgery sales grew 4.0% while internationally, general surgery sales increased 6.4%.

Now let's move to the expense side of the income statement. We'll discuss expenses and profitability in the fourth quarter and the full year, excluding special items, which are detailed in our press release. Adjusted gross margin for the fourth quarter was 56.6%, down 100 basis points from the prior year period, driven by the expected tariff impact. For the full year, adjusted gross margin was 56.4%, an increase of 10 basis points over 2024 and despite the new tariffs.

Adjusted research and development expense for the fourth quarter was 3.8% of sales, the same as the prior year quarter. For the full year adjusted R&D expense was 4.0% of sales, 20 basis points lower than 2024. Fourth quarter adjusted SG&A expenses were 35.6% of sales, the same as the prior year quarter. For the full year, adjusted SG&A expenses were 37.1% of sales, also the same as 2024. On an adjusted basis, interest expense was $5.8 million in the fourth quarter and $25.4 million for the full year. The adjusted effective tax rate in Q4 was 25.7%. For the full year, our adjusted effective tax rate was 24.9%.

The Fourth quarter GAAP net income was $16.7 million compared to $33.8 million in Q4 of 2024. GAAP earnings per diluted share in Q4 were $0.54 this quarter compared to $1.08 a year ago. For the full year, GAAP net income was $47.1 million compared to GAAP net income of $132.4 million in 2024. GAAP earnings per diluted share were $1.51 in 2025 compared to $4.25 in 2024. Excluding the impact of special items discussed earlier, in the fourth quarter, we reported adjusted net income of $44.4 million, an increase of 6.2% compared to the fourth quarter of 2024.

Our Q4 adjusted diluted net earnings per share were $1.43, an increase of 6.7% compared to the prior year quarter. For the full year of 2025, we reported adjusted net income of $143.1 million, an increase of 10.1% compared to 2024. Our full year adjusted diluted net earnings per share were $4.59 and also an increase of 10.1% compared to the prior year. Turning to the balance sheet. Our cash balance at the end of the year was $40.8 million compared to $38.9 million as of September 30.

Accounts receivable days as of December 31 were 60 days, the same as the end of Q3 and 2 days lower than a year ago. Inventory days at year-end were 207 compared to 191 at September 30 and 211 days a year ago. Long-term debt at the end of the year was $834.2 million versus $853.0 million as of September 30. Our leverage ratio on December 31 was 2.9x. Cash flow provided from operations in the quarter was $46.3 million compared to $43.3 million in the fourth quarter of 2024.

Cash flow provided from operations for the full year 2025 and was $170.7 million compared to $167.0 million in 2024. Capital expenditures in the fourth quarter were $5.1 million compared to $4.0 million a year ago. For the full year, capital expenditures were $19.8 million in 2025, compared to $13.1 million in 2024.

Now let's turn to financial guidance. Let's start with revenue. We're guiding the full year reported revenue between $1.345 billion and $1.375 billion, which represents constant currency organic growth between 4.5% and 6%, with FX tailwind between zero and 50 basis points. We've provided the detailed assumptions in our investor deck in conjunction with this call. That deck also shows the moving pieces in adjusted gross margin from 2025 to 2026. We're guiding a net improvement of 50 to 100 basis points for the full year despite digesting headwinds from incremental tariffs between 100 and 110 basis points. The improvement is driven by our continued strong organic mix tailwind and cost improvements.

We expect adjusted SG&A expense as a percentage of sales to be between 38.0% and 38.5% in 2026. The increase is due to lower sales because of the GI exit and increased investments to accelerate our key growth drivers. We expect full year adjusted R&D expense in 2026 to be between 4.5% and 5% of sales. This represents an increased investment to support our key growth drivers (inaudible).

Capital expenditures in the fourth quarter were $5.1 million (inaudible) operating cash flow in 2026 to be between $145 million and $155 million with capital expenditures in the $20 million to $30 million range, putting free cash flow around $125 million for the year. We project adjusted EBITDA between $255 million and $265 million for 2026. For Q1 specifically, we expect reported revenue between $308 million and $313 million. We expect adjusted SG&A expense in Q1 as a percentage of sales to be the highest quarter of the year and above the range we guided for the full year. We expect adjusted EPS in Q1 to be between $0.80 and $0.83.

