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    ICUI
    Earnings call· Jun 2026(Q2 FY26)

    ICU MEDICAL INC/DE Q2 FY26 earnings call ICUI

    Aug 6, 2026 Source

    Executive summary

    ICU Medical Q2 FY26 — Strong Organic Growth and Raised Full-Year Guidance

    ICU Medical delivered a strong second quarter, driven by robust organic growth in its core Consumables and IV Systems businesses, leading to raised full-year adjusted EBITDA and EPS guidance. The company made significant progress on debt reduction, nearing its leverage target, and continues to advance its strategic vision for a comprehensive infusion therapy portfolio, despite ongoing macroeconomic headwinds from currency and tariffs. Innovation in new product cycles and operational efficiencies are expected to drive future margin expansion and predictable revenue growth.

    Highlights

    5

    • Total company organic revenue growth of 6% in Q2 FY26.

    • Adjusted EBITDA improved to $110 million, reflecting 10% growth year-over-year.

    • Adjusted EPS increased 13% to $2.37 compared to $2.10 last year.

    • Strong free cash flow of $62 million, enabling $50 million debt repayment and reducing net leverage to 2.3x.

    • Full-year adjusted EBITDA guidance raised to $415 million-$435 million and adjusted EPS guidance raised to $8.60-$9.00.

    Concerns

    4

    • Reported revenue growth was only 1% due to the deconsolidation of the IV Solutions JV and OEM wind down.

    • Vital Care segment decreased 4% organically and 32% reported due to JV deconsolidation.

    • Continued negative impact from currency fluctuations (Costa Rican Colon, Mexican Peso, Japanese Yen) and tariffs, totaling $90 million-$100 million annually.

    • Higher logistics expense from elevated diesel costs impacted gross margins.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full-year Adjusted EBITDA
    $415M-$435M
    high materiality
    High
    Full-year Adjusted EPS
    $8.60-$9.00 per share
    high materiality
    High
    Full-year Adjusted Gross Margin
    around 41.5%
    medium materiality
    High
    Consumables Business Organic Growth
    mid-single-digit growth
    medium materiality
    High
    IV Systems Organic Growth
    at or above 6% rate
    medium materiality
    High
    Vital Care Business Performance
    down slightly for the year
    low materiality
    Medium
    Net Leverage Ratio
    approximately 2x
    high materiality
    High
    Full-year Adjusted Operating Expenses
    approximately 25% of revenue
    medium materiality
    High
    Full-year Net Interest Expense
    $65M
    medium materiality
    High
    Full-year Adjusted Tax Rate
    25%
    medium materiality
    High
    Full-year Diluted Shares Outstanding
    25.2 million
    medium materiality
    High
    Full-year JV Earnings Contribution
    breakeven or a small loss
    low materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Total Company
    Reported results impacted by mid-2025 creation of Otsuka ICU Medical JV and deconsolidation of IV Solutions.
    Organic growth: 6%
    		$548M1% reported——
    Consumables
    Growth was balanced across all 4 product families and improved year-over-year. Mid-single-digit growth expected for the remainder of the year.
    Organic growth: 5%Record absolute sales
    		—6% reported——
    IV Systems
    Dedicated sets were strong, offset by declines in OEM revenues. Some earlier-than-expected installations occurred. Organic growth expected to continue at or above 6% rate for Q3.
    Organic growth: 12%Record quarter in pumps
    		—13% reported——
    Vital Care
    Decrease due to deconsolidation of IV Solutions. Sequential improvement observed, with stability expected for the balance of the year and down slightly for the full year.
    Organic decrease: 4%
    		—decreased 32% reported——

    Operational metrics

    23
    Adjusted Gross Margin
    41%
    Q2 FY26

    In line with expectations, with higher logistics costs offset by lower tariffs and synergy capture.

    Tariff Expense
    $8M
    Q2 FY26

    Represents approximately 1.5% of adjusted revenue, with a lower average rate compared to IEEPA tariffs.

    Tariff Refunds
    $20M
    Q2 FY26

    Received during the quarter, excluded from non-GAAP income statement but included in free cash flow. Represents the majority of IEEPA tariffs paid, with potential for further, smaller refunds.

    Adjusted SG&A Expense
    $112Mdeclined 1 percentage point YoY and QoQ as % of revenue
    Q2 FY26

    The 20.4% rate declined compared to Q2 last year and Q1 this year, driven by efficiencies and timing benefits. Current Q2 run rate is not indicative of future SG&A run rate.

