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    TFX
    Earnings call· Jun 2026(Q2 FY26)

    TELEFLEX Q2 FY26 earnings call TFX

    Aug 6, 2026 Source

    Executive summary

    Teleflex Q2 FY26 — Strong Vascular & Surgical Performance Amidst Interventional Integration Challenges

    Teleflex delivered better-than-expected Q2 FY26 revenue and EPS, driven by robust performance in its Vascular and Surgical segments. However, the Interventional business faced integration challenges post-acquisition, leading to a revised full-year revenue outlook. The company is actively executing strategic divestitures and capital allocation plans, including significant share repurchases and debt reduction, with management anticipating substantial financial performance improvements in 2027 and beyond.

    Highlights

    5

    • Overall pro forma adjusted constant currency growth was 4.7%.

    • Adjusted operating margin reached 19.6%.

    • Adjusted EPS was $1.76, a 1.7% increase year-over-year, exceeding expectations.

    • Successful close of the OEM divestiture, generating $1.5 billion in proceeds.

    • FDA BLA approval for EZPlas freeze-dried plasma, expanding the emergency medicine portfolio.

    Concerns

    4

    • Interventional business revenue decreased 1% year-over-year, falling short of expectations due to integration delays.

    • Adjusted gross margin decreased 280 basis points year-over-year to 61.7%, primarily due to tariffs and the Vascular Intervention business.

    • Adjusted operating margin decreased 520 basis points to 19.6% due to gross margin pressure, higher operating expenses, and increased R&D.

    • Full-year 2026 pro forma adjusted constant currency revenue growth guidance lowered to 3.5%-4.5% from 4.5%-5.5%.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year 2026 pro forma adjusted constant currency revenue growth
    3.5% to 4.5%
    high materiality
    High
    Full-year 2026 adjusted EPS
    $6.90 to $7.20
    high materiality
    High
    Full-year 2026 adjusted operating margin
    approximately 19%
    medium materiality
    High
    Steady-state adjusted operating margin
    approximately 23%
    high materiality
    High
    Full-year 2026 net interest expense
    approximately $85 million
    medium materiality
    High
    Full-year 2026 adjusted tax rate
    approximately 12.25%
    medium materiality
    High
    Full-year 2026 shares outstanding
    approximately $43.3 million
    medium materiality
    High
    Annual pretax cost savings from restructuring plan
    approximately $50 million
    medium materiality
    High
    Financial performance step-up
    meaningful step-up
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Vascular
    Primarily driven by growth in hemostatic products and the central access portfolio. Management expects a more moderate growth rate in H2 2026 as distributor inventories normalize.
    		$246.3 million8%——
    Surgical
    Primarily driven by strong performance in ligation clips, the instrument portfolio, and skin safety. Management expects a more moderate growth rate in H2 2026 due to tougher year-over-year comps.
    		$112.1 million9.2%——
    Interventional
    Performance fell short of expectations, impacted by ongoing integration and restructuring activities associated with the VI acquisition. Growth was softer than expected, despite strong performance in several categories like hemostatic products and right heart catheters.
    		$211.9 million-1%——

    Operational metrics

    9
    Adjusted gross margin
    61.7%280 basis point decrease YoY
    Q2 FY26

    No recognition of IEEPA tariff refunds in Q2.

    Adjusted operating margin
    19.6%520 basis point decrease YoY
    Q2 FY26

    Reflects year-over-year pressure.

    Adjusted net interest expense
    $26.5 millionvs $20.3 million prior period
    Q2 FY26

    Year-over-year increase.

    Adjusted tax rate
    9.9%vs 14.1% prior period
    Q2 FY26

    Year-over-year decrease.

    Cash and cash equivalents and restricted cash equivalents balance
    $316.9 millionvs $402.7 million as of year-end 2025
    as of end Q2 FY26

    Balance at the end of the second quarter.

    Share repurchases
    1.9 million shares$250 million
    Q2 FY26

    Executed through open market transactions.

    R&D expense as % of sales
    7.9%vs historical levels at 6%
    H1 FY26

    Deliberately increased R&D investment.

    Expected tariff refunds
    approximately $15 million
    2026

    Represents the only opportunity for 2026 refunds that hit in Q1 and Q2; this amount would come back into earnings upon full confirmation from the U.S. government.

    Total expected tariff refunds (cash)
    approximately $39 million
    Total

    Total expected cash refunds to Teleflex.

    Industry KPIs

    8
    MetricValueDetails
    Tariff impact280 basis point decreasebps
    New product launch rampimmaterial
    Procedure volume growthnot seeing any impact
    FCF conversion leverage guidance2.8xx
    Segment franchise organic growth4.7%%
    Sales force commercial capacity buildopen positions
    Indicated addressable patient populationapproximately $100 millionUSD
    Pivotal trial clinical evidence milestonesMultiple milestones

    Product announcements

    1
    ProductTypeDetails
    EZPlas freeze-dried plasmalaunch

    Deals & partnerships

    2
    N/A (buyer not named)Sale of OEM business$1.5 billion (proceeds), $1.25 billion (estimated after-tax proceeds)

    Announced in December 2025, successfully closed earlier this week.

