Q2 2025 ICU Medical Inc Earnings Call
Please stand by. We're about to begin.
Good afternoon, everyone, and welcome to today's ICU Medical second 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. To ask a question at that time, please press star 1. Also, please note that today's event is being recorded. I would now like to turn the conference over to Mr. John Mills, Managing Partner at ICR. Please go ahead, sir.
Thank you, and thank you for joining us to discuss ICU, Medical's Financial results for the second quarter of 2025. On the call today, representing ICU medical is VC. Jane chief executive officer, and chairman and Brian, benell Chief Financial Officer.
We wanted to let everyone know that we have. We have a presentation accompanying, today's prepared, remarks to view the presentation. Please go to our investor page and click on the events calendar and is under the second quarter, 2025 events.
Before we start our prepared remarks, I want to touch upon any forward-looking statements made during the call including belief 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 a 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 positions.
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 and 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 provided as much detail as possible on any addendums that are added back and with that, it is my pleasure to turn the call over to vivec.
Thanks John and good afternoon everyone. I'll walk through our Q2 revenue and earnings performance and provide some commentary in the businesses and then turn it over to Brian to recap the full Q2 results and the more positive gross margin implications of our IV Solutions joint venture. Now that it's operational and our current view on the impact of tariffs at the moment, as there was an increased levied on our core production environment of
Costa Rica after that. I'll come back with some color on where we are in creating a comprehensive infusion therapy company and optimizing our portfolio, and a bit of qualitative discussion on the evolving tariffs, and just make a few comments about the medium-term activities of the company.
Revenue for Q2 was in line with our expectations at 544 million for total company growth of 2% on an organic basis or minus 6% reported, which is driven by the impact of the JV being consummated. Consumables, and Ivy systems had good year-over-year growth adjusted. Eva was 100 million and EPS was $2.10. Gross. Margins were ahead of our expectations due to the JV and cash generation was neutral. As some cash was tied up in the JB creation itself, tax payment and tariffs.
As a reminder between excess cash generated in q1 and the net proceeds from the creation of the JB, we have repaid 250 million in principle year to date and expect the only variance to our cash flow planning for the year to be tariff payments.
The broader demand and utilization of the environment in Q2 continue to be attractive across almost every geography, with a positive growth rate, but not at the levels we saw last year. The capital environment is status quo, and it does appear that investments that customers need to get done are getting done.
Currency at the moment was not quite as good as it was earlier in the quarter, but it is obviously a benefit in the key selling geographies.
Getting into our businesses more, specifically our consumables business, grew 4% organic and 3% reported. It was a record quarter in absolute sales levels, with good sequential growth driven by new global customers, improved pricing, rapid growth in some of our niche markets, and solid census. We had mentioned on the previous call that last year we had major sequential increases in Q2 over Q1 of 2024, so we didn't expect Q2 growth now to be at the same rates as Q1. For the near term of Q3, we again see sequential growth and are very comfortable with our comments of mid-single-digit growth for the year.
In our consumables business.
One example of this in Q2 was that we received an additional 5 510(k) clearances for our claim neutral displacement connectors, which are the anchor product of the segments. Inside this updated 510(k) is a published study that correlates the usage of Clave connectors with lower patient infection rates. Specifically, the study shows that hospitals with standardized EnClave needle-free connector technology report significantly lower patient infection rates versus hospitals not using Clave technology. We're excited about this new clearance, both in that it provides more evidence around our largest, most differentiated business that we will market on for years to come, and it updates the regulatory approval to 2025 standards.
We have a number of other new consumable line extensions and adjacencies that were rapidly pushing in the development process and or have already submitted 510 KS to further strengthen and Mark 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 are combining the parts and pieces of the Legacy ICU and what we acquired from Smith,
Our IV systems business grew 2% organic and reported. This was entirely driven by lvp growth, which was double digits. Even with some of the installs that came in a little ahead of schedule in q1,
lvp growth was from new installations and strong census for dedicated set utilization. We continue to be engaged in many new RFP processes and our beginning, customer discussions around the multi-year refresh of our Plum 360 installs. Now, that it's cleared as we described in the last call, we had an excellent 2024 in selling, our cat ambulatory pumps and would have a tougher set of comps on this line particularly in Q2, which muted the overall segment growth,
For the near-term of Q3 we again see, sequential growth here. Frankly expect a record quarter in aggregate for the IV system, segments, and our comfortable. With the previous comments on Mid single digit growth for the year.
