Teleflex Q2 2025 Earnings Report

Teleflex EPS Results

• Actual EPS: $3.73
• Consensus EPS: $3.36
• Beat/Miss: Beat by +$0.37
• One Year Ago EPS: $3.42

Teleflex Revenue Results

• Actual Revenue: $780.90 million
• Expected Revenue: $771.53 million
• Beat/Miss: Beat by +$9.37 million
• YoY Revenue Growth: +4.20%

Teleflex Announcement Details

• Quarter: Q2 2025
• Date: 7/31/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, July 31, 2025
• Conference Call Time: 8:00AM ET

Teleflex (NYSE:TFX) designs, develops, manufactures, and supplies single-use medical devices for common diagnostic and therapeutic procedures in critical care and surgical applications worldwide. The company provides vascular access products that comprise Arrow branded catheters, catheter navigation and tip positioning systems, and intraosseous access systems for the administration of intravenous therapies, the measurement of blood pressure, and the withdrawal of blood samples through a single puncture site. It also offers interventional products, which consists of various coronary catheters, structural heart support devices, and peripheral intervention and mechanical circulatory support platform that are used by interventional cardiologists and radiologists, and vascular surgeons; and Arrow branded pumps and catheters, Guideline, Turnpike, and Trapliner catheters, the Manta Vascular Closure, and Arrow Oncontrol devices. The company provides anesthesia products, such as airway and pain management products to support hospital, emergency medicine, and military channels; and surgical products, including metal and polymer ligation clips, and fascial closure surgical systems that are used in laparoscopic surgical procedures, percutaneous surgical systems, and other surgical instruments. It also offers interventional urology products comprising the UroLift System, an invasive technology for treating lower urinary tract symptoms due to benign prostatic hyperplasia; respiratory products, including oxygen and aerosol therapies, spirometry, and ventilation management products for use in various care settings; urology products, such as catheters, urine collectors, and catheterization accessories and products for operative endourology; and bladder management services. The company serves hospitals and healthcare providers, medical device manufacturers, and home care markets. Teleflex Incorporated was incorporated in 1943 and is headquartered in Wayne, Pennsylvania.

Teleflex Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Teleflex reported Q2 revenue of $780.9 million (up 4.2% GAAP, 1% adjusted constant currency) and adjusted EPS of $3.73, beating the high end of guidance.
• Positive Sentiment: The Interventional segment delivered 19.3% year-over-year growth, led by intra-aortic balloon pumps and complex catheters.
• Negative Sentiment: Interventional Urology revenues fell 8.3%, as UroLift continued to face headwinds despite strong Barrigel performance.
• Positive Sentiment: Teleflex closed the €704 million acquisition of BioTronic’s Vascular Intervention business, expected to generate over $800 million in annual revenues and be accretive to EPS.
• Positive Sentiment: The company raised 2025 revenue growth guidance to 9–10% and increased adjusted EPS outlook by $0.70 to a range of $13.90–$14.30.

Presentation

[Operator]

morning, ladies and gentlemen, and welcome to the Teleflex Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants have been placed in a listen only mode. At the end of the company's prepared remarks, we will conduct a question and answer session. Please note that this conference call is being recorded and will be available on the company's website for replay shortly. And now, I will turn the call over to Mr. Laurence Kirsch, Vice President of Investor Relations and Strategy Development.

[Lawrence Keusch, VP - IR & Strategy Development at Teleflex]

Good morning, everyone, and welcome to the Teleflex Incorporated second quarter twenty twenty five earnings conference call. The press release and slides to accompany this call are available on our website at teleflex.com. As a reminder, a replay will be available on our website. Those wishing to access the replay can refer to our press release from this morning for details. Participating on today's call are Liam Kelly, Chairman, President and Chief Executive Officer and John Darron, Executive Vice President and Chief Financial Officer.

[Lawrence Keusch, VP - IR & Strategy Development at Teleflex]

Liam and John will provide prepared remarks and then we will open the call to Q and A. Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward looking statements regarding future events as outlined in the slides posted to the Investor Relations section of the Teleflex website. We wish to caution you that such statements are in fact forward looking in nature and are subject to risks and uncertainties, and actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors referenced in our press release today as well as our filings with the SEC, including our Form 10 ks, which can be accessed on our website. Now I will turn the call over to Liam for his remarks.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Thank you, Larry, and good morning, everyone. On this morning's call, we will discuss the second quarter results, provide a strategic update, review commercial highlights and conclude with our updated financial guidance for 2025. Of note, year over year constant currency revenue growth is adjusted for the impact of the Italian measure, which was recorded in the 2024. Our second quarter results demonstrate our continued progress as we work to drive operational excellence and enhance value creation across our business. Second quarter revenues were $780,900,000 an increase of 4.2% year over year on a GAAP basis and up 1% on an adjusted constant currency basis.

