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    ICUI
    Earnings call· Mar 2026(Q1 FY26)

    ICU MEDICAL INC/DE Q1 FY26 earnings call ICUI

    May 7, 2026 Source

    Executive summary

    ICU Medical Q1 FY26 — Strong Infusion Systems Growth and Gross Margin Expansion

    ICU Medical delivered solid Q1 FY26 results, marked by strong organic growth in its core IV Systems business and sequential gross margin expansion. While facing headwinds from the IV Solutions deconsolidation and increased logistics costs, the company reaffirmed its full-year guidance, anticipating offsets from lower tariffs and accelerated operational efficiencies. Management is focused on deleveraging and exploring strategic options for the Vital Care portfolio.

    Highlights

    5

    • Total company organic revenue grew 1% in Q1 FY26.

    • Gross margins increased sequentially to over 41%.

    • IV Systems business grew 6% organically, marking a record quarter in pumps.

    • Adjusted EPS increased 15% to $1.97.

    • Free cash flow was strong at $28 million.

    Concerns

    4

    • Total company reported revenue decreased 12% due to the deconsolidation of IV Solutions.

    • Vital Care organic revenue decreased 14% due to SKU discontinuations.

    • FDA clearances for new Medfusion and CADD hardware platforms are delayed due to increased testing requirements.

    • An estimated $10 million in additional logistics expense is projected for 2026 due to higher oil/diesel prices.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year guidance
    Reaffirmed
    high materiality
    High
    IV Systems growth cadence
    More balanced throughout the year
    medium materiality
    High
    Cash consumed in integration and remediation activities
    Materially decrease later in the year, down sequentially in Q2
    medium materiality
    High
    Gross margin target
    2 percentage points of opportunity remaining
    high materiality
    High
    Net leverage target
    2x or less
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Consumables
    Q1 revenues were in line with expectations, down sequentially like prior years. Expect growth rates to return to historical levels in Q2.
    		—5% reported, 2% organicdown sequentially—
    IV Systems
    Expect organic growth to continue at this rate or above, absorbing OEM wind down. Growth will be more balanced throughout the year, not back-half weighted.
    Record quarter in pumps
    		—8% reported, 6% organic——
    Vital Care
    Reported decrease due to deconsolidation of IV Solutions. Organic decrease due to discontinuing certain SKUs to improve profitability, with largest impact in Q1. Expect sequential stability to improvement organically, near-term revenue flat to slightly down.
    		—decreased 14% organic, decreased 59% reported——

    Operational metrics

    20
    Adjusted Gross Margin
    41%increased sequentially
    Q1 FY26

    Slightly ahead of expectations due to favorable product mix with higher-margin core business units (Consumables and Infusion Systems) growing faster than Vital Care, and continued benefit from IV Solutions deconsolidation and integration synergies.

    Tariff Expense
    $10 millionincreased $8 million YoY
    Q1 FY26

    Recognized in Q1. Expected to be slightly lower in Q2 and Q3 due to current Section 122 tariff rate of 10% being less than the average rate paid under IEEPA.

    Adjusted SG&A Expense
    $112 million
    Q1 FY26

    Consistent with previously provided full year guidance.

    Adjusted R&D Expense
    $21 million
    Q1 FY26

    Consistent with previously provided full year guidance.

    Restructuring, Integration and Strategic Transaction Expenses
    $17 millionsequential decline relative to Q4
    Q1 FY26

    Related primarily to IT systems integration and manufacturing plant consolidation projects. Anticipate continued reductions in both activity and spend in the second half of this year.

    Adjusted EBITDA
    $99 millionflat YoY
    Q1 FY26

    Year-over-year comparability impacted by IV Solutions deconsolidation and increased tariff expense, largely offset by higher earnings from the core business.

    Adjusted Diluted EPS
    $1.97increased 15% YoY
    Q1 FY26

    Compared to $1.72 last year.

    Net Interest Expense
    $16 million
    Q1 FY26

    Reflected in current quarter results.

    Adjusted Effective Tax Rate
    24%
    Q1 FY26

    Reflected in current quarter results.

    Diluted Shares Outstanding
    25.2 million
    Q1 FY26

    For the quarter.

    Cash Spend for Quality System and Product-Related Remediation Activities
    $9 million
    Q1 FY26

    Invested during the quarter.

    Cash Spend for Restructuring and Integration
    $17 million
    Q1 FY26

    Invested during the quarter.

    Capital Expenditure
    $11 million
    Q1 FY26

    For general maintenance and capacity expansion at facilities, as well as placement of revenue-generating infusion pumps with customers outside the U.S.

    Debt Balance
    $1.3 billion
    Q1 FY26

    Finished the quarter with this amount of debt.

    Cash Balance
    $288 million
    Q1 FY26

    Finished the quarter with this amount of cash.

    Annualized Incremental Logistics Expense (Oil Price Impact)
    $3 million
    Annualized

    Estimated impact of a $10 increase in oil price on the P&L.

