ICU Medical, Inc.

Good afternoon, everyone, and welcome to ICU Medical's third quarter 2025 earnings conference call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note that today's event is being recorded. I would now like to turn the conference over to Deirdre Thompson of ICR. Please go ahead.

Good afternoon, everyone. Thank you for joining us to discuss ICU Medical's financial results for the third quarter of 2025. On the call today representing ICU Medical is Vivek Jain, Chief Executive Officer and Chairman, and Brian Bunnell, Chief Financial Officer. We wanted to let everyone know that we have a presentation accompanying today's prepared remarks. To view the presentation, please go to our investor page and click on events calendar, and it will be under the third quarter 2025 event. Before we start our prepared remarks, I want to touch upon any forward-looking statements made during the call. including beliefs and expectations about the company's future results. Please be aware they are based on the best available information to management and assumptions that are reasonable. Such statements are not intended to be a representation of future results and are subject to risk and uncertainties. Future results may differ materially from management's current expectations. We refer all of you to the company's SEC filings for more detailed information on the risk and uncertainties that have a direct bearing on operating results and financial position. Please note that during today's call, we will also discuss non-GAAP financial measures, including results on an adjusted basis. We believe these financial measures can facilitate a more complete analysis and greater transparency into ICU Medical's ongoing results of operations, particularly when comparing underlying results from period to period. We've also included a reconciliation of these non-GAAP measures in today's release and provide as much detail as possible on any addendums that are added back. And with that, it's my pleasure to turn the call over to Vivek.

Thanks, Deirdre, and good afternoon, everyone. I'll walk through our Q3 revenue and earnings performance and provide some commentary on the businesses and then turn it over to Brian to recap the full Q3 results and balance sheet and provide an update to our latest outlook. After that, I'll come back with a few comments on how we evaluate our performance year-to-date where we are in our mission of creating a comprehensive infusion therapy company, our goals around the balance sheet and optimizing our portfolio, and lastly, a couple of thoughts on the medium-term priorities of the company. The short story for Q3 is revenue was $533 million per total company growth of 5% on an organic basis or minus 8% reported year over year. Gross margins increased, operating expenses declined, leading to more EBITDA and EPS. As a reminder, the reported results are impacted by the mid-year creation of the Atsuka ICU Medical JV and resulting deconsolidation of IV solutions from our income statement. Consumables and IV systems had good year-over-year growth. Both revenues and gross margins were slightly positively impacted from a settlement of a portion of the Italian payback liability, which was an expense we absorbed towards the end of 2022, and Brian will provide more detail. Adjusted EBITDA was $106 million, and EPS was $2.03. Free cash flow generation improved, and as of today, we've repaid $273 million in principal year-to-date. The broader demand and utilization environment in Q3 continued to be attractive across almost every geography, with the growth rates positive, but not at the levels we saw last year. The capital environment is status quo, and it does appear investments that customers need to get done are getting done. Getting into our businesses more specifically, our consumables business in Q3 grew 8% reported and 7% organic. It was a record quarter in absolute sales levels with growth driven by new global customer implementations, rapid growth in some of our niche markets, and solid census. We had the best sequential increase in absolute dollars since Q2 of 2024. For the balance of the year, we're very comfortable with our comments on mid-single-digit growth for the year, but don't expect Q4 to have the same growth rates as this quarter. On the last few calls, we've made some high-level comments around new product filings and innovation in our consumables business with a number of line extensions or adjacencies that are rapidly pushing in the development process and or have already submitted 510Ks to further strengthen our market positions. These products at their core are around enhancing patient safety and workflow efficiencies in the infusion drug delivery process. A number of these programs combine the parts and pieces of legacy ICU and what we acquired from Smith. We believe these developments, alongside our existing commercial opportunity, can keep this segment growing at historical rates into the medium term. Our IV systems business grew 9% reported and 8% organic. Unlike Q2, this was driven by all three main product families as we lapped the difficult comparison in the CAD ambulatory product line. LVP pumps and dedicated sets were, again, the largest contributors with double-digit growth driven by new installations and strong census for dedicated set utilization. We continue to be engaged in many new RFP processes and are beginning customer discussions around the multi-year refresh of our Plum 360 install base with Plum Solo now that it's been cleared. As we've discussed, since the new Plum Duo Solo products have been approved, the installation schedule is not predictable enough to be perfectly smooth just yet. Hence, we knew Q3 would be a record quarter as some installs from Q2 pushed into Q3 and even a few Q4 installs came forward. For the balance of the year, we're very comfortable with the previous comments on mid-single-digit growth for a year. We don't expect Q4 to have the same growth rates as this quarter, given the comments we just made on installs and the very large sequential step-up in Q4 over Q3 in 2024. Since the last call, we've been in dialogue with FDA about the submitted 510 s for both the MedFusion 5000 syringe pump and the cat ambulatory pumps and related life-sealed safety software. These submissions are working their way through the process, and we would call the process fair, and like prior experiences, with no real change in responsiveness from the agency, even with all the challenges they're dealing with. As a reminder, we've characterized the MedFusion 5000 as a groundbreaking new innovative product, but like what we did with Plum Duo and Plum Solo, we conserved the guts of the product that made MedFusion a market leader based on accuracy and workflow. We would describe the CAD submission as more like a catch-up 510K, bringing a variety of product iterations up to date in a curled file. When these products get cleared, all of our pump modalities will connect to a single software solution, bringing ease of use and tighter control of all types of infusions to a hospital customer. This was the core tenant of the acquisition, to have a single software solution across hospital LVPs, syringe, and ambulatory pumps. We want customers to have the right tool for the right job, all connected with a common user interface and software solution that minimizes training speeds onboarding, supports interoperability, and enables standardization for our enterprise customers. We believe we're seeing the benefits of this vision in the marketplace today with three distinct value drivers, which can be summarized as, first, the opportunity to win competitive market share with a full suite of the newest and best-in-class products. Second, the opportunity to refresh our install base of not only the LVP pumps, but also the install base of the syringe and ambulatory pumps, as that is a very significant install base. And lastly, to create new revenue streams via software and home care connectivity, which are still in the very early days. We believe these drivers, again, which are frankly the main reasons for the acquisition, position us for sustained growth in the medium term. Just wrapping up the business segments, our vital care segment was down 52% reported, and down 4% organically as IV solutions revenues were deconsolidated from our income statement. Critical care and respiratory were slightly up year over year. That's a quick summary for me on the businesses. I'll come back shortly with a few more comments. And so with that, over to you, Brian.