On the last call, we provided a lot of detail on the actions related to the FDA warning letter efforts to remediate products in the field and filings. Over this year to ensure all pump products. Have the most up-to-date 510 ks in modern architecture. So I won't go into that detail again.
What we are pleased to announce is that an early July? We did submit 510 KS, for both the medfusion 5000 syringe pump. The cat ambulatory pumps and all related life sealed safety software. These submissions have crossed the First Acceptance stage of the review process and dialogue has started around the filings themselves. I would characterize the medfusion 5000 as a groundbreaking new Innovative product, but like, what we did with Plum, Duo and Plum solo. We conserved the core of the product that made it, a market leader, based on accuracy and workflow, we would describe the cad submission as more of a catch-up filing. Bringing a variety of product iterations up to date in a current filing. But the most important aspect of this and what really is a milestone, when these products get cleared, is that all of our pumps will now connect on a single software solution, across all pump modalities, bringing the ease of use and Tighter control of all types of infusions to a hospital. Customer
This was a core tenet of the acquisition: to have a single software solution across hospital IV pumps, syringe pumps, 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 enable standardization for our Enterprise customers. The last development item that will take longer to finish is what we call CAD connect and is really the final frontier. Connecting the Home Care CAD environment back into the same common software framework.
We believe we're seeing the benefits of this Vision in the marketplace today. And in addition to continuing, to focus on competitive opportunities, we are just in the very early stages of refreshing. Our own install base with opportunities, to create more value from the hardware and software offerings here.
Just wrapping up the business. Segments, our Vital Care segment was down 4% and 34%, reported as IV Solutions revenues were deconsolidated from our income statement, the non-IV Solutions product line. This is basically down $4 million sequentially for the year. We continue to believe these products to be flattish, either up or down, marginally. I'll come back after Brian with some comments on the joint venture and how we're thinking about the overall portfolio within Vital, Care, and tariffs. And so with that, over to you, Brian.
Given the closing of the JB transaction and ongoing developments in the Tariff environment.
As you can see from the GAAP to non-GAAP reconciliation in the press release, adjusted gross margin for the second quarter was 40%, which was in line with our expectations.
Here we saw meaningful improvement with a 3 percentage Point expansion on both a year-over-year as well as a sequential basis.
The biggest driver of this improvement was the decommissioning of the IB Solutions business, which contributed approximately 2.5 percentage points of gross margin expansion for the quarter.
Continued integration synergies and favorable foreign exchange also contributed to the Improvement.
For the second quarter, the p&l impact from tariffs was not significant reducing gross margins by only 50 basis points. That is because while we incurred and paid a little over 10 million in new tariffs,
The majority of this was capitalized in the inventory as of the end of the quarter, and therefore only $3 million of expense was recognized in the P&L.
Adjusted sgna expense was 116 million in Q2 and the adjusted R&D was 21 million total adjusted. Operating expenses were 138 million in represented 25.3% of Revenue.
The total dollar amount of spend was the same as the past 2 quarters and a bit below. Our original full year guidance as we have been measured in making some of the Strategic R&D and Commercial Investments that that we mentioned.
Earlier this year, as well as exercising general cost controls across the company, given the uncertain and changing environment.
Restructuring integration and strategic transaction. Expenses were 16 million in the second quarter and related primarily to continue efforts to integrate our it systems and consolidate, our manufacturing Network along with transaction, expenses associated, with the IV Solutions joint venture,
Adjusted diluted earnings per share for the quarter was $2.10 compared to $1.56 last year.
The current quarter results. Reflect net, interest expense of 21 million.
The second quarter adjusted effective tax rate was 16% and includes a discrete benefit from their release of tax contingencies as a result of the expiration of various tax, statute of limitation periods, which contributed to the 20 cents per share.
