Core Insights - Merit Medical reported revenue of $384.16 million for the quarter ended September 2025, reflecting a 13% increase year-over-year and surpassing the Zacks Consensus Estimate of $371.21 million by 3.49% [1] - The company's EPS for the quarter was $0.92, up from $0.86 in the same quarter last year, exceeding the consensus EPS estimate of $0.82 by 12.2% [1] Financial Performance - The stock has returned -0.8% over the past month, while the Zacks S&P 500 composite increased by 3.6%, with a Zacks Rank 2 (Buy) indicating potential outperformance in the near term [3] - Geographic sales showed strong performance, with International sales at $153.56 million (+15.2% YoY), APAC at $64.86 million (+7.4% YoY), and the United States at $230.6 million (+11.7% YoY) [4] - EMEA sales reached $71.53 million, representing a 22.3% increase year-over-year, while the Rest of World sales were $17.17 million (+18.5% YoY) [4] Segment Performance - Revenue from Cardiovascular-Peripheral Intervention was $144.78 million (+5% YoY), while Cardiovascular-Cardiac Intervention saw a significant increase to $116.68 million (+28.6% YoY) [4] - Endoscopy revenue was reported at $17.73 million (+4.4% YoY), and Cardiovascular-OEM revenue was $50.83 million (+17.2% YoY) [4] - Overall Cardiovascular revenue totaled $366.43 million, reflecting a 13.5% increase year-over-year, with Custom Procedural Solutions revenue at $54.14 million (+6.6% YoY) [4]

Financial Data and Key Metrics Changes - The company reported total revenue of $384.2 million, up 13% year-over-year on a GAAP basis and up 12.5% year-over-year on a constant currency basis, exceeding growth expectations [14][15] - Non-GAAP operating margin increased by 51 basis points year-over-year to 19.7%, with nearly 7% growth in non-GAAP EPS, exceeding expectations [15][32] - Free cash flow generated was $53 million, an increase of 38% year-over-year, contributing to a total of over $140 million in free cash flow for the first nine months of 2025 [15][32] Business Line Data and Key Metrics Changes - Cardiovascular segment sales grew by 13%, with cardiac intervention product sales increasing by 29% [26][28] - Endoscopy segment sales increased by 4%, with total revenue growth driven primarily by the cardiovascular segment [26][27] - Peripheral intervention product sales increased by 8%, while custom procedural solutions products increased by 6% [27][29] Market Data and Key Metrics Changes - U.S. sales increased by 12% on a constant currency basis, exceeding organic growth expectations [30] - International sales increased by 13% year-over-year, with specific regions like EMEA and the rest of the world exceeding expectations [30] - Sales in China decreased by 1%, attributed to broader macroeconomic conditions, although excluding VBP impacts, sales increased by 2% [30] Company Strategy and Development Direction - The company is focused on innovation and R&D, with recent product launches including the Prelude Wave hydrophilic sheath introducer and Embosphere microspheres for knee osteoarthritis treatment [16][17] - An acquisition of the C2 Cryo Balloon technology for $22 million is expected to strengthen the company's position in the gastroenterology market [25][26] - The company aims to leverage its strong free cash flow for investments in R&D and acquisitions, maintaining a focus on both organic and inorganic growth strategies [54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's strong performance despite a dynamic global macro environment [15] - The updated financial guidance for 2025 reflects strong Q3 results, with expectations for continued growth and profitability [16][34] - The company is committed to achieving its CGI goals through the end of 2026, focusing on closing out a strong 2025 [54] Other Important Information - The company has made notable progress in securing clinical evidence for its Rhapsody CIE product, with ongoing studies and registries to support its market position [22][23] - The management team is actively engaging with stakeholders and focusing on building awareness for new products [10][13] Q&A Session Summary Question: Can you provide more color on the Rhapsody CIE response in the inpatient setting? - Management noted strong initial market response and highlighted the training of over 500 physicians, which has contributed to access and utilization in hospitals [46] Question: What is the source of the gross margin upside and its durability? - Management attributed the gross margin increase to a focus on product mix, pricing improvements, and operational efficiencies, while acknowledging tariff impacts [49][50] Question: What are the thoughts on 2026 and future M&A strategies? - Management indicated a focus on closing out a strong 2025 and emphasized the importance of both organic and inorganic growth, with no major shifts in capital allocation strategy expected [54]

