Integer Holdings’ third quarter results were overshadowed by management’s acknowledgment of unexpected headwinds tied to lower-than-anticipated adoption of several new products. CEO-elect Payman Khales explained that multiple customers revised their forecasts downward, impacting both the Cardio & Vascular and Neuromodulation product lines. These customer-driven changes, which management described as “highly unusual,” led to a reduction in the company’s full-year outlook. Khales clarified, “We recently received customer updates related to the adoption of new products in the market that we expect will impact the next 3 quarters.”
Is now the time to buy ITGR? Find out in our full research report (it’s free for active Edge members).
Integer Holdings (ITGR) Q3 CY2025 Highlights:
- Revenue: $467.7 million vs analyst estimates of $466.4 million (8.4% year-on-year growth, in line)
- Adjusted EPS: $1.79 vs analyst estimates of $1.68 (6.8% beat)
- Adjusted EBITDA: $105.9 million vs analyst estimates of $105.8 million (22.6% margin, in line)
- The company dropped its revenue guidance for the full year to $1.85 billion at the midpoint from $1.86 billion, a 0.9% decrease
- Management reiterated its full-year Adjusted EPS guidance of $6.36 at the midpoint
- EBITDA guidance for the full year is $322 million at the midpoint, below analyst estimates of $410 million
- Operating Margin: 12.1%, down from 13.4% in the same quarter last year
- Organic Revenue rose 6.6% year on year vs analyst estimates of 6.5% growth (9.3 basis point beat)
- Market Capitalization: $2.29 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Integer Holdings’s Q3 Earnings Call
- Brett Fishbin (KeyBanc): asked for detail on the headwinds in the Cardio & Vascular segment. CEO Payman Khales confirmed the declines stem from slower-than-expected new product adoption, not share loss or product discontinuation, and described the situation as “highly unusual.”
- Travis Steed (Bank of America): requested clarification on the types of affected EP products and the timing of customer communications. Khales explained the issue was communicated by customers during Q3 and is tied to lower end-market adoption rates.
- Joanne Wuensch (Citi): questioned whether the neuromodulation dynamics mirrored those in EP. Khales confirmed both involved customers aligning inventory purchases with weaker-than-expected market demand for new products.
- Matthew O’Brien (Piper Sandler): sought more specifics on the magnitude and customer profile of the outlook cuts. Khales noted the reductions relate to three products among emerging customers, not the top three largest clients.
- Nathan Treybeck (Wells Fargo): probed whether the sales shortfall was due to inventory build in 2025 or true demand softness. Khales responded that both inventory build and lower real-time adoption played a role in revised customer orders.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will be watching (1) whether Integer’s new product launches in late 2026 and 2027 can offset current headwinds, (2) the pace and sustainability of recovery in Cardio & Vascular and Neuromodulation sales as headwinds abate, and (3) management’s ability to control costs and protect margins amid lower volumes. Progress in broadening the customer base and successful integration of recent acquisitions will also be important signposts.
Integer Holdings currently trades at $65.30, down from $109.27 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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