For comparison purposes, the prior year tax rate reflected discrete benefits, which contributed approximately 15 cents per share.
Diluted shares outstanding for the quarter were 24.7 million.
And finally adjusted ebitda for Q2 increased by 10% to 100 million compared to 91 Million last year. And it's worth noting that the second quarter ebita results. Positively benefited from 3 million of income related to our remaining 40% Equity investment in the IV Solutions joint venture, which is now reported as a separate line item in our p&l.
The earnings contribution from the joint venture was higher than planned and is not expected to continue at the same level.
Now, moving on to cash flow and the balance sheet for the quarter free, cash flow was a net outflow of 8 million which largely reflects the offsetting impact associated. With the Positive timing benefits from working capital that we experienced during the first quarter and mentioned on our last earnings. Call in particular for accounts, receivable and accounts payable, it also reflects the timing impact of higher tax payments in Q2, which will not recur this year along with higher tariff payments, which will continue
During the quarter, we invested 13 million of cash, Bend for Quality system and product related to remediation activities, 16 million on restructuring and integration in 20 million on capex for general maintenance and capacity expansion at our facilities as well as placement of Revenue. Generating infusion pumps with customers outside the US.
And just to wrap up on the balance sheet, we finished the quarter with 1.35 billion of debt and 300 million of cash.
During the second quarter upon closing, the JV transaction on May 1st, we used all of the 200 million of net proceeds to pay down the term loan. A bringing total principal payments year to date to approximately 250 million.
For the presentation.
And we are confirming that the previously provided impacts for Revenue, adjusted ebita and adjusted EPS have not changed.
We also provided updates on the expected, impacts of the evolving situation around tariffs and foreign exchange specifically. We said that we anticipated the direct expense from tariffs in FY. 25 to be in the range of 25 to 30 million. The vast majority of which would be recognized in the back, half of the Year, given the cap and roll accounting process.
At that time, we also expected the weaker US dollar to offset almost half of the direct tariff. Expense and said that we would often a portion of the remaining net exposure through various measures, including lower incentive, compensation, expense, and general cost controls. But expected 5 to 10 million of unmitigated. Residual, impact from tariffs that would cause us to be at the low end of our annual guidance range for adjusted, Eva adjusted EPs, and adjusted gross margin.
Now that we've reached the midpoint of the fiscal year, when we typically update our outlook in consideration of these items, we are updating our full year guidance for adjusted AVA and adjusted EPS. For full year adjusted EVO, we are narrowing our previous guidance range of $380 million to $405 million to a range of $380 million to $390 million for the full year. And for adjusted EPS, we are narrowing our previous guidance range.
Of $0.655 to $0.725 per share to $0.685 to $0.715 per share.
Our updated guidance for adjusted ebit. Uh, includes the expected impact from last week's executive order, which established new reciprocal, tariffs, that became effective today. And we estimate will cause our 2025 tariff expense to increase by an additional 5 million.
The majority of this 5 million is driven by the Tariff rate for Costa Rica, increasing from 10% to 15% as Costa Rica represented our largest tariff, exposure country, even prior to, this latest increase.
As a result. We now expect to be at the high end of the 25 to 30 million dollar range for FY, 25 tariff expense.
The updated EPS guidance includes the same impacts as adjusted. EBA plus lower net interest expense. And the previously mentioned, 20 cent tax benefit recognized in the second quarter.
On the revenue line as Rebecca, alluded to there are no changes from our original expectations for the full year.
For gross margin, despite the million dollar impact, from tariffs, we continue to expect full year, adjusted gross margin in the range of 39 to 40% consistent with our original pre- tariff guidance. At the beginning of the year,
The impact from tariffs is being largely offset by the realization of the full gross margin expansion from the IV Solutions deck consolidation sooner than previously modeled. This implies a back-half average gross margin rate of just above 40%, inclusive of the tariff headwind of between 2 to 3 percentage points.
As we said before, the gross margin expansion. Resulting from the jvd consolidation doesn't actually generate higher ibida.
