Medical device company ICU Medical (NASDAQ: ICUI) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 6.7% year on year to $604.7 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: $604.7 million vs analyst estimates of $567.2 million (6.7% year-on-year growth, 6.6% 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 (16.4% margin, 12.4% beat)
- Operating Margin: 2.1%, up from 1% in the same quarter last year
- Free Cash Flow Margin: 6.1%, similar to the same quarter last year
- Market Capitalization: $3.31 billion
Vivek Jain, ICU Medical’s Chief Executive Officer, said, “First quarter results were generally in line with our expectations."
Company Overview
Founded in 1984 and named for its initial focus on intensive care units, ICU Medical (NASDAQ: ICUI) develops and manufactures medical products for infusion therapy, vascular access, and vital care applications used in hospitals and other healthcare settings.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, ICU Medical’s sales grew at a solid 14.7% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. ICU Medical’s recent performance shows its demand has slowed as its annualized revenue growth of 2.3% over the last two years was below its five-year trend. 
We can better understand the company’s revenue dynamics by analyzing its most important segment, . Over the last two years, ICU Medical’s revenue averaged 4.7% year-on-year growth. This segment has outperformed its total sales during the same period, lifting the company’s performance.
This quarter, ICU Medical reported year-on-year revenue growth of 6.7%, and its $604.7 million of revenue exceeded Wall Street’s estimates by 6.6%.
Looking ahead, sell-side analysts expect revenue to decline by 3.8% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will face some demand challenges.
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Operating Margin
Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
ICU Medical was profitable over the last five years but held back by its large cost base. Its average operating margin of 3% was weak for a healthcare business.
Looking at the trend in its profitability, ICU Medical’s operating margin decreased by 3.7 percentage points over the last five years, but it rose by 4 percentage points on a two-year basis. Still, shareholders will want to see ICU Medical become more profitable in the future.
This quarter, ICU Medical generated an operating profit margin of 2.1%, up 1.1 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
ICU Medical’s flat EPS over the last five years was below its 14.7% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.
We can take a deeper look into ICU Medical’s earnings to better understand the drivers of its performance. As we mentioned earlier, ICU Medical’s operating margin improved this quarter but declined by 3.7 percentage points over the last five years. Its share count also grew by 14.1%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders. 
In Q1, ICU Medical reported EPS at $1.72, up from $0.96 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects ICU Medical’s full-year EPS of $6.98 to grow 3.2%.
Key Takeaways from ICU Medical’s Q1 Results
We were impressed by how significantly ICU Medical blew past analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock remained flat at $144.25 immediately after reporting.
ICU Medical put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.