Financial Performance (GAAP) - Revenue for Q3 2025 was $3842 million, a 130% increase compared to $3398 million in Q3 2024[8] - Year-to-date revenue in 2025 reached $11220 million, a 120% increase from $10014 million in the same period of 2024[8] - Net income for Q3 2025 was $278 million, a decrease of 24% compared to $284 million in Q3 2024[8] - Earnings per share for Q3 2025 were $046, a decrease of 30% compared to $048 in Q3 2024[8] Financial Performance (Non-GAAP) - Non-GAAP revenue for Q3 2025 was $3662 million, a 78% increase compared to $3398 million in Q3 2024[9] - Non-GAAP year-to-date revenue in 2025 reached $10697 million, a 68% increase from $10014 million in the same period of 2024[9] - Non-GAAP net income for Q3 2025 was $549 million, a 74% increase compared to $512 million in Q3 2024[9] - Non-GAAP earnings per share for Q3 2025 were $092, a 67% increase compared to $086 in Q3 2024[9] Revenue Breakdown by Region (Q3 2025) - US revenue was $230597 thousand, an 117% increase from $206492 thousand in Q3 2024[11] - EMEA revenue was $71531 thousand, a 223% increase from $58474 thousand in Q3 2024[11] Fiscal Year 2025 Financial Guidance - Net sales are projected to be between $1502 billion and $1515 billion, representing an 11%-12% year-over-year increase[14] - Non-GAAP earnings per share are expected to be between $366 and $379, representing a 6%-10% year-over-year increase[14]

Financial Performance - For the three-month period ended September 30, 2025, the company reported sales of $384.2 million, an increase of 13.0% compared to $339.8 million for the same period in 2024[107] - Net income for the three-month period ended September 30, 2025, was $27.8 million, or $0.46 per share, compared to $28.4 million, or $0.48 per share, for the same period in 2024[110] - The company experienced a 12.0% increase in sales for the nine-month period ended September 30, 2025, totaling $1,122.0 million compared to $1,001.4 million for the same period in 2024[107] - Operating income for the three-month period ended September 30, 2025, was $42.6 million, compared to $37.3 million in the same period of 2024[129] Sales Breakdown - Cardiovascular sales for the three-month period ended September 30, 2025, were $366.4 million, up 13.5% from $322.9 million in the corresponding period of 2024[114] - U.S. sales for the three-month period ended September 30, 2025, were $230.6 million, or 60.0% of net sales, up 11.7% compared to $206.5 million in the same period of 2024[121] - International sales for the three-month period ended September 30, 2025, were $153.6 million, or 40.0% of net sales, up 15.2% from $133.4 million in the corresponding period of 2024[122] Profitability Metrics - Gross profit as a percentage of sales increased to 48.5% for the three-month period ended September 30, 2025, compared to 46.4% for the same period in 2024[108] - SG&A expenses increased by $20.2 million, or 20.2%, for the three-month period ended September 30, 2025, as a percentage of sales rising to 31.2% from 29.3% in 2024[126] - R&D expenses for the three-month period ended September 30, 2025, were $24.0 million, up 16.8% from $20.5 million in the corresponding period of 2024[127] - Effective tax rate increased to 28.0% for the three-month period ended September 30, 2025, compared to 22.4% in 2024[135] Cash Flow and Investments - Cash generated from operating activities was $198.9 million for the nine-month period ended September 30, 2025, compared to $152.1 million in 2024[139] - Cash used in investing activities was $197.1 million for the nine-month period ended September 30, 2025, including $57.3 million for capital expenditures[139] - Cash outflows for acquisitions were $122.8 million for the nine-month period ended September 30, 2025, primarily related to the Biolife Merger[140] - The company had cash, cash equivalents, and restricted cash of $394.6 million as of September 30, 2025[112] Risks and Challenges - Merit is facing risks related to executive succession planning and leadership transition, which could impact future performance[148] - The proposed acquisition of the C2 CryoBalloon device from Pentax of America, Inc. presents uncertainties regarding completion and integration[148] - Integration of the Biolife business and operations is expected to yield financial results and product development benefits, but risks remain[148] - The company is managing risks associated with supply chain disruptions and increased costs of components and raw materials[148] - Fluctuations in interest rates and foreign currency exchange rates could affect Merit’s financial performance[151] - The ongoing government shutdown in the U.S. poses additional regulatory and economic risks to the business[151] - The company is subject to potential product recalls and liability claims, which could adversely affect its operations[151] - Changes in tax laws and regulations may impact Merit’s effective tax rate and overall financial health[151] Strategic Focus - The company is focused on developing new products and technologies to remain competitive in the market[151] - Market acceptance of new products is critical for future growth and success, with ongoing clinical trials and studies being essential[150]

