Revenue volatility persists with a 27.0% YoY decline in 2026Q2, but gross margin improved to 58.2% from 49.5% in 2025Q3, indicating a favorable mix shift despite operating margin compression to 10.6%.
Teleflex Incorporated (TFX) annual income statement — 30-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Sales/Revenue | 2.26B | 1.99B | 3.05B | 2.97B | 2.79B | 2.81B | 2.54B | 2.6B | 2.45B | 2.15B | 1.87B | 1.81B | 1.84B | 1.7B | 1.55B | 1.53B | 1.8B | 1.89B | 2.42B | 1.93B | 2.65B | 2.51B | 2.49B | 2.28B | 2.08B | 1.91B | 1.76B | 1.6B | 1.44B | 1.15B | 931.2M |
| Revenue Growth % | -29.3% | -34.61% | 2.45% | 6.57% | -0.66% | 10.74% | -2.24% | 6% | 14.07% | 14.9% | 3.22% | -1.64% | 8.46% | 9.37% | 1.45% | -15.14% | -4.67% | -21.93% | 25.16% | -26.92% | 5.26% | 1.17% | 8.89% | 9.93% | 8.99% | 7.96% | 10.2% | 11.37% | 25.47% | 23.05% | 2.03% |
| Cost of Goods Sold | 939.99M | 871.96M | 1.34B | 1.33B | 1.26B | 1.26B | 1.21B | 1.19B | 1.06B | 974.5M | 871.83M | 865.29M | 897.4M | 857.33M | 802.78M | 810.07M | 1.01B | 1.08B | 1.46B | 1.25B | 1.87B | 1.8B | 1.79B | 1.68B | 1.52B | 1.37B | 1.2B | 1.09B | 969.6M | 746.9M | 601.4M |
| COGS % of Revenue | - | 43.76% | 44.13% | 44.63% | 45.14% | 44.85% | 47.78% | 45.71% | 43.45% | 45.4% | 46.67% | 47.81% | 48.78% | 50.54% | 51.76% | 52.98% | 55.93% | 56.93% | 60.17% | 64.83% | 70.75% | 71.77% | 71.88% | 73.81% | 73.39% | 71.9% | 67.83% | 67.98% | 67.45% | 65.19% | 64.58% |
| Gross Profit | 1.32B | 1.12B | 1.7B | 1.65B | 1.53B | 1.55B | 1.32B | 1.41B | 1.38B | 1.17B | 996.2M | 944.4M | 942.43M | 838.95M | 748.23M | 718.84M | 794.07M | 814.08M | 964.17M | 680.35M | 774.19M | 709.95M | 698.8M | 597.79M | 552.45M | 535.29M | 567.7M | 512.6M | 468M | 398.9M | 329.8M |
| Gross Margin % | 58.32% | 56.24% | 55.87% | 55.37% | 54.86% | 55.15% | 52.22% | 54.29% | 56.55% | 54.6% | 53.33% | 52.19% | 51.22% | 49.46% | 48.24% | 47.02% | 44.07% | 43.07% | 39.83% | 35.17% | 29.25% | 28.23% | 28.12% | 26.19% | 26.61% | 28.1% | 32.17% | 32.02% | 32.55% | 34.81% | 35.42% |
| Gross Profit Growth % | - | -34.18% | 3.38% | 7.57% | -1.19% | 16.96% | -5.97% | 1.77% | 18.15% | 17.63% | 5.48% | 0.21% | 12.33% | 12.12% | 4.09% | -9.47% | -2.46% | -15.57% | 41.72% | -12.12% | 9.05% | 1.6% | 16.9% | 8.21% | 3.21% | -5.71% | 10.75% | 9.53% | 17.32% | 20.95% | 2.3% |
| Operating Expenses | 1.09B | 864.95M | 1.55B | 1.14B | 1.03B | 921.51M | 901.81M | 981.75M | 984.9M | 784.73M | 621.89M | 621.1M | 639.7M | 567.23M | 510.77M | 478.58M | 517.6M | 522.52M | 624.18M | 445.25M | 494.35M | 434.82M | 491.7M | -1.51B | 346.12M | 347.13M | 388.69M | 352.1M | 326.2M | 278.1M | 229.1M |