But it does highlight and make more obvious. The actual gross margin contribution of the rest of the ICU portfolio and VC will provide some further thoughts on that topic.
Adjusted operating expenses should be approximately 26% of revenue for the back half of the Year. Net interest expense should be 83 million for the full year. And for modeling purposes, you can assume a back half adjusted tax rate of 25% and back half diluted shares outstanding of 24.9 million.
Note that our updated guidance reflects tariff policies that are in place today and assumes foreign exchange rates as of August 3rd. It does not consider potential future impacts, such as additional retaliatory tariffs or the broader effects from higher inflation. We are also assuming the income from our equity interests in the joint venture is minimal in the back half of the year, given the additional costs related to the scheduled annual maintenance shutdown of the JV's Austin plant.
JV transaction, tariffs and foreign exchange.
These improvements are driven by growth within the consumables business and lvp pump line along with continued Synergy capture and cost management.
And just to help quantify, the underlying performance improvements in the business that we expect this year. If you were to exclude the 30 million impact of tariffs, the midpoint of our updated IBA guidance range would be 10 million dollars above the top. End of our original post JB guidance,
But we understand tariffs aren't something that can be ignored.
As they reduce our profitability and its real cash out the door. So While others can speculate on the permanence of the current tariffs or future trade deals for individual countries. Our goal is to minimize and offset. The impact anywhere we can including implementation of price increases where possible realization of cost savings and carefully, managing cash, Bend for integration and Remediation activities. And that's what we're focused on. Is we begin to approach 2026. Now, I'll hand the call back over to vbec to expand upon some of the initiatives. We're currently focused on.
Thanks Brian. Um,
Let me try to go back to the strategy of what we've been building here and how that ultimately gets profit ties, given some of the new challenges in this environment and why shareholders should care.
First and foremost our goal since having to go from a needle-free component supplier to an integrated vendor was to build the most comprehensive and Innovative infusion focused company.
We believe our track record in infusion, consumables speaks for itself, as we have great Brands supported by great clinical data and Manufacturing scale that is and will continue to be globally. Competitive, regardless of tariffs, and we will have more innovation in the core and adjacencies of this segment to supplement growth.
In our IV systems business, we believe we're very close to delivering a complete platform solution with the most modern clinically relevant devices and enterprise cloud-based software for customers. This platform solution will anchor the segment for the next 10 plus years. As the product life cycles are incredibly long, there is a great opportunity for new customers, but also to offer more value to our existing install base.
The IV systems business. In the short term Bears, the highest tariff burden as we went all in on Costa Rica but we believe, as we work off the backlog, signed to date that we will overcome these burdens due to the technology value offered and as contracts again, come up for Renewal these product developments have been substantial.
R&D investments that we did not skimp on, even with the difficulties we faced following the acquisition, are beginning to reach fruition.
We also believe that IV Solutions are relevant to the total offering for customers. But in that product category, there are others who could innovate better than us, and we were able to make a unique relationship with auka while early. Ottsix commitment to date, has been great, and they have a roadmap in all the right areas. PV PVC free delivery, technology. Ready to use premixes and nutrition. Reconstitution formats Etc, and the significant Capital required and time Horizon to invest in these markets. And we will bring all of this with our consumables and systems offerings together to customers over time.
So that all sounds, uh, logical and nice. But of course, it needs to be prophetic to the right levels. We clearly stated last year we believe that we were under earning and have made progress on the gross margin line, due to the synergies being realized and accounting impacts of the JP, our primary focus for the last 18 months after we stabilized. The business has has been to improve our gross margins after finally recovering some of the historical inflation and stabilizing the ins and consistent volume. We faced
The tariffs in 2025 now, eat into some of the real cash from those improvements and burden, the gross margin line, even if it's showing major Improvement, while mitigation was the topic on the last call and well described we continue to do and we continue to do everything possible, to mitigate our mindset is Shifting to offsetting as much of the Tariff burden on the assumption that these are now permanent and that'll be our work over the balance of the year. And we'll have more comments on this later in the year.
Feel we've described these items. Many times on previous calls, it all needs to happen in concert with increasing revenues.
