Merit Medical Systems, Inc. Q2 FY2025 earnings call

1. Second quarter financial results: Total revenue $382.5M, up 13% GAAP and 12.5% constant currency. Non-GAAP operating margin increased nearly 109 basis points to 21.2%, highest in public company history. 2. Strategic announcements: Acquired Biolife Delaware for $120M, which has hemostatic products with growth potential. Appointed Martha Aronson as new President and CEO effective October 3, 2025. 3. WRAPSODY CIE update: U.S. commercial strategy includes marketing, physician training, and pricing. Reimbursement strategy for inpatient is on track, but outpatient application for APC was misunderstood, and working on TPT add-on payment.

Second quarter total revenue was $382.5 million, up 13% year-over-year on a GAAP basis and 12.5% on a constant currency basis. The Cardiovascular segment saw 10% growth, and the Endoscopy segment had 81% growth. Excluding sales of acquired products, Cardiovascular segment organic constant currency growth was 6.8% and Endoscopy segment was 1%. U.S. sales grew 17% on constant currency and 10% on organic constant currency, exceeding expectations. International sales increased 7% year-over-year and 2% on organic constant currency. China sales decreased 6% due to the broader macro environment.

2025 GAAP net revenue growth 10%-11%, constant currency growth 9.7%-10.6%. Non-GAAP diluted EPS $3.52-$3.72. Expected free cash flow at least $150M in 2025. Third quarter total revenue GAAP growth 8.6%-10.5%, constant currency growth 8%-9.8%.

Tariff uncertainties, China market macro environment impact, uncertainty in WRAPSODY CIE outpatient reimbursement, and dynamic nature of global trade policies.

Q: Jason Bednar asked about WRAPSODY reimbursement, specifically TPT filing and confidence in securing it.

A: Fred and Raul explained that they filed for APC incorrectly, are targeting TPT submission by 9/1, and have confidence in meeting the deadline.

Q: Jayson Bedford asked about difference between APC and TPT and optimism for TPT.

A: Raul explained APC is procedure-based and TPT is cost-based around the product, and they are confident in meeting TPT guidelines.

Q: Steve Lichtman asked about drivers of cardiac intervention sales growth and sustainability.

A: Fred and Raul said it's due to internal product development, Cook acquisition, and sales force enthusiasm.

Q: James Sidoti asked about Biolife distribution and cash flow.

A: Fred said Biolife products are sold directly to customers now, and cash flow is strong with plans for capital expenditures.

Q: Lei Huang asked about guidance update and tariffs.

A: Raul said guidance reflects first half performance and tariff uncertainties, with confidence in the guidance.

Q: Michael Matson asked about Biolife products and China sales.

A: Fred said Biolife products are used in various procedures, and China sales are affected by macro environment.

Q: David Rescott asked about EPS guidance and WRAPSODY contribution.

A: Raul explained EPS guidance includes tariff and other impacts, and WRAPSODY U.S. revenue is expected $2M-$4M.

Q: Michael Petusky asked about China sales and tariffs in Q2.

A: Raul said China sales are affected by macro environment and tariffs had $2M impact in Q2.

Q: Michael Petusky asked about balance sheet and assets.

A: Fred said there are opportunities for acquisitions but need to be patient.