Integer (ITGR 1.32%), a leading medical device contract manufacturer, released financial results for Q2 FY2025 on July 24, 2025. The headline news was GAAP revenue reaching $476 million, up 11.4% from Q2 2024 and beating analyst estimates by $11.63 million. Adjusted earnings per share (EPS) came in at $1.55, matching expectations and representing a 19.2% increase year over year. Management raised profit guidance for the rest of the year, reflecting ongoing robust performance, especially in its main Cardio & Vascular product lines. The quarter was marked by continued organic growth, expanding margins, and contributions from recent acquisitions. Overall, the period showed strong operational progress in line with expectations.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.55 | $1.55 | $1.30 | 19.2% |
| Revenue (GAAP) | $476 million | $464.37 million | $428 million | 11.2% |
| Adjusted Operating Income | $81 million | $71 million | 14.1% | |
| Adjusted EBITDA | $99 million | $89.8 million | 10.2% | |
| EPS (GAAP) | $1.04 | $0.88 | 18.2% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Understanding Integer: Business Overview and Success Factors
Integer is a contract manufacturer specializing in the production of complex medical device components and finished systems. Its customers are large medical technology companies, known as original equipment manufacturers (OEMs), who rely on Integer for designing, engineering, and manufacturing components that go into life-saving devices used in hospitals and clinics worldwide.
In recent years, Integer has streamlined its business to focus on its principal product lines: Cardio & Vascular, Cardiac Rhythm Management & Neuromodulation, and Other Markets. These areas involve products such as catheters, implantable cardiac devices, and advanced stimulation systems for neurological conditions. The company’s growth strategy combines innovation in product design, investments in global manufacturing capacity, targeted acquisitions to expand capabilities, and close partnerships with its top-tier OEM customers. Key challenges include maintaining quality and regulatory compliance, managing heavy customer concentration, and integrating acquired businesses within its existing network.
Quarter Highlights: Financial and Operational Developments
During the quarter, Integer delivered solid top- and bottom-line results. Revenue rose 11.4% (GAAP) compared to the prior-year period, driven by both organic demand and recent acquisitions. Adjusted operating income, which removes the effects of nonrecurring costs and acquisition-related charges, grew 14.7% to $81 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to $99 million, up 10.1 % from a year earlier. Reported (GAAP) net earnings were also higher, but lagged adjusted figures due to one-time non-operational charges linked to acquisitions and financing activities.
The company’s financial strength was particularly evident in its main business segments. In the Cardio & Vascular category, which includes products like advanced catheters and cardiovascular therapy systems, GAAP sales jumped 24% year on year, reaching $286.9 million. Most of this growth came from new product launches in electrophysiology—technologies used to diagnose and treat heart rhythm disorders—as well as contributions from recent acquisitions, such as Precision Coating and VSi Parylene. Cardiac Rhythm Management & Neuromodulation, which covers implantable devices managing irregular heartbeats and devices for nerve stimulation therapies, exhibited modest year-on-year organic (non-GAAP) growth of 2.3%. This expansion aligned with management expectations, as the segment faces ongoing declines from a previously announced exit of certain legacy neuromodulation products.
One key operational change in Q2 FY2025 was the ongoing exit from the portable medical market, classified under “Other Markets.” Sales here declined by 37.9% (GAAP), in line with management’s long-term strategy to focus on core medtech businesses. This segment’s revenue now represents a minor share of total results.
Acquisition activity remained a central theme. Management highlighted recent purchases, notably in coating technology, aimed at deepening Integer’s capability portfolio and supporting vertical integration. These “tuck-in” deals are vital to the company’s plan to offer OEMs end-to-end solutions. However, the debt associated with these acquisitions pushed Integer’s leverage ratio (net debt to adjusted EBITDA) up to 3.2x, nearing the higher end of its internal target range. Long-term debt stood at $1.20 billion, compared to $0.98 billion at the end of 2024.
Product Lines, Notable One-Time Events, and Segment Performance
The quarter’s growth was uneven across product families. Cardio & Vascular, Integer’s largest segment, led with double-digit gains, especially in newer therapeutic areas like electrophysiology and neurovascular applications. Management cited strong demand for newly launched products and steady contributions from past acquisitions in specialized medical coatings, which help improve product performance and durability for devices such as catheters and heart implants.
Meanwhile, Cardiac Rhythm Management & Neuromodulation -- devices that help regulate heartbeat and deliver electrical pulses to nerves for pain management or other therapeutic purposes -- saw single-digit growth. Within this category, Integer continues to see strong sales from emerging neuromodulation products that obtained pre-market approval from regulators, balanced against declining legacy business as planned. The company expects this segment to grow at a low to mid-single-digit rate for the full year 2025.
Integer recorded some non-operational (one-time) charges that lowered its reported (GAAP) profit relative to adjusted, or non-GAAP, earnings. These included costs linked to integrating recent acquisitions, restructuring, and a large expense related to convertible debt refinancing, as disclosed in Integer's non-GAAP adjustments. GAAP net income was therefore lower than adjusted net income. Nevertheless, these charges are not expected to affect future profitability in the same way.
Management confirmed that the impact of increased tariffs on components sourced abroad should remain minimal, with cost estimates between $1 million and $5 million for FY2025. The company noted that most of its suppliers are based in the United States, which insulates Integer against larger tariff increases, as stated by management in Q1 2025. Integer’s robust backlog stands close to $800 million in customer orders, indicating strong near-term demand visibility but signaling a likely decline as the portable medical business exits and new contracts adjust to regular order cycles.
Looking Ahead: Guidance and Investor Watchpoints
Management raised full-year 2025 profit guidance following the better-than-expected quarter. It now expects adjusted operating income between $319 million and $331 million for FY2025, up as much as 16% from 2024. Adjusted earnings per share guidance is set at $6.25–$6.51 for FY2025, representing as much as 23% growth. The company also reaffirmed its revenue outlook of $1.85 billion–$1.88 billion (GAAP) for FY2025, signaling roadmap confidence in both customer demand and recent acquisitions.
The company plans continued investments in manufacturing, capital expenditures, and further innovation as it pursues growth through both organic developments and strategic “tuck-in” acquisitions. Key risks remain customer concentration, as nearly half of sales—47% in 2024—come from just three large OEMs. Leverage from recent acquisitions and the pace of integrating new businesses are additional areas to monitor over the coming quarters. Management expects the leverage ratio to stay within target levels (2.5–3.5x adjusted EBITDA) by year-end FY2025, and is targeting free cash flow and merger-and-acquisition capacity of $350 million–$400 million to support ongoing growth opportunities.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
