Core Insights - Integer Holdings Corporation (ITGR) reported adjusted earnings per share (EPS) of $1.55 for Q2 2025, a 19.2% increase year over year, but missed the Zacks Consensus Estimate by 1.3% [1] - The company achieved revenues of $476.5 million in Q2 2025, reflecting an 11.4% year-over-year growth and surpassing the Zacks Consensus Estimate by 2.9% [2][9] - The gross profit for the quarter was $129.2 million, up 10% year over year, although the gross margin contracted by 30 basis points to 27.1% [8] Revenue Breakdown - The Cardio and Vascular (C&V) segment generated revenues of $286.9 million, a 24% increase year over year, driven by organic growth and acquisitions [5] - The Cardiac Rhythm Management & Neuromodulation (CRM&N) segment reported revenues of $171.9 million, up 2.3% year over year, supported by growth in emerging Neuromodulation customers [6] - Revenues from the Other Markets segment were $17.6 million, down 37.9% year over year, attributed to the planned exit from the Portable Medical market [7] Margin and Expense Analysis - Selling, general and administrative expenses rose to $52.9 million, an increase of 13.9% year over year, while research and development costs decreased to $14.2 million, down 8.8% year over year [10] - Adjusted operating profit was $81.3 million, reflecting a 14.7% increase from the prior year, with an adjusted operating margin expanding by 50 basis points to 17.1% [10] Financial Position - At the end of Q2 2025, Integer Holdings had cash and cash equivalents of $23.1 million, down from $31.7 million at the end of Q1 2025, while total debt was $1.2 billion [11] - Cumulative net cash flow from operating activities was $75.1 million, compared to $70.5 million a year ago [11] 2025 Guidance - Integer Holdings updated its 2025 revenue guidance to a range of $1,850 million to $1,876 million, indicating an 8-9% improvement from 2024 [12] - The company expects full-year adjusted EPS to be between $6.25 and $6.51, representing an 18-23% increase from 2024 [12] Overall Performance - The company demonstrated strong year-over-year growth in both top-line and bottom-line metrics, with significant contributions from the C&V segment and recent acquisitions [13][14] - However, modest growth in the CRM&N segment and a decline in the Other Markets segment are areas of concern [15]

Core Insights - Integer reported Q2 FY2025 GAAP revenue of $476 million, an 11.4% increase from Q2 2024, exceeding analyst estimates by $11.63 million [1] - Adjusted EPS for the quarter was $1.55, reflecting a 19.2% year-over-year growth [1][2] - Management raised profit guidance for FY2025, indicating strong operational performance, particularly in Cardio & Vascular product lines [1] Financial Performance - GAAP revenue for Q2 2025 was $476 million, up from $428 million in Q2 2024, marking an 11.2% increase [2] - Adjusted operating income rose to $81 million, a 14.1% increase from $71 million in the previous year [2] - Adjusted EBITDA increased to $99 million, up 10.2% from $89.8 million year-over-year [2] Business Overview - Integer specializes in contract manufacturing of complex medical device components for large medical technology companies [3] - The company focuses on key product lines: Cardio & Vascular, Cardiac Rhythm Management & Neuromodulation, and Other Markets [4] Segment Performance - Cardio & Vascular segment saw a 24% year-on-year increase in GAAP sales, reaching $286.9 million, driven by new product launches and acquisitions [6] - Cardiac Rhythm Management & Neuromodulation experienced modest organic growth of 2.3%, aligned with management expectations [6][11] - The "Other Markets" segment reported a 37.9% decline in sales, consistent with the company's strategy to exit the portable medical market [7] Strategic Initiatives - Recent acquisitions, particularly in coating technology, are aimed at enhancing Integer's capabilities and supporting vertical integration [8] - The company plans to continue investing in manufacturing and innovation while pursuing strategic acquisitions [14][15] Guidance and Outlook - Management raised full-year 2025 profit guidance, expecting adjusted operating income between $319 million and $331 million, a potential 16% increase from 2024 [14] - Adjusted EPS guidance for FY2025 is set at $6.25–$6.51, indicating up to 23% growth [14] - Revenue outlook for FY2025 is projected at $1.85 billion–$1.88 billion, reflecting confidence in customer demand and acquisitions [14]

