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- **Record Performance**: Q3 revenue up 13% YoY, non-GAAP EPS of $1.08 beats estimates, 53.6% gross margin (highest in company history). 
- **Strategic Wins**: WRAPSODY CIE adoption exceeds expectations, C2 CryoBalloon acquisition expands endoscopy portfolio. 
- **China Challenges**: Sales down 1% YoY, but VBP impact better than feared; core business volume strong. 
- **Tariff Resilience**: Overcame 90 basis point headwind, with $7.6 million annualized tariff impact. 
- **Free Cash Flow**: $140 million year-to-date, targeting $175 million for 2025 to fund growth and M&A.

**【CEO Summary Section】**
- **Revenue Growth**: Total revenue of $384.2 million, up 13% year-over-year (12.5% on constant currency basis), driven by 7.8% organic growth. Non-GAAP EPS of $1.08 exceeded expectations, with free cash flow of $53 million (38% YoY increase). 
- **Gross Margin Record**: Achieved 53.6% gross margin, a 267 basis point YoY improvement, supported by product mix, pricing, and cost control. 
- **New Product Momentum**: Launched WRAPSODY CIE with strong early adoption in hospitals, and announced C2 CryoBalloon acquisition for gastroenterology. 
- **Strategic Acquisitions**: Completed $22 million acquisition of Pentax's C2 CryoBalloon to expand endoscopy portfolio. 
- **China Market**: Sales decreased 1% YoY, but VBP impact was better than expected, with 2% growth excluding tariffs. 

**【CFO Financial Commentary】**
- **Revenue Breakdown**: Cardiovascular segment grew 29% (excluding acquired products), Endoscopy segment grew 4%. U.S. sales increased 12% (7.6% organic), international sales up 8% (excluding China). 
- **Profitability**: Non-GAAP operating margin of 19.7% (51 basis points YoY improvement), net income of $54.9 million ($0.92 EPS). 
- **Free Cash Flow**: Generated $52.5 million in Q3, with $140 million year-to-date, targeting $175 million for 2025. 
- **Tariff Impact**: Q3 gross margin headwind of 90 basis points from tariffs, with $7.6 million annualized impact. 

**【Q&A Highlights】**
- **WRAPSODY CIE**: Early adoption in hospitals exceeds expectations, with 200+ trained physicians. TPT reimbursement application submitted, expecting Jan 2026 effective date. 
- **Gross Margin Durability**: 53.6% gross margin driven by mix, pricing, and cost control; long-term headroom exists through CGI initiatives. 
- **China Strategy**: Focus on core business growth, with VBP better than expected, but OEM softness due to macro environment. 
- **M&A Cadence**: Small, strategic tuck-ins (e.g., C2 CryoBalloon) to expand endoscopy portfolio, with $140 million+ free cash flow for 2025. 
- **2026 Outlook**: CGI goals remain focus, with no major shifts in capital allocation strategy.

Merit Medical Systems, Inc. (MMSI) Q3 2025 Earnings Call Transcript

- **Record Financials**: Q2 revenue $382.5M (+13% YoY), non-GAAP EPS $1.01 (+10%), highest operating margin (21.2%) in company history.
- **Strategic Moves**: $120M Biolife acquisition for hemostatic devices; Martha Aronson appointed CEO effective Oct 3, 2025.
- **WRAPSODY Delay**: Outpatient reimbursement delayed 6 months; Q2 U.S. sales $2-4M, unchanged long-term growth outlook.
- **Tariff Impact**: High end guidance assumes $7M tariff impact vs. prior $26.3M; low end reflects $26.3M worst-case scenario.
- **China Challenges**: Q2 sales down 6% due to macro environment; APAC growth expected 2-3% YoY.