    Additional Logistics Expense (2026 forecast)
    $10 million
    FY26

    Based on latest market forecast for oil and diesel, representing additional logistics expense in 2026.

    Lower Tariff Benefit (Q2/Q3)
    2/3 of $10M offset
    Q2/Q3 FY26

    Expected benefit from the current Section 122 tariff rate of 10% being less than the average rate paid under IEEPA. This benefit is not assumed to continue beyond the expiration of 122 tariffs.

    Accelerated Operational Efficiencies Benefit
    1/3 of $10M offset
    FY26

    Expected to be realized this year and, combined with lower tariffs, largely offset the impact of higher diesel costs.

    Japanese Surgical Commodities Revenue
    down over 50%
    cumulative over few years

    A product line that was over $20 million in revenues a few years ago, now being exited due to not aligning with core infusion business and contractual flexibility.

    Industry KPIs

    3
    MetricValueDetails
    Tariff impact$10 millionUSD
    FCF conversion leverage guidance$28 millionUSD
    Segment franchise organic growth2%%

    Product announcements

    3
    ProductTypeDetails
    Oncology line product (Clave connectors + IV bags)launch
    Revised disinfection cap (SwabCap portfolio)launch
    LifeShield safety software (latest version)update

    Deals & partnerships

    1
    OtsukaCreation of Otsuka ICU Medical joint venture and resulting deconsolidation of IV Solutions from income statement.

    Joint venture created in mid-2025, modernizing the IV Solutions business.

    Risks & headwinds

    3
    Increased logistics costs due to higher oil/diesel prices2026

    Estimated $10 million additional logistics expense in 2026

    Mitigation: Partially offset by lower tariffs in Q2/Q3 and accelerated operational efficiencies.

    FDA delays for new infusion pump hardware clearancesNear-term

    Additional testing data required (larger sample size, more set configurations)

    Mitigation: Prioritizing Medfusion testing, then CADD. Company has expertise with 6 prior 510(k) clearances.

    Uncertainty around future tariff frameworkBeyond Q3 FY26

    Current Section 122 tariffs are temporary; not known what new framework may replace them.

    Mitigation: Not assuming benefit from lower Section 122 tariffs will continue beyond expiration.

    What to watch in Q2 FY26

    5

    IV Systems organic growth rate

    Q2 FY26
    Current6%
    TargetContinue at this rate or above

    Why it matters

    Indicates sustained momentum in a core business and successful rebalancing of installation cadence.

    For Q2 and the near term, we would expect organic growth to continue at this rate or above while absorbing the previously mentioned OEM wind down.

    Q&A highlights

    6

    What was the LVP growth in Q1 for Infusion Systems?

    Vivek Jain stated that LVP was the strongest growth driver in the Infusion Systems segment, but the company prefers to reflect on specific business line growth at year-end.

    “the strongest growth driver was LVP by far and away in the segment.”

    asked by Jayson Bedford · answered by Vivek Jain

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 Performance Overview

    ICU Medical reported Q1 FY26 revenue of $526 million, reflecting 1% organic growth but a 12% reported decrease due to the mid-2025 deconsolidation of the Otsuka ICU Medical joint venture. Gross margins improved sequentially to over 41%, driven by a favorable product mix towards higher-margin consumables and infusion businesses. Adjusted EBITDA was $99 million, flat year-over-year, while adjusted EPS increased 15% to $1.97.

    02

    Product Development & Regulatory Updates

    The company received two new 510(k) clearances for consumables: an oncology line product bonding Clave connectors to IV bags and a revised disinfection cap for the SwabCap portfolio. On Infusion Systems, FDA approval was received for the latest LifeShield safety software version. However, new Medfusion and CADD hardware submissions face delays due to increased FDA testing requirements for larger sample sizes, with Medfusion prioritized.

    03

    Macroeconomic Headwinds & Offsets

    Management highlighted an estimated $10 million in additional logistics expense for 2026 due to higher oil and diesel prices. This is expected to be largely offset by slightly lower tariff expenses in Q2 and Q3 (due to Section 122 rates being less than IEEPA rates) and accelerated operational efficiencies. The company is not factoring in potential IEEPA refunds into its guidance.

    04

    Strategic Priorities & Capital Allocation

    ICU Medical aims to build a comprehensive infusion therapy company by focusing on innovation in consumables and systems, optimizing its manufacturing network, and improving earnings power. The company is actively pursuing operational and strategic choices for the Vital Care portfolio, including exiting certain non-core SKUs like Japanese surgical commodities. A key financial goal is to achieve 2x or less net leverage, which they are within half a turn of, through organic cash flow or strategic moves.

    05

    IV Systems Growth Rebalancing

    The company initially expected IV Systems growth to be back-half weighted⚖️ but now anticipates a more balanced growth trajectory throughout the year. This shift is attributed to improved synchronization of installation resources and customer scheduling for new product rollouts, helping manage near-term volatility.

    AI-generated summary of the company’s earnings call. Not investment advice.