Integra's Revenue Growth Nearly Stalls Even as Margins Recover
Integra Lifesciences swung to a GAAP profit in the second quarter, but organic revenue growth slowed to 0.7%, its weakest pace in more than a year.
Integra Lifesciences Holdings (IART), the medical-device maker known for its neurosurgery and wound-care implants, reported second-quarter 2026 revenue of $418.8 million, up just 0.8% from a year earlier. Organic growth came in at 0.7%, down from 1.3% in the first quarter and 5.0% in the third quarter of 2025, extending a deceleration that has now run for three straight quarters.
The headline number masked a reversal underneath. GAAP earnings per share came in at $0.06, compared with a loss of $6.31 a share a year earlier, when a $511.4 million goodwill impairment charge wiped out the bottom line, and an improvement from losses of $0.06 in the first quarter and $0.02 in the fourth quarter of 2025. Adjusted earnings of $0.56 a share rose 24% from $0.45 in the year-ago quarter, though that figure slipped from $0.54 in the first quarter.
Gross margins told a similar two-sided story. GAAP gross margin expanded to 52.5% from 50.4% a year earlier, but that was down from 55.4% in the first quarter. Adjusted gross margin of 61.3% edged up from 60.7% a year ago while falling from 64.1% in the first quarter and 62.9% in the third quarter of 2025. Adjusted EBITDA margin followed the same pattern, rising to 18.7% from 17.1% a year earlier but trailing the 19.4% posted in the first quarter and the 24.0% reached in the fourth quarter of 2025.
The segment mix that had powered Integra's growth through 2025 flipped in the second quarter. Specialty Surgery, which now makes up about 70% of revenue, down from 75% in the fourth quarter of 2025, grew organically just 1.6%, a sharp retreat from the 7.1% pace it posted in the third quarter of last year. Tissue Reconstruction, which had grown 6.4% organically in the first quarter, contracted 2.0% in the second. Within Specialty Surgery, the Instruments sub-segment swung to 3.2% organic growth after a 7.7% decline in the first quarter and a 7.6% drop in the third quarter of 2025, ending two consecutive quarters of decline. Wound Reconstruction/Tissue moved the other direction, sliding from mid-single-digit growth in the first quarter to a mid-single-digit decline, as MicroMatrix and Integra Skin sales fell against a comparison period that had benefited from backorder clearance.
Integra raised its full-year adjusted earnings guidance to a range of $2.40 to $2.50 a share, up from the $2.30 to $2.40 range set at the start of the year. At the same time, it cut its full-year reported revenue guidance to $1.654 billion to $1.695 billion from the $1.662 billion to $1.702 billion range it had reiterated in the first quarter, citing a stronger U.S. dollar.
Cash generation improved alongside the earnings turn. Operating cash flow more than doubled sequentially to $22.8 million from $9.8 million in the first quarter, and rose from $8.9 million a year earlier. Adjusted free cash flow conversion turned positive at 24.0% for the quarter, versus negative 32.7% a year earlier, helped by capital spending falling to $12.3 million from $20.1 million. Net debt held steady at $1.6 billion, or 4.1 times leverage, a level unchanged since year-end 2025, even as the company remains focused on deleveraging.
Integra also confirmed that its Braintree, Massachusetts manufacturing facility has begun production, having said as recently as the first quarter that the site was only on track to start by the end of June. The update keeps its planned fourth-quarter relaunch of the SurgiMend tissue-repair product on schedule.