| OpEx % of Revenue | - | 43.41% | 50.92% | 38.35% | 36.95% | 32.8% | 35.54% | 37.83% | 40.23% | 36.56% | 33.29% | 34.32% | 34.77% | 33.44% | 32.93% | 31.3% | 28.73% | 27.65% | 25.78% | 23.02% | 18.68% | 17.29% | 19.78% | -66.02% | 16.67% | 18.22% | 22.03% | 21.99% | 22.69% | 24.27% | 24.6% |
| Selling, General & Admin | 882.62M | 720.17M | 995.27M | 929.87M | 863.75M | 860.09M | 743.57M | 851.77M | 878.69M | 699.96M | 563.31M | 568.98M | 578.66M | 502.19M | 454.49M | 429.26M | 475.32M | 519.92M | 596.77M | 445.25M | 493.52M | 449.04M | 494.43M | 423.03M | 365.02M | 347.13M | 311.28M | 284.7M | 266.1M | 230.2M | 190.3M |
| SG&A % of Revenue | - | 36.14% | 32.66% | 31.26% | 30.95% | 30.61% | 29.31% | 32.82% | 35.89% | 32.61% | 30.16% | 31.44% | 31.45% | 29.61% | 29.3% | 28.08% | 26.38% | 27.51% | 24.65% | 23.02% | 18.65% | 17.86% | 19.89% | 18.53% | 17.58% | 18.22% | 17.64% | 17.78% | 18.51% | 20.09% | 20.44% |
| Research & Development | 181.23M | 144.78M | 161.67M | 154.35M | 153.82M | 130.84M | 119.75M | 113.86M | 106.21M | 84.77M | 58.58M | 52.12M | 61.04M | 65.05M | 56.28M | 48.73M | 42.62M | 0 | 0 | 30M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | 7.27% | 5.31% | 5.19% | 5.51% | 4.66% | 4.72% | 4.39% | 4.34% | 3.95% | 3.14% | 2.88% | 3.32% | 3.83% | 3.63% | 3.19% | 2.37% | - | - | 1.55% | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 1.65M | 0 | 394.72M | 56.4M | 13.79M | -69.42M | 38.49M | 16.13M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 582K | -341K | 2.6M | 2.34M | 0 | 838K | -14.22M | -2.73M | -1.93B | -18.9M | 0 | 77.42M | 67.4M | 60.1M | 47.9M | 38.8M |
| Operating Income | 222.21M | 255.8M | 151.01M | 506.31M | 499.73M | 628.1M | 423.07M | 427.25M | 321.7M | 372.28M | 319.45M | 315.89M | 284.86M | 233.26M | -97.38M | 233.17M | 273.59M | 269.77M | 339.99M | 192.64M | 254.61M | 248.07M | 139.49M | 2.1B | 206.33M | 188.16M | 179M | 160.5M | 141.8M | 120.8M | 100.7M |
| Operating Margin % | 9.85% | 12.84% | 4.96% | 17.02% | 17.9% | 22.36% | 16.67% | 16.46% | 13.14% | 17.35% | 17.1% | 17.46% | 15.48% | 13.75% | -6.28% | 15.25% | 15.19% | 14.27% | 14.04% | 9.96% | 9.62% | 9.87% | 5.61% | 92.21% | 9.94% | 9.88% | 10.14% | 10.02% | 9.86% | 10.54% | 10.81% |
| Operating Income Growth % | - | 69.39% | -70.17% | 1.32% | -20.44% | 48.46% | -0.98% | 32.81% | -13.59% | 16.54% | 1.13% | 10.89% | 22.12% | 339.55% | -141.76% | -14.77% | 1.42% | -20.65% | 76.49% | -24.34% | 2.64% | 77.84% | -93.37% | 920.02% | 9.66% | 5.12% | 11.53% | 13.19% | 17.38% | 19.96% | 9.1% |
