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    MMSI
    Earnings call· Mar 2026(Q1 FY26)

    MERIT MEDICAL SYSTEMS Q1 FY26 earnings call MMSI

    Apr 30, 2026 Source

    Executive summary

    Merit Medical Q1 FY26 — Strong Start with Strategic Oncology Acquisition

    Merit Medical delivered a strong Q1 FY26, surpassing revenue and EPS expectations, driven by solid organic growth and contributions from recent acquisitions. The company strategically expanded its oncology platform with the acquisition of View Point Medical, significantly broadening its addressable market. Despite headwinds in OEM sales and tariff impacts, management reaffirmed its full-year guidance, confident in its continued growth initiatives and disciplined operational execution.

    Highlights

    5

    • Total revenue of $381.9 million, up 7% GAAP and 5% constant currency, exceeding high end of expectations.

    • Non-GAAP operating margin increased 47 basis points year-over-year to 19.7%, highest Q1 operating margin in company history.

    • Non-GAAP EPS grew 9% to $0.94, exceeding high end of expectations by $0.07.

    • Free cash flow generated $25 million, a 26% increase year-over-year.

    • Strategic acquisition of View Point Medical for $140 million, expanding oncology market opportunity 3x-4x.

    Concerns

    4

    • OEM sales declined 14% year-over-year in Q1, significantly lower than guidance assumptions.

    • Gross margin down 20 basis points year-over-year to 53.2%, impacted by $4.6 million tariff costs.

    • Acquisition of View Point Medical expected to be $0.05 dilutive to 2026 non-GAAP EPS.

    • Geopolitical issues in the Middle East led to $1.5 million of left-on-table revenue due to shipping delays.

    Guidance & targets

    23
    CategoryTargetConfidence
    Total GAAP Net Revenue Growth
    6.3% to 7.8% year-over-year
    high materiality
    High
    Total Constant Currency Net Revenue Growth
    5.6% to 7% year-over-year
    high materiality
    High
    Foundational Products Sales Growth
    mid-single digits year-over-year
    medium materiality
    Medium
    Therapeutic Products Sales Growth
    high single digits year-over-year
    medium materiality
    Medium
    Inorganic Revenue Contributions
    $17 million to $20 million
    medium materiality
    High
    Total Net Revenue Growth (Organic Constant Currency)
    4.5% to 6% year-over-year
    high materiality
    High
    WRAPSODY CIE Revenue
    $7 million
    medium materiality
    High
    Non-GAAP Diluted Earnings Per Share
    $4.01 to $4.15
    high materiality
    High
    Tariff Impact (Non-GAAP EPS)
    $0.19 per share
    high materiality
    Medium
    Total Revenue (GAAP)
    $400 million to $410 million
    high materiality
    High
    Total Revenue Growth (GAAP)
    5% to 7% year-over-year
    high materiality
    High
    Total Revenue Growth (Constant Currency)
    4% to 7% year-over-year
    high materiality
    High
    Inorganic Revenue Contributions
    $4 million to $4.5 million
    medium materiality
    High
    Total Revenue Growth (Organic Constant Currency)
    3% to 5%
    high materiality
    High
    Non-GAAP Operating Margins
    18.7% to 20.4%
    high materiality
    High
    Non-GAAP EPS
    $0.90 to $1
    high materiality
    High
    View Point Medical Revenue Contribution
    $2 million to $4 million
    medium materiality
    High
    View Point Medical Non-GAAP EPS Dilution
    approximately $0.05
    high materiality
    High
    View Point Medical Revenue Contribution
    $14 million to $16 million
    medium materiality
    High
    View Point Medical Sales Growth Rate
    at least 20% per year
    medium materiality
    High
    OEM Business Normalized Growth Profile
    mid- to high single digits annually
    medium materiality
    High
    OEM Business Growth
    mid-single digits
    medium materiality
    High
    China Sales Growth
    low single digits
    medium materiality
    Medium

