Avanos Medical, Inc. (AVNS): Business Model Canvas [Dec-2025 Updated]

You're digging into how Avanos Medical, Inc. is actually making money as they push through their 2025 transformation, right? Honestly, the core engine is shifting hard: they are doubling down on opioid-sparing pain relief, like their RFA tech, and life-sustaining nutrition, aiming for that $690 million to $700 million revenue target this year while shedding non-core bits. It's a classic pivot, supported by $46.5 million in operating cash flow over the first nine months, but it hinges on successful execution in their direct sales channels and managing those tariff headwinds on COGS. Dive into the full Business Model Canvas below to see exactly where the resources are flowing and what the real risks are in this strategy.

Avanos Medical, Inc. (AVNS) - Canvas Business Model: Key Partnerships

You're looking at how Avanos Medical, Inc. (AVNS) is structuring its external relationships as of late 2025, especially following major portfolio adjustments. These partnerships are critical because they define where the company is focusing its capital and operational energy.

Channel-Markers Medical, LLC for HA divestiture

Avanos Medical, Inc. executed a significant portfolio streamlining move by divesting its Hyaluronic Acid (HA) product line, which includes TriVisc® and GenVisc® 850 injection products, to Channel-Markers Medical, LLC (CMM). This transfer of ownership officially occurred on July 31, 2025. The HA products had previously contributed to an unfavorable pricing impact on the Adjusted Gross Margin. Avanos Medical committed to providing transition support to CMM through the end of 2025 to ensure service continuity for customers and patients.

WRS for Game Ready US rental transition

The US Game Ready orthopedic rental business was divested to WRS Group, based in Ann Arbor, Michigan. The agreement dictates that WRS Group assumes ownership of substantially all related assets effective December 1, 2025. This transaction is coupled with a long-term distribution and supply partnership. Under this arrangement, Avanos Medical will continue to manufacture and supply Game Ready systems and accessories, with transition support continuing until the end of 2025.

Global distributors for international market reach

Avanos Medical markets its recognized brands globally, with operations spanning North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The overall scale of the business these partners support is framed by the reaffirmed 2025 estimated revenue guidance, which remains between $665 million and $685 million, inclusive of the HA divestiture impact.

• Geographic Footprint: North America, Europe, Middle East, Africa, Asia Pacific, Latin America.
• Specialty Nutrition Systems (SNS) segment delivered 9.1% volume growth for the nine months ended September 30, 2025.

Group Purchasing Organizations (GPOs) for hospital access

Access to hospital systems relies heavily on established relationships, often facilitated through GPOs. While specific Avanos Medical contract data isn't public, the broader US Group Purchasing Organizations industry revenue for 2025 is estimated at $7.3 billion. The industry saw an expansion of 1.6% in 2025 alone.

Technology partners for R&D collaboration

Avanos Medical reinforces its R&D and product portfolio through strategic acquisitions that function as technology partnerships. The company completed the acquisition of Nexus Medical in the third quarter of 2025, adding complementary technology to the Specialty Nutrition Systems business. This follows the 2023 acquisition of Diros Technology Inc., which strengthened the Radiofrequency Ablation (RFA) technology offering.

• Acquired Nexus Medical in Q3 2025 to bolster Specialty Nutrition Systems.
• Acquired Diros Technology in 2023 to enhance RF technology for pain management.
• RFA product net sales grew 10.9% for the nine months ended September 30, 2025.

Here's the quick math on the financial context surrounding these strategic moves as of late 2025:

What this estimate hides is the exact dollar value of the HA divestiture and the terms of the WRS distribution agreement, as those figures weren't disclosed in the reports I reviewed. Finance: draft 13-week cash view by Friday.

Avanos Medical, Inc. (AVNS) - Canvas Business Model: Key Activities

Manufacturing and quality control of medical devices

Avanos Medical, Inc. is actively managing its manufacturing footprint in response to global trade dynamics. The company is accelerating its exit from China for neonatal syringe production, with a target completion date of mid-2026. This activity is tied to managing estimated incremental manufacturing costs from tariffs, which are approximately $18 million for the full year 2025. Quality control is implicitly tied to maintaining product standards across the portfolio, which includes Specialty Nutrition Systems (SNS) and Pain Management and Recovery (PM&R) segments.

