Avanos Medical 2025 Q3 Earnings Turns to Loss Despite Revenue Beat

Avanos Medical (AVNS) reported Q3 2025 earnings on Nov 5, 2025, with revenue of $177.8 million, exceeding estimates and reflecting strong performance in its Specialty Nutrition Systems segment. The company raised full-year revenue guidance to $690–700 million but swung to a net loss of $1.4 million, down from a $4.3 million profit a year ago, due to tariff impacts and operational challenges.

Revenue

Avanos Medical’s total revenue rose 4.3% year-over-year to $177.8 million in Q3 2025, outpacing the $164.5 million consensus estimate. The Specialty Nutrition Systems segment led with $114 million in revenue, driven by robust demand for enteral feeding and neonate solutions. Pain Management and Recovery contributed $59 million, with Radiofrequency Ablation growth offsetting declines in surgical pain products. Corporate and Other revenue totaled $4.8 million, completing the $177.8 million net sales.

Earnings/Net Income

The company swung to a net loss of $1.4 million ($0.03 per share) in Q3 2025, compared to a $4.3 million profit ($0.09 per share) in Q3 2024. The earnings decline reflects a 132.6% deterioration in net income and highlights ongoing margin pressures from tariffs and operational inefficiencies.

Price Action

AVNS shares fell 13.86% in the latest trading day, 6.74% in the past week, and 7.94% month-to-date, reflecting market concerns over profitability and debt levels.

Post-Earnings Price Action Review

Following the earnings release, AVNS shares surged 11.59% in pre-market trading to $12.32, driven by the revenue beat and raised guidance. The stock closed the day at $12.10, maintaining 9.5% gains relative to pre-earnings levels. However, risks loom large: $18 million in annualized tariff costs and $77 million in goodwill impairment could pressure near-term profitability. The company’s Altman Z-Score of -0.41 indicates financial distress, and $102.8 million in debt outstanding post-Q3 underscores liquidity risks. While short-term momentum appears positive, long-term sustainability remains uncertain.

CEO Commentary

David Pacitti, CEO, emphasized strong execution in Specialty Nutrition Systems and Pain Management & Recovery, citing double-digit growth in enteral feeding and RFA solutions. He noted strategic acquisitions, including Nexus Medical, to bolster NICU/PICU offerings, and highlighted cost-saving initiatives targeting $15–20 million in annualized savings by 2026.

Guidance

Avanos raised 2025 revenue guidance to $690–700 million and adjusted EPS to $0.85–0.95, reflecting confidence in mitigating tariff impacts through pricing and cost controls. However, risks persist if tariffs exceed expectations or mitigation efforts fall short.

Additional News

Avanos Medical completed the acquisition of Nexus Medical, enhancing its SNS portfolio for neonatal and pediatric care. The company also divested its hyaluronic acid (HA) product line to Channel-Markers Medical, LLC, focusing on core SNS and Pain Management & Recovery segments. Additionally, Avanos announced a $15–20 million annualized cost-saving plan through organizational streamlining and R&D efficiency improvements, aiming to offset $18 million in tariff-related costs.

Backtest Analysis

CEO Commentary

Guidance

Additional News