Financial Performance - Merit Medical reported revenue of $384.2 million for Q3 2025, a 13.0% increase compared to Q3 2024[4] - Constant currency revenue for Q3 2025 increased by 12.5%, while organic constant currency revenue rose by 7.8% year-over-year[6] - Net sales for Q3 2025 reached $384.2 million, a 12.9% increase from $339.8 million in Q3 2024[20] - Reported revenue for Q3 2025 was $384,157,000, representing a 13.0% increase from $339,845,000 in Q3 2024[45] - Reported revenue for the nine months ended September 30, 2025, was $1,121,970,000, a 12.0% increase from $1,001,356,000 in the same period of 2024[45] - Constant currency revenue for the nine months ended September 30, 2025, was $1,121,192,000, a 12.0% increase compared to the previous year[45] Profitability Metrics - GAAP operating margin improved to 11.1% from 11.0% in the prior year, while non-GAAP operating margin increased to 19.7% from 19.2%[6] - GAAP EPS for Q3 2025 was $0.46, down 3.0%, while non-GAAP EPS rose by 6.7% to $0.92[6] - GAAP gross margin for Q3 2025 was 48.5%, up from 46.4% in Q3 2024, while non-GAAP gross margin increased to 53.6% from 50.9%[8] - Gross profit for Q3 2025 was $186.4 million, up 18.3% from $157.5 million in Q3 2024[20] - Non-GAAP operating income for Q3 2025 was $75,574, accounting for 19.7% of sales, compared to 19.2% in Q3 2024[41] - Non-GAAP net income for Q3 2025 increased to $73,176, with an after-tax income of $54,933, or $0.92 per share, compared to $66,009 in Q3 2024[39] Cash Flow and Debt - Free cash flow generation for the first nine months of 2025 was $141.6 million, reflecting a 17.6% year-over-year increase[6] - Cash provided by operating activities for the nine months ended September 30, 2025, was $198.9 million, compared to $152.1 million in the same period of 2024, an increase of 30.8%[22] - As of September 30, 2025, Merit had cash and cash equivalents of $392.5 million and total debt obligations of $747.5 million[10] - Long-term debt remained stable at $732.9 million as of September 30, 2025, compared to $729.6 million at the end of 2024[18] Segment Performance - For the full year 2025, Merit anticipates net sales between $1.502 billion and $1.515 billion, representing an 11% to 12% year-over-year growth[11] - The cardiovascular segment is expected to generate revenue between $1.430 billion and $1.441 billion, a 10% to 11% increase from the previous year[11] - The endoscopy segment is projected to achieve revenue of $72.0 million to $74.0 million, marking a 32% to 34% growth[11] Assets and Equity - Total assets as of September 30, 2025, were $2.63 billion, up from $2.42 billion at the end of 2024, indicating an increase of 8.8%[18] - The company’s total stockholders' equity increased to $1.53 billion as of September 30, 2025, from $1.38 billion at the end of 2024, reflecting an increase of 10.9%[18] Research and Development - Research and development expenses for the nine months ended September 30, 2025, were $70.8 million, an increase of 13.0% from $62.3 million in the same period of 2024[20] Company Operations - The company employs approximately 7,400 people worldwide, supporting its global operations[49] - Merit is in the process of acquiring the C2 CryoBalloon device and related assets from Pentax of America, Inc., which may impact future financial results[51] - The integration of the Biolife business and operations is ongoing, with expectations for achieving financial results and product development benefits[51]

