ICU MEDICAL INC/DE (ICUI) Q4 2024 Earnings Summary

Executive Summary

Q4 2024 adjusted revenue was $621.6M, up ~8% y/y, driven by a temporary U.S. IV Solutions shortage; GAAP revenue was $629.8M (+7% y/y). Adjusted EPS was $2.11 versus $1.57 y/y; adjusted EBITDA rose to $105.5M from $86.3M y/y .
Gross margin expanded materially y/y (GAAP 36.1% vs. 29.2% y/y) but was down slightly q/q on mix (higher IV Solutions) and FX; adjusted gross margin was ~37% for Q4 per management .
FY 2025 guidance introduced: adjusted EBITDA $395–$425M, adjusted EPS $6.55–$7.25, adjusted gross margin 37–38%, OpEx ~24% of revenue; net interest ~$95M; tax rate ~25%. The IV Solutions JV (expected Q2 close) would reduce 2025 adjusted EBITDA by $15–$20M and be neutral to adjusted EPS .
Key catalysts: JV closing and deconsolidation (immediate 300–400 bps adjusted gross margin uplift with a further 100–200 bps longer-term), pump platform rollout (Plum Duo in market; Plum Solo and software advancing), and continued quality/integration progress supporting margin trajectory and free cash flow .

What Went Well and What Went Wrong

What Went Well

Strong y/y revenue growth across all segments; Vital Care +16% benefited from IV Solutions shortage; Consumables +6% and Infusion Systems +7% in Q4; adjusted EBITDA up 22% y/y to $106M .
Clear operational progress: ERP order-to-cash cutover in North America, manufacturing network consolidation underway, lowest backorders since the acquisition, and successful FDA follow-up inspection with no observations at the site underpinning the warning letter (awaiting final resolution) .
Strategic portfolio optimization: IV Solutions JV with Otsuka expected to close Q2 2025, bringing scale, redundancy, innovation, and immediate adjusted gross margin expansion post-deconsolidation; proceeds to reduce net debt toward ~$1B by year-end 2025 .

What Went Wrong

GAAP loss persisted: Q4 GAAP net loss of $(23.8)M (diluted $(0.97)), impacted by valuation allowance tax expense; despite adjusted improvements, company still highlights “under earning” versus industry benchmarks .
Gross margin pressured sequentially by mix (higher IV Solutions) and unfavorable FX in selling geographies vs. Q3; free cash flow moderated to $16M in Q4 as AR purchase program was fully paid down .
Tariffs risk: Guidance excludes potential new U.S. tariffs on Mexico-manufactured products (~1/3 of revenues), with mitigation options requiring capital and time; uncertainty remains .

Financial Results

Summary Results vs. Prior Year and Prior Quarter

Metric	Q4 2023	Q3 2024	Q4 2024
GAAP Revenue ($M)	$587.9	$589.1	$629.8
Adjusted Revenue ($M)	$575.7	$580.1	$621.6
GAAP Gross Margin %	29.2%	34.8%	36.1%
GAAP Net (Loss)/Income ($M)	$(17.1)	$(33.0)	$(23.8)
GAAP Diluted EPS ($)	$(0.71)	$(1.35)	$(0.97)
Adjusted EPS ($)	$1.57	$1.59	$2.11
Adjusted EBITDA ($M)	$86.3	$94.8	$105.5

Note: Q4 2024 call remarks cited “Revenue $622M” consistent with adjusted revenue excluding contract manufacturing; GAAP revenue was $629.8M .

Segment/Product Line Breakdown (Q4)

Product Line	Q4 2023 ($M)	Q4 2024 ($M)	y/y Δ ($M)
Consumables	$254.0	$268.1	+$14.1
Infusion Systems	$165.1	$171.7	+$6.6
Vital Care	$168.7	$190.0	+$21.3
Total	$587.8	$629.8	+$42.0

Vital Care includes Pfizer contract manufacturing of $12.1M (Q4’23) vs. $8.2M (Q4’24) .

Operating Expenses (Adjusted)

Metric	Q4 2023	Q3 2024	Q4 2024
Adjusted SG&A ($M)	$112.9	$120.0	$116.0
Adjusted R&D ($M)	$22.0	$20.0	$22.0
Total Adjusted OpEx ($M)	$134.8	$140.0	$138.0
Adjusted OpEx % of Revenue	~23.4%	24.2%	22.1%

KPIs and Cash/Balance Sheet

KPI	Q4 2023	Q3 2024	Q4 2024
Net Cash from Ops ($M, qtr)	$91.3	$36.1	$40.2
Capex ($M, qtr)	$29.9	$19.9	$24.1
Free Cash Flow ($M, qtr)	$61.4	$16.2	$16.2
Cash & Equivalents ($M, end)	$254.2	$312.5	$308.6
Long-Term Debt ($M)	$1,577.8	$1,543.3	$1,531.9

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA ($M)	FY 2024	$345–$365 (8/7/24)	$355–$365 (11/12/24)	Raised midpoint
Adjusted EPS ($)	FY 2024	$4.95–$5.35 (8/7/24)	$5.40–$5.70 (11/12/24)	Raised
Adjusted EBITDA ($M)	FY 2025	N/A	$395–$425	Introduced
Adjusted EPS ($)	FY 2025	N/A	$6.55–$7.25	Introduced
Adjusted Gross Margin %	FY 2025	N/A	37–38%	Introduced
Adjusted OpEx (% of Rev)	FY 2025	N/A	~24%	Introduced
Net Interest Expense ($M)	FY 2025	N/A	~95	Introduced
Adjusted Tax Rate	FY 2025	N/A	~25%	Introduced
Diluted Shares (M)	FY 2025	N/A	~24.7	Introduced
IV Solutions JV impact	FY 2025	N/A	EBITDA −$15–$20M; EPS neutral (assuming Q2 close)	Introduced