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    Foundational Products
    Driven primarily by Vascular Intervention and Access platforms, offsetting declines in OEM and Procedural Solution products (impacted by DualCap divestiture).
    Organic constant currency growth: 1.5%
    		$254.6M4%——
    Therapeutic Products
    Driven by strong growth in Cardiac Therapies and Endoscopy platforms, and contributions from Vascular Intervention and Oncology platforms, offsetting declines in OEM and Renal Therapies platforms.
    Organic constant currency growth: 5.2%
    		$127.3M7%——
    United States
    Sales increased $14.5 million, modestly exceeding the high end of expectations.
    		$227.1M6.8%——
    International
    Sales increased $4.1 million, modestly exceeding the high end of expectations.
    		$154.8M3%——
    OEM
    Sales declined significantly year-over-year in Q1, lower than guidance assumptions, due to macro environment in APAC and U.S. customer inventory destocking. Expected to return to mid-single-digit growth in Q2.
    		—-14%——
    APAC
    Up 1% on a constant currency basis in Q1, which was a beat for us. OEM sales to customers in this region were impacted by macro environment.
    		—1%——
    China
    Sales increased by about 2% year-over-year on a constant currency basis in Q1, in line with expectations. VBP impact was modestly better than expected.
    		—2%——

    Operational metrics

    36
    Total Revenue
    $381.9 millionup 7% YoY GAAP, up 5% YoY constant currency
    Q1 FY26

    Exceeded the high end of expectations.

    Organic Constant Currency Growth
    2.7%
    Q1 FY26

    Exceeded the high end of expectations.

    Organic Constant Currency Growth (excluding divested revenue)
    3.7%
    Q1 FY26

    Excludes impact of DualCap product line divestiture.

    Non-GAAP Operating Margin
    19.7%up 47 bps YoY
    Q1 FY26

    Highest first quarter operating margin in company's history.

    Non-GAAP EPS
    $0.94up 9% YoY
    Q1 FY26

    Exceeded the high end of expectations.

    Cash and Cash Equivalents
    $488.1 millionvs $446.4 million as of Dec 31, 2025
    March 31, 2026

    Increase driven by strong FCF and divestiture proceeds, partially offset by financing activities.

    Total Debt Obligations
    $747.5 millionflat vs Dec 31, 2025
    March 31, 2026
    Available Borrowing Capacity
    $697 millionflat vs Dec 31, 2025
    March 31, 2026
    Net Leverage Ratio (Adjusted)
    1.6x
    March 31, 2026
    Proceeds from Divestiture (DualCap)
    $25.5 million
    Q1 FY26

    From divestiture and sale of DualCap product line.

    Cash Used for Financing Activities
    $6.3 million
    Q1 FY26

    Partially offset cash increase.

    View Point Medical Acquisition Consideration
    $140 million
    April 1, 2026

    Aggregate transaction consideration.

    View Point Medical Non-GAAP Gross Margin
    70%
    Longer term

    Projected for the acquired OneMark system.

    View Point Medical Non-GAAP Operating Margins
    above company average
    Longer term

    Projected for the acquired OneMark system.

    DualCap Product Sales and Royalty Revenue
    $20 million
    FY25

    Total revenue from DualCap in 2025.

    DualCap Product Sales
    $1.6 million
    Q1 2026

    Sales prior to divestiture in Q1 2026.

    DualCap Divestiture Headwind to Constant Currency Revenue Growth
    130 basis points
    FY26

    Estimated year-over-year headwind.

    Tariff Impact
    $4.6 millionvs no impact in prior year
    Q1 FY26

    Included in Q1 gross margin.

    Tariff Impact
    $15 millionvs $9 million in 2025
    FY26

    Assumed 12-month tariff impact in 2026 non-GAAP EPS guidance.

    SG&A Expense Increase
    $5.4 millionup 5% YoY
    Q1 FY26

    Driver of operating expense increase.

    R&D Expense Increase
    $1.1 millionup 5% YoY
    Q1 FY26

    Driver of operating expense increase.

    Total Operating Income
    $75.3 millionup 10% YoY
    Q1 FY26
    Breast Biopsies
    1.6 million
    Annually

    Total market for breast biopsies.