Company Performance - Integer (ITGR) reported quarterly earnings of $1.55 per share, missing the Zacks Consensus Estimate of $1.57 per share, but showing an increase from $1.3 per share a year ago, representing an earnings surprise of -1.27% [1] - The company posted revenues of $476.49 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.87%, compared to year-ago revenues of $436.2 million [2] - Over the last four quarters, Integer has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance and Outlook - Integer shares have lost about 12.6% since the beginning of the year, while the S&P 500 has gained 8.1% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $1.67 for the coming quarter and $6.33 for the current fiscal year [7] - The current Zacks Rank for Integer is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Industry Context - The Medical - Instruments industry, to which Integer belongs, is currently in the bottom 34% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - iRadimed (IRMD), another company in the same industry, is expected to report quarterly earnings of $0.45 per share, reflecting a year-over-year change of +7.1% [9]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported sales of $476 million, reflecting an 11% year-over-year growth on both a reported and organic basis [6][9] - Adjusted operating income grew 15% year-over-year, with adjusted earnings per share increasing 19% to $1.55 [6][10] - For the first half of 2025, sales increased by 9%, and adjusted operating profit rose by 14%, indicating a strong performance above market growth [6][21] Business Line Data and Key Metrics Changes - Cardio and vascular sales increased by 24% in Q2 2025, driven by new product ramps and strong customer demand [11] - Cardiac Rhythm Management and Neuromodulation sales grew by 2% in Q2 2025, with expectations for mid-single-digit growth for the full year [12] - Adjusted net income for Q2 2025 was $55 million, up 23% year-over-year, attributed to operational improvements and lower interest expenses [13] Market Data and Key Metrics Changes - The company expects sales growth in the mid-teens for Cardio and Vascular for the full year 2025, while CRM and Neuromodulation are projected to grow in the mid-single digits [11][12] - The company anticipates second-half sales growth of approximately 8% at the midpoint, with similar growth rates in Q3 and Q4 [19] Company Strategy and Development Direction - The company is focused on expanding margins through manufacturing and business excellence initiatives, alongside integrating tuck-in acquisitions [8] - The strategic outlook includes maintaining a leverage ratio within the target range of 2.5 to 3.5 times trailing four-quarter adjusted EBITDA [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sustained performance levels that will produce a premium valuation for shareholders [21] - The company has good visibility to customer demand and maintains a backlog of approximately $700 million, which supports its guidance for the year [19][75] Other Important Information - The adjusted effective tax rate for Q2 2025 was 19%, down from 20.7% in the prior year, with expectations for the full year to be between 18.5% and 19.5% [13] - The company experienced a foreign exchange headwind of $3 million in Q2 2025, primarily due to a weakening U.S. dollar [14] Q&A Session Summary Question: Full year organic growth guidance update - Management explained that while Q2 showed strong performance, the guidance for the second half remains at 8% due to typical customer demand shifts and tough comparisons from the previous year [25][28] Question: CRM and Neuromodulation growth outlook - Management indicated that the improvement in the full year outlook for CRM and Neuromodulation is driven by strong customer demand and a planned decline in a specific program that is expected to lessen in the second half [33][34] Question: Inventory management and tariffs - Management confirmed that inventory management has normalized and that the impact of tariffs on the business remains minimal, with a range of $1 million to $5 million expected [44][49] Question: Revenue pull forward and future performance - Management clarified that the 11% growth in Q2 included some pull forward of demand from Q3, but overall guidance for the year remains unchanged [60][63] Question: Strategic priorities under new CEO - The new CEO emphasized the continuation of existing strategies focused on growth markets, margin expansion, and tuck-in acquisitions [56][58] Question: Impact of tariffs on customer relationships - Management stated that while tariffs have minimal direct impact, they are actively working with customers to minimize any logistical challenges [95][97]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported sales of $476 million, reflecting an 11% year-over-year growth on both a reported and organic basis [9][6] - Adjusted operating income grew 15% year-over-year, with adjusted earnings per share increasing 19% to $1.55 [6][11] - For the first half of 2025, sales increased by 9%, and adjusted operating profit increased by 14%, outpacing sales growth [6][23] - The company raised the midpoint of its adjusted operating income and EPS outlook while maintaining the sales outlook midpoint [7][17] Business Line Data and Key Metrics Changes - Cardio and vascular sales increased by 24% in Q2 2025, driven by new product ramps and strong customer demand [12] - Cardiac Rhythm Management and Neuromodulation sales increased by 2% in Q2 2025, with expectations for mid-single-digit growth for the full year [13][20] - The company expects Cardio and Vascular sales to grow in the mid-teens for the full year 2025 [12][20] Market Data and Key Metrics Changes - The company anticipates second-half 2025 reported sales growth to be approximately 8% at the midpoint, with similar growth rates in Q3 and Q4 [21][18] - The adjusted effective tax rate for Q2 2025 was 19%, down from 20.7% in the prior year, with expectations for the full year to be between 18.5% and 19.5% [14][20] Company Strategy and Development Direction - The company is focused on expanding margins through manufacturing and business excellence initiatives and integrating tuck-in acquisitions [7][23] - The strategic exit from the portable medical market is expected to be completed by the end of 2025, with a negligible impact from tariffs anticipated [21][20] - The company aims to maintain a leverage ratio within the target range of 2.5 to 3.5 times trailing four-quarter adjusted EBITDA [22][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining above-market performance and achieving financial objectives [23] - The company highlighted strong visibility to customer demand for the second half of the year, supported by a backlog of approximately $700 million [45][78] - Management noted that the second half of the year will face tough comparisons due to strong growth in Q4 of the previous year [89][90] Other Important Information - The company generated $44 million in cash flow from operations in Q2 2025, with free cash flow increasing by 55% year-over-year to $25 million [16][17] - The company expects capital expenditures to remain between $110 million and $120 million for the full year [22][20] Q&A Session Summary Question: Full year organic growth guidance update - Management maintained the full year organic growth guidance at 8.5% midpoint, despite a strong Q2 performance [30][34] Question: CRM and Neuromodulation growth outlook - Management indicated that CRM and Neuromodulation growth is expected to improve in the second half due to customer demand and reduced impact from planned declines [36][37] Question: Inventory management and tariffs - Management confirmed that inventory management has normalized and that the impact of tariffs remains minimal, with a range of $1 million to $5 million expected [50][101] Question: Revenue pull-through and contract flexibility - Management explained that while 70% of contracts are long-term, there is variability in customer forecasts, but overall visibility remains strong [114][117] Question: Electrophysiology growth sustainability - Management expressed confidence in the sustainability of growth in electrophysiology, supported by strong market demand and a robust product pipeline [70][72]

Financial Performance - Sales increased by 11% compared to Q2 2024, with organic sales also up by 11%[14, 61] - Adjusted operating income rose by 15% compared to Q2 2024[14, 61] - Adjusted EPS reached $1.55, a 19% increase from $1.30 in Q2 2024[14, 61] - Free cash flow is up $9 million, +55% compared to 2Q24[42] Outlook - The company narrowed its sales outlook to $1,850 to $1,876 million, reflecting an 8% to 9% increase compared to 2024[14, 61] - Adjusted operating income outlook increased by $2 million at the midpoint, ranging from $319 to $331 million, a 12% to 16% increase vs 2024[12, 14, 61] - Adjusted EPS outlook increased by $0.05 at the midpoint, ranging from $6.25 to $6.51, an 18% to 23% increase vs 2024[12, 14, 61] - Free cash flow is projected to be between $120 to $140 million, up 20% to 40% vs 2024[14, 61] Business Segments - Cardio & Vascular (C&V) trailing 4 quarter sales increased 17% year-over-year in 2Q25[24] - CRM & Neuromodulation trailing 4 quarter sales increased 5% year-over-year in 2Q25[31]