[Liam Kelly, Chairman, President & CEO at Teleflex]

This result exceeded the high end of our previous $769,000,000 to $777,000,000 guidance. Second quarter adjusted earnings per share were $3.73 a 9.1% increase year over year. Now let's turn to a deeper dive into our second quarter revenue results. I will begin with a review of our geographic segment revenues for the second quarter. All growth rates that I refer to are on an adjusted constant currency basis unless otherwise noted.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Americas revenues were $525,700,000 a 2% increase year over year and in line with expectations. Revenue growth in the quarter was driven by strength in intra aortic balloon pumps and was partially offset by OEM declines and continued challenges in UroLift. EMEA revenues of $166,200,000 decreased 2.1% year over year and were a bit softer than expected. During the quarter, we saw strength in our Interventional business, which was offset by our Anesthesia business, including a tough year over year comp in military orders. Turning to Asia.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Revenues were $89,000,000 a 1.2% increase year over year and in line with our expectations. Revenue growth was driven by strength in Southeast Asia, India and Japan, which were partially offset by the previously announced volume based procurement dynamics affecting our China business. As expected, we saw sequential revenue improvement in China during the second quarter and expect continued improvement through the remainder of 2025. Now let's move to a discussion of our second quarter revenues by global product category. Commentary on global product category growth for the second quarter will also be on a year over year adjusted constant currency basis.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Starting with Vascular Access, revenue increased 1.4% year over year to $185,500,000 The quarter was led by year over year growth in PICCs, which increased at a double digit rate and a solid performance in EasyIO. Looking forward, we expect acceleration in growth in the second half of the year. Moving to Interventional. Revenue was $170,000,000 an increase of 19.3% year over year. The strong performance for the quarter was led by growth drivers such as intra aortic balloon pumps and catheters, uncontrolled complex catheters and right heart catheters.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Turning to anesthesia, revenues decreased 7.6% year over year to $96,400,000 Among our largest product categories, hemostatic products and LMA single use masks delivered growth in the quarter, but were primarily offset by a tough comp in military orders and pressure on airway products. In our Surgical business, revenue was $114,000,000 an increase of 1.4% year over year. Underlying trends in our core Surgical franchise continued to be solid, partially offset by the expected impact of volume based procurement in China. Our North America Surgical business, which is not impacted by volume based procurement grew mid single digits in the quarter. For Interventional Urology, revenue was $76,400,000 representing a decrease of 8.3% year over year.

[Liam Kelly, Chairman, President & CEO at Teleflex]

While we saw strong double digit growth for Barriegel, we continue to experience pressure on UroLift. In line with our expectations, OEM revenue decreased 12.4% year over year to $78,700,000 The second quarter was impacted by the previously disclosed lost customer contract and continued customer inventory management. As expected, we saw sequential revenue improvement during the second quarter and continue to anticipate increased revenue contribution in the 2025 versus the first half of the year. Second quarter other revenues increased 3.5% to $59,900,000 year over year. The performance was driven by urology care in particular Intermittent Catheters.

[Liam Kelly, Chairman, President & CEO at Teleflex]

That completes my comments on the second quarter revenue performance. Moving to a strategic update. We are actively taking steps to unlock value within our business. As part of this, we continue to progress the separation of Teleflex that we announced in February. Once separated, each business will be best positioned for the future with more focused strategic direction, simplified operating models, streamlined manufacturing footprint and individually tailored capital allocation strategies aligned with their respective growth philosophy and objectives.

[Liam Kelly, Chairman, President & CEO at Teleflex]

At the same time, we are also pursuing in parallel a potential sale of NewCo. As we discussed on our first quarter earnings call, we have received a significant number of inbound expressions of interest in acquiring NewCo. Since then, and in line with our commitment to maximize value for our shareholders, our Board and management have been actively evaluating a potential sale of NewCo. By way of a progress update, we have had preliminary meetings with many potential buyers. We continue to be impressed by the quantity and quality of interested parties.

[Liam Kelly, Chairman, President & CEO at Teleflex]

We will provide updates to the investment community on our progress as we move along the parallel path as appropriate. Importantly, our guiding principles continue to focus on maximizing shareholder value through this process. Should a sale be consummated, we currently intend to utilize proceeds to balance pay down our debt and return capital to shareholders. We will continue to act in the best interest of our company and shareholders as we move through this process. Turning to our capital allocation strategy.

[Liam Kelly, Chairman, President & CEO at Teleflex]

On June 30, which marks the start of our third quarter, we were pleased to complete the acquisition of substantially all of the vascular intervention business of BioTronic for a net initial upfront cash payment of $7.00 €4,000,000 The Teleflex Interventional portfolio has long been a cornerstone of growth and innovation within our company. With the opportunity to drive sustainable revenue growth and improved margins, the Vascular Intervention acquisition is a key part of our value creation strategy that will enable us to further build upon this strong foundation. We expect our combined Interventional business to generate $800,000,000 plus in annual revenues. The acquired product portfolio includes a broad suite of vascular intervention devices such as drug coated balloons, drug eluting stents, covered stents, balloon and self expanding bare metal stents and balloon catheters. We believe this acquisition will enhance our global presence in the cath lab, expand our suite of innovative technologies and improve patient care.

[Liam Kelly, Chairman, President & CEO at Teleflex]

The acquisition of the Vascular Intervention business will also provide Teleflex with the opportunity to invest in and expand the clinical trial program for PRESOLVE, a sirolimus diluting, resorbable metallic scaffolds technology. PRESOLVE's combination of temporary scaffolding with drug delivery is anticipated to address the current trend in interventional cardiology and endovascular procedures towards leaving behind less permanent hardware. We also see PRESOLD's potential to address the limitations of previous polymeric resorbable scaffolds, achieving more rapid absorption, thinner struts and metallic mechanical performance. PRESOLD received its CE Mark in February 2024 and is indicated for treatment of de novo coronary artery lesions. The European pivotal BIOMAG two study is currently ahead of schedule with more than eight hundred patients enrolled out of the 2,000 patients total.

