Integra LifeSciences (IART) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $382.7 million, up 3.7% year-over-year, but organic revenue declined 3.5% due to ship holds and supply disruptions; net loss widened to $25.3 million ($0.33/share) primarily from operational and quality issues.

• Adjusted EPS was $0.41, down 25% year-over-year, and adjusted gross margin fell 220bps to 62.2%; GAAP gross margin declined to 50.8%.

• The company is executing a turnaround with a new transformation office, key leadership hires, and ongoing investments in compliance and supply reliability.

• Progress continues on the Compliance Master Plan, with most manufacturing site assessments completed and remediation actions ongoing.

• Special charges of $42.6 million in Q1 2025 included costs for acquisitions, structural optimization, and the Boston recall/Braintree transition.

Financial highlights

• Q1 2025 reported revenue: $382.7 million (+3.7%); organic revenue: $355.8 million (-3.5%).

• Adjusted EBITDA margin: 16.6% (down 290bps); adjusted gross margin: 62.2% (down 220bps); GAAP gross margin: 50.8%.

• Net loss: $25.3 million; adjusted net income: $31.7 million (down 26.3%).

• Operating cash flow: $(11.3) million; free cash flow: $(40.2) million due to higher capex.

• Net debt at quarter-end: $1.58 billion; total liquidity: $1.16 billion.

Outlook and guidance

• Q2 2025 revenue expected at $390–$400 million (reported decline 6.8%–4.4%, organic decline 7.5%–5.1%).

• Full-year 2025 revenue guidance reaffirmed at $1.65–$1.72 billion; adjusted EPS guidance lowered to $2.19–$2.29 due to $0.22 per share tariff impact.

• Ship holds for 2025 now projected at $55–$70 million, up from $27 million previously, but within the $90–$150 million disruption range.

• Braintree facility expected operational with FDA approval in H1 2026, supporting key product launches.

• Management plans to maintain covenant compliance through expense reductions, price increases, and operational initiatives.