R&D for next-generation pain and nutrition solutions

Research and development efforts are evident through the growth in specific product lines. Net sales of Radiofrequency Ablation (RFA) products grew by 10.9% for the nine months ended September 30, 2025, driven by higher procedure volumes in RFA generator sales. The company maintains external research collaborations, such as with the University of Johns Hopkins in Pain Management technologies, valued at $2.3 million annually, and Stanford School of Medicine in Surgical Innovation, valued at $1.7 million annually. The SNS segment saw 9.1% volume growth for the nine months ended September 30, 2025, indicating continued demand for existing nutrition solutions.

Strategic portfolio management (e.g., Nexus acquisition)

Portfolio management involved both divestitures and accretive acquisitions to sharpen focus on core segments. Avanos Medical, Inc. closed the acquisition of Nexus Medical, which is expected to add roughly $5 million of revenue for the full year 2025. This acquisition complements the Specialty Nutrition Systems offerings. Concurrently, the company completed the divestiture of its hyaluronic acid (HA) business. The Game-Ready US rental business transition to WRS is also a key portfolio management activity. Management expects to incur approximately $10 million of mostly Q4-2025 one-time cash charges to deliver expected annualized run-rate cost savings of $15 million-$20 million by the end of 2026. The company's cash on hand as of September 30, 2025, was $70.5 million, which supported the cash-funded Nexus acquisition. The company's debt level is low, with total debt outstanding, net of unamortized discounts, at $105.1 million at June 30, 2025. It defintely shows a focus on strategic alignment.

Global commercial execution and direct sales

Commercial execution is reflected in segment sales performance through the first nine months of 2025. Total net sales for the nine months ended September 30, 2025, reached $520.3 million. The Specialty Nutrition Systems (SNS) segment achieved net sales of $317.8 million for the same period. The Pain Management and Recovery (PM&R) segment reported net sales of $176.2 million for the nine months ended September 30, 2025. The company raised and narrowed its full-year 2025 estimated revenue guidance to between $690 million and $700 million. The company is also strategically deciding not to pursue certain revenue streams that do not meet minimum return criteria, as seen in the PM&R segment.

Key Commercial and Financial Metrics (Nine Months Ended September 30, 2025):

Supply chain optimization to mitigate tariffs

Avanos Medical, Inc. is actively executing supply chain optimization strategies to counter tariff impacts. Mitigation strategies include pricing actions, supply chain adjustments, and reliance on existing international agreements that allow for reduced or duty-free importation of products. The estimated incremental manufacturing cost impact from tariffs for 2025 is about $18 million. The company is raising and narrowing its full-year 2025 adjusted diluted earnings per share guidance to a new range of between $0.85 and $0.95 per share, which includes the estimated impact of tariffs. The company's Q3 2025 Adjusted EBITDA was $20.2 million, compared to $30.6 million a year ago, showing pressure from costs like tariffs.

Supply Chain and Cost Mitigation Data Points:

• Estimated Tariff Headwind (Incremental Cost): $18 million
• 2025 Full-Year Adjusted EPS Guidance Range (Inclusive of Tariffs): $0.85 to $0.95
• Expected Annualized Run-Rate Cost Savings by End of 2026: $15 million-$20 million
• One-Time Cash Charges in 2025 for Savings: Approximately $10 million

Avanos Medical, Inc. (AVNS) - Canvas Business Model: Key Resources

You're looking at the core assets Avanos Medical, Inc. (AVNS) relies on to execute its strategy, focusing on the tangible and intellectual property that drives their Pain Management and Recovery (PM&R) and Specialty Nutrition Systems (SNS) segments. These resources are what make their value proposition possible.

Intellectual Property and Proprietary Technology

A significant portion of Avanos Medical, Inc.'s competitive edge rests on its patented and proprietary technologies, particularly within the PM&R segment.

• Proprietary Radiofrequency Ablation (RFA) technology platforms, including the COOLIEF Cooled Radiofrequency System, which uses water-cooled technology to deactivate pain-causing sensory nerves, and the TRIDENT Hybrid All-In-One Cannula.
• The TKO® Anti-Reflux Needleless Connector IP, acquired through the Nexus Medical transaction, features a patented, pressure-activated diaphragm designed to provide 24/7 protection against unintentional blood reflux in IV catheters, meeting the 2024 INS Infusion Therapy Standards of Practice.