[Financial Highlights and Outlook](index=1&type=section&id=Financial%20Highlights%20and%20Outlook) This section presents Integer's strong Q2 2025 financial performance and its updated full-year 2025 outlook [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Integer reported strong Q2 2025 results with double-digit growth in sales, adjusted operating income, and adjusted EPS, driven by the continued execution of its strategy - Integer's President and CEO, Joseph Dziedzic, highlighted the strong quarter with **11% sales growth**, **15% adjusted operating income growth**, and **19% adjusted EPS growth**[3](index=3&type=chunk) - Total debt increased by **$212 million** from the end of 2024 to **$1.202 billion** Net total debt increased by **$250 million** to **$1.204 billion**, resulting in a leverage ratio of **3.2 times adjusted EBITDA**[5](index=5&type=chunk) Q2 2025 Financial Highlights vs. Q2 2024 | Metric | Q2 2025 | Change vs. Q2 2024 | | :--- | :--- | :--- | | Sales | $476 million | +11% | | GAAP Operating Income | $59 million | +9% | | Non-GAAP Adjusted Operating Income | $81 million | +15% | | GAAP Income from Continuing Operations | $37 million | +19% | | Non-GAAP Adjusted Net Income | $55 million | +23% | | GAAP Diluted EPS from Continuing Operations | $1.04 | +18% | | Non-GAAP Adjusted EPS | $1.55 | +19% | | Adjusted EBITDA | $99 million | +10% | [2025 Full Year Outlook](index=1&type=section&id=2025%20Full%20Year%20Outlook) The company raised its full-year 2025 profit outlook, now expecting adjusted operating income growth of 12-16% and adjusted EPS growth of 18-23% - Projected non-GAAP adjustments for 2025 include approximately **$87 million pre-tax** for adjusted operating income and **$134 million pre-tax** for adjusted net income These adjustments primarily consist of amortization, restructuring, acquisition costs, and debt conversion expenses[8](index=8&type=chunk)[9](index=9&type=chunk) 2025 Full Year Outlook (in millions, except per share) | Metric | GAAP | Change from Prior Year | Adjusted (Non-GAAP) | Change from Prior Year | | :--- | :--- | :--- | :--- | :--- | | Sales | $1,850 to $1,876 | 8% to 9% | N/A | N/A | | Operating income | $232 to $244 | 11% to 17% | $319 to $331 | 12% to 16% | | EBITDA | N/A | N/A | $402 to $418 | 11% to 16% | | Income from continuing operations | $100 to $109 | (17)% to (10)% | $222 to $231 | 21% to 26% | | Diluted earnings per share | $2.79 to $3.05 | (20)% to (13)% | $6.25 to $6.51 | 18% to 23% | [Financial Performance Analysis](index=1&type=section&id=Financial%20Performance%20Analysis) This section details Integer's product line sales performance and summarizes key financial results for Q2 and YTD 2025 [Product Line Sales Performance](index=1&type=section&id=Product%20Line%20Sales%20Performance) In Q2 2025, Cardio & Vascular sales grew strongly by 24.0% (17.6% organic), while Other Markets sales declined due to a planned exit - Growth in the Cardio & Vascular segment was driven by new product introductions in electrophysiology, contributions from the Precision Coating and VSi Parylene acquisitions, and strong neurovascular demand[6](index=6&type=chunk) - The decline in the Other Markets segment was primarily due to the planned multi-year exit from the portable medical market, which was announced in 2022[6](index=6&type=chunk) Product Line Sales (Q2 & YTD 2025 vs 2024) | Product Line | Q2 2025 Sales ($M) | QTD Change | QTD Organic Change | YTD 2025 Sales ($M) | YTD Change | YTD Organic Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cardio & Vascular | $286.9 | 24.0% | 17.6% | $545.7 | 20.4% | 14.3% | | Cardiac Rhythm Management & Neuromodulation | $172.0 | 2.3% | 2.3% | $332.3 | 2.3% | 2.3% | | Other Markets | $17.6 | (37.9)% | (1.8)% | $35.8 | (37.6)% | (12.8)% | | **Total Sales** | **$476.5** | **11.4%** | **10.8%** | **$913.9** | **9.4%** | **8.6%** | [Summary Financial Results](index=3&type=section&id=Summary%20Financial%20Results) The company's summary financials show increased Q2 2025 adjusted net income and EPS, but a sharp YTD GAAP decline due to a debt conversion expense - The significant year-to-date decrease in GAAP income from continuing operations was heavily impacted by a **$46.7 million debt conversion inducement expense** related to the partial exchange of the 2028 