Core Insights - Merit Medical Systems, Inc. reported revenue of $384.2 million for Q3 2025, a 13.0% increase compared to Q3 2024, with constant currency revenue up 12.5% and organic constant currency revenue up 7.8% [4][6][12] - The company exceeded financial expectations for both top and bottom lines, prompting an increase in revenue and non-GAAP earnings per share guidance for 2025 [5][11] - The GAAP operating margin improved to 11.1% from 11.0% year-over-year, while non-GAAP operating margin rose to 19.7% from 19.2% [6][8] Financial Performance - Q3 2025 GAAP net income was $27.8 million, or $0.46 per share, down from $28.4 million, or $0.48 per share in Q3 2024; non-GAAP net income was $54.9 million, or $0.92 per share, up from $51.2 million, or $0.86 per share [9][22] - Free cash flow for the first nine months of 2025 was $141.6 million, reflecting a 17.6% year-over-year increase [6][35] - The company’s GAAP gross margin for Q3 2025 was 48.5%, compared to 46.4% in Q3 2024, while non-GAAP gross margin improved to 53.6% from 50.9% [8][9] Revenue Breakdown - For Q3 2025, revenue from the Cardiovascular segment was $366.4 million, up 13.5% year-over-year, with notable growth in Cardiac Intervention (29.3% increase) and Peripheral Intervention (8.8% increase) [5][7] - The Endoscopy segment reported revenue of $17.7 million, a 4.4% increase compared to the previous year [7][12] - For the nine months ended September 30, 2025, total revenue was $1.122 billion, a 12.0% increase from $1.001 billion in the same period of 2024 [7][22] Guidance and Outlook - The updated revenue guidance for 2025 is projected between $1.502 billion and $1.515 billion, reflecting an 11% to 12% year-over-year increase, up from the previous guidance of $1.495 billion to $1.507 billion [11][12] - Non-GAAP earnings per share guidance for 2025 has been raised to between $3.66 and $3.79, representing a 6% to 10% increase [11][12] - The company anticipates stable constant currency growth and improving profitability through its Continued Growth Initiatives Program [5][11] Balance Sheet Highlights - As of September 30, 2025, Merit had cash and cash equivalents of $392.5 million and total debt obligations of $747.5 million, with available borrowing capacity of approximately $697 million [10][19] - Total assets increased to $2.631 billion from $2.419 billion as of December 31, 2024 [19][20] Segment Performance - The Cardiovascular segment's revenue for the nine months ended September 30, 2025, was $1.069 billion, a 10.9% increase year-over-year, while the Endoscopy segment saw a significant 41.5% increase in revenue to $52.8 million [7][12] - The company reorganized its sales teams and product categories, including spine devices under the OEM category, which affected revenue comparisons [7][12]

Core Insights - Carillon Tower Advisers reported a continued upward trend in equity markets, driven by AI advancements, reduced inflation from tariffs, and potential interest rate cuts by the U.S. Federal Reserve [1] - The Russell 2000® Growth Index increased by 12.19% in Q3 2025, slightly underperforming the Russell 2000 Value Index, which rose by 12.60% [1] Company Overview: Merit Medical Systems, Inc. - Merit Medical Systems, Inc. specializes in single-use medical devices for various medical procedures, including cardiology and oncology [3] - The company's stock experienced a decline of 0.53% over the past month and a significant drop of 13.67% over the last 52 weeks, closing at $82.79 per share with a market cap of $4.903 billion on October 28, 2025 [2] Financial Performance - In Q2 2025, Merit Medical reported revenues of $382.5 million, reflecting a 13% year-over-year increase on a GAAP basis and a 12.5% increase on a constant currency basis [4] Challenges and Outlook - The stock's decline was attributed to a reimbursement application misstep for the new WRAPSODY product, delaying its revenue contribution and potentially impacting margins [3] - Despite short-term challenges, the company maintains a positive long-term outlook [3] - Merit Medical is not among the top 30 most popular stocks among hedge funds, with 26 hedge fund portfolios holding its stock at the end of Q2 2025, an increase from 24 in the previous quarter [4]