In terms of where the balance sheet income statement, portfolio optimization and capital deployment intersect we would offer a few comments.
First our number 1 priority last year and to date has been to stand up the IV Solutions JV. This helped the income statement and balance sheet and will continue to help the balance sheet, as we may realize, and earn out payment and will definitely receive a back-end payment.
When looking at the remainder of the Vital Care portfolio versus the innovation in the consumables and system segments, it's pretty obvious. Vital Care is diluted to the overall company growth rate, and it's a safe assumption that it's also diluted to the overall corporate gross margin. But these are businesses that still generate good positive cash flow with very low capital investments. We're not interested in making value destructive decisions in the name of margin or growth rate, but we can now spend a little time thinking about how to optimize each piece of the portfolio. If the opportunity to us arises, our previous comments still apply. Our ideal place is to be around 2 times levered. And given the innovation we believe we have in-house, we aim to return any additional capital to shareholders in the most efficient fashion. It's also why, in addition to offsets to tariffs, we have to focus on reductions to below the line capital outlays in restructuring, integration, and quality.
To be direct on our goals for the next year or 2. We want our consumables and systems businesses to be reliable Growers with an industry, acceptable profit margin the tightest and most optimized manufacturing Network and each with a multi-year, Innovation portfolio. So we can ultimately transfer value from debt to equity. There's no confusion within the company and the pursuit of these goals, and we don't really have any frivolous activities. Here, we produce essential items that require significant clinical training, hold manufacturing, barriers, in general. And in general items, customers do not want to switch unless they must the market needs Ico medical being an Innovative reliable supplier and our company is stronger from all the events of the last few years. Thank you to all our team members and customers as we improve each day. And with that, we'll open it up to Q&A.
Thank you, Mr. Jane. Ladies and gentlemen, at this time, if you do have any questions or comments, please press star 1. You can also remove yourself from the queue by pressing star 2. So again, that's star 1 for questions, and we'll go first this afternoon to Jason Bedford of Raymond James.
Uh, good afternoon. Can you hear me, okay?
Perfectly Jason, how are you? Okay. So a few questions and I hate to start on on tariffs, but I'm I'm going to, um, appreciate the increase in the, in the rate. Uh, tariff rate in Costa Rica but
What what if you assume for China?
Um, I'm a little surprised that that that level or exposure didn't come down.
At the current.
The current, uh, guidance.
Assumes China at the current rates.
Uh, in effect today, and we did, we did receive, um, a little bit. We did get a little bit of benefit, um, because of the pause, um, which is part of the reason why, uh, we're sort of just at the high end of our previous range as opposed to sort of being above it. Plus, you know, we as we've been working through it. Um, we are, you know, seeing some
uh,
Some additional tariff, exposure on some raw materials and other areas uh, that maybe hadn't been fully Quantified previously. So there's always a lot of puts and takes when it comes to uh, these sorts of exercises.
okay, and and I guess the other
And I don't mean to be a bad guy with this question, but I think last quarter you kind of steered folks towards the low end of the range. But you thought the ebita range was appropriate but you're kind of lowering the top end of the range. Now, outside of tariffs, is there anything else? That's, that's impacting your view.
Uh, no, not no, it's it all. It essentially comes down to just tariffs and obviously if if if we didn't have to you know, deal with that situation, we'd be in a much different position as it relates to our outlook for the year. But that, you know, this is the reality that we find ourselves. I don't think item given what we've put people through. We don't want to number out there that is not realistic, right? And so, I think we said we'd be at the low end I think.
We're narrowing, what we have out there in Brian? Tried to be as precise? If if, if the in a in a world is not the 1, we live in, if these things didn't exist, what performance would have been
While specifically for for duo and where you are with some imple implementation and just the the infusion systems, um, segment in general.
