Merit Medical's Q2 2025 Earnings Call: Unpacking Contradictions on Tariffs, Demand, and Margins

Tariff impact mitigation and offset, China demand and tariffs, TPT application and confidence, gross margin expectations, tariff impact and financial guidance are the key contradictions discussed in Merit Medical Systems' latest 2025Q2 earnings call.



Strong Financial Performance:
- Merit Medical Systems reported total revenue of $382.5 million for the second quarter of 2025, up 13% year-over-year on a GAAP basis, and 12.5% year-over-year on a constant currency basis.
- The growth was driven by a 6.7% constant currency organic growth, which exceeded the high end of the guidance range.

Operating Margin Improvement:
- The company achieved an operating margin of 21.2%, representing a nearly 109 basis points year-over-year increase, marking the highest non-GAAP operating margin performance in the company's history as a public company.
- This improvement was due to strong revenue results and disciplined cost management.

Strategic Acquisitions:
- Merit Medical Systems completed acquisitions of Biolife Delaware, L.L.C. and assets of EndoGastric Solutions, which contributed approximately $19.6 million to second-quarter revenue.
- These acquisitions aim to enhance the company's offerings in areas such as hemostatic devices and endoscopy, expanding its product portfolio.

wrAPSODY CIE Commercial Strategy:
- The company is focusing on a premium pricing strategy for the WRAPSODY CIE, driven by its novel design and clinical benefits, expecting a significant impact on patient outcomes and cost reduction.
- The strategy aligns with efforts to secure reimbursement coverage, both inpatient and outpatient, to support the device's adoption and utilization.