Integer Holdings Q2 Earnings & Revenues Top Estimates, Margins Decline

GAAP EPS for the quarter was 69 cents, down 33.7 % from the prior-year quarter.

ITGR’s Revenues in Detail

Integer Holdings registered revenues of $464.1 million in the second quarter, down 2.6% year over year. However, the figure topped the Zacks Consensus Estimate by 2.2%.

Organically, revenues decreased 1.5%.

Integer Holdings’ Q1 Segmental Analysis

Integer Holdings operates through three product lines — Cardio and Vascular (C&V); Cardiac Rhythm Management & Neuromodulation (CRM&N) and Other Markets.

In the second quarter of 2026, the C&V product line generated revenues of $280.3 million, down 2.3% year over year. Organically, sales declined 2.5%. The decrease primarily reflected the previously communicated impact from two new Electrophysiology products.

The CRM&N product line reported revenues of $173.7 million, up 1% year over year. Organic sales also increased 1%. Growth in the product line was partially offset by the previously communicated impact from one new Neuromodulation product.

Revenues from Other Markets totaled $10.1 million, down 42.8% from $17.6 million in the prior-year quarter. Organically, sales declined 13.5%. The sharp reported decrease primarily reflected Integer Holdings’ strategic exit from the Portable Medical business.

ITGR’s Margin Analysis

Integer Holdings generated a gross profit of $112.9 million in the second quarter, down 12.6% year over year. The gross margin in the reported quarter contracted about 280 basis points (bps) to 24.3% from 27.1% in the prior-year period.

Selling, general and administrative expenses were $57.7 million, up 9% year over year. Research, development and engineering costs were $11.3 million in the quarter, down 20.8% year over year. Total operating expenses of $78.4 million increased 12.3% year over year.

Adjusted operating profit totaled $73 million, reflecting a decline of 10.2% from the prior-year quarter. Adjusted operating margin in the second quarter contracted about 130 bps to 15.7% from 17.1% a year ago.

Integer Holdings’ Financial Position

Integer Holdings exited the second quarter of 2026 with cash and cash equivalents of $21.4 million compared with $8.1 million at the first-quarter end. Total debt (including the current portion) at the end of second-quarter 2026 was $1.24 billion, down from $1.25 billion at the end of the first quarter.

Cumulative cash flow from operating activities at the end of second-quarter 2026 was $84.4 million compared with $75.1 million a year ago.

Integer Holdings’ KKR Deal Reshapes the Outlook

Integer Holdings and KKR separately announced a definitive agreement under which an affiliate of KKR-managed investment funds will acquire all outstanding Integer shares for $127 per share in cash. The transaction carries an enterprise value of $5.7 billion.

Given the pending transaction, Integer Holdings withdrew its previously issued financial outlook. The company also canceled its previously scheduled second-quarter earnings conference call and webcast.

Wrapping Up

Integer Holdings exited the second quarter of 2026 with a mixed performance. Revenues declined year over year, reflecting continued pressure from previously communicated product-related headwinds and the strategic exit from Portable Medical. However, adjusted EPS increased 3.2%, supported by a relatively stable adjusted net income despite the softer top line.

On the product-line front, performance remained uneven. Cardio & Vascular sales declined as two new Electrophysiology products continued to weigh on results, while Cardiac Rhythm Management & Neuromodulation posted modest growth despite the impact from one new Neuromodulation product. Profitability also remained under pressure, with adjusted operating income declining 10.2% and gross margin contracting year over year. Still, operating cash flow for the first six months improved to $84.4 million from $75.1 million a year ago.

The company withdrew its previously issued 2026 financial outlook in light of the pending acquisition. Integer Holdings and KKR announced a definitive agreement under which an affiliate of KKR-managed investment funds will acquire all outstanding shares of ITGR for $127 per share in cash, valuing the transaction at an enterprise value of $5.7 billion.The transaction is expected to close by the end of 2026.

Integer Holdings’ Zacks Rank & Key Picks

Integer Holdings currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are McKesson MCK, Phibro Animal Health PAHC andCardinal Health CAH.

McKesson carries a Zacks Rank #2 (Buy) at present and has an estimated long-term growth rate of 13.7%. MCK’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.09%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

McKessonshares have gained 8.8% against the industry’s 12.7% decline in the year-to-date period.

Phibro Animal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 21.5%. PAHC’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.25%.

Phibro Animal Health stock has climbed 44.2% against the industry’s 17.1% decline in the year-to-date period.

Cardinal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 17%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 10.27%.

Cardinal Health’s shares have lost 2.6% compared with the industry’s 3.1% decline in the year-to-date period.

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