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ICU MEDICAL INC/DE (ICUI) Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $537.0M, down 8.8% YoY due to IV Solutions deconsolidation, but beat S&P Global consensus by ~$25.5M; adjusted EPS was $2.03, materially above consensus, while GAAP diluted EPS was -$0.14, reflecting non-GAAP adjustments and tariff headwinds . Values retrieved from S&P Global.*
  • Adjusted gross margin rose to 41% (from 37% YoY and 40% in Q2), driven by IV Solutions deconsolidation, synergies, FX, and a one-time Italy payback accrual reversal; tariffs reduced gross margin by ~200 bps in Q3 .
  • FY 2025 guidance was raised: adjusted EBITDA to $395–$405M (from $380–$390M) and adjusted EPS to $7.35–$7.65 (from $6.85–$7.15); GAAP net loss narrowed to $(8)–$0 and GAAP loss per share to $(0.30)–$0.00 .
  • Segment performance: Consumables and Infusion Systems grew YoY (record levels), while Vital Care fell with IV Solutions deconsolidation; free cash flow improved to $27.6M despite higher tariffs .
  • Potential stock reaction catalysts: broad beats vs consensus, raised FY guidance, record Consumables/Systems scale; watch Q4 tariff step-up and FDA warning letter resolution timeline .

What Went Well and What Went Wrong

What Went Well

  • Record Consumables quarter: +8% reported, +7% organic, driven by new implementations, niche markets (oncology/dialysis), and strong census; “It was a record quarter in absolute sales levels” .
  • Infusion Systems +9% reported, +8% organic, with double-digit growth in LVP pumps and dedicated sets; active RFPs and start of Plum 360 refresh with Solo approval .
  • Adjusted gross margin improved to 41%, aided by IV Solutions deconsolidation (+500 bps), FX, and Italy payback settlement ($4M revenue/GP) .
  • Refinancing shifted $190M from higher-cost Term Loan B to A, saving ~$2M annually in interest; $273M debt principal repaid YTD, ending Q3 with $1.3B debt and $300M cash .

What Went Wrong

  • Reported revenue declined YoY (to $537.0M from $589.1M), primarily from IV Solutions deconsolidation, and Vital Care fell 52% reported YoY .
  • Tariffs stepped up: ~$11M incurred; ~$9M expensed reduced Q3 gross margin 200 bps; CFO guided Q4 tariff expense to $12–$14M ($25M FY total) .
  • Sequential operating expenses expected to rise in Q4 as incentive comp and discretionary spend deferrals normalize; Q4 OpEx modeled at ~25.5% of revenue vs 24.3% in Q3 .

Financial Results

MetricQ3 2024Q2 2025Q3 2025Consensus Q3 2025
Revenue ($USD Millions)$589.1 $548.9 $537.0 $511.5*
GAAP Diluted EPS ($)-$1.35 $1.43 -$0.14 -$0.55*
Adjusted Diluted EPS ($)$1.59 $2.10 $2.03 n/a*
GAAP Gross Margin (%)35% 38% 37% n/a*
Adjusted Gross Margin (%)37% 40% 41% n/a*
Adjusted EBITDA ($USD Millions)$94.8 $100.3 $105.9 $87.9*
  • Revenue beat consensus; GAAP EPS beat consensus; Adjusted EBITDA beat S&P consensus definition despite tariff headwinds. Values retrieved from S&P Global.*

Segment Revenue Breakdown (Q3 2025 vs Q3 2024)

Product LineQ3 2024 ($M)Q3 2025 ($M)YoY Change
Consumables$264.9 $285.1 +$20.2
Infusion Systems$159.8 $173.9 +$14.1
Vital Care$164.5 $78.0 -$86.5
Total$589.2 $537.0 -$52.2
  • Note: IV Solutions disposed May 1, 2025; Vital Care Q3 2025 includes $0.0M IV Solutions vs $88.0M in Q3 2024 .

KPIs and Cash Flow

KPIQ3 2024Q3 2025
Operating Cash Flow ($M)$36.1 $56.7
Free Cash Flow ($M)$16.2 $27.6
Tariffs Expensed in P&L ($M)n/a~$9
Debt Principal Repaid YTD ($M)n/a~$273

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP Net Loss ($M)FY 2025$(43) to $(35) $(8) to $0 Raised (narrowed loss)
GAAP Loss per Share ($)FY 2025$(1.68) to $(1.38) $(0.30) to $0.00 Raised (narrowed loss)
Adjusted EBITDA ($M)FY 2025$380 to $390 $395 to $405 Raised
Adjusted EPS ($)FY 2025$6.85 to $7.15 $7.35 to $7.65 Raised