| EBITDA | 356.74M | 433.54M | 425.61M | 748.43M | 730.32M | 865.46M | 650.32M | 641.32M | 531.68M | 527.54M | 437.36M | 424.28M | 396M | 326.24M | -16.91M | 318.79M | 365.78M | 370.82M | 451.21M | 271.4M | 353.62M | 348.92M | 254.08M | 2.21B | 301.45M | 280.56M | 256.42M | 227.9M | 201.9M | 168.7M | 139.5M |
| EBITDA Margin % | 15.82% | 21.76% | 13.97% | 25.16% | 26.17% | 30.8% | 25.63% | 24.71% | 21.72% | 24.58% | 23.41% | 23.45% | 21.52% | 19.23% | -1.09% | 20.85% | 20.3% | 19.62% | 18.64% | 14.03% | 13.36% | 13.88% | 10.22% | 96.78% | 14.52% | 14.73% | 14.53% | 14.23% | 14.04% | 14.72% | 14.98% |
| EBITDA Growth % | -15.78% | 1.86% | -43.13% | 2.48% | -15.62% | 33.08% | 1.4% | 20.62% | 0.79% | 20.62% | 3.08% | 7.14% | 21.38% | 2029.6% | -105.3% | -12.85% | -1.36% | -17.81% | 66.25% | -23.25% | 1.35% | 37.33% | -88.5% | 632.79% | 7.44% | 9.42% | 12.51% | 12.88% | 19.68% | 20.93% | 7.31% |
| D&A (Non-Cash Add-back) | 155.15M | 177.74M | 274.6M | 242.12M | 230.59M | 237.36M | 227.25M | 214.06M | 209.98M | 155.26M | 117.91M | 108.39M | 111.13M | 92.98M | 80.47M | 85.62M | 92.19M | 101.06M | 111.22M | 78.76M | 99M | 100.85M | 114.59M | 104.35M | 95.12M | 92.4M | 77.42M | 67.4M | 60.1M | 47.9M | 38.8M |
| EBIT | 165.32M | 124.78M | 159.02M | 519.09M | 500.18M | 616.44M | 424.23M | 420.17M | 322.65M | 367.46M | 300.67M | 305.97M | 285.57M | 232.63M | -95.8M | 203.25M | 210.52M | 252.72M | 342.62M | 235.1M | 210.2M | 183.28M | 201.87M | 204.19M | 215.11M | 188.16M | 179M | 160.47M | 141.78M | 120.8M | 100.7M |
| Net Interest Income | -95.77M | -93.82M | -75.53M | -72.3M | -53.35M | -55.64M | -65.34M | -78.53M | -102.08M | -81.78M | -54.47M | -60.79M | -64.75M | -56.28M | -67.99M | -69.06M | -79.07M | -86.93M | -119.32M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 7.26M | 6.4M | 8.01M | 12.78M | 912K | 1.33M | 1.16M | 1.74M | 944K | 771K | 474K | 532K | 706K | 624K | 1.57M | 1.26M | 861K | 2.54M | 2.63M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 103.03M | 100.22M | 83.54M | 85.08M | 54.26M | 56.97M | 66.49M | 80.27M | 103.02M | 82.55M | 54.94M | 61.32M | 65.46M | 56.91M | 69.56M | 70.32M | 80.03M | 89.46M | 121.65M | 0 | 0 | 0 | 37.12M | 26.34M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -110.2M | -231.25M | -75.53M | -72.3M | -53.81M | -68.63M | -65.34M | -87.35M | 23.2M | -87.37M | -73.73M | -71.25M | -64.75M | -57.53M | -181.78M | -84.47M | -82.5M | -86.92M | -119.01M | -83.29M | -35.93M | -39.67M | -42.35M | -23.27M | -33.84M | -28.46M | -20.79M | -17.77M | -16.98M | -14.4M | -13.9M |
