How did BVS outperform EPS forecasts in Q4 2024?

Bioventus Inc. (BVS) outperformed EPS forecasts in Q4 2024 primarily due to strong revenue growth in its Pain Treatments and Surgical Solutions segments, which contributed to a higher gross profit and improved profitability metrics.

1. **Revenue Growth in Pain Treatments and Surgical Solutions**:
- Bioventus reported a 14% revenue growth in Q4, driven by strong performance in surgical solutions and pain treatments.
- Pain Treatments revenue increased by 18.7% to $62.8 million, while Surgical Solutions revenue rose by 16.8% to $46.43 million.
2. **Gross Profit Improvement**:
- The company recorded a gross profit of $388,226,000 for 2024, an increase from $328,193,000 in 2023.
- This increase was attributed to higher net sales and improved gross margins, which were enhanced by a favorable product mix.
3. **Strategic Debt Repayment**:
- Bioventus successfully paid down nearly $50 million in debt in Q4, improving its liquidity position.
- This strategic move not only enhanced financial stability but also reflected the company's ability to manage its financial obligations effectively.
4. **Operational Efficiency and Cost Management**:
- The company's adjusted EBITDA margin improved by 160 basis points, indicating enhanced profitability.
- Cost of sales for 2024 was $185,054,000, representing 32.3% of net sales, a decrease from 35.9% in the previous year, due to a favorable product mix.

In summary, Bioventus' outperformance in Q4 2024 can be attributed to its successful execution of strategic growth initiatives, strong revenue growth across key segments, improved gross margins, and effective cost management. These factors collectively contributed to the company's financial strength and positive earnings surprise.