Sure. I mean, I think it
Big pillars in consumables and pumps. We feel really good about the revenue side. So it's obviously, if you, if you go back 5 or 6 quarters, it's been consistent. This was a little bit lighter than the others, but it was obviously a very steep ramp last year. Um, so on consumables, this was a record. We think we'll have sequential growth off of this 1. As I said, and then specifically on systems, we have installed some Duos. Now, they're up and running at customer sites, the the real, uh, interoperable sites. Are just coming out of LMR, the interoperable. Runs are coming out of LMR soon, as we're able to move on that. I think the pace of installations will increase and there's a, you know, as we send the script, there's a lot of dialogue out there, uh, obviously a lot of views in the infusion pump Market, we all live in Glass Houses, we have to be very mindful of ensuring uh, you know caution on these these rollouts. But uh, but it feels pretty good.
It's safe to say that just on on lvps.
The landscape is more opportunistic today than it has been in quite some time.
Interesting. If the Confluence of events that we've talked about, for the, last 2 years have been building up and the, the window that people have to make decisions on that aging of the technology itself is all kind of at a at a good place for the next couple of quarters and it's I'm glad our Innovation is in hand to get that done. And we're excited about the new stuff we filed, right? It all the all the headache of the transaction we did was to bring these different platforms together and I think
It's, it's months away from that coming together. If we can work our way through these approvals,
Got it. Okay, thank you.
Thank you, we go next. Now to Mike Matson of meet and Company.
Yeah, thank thanks for taking my questions. Um, it gets just have a few things I wanted to clarify. So, um, on the Tariff impact, um, the the incremental 5 million that you're expecting, um, that would essentially put that kind of net impact that you got. If you get a 5- 10 million basically, at 10 million for this year, it's in other words, like the part that's actually flowing through the p&l. The headwind would be about 10 million. Is that correct? Am I hearing that correctly or
R. Rough bath Mike. That's correct.
Okay. All right. Um and then the commentary around sequential growth. So you expect sequential growth in consumables in Ephesians systems? I think
So, I know.
I don't remember what you said on vital care, but do do you expect overall to see sequential growth or for the total revenue in 23 and 24?
Uh, it, it does come down a little bit to an app in the vital care. I, I think it, I think we'd rather talk about it as the individual segments levels, right? What what we measure Mike is it, consumables is the business bigger than ever the consumables quarter was the largest quarter we ever had in the history of the company and consumables.
We said, we think the systems business, could be a record level in Q3, the largest in the history of the company. Those are the things where the, the profits and cash flow through. So I think we're probably more focused on those. I I, I don't have such a precise answer and I don't care for Q3 right now.
Okay. And then just this news around Baxter suspending sales of their novom pump. I know it's probably only temporary maybe till the end of the year or something. But do you think that helps you guys at all over the next couple quarters?
Um again I I I think we all live in a glass house, right? And so we're very kind of respectful of the things people have to go through to get these products approved and stabilized. Um, you know, we we believe customers make a technology choice, these products have a 10 year life cycle, and we have to believe everybody in the same, as with the, the other Market participant. Everybody's back on the market, we have to leave our technology is, uh, a valued at over 10 year run. And so, it still has to, and everybody will get their Technologies up and running and so, you know, maybe a little bit it at least, uh,
forces people to look at things a little closer. But I think if you take a long term view, you have to assume everybody's going to be in the market, and we still feel good about where we are.
We are.
Okay, got it. Thank you.
We'll go next now to will corner of keybanc capital markets.
And utilize basis for, uh, 2026. I was just wondering if you have any updated thoughts on that.
I think the same language would apply.
Please don't take with this year.
Annualize it. We
tried to
somewhat in the script, say what we thought there which is at least on some of the pump items were installing pumps that we contracted before the uh tariffs kicked in
As.
Time goes by and those insulation, stops. You you should make an assumption on, uh, items that were selling today, where we have the ability to correct price. We have but those implementations are still a ways out. So it will burden our p&l certainly for a bit. But I, I, that's why we said in the last call, please don't annualize and then we continue to
Some of the mitigations take time and Logistics efforts Etc. We continue to work on those so I I'm not sure we would
have a precise number for you today. I think we just stay with the same high level. Please, don't annualize what's there?
Okay, yeah, that's that's helpful. Um and then switching over to uh Plum. I just would like to hear if there's been any customer feedback that is maybe surprising you uh just by the amount that is getting brought up or
It's actually like, what customers are finding to be incremental.