Convertible Notes[41](index=41&type=chunk)[50](index=50&type=chunk) Summary Financial Results (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | QTD Change | YTD 2025 | YTD 2024 | YTD Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Operating income | $59,338 | $54,494 | 8.9% | $108,890 | $93,195 | 16.8% | | Income from continuing operations | $37,009 | $31,207 | 18.6% | $14,544 | $51,798 | (71.9)% | | Diluted EPS from continuing operations | $1.04 | $0.88 | 18.2% | $0.41 | $1.47 | (72.1)% | | Adjusted operating income | $81,266 | $70,825 | 14.7% | $152,189 | $133,020 | 14.4% | | Adjusted net income | $54,818 | $44,683 | 22.7% | $100,756 | $83,351 | 20.9% | | Adjusted EPS | $1.55 | $1.30 | 19.2% | $2.85 | $2.44 | 16.8% | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section provides an overview of Integer's condensed consolidated balance sheets, statements of operations, and cash flows [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 27, 2025, total assets increased to $3.37 billion, driven by goodwill and intangibles, while total liabilities grew to $1.67 billion due to rising long-term debt Balance Sheet Summary (in thousands) | Account | June 27, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | **$737,430** | **$671,119** | | Goodwill | $1,100,371 | $1,017,729 | | Other intangible assets, net | $854,545 | $778,286 | | **Total Assets** | **$3,370,935** | **$3,077,971** | | **Total Current Liabilities** | **$216,030** | **$227,173** | | Long-term debt | $1,202,495 | $980,153 | | **Total Liabilities** | **$1,667,398** | **$1,458,756** | | **Total Stockholders' Equity** | **$1,703,537** | **$1,619,215** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, sales and operating income increased, but a significant 'Other (income) loss' for the six-month period reduced income from continuing operations Statement of Operations Summary (in thousands) | Account | Three Months Ended June 27, 2025 | Six Months Ended June 27, 2025 | | :--- | :--- | :--- | | Sales | $476,494 | $913,886 | | Gross Profit | $129,152 | $249,470 | | Operating Income | $59,338 | $108,890 | | Other (income) loss, net | $3,980 | $51,907 | | Income from continuing operations | $37,009 | $14,544 | | Net Income | $37,009 | $14,522 | | Diluted EPS | $1.04 | $0.41 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, operating activities provided $75.1 million, while investing activities used $215.0 million, primarily for acquisitions Cash Flow Summary - Six Months Ended (in thousands) | Activity | June 27, 2025 | June 28, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $75,138 | $70,474 | | Net cash used in investing activities | ($214,994) | ($198,796) | | Net cash provided by financing activities | $115,989 | $138,768 | | Net (decrease) in cash and cash equivalents | ($23,408) | $10,463 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of GAAP financial measures to their corresponding non-GAAP adjusted counterparts [Table A: Adjusted Net Income and Diluted EPS](index=9&type=section&id=Table%20A%3A%20Adjusted%20Net%20Income%20and%20Diluted%20EPS) This table reconciles GAAP income from continuing operations to non-GAAP adjusted net income, highlighting the impact of a significant debt conversion inducement expense - For the six months ended June 27, 2025, a **debt conversion inducement expense of $46.7 million** was a major reconciling item between GAAP and non-GAAP net income[41](index=41&type=chunk)[50](index=50&type=chunk) Q2 2025 Net Income Reconciliation (in thousands) | Description | Pre-Tax | Net of Tax | | :--- | :--- | :--- | | Income from continuing operations (GAAP) | $45,596 | $37,009 | | Amortization of intangible assets | $16,120 | $12,978 | | Restructuring and restructuring-related charges | $2,575 | $2,049 | | Acquisition and integration costs | $2,007 | $1,596 | | **Adjusted net income (non-GAAP)** | **$67,662** | **$54,818** | [Table B: Adjusted Operating Income](index=11&type=section&id=Table%20B%3A%20Adjusted%20Operating%20Income) This table reconciles GAAP operating income to non-GAAP adjusted operating income, primarily by adding back amortization of intangible assets Q2 2025 Operating Income Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | Operating income (GAAP) | $59,338 | | Amortization of intangible assets | $16,120 | | Restructuring and restructuring-related charges | $2,575 | | Acquisition and integration costs | $2,007 | | **Adjusted operating income (non-GAAP)** | **$81,266** | [Table C: EBITDA](index=12&type=section&id=Table%20C%3A%20EBITDA) This