Medical device company Merit Medical Systems (NASDAQ: MMSI) announced better-than-expected revenue in Q1 CY2026, with sales up 7.5% year on year to $381.9 million. The company expects the full year’s revenue to be around $1.62 billion, close to analysts’ estimates. Its non-GAAP profit of $0.94 per share was 12.8% above analysts’ consensus estimates.
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Merit Medical Systems (MMSI) Q1 CY2026 Highlights:
- Revenue: $381.9 million vs analyst estimates of $377.5 million (7.5% year-on-year growth, 1.2% beat)
- Adjusted EPS: $0.94 vs analyst estimates of $0.83 (12.8% beat)
- Adjusted EBITDA: $83.61 million vs analyst estimates of $81.41 million (21.9% margin, 2.7% beat)
- The company slightly lifted its revenue guidance for the full year to $1.62 billion at the midpoint from $1.62 billion
- Management reiterated its full-year Adjusted EPS guidance of $4.08 at the midpoint
- Operating Margin: 11.6%, in line with the same quarter last year
- Organic Revenue rose 2.7% year on year (miss)
- Market Capitalization: $4.07 billion
StockStory’s Take
Merit Medical Systems’ first quarter results surpassed Wall Street’s expectations, fueled by contributions from recently acquired products and ongoing strength in both foundational and therapeutic product lines. Management highlighted the successful U.S. launch of the Resilience esophageal stent and early momentum from the C2 Cryo Balloon device, while also noting headwinds from the divestiture of the DualCap product line and softness in the OEM business, especially in Asia-Pacific. CEO Martha Aronson emphasized that effective cost controls and operational discipline offset tariff-related margin pressures, allowing the company to maintain stable operating margins despite external challenges.
Looking ahead, Merit Medical Systems’ forward guidance is shaped by its continued focus on portfolio expansion—exemplified by the acquisition of Viewpoint Medical and the integration of the OneMark ultrasound tissue marker. Management believes that synergies between the existing SCOUT radar localization platform and OneMark’s ultrasound technology will allow Merit to address a significantly larger portion of the breast biopsy market. CFO Raul Parra cautioned that the ongoing impact of tariffs and inventory adjustments will remain key variables, but stressed, “Our multi-year growth initiatives and disciplined approach to spending provide us with confidence in delivering on our long-term financial targets.”
Key Insights from Management’s Remarks
Management identified product portfolio expansion, platform realignment, and disciplined cost controls as the primary forces influencing the quarter’s results and strategic direction.
- Oncology platform expansion: The acquisition of Viewpoint Medical and its OneMark system substantially broadens Merit’s addressable market in breast biopsies, enabling the company to target both higher- and lower-risk procedures and to offer complementary technologies alongside the existing SCOUT platform.
- New product launches: Merit introduced the Resilience Through-The-Scope esophageal stent in the U.S., aiming to address migration resistance and physician control—factors management believes will drive adoption in the endoscopy segment.
- OEM business volatility: The OEM division faced significant year-over-year sales declines, particularly in the APAC region, due to macroeconomic headwinds and inventory adjustments tied to manufacturing transitions. Management described these as largely timing-related, with an expectation for improvement in the coming quarters.
- Revenue categorization overhaul: The company now reports results in two product categories—foundational and therapeutic—and has aligned internal operations around eight global platforms. Management expects this structure to improve transparency both internally and for investors, and to better highlight growth drivers.
- Margin management amid tariffs: Despite $4.6 million in tariff-related gross margin impacts, operational focus and divestiture of low-margin products, such as DualCap, helped maintain overall margin stability. Parra credited targeted pricing strategies and product mix improvements for offsetting cost pressures.
Drivers of Future Performance
Looking ahead, management sees multi-platform growth, new product adoption, and strategic acquisitions as the primary themes underpinning Merit’s forward guidance, while remaining cautious about macro and geopolitical risks.
- Synergies from oncology acquisitions: The integration of OneMark with the SCOUT platform is expected to allow Merit to address a broader segment of the breast cancer localization market. Management projects annual growth rates of at least 20% for the OneMark system, with margins above the company average, but notes real-world adoption will depend on effective clinical education and account targeting.
- Tariff and supply chain uncertainties: Tariffs remain a headwind, with $15 million of costs assumed in annual guidance. Management has initiated reimbursement filings, but the final impact will depend on regulatory outcomes and ongoing geopolitical developments, especially in relation to the Middle East and China.
- Platform realignment and product launches: Merit’s new operating model, organized around eight platforms, is designed to improve accountability and cross-functional execution. The rollout of products such as the Resilience stent and expanded endoscopy offerings is expected to support growth, although management cautions that OEM and APAC dynamics may temper overall momentum.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will be watching (1) the rate of adoption and revenue contribution from the expanded oncology portfolio, especially OneMark’s integration, (2) ongoing performance of the OEM business as inventory normalization and APAC demand trends unfold, and (3) the company’s ability to offset tariff headwinds and maintain margin discipline. Future updates on reimbursement for tariffs and progress with new product launches in endoscopy will also be important signposts.
Merit Medical Systems currently trades at $68.32, in line with $68.18 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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