    SCOUT Applicable Procedures
    300,000
    Annually

    Market for SCOUT, typically for higher-risk patients.

    OneMark Addressable Procedures
    1.3 million
    Annually

    Market for OneMark, typically for lower-risk patients, expanding total market 3x-4x.

    Breast Cancer Market Growth
    4%
    Annually
    Wire-Free Localization Market Growth
    13%
    Annually

    Market where Merit plays.

    Endoscopy Segment Growth
    mid-teen growth
    Q1 FY26

    Strong performance by the team.

    International Revenue Mix
    40%
    Current

    Approximately 40% of total revenue is outside the United States.

    Middle East Revenue Left on Table
    $1.5 million
    Q1 FY26

    Due to shippers unable to pick up and deliver product, related to geopolitical issues.

    Acquired Products Contribution
    $6.6 million
    Q1 FY26

    Included in Foundational Products sales increase.

    Acquired Products Contribution
    $2.5 million
    Q1 FY26

    Included in Therapeutic Products sales increase.

    Gross Margin
    53.2%down 20 bps YoY
    Q1 FY26

    Notably stronger than internal expectations, despite tariff impact.

    Other Expense Net
    $1.2 millionvs $1.7 million prior year
    Q1 FY26

    Change driven by gain/loss on foreign exchange and higher interest income.

    GAAP Net Income
    $56.7 millionvs $52.9 million prior year
    Q1 FY26

    Exceeded the high end of guidance range by $3.7 million.

    GAAP EPS
    $0.94vs $0.86 prior year
    Q1 FY26

    Exceeded the high end of guidance range by $0.07.

    Industry KPIs

    5
    MetricValueDetails
    Tariff impact$4.6 millionUSD
    New product launch rampResilience TTS Esophageal Stent
    FCF conversion leverage guidance1.6xx
    Segment franchise organic growth1.5%%
    Indicated addressable patient population1.3 millionprocedures

    Product announcements

    1
    ProductTypeDetails
    The Resilience Through-the-Scope (TTS) Esophageal Stentlaunch

    Deals & partnerships

    3
    View Point MedicalAcquisition of a company manufacturing the OneMark Detection Imaging System and OneMark Tissue Markers, expanding oncology portfolio.$140 million (aggregate consideration)

    $90 million paid in cash at closing, with two deferred payments of $25 million each scheduled for the first and second anniversary of closing. Expands annual addressable procedure opportunity by approximately 3x for oncology business.

    DualCap product lineDivestiture of the DualCap product line.

    Discussed in Q4 2025 call. DualCap product sales and royalty revenue totaled approximately $20 million in 2025.

    MedtronicDistribution deal for OEM products.

    Medtronic is an existing OEM customer. This deal is a good example of the lumpy nature of OEM business and contributes to gaining confidence in the OEM platform for FY26.

    Risks & headwinds

    6
    OEM Sales DeclineQ1 FY26

    Declined 14% year-over-year in Q1

    Mitigation: Management characterizes as transient/timing-based; expects return to mid-single-digit growth in Q2 and mid-to-high single digits annually. New Medtronic distribution deal provides confidence.

    Tariff ImpactQ1 FY26 and FY26

    $4.6 million impact to gross margin in Q1 (120 bps); $15 million or $0.19 per share assumed for FY26

    Mitigation: Company has started process for tariff reimbursement; will re-evaluate 2026 guidance after Q2 based on Supreme Court decision and potential administrative challenges.

    Geopolitical Issues (Middle East)Q1 FY26

    $1.5 million of revenue left on the table in Q1

    Mitigation: Currently manageable; no price increases from vendors, fuel surcharges are typical. Will re-evaluate if issues continue.

    View Point Medical Acquisition DilutionFY26

    $0.05 dilutive to 2026 non-GAAP EPS

    Mitigation: Offset by better-than-expected Q1 non-GAAP EPS results; expected to be accretive in 2027 and longer term.