| Pretax Income | 112.01M | 24.55M | 75.48M | 434.01M | 445.92M | 559.47M | 357.73M | 339.9M | 219.63M | 284.91M | 245.72M | 244.65M | 220.11M | 175.73M | -165.37M | 148.7M | 147.79M | 182.85M | 220.98M | 109.35M | 219.03M | 207.91M | 102.37M | 151.49M | 172.49M | 159.69M | 158.21M | 142.7M | 124.8M | 106.4M | 86.8M |
| Pretax Margin % | 4.97% | 1.23% | 2.48% | 14.59% | 15.98% | 19.91% | 14.1% | 13.1% | 8.97% | 13.27% | 13.15% | 13.52% | 11.96% | 10.36% | -10.66% | 9.73% | 8.2% | 9.67% | 9.13% | 5.65% | 8.28% | 8.27% | 4.12% | 6.64% | 8.31% | 8.38% | 8.97% | 8.91% | 8.68% | 9.29% | 9.32% |
| Income Tax | 24.35M | -33.98M | 5.32M | 76.44M | 83M | 74.35M | 21.93M | -122.08M | 23.2M | 129.65M | 8.07M | 7.84M | 28.65M | 23.55M | 16.41M | 27M | 21.89M | 39.9M | 52.17M | 122.77M | 54.14M | 47.81M | 14.35M | 42.39M | 47.22M | 47.38M | 48.99M | 47.5M | 42.2M | 36.3M | 29.6M |
| Effective Tax Rate % | 21.74% | -138.38% | 7.04% | 17.61% | 18.61% | 13.29% | 6.13% | -35.92% | 10.56% | 45.5% | 3.29% | 3.2% | 13.02% | 13.4% | -9.93% | 18.16% | 14.81% | 21.82% | 23.61% | 112.27% | 24.72% | 22.99% | 14.02% | 27.98% | 27.38% | 29.67% | 30.96% | 33.29% | 33.81% | 34.12% | 34.1% |
| Net Income | 306.96M | -905.64M | 69.67M | 356.33M | 363.14M | 485.37M | 335.32M | 461.47M | 200.8M | 152.53M | 237.38M | 244.86M | 187.68M | 150.88M | -190.06M | 323.33M | 201.09M | 302.99M | 119.77M | 146.48M | 139.43M | 138.82M | 9.52M | 109.1M | 125.27M | 112.31M | 109.22M | 95.2M | 82.6M | 70.1M | 57.2M |
| Net Margin % | 13.61% | -45.45% | 2.29% | 11.98% | 13.01% | 17.28% | 13.22% | 17.78% | 8.2% | 7.11% | 12.71% | 13.53% | 10.2% | 8.89% | -12.25% | 21.15% | 11.16% | 16.03% | 4.95% | 7.57% | 5.27% | 5.52% | 0.38% | 4.78% | 6.03% | 5.9% | 6.19% | 5.95% | 5.75% | 6.12% | 6.14% |
| Net Income Growth % | 193.6% | -1399.81% | -80.45% | -1.88% | -25.18% | 44.75% | -27.34% | 129.81% | 31.65% | -35.74% | -3.06% | 30.47% | 24.39% | 179.39% | -158.78% | 60.78% | -33.63% | 152.97% | -18.23% | 5.06% | 0.44% | 1358.62% | -91.28% | -12.9% | 11.53% | 2.83% | 14.73% | 15.25% | 17.83% | 22.55% | 16.97% |
| Net Income (Continuing) | 87.66M | 58.53M | 70.16M | 357.57M | 362.92M | 485.12M | 335.8M | 461.98M | 196.43M | 155.26M | 237.65M | 236.81M | 191.46M | 152.18M | -181.78M | 121.7M | 125.91M | 142.94M | 168.81M | -13.42M | 164.89M | 160.11M | 84.34M | 118.2M | 126.18M | 112.31M | 109.22M | 95.2M | 82.6M | 70.1M | 57.2M |