**【CEO Summary Section】**
- **Revenue Growth**: Q2 2025 revenue of $382.5M (+13% YoY, +12.5% constant currency), exceeding high-end guidance. Organic constant currency growth of 6.7% vs. 6% target.
- **Profitability**: Non-GAAP operating margin 21.2% (+109bps YoY), highest in company history. Non-GAAP EPS up 10% to $1.01, free cash flow $70M (+20% YoY).
- **Strategic Acquisitions**: $120M Biolife acquisition for hemostatic devices (StatSeal/WoundSeal), targeting $350M global market. Martha Aronson appointed President & CEO effective Oct 3, 2025.
- **WRAPSODY Update**: U.S. commercial strategy progressing, but outpatient reimbursement delayed 6 months due to CMS process. Q2 U.S. sales $2-4M, unchanged long-term growth outlook.

**【CFO Financial Commentary】**
- **Revenue Breakdown**: Cardiovascular (+10%), Endoscopy (+81%). Excluding acquisitions, organic growth 6.8% (Cardio) and 1% (Endo). U.S. sales +17% constant currency, intl +7% YoY (APAC strong, EMEA flat, China -6%).
- **Margins**: Gross margin 53.2% (+167bps YoY), driven by lower tariffs, mix, and pricing. Operating expenses +15% (SG&A +13%, R&D +24%).
- **Guidance Update**: 2025 GAAP revenue +10-11%, non-GAAP EPS $3.52-3.72 (+$0.24 low end, +$0.31 high end). Free cash flow ≥$150M. Q3 non-GAAP EPS $0.76-0.85.
- **Tariff Impact**: High end assumes $7M tariff impact vs. prior $26.3M. Low end reflects $26.3M impact, reflecting uncertainty.

**【Q&A Key Highlights】**
- **WRAPSODY Reimbursement**: CMS denied APC assignment for outpatient setting; resubmitted TPT application by Sep 1, 2025. Delayed effective date to Jan 1, 2026. Company maintains premium pricing strategy.
- **China Sales**: Q2 down 6% due to macro environment, not VBP. APAC growth expected 2-3% YoY, China low single digits.
- **Tariffs**: Q2 impact $2M, but high uncertainty. Company mitigating via shipment redirects and product transfers.
- **Biolife Integration**: Direct distribution replacing 4 U.S. distributors. International growth potential via Merit's global footprint.
- **CEO Transition**: Fred remains Chairman; Martha Aronson brings industry expertise to lead next phase of growth.


Merit Medical Systems, Inc. (MMSI) Q2 2025 Earnings Call Transcript

- **Q1 Growth & Margin Wins**: 10.9% constant currency revenue growth, 19.3% operating margin, and $1.08 EPS beat reflect strong execution and CGI initiatives.
- **Tariff Headwinds**: $26.3M annualized tariff impact reduces 2025 EPS by $0.34, but 45% offset potential via CGI and operational shifts.
- **U.S. Strength & China Challenges**: 14% U.S. growth vs. 10% China decline, with China tariffs driving 94% of tariff costs.
- **Endoscopy Surge**: 64% growth from acquisitions, positioning for 34-37% 2025 segment expansion.
- **OEM Momentum**: 21% Q1 growth highlights Medtronic deal success and CGI pricing discipline.

**【CEO Summary Section】**
- Total revenue for Q1 2025 was $355.4 million, up 9.8% YoY (10.9% on a constant currency basis), driven by 6% organic growth in the U.S. and strong execution across all segments.
- Non-GAAP operating margin improved 229 basis points YoY to 19.3%, with non-GAAP EPS up 15% to $1.08, exceeding high-end guidance.
- 2025 revenue guidance reaffirmed at 8-10% YoY growth, with updated non-GAAP EPS range of $3.29-$3.42 due to $26.3 million tariff-related cost headwinds.

