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TI

TELEFLEX INC (TFX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered revenue and EPS beats with raised full‑year guidance: GAAP revenue $780.9M (+4.2% YoY) vs consensus ~$771.5M; adjusted EPS $3.73 (+9.1% YoY) vs consensus ~$3.37; GAAP EPS $2.77 . Values retrieved from S&P Global for consensus.
  • Guidance lifted on revenue, EPS, and margins; tariff headwind cut materially: GAAP revenue growth to 9–10% (from 1.28–2.28%), adjusted constant currency to 7.7–8.7% (from 1–2%), adjusted EPS to $13.90–$14.30 (from $13.20–$13.60); tariffs now $29M ($0.55/share) vs prior $55M ($1.05/share) .
  • Strategic catalysts: closed BIOTRONIK Vascular Intervention acquisition (adds ~$204M 2H’25 revenue; ~+$0.10 adjusted EPS accretion first year), and accelerated progress on planned separation into RemainCo/NewCo; management also flagged active exploration of a potential sale of NewCo .
  • Operational drivers: Interventional strength (IABP, complex catheters) offset UroLift and OEM pressures; China VBP headwinds moderated sequentially; CMS proposed 2026 rule boosts office economics for UroLift and Barrigel .

What Went Well and What Went Wrong

What Went Well

  • Interventional outperformed: strong double‑digit IABP; upside from OnControl and complex catheters; category revenue +19.3% YoY constant currency to $170.0M .
  • Raised FY 2025 guidance and cut tariff impact: adjusted EPS to $13.90–$14.30; tariffs reduced to $29M ($0.55/share) with mitigation via USMCA mix and pricing; CFO: “we are raising… guidance… $0.70… $0.50… lower than expected tariff impact” .
  • Strategic optionality and accretive M&A: VI acquisition closed July 1 with €177M (~$204M) 2H’25 revenue and ~+$0.10 adjusted EPS accretion; management moving in parallel on separation and potential NewCo sale .

What Went Wrong

  • UroLift softness persisted; Interventional Urology down 8.3% YoY constant currency to $76.4M, particularly in office site of service .
  • OEM declines continued from customer contract loss and inventory management; OEM -12.4% YoY constant currency to $78.7M; sequential improvement expected in 2H .
  • Gross margin pressure: adjusted gross margin 59.7% (down ~110 bps YoY) on cost inflation, logistics, and mix; operating margin improved via OpEx control .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$749.7 $700.7 $780.9
GAAP Diluted EPS ($)$1.69 $2.07 $2.77
Adjusted Diluted EPS ($)$3.42 $2.91 $3.73
Adjusted Gross Margin (%)60.8% 60.4% 59.7%
Adjusted Operating Margin (%)26.7% 24.7% 26.9%
Adjusted Tax Rate (%)12.3% 14.5% 13.1%

Estimates vs actuals (consensus from S&P Global):

MetricQ2 2025 ConsensusQ2 2025 Actual
Revenue ($USD Millions)771.5*780.9
Primary EPS ($)3.37*3.73

Values retrieved from S&P Global.*

Segment breakdown (Geography, Q2)

SegmentQ2 2024 Revenue ($M)Q2 2025 Revenue ($M)Adjusted Constant Currency Growth
Americas$515.6 $525.7 +2.0%
EMEA$147.1 (Adj: $160.9) $166.2 (2.1)%
Asia$87.0 $89.0 +1.2%
Consolidated$749.7 (Adj: $763.5) $780.9 +1.0%

Product categories (Q2)

CategoryQ2 2024 ($M)Q2 2025 ($M)Adjusted Constant Currency Growth
Vascular Access$181.1 $185.5 +1.4%
Interventional$141.2 $170.0 +19.3%
Anesthesia$102.5 $96.4 (7.6)%
Surgical$111.3 $114.0 +1.4%
Interventional Urology$83.1 $76.4 (8.3)%
OEM$88.8 $78.7 (12.4)%
Other$41.7 (Adj: $55.5) $59.9 +3.5%

KPIs

KPIQ2 2025
Adjusted net interest expense ($M)$19.9
Cash, cash equivalents and restricted cash ($M)$283.9
Inventories ($M)$693.7
Net accounts receivable ($M)$513.8
Net leverage~1.8x (2.6x pro forma VI)
Dividend$0.34/sh declared, payable Sep 15, 2025

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2025)Current Guidance (Q2 2025)Change
GAAP Revenue GrowthFY 20251.28%–2.28% 9.00%–10.00% Raised
Adjusted Const. Currency Revenue GrowthFY 20251.00%–2.00% 7.70%–8.70% Raised
GAAP EPS ($)FY 2025$6.51–$6.91 $6.73–$7.13 Raised
Adjusted EPS ($)FY 2025$13.20–$13.60 $13.90–$14.30 Raised
Adjusted Gross Margin (%)FY 202558.25%–59.00% 58.75%–59.50% Raised
Adjusted Operating Margin (%)FY 202524.60%–25.00% 24.50%–25.00% Slightly Lower Low End
Net Interest Expense ($M)FY 2025~$75 ~$95 Higher (VI financing)
Tariff Impact ($ / EPS)FY 2025~$55M / ~$1.05 ~$29M / ~$0.55 Lower