| Discontinued Operations | 0 | -964.17M | -487K | -1.24M | 223K | 255K | -477K | -515K | 4.37M | 0 | 190K | 8.9M | 0 | 0 | 0 | -2.38M | 76.55M | 171.07M | -70.69M | -28.95M | -68.8M | -72.46M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1.82M | 2.39M | 2.49M | 2.59M | 2.19M | 3.9M | 4.83M | 39.43M | 42.18M | 42.06M | 17.4M | 65.48M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 7.37 | -20.25 | 1.48 | 7.53 | 7.68 | 10.23 | 7.09 | 9.80 | 4.29 | 3.27 | 4.98 | 5.10 | 4.04 | 3.45 | -4.65 | 7.92 | 4.99 | 7.59 | 3.01 | 3.73 | 3.49 | 3.39 | 0.24 | 2.73 | 3.08 | 2.86 | 2.83 | 2.47 | 2.15 | 1.86 | 1.58 |
| EPS Growth % | 211.97% | -1468.24% | -80.35% | -1.95% | -24.93% | 44.29% | -27.65% | 128.44% | 31.19% | -34.34% | -2.35% | 26.24% | 17.1% | 174.19% | -158.71% | 58.72% | -34.26% | 152.16% | -19.3% | 6.88% | 2.95% | 1312.5% | -91.21% | -11.36% | 7.69% | 1.06% | 14.57% | 14.88% | 15.59% | 17.72% | 14.49% |
| EPS (Basic) | - | -20.30 | 1.49 | 7.58 | 7.74 | 10.38 | 7.21 | 9.99 | 4.39 | 3.39 | 5.48 | 5.89 | 4.54 | 3.67 | -4.65 | 7.98 | 5.04 | 7.63 | 3.03 | 3.73 | 3.51 | 3.43 | 0.24 | 2.76 | 3.12 | 2.90 | 2.86 | 2.52 | 2.21 | 1.91 | 1.58 |
| Diluted Shares Outstanding | 41.63M | 44.72M | 47.09M | 47.3M | 47.31M | 47.43M | 47.29M | 47.09M | 46.8M | 46.66M | 47.65M | 48.06M | 46.47M | 43.69M | 40.86M | 40.8M | 40.28M | 39.94M | 39.83M | 39.26M | 39.99M | 40.96M | 40.49M | 39.94M | 40.67M | 39.27M | 38.6M | 38.54M | 38.42M | 37.69M | 36.2M |
| Basic Shares Outstanding | 41.48M | 44.62M | 46.84M | 46.98M | 46.9M | 46.77M | 46.49M | 46.2M | 45.69M | 45M | 43.33M | 41.56M | 41.37M | 41.1M | 40.86M | 40.5M | 39.91M | 39.72M | 39.58M | 39.26M | 39.76M | 40.52M | 40.2M | 39.6M | 40.15M | 38.73M | 38.19M | 37.78M | 37.38M | 36.7M | 36.2M |
| Dividend Payout Ratio | - | - | 91.2% | 17.93% | 17.57% | 13.11% | 18.85% | 13.61% | 30.96% | 40.15% | 24.84% | 23.09% | 29.98% | 37.06% | - | 17.05% | 27.01% | 17.83% | 44.29% | 33.4% | 31.63% | 28.33% | 363.3% | 28.3% | 22.24% | 22.78% | 20.29% | 20.06% | 20.1% | 20.4% | 21.15% |
Quick answers to the most common questions about buying TFX stock.
For fiscal year 2025, Teleflex Incorporated (TFX) reported total revenue of $1.99B. This represents a 114.0% increase compared to $931.2M in 1996.
Teleflex Incorporated (TFX) reported a net loss of $905.6M for the fiscal year ending 2025.
Teleflex Incorporated (TFX) reported an operating income of $255.8M, resulting in an operating profit margin of 12.8%. This margin reflects the operational efficiency of the business before interest and taxes.
Teleflex Incorporated (TFX) generated $1.12B in gross profit for the year, representing a gross profit margin of 56.2%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Revenue volatility and impairment charges
Metrics are mathematically derived from official filings.
