Integer Holdings Q2 2025 presentation: 11% sales growth, raises profit outlook

Published 24/07/2025, 13:30
Integer Holdings Q2 2025 presentation: 11% sales growth, raises profit outlook

Integer Holdings Corporation (NYSE:ITGR) reported strong second-quarter 2025 results during its earnings conference call on July 24, with double-digit growth in sales and profits leading management to raise its adjusted operating income outlook for the full year.

Despite the positive results, Integer’s stock was down 4.98% in premarket trading at $110, suggesting investors may have had higher expectations or found concerns not emphasized in the presentation.

Quarterly Performance Highlights

Integer delivered robust financial performance in the second quarter of 2025, with sales reaching $476 million, an 11% increase compared to the same period last year. The company’s adjusted operating income grew even faster at 15% year-over-year to $81 million, while adjusted earnings per share jumped 19% to $1.55 from $1.30 in Q2 2024.

As shown in the following chart of Integer’s Q2 2025 financial results, the company demonstrated strong growth across all key financial metrics:

The company’s adjusted net income rose 23% year-over-year to $55 million. A detailed breakdown of this improvement shows that operational drivers contributed $8 million to the increase, while interest expense reductions added $4 million. These gains were partially offset by a $3 million negative impact from foreign exchange.

The following waterfall chart illustrates the components driving the change in adjusted net income:

Integer also reported strong free cash flow growth of 55% in Q2 2025, reaching $25 million compared to $16 million in the same quarter last year. The company maintained a debt leverage ratio of 3.2x, which falls within its strategic target range of 2.5x to 3.5x.

Segment Performance Analysis

Integer’s growth was primarily driven by its Cardio & Vascular segment, which saw sales surge 24% year-over-year to $287 million in Q2 2025. This segment, which represents 58% of total sales, benefited from new product ramps in Electrophysiology, contributions from the Precision Coating and VSi Parylene acquisitions, and strong customer demand in Neurovascular products.

The following chart shows the impressive performance of the Cardio & Vascular segment:

The CRM & Neuromodulation segment, which accounts for 37% of Integer’s total sales, delivered more modest growth of 2% year-over-year, with sales reaching $172 million in Q2 2025. This growth was driven by strong performance from emerging Neuromodulation customers with PMA products, offset by the planned decline of an early SCS Neuromodulation finished IPG customer.

The Other Markets segment, representing the remaining 5% of sales, saw a 38% decline to $18 million, reflecting the company’s strategic exit from the Portable Medical (TASE:BLWV) market and divestiture of the AS&O product line.

Financial Outlook and Guidance

Based on its strong first-half performance, Integer raised its adjusted operating income outlook by $2 million at the midpoint while maintaining its sales guidance. For the full year 2025, the company now expects:

  • Sales of $1,850-$1,876 million, representing 8-9% growth
  • Adjusted operating income of $319-$331 million, up 12-16%
  • Adjusted EPS of $6.25-$6.51, an increase of 18-23%
  • Free cash flow of $120-$140 million, up 20-40%

The following chart illustrates Integer’s updated full-year outlook compared to 2024 results:

The company expects organic sales growth of 6-8% for the full year, with inorganic growth contributing approximately $59 million from acquisitions, partially offset by a $29 million negative impact from the Portable Medical exit. Management also anticipates that adjusted operating income as a percentage of sales will expand throughout 2025, reaching 17.4% for the full year, an 86 basis point improvement.

As shown in the following chart detailing the components of Integer’s 2025 sales growth:

Strategic Positioning and Investment Thesis

Integer’s management emphasized that the company is executing its strategy to sustain above-market growth, as evidenced by its sales performance and adjusted operating income growing at 1.5 times the rate of sales growth in the first half of 2025.

The company’s investment thesis centers on its diversified portfolio strategy, operational excellence, and financial discipline. Integer highlighted that approximately 70% of its sales are under multi-year agreements, providing revenue stability, while favorable outsourcing trends in the medical device industry continue to support growth opportunities.

The following comprehensive overview illustrates Integer’s investment thesis and strategic positioning:

Integer’s historical performance shows a consistent upward trend in both sales and adjusted EPS, with particularly strong growth in the Cardio & Vascular segment:

Looking ahead, management expects reported sales growth in the second half of 2025 to be approximately 8% at the midpoint, with similar growth rates in both the third and fourth quarters. The company remains focused on expanding operating margins throughout the year while maintaining its strategic debt leverage target of 2.5x to 3.5x.

Despite the positive outlook and strong quarterly results, investors appeared cautious, as reflected in the premarket trading decline. This reaction may indicate concerns about the sustainability of growth rates or potential headwinds not emphasized in the presentation, such as the tariff impacts mentioned in the previous earnings call that were estimated to cost $1-5 million in 2025.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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