Merit Medical Raises Full-Year Guidance as Growth Accelerates
Merit Medical Systems posted second-quarter revenue of $418.8 million, up 10% year over year, and raised its full-year revenue and profit guidance.
Merit Medical Systems (MMSI) reported second-quarter revenue of $418.8 million, up 10% year over year, or 9% on a constant-currency organic basis.
The growth marked an acceleration from the first quarter, when reported revenue rose 7% and organic constant-currency revenue grew just 3%. Non-GAAP operating margin followed the same pattern, expanding 140 basis points year over year to 22.6% in the second quarter after widening only 40 basis points to 19.7% in the first. GAAP operating margin rose to 14.4% from 12.3% a year earlier, up from 11.6% in the first quarter.
Earnings growth reaccelerated alongside revenue. Non-GAAP earnings per share reached $1.19, up 18% year over year, compared with 9% growth to $0.94 in the first quarter. GAAP gross margin expanded to 51.4% from 48.2%, while non-GAAP gross margin rose to 55.8% from 53.2%.
Merit reported U.S. customer sales growth of 10% for the first time in the second-quarter release, describing the figure as ahead of company expectations, a highlight that was absent from the first-quarter release.
The Therapeutic segment drove much of the acceleration, with revenue up 15%, or 14% in constant currency, compared with 7% growth, or 6% in constant currency, at the Foundational segment. Within Therapeutic, Cardiac Therapies revenue rose 24% to $28.5 million and Endoscopy rose 29% to $23.6 million, both accelerating from the segment's blended 10% growth in the first quarter. Foundational's Procedural Solutions sub-segment declined 12% year over year, a drag that also showed up in first-quarter category detail. Merit expanded its revenue disclosure in the second-quarter release, breaking out product lines including Foundational Access, OEM, Procedural Solutions, Vascular Intervention, Cardiac Therapies, Endoscopy, Oncology and Renal Therapies, compared with the two broad categories reported in the first quarter.
Merit raised its full-year 2026 revenue guidance to $1.631 billion to $1.643 billion, implying 8% growth, from a prior range of $1.612 billion to $1.634 billion, or 6% to 8% growth, issued April 30, 2026. The company also raised its constant-currency organic revenue growth guidance to 6.8% to 7.6% from 5.6% to 7.0%. Full-year non-GAAP earnings guidance rose to $4.25 to $4.35 a share, implying 11% to 14% growth, from a prior $4.01 to $4.15, or 5% to 8% growth.
Cash flow softened even as profitability improved. Operating cash flow fell 11% year to date to $110.0 million and free cash flow declined 14% to $76.6 million, a reversal from the first quarter, when free cash flow rose 26% year over year to $24.7 million. Total debt held flat at $747.5 million from December 31, 2025, while cash and equivalents edged up to $448.7 million from $446.4 million. Merit recorded a $2.16 million corporate restructuring charge in the quarter, roughly flat with $2.59 million a year earlier.