The RFA portfolio enables physicians to perform a full spectrum of procedures, including cooled, standard, pulsed, and dual bipolar RFA. The COOLIEF system, for instance, has been documented to provide chronic back pain patients up to 24 months of pain relief. The TKO connector IP is proven to reduce occlusions by up to 48% in some documented studies. This IP is central to their opioid-sparing strategy.

Human Capital and Commercial Reach

The company's ability to sell and support these complex devices relies heavily on its specialized personnel.

• Each franchise is supported by a dedicated sales force.
• Customer engagement includes a customer support team with significant industry experience.
• These teams are backed by robust product training and customer education programs.

This structure supports their market presence across more than 90 countries worldwide.

Manufacturing and Financial Foundation

Physical infrastructure and financial stability underpin the entire operation. Avanos Medical, Inc. is vertically integrated, manufacturing most of its products.

The $46.5 million in cash flow from operations for the first nine months of 2025 shows the business's ability to generate cash from its core activities, which is vital for funding ongoing R&D and strategic initiatives, like the acceleration of the China exit for neonatal syringe production planned for mid-2026.

Avanos Medical, Inc. (AVNS) - Canvas Business Model: Value Propositions

You're looking at the core reasons why customers choose Avanos Medical, Inc. (AVNS) products, grounded in their late 2025 performance data. The value propositions center on clinical differentiation and strategic portfolio focus.

Opioid-sparing, non-invasive chronic pain relief (RFA)

Avanos Medical, Inc. offers Radiofrequency Ablation (RFA) solutions as a key component in addressing the need for alternatives to systemic opioids for pain management. The momentum in this area is clear from recent results.

• Net sales of RFA products grew by 10.5% in the third quarter of 2025.
• The overall Pain Management & Recovery (PM&R) segment net sales for Q3 2025 were $59.0 million, an increase of $1.2 million versus the prior year period.
• This growth reflects sustained momentum in RFA generator sales, which directly resulted in higher procedural volumes across their product lines.

Life-sustaining enteral feeding and neonatal solutions

The Specialty Nutrition Systems (SNS) segment provides vital support for patients requiring long-term nutrition, including neonates. This segment is a primary growth engine for Avanos Medical, Inc.

• SNS achieved 14.5% organic growth in the third quarter of 2025.
• For the first nine months of 2025, SNS net sales reached $317.8 million, representing an increase of $27.3 million compared to the prior year period, driven by 9.1% volume growth.
• The NeoMed product offering, part of the neonatal solutions, exceeded $100 million of annualized revenue as of December 2024, maintaining the number one share position in the US.
• Operating income for the SNS segment for the first nine months of 2025 was $62.1 million, which is 19.5% of SNS net sales.

Safer, more consistent nutrition/medication delivery

Avanos Medical, Inc. focuses on improving the reliability and safety of feeding delivery, particularly through standardization and technology adoption.

The value here is tied to preventing adverse events and ensuring proper nutrient uptake, supported by specific product adoption metrics.

• Short-term feeding portfolio growth is driven by the continued expansion of their US CORTRAK standard of care offerings.
• The shift to new alternatives like the ENFit connectors helps prevent hospital-never events, a critical safety metric in feeding.
• Reimbursement for long-term feeding patients in the US is described as robust and not expected to change soon.

Clinically superior, evidence-based medical devices

The company emphasizes that its devices offer superior clinical outcomes, which drives adoption, especially in the enteral feeding space where CORTRAK is mentioned as a standard of care offering.

Here's a quick look at the segment performance that underpins the overall financial health, which supports continued R&D and market presence:

Focus on high-growth, core segments for investors

Avanos Medical, Inc. is actively refining its portfolio to concentrate capital and resources on areas with the highest growth potential, signaling a clear strategic direction for investors.

