Integer Holdings Corporation Q4 FY2025 earnings call

Peyman Khales mentioned Integer's strategy focuses on cardiovascular, neuromodulation, and cardiac rhythm management markets. The company invests in differentiated capabilities and partners early with customers. It has growth teams for key markets, has made investments in capabilities like advanced automation, and executed tuck - in acquisitions. Integer has a high - performance culture centered on customer success, operational excellence, and leadership impact. The company is disciplined in capital management, with share repurchase programs and plans for ERP modernization.

Fourth quarter 2025: Cardio & Vascular sales increased 11% to $284,000,000, driven by acquisitions and neurovascular demand; Cardiac Rhythm Management and Neuromodulation decreased 2% to $167,000,000. Trailing four - quarter basis: C&V sales increased 17% to $1,107,000,000; CRM&N sales increased 1% to $669,000,000. Full year 2025: Sales increased 8% on reported basis and over 6% organically; Adjusted operating income increased 13%; Adjusted EPS increased 21%. Cardio & Vascular sales for full year reached $1,854,000,000 with 11% growth in fourth quarter; Cardiac Rhythm Management and Neuromodulation for full year was $669,000,000 with 1% growth on trailing four - quarter basis.

2026 reported sales expected to be down 1% to up 1%, organic sales flat to up 3%. Excluding three new products, underlying business expected to grow 4% to 6%. Adjusted operating income expected to be down 5% to up 1%, adjusted EPS down 2% to up 6%. The 2026 outlook is tightened from preliminary outlook in October. First quarter reported sales expected to be flat to down low single digits, adjusted operating income margin expected to decline 200 - 250 basis points versus prior year, but expected to improve throughout 2026.

Lower than expected market adoption of three new products (two in electrophysiology and one in neuromodulation) which is a headwind. Inorganic decline from portable medical exit and foreign exchange pressure could also impact results.

Q: Hey, guys. Good morning. Thanks very much for taking the questions. Just wanted to start with the guidance top line. Think, you know, most people will be encouraged to see a pretty stable outlook relative to last quarter. But we just wanted to touch on the decision to lower the high end of the preliminary range. I think last quarter, you were at 0% to 4% organic. Now 0% to 3%, so just a slight change. But just curious what the incremental reason for that was and if it has something to do specifically with what you saw in January or more about just the pace of the improvement the second half of the year?

A: Yeah. Sure. I think for 2026, as Diron mentioned in the prepared remarks, we are not making any structural changes to our business because we have expectations to get to above - market growth in 2027. So as we progress throughout 2026, we expect to get to margin expansion in 2027. When we get back to 200 basis points over market performance, we will continue to deliver margin expansion as we have as part of our strategy and as part of our Integer Production System. Our long - term strategy has not changed: deliver 200 basis points over market and 2x margin expansion.

Q: Alright. Super helpful. And then, just thinking about margins, and really more of a 2027 question. So the 2026 outlook still implies some pressure, I think, you know, given that sales are expected to be subdued. But, you know, you kind of noted the expected recovery to above - market sales growth in 2027 and then a return to operating margin expansion. So maybe just a little bit more on what drives the return to operating income growth above sales growth in 2027?

A: Yeah. Sure. I think for 2026, as Diron mentioned in the prepared remarks, we are not making any structural changes to our business because we have expectations to get to above - market growth in 2027. So as we progress throughout 2026, we expect to get to margin expansion in 2027. When we get back to 200 basis points over market performance, we will continue to deliver margin expansion as we have as part of our strategy and as part of our Integer Production System. Our long - term strategy has not changed: deliver 200 basis points over market and 2x margin expansion.

Q: Alright. Great. And then last one for me. You know, I always enjoy this strategic update and some of the updates around the portfolio and PMA products. I think, compared to last year, the total number of PMA products is up by one. Just wanted to maybe ask about overall contribution from the new products that have been coming through and how you kind of expect those to perform this year. A little bit, like, just more long term. It kind of seems like more of the future activity is in the development and clinical phase rather than regulatory. So whether you would kind of expect any of those to progress this year and reach the market by 2027 or if there is kind of a little bit gap in some of the development product actually reaching commercialization?

A: Yeah. No problem. The model that we have, what we have talked about, that we expect this portfolio of products to grow 15% to 20% in a three - to five - year period, takes into account all the dynamics that you talked about. We have a good pipeline that we will be working on. We have about 40 customers in this grouping, if you will. And we have really good visibility to the products that we are working on. Number one, the products that are already in the market: we have expectations of what the growth of those products will be. And then we have good visibility to the launch dates and the expected revenues that, on a risk - adjusted basis, give us confidence that we can grow at 15% to 20% in a three - to five - year period. So what you are seeing here in terms of adding one more customer in the launch phase is in full alignment with our expectations. It has already been modeled in our projections.