table reconciles GAAP income from continuing operations to non-GAAP EBITDA and adjusted EBITDA, including adjustments for interest, taxes, depreciation, and amortization Q2 2025 EBITDA Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | Income from continuing operations (GAAP) | $37,009 | | Interest expense | $9,754 | | Provision for income taxes | $8,587 | | Depreciation | $15,040 | | Amortization of intangible assets and financing leases | $17,246 | | **EBITDA (non-GAAP)** | **$87,636** | | Stock-based compensation | $5,499 | | Other adjustments (Restructuring, Acquisition, etc.) | $5,808 | | **Adjusted EBITDA (non-GAAP)** | **$98,951** | [Table D: Organic Sales Change](index=12&type=section&id=Table%20D%3A%20Organic%20Sales%20Change) This table reconciles GAAP reported sales growth to non-GAAP organic sales growth by adjusting for foreign currency impacts and strategic exits/acquisitions Q2 2025 Sales Growth Reconciliation (%) | Product Line | GAAP Reported Growth | Impact of Foreign Currency | Impact of Exits and Acquisitions | Non-GAAP Organic Change | | :--- | :--- | :--- | :--- | :--- | | Cardio & Vascular | 24.0% | 0.3% | 6.1% | 17.6% | | Other Markets | (37.9)% | —% | (36.1)% | (1.8)% | | **Total Sales** | **11.4%** | **0.2%** | **0.4%** | **10.8%** | [Table E: Net Total Debt](index=13&type=section&id=Table%20E%3A%20Net%20Total%20Debt) This table reconciles total debt to non-GAAP net total debt by subtracting cash and cash equivalents from the total principal amount of debt outstanding Net Total Debt Reconciliation (in thousands) | Description | June 27, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total debt (GAAP) | $1,202,495 | $990,153 | | Total principal amount of debt outstanding | $1,227,301 | $1,000,994 | | Less: Cash and cash equivalents | $23,135 | $46,543 | | **Net Total Debt (Non-GAAP)** | **$1,204,166** | **$954,451** | [Supplementary Information](index=2&type=section&id=Supplementary%20Information) This section provides important context regarding the company's use of non-GAAP financial measures and outlines key forward-looking statements and risk factors [Notes Regarding Non-GAAP Financial Information](index=4&type=section&id=Notes%20Regarding%20Non-GAAP%20Financial%20Information) The company uses non-GAAP measures to provide supplemental information on business trends, excluding specific items to enhance comparability of financial results - Adjusted net income and adjusted EPS exclude items such as amortization of intangibles, certain legal expenses, restructuring costs, acquisition costs, and gains/losses on equity investments[23](index=23&type=chunk) - Organic sales change is a non-GAAP measure that adjusts reported sales growth to remove the impacts of foreign currency fluctuations, acquisitions, and the strategic exit of the Portable Medical market[27](index=27&type=chunk) - The company believes these non-GAAP measures provide important supplemental information to management and investors for understanding financial and business trends[28](index=28&type=chunk) [Forward-Looking Statements and Risk Factors](index=5&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The report contains forward-looking statements subject to various risks, including operational, strategic, financial, and legal/compliance factors - The press release contains forward-looking statements concerning the 2025 outlook and future performance, which are predictions and may differ materially from actual results[29](index=29&type=chunk) - Key operational risks include dependence on a limited number of customers, pricing pressures, and reliance on third-party suppliers[30](index=30&type=chunk) - Key financial and strategic risks include intense competition, ability to integrate acquisitions, significant outstanding debt, and economic uncertainties affecting access to capital[34](index=34&type=chunk)

