Integra LifeSciences’ third quarter was marked by operational disruptions and underwhelming revenue growth, resulting in a significant negative market reaction. Management attributed the revenue shortfall to two supply interruptions in its Codman Specialty Surgical (CSS) business and insufficient inventory levels, which offset healthy demand across the company’s broader portfolio. CEO Mojdeh Poul noted, “Our third quarter revenue shortfall underscores the work still ahead to achieve greater execution consistency,” emphasizing the ongoing transformation needed in supply chain reliability and execution. Despite these challenges, the company delivered strong operating income and improved cash flow, driven by disciplined cost control and operational efficiencies.
Is now the time to buy IART? Find out in our full research report (it’s free for active Edge members).
Integra LifeSciences (IART) Q3 CY2025 Highlights:
- Revenue: $402.1 million vs analyst estimates of $414.2 million (5.6% year-on-year growth, 2.9% miss)
- Adjusted EPS: $0.54 vs analyst estimates of $0.43 (24.1% beat)
- Adjusted EBITDA: $78.45 million vs analyst estimates of $68.79 million (19.5% margin, 14% beat)
- Revenue Guidance for Q4 CY2025 is $430 million at the midpoint, below analyst estimates of $457 million
- Management lowered its full-year Adjusted EPS guidance to $2.22 at the midpoint, a 1.1% decrease
- Operating Margin: 9.9%, up from 6.6% in the same quarter last year
- Organic Revenue rose 5% year on year vs analyst estimates of 8.4% growth (339.7 basis point miss)
- Market Capitalization: $888 million
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 Integra LifeSciences’s Q3 Earnings Call
- Vikramjeet Chopra (Wells Fargo) asked about the drivers behind the lower Q4 guidance, particularly supply headwinds. CFO Lea Knight explained that revised assumptions for ENT and private label, remediation timing, and supply improvement timelines all contributed to the pullback.
- Vikramjeet Chopra (Wells Fargo) inquired whether top-line growth is achievable in 2026 and about gross margin stabilization. CEO Mojdeh Poul stressed that foundational improvements are ongoing, while Knight anticipates modest growth and continued margin discipline next year.
- Unknown Analyst (Citi) questioned the ongoing headwinds in the private label business. Poul confirmed continued challenges with the same partner, noting order reductions tied to their market share issues, with expectations for only low- to mid-single-digit growth ahead.
- Ryan Zimmerman (BTIG) asked about portfolio prioritization and potential divestitures. Poul clarified there are no immediate divestitures planned, but ongoing SKU rationalization and portfolio simplification are underway. She also addressed Acclarent’s mixed performance and outlined steps to address payer challenges.
- Ravi Misra (Truist Securities) probed on gross margin resilience and the impact of remediation efforts, as well as revenue expectations from PriMatrix and Durepair. Knight highlighted cost management and product mix benefits, while noting that recapturing prior sales levels for relaunched products will be gradual.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will track (1) the effectiveness of supply chain improvements, as measured by reduced product interruptions and inventory stability; (2) the pace of market share recovery from PriMatrix and Durepair relaunches; and (3) progress on key cost-saving initiatives and gross margin stabilization. We will also monitor international sales momentum and the resolution of ongoing headwinds in the private label and MediHoney segments.
Integra LifeSciences currently trades at $11.40, down from $15.43 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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