    Adjusted R&D Expense
    $22M
    Q2 FY26

    Represents 4.0% of adjusted revenue.

    Restructuring, Integration and Strategic Transaction Expenses
    $21Mhigher than previous quarters
    Q2 FY26

    Higher due to non-cash asset write-offs related to facility consolidation. Actual cash spend was down sequentially, with reductions expected in H2 FY26.

    Adjusted EBITDA
    $110M10% growth YoY
    Q2 FY26

    Reflects a 20% margin rate. Year-over-year comparability impacted by JV deconsolidation and increased tariff expense, which have now been lapped.

    JV EBITDA Contribution
    $3Msimilar level of profitability as last year
    Q2 FY26

    From the 40% equity investment in the joint venture. Full-year contribution expected to be breakeven or a small loss.

    Adjusted Diluted EPS
    $2.37increased 13% from $2.10 last year
    Q2 FY26

    Reflects net interest expense of $16 million and adjusted effective tax rate of 23%.

    Net Interest Expense
    $16M
    Q2 FY26

    Reported for the quarter.

    Adjusted Effective Tax Rate
    23%
    Q2 FY26

    Reported for the quarter.

    Diluted Shares Outstanding
    25.0M
    Q2 FY26

    Reported for the quarter.

    Cash Spend for Quality System and Product-Related Remediation
    $11M
    Q2 FY26

    Investment in remediation activities.

    Cash Spend for Restructuring and Integration
    $11Mdown sequentially compared to Q1
    Q2 FY26

    Cash spend expected to reduce in the second half of the year.

    Capital Expenditure
    $19M
    Q2 FY26

    Investment in facilities and pump placements.

    Debt
    $1.24B
    Q2 FY26 end

    Total debt at the end of the quarter.

    Cash Balance
    $298M
    Q2 FY26 end

    Cash on hand at the end of the quarter.

    Net Leverage Ratio
    2.3xdown from prior period
    Q2 FY26 end

    Reduced due to strong free cash flow and debt repayment.

    Debt Repayment
    $50M
    Q2 FY26

    Repaid during the quarter, enabled by strong free cash flow.

    Annual Tariff Headwind
    $30M-$40M
    Annual

    Ongoing incremental tariffs burdening earnings.

    Currency Headwind
    $60M
    Last 4 years

    Negative impact over the last four years from specific currency fluctuations.

    Gross Margin Expansion Target
    2 percentage points
    Longer term

    Targeted gain to offset tariff and currency headwinds and achieve normal medical device company margins.

    OEM Revenue Wind Down Impact
    1-2 point drag
    Balance of FY26

    Expected impact on the IV Systems segment for the remainder of the year, primarily in international geographies.

    Industry KPIs

    9
    MetricValueDetails
    Tariff impact$8MUSD
    Pricing realized price—
    New product launch rampPlum Duo and Solo
    Procedure volume growth—
    FCF conversion leverage guidance2.3x
    Installed base system placements—
    Segment franchise organic growth6%%
    Indicated addressable patient population—
    Pivotal trial clinical evidence milestonesMedfusion 5000 syringe pump

    Deals & partnerships

    1
    OtsukaIV Solutions production and technology$0.5B investment

    Otsuka, as the joint venture partner, announced a $0.5 billion investment into IV Solutions production. A groundbreaking ceremony for the first and largest greenfield IV Solutions production site in the U.S. in this century is scheduled for August 24 on adjacent land to the current facility.

    Risks & headwinds

    6
    Currency fluctuationsOngoing

    Negative impact of approximately $60 million over the last 4 years

    Mitigation: Focus on controllable items like synergy realization, incremental pricing, and product mix to offset impact.

    Tariff burdenOngoing

    $30M-$40M annual range

    Mitigation: Focus on controllable items like synergy realization, incremental pricing, and product mix to offset impact. Lower Section 122 tariffs in Q2 helped.

    Higher logistics expenseQ2 FY26

    Impacted Q2 gross margin

    Mitigation: Offset by lower tariff expense and accelerated synergy capture.

    OEM wind downRemainder of FY26

    1-2 point drag on IV Systems segment

    Mitigation: Offset by strong performance in other IV Systems lines and competitive wins.

