Merit Medical Systems delivered a second quarter that exceeded Wall Street’s expectations, driven by strong performances in its Cardiovascular and Endoscopy segments. Management highlighted that U.S. demand, particularly within cardiac intervention products, outpaced expectations, supported by successful integration of recent acquisitions. CEO Fred Lampropoulos pointed to the company’s “continued strong momentum,” attributing the results to effective sales execution and targeted product expansion. This quarter also saw significant contributions from Biolife’s hemostatic portfolio, as Merit continued to broaden its clinical offerings, while ongoing cost discipline helped offset tariff headwinds and margin pressures.
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Merit Medical Systems (MMSI) Q2 CY2025 Highlights:
- Revenue: $382.5 million vs analyst estimates of $373.4 million (13.2% year-on-year growth, 2.4% beat)
- Adjusted EPS: $1.01 vs analyst estimates of $0.85 (18.6% beat)
- Adjusted EBITDA: $97.04 million vs analyst estimates of $77.55 million (25.4% margin, 25.1% beat)
- The company lifted its revenue guidance for the full year to $1.50 billion at the midpoint from $1.48 billion, a 1.4% increase
- Management raised its full-year Adjusted EPS guidance to $3.62 at the midpoint, a 7.9% increase
- Operating Margin: 12.3%, down from 13.6% in the same quarter last year
- Organic Revenue rose 6.7% year on year vs analyst estimates of 5.1% growth (155.5 basis point beat)
- Market Capitalization: $5.02 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Merit Medical Systems’s Q2 Earnings Call
- Jason M. Bednar (Piper Sandler) pressed for details on the WRAPSODY CIE reimbursement timeline and the likelihood of securing transitional pass-through (TPT) status. CEO Fred Lampropoulos and CFO Raul Parra clarified the misunderstanding in their initial application and reiterated “high confidence in the product” but acknowledged the process would delay commercialization.
- Jayson Tyler Bedford (Raymond James) sought clarification on the difference between APC and TPT reimbursement paths for WRAPSODY and why management is optimistic about TPT approval after the APC setback. Parra explained TPT is product-cost based and fits WRAPSODY’s profile, while Lampropoulos stressed ongoing engagement with CMS.
- Robert Justin Marcus (JPMorgan) asked how much of the margin outperformance was structural versus temporary tariff relief. Parra cited strong sales execution, product mix, and pricing discipline as underlying drivers, with only half the anticipated tariff impact realized in Q2.
- Steven Michael Lichtman (Oppenheimer) questioned the sustainability of cardiac intervention growth and the impact of recent acquisitions. Lampropoulos credited internal development and the Cook acquisition, while Parra noted the salesforce’s enthusiasm for cross-selling.
- James Philip Sidoti (Sidoti & Company) inquired about integration plans for Biolife, specifically international expansion and direct distribution. Lampropoulos confirmed U.S. distribution is now direct and highlighted international growth potential given Merit’s broader footprint.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be watching (1) progress on securing outpatient reimbursement for WRAPSODY CIE and its impact on adoption rates, (2) successful integration and revenue contribution from recent acquisitions like Biolife, and (3) Merit’s ability to sustain margin performance amid ongoing tariff and macroeconomic fluctuations. Execution on pricing strategies and commercial expansion will also be important markers of underlying business health.
Merit Medical Systems currently trades at $84.51, up from $82.91 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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