Integer Holdings Corp (ITGR) Q3 2025 Earnings Summary

Executive Summary

Q3 2025 delivered solid top- and bottom-line growth with sales up 8% to $467.7M and adjusted EPS up 25% to $1.79; revenue and EPS were modest beats vs S&P Global consensus ($466.4M revenue, $1.68 EPS). Integer reduced full‑year sales midpoint by ~$16M but limited profit impact via cost actions, cutting adjusted EPS midpoint by only $0.02 . Consensus values marked with an asterisk are from S&P Global.*
Product mix was favorable: Cardio & Vascular +15% on EP ramps and acquisitions; CRM & Neuromod +2%, while Other Markets fell due to the planned Portable Medical exit. Adjusted operating margin expanded ~80 bps YoY to ~18.4% on efficiency and opex leverage .
Preliminary 2026 outlook guides reported sales down 2% to up 2% (organic flat to +4%) on lower adoption of three new products (two EP, one neuromodulation), with recovery to above‑market organic growth targeted in 2027; 2025 guidance was updated accordingly .
Incremental capital return: Board authorized a $200M share repurchase program on Nov 4, 2025, reinforcing confidence in cash generation; a potential stock support catalyst as execution progresses through the 2026 digestion year .

What Went Well and What Went Wrong

What Went Well
- Strong execution: Q3 sales +8% to $467.7M, adjusted operating income +14% to $85.9M, adjusted EPS +25% to $1.79; adjusted EBITDA +11% to $105.9M. CEO: “Integer delivered another strong quarter... adjusted EPS growth of 25%.” .
- Segment strength in Cardio & Vascular: +15% YoY on EP ramps, acquisitions (Precision Coating, BSI/VSi Parylene) and neurovascular demand .
- Margin discipline and cash: Adjusted OI margin up ~80 bps YoY to ~18.4%; adjusted tax rate improved to 17–18% for 2025 (150 bps better than July guide), supporting profit growth > sales growth .
What Went Wrong
- 2026 headwinds: Lower-than-expected market adoption for three new products (two EP, one neuromodulation) will create a 3–4% sales headwind in 2026, most acute in 1H26; guides sales down 2% to up 2% reported .
- CRM & Neuromod moderation: 2025 growth in CRM & Neuromod guided to low-single digits vs prior mid-single digits due to lower demand from select emerging PMA customers .
- FY25 outlook trimmed: 2025 sales range lowered to $1.840–$1.854B; adjusted OI midpoint −$3M; adjusted EPS range now $6.29–$6.43, despite strong Q3 trajectory .

Financial Results

Revenue and EPS trend vs YoY, sequential, and consensus

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025	Q3 2025 Consensus
Revenue ($M)	431.4	437.4	476.5	467.7	466.4*
Adjusted EPS ($)	1.43	1.31	1.55	1.79	1.676*

Consensus from S&P Global; asterisked cells are S&P Global values.*

Profitability and key P&L metrics

Metric	Q3 2024	Q2 2025	Q3 2025
Operating Income (GAAP, $M)	58.0	59.3	56.4
Adjusted Operating Income ($M)	75.6	81.3	85.9
Adjusted EBITDA ($M)	95.5	99.0	105.9
Adjusted Net Income ($M)	49.8	54.8	63.1
Diluted EPS (GAAP, $)	1.01	1.04	1.11
Adjusted EPS ($)	1.43	1.55	1.79

Margins (calculated from reported figures)

Margin	Q3 2024	Q2 2025	Q3 2025
Gross Margin %	27.0% (116.6/431.4)	27.1% (129.2/476.5)	27.0% (126.2/467.7)
Adjusted OI Margin %	17.5% (75.6/431.4)	17.1% (81.3/476.5)	18.4% (85.9/467.7)
Adjusted EBITDA Margin %	22.1% (95.5/431.4)	20.8% (99.0/476.5)	22.6% (105.9/467.7)

Segment sales breakdown (Q3 2025 vs Q3 2024)

Product Line	Q3 2024 ($M)	Q3 2025 ($M)	YoY %	Organic %
Cardio & Vascular	241.0	277.1	15.0%	8.5%
CRM & Neuromodulation	165.1	169.2	2.5%	2.5%
Other Markets	25.3	21.4	(15.5)%	27.5%
Total Sales	431.4	467.7	8.4%	6.6%

Balance sheet and cash flow KPIs

KPI	Q3 2025
Cash from Operations (YTD, $M)	140.7
CapEx (YTD, $M)	63.6
Net Total Debt ($M)	1,158.4
Leverage (Net Debt / TTM Adj. EBITDA, x)	3.0x as of 9/26/25

Estimate beats/misses (S&P Global)

Revenue: $467.7M vs $466.4M consensus → beat by ~$1.3M . S&P consensus marked with asterisk.*
Adjusted EPS: $1.79 vs $1.676 consensus → beat by ~$0.11 . S&P consensus marked with asterisk.*