Our 2026 plan is built to strengthen the portfolio by increasing the focus and investments on our key growth drivers. As Pat said, our financial strength, our operational progress, and the potential of our growth platforms give us confidence in the path forward. With that, we'd like to open the call to your questions, and I'll hand it back to the operator.

(Operator Instructions) Vic Chopra, Wells Fargo.

I really enjoyed working with you. So I appreciate the color you gave on Q1, but perhaps can you talk about how you see the rest of the year playing out from a cadence standpoint? And any selling day differences to highlight for the year? And then I have a quick follow-up.

Yes. No selling day differences, thank fully. All the quarters were look the same. Of course, we're all around the world, right? And so there could be some rounding but they all round to the same number of days for the quarters.

And I wouldn't call anything out other than normal seasonality that we -- that's typical but as medtech plays out through the quarters. So we called out Q1 and I would say the rest of the year should follow the normal sequence that the medtech calendar does.

Okay. Great. And my follow-up question is for Pat. But can you maybe just talk about where you are with the CFO search? I'm sure they're pretty big shoes to fill and maybe talk about what you're looking for in a new CFO?

Vik, appreciate the question. Again, it's an important role for the company. We've been blessed to have Todd as our CFO at CONMED for eight years, and I've been lucky to have him as a teammate. We are actively searching now. I'm looking for a CFO that exhibits the same dynamics that Todd did, which is a CFO that will be focused on shareholder value accretion and be a great teammate to the leadership team and will be a steward of the CONMED shareholders that we have.

Robert Marcus, JPMorgan.

Great. Just for me, Todd, I just wanted to ask on the slides you showed at our health care conference in the slides you showed today, different organic revenue numbers, same similar growth rates but different organic revenue numbers. Maybe you could just walk through that. And then I had a follow-up.

Yes, absolutely. Robbie, your conference was, I think, on the fifth business day of the year, so the final '25 numbers were still rolling up. What we guided was in the neighborhood of 4% to 6% organic constant currency growth at your conference, as the final '25 numbers come into play, and that's now the base, we landed at 4.5% to 6%, which is just more precise. So I would say at your conference, we were a little wider on the characterization. And now we're a little more precise with the final '25 numbers and the specific '26 pieces of how it all lays out.

Great. Then a follow-up. It looks like versus the Street, you beat pretty handily in ortho and mist in surgery. I was hoping you could just talk through what drove the upside in ortho? What drove the downside?

And how you're thinking about the two different businesses throughout '26.

Robbie, thanks for the question. Pat here. I'll take that. Again, we feel good about both pieces of our portfolio. Again, soft tissue augmentation and sports medicine repair is a strong platform for us, and robotic and laparoscopic innovation platforms also continue to be a strong platform for us.

I'll take the Orthopedic side first. We really had four things, Robbie, I would call out on the ortho side. So how did we be, number one, I would just level set everybody, the base of our ortho performance is a group of committed sales professionals that have continued to support our clinicians tirelessly through the supply chain challenges we've had. So when you have that and then you have the benefit of an improving supply chain, continued strength of BioBrace. And we've got a positive benefit of some of the clinical solutions CONMED has had approved in the United States that we're now getting those approved around the world.

And in the fourth quarter, our European business was able to launch our a meniscal repair program that had just been approved on it. So really 3 good things happening on the global side for our Orthopedic business. On the general surgery side, Robbie, I want to confirm that our smoke and our AirSeal business performed in line with guidance that we've said it would do, which is high single digits to low double digits. On the backdrop of that, the USA GS growth was impacted by our continued execution on portfolio management and focusing on our growth drivers. During the fourth quarter and during 2025, we've been doing heavy portfolio management, and we exited some minor products in the GS range, and we continue to focus on our direct smoke business.

Those things will continue to evolve, but our focus continues to be accretive growth over the long term. and continue to factor this approach into our guidance. And so we knew what we were doing in quarter 4. We tried to include that in our guidance and the overall macro level for CONMED.