[Liam Kelly, Chairman, President & CEO at Teleflex]

We plan to initiate the Biomag three U. S. Pivotal study in the coming months. The U. S.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Study design is complete and in partnership with the Scientific Steering Committee, we are initiating recruitment of leading interventional cardiology programs and investigators from across The United States. As noted on our July 1 press release announcing the closing of the acquisition, we expect the acquired products to generate revenues of €177,000,000 or $2.00 $4,000,000 in the 2025. Specifically, we expect acquisition revenue of 86,000,000 and €91,000,000 in the third and fourth quarters respectively. Beginning in 2026, we expect sales of the acquired products to deliver annual constant currency revenue growth of 6% or better. Also noted in our July 1 announcement, excluding non recurring purchase accounting items and other acquisition and integration related costs, we expect the transaction to be approximately $0.10 accretive to our adjusted earnings per share in the first year of ownership and to be increasingly accretive thereafter.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Turning to some commercial and clinical updates. Starting with our Vascular business. We recently announced findings from a new multinational study reporting efficacy of aryl chlorhexidine impregnated CBCs among ICU patients. The study analysis demonstrated a statistically significant reduction in CLABSI of seventy point five percent in patients receiving the impregnated antimicrobial catheters. Even though this cohort of patients had longer average length of ICU stay and device utilization ratios indicating frequent and extended use, infection still remains significantly lower.

[Liam Kelly, Chairman, President & CEO at Teleflex]

This underscores the potential benefit of the antimicrobial technology even in high risk patients. Additionally, the use of chlorhexidine impregnated CVCs was associated with the lower incidence of infection causing pathogens, including gram negative and gram positive bacteria and fungi. Moving to our Surgical business. We continue to expand our foundation of clinical data that supports the use of the Titan SGS stapler as safe and effective for patients undergoing laparoscopic sleeve gastrectomy. In May, we announced the publication of a retrospective study comprising of two fifty seven patients from 2016 and 2023, who underwent sleeve gastrectomy.

[Liam Kelly, Chairman, President & CEO at Teleflex]

The study showed that one year post procedure compared to traditional surgical staplers, fewer patients in the TITAN SGS stapler cohort reported having GERD and fewer patients in the TITAN SGS stapler cohort developed de novo GERD, both of which were statistically significant. Additionally, more patients in the TITAN SGS stapler cohort who had GERD prior to the procedure saw resolution of this condition compared to patients in the traditional surgical stapler cohort. Notably, the improvements in GERD outcomes linked to the TITAN SGS stapler were achieved without a significant difference in weight loss at one year between the two cohorts. This study also showed that the TITAN SGS stapler enabled a shorter average hospital length of stay compared with traditional surgical staplers. As the only stapler to provide a 23 centimeter staple line, the industry's longest continuous staple cut line.

[Liam Kelly, Chairman, President & CEO at Teleflex]

The Titan SGS stapler is designed to provide an ideal tubular surgical sleeve anatomy that is a consistent shape, free of kinks, twists or spirals, improving the potential to resolve GERD and nausea. We will continue to focus on supporting the Titan SGS stapler with expanded clinical data. On the reimbursement front, the Centers for Medicare and Medicaid Services released its twenty twenty six proposed rules for reimbursement of UroLift and Barajel in the physician office and ASC hospital outpatient care settings. Overall, the proposed rules for 2026, if enacted largely as outlined, would be a positive for the reimbursement environment. That completes my prepared remarks.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Now I would like to turn the call over to John for a more detailed review of our second quarter financial results. John?

[John Deren, EVP & CFO at Teleflex]

Thanks, Liam, and good morning. Given the previous discussion of the company's revenue performance, I'll begin with margins. For the quarter, adjusted gross margin was 59.7%, The 110 basis point decrease year over year, which was in line with our expectations, was primarily due to continued cost inflation from macroeconomic factors, specifically with respect to labor and raw materials, an increase in logistics and distribution costs, and unfavorable product mix, partially offset by fluctuations in foreign currency exchange rates. Adjusted operating margin was 26.9% in the second quarter. The 20 basis point year over year increase was better than expected as we offset year over year gross margin pressure with prudent operating expense control and a positive benefit from foreign exchange rates.

[John Deren, EVP & CFO at Teleflex]

Adjusted net interest expense totaled $19,900,000 in the second quarter, a slight increase from the $19,400,000 in the prior period. The year over year increase is primarily due to a higher average debt outstanding, partially offset by lower interest rates on floating rate debt. Our adjusted tax rate for the 2025 was 13.1% compared to 12.3% in the prior year period. The year over year increase is primarily due to additional costs arising from the enactment of Pillar two tax reform. At the bottom line, second quarter adjusted earnings per share was $3.73 The 9.1% increase year over year is primarily due to higher adjusted operating income, a lower share count, and a positive benefit of foreign exchange.

[John Deren, EVP & CFO at Teleflex]

Turning now to selected balance sheet and cash flow highlights. Cash flow from operations for the six months was $81,200,000 compared to $204,500,000 in the comparable prior period. The $123,300,000 decrease was primarily attributable to unfavorable changes in working capital, including payments for recently enacted tariffs. The year over year change also includes payments related to the proposed separation, payments related to due diligence and transition planning costs associated with the vascular intervention acquisition, as well as outflows related to cloud computing arrangement expenditures as part of our ongoing development of our new ERP solution. Moving to the balance sheet.

