Medical device company ICU Medical (NASDAQ: ICUI) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 5.8% year on year to $599.5 million. Its non-GAAP profit of $1.72 per share was 34.4% above analysts’ consensus estimates.
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ICU Medical (ICUI) Q1 CY2025 Highlights:
- Revenue: $599.5 million vs analyst estimates of $567.2 million (5.8% year-on-year growth, 5.7% beat)
- Adjusted EPS: $1.72 vs analyst estimates of $1.28 (34.4% beat)
- Adjusted EBITDA: $99.43 million vs analyst estimates of $88.48 million (16.6% margin, 12.4% beat)
- Operating Margin: 4.9%, up from 1% in the same quarter last year
- Free Cash Flow Margin: 6.1%, similar to the same quarter last year
- Market Capitalization: $3.52 billion
StockStory’s Take
ICU Medical’s first quarter performance was driven by growth across all core business segments, with management highlighting momentum in consumables, infusion systems, and vital care. CEO Vivek Jain attributed the broad-based expansion to new global customer implementations and positive trends in key markets such as oncology and home infusion. Jain noted, “Our consumables business saw rapid growth in niche markets and benefited from earlier-than-anticipated hardware installs in IV Systems.”
Looking ahead, management’s guidance is shaped by several moving pieces, including the impact of newly implemented tariffs and ongoing product upgrades. CFO Brian Bonnell stated that while the company aims to offset most tariff costs through mitigation measures and currency tailwinds, “there is probably $5 to $10 million of unmitigated residual impact from tariffs” in 2025. Jain emphasized continued investment in pump innovation and compliance initiatives, positioning the company for a multi-year upgrade cycle and supporting reliable revenue growth.
Key Insights from Management’s Remarks
Management pointed to consistent execution and ongoing product investment as key drivers in the quarter, while also flagging regulatory and trade-related costs as areas of focus for the remainder of the year.
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Consumables business acceleration: Growth in the consumables segment was supported by new global customer implementations, improved product pricing, and demand in specialized markets like oncology and home infusion. Management identified group purchasing organization (GPO) activity and earlier contract resets as contributing factors.
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IV Systems product cycle: The infusion systems segment benefited from increased utilization of dedicated sets and some early hardware installs, though management clarified that widespread adoption of new products like PlumDuo is expected later in the year.
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Quality and regulatory remediation: Management described significant efforts to address quality issues in legacy products, including extensive remediation of MedFusion and CAD pumps and ongoing work to secure new regulatory clearances. CEO Vivek Jain stated, “Modern devices and high compliance are table stakes in our industry.”
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Tariff and supply chain impact: The introduction of tariffs on products from Costa Rica, China, and Mexico will increase costs in 2025. While some mitigations are in place, management explained that tariffs on Costa Rica-sourced pumps represent the largest exposure, and the company has begun adjusting supply chains where possible.
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Joint venture formation: ICU Medical completed the formation of a joint venture with Otsuka Pharmaceutical Factory for IV Solutions, which is expected to provide long-term product and technology access. Management noted this is neutral to current earnings but strategically significant for the U.S. market.
Drivers of Future Performance
Management’s outlook for the year centers on executing product upgrades, navigating tariff costs, and maintaining operational discipline as the company enters a period of portfolio refresh and supply chain adjustment.
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Product upgrade cycle: The company expects a multi-year upgrade cycle for its installed base of infusion pumps, with the launch of PlumSolo and PlumDuo positioned to drive adoption as customer contracts come up for renewal.
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Tariff mitigation efforts: Management is pursuing a range of mitigation strategies to offset new tariff costs, including supply chain adjustments, price renegotiations, and cost controls. However, residual headwinds of $5–10 million may persist if additional offsets are not identified.
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Regulatory compliance focus: Continued investment in quality remediation and securing new regulatory clearances for legacy product lines is expected to support both compliance and future product competitiveness, reducing operational risk.
Top Analyst Questions
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Jayson Bedford (Raymond James): Asked about sources of consumables growth and whether pricing or niche market demand was driving results. Management pointed to oncology and renal markets, GPO activity, and clarified that pricing was not the primary factor.
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Brett Fishbin (KeyBanc): Inquired about the geographic structure of tariff exposure and opportunities for further mitigation. CFO Brian Bonnell explained that Costa Rica-sourced products are the largest exposure, with ongoing actions to reduce impact from China and Mexico.
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Larry Solow (CJS Securities): Questioned the expected pace and customer receptivity to the new PlumSolo and PlumDuo pumps. CEO Vivek Jain described a gradual upgrade cycle, emphasizing the installed base’s readiness for refresh due to device age.
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Michael Toomey (Jefferies): Asked if recent growth in infusion systems reflected market share gains or underlying market strength. Management cited improved utilization and earlier hardware installs as key contributors.
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Joseph Conway (Jefferies): Sought detail on marketing strategies for new pump products and expectations for customer adoption patterns. Jain noted the importance of safety features and flexibility for both single and mixed device environments.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace of customer adoption and upgrade activity for the PlumSolo and PlumDuo infusion pumps, (2) the effectiveness of tariff mitigation strategies and any adjustments to supply chain or pricing, and (3) regulatory progress on clearing legacy product lines. Progress on these fronts will be critical for sustaining revenue growth and managing cost pressures.
ICU Medical currently trades at a forward P/E ratio of 19.8×. In the wake of earnings, is it a buy or sell? See for yourself in our free research report.
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