Matthew O'Brien, Piper Sandler.

Todd, maybe just to follow up on Robbie's question, and I'm trying to do this on the fly and get all these numbers correct with FX. And and the GI divestiture. But it just seems like the constant currency full year number for CONMED is a little bit lower than what you said at JPM a few weeks ago. Am I doing the math on that wrong? Or is it just -- is it just the delta in terms of how you did versus the Street on '25 that makes things maybe a little skewed in terms of how we're calculating things.

Yes. It really is just the finish of '25 and then the mix between what's expected in the GI business. That's the only piece really, there's FX and then the GI sales. So we got to the total dollar range that we gave at JPMorgan,but the pieces shook out just slightly when you add in the prior year starting point for both the GI business and the organic side of the business.

Okay. But no change to the organic full year expectation of slowdown in the core organic number?

Yes. Again and again, I think we just spoke a little more generally at JPMorgan when we said the 4% to 6% range, and when you put a decimal point on that, on the final numbers, including where 2025 ended, it rounds to 4.5 to 6 million. So it's just a little more precision in that communication today versus at JPMorgan.

Got it. And then maybe for Pat, just going back to AirSeal. It has decelled from the 20% range down to high single digits to low doubles like you've mentioned. Still good growth there. Is that still a $200 million, $250 million business roughly kind of growing at that rate?

And then the confidence in that growth rate going forward I know that traditional lap is underpenetrated. I get that but robotics has been so easy to drive that growth. And then the ASC setting is a lower cost setting generally. So in AirSeal much more expensive than traditional insufflators. So again, putting all that together, why are you still confident in the high single to low double-digit growth rate going forward?

Matt, fair question and good question. Again, I'm not going to comment on the scale of specifically AirSeal. I will draw your attention to the investor deck, which has a pie chart that kind of shows the AirSeal and our direct smoke as a pie. So you see that it's a significant portion of the company. We also believe it's a high single-digit, low double-digit grower based on what we're seeing in the clinical performance and the clinical acceptance and demand from customers we're seeing globally.

And we still feel really strongly about the two lanes that we can swim in there being the laparoscopic robotic opportunities we have globally, and the laparoscopic nonrobotic procedures that we're seeing as an opportunity globally. And we continue to see those evolve and strengthen as the clinical outcomes that we're seeing with reduction in length of stay and reduction in pain continue to play out there.

Travis Steed, Bank of America.

I guess there's still some people confused, Todd, on the slides. If you look at the organic constant currency dollar number, it's about $100 million lower than it was at JPMorgan. So I just want to understand any way to kind of bridge that $100 million difference because I think it was like $1324 million on the current slide deck versus $1423 million to $1450 million before?

Yes. So the organic -- when we communicated with '25 in the base, we were talking about organic from that base, which has GI in that base number. But as we move to '26 and GI is out of the number, we're now talking about the organic without that number. So that's really just -- and you'll notice, if you go look at the JPMorgan deck, the GI impact was presented as a negative from that number, right? But now the presentation is GI revenue as a positive number.

So instead of taking the GI impact subtracted from that top number, you now have the true organic going forward in the '26 baseline, and then the GI sales as a positive of what we expect to sell in the GI business. So it's a -- there is a difference in how it was presented. That's true, Travis. Thanks for that clarification.

Yes, I just want to make sure it was clear. And going forward, how will the GI be reported?

Yes, it will be reported separately as we're doing it in this deck.

Mike Matson, Needham & Company.

Yes. Thanks. So I know there was a question on kind of the growth in general surgery versus orthopedics but the other kind of difference I saw was US versus OUS. So OUS seem particularly strong, whereas US is a little weaker, taking both businesses into account. So can you maybe talk about what happened there? And then on the international side, was any of that kind of one-off like stocking orders for distributors or anything like that? Or is that just true kind of in demand?

Two things I'd say, let's focus on the US general surgery. Again, when I talk about the portfolio management, the two items were we exited one of our small minor product lines that impacted the US more than international. And when I talked about focusing on our direct smoke business, our OEM business is in the United States.