[John Deren, EVP & CFO at Teleflex]

At the end of the second quarter, our cash, cash equivalents, and restricted cash equivalents balance was 283,900,000.0 compared to 327,700,000.0 as of year end 2024. Net leverage at quarter end was approximately 1.8 times and 2.6 times pro form a for the Vascular Intervention acquisition. Turning to our updated financial guidance for 2025. After giving effect to the June 30 closing of the acquisition of the Vascular Intervention business, we now expect total constant currency growth for 2025 to be in the range of 7.7% to 8.7% versus our prior guidance of 1% to 2%. The constant currency revenue for 2025 growth reflects assumptions that are unchanged from our previous outlook plus an estimated $2.00 $4,000,000 in revenue contribution associated with the Vascular Intervention acquisition in the second half of the year.

[John Deren, EVP & CFO at Teleflex]

We now expect a positive impact from foreign exchange of $26,000,000 representing an approximately 85 basis point tailwind to GAAP revenue growth in 2025. This compares to our prior guidance of approximately $5,000,000 or 17 basis point headwind for 2025. The updated foreign exchange guidance assumes approximately a $1.15 average euro exchange rate for the 2025. For 2025, we now expect GAAP revenue growth to be in the range of 9% to 10% versus our prior guidance of 1.3% to 2.3%, implying a dollar range of $3,322,000,000 to $3,352,000,000 The outlook for 2025 includes the previous assumptions plus updated foreign exchange rates and the contribution from the Vascular Intervention acquisition. The year over year growth rate reflects the $13,800,000 impact from the Italian measure in the 2024.

[John Deren, EVP & CFO at Teleflex]

On the topic of tariffs, the situation remains highly dynamic and may change further over the coming months. There remains significant uncertainty on the positioning, timing and magnitude of the administration's tariff policy as well as the impact of any retaliatory actions from other countries. Consistent with the methodology discussed at the time of our first quarter earnings call, our outlook is based on tariffs currently enacted, including country specific reciprocal tariff rates as well as the status of certain tariff exemptions primarily in Mexico related to the current USMCA rules and regulations. The outlook does not contemplate future tariffs that are not yet enacted. Any future changes could change the anticipated impact on our adjusted EPS in 2025.

[John Deren, EVP & CFO at Teleflex]

We now estimate the impact from tariffs of approximately $29,000,000 in 2025 or $0.55 a share versus a previous outlook of $55,000,000 or $1.05 a share. The reduction in expected tariff impact for 2025 is driven by changes in tariff rates primarily associated with China as well as the early benefit of expanding mitigation efforts with the additional opportunities to come as we progress through the 2025. We continue to actively explore strategies to mitigate our exposure to tariffs in 2025, including optimizing our supply chain, increasing our mix of USMCA compliant products, which provides tariff waivers for products assembled in Mexico and Canada using US components, and continued and diligent control of our spending. Since our last earnings report, we have made progress increasing our percentage of USMCA compliant products entering The US from our manufacturing facilities in Mexico. We will also begin to implement increased customer pricing as contracts come up for renewal.

[John Deren, EVP & CFO at Teleflex]

Additionally, for modeling purposes, you should consider the following: We are increasing 2025 adjusted gross margin guidance to be in the range of 58.75% to 59.5%, which represents an increase of 50 basis points at the low and high end of the range. The increase in our 2025 gross margin guidance expectation is primarily driven by lower than expected tariffs, partially offset by an adverse impact from foreign exchange. We expect adjusted operating margin to be in the range of 24.5% to 25%, which reflects a 10 basis point reduction at the low end of the range versus our prior guidance. Our updated guidance reflects the benefit of lower than expected tariffs offset by incremental expenses associated with the acquisition of the vascular intervention business and an adverse impact from foreign exchange. Moving to items below the line.

[John Deren, EVP & CFO at Teleflex]

Net interest expense is now expected to be approximately $95,000,000 for 2025 as compared to $75,000,000 previously. The incremental net interest expense is primarily due to the financing associated with the acquisition of the vascular intervention business. We have refined our tax assumption for 2025 and now expect our tax rate to be 13.25% versus our previous expectation of 13.5%. Turning to adjusted earnings per share, we are raising the low and high end of our 2025 guidance by zero seven zero dollars of which $0.50 is associated with a lower than expected tariff impact. Although the acquisition of the Vascular Intervention business is expected to be slightly dilutive in 2025, we expect to offset any negative impact to adjusted EPS through operational performance.

[John Deren, EVP & CFO at Teleflex]

As such, we now expect 2025 adjusted earnings per share to be in the range of $13.9 to $14.3 For the third quarter, adjusted constant currency growth is expected to be in the range of 15% to 16.5%, excluding a foreign exchange benefit of approximately $8,000,000 As a reminder, the third quarter revenue outlook includes $99,000,000 in revenue associated with the Vascular Intervention acquisition. That concludes my prepared remarks and I would now like to turn the call back over to Liam for closing commentary.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Thanks John. In closing, I will highlight our three key takeaways from the 2025. First, we continue to make significant progress in executing our strategy, delivering second quarter revenues above the high end of our range of guidance. In addition, we are pleased with our adjusted operating margin and adjusted earnings per share. Second, we successfully completed the acquisition of the Vascular Intervention business and have begun our integration activities.

[Liam Kelly, Chairman, President & CEO at Teleflex]

It is our intention to host a virtual investor event in the fall dedicated to the vascular intervention business with a focus on the strategic rationale, the comprehensive coronary and peripheral product portfolio and clinical trial pathway to the presolid by absorbable scaffold. That, we remain laser focused on controlling what we can across our business as we continue to advance our strategic objectives. Our focus is on enhancing operational execution, returning the business to growth and strengthening our diverse product portfolio to better deliver for our customers. We continue to progress the separation of Teleflex supported by our guiding principles, which are focused on maximizing shareholder value through this process. That concludes my prepared remarks.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Now I would like to turn the call back to the operator for Q and A.

