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Integer Holdings Corp (ITGR) Q2 2025 Earnings Summary

Executive Summary

  • Integer delivered an 11% revenue increase to $476.5M and adjusted EPS of $1.55, with adjusted operating income up 15% and adjusted EBITDA up 10% year over year; revenue and EPS were broadly in line-to-ahead of Street consensus, reflecting strong Cardio & Vascular growth and execution on margin initiatives .
  • The company raised the midpoint of 2025 adjusted operating income and adjusted EPS outlooks (AOI +$2M midpoint; EPS +$0.05), while tightening the sales range and keeping its midpoint unchanged, signaling confidence in profitability despite demand timing and tough 4Q24 comps .
  • Q2 beats vs consensus: revenue +2.6% vs $464.4M, adjusted EPS in line ($1.55 vs $1.551), with Q1 also a beat on both metrics; Q4 2024 showed a revenue beat and slight EPS miss, framing a consistent “above-market” execution narrative [GetEstimates]*.
  • Management highlighted drivers including electrophysiology ramps (including PFA content), strong neurovascular demand, and improving CRM & Neuromodulation in 2H; risks include FX headwinds (~$0.09 EPS), customer demand timing, and ongoing portable medical exit .
  • Early investor reaction focused on the narrowed sales range and unchanged sales midpoint despite Q2 strength; management emphasized tough comps and timing shifts, but reiterated backlog (~$700M) and second-half visibility as catalysts for confidence .

What Went Well and What Went Wrong

What Went Well

  • Sales up 11% y/y to $476.5M; adjusted operating income up 15% to $81.3M and adjusted EPS up 19% to $1.55, demonstrating margin expansion and operating leverage: “Sales increased 11%… adjusted operating income up 15%… adjusted EPS… $1.55” .
  • Cardio & Vascular grew 24% (reported) with EP ramps and acquisition contributions, and strong neurovascular demand; management expects mid-teens growth for the year in CNV, supported by pipeline and capabilities .
  • Profitability guidance raised: AOI midpoint increased by $2M and adjusted EPS midpoint by $0.05; AOI margin expanded to ~17.1% of sales in Q2 with further sequential improvement expected in Q3 and Q4 .

What Went Wrong

  • Other Markets declined 38% y/y, driven by the multi-year portable medical exit; this remains a headwind to reported growth and mix .
  • FX headwind of ~$3M reduced adjusted EPS by ~$$0.09, and higher adjusted weighted average shares reduced EPS by ~$0.04; these effects muted the translation of operating gains to EPS .
  • Despite Q2 strength, the sales outlook top-end was trimmed and the range tightened, with management citing timing shifts (Q3 pull-forward into Q2) and very tough 4Q24 comps (+11% growth last year), creating near-term deceleration optics .

Financial Results

Income Statement and Profitability (GAAP and Non-GAAP)

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$427.9 $437.4 $476.5
GAAP Diluted EPS (Cont. Ops) ($)$0.88 $(0.66) $1.04
Adjusted EPS ($)$1.30 $1.31 $1.55
GAAP Operating Income ($USD Millions)$54.5 $49.6 $59.3
Adjusted Operating Income ($USD Millions)$70.8 $70.9 $81.3
GAAP EBITDA ($USD Millions)$81.4 $31.6 $87.6
Adjusted EBITDA ($USD Millions)$89.8 $91.5 $99.0
Gross Profit ($USD Millions)$117.4 $120.3 $129.2

Margins (S&P Global)

MetricQ1 2025Q2 2025
Gross Profit Margin %27.60%*27.41%*
EBITDA Margin %19.49%*20.19%*
EBIT Margin %12.66%*13.42%*
Net Income Margin %(5.14%)*7.77%*

Values retrieved from S&P Global.

Segment Breakdown (Product Line Sales)

Segment ($USD Thousands)Q2 2024Q2 2025Y/Y ChangeOrganic Change
Cardio & Vascular$231,418 $286,855 +24.0% +17.6%
Cardiac Rhythm Mgmt & Neuromodulation$168,061 $171,998 +2.3% +2.3%
Other Markets$28,407 $17,641 (37.9%) (1.8%)
Total Sales$427,886 $476,494 +11.4% +10.8%

Actual vs Consensus (Wall Street, S&P Global)

MetricQ4 2024Q1 2025Q2 2025
Revenue Consensus Mean ($USD Millions)$446.3$428.7$464.4
Revenue Actual ($USD Millions)$449.5$437.4$476.5
Primary EPS Consensus Mean ($)$1.459$1.242$1.551
EPS Actual ($)$1.43$1.31$1.55

Values retrieved from S&P Global.

KPIs and Balance Sheet

KPIQ2 2025
Operating Cash Flow ($USD Millions, quarter)$44
Capex ($USD Millions, quarter)$19
Free Cash Flow ($USD Millions, quarter)$25
Net Total Debt ($USD Millions)$1,204.2
Total Debt ($USD Millions)$1,202.5
Leverage Ratio (Net Debt / TTM Adjusted EBITDA)3.2x
Backlog (firm orders)~$700M

