The quarter cleared published expectations on both sales and core earnings. Revenue of $390.6 million exceeded the published consensus of about $380.5 million by roughly $10 million, while adjusted diluted EPS of $1.26 was $0.17 above the published $1.09 expectation. Growth was not solely currency-driven: revenue rose 9.8% at constant currency, with Cardiopulmonary up 9.9% and Neuromodulation up 9.5%. (Net Revenue table; GAAP-to-Non-GAAP reconciliation)
| Metric | Q2 2026 | Q2 2025 | Expectation / prior outlook |
|---|---|---|---|
| Revenue | $390.6M | $352.5M | Published consensus: ~$380.5M (Net Revenue table) |
| Constant-currency revenue growth | 9.8% | — | — (Financial Highlights) |
| Adjusted diluted EPS | $1.26 | $1.05 | Published consensus: ~$1.09 (GAAP-to-Non-GAAP reconciliation) |
| Adjusted operating margin | 23.2% | 21.9% | — (GAAP-to-Non-GAAP reconciliation) |
| FY 2026 constant-currency revenue growth guide | 8%–9% | — | Prior: 7%–8% (2026 Outlook) |
| FY 2026 adjusted diluted EPS guide | $4.30–$4.40 | — | Prior: $4.20–$4.30 (2026 Outlook) |
| FY 2026 adjusted free-cash-flow guide | $140M–$160M | — | Prior: $160M–$180M (2026 Outlook) |
The outlook increase turns a one-quarter beat into a higher full-year baseline. Management lifted the midpoint of constant-currency revenue growth by 100 basis points and adjusted EPS by $0.10, rather than simply reiterating prior targets. First-half constant-currency revenue growth was already 10.4%, above the newly raised full-year range, while both major businesses grew at roughly 10% in the quarter. (Six-Month Net Revenue table; 2026 Outlook)
The eye-catching GAAP EPS is mostly a tax-event effect, not the operating result to extrapolate. GAAP diluted EPS reached $1.93, but the reconciliation shows a $1.97-per-share tax adjustment tied to the favorable Italian ruling on deductibility of the SNIA environmental liability; adjusted EPS was $1.26. Core profitability did improve—adjusted operating income rose to $90.8 million from $77.4 million and adjusted operating margin expanded 130 basis points—but GAAP operating income fell to $49.5 million from $54.2 million amid $12.4 million of other operating expense. (Income Statement; GAAP-to-Non-GAAP reconciliation; Tax Adjustment reconciliation)
The meaningful offset is lower cash generation, not weaker revenue or profit guidance. The adjusted free-cash-flow midpoint fell $20 million to $150 million as the company accelerates Cardiopulmonary capacity, innovation and IT investment. That spending may support future demand fulfillment—alongside the new oxygenator-component supply agreement—but it means the improved sales and EPS outlook requires more near-term cash investment. (2026 Outlook; Cash Flow statement)
Read the original 8-K on SEC EDGAR ↗