This focus is evidenced by recent portfolio management actions:

• The company announced the divestiture of its Hyaluronic Acid (HA) business on July 31, 2025.
• They are executing an exit from the IV infusion products category, planned for early 2026.
• The acquisition of Nexus Medical is expected to be immediately accretive and provides access to a $70 million market segment.
• Management has initiated a $15 million-$20 million cost savings initiative.
• The full-year 2025 revenue estimate was raised to a range of $690 million to $700 million, with the adjusted EPS estimate raised to $0.85 to $0.95 per share.

Finance: draft 13-week cash view by Friday.

Avanos Medical, Inc. (AVNS) - Canvas Business Model: Customer Relationships

You're looking at how Avanos Medical, Inc. (AVNS) builds and maintains its ties with the people and institutions that buy its products. This isn't just about transactions; it's about deep integration, especially in specialized areas like pain management and nutrition.

Dedicated clinical training and support for RFA procedures

Avanos Medical, Inc. supports its Radiofrequency Ablation (RFA) solutions with a history of clinical engagement. The company notes having over 20 years of experience working with leading institutions to develop successful pain management programs. The focus here is on ensuring providers can use the technology effectively, which is critical for procedures where patient outcomes are paramount. For instance, the momentum in RFA generator sales, which drove RFA product net sales growth of 10.9% for the nine months ended September 30, 2025, relies on this support structure.

The relationship is reinforced through educational efforts, such as hosting industry symposiums like the one at ASRA 2025, focusing on opioid-sparing therapies.

Long-term contracts with major hospital systems/IDNs

While specific contract values aren't public, the relationship strategy involves deep integration within hospital systems. The growth in the Pain Management & Recovery (PM&R) segment, which saw net sales of $176.2 million for the nine months ended September 30, 2025, reflects ongoing engagement with these facilities. The company's portfolio, including RFA products, is positioned to support hospital operations by offering evidence-based, non-narcotic solutions for chronic pain management, which is a key concern for hospital administrators focused on efficiency and reputation.

Direct-to-patient support for chronic care products

For its Specialty Nutrition Systems (SNS) segment, which provides a lifeline for nutrition from hospital to home, Avanos Medical, Inc. is taking steps to enhance direct control over the customer experience. A concrete action in this area is the expansion of direct operations for MIC-KEY enteral feeding products into the United Kingdom, effective July 2025. This move signals a commitment to a more direct relationship with the end-user base for chronic care. The SNS segment showed strong performance, with net sales of $317.8 million and 9.1% volume growth for the first nine months of 2025.

High-touch, consultative sales for capital equipment

The sales approach for capital equipment, like RFA generators, is consultative, focusing on providing a full suite of options-cooled, 3-tined, and conventional RFA-to tailor treatment plans. This consultative model supports the sales momentum seen in the PM&R segment. The company has a dedicated sales force and customer support team with significant industry experience and product training supporting its franchises.

Digital tools for product reordering and education

Avanos Medical, Inc. is focused on operational optimization, which includes digital components, though specific usage metrics for reordering aren't detailed. The company's overall transformation priorities through 2025 included strategic and commercial optimization. The company employs more than 2,200 people worldwide, supporting its global footprint and product marketing efforts. The overall net sales for the last twelve months ending September 30, 2025, reached $699.90 million.

Here's a quick look at the scale of the business supporting these relationships as of late 2025:

The company's 2025 estimated revenue guidance was set between $665 million and $685 million.

The relationship strategy is supported by a structure that includes:

• A dedicated sales force for each franchise.
• Customer support teams with significant industry experience.
• A medical education program with HCP-led training.
• Local, in-person support and training availability.

Finance: draft 13-week cash view by Friday.

Avanos Medical, Inc. (AVNS) - Canvas Business Model: Channels

You're looking at how Avanos Medical, Inc. gets its clinically superior medical device solutions into the hands of healthcare providers and patients as of late 2025. The channel strategy is clearly evolving, moving toward more direct control where it makes strategic sense, while still relying on established networks for broad reach.

Here's a quick look at the top-line financial context for the channels to consider:

The company develops, manufactures, and markets its recognized brands globally, holding leading market positions in multiple product categories across its portfolio.