**【CFO Financial Commentary】**
- Cardiovascular segment revenue grew 9%, with Cardiac Intervention products up 12% (2% organic) and Peripheral Intervention up 6.8%.
- Endoscopy segment revenue surged 64% on acquisitions, while U.S. sales increased 14% (13% in Q2 guidance) and international sales grew 1.9% on a constant currency basis.
- Gross margin expanded 251 basis points to 53.4%, driven by product mix, pricing, and cost efficiencies.
- Free cash flow of $19.5 million in Q1, with 2025 guidance for at least $150 million despite $90-100 million in CapEx for a new distribution center.

**【Tariff Impact & Mitigation】**
- $26.3 million annualized tariff headwind (94% from China) reduces 2025 non-GAAP EPS by ~$0.34, offsetting $0.05 from lower convertible debt dilution.
- Mitigation strategies include CGI initiatives (45% potential offset), inventory redirection, and operational efficiency improvements.

**【Key Market Insights】**
- U.S. demand strong with 14% growth, while China faced 10% revenue decline due to macro factors, though VBP impact was in line with expectations.
- OEM business grew 21%, driven by Medtronic's Arcadia deal and CGI-driven pricing discipline.
- WRAPSODY CIE U.S. revenue guidance remains $7-9 million, with CMS NTAP approval proposed for FY26 at $3,770 add-on payment.

Merit Medical Systems (MMSI)-24 Apr 25-2025 Q1 Earnings call transcript

- **Q4 Revenue Beat**: 10% constant currency growth vs. 6-9% guidance, driven by strong U.S. demand and acquired products.
- **Margin Expansion**: 19.6% operating margin (up 305 bps YoY) and record 51.7% gross margin in 2024.
- **2025 Guidance**: 8-10% revenue growth, 4-7% EPS growth, and $150M+ free cash flow despite $0.11 EPS dilution.
- **Key Risks**: Tariff uncertainty, EGS/Cook integration challenges, and China volume-based procurement headwinds.
- **Growth Drivers**: WRAPSODY CIE launch, OEM strength, and 2026 CGI targets of 20%+ operating margin and $400M+ FCF.

**【CEO Summary Section】**
- Fourth quarter revenue reached $355.2 million, up 9% YoY (GAAP) and 10% YoY (constant currency), exceeding the high end of the 6-9% guidance range.
- Non-GAAP operating margin expanded to 19.6%, up 305 basis points YoY, driven by stronger-than-expected revenue and cost control.
- Full year 2024 highlights include 8% constant currency revenue growth, record 51.7% non-GAAP gross margin, and $185 million free cash flow (up 67% YoY).
- 2025 guidance: 8-10% GAAP revenue growth, $3.58-$3.70 non-GAAP EPS (4-7% growth), and at least $150 million free cash flow.

**【CFO Financial Commentary】**
- Q4 gross margin improved to 53.5% (up 304 bps YoY) due to favorable product mix, pricing, and cost reductions.
- Operating expenses increased 9% YoY, with R&D up 26% due to investments in growth initiatives.
- Q4 non-GAAP EPS of $0.93 exceeded expectations, driven by 26% YoY growth in earnings.
- 2025 financial targets include 19.4-19.7% non-GAAP operating margin and $400 million+ free cash flow by 2026.

**【Q&A Key Highlights】**
- **EPS Guidance**: 2025 EPS growth constrained by $5 million incremental interest expense and $0.11 dilution from convertible debt, offsetting 9-12% core growth.
- **Endoscopy Segment**: 88% YoY growth in Q4, but 2025 guidance reflects cautious integration of EGS and Cook Medical acquisitions.
- **Tariff Risk**: 2025 guidance assumes no new tariffs, but company monitors potential impacts on Mexico manufacturing.
- **WRAPSODY CIE**: U.S. sales expected $7-9 million in 2025, with international adoption supported by positive clinical data.
- **OEM Growth**: 22% Q4 growth driven by U.S. demand, with 2025 organic growth expected in low single digits.


Merit Medical Systems, Inc. (MMSI) Q4 2024 Earnings Call Transcript

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