Revenue Volatility Masks Underlying Weakness
Teleflex's revenue swung from $913.0M in 2025Q3 to $570.3M in 2026Q2, a 37.5% decline, with year-over-year growth turning sharply negative at -27.0% in 2026Q2, according to reported quarterly data.
The revenue trajectory is highly erratic, with a spike in 2025Q3 followed by a steep contraction, suggesting possible divestitures or discontinuations. The consistent negative growth in recent quarters (2026Q1 -21.8%, 2026Q2 -27.0%) indicates a structural decline rather than a temporary blip. Investors should monitor whether this reflects portfolio reshaping or demand erosion.
Gross Margin Resilience Amid Revenue Decline
Despite revenue falling 27% in 2026Q2, gross margin expanded to 58.2%, up from 49.5% in 2025Q3, as reported in financial statements, suggesting a favorable product mix shift or cost actions.
The gross margin improvement from 49.5% to 58.2% over four quarters indicates that the company is retaining higher-margin products or benefiting from lower input costs. However, this is offset by operating margin compression, which turned negative in 2025Q3 and 2024Q4, implying that fixed costs are not scaling down with revenue. The sustainability of gross margin gains is questionable if revenue continues to decline.
Operating Leverage Turns Negative
Operating income swung from $155.3M in 2025Q2 to -$29.7M in 2025Q3, and remained weak at $60.3M in 2026Q2, as per reported figures, indicating that SG&A and R&D costs are not flexing with revenue.
The operating margin collapsed from 19.9% in 2025Q2 to -3.3% in 2025Q3, and even in 2026Q2, it only recovered to 10.6%, well below historical levels. SG&A expenses have remained relatively sticky, hovering around $220M-$280M despite revenue fluctuations, suggesting a lack of cost flexibility. This implies that the company's cost structure is too heavy for the current revenue base, and management may need to undertake restructuring.
Impairments Distort Earnings Quality
Net income was -$714.3M in 2025Q4 and -$408.9M in 2025Q3, with EPS of -$16.15 and -$9.24 respectively, as reported, likely reflecting non-cash impairment charges that obscure underlying profitability.
The massive losses in 2025Q3 and Q4 are disproportionate to operating losses, suggesting significant write-downs or one-time charges. Excluding these, the company's core profitability appears strained, with net margins in 2026Q2 at 17.9% but driven by non-operating items. Investors should adjust for these charges to assess normalized earnings power, which appears to be deteriorating.
SG&A and R&D Costs Outpace Revenue
In 2026Q2, SG&A of $213.5M and R&D of $45.1M totaled 45.3% of revenue, up from 38.5% in 2025Q2, based on reported data, indicating rising cost intensity.
The combined SG&A and R&D expenses have not declined proportionally with revenue, leading to margin erosion. In 2025Q3, SG&A alone was $281.8M against revenue of $913.0M, but in 2026Q2, revenue dropped to $570.3M while SG&A only fell to $213.5M. This suggests a lack of expense discipline or fixed cost commitments that are difficult to adjust in the short term.
2025Q3 Marks a Turning Point
The inflection occurred in 2025Q3 when revenue jumped to $913.0M but operating income turned negative at -$29.7M, as per financial statements, signaling a shift from profitability to losses.
This quarter represents a clear break from the prior pattern of stable revenue and positive operating income. The revenue spike may have been due to a one-time event, but the subsequent decline and persistent losses indicate a structural change. The lasting impact is a weakened earnings base, with 2026Q2 net income of $102.0M still below the $122.6M in 2025Q2, suggesting the company has not fully recovered.
What Could Invalidate the Base Case
The apparent recovery in 2026Q2 may be misleading, as net income of $102.0M includes non-operating gains, while operating income of $60.3M remains below prior levels, per reported figures.
Short-sellers might argue that the revenue decline is not a one-off but a secular trend, given the persistent negative growth rates. The gross margin expansion could be a result of cost-cutting that is not sustainable, and the operating margin recovery to 10.6% is still far below the 19.9% seen in 2025Q2. Additionally, the large impairments in 2025 suggest potential further write-downs if the revenue base continues to shrink, which would pressure earnings quality.