[Operator]

Thank And our first question will come from Matt Taylor of Jefferies. Your line is open.

[Matt Taylor, Managing Director at Jefferies & Company Inc]

Hi. Thanks for taking the question. So I really had two. I wanted to see if you could provide more context on the bridge of the guidance between tariffs, FX, and business outperformance. And then congrats on closing, Viatronic.

[Matt Taylor, Managing Director at Jefferies & Company Inc]

I was just hoping you could help us understand, just in rough terms, the outlook for that business and its growth organically.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Okay. I I'll cover thank you, Matt. I'll cover the the Biotronic Vascular Interventions business, and I'll ask John to cover the beat and splitting it into operational and tariffs. So first of all, on the Biotronic business, the expectation for the organic growth of the Biotronic business in the second half of the year is mid single digits during that time. That is the full growth on that $2.00 $4,000,000 in the back half of the year or the €177,000,000 math.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Nothing has changed to our outlook for the business starting in 2026. We still expect the Biotronic Vascular Interventions business to grow 6% or better. And John, do you just want to cover the mix of Yes. EPS

[John Deren, EVP & CFO at Teleflex]

I think you'd see we had a pretty nice operational performance in Q2. We'll carry some of that into the back half of the year, roughly $0.20 and that covers also any dilution we'd see on BioTronic. Tariffs roughly 50% I'm sorry, $0.05 0 for the year. And then foreign exchange is negative, tax and shares positive. They largely offset each other.

[Liam Kelly, Chairman, President & CEO at Teleflex]

I'll just add Matt that of the $0.50 a good chunk of it $0.45 $0.47 is coming from the China. And we've also made some improvements on USMCA. So we've also done some operational work behind the scenes to improve our tariff position as a company.

[Operator]

Our next question comes from Jason Bedford of Raymond James. Your line is open.

[Jayson Bedford, MD - Medical Technology at Raymond James Financial]

Good morning and thanks for all the details here. You threw out a lot of numbers, so I don't want to be greedy with this question. But do you have a rough breakout between the growth of remainco and newco? I'm not sure if we have enough information to fully calculate that.

[Liam Kelly, Chairman, President & CEO at Teleflex]

In the quarter, I do I can give you a breakout of remainco. Nothing has changed to our outlook for remainco and a growth perspective for the year. We expect to still expect it to be in the upper 5s and it was in the mid single digit range excluding the impact of volume based procurement in the second quarter, Jason.

[Jayson Bedford, MD - Medical Technology at Raymond James Financial]

Okay. That's helpful. And there's you touched on it, but Interventional was quite strong. Can you maybe speak to the durability of this type of growth?

[Liam Kelly, Chairman, President & CEO at Teleflex]

Yes. So Interventional did have a good strong quarter. Obviously, balloon pumps had really strong double digit growth and were in line with our expectations. The upside in Interventional actually was delivered by OnControl and complex catheters. And we continue to expect the Interventional business to grow high single, low double digits for the full year of 2025.

[Operator]

Our next question comes from the line of Anthony Petrone with Mizuho Americas. Your line is open.

[Anthony Petrone, MD - Equity Research at Mizuho Financial Group]

Thanks and congrats on the progress here on bringing BioTronic in and moving toward transaction with NewCo. Maybe on on NewCo specifically, sale versus spin, speaking to a number of strategics. Maybe, Liam, just a little bit on on timing, you know, obviously, considering all angles here, but anything on timing that you can provide on on the decision making process for NewCo, that would be helpful. And then maybe, you know, on the BioTronic edition, quarterly cadence of that business, maybe walk us a little bit through the seasonality, would expect maybe 3Q is a little bit more modest than 4Q, and and your thoughts out of the gate on revenue synergies specifically with that business with the existing Teleflex portfolio? Thank you.

[Liam Kelly, Chairman, President & CEO at Teleflex]

All right, Anthony. Thank you for the questions. Let me start off with the sale versus spin and the timing. Nothing has changed in our outlook for the timing of the spin. If we proceed with a spin that would be mid-twenty twenty six.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Difficult for me to give you specifics on the timing of a sale. But I will tell you as we continue to evaluate all options and Anthony our focus is really on maximizing shareholder value. And as I said in my prepared remarks, we've made significant progress. We couldn't get to the point we are today without to conduct numerous preliminary buyer meetings as part of the sales process without having made progress and getting some key deliverables. So one of those would be, for example, finalizing quality of earnings and future outlook, which is needed for both sailors spin, getting a data room ready, identifying key internal leadership talents to lead the management presentations, and obviously, qualifying and quantifying the transition support as well as having numerous NDAs signed, ahead of those preliminary meetings, which should speed up now the second phase of the process as we go into due diligence.

[Liam Kelly, Chairman, President & CEO at Teleflex]

I I remain really encouraged and impressed by the quantity and quality of the interested parties. That continues to be the case. We do plan to continue due diligence, Anthony, as we go through the third quarter. And in the event that we are successful with a sale, we will obviously update the investment community as as we go. Your second question was really around BioTronic and the cadence.

[Liam Kelly, Chairman, President & CEO at Teleflex]

You're you're absolutely correct, and it's reflected in our guidance as you can see. In q three, we have $99,000,000 built in for for BioTronic. And in q four, we have $105,000,000 built in for BioTronic to give you, the total of $2.00 $4,000,000 So there is the normal cadence that you would expect from any interventional business. With regard to the synergies, as I said a little bit earlier, Biotronic is going to grow in that mid single digit range and we still expect it to grow in that 6% or better beginning in 2026. A part of that is the bringing together of the two portfolios.