Core Insights - Integer Holdings Corporation reported strong financial performance in Q2 2025, with sales increasing by 11%, adjusted operating income rising by 15%, and adjusted EPS growing by 19% compared to Q2 2024. The company has raised its full-year 2025 profit outlook midpoint, expecting adjusted operating income growth of 12% to 16% and adjusted EPS growth of 18% to 23% [1][4]. Financial Performance - Q2 2025 sales reached $476 million, reflecting an 11% increase, with organic growth also at 11% [4][12]. - GAAP operating income increased by $5 million to $59 million, a 9% rise, while non-GAAP adjusted operating income rose by $10 million to $81 million, marking a 15% increase [4][31]. - GAAP income from continuing operations grew by $6 million to $37 million, a 19% increase, and non-GAAP adjusted net income increased by $10 million to $55 million, a 23% rise [4][31]. - Adjusted EBITDA increased by $9 million to $99 million, a 10% increase [4][31]. Product Line Performance - Cardio & Vascular sales surged by 24% in Q2 2025 compared to Q2 2024, driven by new product launches and strong customer demand [5]. - Cardiac Rhythm Management & Neuromodulation sales saw a modest increase of 2%, attributed to growth in emerging neuromodulation customers and normalized cardiac rhythm management growth [5]. - Sales in Other Markets decreased by 38%, primarily due to the planned exit from the portable medical market [5]. 2025 Outlook - The company anticipates full-year sales between $1.850 billion and $1.876 billion, representing an 8% to 9% increase from the prior year [3]. - Adjusted operating income is projected to be between $319 million and $331 million, reflecting a growth of 12% to 16% [3]. - Adjusted EPS is expected to range from $6.25 to $6.51, indicating an increase of 18% to 23% [3]. Debt and Cash Flow - Total debt increased by $212 million to $1.202 billion, with a leverage ratio of 3.2 times adjusted EBITDA as of June 27, 2025 [4][28]. - Cash flow from operating activities is projected to be between $235 million and $255 million, a 15% to 24% increase [3].

Investment Rating - The report maintains a "Buy" rating for Boston Scientific (BSX), Edwards Lifesciences (EW), GE Healthcare (GEHC), Intuitive Surgical (ISRG), and Haemonetics (HAE), while downgrading Tandem Diabetes (TNDM) to "Sell/High Risk" from "Neutral/High Risk" [1][5][20]. Core Insights - The MedTech sector has shown resilience against healthcare headwinds, with a focus on returning to fundamentals and several catalysts expected to drive momentum in the second half of 2025 [1][9]. - The S&P Equipment and Supplies Index has outperformed the broader market, with a year-to-date increase of 7.2%, while relative P/E multiples remain below historical averages [2][12]. - Key upcoming catalysts include product launches and data readouts from various companies, which are anticipated to influence stock performance positively [3][10][11]. Summary by Sections Market Overview - The MedTech industry has largely absorbed tariff impacts, with a weakening USD providing additional support [1][9]. - The S&P 500 is up 6.2% year-to-date, while the S&P Equipment and Supplies Index has increased by 7.2% [2][12]. Company-Specific Insights - Boston Scientific (BSX) is expected to benefit from Farapulse and new product launches, projecting a revenue increase of 80.1% year-over-year in 2Q25 [3][10]. - Edwards Lifesciences (EW) anticipates pivotal data releases and the reopening of TAVR NCD, which could enhance its market position [3][10]. - Intuitive Surgical (ISRG) plans a broad launch of its DV5 system, which is expected to drive stock performance [4][10]. - Haemonetics (HAE) has been upgraded to "Buy" due to improved guidance and revenue growth expectations [5][20]. - Tandem Diabetes (TNDM) faces competitive pressures, leading to its downgrade to "Sell/High Risk" [5][20]. Valuation and Target Prices - Target prices have been adjusted for several companies, with BSX at $125, EW at $95, GEHC at $86, and ISRG at $650 [20][21]. - The report highlights that the relative P/E multiple for the MedTech sector is currently at 1.14x, below historical averages, indicating potential undervaluation [2][12][14].

Group 1 - Integer Holdings Corporation has appointed Michael Coyle to its Board of Directors, bringing over 40 years of leadership experience in the medical device industry [1][2] - Coyle's previous roles include president and CEO of iRhythm Technologies and executive vice president at Medtronic, along with leadership positions at St. Jude Medical and Eli Lilly [2] - He holds a master's degree from the Wharton School and a bachelor's degree from Case Western Reserve University, along with six U.S. patents related to cardiovascular medical devices [3] Group 2 - The Board of Integer regularly evaluates its composition to ensure it has the necessary skills and perspectives for growth [4] - Coyle's extensive experience is expected to significantly contribute to Integer's strategic initiatives and corporate culture [4] - The executive leadership team anticipates that Coyle's expertise will enhance Integer's contract development and manufacturing outsourcing strategy [4][5]