Financial Data and Key Metrics Changes - Sales for Q3 2025 totaled $468 million, reflecting an 8% growth on a reported basis and 7% growth organically [13][9] - Adjusted operating income increased by 14% year-over-year, with adjusted EPS growing by 25% to $1.79 [15][9] - For the full year 2025, the company expects sales growth between 7% and 8%, with adjusted operating income growth between 12% and 14% [20][10] Business Line Data and Key Metrics Changes - Cardio and vascular sales increased by 15% in Q3 2025, driven by new product ramps and strong demand in neurovascular [15] - Cardiac rhythm management solutions sales increased by 18% year-over-year, but growth is expected to decelerate in Q4 2025 due to anticipated declines in new products [16][10] - Neuromodulation sales increased by 2% in Q3 2025, with expectations for low single-digit growth for the full year [17] Market Data and Key Metrics Changes - The company anticipates a 3% to 4% headwind to total sales in 2026 due to slower market adoption of three new products [11][25] - The portable medical exit is expected to contribute a 2% headwind to total sales in 2026 [11][25] - The overall market in which the company competes is growing at a steady mid-single digit rate [29] Company Strategy and Development Direction - The company remains confident in its long-term growth strategy, focusing on early design wins in high-growth markets [12][29] - A strong product development pipeline is expected to drive above-market growth in 2027 [28][29] - The company plans to continue its acquisition strategy while maintaining a leverage ratio within the targeted range of 2.5 to 3.5x [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged recent customer forecast changes impacting the financial outlook but expressed confidence in the long-term strategy [5][10] - The company expects a recovery to market growth in the second half of 2026 as new product headwinds moderate [11][12] - Management highlighted the unusual nature of simultaneous forecast changes from multiple customers as a significant factor affecting the outlook [59] Other Important Information - The adjusted effective tax rate for Q3 2025 was 16.3%, down from 17.2% in the prior year, with expectations for the full year to be within the range of 17%-18% [18] - The company generated $66 million of cash flow from operations in Q3 2025, with free cash flow remaining flat at $46 million [19] Q&A Session Summary Question: Can you elaborate on the organic growth of the rest of the portfolio? - Management indicated that without new product introductions, the rest of the portfolio is expected to grow at market rates, which is lower than the typical 6%-8% growth [32][33] Question: What are the expected headwinds in the cardio and vascular items? - The headwinds are related to two electrophysiology products with slower market adoption than anticipated, not due to loss of market share [34][36] Question: How confident is the company in returning to market growth by Q4 2026? - Management expressed confidence due to steady backlog and customer forecasts, despite the unusual simultaneous changes in multiple products [38][39] Question: What is the nature of the changes in the electrophysiology products? - The changes are due to customers adjusting their forecasts based on lower-than-expected market adoption rates [42][46] Question: Is the decline in neuromodulation similar to electrophysiology? - Yes, the decline is attributed to slower market adoption from emerging customers, although the overall book of business is still growing [52][57] Question: How does the company plan to manage costs in 2026? - The company will focus on operational efficiencies and disciplined cost management to navigate the expected headwinds [85][86]