Core Insights - Investors in the Medical - Dental Supplies sector may consider Merit Medical (MMSI) or Straumann Holding AG (SAUHY) as potential undervalued stocks [1] Valuation Metrics - Merit Medical has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Straumann Holding AG has a Zacks Rank of 3 (Hold) [3] - The forward P/E ratio for MMSI is 23.18, compared to SAUHY's 29.60, suggesting that MMSI may be more attractively priced [5] - MMSI has a PEG ratio of 2.38, while SAUHY's PEG ratio is 2.74, indicating that MMSI may offer better value relative to its expected earnings growth [5] - The P/B ratio for MMSI is 3.35, significantly lower than SAUHY's P/B of 7.05, further supporting the notion that MMSI is undervalued [6] - Based on these metrics, MMSI has a Value grade of B, while SAUHY has a Value grade of D, highlighting the relative valuation strength of MMSI [6] Earnings Outlook - MMSI is noted for its improving earnings outlook, which enhances its attractiveness as a value investment compared to SAUHY [7]

Core Insights - Merit Medical Systems (MMSI) has signed a definitive agreement to acquire the C2 CryoBalloon technology from Pentax of America, enhancing its Endoscopy portfolio and targeting the treatment of Barrett's esophagus and other gastrointestinal disorders [2][3] Acquisition Details - The acquisition involves a total purchase price of $22 million, consisting of an upfront cash payment of $19 million and up to $3 million in milestone-based contingent payments [8] - The C2 CryoBalloon is designed to deliver controlled freezing to ablate abnormal tissue while preserving surrounding structures, providing a precise treatment option in the gastrointestinal market [3] Financial Impact - The acquisition is expected to initially pressure earnings, with projected earnings dilution of 1 cent in 2025 and 2-3 cents in 2026 due to integration costs [8][6] - Revenue contributions from the C2 CryoBalloon are anticipated to be modest initially, at about $1 million in late 2025, increasing to $6-$8 million in 2026 [9][7] Market Context - The global market for gastroesophageal reflux disease treatments is estimated to reach $5.11 billion in 2024, with a projected CAGR of 2% through 2030, driven by increasing cases of GERD linked to lifestyle changes [10][11] - The acquisition positions Merit Medical as a significant player in upper GI interventions, potentially leading to deeper market penetration and broader product synergies [11][12] Long-Term Growth Outlook - Despite short-term earnings dilution, the acquisition is viewed as a strategic move to strengthen the company's presence in a high-growth gastroenterology segment, enhancing its long-term growth trajectory [12][6]

Core Viewpoint - Merit Medical Systems, Inc. has signed a definitive asset purchase agreement to acquire the C2 CryoBalloon™ device and related technology from Pentax of America, Inc. for a total consideration of $22 million, aiming to enhance its offerings in the gastroenterology market and improve patient outcomes [1][8]. Company Overview - Merit Medical is a global leader in healthcare technology, focusing on the development, manufacture, and distribution of proprietary medical devices used in various medical procedures [14]. - Pentax Medical, a subsidiary of the HOYA Group, specializes in flexible, reusable endoscopy solutions and is committed to delivering high-quality endoscopic equipment [15]. Acquisition Details - The acquisition includes a $19 million cash payment at closing and potential contingent payments of up to $3 million based on certain milestones [8]. - The C2 CryoBalloon device is designed to treat chronic gastroesophageal reflux disease (GERD) and other gastrointestinal tissue disorders through controlled freezing treatments [3][4]. Market Impact - The acquisition is expected to strengthen Merit's position in the multibillion-dollar gastroenterology market, providing more treatment options for patients suffering from conditions like Barrett's esophagus [5][9]. - The C2 CryoBalloon is projected to contribute approximately $1 million in revenue from November 1, 2025, to December 31, 2025, and is expected to generate between $6 million to $8 million in revenue for the twelve months ending December 31, 2026 [8][9]. Financial Projections - The acquisition is anticipated to dilute Merit's non-GAAP net income and earnings per share by approximately $0.4 million and $0.01, respectively, for the initial period [8]. - For the full year 2025, the acquisition is projected to dilute GAAP net income and earnings per share by approximately $0.5 million and $0.01, respectively [8][10]. Integration Plans - Merit plans to transfer product manufacturing to its facility in South Jordan, Utah, and expects to retain some PENTAX employees involved in the C2 CryoBalloon business to leverage their expertise [7].