Guidance Changes

Metric	Period	Previous Guidance (Jul 24)	Current Guidance (Oct 23)	Change
Sales ($B)	FY 2025	$1.850–$1.876	$1.840–$1.854	Lowered
Adjusted Operating Income ($M)	FY 2025	$319–$331	$319–$325	Lowered midpoint (~$3M)
Adjusted EBITDA ($M)	FY 2025	$402–$418	$398–$404	Lowered
Adjusted Net Income ($M)	FY 2025	$222–$231	$222–$227	Narrowed lower
Adjusted EPS ($)	FY 2025	$6.25–$6.51	$6.29–$6.43	Midpoint −$0.02
CFO ($M)	FY 2025	$235–$255	$230–$240	Lowered
Adjusted Effective Tax Rate	FY 2025	18.5%–19.5%	17.0%–18.0%	Lowered
CapEx ($M)	FY 2025	$110–$120	$95–$105	Lowered
Leverage (x)	FY 2025 YE	2.5–3.5x	2.7–2.8x	Within range
Preliminary Sales	FY 2026	n/a	Down 2% to up 2% reported; organic flat to +4%	New
Preliminary Adj. OI	FY 2026	n/a	Down 5% to up 4%	New
Preliminary Adjusted EPS	FY 2026	n/a	Down 6% to up 5%	New
Preliminary Organic Growth	FY 2027	n/a	200 bps above market	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1–Q2 2025)	Current Period (Q3 2025)	Trend
Profit outlook	Q1: Raised adj. EPS outlook; reiterated sales/adj. OI . Q2: Raised 2025 adj. OI & EPS midpoint .	Narrowed 2025 (lower sales midpoint, slight profit trim) but still strong EPS growth .	From raising to selectively trimming; profitability resilient
EP product adoption	Not highlighted in Q1–Q2 press releases.	Slower adoption for two EP products to pressure 1H26; headwind unusual and concentrated .	New headwind emerging
Neuromod PMA customers	Q1–Q2: Strong growth among emerging neuromod PMA customers .	Select emerging PMA customers reduced demand; CRM & Neuromod now low single-digit growth in 2025 .	Momentum moderating
Portable Medical exit	Multi-year exit pressured Other Markets in Q1–Q2 .	Exit completes by end-2025; ~2% headwind to 2026 sales .	Final lap in Q4’25; headwind shifts to 2026 base
Margin playbook	General efficiency/Integer production system; improving adj. OI .	~80 bps YoY adj. OI margin expansion; continue cost discipline into 2026 .	Continuing structural improvement
Tax rate	Higher AETR ranges early; normalized later .	2025 adjusted ETR now 17–18% (150 bps better than July) .	Favorable update
Capital returns	Not in Q1–Q2 releases.	$200M share repurchase authorization announced Nov 4 .	New positive capital allocation lever

Management Commentary

CEO transition and strategy: “Integer delivered another strong quarter... While select headwinds are expected to impact our 2026 sales, we believe our strategy and strong product development pipeline will lead to a return to 200 basis points above‑market organic growth in 2027.” – Joseph Dziedzic .
New CEO on outlook: “We recently received customer updates... we expect sales of three new products to decline in 2026… a 3% to 4% headwind… recovery to market growth in the second half, and return to above-market organic growth in 2027.” – Payman Khales .
CFO on profitability and cash: “Adjusted operating income as a percentage of sales expanded approximately 80 basis points… adjusted EPS totaled $1.79, up 25%… We expect free cash flow between $130 million and $140 million, up ~35% YoY at midpoint.” – Diron Smith .

Q&A Highlights

EP/Neuromod headwinds: Two EP and one neuromodulation products, all launched and supplier relationships intact, are seeing slower market adoption than forecast, with customers recalibrating demand; described as “highly unusual” to see multiple programs shift simultaneously .
Visibility and backlog: Backlog remains steady (~$730M), with 12‑month rolling forecasts from customers; the issue centers on ramp/adoption variability of new product launches, not loss of programs or share .
2026 margin approach: Expect disciplined cost management and continued Integer production system efficiencies to offset lower volumes; 2026 adj. OI targeted in a range down 5% to up 4% aligned with sales guide .
Segment nuance: Excluding the two EP products, EP business expected to grow at market rates; neuromod portfolio excluding a single pressured customer continues to track market with new launches expected in late-2026/2027 .

Estimates Context

S&P Global consensus for Q3 2025: Revenue $466.4M (9 estimates) vs actual $467.7M; Primary EPS $1.676 (8 estimates) vs actual $1.79 – modest beats on both lines . Values marked with an asterisk are from S&P Global.*
Street likely to lower 2026 sales/EPS on the 3–4% product‑specific headwind (two EP, one neuromod) concentrated in 1H26; 2027 estimates may embed a recovery to above‑market organic growth given pipeline commentary .

Key Takeaways for Investors

Q3 was clean: revenue and EPS beats with continued margin expansion; execution remains strong despite specific product adoption headwinds .
The narrative pivot: 2026 digestion year (product-specific adoption resets, portable medical exit) followed by targeted reacceleration in 2H26 and above‑market growth in 2027 supported by new launches across EP, neurovascular, structural heart, and neuromodulation .
Profit resilience: Integer is prioritizing cost discipline to protect margins/EPS, evidenced by trimming sales but holding most profit guidance; adjusted tax rate also provides tailwind .
Capital allocation: Newly authorized $200M buyback adds downside support and EPS accretion potential through the 2026 transition .
Watchlist items into 2026: trajectory of the two EP and one neuromod programs, pace of backfill from pipeline launches (late-2026/2027), and cadence of CRM & Neuromod growth from emerging PMA customers .
Tactical setup: Expect estimate cuts for 2026 and potentially a range-bound near-term multiple; catalysts include 2027 pipeline visibility updates, incremental margin proof points, and buyback execution .
Risk balance: Concentration in new product ramps increases adoption volatility; however, sole‑source positions and multi‑year agreements (~70% of sales) underpin longer‑term visibility .

Footnote: Asterisked consensus values are retrieved from S&P Global (Capital IQ).*