Direct sales force to hospitals and ASCs

Avanos Medical, Inc. markets its products generally directly to hospitals and other healthcare providers. This direct engagement is crucial for complex devices and capital equipment sales, especially within the Pain Management & Recovery (PM&R) segment, which includes Radiofrequency Ablation (RFA) generator sales that grew 10.5% year over year in Q3 2025 to $34.6 million. The direct sales effort supports the company's commitment to reducing opioid use and helping patients move from surgery to recovery.

Third-party medical device distributors globally

While pushing for direct relationships, a significant portion of sales still flows through third-party wholesale distributors. For the year ended December 31, 2024, approximately 50% of North America net sales were executed via these distributors. Two major distributors, McKesson Corporation and Medline Industries, accounted for approximately 18% and 17% of consolidated net sales in 2024, respectively. Globally, the MIC-KEY product line, which is part of the Specialty Nutrition Systems (SNS) segment, is sold in over 60 countries across six continents.

Direct-to-home patient supply for chronic care

A key part of the Avanos Medical mission involves providing a vital lifeline for nutrition to patients from hospital to home. This is primarily served through the Chronic Care franchise, now integrated into the Digestive Health focus within the combined commercial organization. The Enteral feeding unit, which supports this continuum of care, generated net sales of $82.7 million in the third quarter of 2025, representing a 14.9% increase year over year.

Strategic transition to direct operations (e.g., UK MIC-KEY)

Avanos Medical, Inc. is actively strengthening its direct control over key product lines. A major example is the strategic transition for the MIC-KEY enteral feeding products in the United Kingdom. Effective July 25, 2025, Avanos took direct responsibility for sales and distribution, ending a 29-year distribution partnership with Vygon UK. This move is intended to enhance customer relationships and improve service efficiency by eliminating the intermediary.

E-commerce and online portals for consumables

The company is focused on go-to-market strategies to accelerate growth, which includes enhancing customer engagement. The channels used for consumables, which are typically lower-touch items supporting the core devices, are increasingly being managed through digital means. The company plans to guide healthcare facilities through new ordering processes following the UK transition to ensure continuity.

• The company is focused on advancing its strategic segments in PM&R and SNS following the July 2025 divestiture of its Hyaluronic Acid (HA) product line.
• The SNS segment saw volume growth of 14% in Q3 2025, driven by long-term feeding products.
• The company's overall strategy involves commercial optimization and supply chain effectiveness.
• The direct control in the UK aims to ensure uninterrupted access to MIC-KEY products.

Avanos Medical, Inc. (AVNS) - Canvas Business Model: Customer Segments

Hospitals and Integrated Delivery Networks (IDNs)

• SNS segment net sales for the third quarter of 2025 totaled $114.0 million.
• PM&R segment net sales for the third quarter of 2025 totaled $59 million.
• The Specialty Nutrition Systems (SNS) segment recorded volume growth of 14.0% in the third quarter of 2025.
• The full-year 2025 revenue guidance is between $690 million and $700 million.

Pain management specialists and anesthesiologists

Neonatal and Pediatric Intensive Care Units (NICUs/PICUs)

• Neonate solutions unit revenue for the third quarter of 2025 amounted to $31.3 million.
• Neonate solutions revenue growth year-over-year for the third quarter of 2025 was 19.5%.
• Avanos Medical, Inc. completed the acquisition of Nexus Medical, which is expected to deliver immediate value in NICU and PICU care.

Patients requiring long-term enteral feeding

• Enteral feeding unit revenue for the third quarter of 2025 totaled $82.70 million.
• Enteral feeding revenue growth year-over-year for the third quarter of 2025 was 14.9%.
• The company noted strong demand for its long-term feeding products in the third quarter of 2025.

Ambulatory Surgery Centers (ASCs) for RFA procedures

• RFA product net sales grew 10.5% year-over-year in the third quarter of 2025.
• RFA capital equipment sales drove procedural volumes in the third quarter of 2025.
• The Radiofrequency Ablation (RFA) business posted double-digit growth in the third quarter of 2025 compared to the previous year.

Avanos Medical, Inc. (AVNS) - Canvas Business Model: Cost Structure

You're looking at the cost side of the Avanos Medical, Inc. (AVNS) engine as of late 2025. It's a mix of necessary investment for growth, the lingering effects of external pressures, and costs tied to strategic restructuring. Honestly, keeping the lights on and investing for the future requires significant outlay across the board.