Earnings Call Themes & Trends

TopicQ1 2025 (Prev)Q2 2025 (Prev)Q3 2025 (Current)Trend
TariffsGuided FY impact $25–$30M; urged not to annualize; mitigation in flight Costa Rica tariff raised to 15%; FY near high end ~$30M; GM offset via JV; back-half GM just above 40% inclusive Q3 P&L tariff ~$9M; Q4 $12–$14M; FY ~$25M; continue offsets; don’t annualize 2025 Headwind increasing in H2; mitigation ongoing
FDA Warning Letters / ApprovalsPursuing new 510(k)s for Medfusion 5000 & CADD; extensive remediation 510(k)s for Medfusion 5000 & CADD submitted; dialogue underway Status quo responsive dialogue; focus on approvals; resolution linked to approvals Progressing; still pending closure
Infusion Systems (Plum Duo/Solo)Early installs expected in H2; competitive share + refresh cycle Record quarter expected in Q3; start of refresh cycle; LVP double-digit Orders for Solo; installs early days; competitive RFPs active Building momentum
Consumables Growth+10% CC; oncology/renal/home infusion drivers; pricing +100 bps Record sales; mid-single-digit full-year growth comfort +8% reported; record quarter; niche markets & Europe strength Sustained, strong
Pricing~1% annual pricing benefit Reinforced pricing offsets On track for ~1% price increase in P&L Stable modest tailwind
Balance Sheet / LeveragePaid down $48M Q1; target ~2x leverage medium-term $250M YTD principal; JV proceeds used to pay debt $273M YTD principal; refinancing saves ~$2M annually; end-2025 ~2.5x net debt/EBITDA target Deleveraging progressing

Management Commentary

  • “The short story for Q3 is revenue was $533 million…gross margins increased, operating expenses declined, leading to more EBITDA and EPS” (non-GAAP revenue adjustment removes contract manufacturing) .
  • “Adjusted gross margin for the third quarter was 41%…benefits from deconsolidation of IV solutions, Italy payback settlement, and FX; tariffs reduced gross margin by ~2 percentage points” .
  • “We repaid $273 million in principal year to date…completed refinancing shifting $190 million to term loan A, saving ~$2 million annually” .
  • “Strategically, our goal has been to build the most comprehensive and innovative infusion-focused company…we expect consumables and systems businesses to be reliable growers with industry-acceptable profit margin” .
  • “We are pleased with our third quarter results” .

Q&A Highlights

  • Consumables drivers: wins where ICU holds pump accounts, earlier IV Solutions + consumables wins installing, niche markets (oncology/dialysis), Western Europe strength .
  • Plum Duo/Solo traction: taking orders for Solo, signing contracts; installs early days; multi-year refresh of installed base expected to begin mid/late 2026 with impact later that year .
  • Tariffs 2026: management reiterated not to annualize 2025 run-rate; multiple supply chain and pricing mitigations in flight .
  • Gross margin path: tariff-adjusted target effectively near 43% in Q3 vs 45% long-term goal; levers include technology value, mix shift, portfolio optimization, and financial leverage .
  • Free cash flow: solid Q3 despite AR program reduction and tariffs; remediation/restructuring spend expected to decline over time, but tariffs consume cash near-term .
  • FDA/warning letters: continued normal dialogue; focus on approvals to drive resolution .

Estimates Context

MetricActualConsensusSurprise
Revenue ($M)$537.0 $511.5*+$25.5M — bold beat
GAAP Diluted EPS ($)-$0.14 -$0.55*+$0.41 — bold beat
Adjusted EBITDA ($M)$105.9 $87.9*+$18.0M — bold beat (definitions differ)
  • ICU beat on top-line and EPS, and outperformed S&P’s EBITDA consensus despite tariff headwinds and IV Solutions deconsolidation . Values retrieved from S&P Global.*
  • Note: S&P “EBITDA actual” may reflect standardized (not company “adjusted”) EBITDA; ICU discloses adjusted EBITDA with reconciliation .

Key Takeaways for Investors

  • Broad-based beat and raised FY guidance suggest operational momentum in core segments (Consumables, Infusion Systems) despite tariff headwinds .
  • Watch Q4 modeling: tariffs $12–$14M, gross margin 40–41%, OpEx ~25.5% of revenue, net interest ~$19M, adjusted tax ~25%, diluted shares ~25M .
  • Medium-term: Infusion pump refresh cycle (Plum Solo/Duo, Medfusion 5000, CADD) and software monetization are key growth levers; approvals/closure of warning letters are catalysts .
  • Balance sheet: continued deleveraging and refinancing benefits ($~2M interest savings annually); target ~2–2.5x net debt/EBITDA enhances potential for capital return over time .
  • Segment mix shift (post IV Solutions JV) structurally lifts margins; Vital Care remains dilutive but cash generative—management open to portfolio optimization where accretive .
  • Pricing tailwind (~1% annually) plus synergy capture/FX should help offset tariffs; do not annualize 2025 tariff impact given ongoing mitigation .
  • Near-term trading: positive setup from guidance raise and operating beats; monitor tariff headlines, FDA developments, and Q4 OpEx normalization as potential volatility drivers .

Footnote: *Values retrieved from S&P Global.

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