A medical technology company, Enovis makes orthopedic braces, bone growth stimulators, pain management devices, and surgical implants for joint replacement and limb reconstruction. It grew out of the 1995 founding of Colfax by the Rales brothers, who bought DJO (maker of the well-known DonJoy knee braces) in 2019, then spun off their welding business in 2022 and renamed the rest Enovis—a name blending "innovation" and "vision."
Enovis swung to an operating profit in Q2 2026 as gross margin hit 61.6% and goodwill impairment charges ceased.
Enovis posted its second consecutive quarter of after years of losses driven by impairments. rose 3.2% to $582.8 million and expanded 2.4 points to 61.6%, helped by lower acquisition charges and a net tariff benefit. The company is now generating consistent operating profits, but remains constrained by elevated .
Key takeaways
The company reported of $17.4 million, a swing from a $16.8 million loss a year earlier, marking the second straight quarter of profitability after a multi-year period dominated by non-cash charges.
expanded 2.4 points to 61.6%, driven by a $6.0 million reduction in tied to the acquisition, a $4.0 million net tariff benefit from refunds, and favorable product mix.
Section summaries
Management's Discussion and Analysis
Enovis Q2 2026 sales rose 3.2% to $583M, with Recon driving growth and margins expanding on lower acquisition charges.
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Total grew 3.2% to $582.8M, driven by a 7.5% increase in the to $294.5M, while declined 0.8% to $288.2M due to the Dr. Comfort divestiture.
rose 3.2% to $582.8 million, with the up 7.5% to $294.5 million while declined 0.8% to $288.2 million due to the divestiture of the business.
Adjusted rose 14.4% to $104.3 million and its margin improved 1.7 points to 17.9%, as growth and a sharp drop in strategic transaction costs more than offset higher R&D investment.
Strategic transaction costs fell to $1.4 million from $13.5 million a year earlier, helped by a $5.7 million gain on a settlement and reduced integration spending.
improved to $75.0 million from $47.8 million, while turned positive at $31.1 million after a $31.6 million use a year earlier, though year-to-date free cash flow remains slightly positive at $2.2 million.
What changed
The Q1 2026 watch item on sustainability was answered: gross margin held at 61.6%, down only 0.4 points sequentially from 62.0%, as the remaining continued to decline and a $4.0 million net tariff refund provided an additional .
The Q1 2026 watch item on and showed mixed results: free cash flow turned positive at $31.1 million in Q2 after a $28.9 million use in Q1, but the $52.8 million increase in capital spending noted in Q1 continued to weigh on full cash conversion.
The risk flagged in Q1 2026 did not materialize this quarter, and no new charge was recorded, following the cumulative $1.19 billion in charges taken in Q4 2024 and Q3 2025.
declined to $1,247.1 million from $1,291.0 million in Q1 2026, a 3.4% sequential reduction, as the company began to pay down borrowings.
What to watch
Q3 2026 as the $4.0 million net tariff refund benefit in Q2 reverses, testing whether the 61.6% level can be sustained on product mix and supply chain productivity alone.
Whether the $5.7 million gain on settlement in Q2 is a one-time item or signals further reductions in acquisition-related liabilities.
Q3 2026 after the $31.1 million Q2 result, to confirm the trajectory toward sustained positive free cash flow against elevated to support growth.
level from the $1,247.1 million Q2 base as the company balances cash generation against its $942 million in availability.
expanded 230 to 61.6%, benefiting from a $6.0M reduction in , a $4.0M net tariff benefit from refunds, and favorable product mix.
rose 14.4% to $104.3M with margin improving 170 to 17.9%, as growth and lower strategic transaction costs more than offset higher R&D investment.
Strategic transaction costs fell sharply to $1.4M from $13.5M, driven by a $5.7M gain on a settlement and reduced Lima integration spending.
improved significantly to $99.0M from $46.2M, supported by higher , lower integration costs, and improved collections.
The company maintains ample liquidity with $942M available on its and expects current sources to fund operations for the next twelve months.
Quantitative and Qualitative Disclosures About Market Risk
Enovis faces interest-rate, currency, and commodity risks, using swaps and forwards to hedge but with some hedges now undesignated.
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A hypothetical 1% rate rise would have increased on variable-rate SOFR-based debt by $2.2M (Q2) and $4.3M (YTD).
About 44–45% of sales came from outside the U.S., with the Euro and U.S. Dollar as the heaviest currency exposures.
Cross-currency swaps hedge net investments in Swiss Franc subsidiaries, but a portion became undesignated after prior-year impairments reduced the net investment base.
Undesignated cross-currency swaps now flow fair-value changes through non-operating Other income (expense) until hedge designation is restored.
New forward contracts totaling $303.1M notional (USD/CHF and USD/EUR) were entered to hedge intercompany loan balances and are designated as fair-value hedges.
Commodity price risk is managed through fixed-price contracts directly with suppliers rather than financial derivatives.
Discussion of legal proceedings is incorporated by reference to Note 12, “Commitments and Contingencies,” in the Notes to Condensed Consolidated Financial Statements included in Part I. Item 1. “Financial Statements” of this Form 10-Q.
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Discussion of legal proceedings is incorporated by reference to Note 12, “Commitments and Contingencies,” in the Notes to Condensed Consolidated Financial Statements included in Part I. Item 1. “Financial Statements” of this Form 10-Q.
An investment in our common stock involves a high degree of risk. You should carefully consider the risks set forth in “Part I. Item 1A. Risk Factors” of our 2025 Form 10-K and the other information set forth in this Form 10-Q, and the additional information in the other reports…
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An investment in our common stock involves a high degree of risk. You should carefully consider the risks set forth in “Part I. Item 1A. Risk Factors” of our 2025 Form 10-K and the other information set forth in this Form 10-Q, and the additional information in the other reports we file with the SEC before making an investment decision. If any of the risks contained in those reports actually occur, our business, results of operation, financial condition, and liquidity could be harmed, the value of our securities could decline, and you could lose all or part of your investment. Except as set forth below, there have been no material changes in the risk factors set forth in “Part I. Item 1A. Risk Factors” in our 2025 Form 10-K.