    FDA approval delaysExpected resubmission this year

    Medfusion 5000 syringe pump resubmission delayed from initial expectations

    Mitigation: Prioritizing resources for additional verification testing to expedite resubmission.

    Macroeconomic volatilityFY26

    Inflation, currency, and interest rates in line with today's levels assumed in guidance

    Mitigation: Guidance assumes stable macroeconomic environment and latest forecasts for oil/diesel prices and tariff policies.

    What to watch in Q3 FY26

    5

    Medfusion 5000 FDA resubmission

    this year
    CurrentSubstantial progress on verification testing
    TargetAmended package submitted to FDA

    Why it matters

    FDA approval is critical for unlocking a large upgrade base and competitive wins for this syringe pump.

    The biggest update since the last call is that we made substantial progress on the additional verification testing required by FDA for the Medfusion 5000 syringe pump and believe an amended package will go back into the FDA this year.

    Q&A highlights

    7

    Is the 12% growth in Infusion Systems due to an uptick in the replacement cycle or competitive wins?

    The strong growth in Infusion Systems was primarily driven by competitive wins from the previous year and earlier in the current year, along with some upgrades to existing customers. The major upgrade cycle has not yet started in earnest.

    “Some of it is upgrades to existing customers. The majority is competitive. I certainly, we don't want to. There is some -- always some upgrading going on.”

    asked by Jayson Bedford · answered by Vivek Jain

    2 min read6 chapters

    Detailed Narrative

    01

    Q2 Performance and Full-Year Outlook

    ICU Medical reported Q2 FY26 revenue of $548 million, achieving 6% organic growth, though reported growth was 1% due to the deconsolidation of the IV Solutions JV. Adjusted gross margins reached 41%, and adjusted EBITDA improved to $110 million, representing 10% year-over-year growth. Adjusted EPS was $2.37, up 13% from the prior year. The company raised its full-year adjusted EBITDA guidance to $415 million-$435 million and adjusted EPS guidance to $8.60-$9.00, reflecting confidence in continued business momentum.

    02

    Business Segment Highlights

    The Consumables business recorded a record quarter with 6% reported and 5% organic growth, balanced across all four product families. IV Systems also had a record quarter in pumps, growing 13% reported and 12% organically, driven by earlier-than-expected installations and competitive wins. Vital Care decreased 4% organically and 32% reported due to the JV deconsolidation, but sequential improvement is expected, with the business projected to be down slightly for the full year.

    03

    Strategic Vision and Innovation

    ICU Medical is committed to its mission of creating a comprehensive infusion therapy company. The company is at the beginning of new product cycles across its differentiated lines, including the LifeShield, Plum Duo, and Solo family of products in Infusion Systems. Significant progress has been made on the Medfusion 5000 syringe pump FDA resubmission, with an amended package expected to be submitted this year. The long-term vision includes connecting the home care CADD environment into a common software framework.

    04

    IV Solutions Joint Venture and Manufacturing Investment

    The IV Solutions joint venture partner, Otsuka, announced a $0.5 billion investment to bring PVC-free products and production technologies to the U.S. market. A groundbreaking ceremony for a new greenfield IV Solutions production site in the U.S. is scheduled for August 24. This investment is seen as a win-win for U.S. customers, providing new offerings alongside ICU Medical's pump and consumables innovations, despite the JV's revenues no longer flowing through ICU Medical's income statement.

    05

    Capital Allocation and Leverage

    Strong organic free cash flow, combined with tariff refunds, allowed ICU Medical to repay $50 million of debt in Q2, reducing its net leverage ratio to 2.3x. The company is on track to hit its target of approximately 2x leverage by year-end. Management emphasized protecting the share base and minimal external M&A needs, focusing on organic innovation and transferring value from debt to equity. Reduced cash consumption from restructuring and remediation work is a key driver for achieving leverage targets.

    06

    Macroeconomic Headwinds and Mitigation

    ICU Medical continues to face headwinds from tariffs, which are in the $30 million-$40 million annual range, and adverse currency movements, particularly the Costa Rican Colon, Mexican Peso, and Japanese Yen, which have had a negative impact of approximately $60 million over the last four years. Higher logistics expenses due to elevated diesel costs also impacted gross margins. The company is focusing on controllable items like synergy realization, incremental pricing, and product mix to achieve its target of 2 percentage points of additional gross margin.

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