[Liam Kelly, Chairman, President & CEO at Teleflex]

There's two aspects of that Anthony. One is access to the cath lab. Because the Biotronic VI organization in North America is pretty is is is smaller than Teleflex's, gaining access to the cath lab is quite difficult for them. But now you combine the two entities, therefore access is going to be a lot easier. So that really will help in bringing some of these portfolios together.

[Liam Kelly, Chairman, President & CEO at Teleflex]

And then there are some natural synergies with portfolio. I'm just going to give you two examples. The biggest part of our portfolio in that cath lab is our complex catheters. So what do complex catheters do? They give you access to the car the tortuous coronary arteries.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Why are getting access? Because you want to put in a a bare metal stent or a drug eluting stent. And so bringing those two together will definitely help the the combination. The second is in in regard to perforations. When one has a perforation and accidents happen in any procedure, the first thing you need to do, there's two combo products in this area that that one Teleflex has and now with the combination of the the Biotronic VI business, we'll have we we will be the dominant player in this area.

[Liam Kelly, Chairman, President & CEO at Teleflex]

So, the ringer catheter would be used initially, in order to continue doing the procedure, and then the PK papyrus would be used to close-up the perforation. So you we would be able to block out this niche of a market globally for Teleflex with the combination of these products. So they're just two quick examples, Anthony, on how this portfolio will work incredibly well together. And we're really looking forward to have an investor day to outline this, to share our excitement with Wall Street as to why this is a great fit for Teleflex.

[Operator]

Our next question comes from Shagun Singh with RBC. Your line is open.

[Shagun Singh, Medical Technology Analyst at RBC Capital Markets]

Great. Thank you so much. I guess a couple of clarification questions. So just on Q2 EPS beat, can you maybe help us identify how much was tariff versus business outperformance phasing for EPS or margins in Q3 versus Q4? And then Liam, on the underlying business, I just want to make sure that I understand.

[Shagun Singh, Medical Technology Analyst at RBC Capital Markets]

So I think you indicated that the adjusted constant currency revenue guidance on an underlying basis excluding the acquisition is unchanged. So I don't know if you can further elaborate on how you're thinking about each of your businesses. Are there areas of upside versus downside relative to expectations internally, to highlight? That would be helpful. Thank you so much.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Absolutely, Shigun. So I'll cover the last part of the question, and then I'll ask John to cover the the first two components of it. With regard to our our outlook, if we take a step back, first of all, we're really happy with Q2. I think we delivered well in Q2. We hit some really key metrics.

[Liam Kelly, Chairman, President & CEO at Teleflex]

We delivered on our expectations for revenue. We exceeded op margin and EPS. And I think we executed well and the team executed well in the quarter. To answer your question and you are absolutely correct Shigun on our 2025 outlook. There is no change to our underlying revenue guidance in that regard.

[Liam Kelly, Chairman, President & CEO at Teleflex]

The only change is we've added the Biotronic Vascular Interventions business of $2.00 $4,000,000 in the second half, dollars 99,000,000 in Q3 and $105,000,000 update in Q4. Our updated revenue guidance is 7.7 to 8.7%. And obviously, we've increased our gross margin guidance by 50 basis points and we've increased our EPS by $0.70 Now I'll ask John just to again reiterate the breakup of that $0.70 and answer the other part of your question again.

[John Deren, EVP & CFO at Teleflex]

Yes. So again, $0.70 about $0.50 of it relates to tariffs again. And as Liam pointed out earlier, some of that is improvements we've made from a USMCA compliance standpoint and exemption standpoint. But obviously the adjustments in China and elsewhere made a large difference. So again, there's no tariff impact in Q2 as the tariff impact start in the second half of the year.

[John Deren, EVP & CFO at Teleflex]

And then and I apologize if you're looking for the impacts from a gross margin perspective as well, is that what you wanted?

[Shagun Singh, Medical Technology Analyst at RBC Capital Markets]

Just phasing on margins in the back half.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Q3 and Q4.

[John Deren, EVP & CFO at Teleflex]

Q3 and Q4. So the tariff impacts largely similar in Q3, Q4. I think we're down a little bit in Q3 versus Q4 from a beat perspective. We'll see little bit of uplift in Q4, but I don't well, I don't the I don't have we don't we're not providing the detailed breakup between Q3 and Q4, Morgan.

[Operator]

Our next question comes from Richard Newitter with Truist. Your line is open.

[Richard Newitter, Managing Director at Truist Securities]

Hi. Thanks for taking the questions.

[Richard Newitter, Managing Director at Truist Securities]

Just wanted to go to the urology segment for a minute and back to the CMS proposal, I'm just curious if if if you can talk a little bit about how you see that potentially impacting the business, if at all, and and if there's any kind of side of care kind of positive impact, you know, I know there's been a migration out of the office for UroLift. Is that is that something that you think will change practice at the margin and and help that business recover a little bit?

[Liam Kelly, Chairman, President & CEO at Teleflex]

Hey, Rich. Thanks for the question. Look. The the the updated CMS proposed rule, just want to point it is a proposed rule. If it comes into effect as it has been outlined will definitely be positive.

