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TI

TELEFLEX INC (TFX)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered adjusted EPS $3.67 and GAAP revenue $913.0M; both exceeded S&P Global consensus: EPS $3.38* and revenue $892.8M*, despite a 350 bps y/y decline in adjusted gross margin and 400 bps decline in adjusted operating margin due to tariffs, FX and mix . Values retrieved from S&P Global.*
  • Guidance mixed: FY25 adjusted constant-currency (CC) revenue growth lowered to 6.9–7.4% (from 7.7–8.7%), while adjusted EPS was narrowed to $14.00–$14.20; GAAP EPS moved to a loss $(4.42)–$(4.22) driven by non-cash impairments ($403.9M IU goodwill; $100M Titan SGS) .
  • Growth engines vs headwinds: BIOTRONIK Vascular Intervention (VI) modestly exceeded its ~$99M Q3 target and remains on track for $204M in H2; intra-aortic balloon pump demand slowed sooner than expected (lower U.S. replacement activity), prompting a cut to pump revenue assumptions for H2 .
  • Strategic catalyst watch: late-stage diligence underway to sell “NewCo” (urology, acute care, OEM) with sale prioritized over spin; a VI-focused investor event scheduled Nov 14 (8am ET) may provide product pipeline visibility (e.g., Freesolve/BIOMAG-II) .

What Went Well and What Went Wrong

What Went Well

  • “We executed well in the third quarter, delivering adjusted operating margin and earnings per share above our expectations and revenue at the midpoint of our guidance range,” with VI modestly ahead of ~$99M Q3 guide and integration on track .
  • VI business grew ~6.9% y/y (reported) and exceeded expectations; management affirmed $204M H2 revenue for VI and highlighted healthy cath lab trends; BIOMAG‑II enrollment passed 1,000 patients, with data expected in 2027 .
  • Tariff headwind mitigation improved: 2025 impact now estimated at $25–$26M (~$0.50/share) vs prior $29M ($0.55/share) .

What Went Wrong

  • Interventional Urology (UroLift) pressure persisted; Teleflex recorded a $403.9M IU goodwill impairment. Titan SGS intangible impairment of $100M reflected weaker bariatric surgery demand attributed to rising GLP‑1 adoption .
  • Intra‑aortic balloon pump order rates (U.S.) slowed earlier than expected; management cut FY25 balloon pump revenue assumptions (vast majority U.S.) and lowered FY25 adjusted CC revenue growth to 6.9–7.4% .
  • Margins compressed: adjusted gross margin fell 350 bps y/y and adjusted operating margin fell 400 bps, driven by tariffs, logistics costs, FX, and VI-related opex .

Financial Results

Headline P&L vs prior periods and S&P Global consensus

MetricQ3 2024Q2 2025Q3 2025Consensus (Q3 2025)
Revenue (GAAP, $USD Millions)$764.4 $780.9 $913.0 $892.8*
Adjusted Revenue ($USD Millions)$764.4 $780.9 $892.9 —
Diluted EPS (GAAP)$2.36 $2.77 $(9.24) —
Adjusted Diluted EPS$3.49 $3.73 $3.67 $3.38*
Gross Margin (GAAP)56.3% 55.2% 49.5% —
Gross Margin (Adjusted)60.8% 59.7% 57.3% —
Operating Margin (GAAP)19.5% 19.9% (44.8)% —
Operating Margin (Adjusted)27.3% 26.9% 23.3% —

Values retrieved from S&P Global.*

Interpretation: Revenue and adjusted EPS beat consensus, but y/y margin compression reflects tariffs, FX and mix; GAAP loss driven by large non‑cash impairments .

Segment Revenue – Global Product Categories ($USD Millions)

CategoryQ3 2024Q2 2025Q3 2025
Vascular Access$180.9 $185.5 $191.0
Interventional$149.9 $170.0 $266.4
Anesthesia$101.1 $96.4 $101.4
Surgical$111.7 $114.0 $122.9
Interventional Urology$83.4 $76.4 $71.8
OEM$82.6 $78.7 $80.4
Other$54.8 $59.9 $79.1 (reported); $59.0 adjusted

Notes: “Other” includes non‑interventional urology and respiratory plus the Italian payback adjustment; adjusted excludes Italian payback reserve adjustment .

Segment Revenue – Geography ($USD Millions)

GeographyQ3 2024Q2 2025Q3 2025
Americas$515.9 $525.7 $555.9
EMEA$150.2 $166.2 $234.2 (reported); $214.1 adjusted
Asia$98.3 $89.0 $122.9

Commentary: Asia benefited from ~$9M stocking order for balloon pumps in China as part of a growth strategy, partially offset by VBP dynamics .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP Revenue GrowthFY20259.00%–10.00% 9.10%–9.60% Narrowed up slightly
Adjusted CC Revenue GrowthFY20257.70%–8.70% 6.90%–7.40% Lowered
GAAP EPSFY2025$6.73–$7.13 $(4.42)–$(4.22) Lowered (impairments)
Adjusted EPSFY2025$13.90–$14.30 $14.00–$14.20 Narrowed (midpoint slightly up)
Adjusted Gross MarginFY2025n/a58.75%–59.50% Introduced
Adjusted Operating MarginFY2025n/a24.50%–24.70% Introduced
FX Tailwind to GAAP RevFY2025~$26M (~0.85%) $32M (~1.0%) Increased
VI RevenueH2 2025$204M (introduced Q2) $204M (unchanged) Maintained
Q4 Adj. CC Revenue GrowthQ4 2025n/a14%–15.8% (ex-FX) Introduced
Q4 FX BenefitQ4 2025n/a~$21M benefit Introduced
Tax Rate (Adjusted)FY2025~13.25% (prior internal assumption) ~12.5% Lowered
Net Interest ExpenseFY2025n/a~$93M Introduced
Tariff ImpactFY2025$29M ($0.55/sh) $25–$26M (~$0.50/sh) Improved

