Smith+Nephew Shares Plunge Despite Revenue Growth and Increased Free Cash Flow Guidance

Smith+Nephew (LON: SN.) delivered a strong third-quarter 2025 trading report, exceeding expectations and raising full-year free cash flow guidance.

Revenue for Q3 2025 reached $1,501 million, a 5.0% increase in underlying revenue compared to $1,412 million in Q3 2024. Reported revenue growth, which includes a 130bps currency tailwind, was 6.3%.

Orthopaedics underlying revenue grew by 4.1%, with strong performance in US Hip Implants offsetting softness in US Knee Implants. Sports Medicine & ENT saw a 5.1% underlying revenue increase, driven by strong growth outside of China as VBP headwinds began to diminish.

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Advanced Wound Management led the way with 6.0% underlying revenue growth, fueled by double-digit growth in Advanced Wound Bioactives.

The company maintained its full-year outlook for underlying revenue growth of around 5.0% and a trading profit margin between 19.0% and 20.0%. Importantly, Smith+Nephew raised its free cash flow guidance to around $750 million, a significant increase from the previous guidance of over $600 million.

Deepak Nath, Chief Executive Officer, stated: “Our third quarter results again demonstrate how the 12-Point Plan has improved Smith+Nephew’s revenue growth profile, keeping us on track to meet our full-year outlook for revenue growth and a step-up in trading profit margin. Additionally, we are pleased to be able to raise our guidance for improved free cash flow, which we now expect to be around $750 million, a more than five-fold increase since 2023.”

Smith+Nephew is hosting Capital Markets Days in London and New York in December to introduce its new strategy, mid-term priorities, financial goals, and innovation portfolio.