[Liam Kelly, Chairman, President & CEO at Teleflex]

I'll start with Baragel. Baragel in the office site of service got an uplift of approximately 40%. In the ASC, you got a 9% uplift as well as a 9% in the hospital. With regards to UroLift, in the office it's approximately a 10% uplift. And it's 9% to 10% actually in all sites of service for UroLift across the board.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Now what that means from the office, Rich, just to give you a little bit of detail is that it will almost net of any rebates that we would have put in place. If you just take the reimbursement change, it would more than double the doctors fee, if you want to call it that, net of the cost of the product in the office side of service. So we see it as a positive development. It's very encouraging. And we also would like it to become the the not be a proposed rule, but be an actual rule, and we'll wait to see that.

[Liam Kelly, Chairman, President & CEO at Teleflex]

And I think to the credit of CMS, this is is really a strong focus on moving procedures from a a more expensive location to a a less expensive location as in the doctor's office, and we would strongly encourage them to continue that focus.

[Richard Newitter, Managing Director at Truist Securities]

Thank you. And then just one more. Intra aortic balloon pumps, it looks like there was that was the drive of most of the interventional outperformance. Can you maybe update us there on your thoughts on the kind of the jump ball opportunity in the wake of competitor issue and kind of any updated views of what that could be even looking out of the next twelve months? Thanks.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Yeah, Rich. Actually, the Bs in interventional from our internal plan was not intra aortic balloon pumps. The Bs actually came from uncontrolled and complex catheters. So we were very encouraged by the overall performance of that business. Now did balloons perform well?

[Liam Kelly, Chairman, President & CEO at Teleflex]

Yes, they performed well and very much in line with our expectation. And in particular the focus here is in North America. And just like we had in Q1, we had very strong double digit growth in balloon pumps in Q2. The outlook, we expect we as I said earlier, we continue to expect the interventional base business excluding the biotronic vascular interventions business to grow high single low double digits for the year. Obviously, you come up on specifically to balloon pumps, come up on a tougher comp in Q4.

[Liam Kelly, Chairman, President & CEO at Teleflex]

So I would expect the growth from balloon pumps themselves to moderate when we get into Q4 because that was the beginning of the issue with the competitor. But all in all, we couldn't be more pleased with the performance of our Interventional business and it couldn't be timed better because now we have the the addition of the Biotronic BI business into a business that's performing exceptionally well, and and we're going through a separation at the same time. So all the stars seem to be aligning for that process.

[Operator]

Our next question comes from Matthew O'Brien with Piper Sandler. Your line is open.

[Analyst]

Hi. This is Samantha on for Matt this morning. Thank you so much for taking our question. I guess, we're wondering if you can provide any more details on the, I guess, progress for the separation or sale. You know, if you were $50.50, sale or spend at the time of the announcement, you know, what are you leaning one way or the other now?

[Liam Kelly, Chairman, President & CEO at Teleflex]

So we didn't actually give any leaning at the time of the announcement. Actually, we announced, we only announced a spin. And as we went through the process, we got significant inbound interest. And as I said a little bit earlier, we are encouraged by the amount of inbound interest that we have received. I can tell the investment community our focus remains on unlocking shareholder value.

[Liam Kelly, Chairman, President & CEO at Teleflex]

I can also tell you that we have been working incredibly hard. We are not sitting in our hands. And I guess the most significant update we gave on the call was we have had many preliminary management meetings with interested parties. And we've done, as I said a little bit earlier, we've done a lot of work in regarding the financial outlook of both businesses, identifying some of the key internal leadership that will lead the management presentations, many NDAs signed, which should accelerate the due diligence because that in itself can only take two weeks to get that done. So front loading these management meetings was actually strategically a good move because it gets us moving in the right direction.

[Liam Kelly, Chairman, President & CEO at Teleflex]

We will do whatever unlocks the most shareholder value. That is our North Star and our guiding principle. And whether it's a sale or a spin, we have very complex models working with independent third parties to help us work through this. We know what our tax basis is. We have a really good understanding as to what the spin would generate to shareholders.

[Liam Kelly, Chairman, President & CEO at Teleflex]

So now it's just a question of going through the process of the parallel path and get to an outcome, that would be in the best interest of our shareholders.

[Analyst]

Perfect. Thank you. And then if I could sneak in one more on the proposed rule, specifically for, from CMS in urology. I I I think you've, said that UroLift is at nine to 10% in the office. You know?

[Analyst]

I know that there was expected that UroLift would get back to growth next year, with these reimbursement changes. I just wanna confirm if that's that's still the thinking.

[Liam Kelly, Chairman, President & CEO at Teleflex]

Well Samantha getting a 10% proposed rule uplift is definitely going to help that hypothesis as we head into 2026. As I said a little bit earlier and where we've had a lot of pressure as everybody knows is in the office side of service that 10% lift would result in a nice uptick the uptick for the doctor. We will work through this and we will work with our customer base diligently to position for improvements into 2026. But Samantha, you're absolutely right. This is incredibly encouraging.

[Liam Kelly, Chairman, President & CEO at Teleflex]

It's a proposed rule. I'm hopeful that it will become the rule in the beginning of the New Year. And if so, it will definitely be more of a it'll definitely be a help and not a hindrance to UroLift in all sites of service.

[Operator]

Our next question comes from Michael Pollard with Wolfe Research. Your line is open.

[Mike Polark, Senior Equity Research Analyst - Medical Devices at Wolfe Research, LLC]

Good morning. Thank you. I'll follow-up on that thread. But on Barajel, Liam, office or the proposed office increase sounded significant. What is the site of service mix for Baragel today?

[Mike Polark, Senior Equity Research Analyst - Medical Devices at Wolfe Research, LLC]

And, you know, with a different economic incentive, what do you think it could be?