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2025)Current Guidance (Q2 2025)Change
Sales ($USD Millions)FY 2025$1,846–$1,880 $1,850–$1,876 Range tightened; midpoint unchanged
Adjusted Operating Income ($USD Millions)FY 2025$315–$331 $319–$331 Raised (low end +$4M; midpoint +$2M)
Adjusted EBITDA ($USD Millions)FY 2025$401–$422 $402–$418 Tightened (midpoint slight down)
Adjusted Net Income ($USD Millions)FY 2025$218–$231 $222–$231 Raised (low end +$4M; midpoint +$2M)
Adjusted EPS ($)FY 2025$6.15–$6.51 $6.25–$6.51 Raised (midpoint +$0.05)
Adjusted Effective Tax RateFY 202519.0%–21.0% 18.5%–19.5% Lowered
Cash Flow from Operations ($USD Millions)FY 2025$235–$255 $235–$255 Maintained
Capital Expenditures ($USD Millions)FY 2025$110–$120 $110–$120 Maintained
Leverage Ratio (Net Debt/TTM Adj. EBITDA)FY 2025 YE2.5x–3.5x 2.5x–3.5x Maintained
Tariff ImpactFY 2025Minimal ($1–$5M) Minimal ($1–$5M) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Sales cadence and comps4Q24 was a very strong quarter (+11%), creating tougher comps for 2H 2025 . Q1 reiterated 8–10% sales growth and improved EPS guidance .Q2 upside includes timing shifts from Q3 into Q2; 2H guided to ~8% y/y with similar growth in Q3 and Q4 .Stable full-year midpoint; near-term cadence normalizing after pull-forward
Margin expansion (AOI %)Margin initiatives emphasized in Q1 outlook .AOI margin reached ~17.1%; management expects sequential improvement through Q3 and Q4 .Improving
Cardio & Vascular (EP, PFA)Emphasis on growth markets and EP capabilities in Q1 .CNV +24% y/y; EP ramps, PFA content across the procedure; mid-teens CNV growth expected FY25 .Strengthening
CRM & NeuromodulationQ1 low-single to mid-single digit trajectory .2% y/y in Q2; expecting mid-single digit FY25 with 2H pickup as the planned IPG customer decline relents .Improving in 2H
FX and tariffsCompany statement on tariffs indicated minimal impact ($1–$5M) .FX headwind $3M ($0.09 EPS); tariffs still minimal, mitigated via logistics and contracts .Manageable headwinds
Backlog and demand visibilityBacklog around ~$730M at YE; strong visibility .Backlog ~ $700M; majority for next two quarters; supports guidance .Stable support

Management Commentary

  • “Sales increased 11% on both a reported and organic basis. Our adjusted operating income grew 15%… and our adjusted earnings per share grew 19% year-over-year to $1.55” — CEO opening remarks .
  • “Adjusted operating income as a percentage of sales expanded 50 basis points y/y to 17.1%, with ~10 bps from gross margin and ~40 bps from OpEx leverage” — CFO on margin drivers .
  • “We are raising the midpoint of our adjusted operating income and EPS outlook… maintaining our sales outlook midpoint… with strong pipeline concentrated in faster-growing end markets” — CEO .
  • “Cardio & Vascular sales increased 24%… driven by new product ramps in electrophysiology, Precision Coating and VSI acquisitions, and strong customer demand in neurovascular” — press release .
  • “We generated $44M of cash from operations and $25M of free cash flow in Q2; leverage ended at 3.2x” — CFO .

Q&A Highlights

  • Sales outlook and range: Management narrowed the FY25 sales range but kept the midpoint unchanged, citing Q2 timing shifts (~200 bps, ~$10M pull-forward from Q3) and tough 4Q24 comps; expects ~8% y/y growth in both Q3 and Q4 .
  • CRM & Neuromodulation trajectory: Expect mid-single digit FY25, with 2H pickup as planned IPG customer decline fades and normalized CRM demand resumes .
  • CNV sustainability and EP/PFA: Company has broad exposure across EP procedures (access, guidewires, transeptal sheaths, diagnostics, ablation) and a strong pipeline; CNV growth guided mid-teens for FY25 .
  • FX and share count impact: $3M FX headwind ($0.09 EPS) and a ~$0.04 EPS reduction from higher adjusted weighted average shares y/y .
  • Tariffs and logistics: Minimal direct impact ($1–$5M) with mitigation via logistics (e.g., direct international shipments from Mexico) and contract structures (~70% under long-term contracts) .

Estimates Context

  • Q2 2025: Revenue $476.5M vs consensus $464.4M (beat ~+2.6%); adjusted EPS $1.55 vs consensus $1.551 (in line). Q1 2025: revenue and EPS both beat; Q4 2024: revenue beat and slight EPS miss [GetEstimates]*.
  • Implication: Street models likely move up for AOI/EPS given raised profit guidance and tax rate reduction; sales expectations may modestly tighten given management’s cadence and tough comps .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Strong execution: Revenue +11%, adjusted AOI +15%, adjusted EPS +19%; CNV +24% led by EP ramps and neurovascular demand, supporting the above-market growth narrative .
  • Profit focus: Midpoints raised for adjusted AOI (+$2M) and EPS (+$0.05) with AOI margin at ~17.1% and expected sequential improvement; OpEx leverage and manufacturing efficiencies are driving margin expansion .
  • Cadence normalization: Q2 upside partly reflects timing shifts from Q3; management guides similar y/y growth in Q3 and Q4 (~8%) amid tough 4Q24 comps—plan assumptions should reflect this cadence .
  • CRM & Neuromodulation improving in 2H: Planned IPG customer decline fades and normalized CRM demand resumes; expect mid-single digit FY25 growth .
  • FX and share count headwinds are manageable: $3M FX hit ($0.09 EPS) and ~$0.04 EPS impact from adjusted share count; tax rate outlook trimmed to 18.5–19.5% helps offset .
  • Balance sheet and FCF: Q2 OCF $44M, FCF $25M; leverage 3.2x within target range; FY25 FCF guided to $120–$140M with capex $110–$120M, supporting continued tuck-in M&A and capacity investments .
  • Backlog and visibility: ~$700M firm orders, concentrated in next two quarters, underpinning the tightened sales range and unchanged midpoint .
* S&P Global disclaimer: Where noted, values are retrieved from S&P Global consensus datasets.

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