Avanos Medical (AVNS) Q4 2025 earnings summary

Executive summary

• Delivered FY25 revenue of $701 million, surpassing revised guidance, with adjusted EPS at $0.94 at the high end of expectations and 6% organic growth in strategic segments driven by Specialty Nutrition Systems (SNS) and Pain Management & Recovery (PM&R).

• Transformation initiatives are expected to deliver $15–$20 million in annualized savings by end of 2026.

• Divested hyaluronic acid (HA) business, exited IV therapy and Game Ready rental businesses, and completed the acquisition of Nexus Medical.

• Strategic focus on SNS and PM&R segments drove above-market growth.

Financial highlights

• Q4 net sales were $180.9 million; full-year net sales rose to $701.2 million, with 6% organic growth in strategic segments.

• Adjusted diluted EPS for the year was $0.94; Q4 adjusted EPS was $0.29.

• Adjusted EBITDA for the year was $87 million; Q4 adjusted EBITDA was $28 million.

• Adjusted gross margin for the year was 54.6%; Q4 was 53.4%.

• Free cash flow for the year was $43.1 million, down from $82.9 million prior year.

Outlook and guidance

• 2026 net sales expected between $700 million and $720 million; adjusted diluted EPS guidance is $0.90–$1.10.

• SNS segment projected to grow mid to high single digits organically; PM&R segment low to mid single digits.

• Full-year tariff P&L costs expected to be ~$30 million, up $12 million from 2025, with majority impacting neonatal products.

• Gross margin improvement anticipated in the second half of 2026 and into 2027 as tariff mitigation completes.

• Transformation initiatives projected to yield $15–$20 million in annualized savings by end of 2026.