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
Tariffs & mitigationExposure outlined; no enacted Mexico tariffs yet ~$55M headwind; mitigation via USMCA, supply chain, pricing planned Reduced to ~$29M; increased USMCA compliance, pricing as contracts renew Improving
BIOTRONIK VI acquisitionAnnounced definitive agreement; financial profile and CVI/PVI expansion On track to close; strategic fit with complex PCI Closed; €177M (~$204M) 2H’25, ~+$0.10 EPS accretion; integration underway Executed
Separation (RemainCo/NewCo)Announced plan; RemainCo 6%+ growth target Progressing; 2026 timing; strong inbound NewCo interest Parallel sale path; diligence with buyers; timing updates; RemainCo to retain CEO Advancing
China VBP & regional trendsChina VBP headwinds noted Asia down (VBP); sequential improvement expected Sequential revenue improvement in China; further improvement expected Stabilizing
UroLift & BarrigelIU softness; goodwill impairment Q4 UroLift challenged; Barrigel strong double‑digit growth UroLift pressure persisted; CMS proposed 2026 office uplift ~10%; Barrigel office ~40% uplift proposed Mixed; >2026 tailwind
Interventional performanceInterventional strong; IABP IABP double‑digit growth; complex catheters robust Continued strength; upside from OnControl/complex catheters; IABP strong Strong

Management Commentary

  • CEO on quarter and guidance: “Second quarter revenues were $780.9 million… exceeded the high end of our previous $769–$777 million guidance… adjusted EPS were $3.73, a 9.1% increase” .
  • CFO on margin drivers: “Adjusted gross margin was 59.7%… decrease… due to continued cost inflation… increase in logistics… unfavorable product mix, partially offset by FX; adjusted operating margin 26.9%… better than expected due to prudent operating expense control” .
  • CEO on VI acquisition: “We expect the acquired products to generate revenues of €177 million, or $204 million in the second half of 2025… approximately $0.10 accretive to our adjusted EPS in the first year” .
  • CEO on NewCo options: “We are… actively evaluating a potential sale of NewCo… preliminary meetings with many potential buyers” .

Q&A Highlights

  • EPS/guidance bridge: ~$0.50 benefit from lower tariffs; operational performance ~$0.20; FX negative; tax and shares positive; net interest higher due to VI financing .
  • RemainCo vs NewCo growth: RemainCo expected upper‑5% underlying for 2025 (ex China VBP), Interventional high single to low double‑digit for 2025 .
  • VI cadence and synergies: €86M in Q3 and €91M in Q4; synergies via cath lab access and portfolio combinations (e.g., complex catheters with stents; perforation management with Ringer catheter + PK Papyrus) .
  • CMS proposed rule (2026): Barrigel office ~+40% uplift; ASC/hospital +9%; UroLift office ~+10%; improves physician office economics .
  • Pricing as mitigation: planning to implement increased pricing as contracts renew; larger opportunity in 2026 .

Estimates Context

  • Q2 beat vs Street: revenue $780.9M vs ~$771.5M consensus; adjusted EPS $3.73 vs ~$3.37 consensus. Potential upward estimate revisions supported by raised FY revenue/EPS guidance, lower tariff headwinds, and VI contributions in 2H’25 . Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Interventional momentum remains the core growth engine; continued strength in IABP, complex catheters, and VI portfolio integration supports top‑line acceleration and future margin leverage .
  • Guidance reset higher with reduced tariff drag is a positive revision cycle catalyst; monitor pricing actions and USMCA mix to sustain mitigation .
  • UroLift remains pressured near‑term, but proposed 2026 CMS changes and Barrigel growth provide medium‑term recovery optionality; position sizing should reflect the 2025 office headwinds vs 2026 tailwinds .
  • China VBP headwinds are moderating sequentially; management expects continued improvement through 2025, reducing a key regional risk .
  • VI deal adds scale in cath lab and creates cross‑selling synergies; expect ~$204M 2H’25 revenue, with incremental accretion thereafter; watch for integration updates and investor event in fall .
  • Separation path (and potential NewCo sale) is a structural catalyst; outcome could unlock valuation by clarifying growth/margin profiles; diligence underway with numerous interested parties .
  • Near‑term trading: raised guidance + lower tariffs + acquisition close are supportive; medium‑term thesis: Interventional strength, portfolio optimization, and structural catalysts (spin/sale) drive durable growth and earnings expansion .