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
IV Solutions JV	JV announced; rationale: innovation, redundancy; upfront ~$200M; deconsolidation; initial +300–400 bps adjusted GM, +100–200 bps later	Expected Q2 2025 close; EBITDA −$15–$20M; EPS neutral; deconsolidation and margin uplift reiterated	Advancing to close; structural margin tailwind
Supply chain/operations	ERP cutover in NA; manufacturing consolidation; backorders low; FDA inspection with no observations	Lowest backorders since acquisition; continued consolidation; JV setup complexity managed	Improving execution
Tariffs/macro	Peso tailwind; general FX favorable in Q3; tariff uncertainty noted	2025 guidance excludes tariffs; ~1/3 of revenue potentially exposed; mitigation options under evaluation	Risk elevated; contingency planning
Infusion pumps (Plum Duo/Solo)	Duo in market; Solo/LifeShield submissions; Medfusion next; competitive environment active	Duo driving 2H installs; Solo response nearing submission; modernized fleet to anchor portfolio	Product cycle progressing
Consumables growth/pricing	Mid-single digit baseline; evidence-based wins; pricing initiatives via GPOs	Q4 Consumables +6% y/y; global installs, pricing, niche markets; legacy lines at record levels	Sustained growth with pricing support
Quality remediation	Extensive actions; FDA follow-up with no observations	Continued investments (~$100M in 2025) to finish work; aiming for lasting margin benefits	Nearing completion; cost near-term

Management Commentary

“Fourth quarter results were generally in line with our expectations with the exception of higher IV solutions revenues due to the U.S. market shortage.” – Vivek Jain, CEO .
“Adjusted gross margin for the fourth quarter was 37%…benefits from continued capture of synergies offset by…higher revenue mix of IV Solutions…and reversal of favorable FX.” – Brian Bonnell, CFO .
“Mathematically…we should be in the 20-ish [EBITDA margin] range [post JV]…Revenue growth coming with our ability to raise our gross margins is the biggest driver to improving earnings.” – Vivek Jain .
“With…approximately $200 million of expected proceeds from the IV Solutions JV…total principal payments during 2025 should approximate $300 million and reduce our net debt to around $1 billion.” – Brian Bonnell .

Q&A Highlights

Consumables strength drivers: mix of new installs, global growth, price, niche markets; sequential and y/y momentum acknowledged .
IV Solutions trajectory: shortage cooling into Q1; JV deconsolidation timing drives reported period impact; rough 55/45 H1/H2 split implied for 2025 pre-close contribution .
Capital equipment demand: environment “normal”; competitive wins with Plum Duo; installation pace expected to ramp through 2H .
Tariffs: guidance excludes potential impacts; mitigation options include routing and footprint shifts (Costa Rica), but require capital and clarity on duration .
Leverage: target net leverage ~2x longer term; JV proceeds and debt paydown to lower leverage by ~0.3x near-term .

Estimates Context

S&P Global Wall Street consensus estimates for Q4 2024 EPS and revenue were unavailable due to access limitations at the time of this analysis; therefore, estimate comparisons are not provided. The company reported Q4 adjusted EPS of $2.11 and adjusted revenue of $621.6M vs. prior year $1.57 and $575.7M, respectively .
Given the temporary IV Solutions uplift and FX headwinds, consensus models may need to reflect: (a) mix-driven gross margin variability, (b) post-JV deconsolidation adjustments (EBITDA −$15–$20M, EPS neutral), and (c) tariff scenario risk management .

Key Takeaways for Investors

Mix boosted Q4 results: Vital Care benefited from the IV Solutions shortage; expect normalization beginning Q1, so model a reversion in Vital Care and margin trajectory accordingly .
Structural margin inflection set up for 2H 2025: JV deconsolidation drives immediate adjusted gross margin expansion (300–400 bps, with 100–200 bps later), while operating consolidation and pricing initiatives target longer-term EBITDA margin ≥20% .
2025 guide credible and detailed: adjusted gross margin 37–38%, OpEx ~24%, interest ~$95M, tax ~25%; free cash flow near 2024 levels despite ~$100M remediation/integration spend .
Balance sheet improving: plan to reduce net debt toward ~$1B in 2025 with ~$300M of principal payments (including JV proceeds), lowering leverage and interest burden .
Pump cycle as growth driver: Plum Duo installed base building; Plum Solo and LifeShield software nearing regulatory milestones; competitive activity high, but incumbency effects moderate opportunity—wins should be incremental yet meaningful to ICUI’s scale .
Tariffs are a swing factor: with ~1/3 of revenues manufactured in Mexico, potential tariffs could be material; mitigation options exist but require time and capital—treat as a scenario in models rather than base case .
Estimate implications: absent published consensus in this report, adjust models for normalized IV Solutions demand, FX sensitivities, and JV impacts on reported revenue/EBITDA while keeping EPS neutral post-JV .