Merit Medical Systems, Inc. earnings

Management highlights

- Brief summary of first quarter financial results: total revenue $381.9M, up 7% GAAP and 5% constant currency, non-GAAP operating margin 19.7% up 47bps, non-GAAP EPS up 9%, free cash flow $25M up 26%. - Strategic acquisitions: acquisition of Viewpoint Medical in oncology space, expanding breast cancer biopsy market opportunity. - New revenue presentation: reporting revenue in foundational and therapeutic categories, with 8 platforms including Access, Vascular Intervention, etc. - Introduction of Resilience through-the-scope esophageal stent for esophageal fistulas and strictures.

Guidance

Updated 2026 guidance reflects Viewpoint acquisition impact. Total GAAP net revenue growth 6.3%-7.8% YOY, constant currency 5.6%-7% excluding FX tailwind. Non-GAAP EPS range $4.10-$4.15. Second quarter total revenue expected $400M-$410M, non-GAAP operating margin 18.7%-20.4%, non-GAAP EPS $0.90-$1.00. Viewpoint acquisition projected $0.05 dilutive to 2026 non-GAAP EPS but accretive 2027 onwards with 20%+ sales growth and 70%+ gross margins.

Segment performance

Total revenue was $381.9 million, up 7% year-over-year on a GAAP basis and up 5% year-over-year on a constant currency basis. Foundational products comprised about two-thirds of total revenue in 2025, with 6% CAGR over last three years. Therapeutic products comprised about one-third of total revenue in 2025, with 11% organic CAGR over last three years. First quarter total revenue was driven by $10.1 million increase in foundational products and $8.5 million increase in therapeutic products. Organic constant currency growth in foundational was 2.7%, therapeutic was 2.7% including acquisitions. OEM sales declined 14% year-over-year in Q1 but remains healthy with normalized mid to high single-digit growth profile.

Risks & headwinds

- OEM sales impacted by macro environment, APAC region demand trends, and inventory destocking dynamics. - Tariffs impact gross margin, with $4.6M impact in Q1. - Geopolitical issues like Middle East conflict may lead to price increases and supply chain challenges. - Uncertainty around U.S. Supreme Court decision on tariffs and potential retaliatory actions.

Analyst Q&A

• Q: Michael Petusky of Barrington Research asked about Rhapsody updates.

  A: Martha Aronson said Rhapsody is tracking on the $7M guidance for 2026.

• Q: Jason Bednar of Piper Sandler asked about Viewpoint growth and SCOUT synergy.

  A: Martha Aronson and Raul Parra discussed market expansion in oncology, Viewpoint's 20%+ sales growth projection, and SCOUT synergy.

• Q: Sam Elber of BTIG asked about Cardiac business and geopolitical impact.

  A: Raul Parra said Cardiac product recall is immaterial to 2026 results, and geopolitical issues are manageable.

• Q: David Rescott of R.W. Baird asked about APAC OEM and operating margin controls.

  A: Raul Parra said APAC OEM was in line with expectations, and operating expenses were controlled.

• Q: Aidan Lahey of Bank of America asked about OneMark and SCOUT.

  A: Martha Aronson said OneMark is a market expansion play with physician preference.

• Q: James Sidoti of Sidoti & Company asked about gross margin and inventory.

  A: Raul Parra said gross margin was affected by tariffs and mix, and inventory was due to acquisitions and supply chain.

• Q: John Young of Canaccord asked about OUS growth and Endoscopy.

  A: Martha Aronson and Raul Parra discussed OUS growth progress and Endoscopy platform performance.

• Q: Analyst (Zack on for Jason Bedford) asked about acquisition pipeline and Medtronic deal.

  A: Martha Aronson said acquisitions need strategic fit, and Medtronic deal is built into OEM guidance.

• Q: Mike Matson of Needham & Company asked about capital allocation.

  A: Raul Parra said focus is on M&A, CGI, and free cash flow generation with no immediate share repurchase plans.