So those two items impact the US more than they do internationally. And international, again, we -- you're right to call out that we do have distributors around the world, but we're not in -- we don't stock distributors there. Distributors are managing their business at year-end and the demands they have with their customers and their supply chains and their systems economically around the world. And so it wouldn't have called that.

But we did have a strong international fourth quarter. and it does cause us to pause and think about how Q1 will be internationally in that. (inaudible)

Just given the supply chain, I didn't know if there were some back orders that you filled or something like that. But I understand you're right -- so then I guess the other question would just be -- so you put the GI benefit -- it sounds like you did kind of a comprehensive review of the entire portfolio. So is there a potential to see any other exits or divestitures from here? Or are you happy with what's left at this point?

Two things. Portfolio management is going to be a continual operational execution that we will go through. And you saw that in quarter 4 in the United States where we exited a small product line. We feel really strongly about our growth platforms and our growth drivers today. That's something our portfolio review showed us.

We feel strongly about our sports medicine tissue augmentation and repair market and feel strongly about our laparoscopy minimally invasive market. And we'll continue to drive at our growth drivers there. And today, we do not see any major portfolio management that would warrant signaling that like the GI opportunity we saw and was appropriate to do.

Young Li, Jefferies.

All right. Great. Todd, great working with you and wishing you all the best going forward. I guess first question just on AirSeal. Is it possible to get a little bit more color about maybe OUS growth trends because tied a little bit less to DB5 and intuitive.

And then also for the US laparoscopic opportunity underpenetrated. But how has that share capture with Charge been trending over the past few years?

Young, Pat here. As we think of -- again, macro comments, I would say, on AirSeal, it continued to perform in the range that we said globally, high single digit, low double digits. The attachment rate to DB5 continue to be in the range that we said it would be between 10% and 20%. What we're seeing globally is these two opportunities we have, laparoscopic and robotic pace itself differently. So where internationally, our business was more tilted towards laparoscopic.

We're now seeing more Xis and the robotic opportunity present itself. And so we're expanding into that opportunity. In the United States, we've been more robotic-focused and we've been tilted towards that. And we're now seeing the 3 million-plus procedures annually in the United States and the laparoscopy opportunity present itself, and we're moving more into that. We think of those four swim lanes being presented in two geographies, and they're not going to sequence themselves perfectly at the same time in each area, in each geography. But we see those as strong growth opportunities for us that we're continuing to drive into.

All right. Got it. I appreciate the comments. I guess one on investments. Now that your leverage is below 3. Can you maybe talk about the appetite and interest in M&A again, thoughts on valuation and the target environment out there? And then I think you also mentioned at JPMorgan, a focus on organic investments. Maybe if you can talk about some of the things in the pipeline at the high level, that would be helpful.

Young, I'll comment some macro comments and then turn it to Todd, if he has any other things. Again, we're continuing to look at M&A in areas that we can -- technologies that we can tuck-in to the segments we're focused on. And so it's important that we continue to do that. We're also continuing to be prudent and pragmatic with internally investing organically. You would see in our -- in the earnings script, we talk about our investment into R&D, and we're spending more on that in 2026 than we have done historically as we continue to invest in these growth platforms that we feel strongly with.

So I think what you're going to see from us is a continued balanced approach there. You're seeing our leverage go down, which makes it more easier and more appropriate for us to consider and pursue external acquisitions. At the same time, I would remind you, we've continued to tell the outside world. We have not walked away from any M&A opportunity that we felt was the right technology or the right company to be in Conmed's hands, and we continue to follow that approach. Todd, anything I missed?

No. I think it's a. I don't wanna anything to add.

Thank you. I would now like to turn the call back over to Pat Beyer for any closing remarks.

Thanks, Josh. I want to thank everybody for joining us on our quarter 4 earnings call. We are -- we feel good about a strong quarter 4 for CONMED. We've had a solid 2025. We move into 2026 smarter, and with a strong conviction to deliver on our commitments to our shareholders and the patients we serve in 2025, 2026. Thank you very much.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.