UFP Technologies Reports 37.2% Revenue Growth in Q2 2025, Net Income Increases to $17.2 Million

UFP Technologies, Inc. reported significant financial growth in its latest quarterly filing, with net sales for the second quarter of 2025 reaching $151.2 million, a 37.2% increase from $110.2 million in the same period last year. For the first half of 2025, net sales totaled $299.3 million, up 39.1% from $215.2 million in the prior year. This growth was primarily driven by a 48.2% increase in sales to the medical market, bolstered by contributions from recent acquisitions, which accounted for approximately $76.3 million in sales during the first half of the year. The company’s largest customers, Intuitive Surgical SARL and Stryker Corporation, represented 27.4% and 20.3% of total net sales, respectively, for the three months ended June 30, 2025.

Despite the revenue increase, UFP Technologies experienced a slight decline in gross margin, which decreased to 28.8% for the second quarter of 2025 from 30.0% in the same quarter of 2024. The company attributed this decrease to rising material and labor costs, as well as operational inefficiencies in its newly acquired AJR operations, which added approximately $1.2 million to cost of sales. Selling, general, and administrative expenses also rose by 34.4% to $18.7 million for the second quarter, primarily due to expenses associated with the 2024 acquisitions.

In terms of operational developments, UFP Technologies completed several acquisitions in 2024, including AJR Specialty Products and AJR Custom Foam, which enhanced its capabilities in the single-use medical device market. The company also reported a net income of $17.2 million for the second quarter, compared to $13.6 million in the same period last year, reflecting a 26.5% increase. The diluted earnings per share for the quarter were $2.21, up from $1.75 in the prior year.

The company’s balance sheet showed total assets of $634.7 million as of June 30, 2025, a slight increase from $629.0 million at the end of 2024. Total liabilities decreased significantly to $249.2 million from $286.2 million, primarily due to a reduction in long-term debt. UFP Technologies had approximately $163.6 million in outstanding borrowings under its credit agreement, with a weighted average interest rate of 5.7%. The company is currently in compliance with all financial covenants under its credit facilities.

Looking ahead, UFP Technologies plans to continue its growth strategy through both organic expansion and strategic acquisitions. The company is focused on enhancing operational efficiencies and increasing manufacturing capacity to meet anticipated demand. However, it acknowledges potential risks related to economic conditions, including inflation and tariffs, which could impact future performance. The company remains optimistic about its ability to generate sufficient cash flow from operations to support its growth initiatives and meet its financial obligations in the coming year.