    OEM Demand Trends (APAC)Q1 FY26

    Impacted OEM sales in Q1

    Mitigation: Largely consistent with expectations; APAC region as a whole beat expectations.

    China Volume-Based Purchasing (VBP)Q1 FY26 and FY26

    Impacted China sales growth (2% YoY CC in Q1, expected low single digits for FY26)

    Mitigation: VBP impact was modestly better than expected in Q1; company continues to deal with it.

    What to watch in Q2 FY26

    4

    Tariff Reimbursement Status

    Q2 FY26 earnings call
    CurrentProcess started for majority of tariffs
    TargetUpdate on reimbursement status and potential reduction in FY26 tariff impact

    Why it matters

    Successful reimbursement could significantly reduce the $0.19/share tariff headwind🌐 baked into FY26 EPS guidance.

    I think we'll have an update, hopefully💬, on our second quarter call as to how that shakes out. Feeling optimistic, I would say, if things stay as they are today, I definitely think that the $15 million would come down.

    Q&A highlights

    8

    Seeking updates on WRAPSODY performance, anecdotal or quantitative, given the reaffirmed $7M guidance.

    Martha Aronson stated the company is pleased with WRAPSODY's progress, noting the go-to-market strategy reset instituted late last year is working, and they are tracking right on the $7 million guidance for FY26.

    “We've given, I think, our previous guidance or our revised guidance in 2026 of $7 million for WRAPSODY for the fiscal year, and we're tracking right on that.”

    asked by Michael Petusky · answered by Martha Aronson

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 Performance Exceeds Expectations

    Merit Medical reported strong first-quarter results, with total revenue of $381.9 million, up 7% GAAP and 5% constant currency, surpassing the high end of expectations. This growth was driven by 2.7% organic constant currency growth and better-than-expected contributions from the Biolife and C2 CryoBalloon acquisitions. Non-GAAP operating margin reached a record 19.7% for a first quarter, increasing 47 basis points year-over-year, and non-GAAP EPS grew 9% to $0.94, exceeding guidance by $0.07.

    02

    Strategic Oncology Expansion with View Point Medical Acquisition

    Subsequent to quarter-end, Merit acquired View Point Medical for $140 million, paying $90 million in cash at closing. This acquisition significantly expands Merit's oncology portfolio, particularly in breast and soft tissue tumor localization. The OneMark system, which uses ultrasound-enhanced technology, complements Merit's existing SCOUT radar platform, expanding the addressable market for localization procedures by 3x-4x, targeting an additional 1.3 million annual procedures in the US.

    03

    New Revenue Reporting Structure

    The company formally introduced a new revenue reporting structure, categorizing products into "foundational" and "therapeutic." Foundational products, comprising about two-thirds of 2025 revenue, grew at a 6% CAGR over the last three years, while therapeutic products, one-third of 2025 revenue, grew at an 11% organic CAGR. This new structure, along with an internal operating model based on eight platforms (Access, Vascular Intervention, Procedural Solutions, Cardiac Therapies, Renal Therapies, Oncology, Endoscopy, and OEM), aims to streamline internal planning and external communication.

    04

    OEM Business Headwinds and Outlook

    OEM sales declined 14% year-over-year in Q1, primarily due to inventory destocking dynamics in the U.S. related to product line transfers to Tijuana, Mexico, and macro-environmental impacts in the APAC region. Despite this, management characterizes the lower-than-expected customer orders as transient📎, not reflecting market share loss, and expects OEM growth to return to mid-single digits in Q2 and mid-to-high single digits annually, supported by new opportunities like the Medtronic distribution deal.

    05

    Tariff Impact and Potential Refunds

    The company's 2026 non-GAAP EPS guidance includes a $0.19 per share impact from tariffs, up from $0.12 in 2025. This estimate is based on policies prior to a U.S. Supreme Court decision, and management has initiated the process to seek refunds for past tariff payments. The ultimate financial impact remains uncertain, pending potential administrative challenges and further updates expected after Q2 FY26.

    AI-generated summary of the company’s earnings call. Not investment advice.