Merit Medical Systems’ first quarter results reflected ongoing momentum in core U.S. markets and contributions from recent acquisitions, leading to revenue growth that modestly exceeded Wall Street’s expectations. Management pointed to strong demand in the Cardiovascular segment, particularly from cardiac intervention and OEM product lines, as key drivers. CEO Fred Lampropoulos credited the team’s execution of efficiency initiatives and improved product mix for an expansion in gross margin prior to tariff impacts. The quarter also saw notable strength in U.S. sales, with international results meeting expectations despite softness in China attributed to broader macroeconomic factors rather than company-specific issues.
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Merit Medical Systems (MMSI) Q1 CY2025 Highlights:
- Revenue: $355.4 million vs analyst estimates of $352.7 million (9.8% year-on-year growth, 0.8% beat)
- Adjusted EPS: $0.86 vs analyst estimates of $0.75 (14.8% beat)
- Adjusted EBITDA: $85.28 million vs analyst estimates of $71.58 million (24% margin, 19.1% beat)
- The company reconfirmed its revenue guidance for the full year of $1.48 billion at the midpoint
- Management lowered its full-year Adjusted EPS guidance to $3.36 at the midpoint, a 7.8% decrease
- Operating Margin: 11.5%, in line with the same quarter last year
- Organic Revenue rose 6% year on year (7% in the same quarter last year)
- Market Capitalization: $5.44 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 Merit Medical Systems’s Q1 Earnings Call
- Jason Bednar (Piper Sandler) asked for details on tariff mitigation efforts and their timeline. CFO Raul Parra explained that existing efficiency initiatives are being accelerated, with some savings expected in 2026.
- Steve Lichtman (Oppenheimer) asked about underlying drivers of gross margin improvements. Parra cited a combination of product mix, pricing, operational efficiencies, and successful integration of acquisitions.
- Robbie Marcus (J.P. Morgan) inquired if operating expenses could be reduced further to offset tariff impacts. Parra indicated the company is focused on executing planned cost controls rather than additional cutbacks.
- Craig Bijou (Bank of America Securities) questioned the sustainability of OEM growth and whether inventory pull-forward contributed. CEO Lampropoulos said growth is from new accounts, not customer stockpiling, and expects high single-digit OEM growth for the year.
- Jon Young (Canaccord) pressed on pricing power in the current environment. Parra confirmed that pricing remains a lever, but the company is cautious not to disrupt customer relationships amid tariff uncertainty.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely monitor (1) the realization of tariff mitigation savings and their effect on margins, (2) the outcome of CMS reimbursement decisions for WRAPSODY CIE, and (3) the pace of integration and revenue contribution from recent acquisitions. Execution on operational cost controls and stable demand in both U.S. and international markets will also be important indicators of Merit Medical’s ability to manage near-term volatility.
Merit Medical Systems currently trades at $91, down from $94.55 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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