[Liam Kelly, Chairman, President & CEO at Teleflex]

We don't break down the site of service Mike for Barajel, but I can tell you that it is spread across all of those three sites of service. And I think that uplift in all sites of service, think is very encouraging. I think that the office uplift may move some product to that site over time. That in itself is encouraging for us because we have a very strong call point into that side of service. And I do think that it is a recognition, think, by CMS how important spacing is when men are going through a radiation therapy.

[Liam Kelly, Chairman, President & CEO at Teleflex]

And it's think it's a reflection of the benefits of spacing in that in that regard.

[Mike Polark, Senior Equity Research Analyst - Medical Devices at Wolfe Research, LLC]

Helpful. If I can follow-up maybe for John. John, I think you mentioned in the tariff mitigation strategy section, you know, you would look to implement increased customer pricing as contracts come up for renewal to to attempt to offset, some of the tariff driven pressure. I guess, any early feel for for how that may go? I mean, I know the industry probably will will probably consider a strategy like this.

[Mike Polark, Senior Equity Research Analyst - Medical Devices at Wolfe Research, LLC]

Hospitals seemingly have been amenable to to positive price adjustments over the last couple years on the heels of the, COVID era inflation wave. I'm just curious if you think it'll be similar, in response to tariffs or or if you're sensing any early pushback on that front? Thank you for any comments on that one. Thank you.

[John Deren, EVP & CFO at Teleflex]

Yes. Mean, certainly kind of we're on the early stages. We don't expect much impact in 2025 and we'll be able to guide a little further as we get to our 2026 guidance as to what we think the year looks like. We have a view of where we think we could increase price as appropriate across just not just The United States but elsewhere. And there is some timing that will cause it to take place a little slower than we would have liked.

[John Deren, EVP & CFO at Teleflex]

But I think in 2026 will be really that larger opportunity. I wouldn't expect significant pushback in what we expect to propose.

[Operator]

Our next question comes from Mike Matson with Needham. Your line is open.

[Mike Matson, MD - Senior Equity Research Analyst at Needham & Company]

Yeah. Thanks for taking my questions. So just now that you've closed the Biotronic deal, I was wondering if you could provide some insight into the the Salesforce integration there. You know, how much overlap is there with the existing interventional Salesforce? How long do you expect the integration effort to take, and what's the the risk of disruption there?

[Liam Kelly, Chairman, President & CEO at Teleflex]

Yeah. Absolutely, Mike. Thanks for the question. So if you look at the breakdown of the BioTronix BI revenue, around 50% of it is in The EMEA, 25% in The Americas and 25% in APAC. That in itself represents a significant opportunity to drive accelerated revenue growth by leveraging those channels.

[Liam Kelly, Chairman, President & CEO at Teleflex]

If you look at our business, it's much stronger in The Americas, good business in Europe and weaker in Asia Pacific. So it gives us an opportunity, as I said a little bit earlier, to help in gaining access to the cath lab for the BioTronic products in The Americas. It also helps with the strength of the BioTronic organization in EMEA to merge that and the product portfolio. And we will end up with a larger sales force across the board selling all of our products into these markets, and we do see an opportunity for revenue synergies being driven by the combination of these two businesses together.

[Mike Matson, MD - Senior Equity Research Analyst at Needham & Company]

Okay. Got it. And then just one on on Titan. So, you know, what are you seeing, more recently with bariatric surgery? Is it still are volumes still declining there?

[Mike Matson, MD - Senior Equity Research Analyst at Needham & Company]

You know, more specifically, what are you seeing with with Titan? I mean, is it I I know it's probably doing better than overall bariatric volumes just given that it's kind of an, you know, market penetration story. But

[Liam Kelly, Chairman, President & CEO at Teleflex]

Yeah. Mike, we still expect them to grow double digits this year as we continue to take share, but we are seeing declines in bariatric surgery in the marketplace. It's clearly the impact of GLP ones is having an impact there, but that is only impacting the the impact of our product on the margins as we continue to penetrate the market. I think that the clinical evidence that we've been generating is really helpful where we're able to show a reduction in GERD. We're also able to show a reduction in hospital stay and and equal if not better clinical outcomes following the procedure.

[Liam Kelly, Chairman, President & CEO at Teleflex]

It's still the only only single line staple product in the market, which gets symmetry of of outcomes, when you're doing bariatric sleeves and bariatric surgery. So still remain encouraged by what we're seeing with Titan, but you're correct. There is pressure in that market because of the rollout of GLP-1s.

[Operator]

That is all the time we have for questions. I will now turn the call to Laurence Kirsch for closing remarks.

[Lawrence Keusch, VP - IR & Strategy Development at Teleflex]

Thank you, Sarah, and thank you to everyone that joined us on the call today. This concludes the Teleflex Incorporated second quarter twenty twenty five earnings conference call.

[Operator]

Thank you. You may now disconnect your lines.

Participants

Executives

• Lawrence Keusch, VP - IR & Strategy Development
• Liam Kelly, Chairman, President & CEO
• John Deren, EVP & CFO

Analysts

• Matt Taylor, Managing Director at Jefferies & Company Inc
• Jayson Bedford, MD - Medical Technology at Raymond James Financial
• Anthony Petrone, MD - Equity Research at Mizuho Financial Group
• Shagun Singh, Medical Technology Analyst at RBC Capital Markets
• Richard Newitter, Managing Director at Truist Securities
• Analyst
• Mike Polark, Senior Equity Research Analyst - Medical Devices at Wolfe Research, LLC
• Mike Matson, MD - Senior Equity Research Analyst at Needham & Company