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025 and Q2 2025)Current Period (Q3 2025)Trend
TariffsQ1: ~$55M FY impact assumed; mitigation under evaluation . Q2: mitigation ongoing; outlook raised on VI acquisition .FY impact improved to $25–$26M (~$0.50/sh) .Improving headwind
Intra‑aortic balloon pumpsQ1: growth driver; no early slowdown flagged . Q2: solid growth context with VI .U.S. replacement cycle slowed earlier than expected; FY pump rev cut; China stocking ~$9M in Q3 .Moderating
Vascular Intervention (BIOTRONIK)Q2: acquisition closed; H2 guide $204M .Q3 revenue modestly ahead of ~$99M plan; +6.9% y/y; integration on track; investor event Nov 14 .Positive execution
Separation / NewCo saleQ1: evaluating options; strong interest . Q2: continued exploration of sale vs spin .Sale prioritized; late‑stage diligence with multiple buyers .Advancing
Interventional Urology & BarrigelQ1/Q2: UroLift pressure; Barrigel growth .IU goodwill impairment $403.9M; Barrigel launched in Japan (PMDA approval/coverage) .Mixed (UroLift weak; Barrigel expanding)
Titan SGS (bariatric)—$100M impairment citing GLP‑1 adoption and lower growth expectations .Negative structural
FXQ1: modest benefit; Q2: ~0.85% FY tailwind .FY tailwind raised to ~$32M (~1%); Q4 assumes €/$ ~1.16 .Slightly favorable
R&D/Clinical (Freesolve/BIOMAG‑II)—>1,000 patients enrolled; 2027 data read‑out .On track

Management Commentary

  • CEO: “Revenue from the acquired Vascular Intervention business modestly exceeded our guidance of $99 million and integration activities have remained on track… We continue to actively advance the process of a potential sale of NewCo, which has become our primary focus” .
  • CEO on pumps: “We have lowered our 2025 global balloon pump revenue expectations by $30 million… conversions have slowed earlier than expected” .
  • CFO: “Adjusted gross margin was 57.3%… decrease driven by tariffs, FX, and increased logistics and distribution costs… adjusted operating margin 23.3%… higher opex from VI and FX headwinds” .
  • CFO on tax and tariffs: “Tax rate 12.5% (vs 13.25% prior); tariff impact now $25–$26M ($0.50/share), improved from $29M (~$0.55/share)” .

Q&A Highlights

  • China balloon pump dynamics: ~$9M distributor stocking order in Q3 as tenders/tariffs timing shifted; expected to normalize with sell‑through by year‑end .
  • NewCo sale: process in late‑stage diligence with multiple buyers; sale prioritized over spin to maximize shareholder value .
  • Q4 guide color: implied revenue $930–$945.6M with ~$21M FX tailwind; adj CC growth 14–15.8% (ex‑FX) .
  • Titan SGS impairment: growth persists but below original plan; GLP‑1 adoption weighs on longer‑term projections, necessitating intangible write‑down .
  • VI integration and retention: integration progressing well with strong leadership retention and robust R&D capabilities .

Estimates Context

  • Beat vs S&P Global consensus: Adjusted EPS $3.67 vs $3.38*, Revenue $913.0M vs $892.8M* (both beats). Values retrieved from S&P Global.*
  • Estimate revisions likely: Lowered FY25 adjusted CC revenue growth (6.9–7.4%) and pump outlook may drive modest revenue estimate trims, while narrower adjusted EPS range ($14.00–$14.20) and improved tariff/tax assumptions could support EPS stability near the high end .

Key Takeaways for Investors

  • Quality beat on revenue and adjusted EPS despite y/y margin compression; GAAP loss is non‑cash impairment‑driven (IU goodwill $403.9M; Titan SGS $100M) .
  • VI performing ahead of plan with clear H2 visibility ($204M) and an investor event on Nov 14 to showcase the portfolio and Freesolve/BIOMAG‑II, a potential medium‑term growth catalyst .
  • Near‑term headwind: earlier‑than‑expected slowdown in U.S. balloon pump replacements; watch Q4 cadence and catheter growth resiliency .
  • Macro/input costs: tariff headwind improving ($25–$26M) with FX tailwinds (FY ~$32M, Q4 ~$21M); adjusted tax rate lowered to ~12.5%, supporting EPS .
  • FY guidance implies strong Q4 adjusted CC growth (14–15.8% ex‑FX); execution on VI integration and remediation of pump softness are key stock drivers .
  • Strategic overhang: progressing sale of NewCo could be a valuation catalyst; proceed monitoring deal terms, use of proceeds (deleveraging and capital returns) .
  • Watch IU/UroLift trend and GLP‑1 spillover into bariatrics; continued Barrigel expansion (Japan launch) offers offset within urology .

Values retrieved from S&P Global.*