Medical technology company Integer Holdings (NYSE: ITGR) met Wall Street’s revenue expectations in Q3 CY2025, with sales up 8.4% year on year to $467.7 million. On the other hand, the company’s full-year revenue guidance of $1.85 billion at the midpoint came in 1% below analysts’ estimates. Its non-GAAP profit of $1.79 per share was 6.8% above analysts’ consensus estimates.
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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 $402.3 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: $2.59 billion
StockStory’s Take
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.”
Management’s updated guidance reflects caution about near-term sales, particularly with a projected 3% to 4% sales headwind from three specific new products in 2026. Khales signaled confidence in long-term growth, citing an expanding development pipeline and visibility into new product launches scheduled for late 2026 and 2027. He emphasized, “We expect to return to above-market organic sales growth in 2027, which is consistent with our long-term financial strategic objective,” while also noting that the current headwinds are not expected to persist beyond the next three quarters.
Key Insights from Management’s Remarks
Management attributed the quarter’s results to strong execution in core businesses but highlighted customer-driven demand shifts in several new products as a major source of near-term turbulence.
- New product adoption shortfall: Lower-than-expected uptake of three recently launched products—two in electrophysiology (EP) and one in neuromodulation—caused multiple customers to revise their demand forecasts downward, driving the reduction in Integer Holdings’ sales outlook for the next three quarters.
- Uncommon magnitude of changes: Management described the simultaneous, significant forecast reductions from several customers as “highly unusual” and not a recurring pattern, noting that this level of volatility in new product adoption had not been experienced before.
- Cardio & Vascular segment dynamics: The Cardio & Vascular business delivered strong growth in Q3, led by ramps in electrophysiology and neurovascular, as well as incremental sales from recent acquisitions. However, management now expects a deceleration due to the EP product headwinds, particularly in the first half of 2026.
- Cost management and margin focus: Integer responded to reduced sales expectations by tightening operational costs, aiming to minimize the impact on adjusted operating income and adjusted EPS. CFO Diron Smith highlighted ongoing efforts in manufacturing efficiency and expense management to support profitability.
- Visibility and forecasting process: Despite the demand swings, management maintains that its backlog and rolling customer forecasts provide solid visibility for the next several quarters. However, forecasting for new product launches remains inherently lumpy, with this episode prompting a review—but not an overhaul—of existing risk-adjustment processes.
Drivers of Future Performance
Integer’s near-term outlook is shaped by new product adoption headwinds, while medium-term performance depends on the success of its development pipeline and cost discipline.
- Headwinds from three new products: Management expects the biggest drag in 2026 from declining demand for two electrophysiology and one neuromodulation product, resulting in flat to low-single-digit organic sales growth for that year. The impact is expected to be most pronounced in the first half of 2026, with recovery in the second half.
- Recovery tied to new launches: Leadership anticipates a return to above-market growth in 2027, driven by new product introductions across Cardio & Vascular, neurovascular, structural heart, and neuromodulation markets. Khales stated that the company is “not counting on any of the products that are giving us headwinds now to rebound in ’27,” but rather on new launches scheduled in the pipeline.
- Margin management and operational efficiency: Despite sales pressure, Integer plans to maintain adjusted operating income within a range of down 5% to up 4% in 2026 by leveraging its production system, direct labor efficiency, and disciplined expense control. The company is aligning costs with manufacturing volumes to support profitability during the sales trough.
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 $72.15, down from $109.27 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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