Integer Holdings' Q4 2024 Earnings Call: Unpacking Contradictions in Cardio Growth, Tariffs, and Margins

These are the key contradictions discussed in Integer Holdings Corporation's latest 2024Q4 earnings call, specifically including: Growth Expectations for Cardio and Vascular, the Impact of Mexico Tariffs, Cardio & Vascular growth expectations, and Gross Margin Expectations:



Strong Financial Performance:
- Integer Holdings Corporation reported sales of $449 million in Q4 2024, marking a 11% increase both organically and on a reported basis. For the full year, sales grew 10% on a reported basis.
- The growth was attributed to a 11% year-over-year increase in adjusted operating income and a 20% increase in adjusted EBITDA.
- The company’s strategic tuck-in acquisitions and operational optimization contributed to these results.

Strategic Acquisitions and Vertical Integration:
- Integer completed the divestiture of Electrochem for $50 million and acquired Precision Coating for $152 million in January 2025, with another acquisition of VSi Parylene announced for $28 million.
- These acquisitions expand the company's capabilities in coating formulation and services, enhancing its vertical integration and positioning it for growth in high-value markets.

Product Line Growth and Market Focus:
- The cardio and vascular product line's trailing four-quarter sales increased 14% year-over-year, driven by new product ramps in electrophysiology and structural heart, and acquisitions like InNeuroCo and Pulse Technologies.
- The Cardiac Rhythm Management & Neuromodulation segment's trailing four-quarter sales increased 8% year-over-year, supported by double-digit growth in emerging neuromodulation and normalized low single-digit growth in cardiac rhythm management.

Outlook and Margin Expansion:
- For 2025, Integer anticipates reported sales growth of 8% to 10%, with adjusted operating income growth projected at 11% to 16%.
- The company aims to maintain organic sales growth above the market by 6% to 8% and expand adjusted operating income twice as fast as sales growth.