Teleflex (NYSE:TFX) outlined a major portfolio transition and provided an updated financial framework as the company reported year-end 2025 results, emphasizing the planned divestitures of its Acute Care, Interventional Urology, and OEM businesses and the creation of a more focused “RemainCo.” Management also discussed the integration of its recently acquired BIOTRONIK Vascular Intervention business, increased R&D investment expectations, and a 2026 outlook shaped by separation-related stranded costs.
Leadership transition and divestiture timeline
Interim President and CEO Stuart Randle said he stepped into the interim role in January following the board’s decision to transition the CEO position after the announced sale of the Acute Care, Interventional Urology, and OEM businesses. Randle said the board is conducting a CEO search with Spencer Stuart and is evaluating external candidates, seeking a leader with experience running a mid-size, high-growth global organization focused on high-acuity hospital settings.
Capital allocation plans: buybacks and debt paydown
Management said its value creation strategy is unchanged and that it intends to use net proceeds from the divestitures to return significant capital to shareholders and reduce debt. During Q&A, the company provided additional detail on the expected mix of capital deployment:
- $1 billion is earmarked for share repurchases under the previously announced authorization, which management said it plans to fully utilize.
- The remaining approximately $800 million is expected to be used to repay debt, including paying down a deferred draw revolver associated with the BIOTRONIK acquisition (about $700 million) and allocating roughly $100 million toward the company’s revolver.
Management noted that its 2026 adjusted EPS guidance does not assume any benefit from the planned buybacks or debt repayment, since those actions are intended to occur after the divestiture closings.
Second-half 2025 continuing operations revenue performance
Because the assets associated with the pending divestitures have been reclassified as discontinued operations, management focused remarks on continuing operations and said growth commentary was provided on a year-over-year pro forma adjusted constant currency basis for the second half of 2025, inclusive of the BIOTRONIK Vascular Intervention acquisition.
For the second half of 2025 by global product category, Teleflex reported:
- Vascular revenue increased 2.4% year-over-year to $472.7 million, driven primarily by Central Access, hemostatic, and atomization products, partially offset by a tough comparison that included military surge orders in the prior-year period.
- Interventional revenue increased 8.1% to $427.5 million, which management attributed to broad portfolio strength. Reported Vascular Intervention revenue was $202 million in the second half.
- Surgical revenue increased 3.2% to $219.3 million. Management cited an impact from volume-based procurement (VBP) in China, while stating underlying core Surgical trends remained solid, with strong double-digit growth across the majority of franchises.
In discussion of Surgical performance, executives highlighted strength in the company’s instrument portfolio (aimed at ear, nose, and throat procedures), continued growth contributions from ligation (with China as an exception due to VBP), and noted automatic appliers as an additional growth opportunity, particularly in EMEA.
Margins, earnings, and balance sheet highlights
CFO John Deren said all financial metrics he discussed were for continuing operations, noting that historic continuing operations reflect stranded costs in all periods presented due to the reclassification to discontinued operations.
Key 2025 continuing-operations figures included:
- Adjusted gross margin of 63.7%, down 200 basis points year-over-year, primarily due to tariffs, the addition of the Vascular Intervention acquisition (with a slightly lower gross margin than the corporate average), and to a lesser extent increased logistics and distribution costs and foreign exchange.
- Adjusted operating margin of 22.7%, down 230 basis points, reflecting gross margin pressure, higher operating expenses associated with the Vascular Intervention acquisition, and foreign exchange impacts.
- Adjusted net interest expense of $93.6 million, up from $77.4 million, driven primarily by borrowings used to finance the Vascular Intervention acquisition.
- Adjusted tax rate of 12.6%, down from 13.4%, which Deren attributed primarily to beneficial provisions in the “One Big Beautiful Bill Act,” including the ability to deduct U.S.-based R&D expenses.
- Adjusted EPS of $6.98, up 8.7% year-over-year, reflecting higher revenue and adjusted operating income (including acquisition impact) and lower tax rate and share count, partially offset by higher interest expense and foreign exchange.
Teleflex ended the fourth quarter with cash equivalents and restricted cash equivalents of $402.7 million, up from $285.3 million at year-end 2024.
2026 guidance: growth outlook amid stranded costs, tariffs, and increased R&D
Management framed 2026 as a year with “transient factors” tied to the divestitures and separation activities. Teleflex guided for 2026 pro forma adjusted constant currency revenue growth of 4.5% to 5.5% for continuing operations, and adjusted EPS of $6.25 to $6.55.
Executives emphasized several notable assumptions embedded in the 2026 outlook:
- Stranded costs: approximately $90 million of stranded costs are expected throughout 2026 and are included in guidance. Management said transition service and manufacturing service agreements (TSAs/MSAs) are expected to fully offset the stranded costs on an annualized basis once the divestitures close, but the guidance does not include those offsets.
- Operating margin:2026 adjusted operating margin of approximately 19%, reflecting the stranded costs and no TSA/MSA benefit during 2026. Management also said R&D investment is expected to be about 8% of sales for RemainCo, compared to roughly 5% historically.
- Steady-state margin view:23%, about 400 basis points above the fully burdened 2026 operating margin guidance.
- Restructuring:$50 million in annual pre-tax savings, with actions expected to be substantially completed by mid-2028. Management said some restructuring savings are baked into the 2026 EPS guidance.
- Interest and tax:$105 million in 2026, reflecting a refinancing assumption for $500 million of 4.625% senior notes due in November 2027, and assuming no debt paydown from divestiture proceeds. The company assumes a 2026 tax rate of approximately 13.5%.
- Share count:
On tariffs, management said its plan contemplates tariffs that were expected prior to a recent Supreme Court decision, and cited additional tariffs of about $18 million in 2026 on top of the prior year (roughly $35 million total). The company said uncertainty remains regarding the ultimate tariff level and duration, and noted that tariff costs are capitalized into inventory and flow through earnings over time.
Regarding the BIOTRONIK Vascular Intervention integration, management said sales force integration was underway into the back half of the year and into early Q1, talent retention has tracked expectations with no “big regrettable losses,” and the company sees potential revenue synergies from combining sales force “bags.” Management also said the increase in RemainCo R&D is partly due to BIOTRONIK’s higher R&D, along with incremental Teleflex investment decisions primarily in Interventional and, secondarily, Vascular.
About Teleflex (NYSE:TFX)
Teleflex Incorporated is a diversified global provider of medical technologies, specializing in critical care and surgery. Headquartered in Wayne, Pennsylvania, the company designs, manufactures and distributes devices and solutions used by healthcare professionals in hospital, ambulatory and alternate site settings. Teleflex focuses on delivering products that support complex interventional procedures and improve patient outcomes.
The company’s offerings span several key segments, including Interventional Urology, Respiratory & Anesthesia, Surgical, Cardiac Care, Vascular and Original Equipment Manufacturer (OEM) solutions.
