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 delivered another strong quarter of growth with sales up 8%, adjusted operating income up 14%, and adjusted EPS growth of 25%,” said Joseph Dziedzic, Integer’s president and CEO.

Company Overview

With its name reflecting the mathematical term for "whole" or "complete," Integer Holdings (NYSE: ITGR) is a medical device outsource manufacturer that produces components and systems for cardiac, vascular, neurological, and other medical applications.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Integer Holdings’s sales grew at a decent 10.1% compounded annual growth rate over the last five years. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Integer Holdings’s annualized revenue growth of 9.6% over the last two years aligns with its five-year trend, suggesting its demand was stable.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Integer Holdings’s organic revenue averaged 7.5% year-on-year growth. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.

This quarter, Integer Holdings grew its revenue by 8.4% year on year, and its $467.7 million of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 7.3% over the next 12 months, a slight deceleration versus the last two years. Still, this projection is above average for the sector and suggests the market is forecasting some success for its newer products and services.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Integer Holdings’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 11% over the last five years. This profitability was higher than the broader healthcare sector, showing it did a decent job managing its expenses.

Looking at the trend in its profitability, Integer Holdings’s operating margin of 12.1% for the trailing 12 months may be around the same as five years ago, but it has increased by 1.6 percentage points over the last two years.

In Q3, Integer Holdings generated an operating margin profit margin of 12.1%, down 1.4 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Integer Holdings’s EPS grew at a spectacular 12.9% compounded annual growth rate over the last five years, higher than its 10.1% annualized revenue growth. However, we take this with a grain of salt because its operating margin didn’t improve and it didn’t repurchase its shares, meaning the delta came from reduced interest expenses or taxes.

In Q3, Integer Holdings reported adjusted EPS of $1.79, up from $1.43 in the same quarter last year. This print beat analysts’ estimates by 6.8%. Over the next 12 months, Wall Street expects Integer Holdings’s full-year EPS of $6.08 to grow 14.9%.

Key Takeaways from Integer Holdings’s Q3 Results

It was good to see Integer Holdings beat analysts’ EPS expectations this quarter. We were also happy its organic revenue was in line with Wall Street’s estimates. On the other hand, its full-year revenue and full-year EBITDA guidance both fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 17.6% to $90 immediately after reporting.

Integer Holdings’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.