That's uh surprising us so much. We we you know, our goal and all the product is to make. Sure customers are delighted and I think the experience we're having is that, is it, is it a uh,
Smooth installation is the user experience. Good is the training. Good. Is the onboarding, good Etc. I mean, I, I think we're trying to check all of those boxes and we believe the device itself has sort of the solve the technology gaps uh in terms of multi plexing and
Cyber security and visualization, except the the user interface that weren't present in the previous device.
Um,
And we think the curve appeal of all that together, it gets people's attention. So
I, I don't know if there's 1 item, we point to, even if the device is great. We like any vendor have to ensure that the implementation and the experience for people coming on board, the is strong and where these things fall down. Is getting anyone to change is really hard and if that effort to change falls down in the early days, it it sometimes backfires. And so we just need to make sure that that the whole install process is very seamless from our end
Thank you, and just a quick reminder, ladies and gentlemen, star, 1 please for any further questions. Today, we'll go next now to Larry solo of CJs.
Hey, it's Ashley Charlie for Larry. I I did it guys.
Hey, Troy.
Hey uh on the ongoing plank consolidation, how much is a heavy lifting? Have you already completed and, and when you look at how much of that benefit is already incorporated into your 25 Outlook versus future benefits.
um,
the the, I mean, the best fit that, that sort of evaporated, the 1 that is 100% done. Was the move of all infusion pumps from, uh, from Minnesota into Costa Rica. And so that did have benefit associated with it. Until Costa Rica had incremental tariffs. And so that, that 1 great is fully completed. Um the other 2 important ones, 1 North American 1 European are very close to completion. Probably both on certainly within the next, uh, 9 months, hopefully done within the next 6 months. So, not a lot is built in. In this year, from those 2 items, they are intended to be helpful next year.
And then there's really not, there's really not any beyond that.
So that's the last of it.
Got it. Great. Thank you. And then just uh, going back to the uh the comments area on Plum. Um, how do you view the opportunity for sales via upgrades from existing customers versus market share gains
They're both.
Very valuable. And normally, you don't think about, um,
you know, if if you were being objective
Uh refraction of your existing customer install base. The way the business model has operated. Historically really getting getting these dedicated sets.
Offering and capture more value there. Uh, that does have real, npv associated with it and so creation of kind of new value streams from existing install base is really, really important Beyond just the revenue, goodness of refreshing, refreshing, the hardware. So I think we're excited about that and then obviously the juiciest stuff is competitive and and we remain focused on that. So so both are good opportunity. We continue to have very, very minimal rollover, in our entire book of business, on pumps,
Today.
Alright, thank you.
Thank you, we go next. Now, to Michael Toomey of Jeffrey's.
Great. Hi guys. Um most of my questions have been answered just just to double click on 1 of them. Do you think you're already seeing like the replacement cycle come through? Did that contribute in?
The second quarter or any signs of that starting to come through already, the replacement cycle of your existing fleet.
Nothing's come through so far of consequence on replacement cycle, Michael.
Okay, when when do you think you'd start to see that come through is that this year or or kind of into next year? I think the discussion is starting uh right now. I think realistically it's more of a next year event. Uh the devices really hit kind of 9 years at the end of this year that have been out there and they're built like tanks. So
I think it's probably more of a next year. Next year, event.
And and so that should give you some some color with our comments around how we felt about lvp anyway. Right heading into next course, I mean without the replacement cycle. So
Yeah, yeah. All right. Thank you.
Thank you.
Thank you and just 1 final reminder. Ladies and gentlemen, any further questions today, star 1 at this time and we'll pause for just 1 moment.
And gentlemen appears we have no further questions today Mr. Jane. I'd like to turn things back to you sir for any closing comments.
Thanks folks for your interest in ICU medical. Um lot to do here, still over the next number of days and months and we look forward to updating everybody on our Q3 call. Thanks very much.
Thank you. Gentlemen again, ladies and gentlemen, that will conclude the ICU medical second quarter, 2025 earnings call again. Thanks so much for joining us, everyone and we wish you all a great remainder of your day. Goodbye.