    N/A (buyer not named)Sale of Acute Care and Interventional Urology businesses

    FTC issued a second request in March; both parties are working cooperatively with the FTC. Timing is dependent on the regulatory approval process.

    Risks & headwinds

    3
    Slower-than-anticipated integration of the Interventional business (VI acquisition)Extended through second half of 2026

    Interventional revenue decreased 1% year-over-year; full-year revenue guidance reduced from 4.5%-5.5% to 3.5%-4.5%.

    Mitigation: Addressing order-to-cash transitions, distributor transitions, and sales force realignments; implementing enhanced training and a clear hiring plan for the sales force.

    Adverse impact of tariffsQ2 FY26

    Adjusted gross margin decreased 280 basis points year-over-year.

    Mitigation: No specific mitigation mentioned, but the company is not including tariff refunds in its guidance until full confirmation from the U.S. government.

    Stranded costs associated with strategic divestitures2026

    Impacts 2026 results.

    Mitigation: Multiyear restructuring plan expected to achieve approximately $50 million in annual pretax cost savings by mid-2028; TS and MS agreements for Acute Care and Interventional Urology divestitures are expected to drive adjusted margin expansion in 2027.

    What to watch in Q3 FY26

    5

    Interventional business integration progress

    End of 2026
    CurrentSlower than anticipated, 1% revenue decrease in Q2 FY26.
    TargetFull integration by year-end 2026.

    Why it matters

    Successful integration is crucial for improved growth in 2027 and beyond, and for achieving the revised full-year revenue guidance.

    Although 2026 was always expected to be a transition year, the integration in the quarter was slower than anticipated, reflecting several transition factors that we expect to be temporary. We are making progress on mitigation actions to address the primary drivers of these temporary impacts. And we remain confident in the long-term strategic and financial prospects for this business.

    Q&A highlights

    5

    As a new CEO, are there any aspects of the current strategy that make you uncomfortable, and have you identified any new opportunities?

    Jason Weidman expressed strong confidence in the transformational strategy, stating it was a key attraction to the role and he sees no reason to deviate. He is currently conducting a comprehensive assessment to develop a long-term operational and strategic plan for sustainable growth and shareholder value.

    “I remain confident in that strategy. There is nothing that stuck out to me in these first 2 months that make me think that we're on the wrong path.”

    asked by Jayson Bedford · answered by Jason Weidman

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Transformation & Divestitures Progress

    Teleflex is actively pursuing a strategic transformation, including the divestiture of its Acute Care, Interventional Urology, and OEM businesses. The OEM divestiture successfully closed, generating $1.5 billion in proceeds, with an estimated $1.25 billion after-tax. These funds are earmarked for debt reduction and share repurchases. The remaining divestitures (Acute Care and Interventional Urology) are anticipated to close in Q4 2026, pending FTC regulatory approval, and are expected to further streamline the portfolio and enhance financial flexibility.

    02

    Interventional Business Integration Challenges & Mitigation

    The integration of the acquired Vascular Intervention (VI) business within the Interventional segment is taking longer than anticipated, leading to a 1% revenue decrease in Q2. Key challenges include order-to-cash transitions causing customer confusion, timing issues with distributor transitions, and sales force realignments requiring enhanced training and new hires. Management views these as temporary issues and has mitigation plans in place, aiming for full integration by the end of 2026 to position the business for improved growth in 2027 and beyond.

    03

    Increased R&D Investment and Innovation Milestones

    Teleflex has deliberately increased its R&D investment, with R&D expense reaching 7.9% of sales in the first half of 2026, up from historical levels of 6%. This focus on innovation has yielded significant milestones. The company received FDA BLA approval for EZPlas freeze-dried plasma, a novel solution for emergency medicine. Additionally, progress continues with the Freesolve drug-eluting resorbable magnesium scaffold, including 4-year follow-up data from BIOMAG-1, completion of patient enrollment in BIOMAG-2, and commencement of the BIOMAG-3 pivotal trial in the U.S.

    04

    Disciplined Capital Allocation and Shareholder Returns

    The company remains committed to its capital allocation strategy, which includes a $1 billion share repurchase authorization and $800 million in debt reduction. In Q2, Teleflex repurchased 1.9 million shares for $250 million at an average price of $130.85. An additional $250 million accelerated share repurchase is planned, funded by the OEM divestiture proceeds, which also facilitated a $700 million debt repayment. These actions are expected to contribute to significantly higher adjusted EPS starting in 2027.

    05

    2026 as a Transition Year with Future Optimism

    Management reiterated that 2026 is a transition year, with results impacted by transient📎 factors related to strategic divestitures and the Interventional business integration. Despite these near-term impacts, the company anticipates 2027 to be more reflective of the underlying business's strength. They foresee significant improvements in adjusted margins, interest expense, and adjusted EPS, driven by the completion of divestitures, mitigation of stranded costs, and ongoing cost-saving initiatives.

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