High Cost of Goods Sold (COGS) due to tariff headwinds

Tariffs are definitely biting into the gross margin. For the second quarter of 2025, the reported gross profit margin was 52.6%, a notable drop from 55.7% in the prior year period. Management specifically cited higher tariffs as a primary driver for this contraction, alongside lower pricing on the Hyaluronic Acid (HA) products before that line was divested. Looking ahead, the full-year 2025 free cash flow forecast is explicitly inclusive of an estimated $18 million tariff impact. The company is actively working on mitigation, including supply-chain relocation and a plan to exit China for neonatal syringe production by mid-2026, which is driving higher capital expenditures in 2025.

Significant R&D and SG&A investment for core growth

Investing in the core segments-Specialty Nutrition Systems (SNS) and Pain Management & Recovery (PM&R)-means keeping R&D and SG&A spending at meaningful levels. You see the discipline in the latest quarterly figures, but the absolute spend is still substantial. Here's a snapshot of the most recent reported operating expenses from the third quarter of 2025:

The company is streamlining management and revamping R&D with a hybrid model to accelerate product development, aiming for $15 million to $20 million in run-rate annualized cost savings by 2026.

Transformation costs, including $10 million one-time Q4 2025 charges

The ongoing transformation process, initiated in January 2023, carries specific one-time costs. Management anticipates approximately $10 million in one-time cash charges related to expanded cost programs, with the majority expected to be incurred in 2025. This $10 million in transformation-related charges is explicitly factored into the full-year 2025 free cash flow forecast of $25 million-$30 million.

Manufacturing and supply chain expenses

While specific manufacturing cost line items aren't broken out separately from COGS, supply chain expenses are embedded within the margin pressures and capital expenditure plans. The company is focused on improving profitability in certain areas, such as transitioning the Game Ready U.S. Rental segment to a distribution arrangement with WRS Group. Furthermore, capital expenditures are higher in 2025 to support the planned exit from China for neonatal syringe production by mid-2026.

Amortization of acquired intangibles (e.g., Nexus Medical)

Amortization of intangible assets, stemming from prior business acquisitions, is a consistent non-cash cost. The most recent reported figure for this expense in the second quarter of 2025 was $3.0 million on an adjusted, non-GAAP basis. For comparison, the full-year 2024 amortization was $25.2 million. The recent acquisition of Nexus Medical is expected to be immediately accretive to revenue and earnings per share, meaning its related amortization will be a new component of the cost structure moving forward.

You should track the quarterly non-GAAP intangibles amortization:

• Q2 2025: $3.0 million
• Q1 2025: $2.9 million
• Full Year 2024: $25.2 million

Finance: draft 13-week cash view by Friday.

Avanos Medical, Inc. (AVNS) - Canvas Business Model: Revenue Streams

You're looking at the core ways Avanos Medical, Inc. brings in money as of late 2025, which is heavily influenced by their recent strategic moves and acquisitions.

The company has officially raised and narrowed its full-year 2025 revenue guidance following the third quarter results.

Sales of Specialty Nutrition Systems (SNS) products remain a primary driver, showing strong momentum.

• SNS segment recorded net sales of $114 million in the third quarter of 2025.
• This reflected 14% volume growth in the third quarter.
• The segment saw double-digit growth, anchored by enteral feeding and neonate solutions.

Revenue from Pain Management & Recovery (PM&R) devices and consumables is also critical, though it includes a mixed performance across its sub-categories.

The Radiofrequency Ablation (RFA) business within PM&R is a key growth area for device sales.

• Net sales of RFA products grew 10.5% year-over-year in Q3 2025, reaching $34.6 million.
• This follows a reported 13.7% growth rate for RFA product sales in the second quarter of 2025.
• The segment's overall growth was partially offset by a year-over-year decline of 7.9% in surgical pain and recovery unit sales.

Furthermore, the recent strategic move to acquire Nexus Medical is expected to contribute directly to the top line.

Revenue accretion from the Nexus Medical acquisition is factored into the full-year estimate, expected to contribute roughly $5 million to the 2025 total revenue figure. Finance: review the Q4 forecast to ensure the $5 million accretion is fully captured within the $690-$700 million range by Friday.