Merit Medical Systems (MMSI -0.09%), a medical device developer serving cardiovascular and endoscopy markets, reported results for its second quarter ended June 30, 2025, on July 30, 2025. The company posted GAAP revenue of $382.5 million, up 13.2% from the prior year and above the analyst consensus of $374.2 million (GAAP). Non-GAAP earnings per share (EPS) reached $1.01, beating the $0.85 estimate. Reported GAAP EPS, however, declined 11.6% to $0.54. The quarter showed solid broad-based growth, especially in the Cardiac Intervention and Endoscopy device lines, and marked progress on profitability (non-GAAP, excluding one-time expenses). Management characterized the period as one of strong outperformance. and increased its full-year revenue and non-GAAP earnings outlook.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.01 | $0.85 | $0.92 | 9.8% |
| Revenue (GAAP) | $382.5 million | $374.15 million | $338.0 million | 13.2% |
| Gross Margin (Non-GAAP) | 53.2% | 51.5% | 1.7 pp | |
| Operating Margin (Non-GAAP) | 21.2% | 20.1% | 1.1 pp | |
| Net Income (Non-GAAP) | $61.0 million | $53.8 million | 13.4% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q2 2025 earnings report.
Company Overview and Strategic Focus
Merit Medical Systems is a global provider of medical devices, supplying specialized products for cardiovascular and endoscopy procedures. Its portfolio includes tools such as vascular intervention catheters, cardiac access systems, and endoscopy devices for minimally invasive therapies. It operates both directly and through distributors in the United States and internationally.
Merit focuses on continuous product development, international market expansion, and regulatory compliance. It invests in research and development, seeks acquisitions that can enhance its product offerings, and works to comply with complex regulations in key global regions. These areas are critical for maintaining competitiveness as the company faces large multinational rivals and changing healthcare environments around the world.
Quarterly Highlights: Financial and Product Performance
The most recent quarter brought broad-based revenue growth across Merit’s product segments. Cardiovascular devices generated $364.0 million (GAAP), an 11.0% increase. Within this segment, Cardiac Intervention products—which include catheters and devices to treat heart-related conditions—jumped 23.5% year-over-year (GAAP), benefiting from product launches and acquired lines. Peripheral Intervention (devices for treating non-heart blood vessels) rose 6.3% (GAAP). The Custom Procedural Solutions category, which supplies kits tailored to specific clinical needs, increased 7.0% (GAAP), and the Original Equipment Manufacturer (OEM), now also encompassing spine devices, posted a 4.6% rise (GAAP).
The Endoscopy segment, focused on devices for diagnostic and therapeutic gastrointestinal procedures, stood out with an 81.0% rise to $18.4 million. This gain reflected contributions from recent acquisitions such as Biolife, which added StatSeal and WoundSeal hemostatic devices to the offering.
Profitability results showed a split between adjustments and the company’s core performance. Non-GAAP gross margin improved 1.7 percentage points to 53.2% and non-GAAP operating margin rose 1.1 points to 21.2%. However, GAAP operating margin slipped to 12.3%, down from 13.6% in Q2 2024. Non-GAAP EPS increased 9.8% compared to Q2 2024, while GAAP EPS fell due to these higher costs. Management particularly attributed cost changes to ongoing integration and expenses from Medical Device Regulation (MDR) requirements in Europe and a Corporate Integrity Agreement with U.S. regulators. R&D investment was $24.4 million.
The quarter saw material acquisition and compliance expenses. Integration costs associated with Biolife, Cook Medical, and EndoGastric Solutions were recognized in non-GAAP adjustments. Key items included $21.5 million in amortization of acquired intangible assets, $5.88 million in performance-based equity compensation, $2.6 million in restructuring charges, and $1.6 million in MDR compliance costs. These adjustments reflect the company’s strategic commitment to growth via acquisition and ongoing regulatory vigilance, but also introduce volatility in reported profitability.
From a cash flow perspective, Merit generated $89.1 million in free cash flow (non-GAAP) in the first six months of 2025, up 8.1% year-over-year. Capital expenditures increased to $34.8 million for the first six months of 2025 as the company invested in new products and expanded capacity. While its cash position remained strong at $341.8 million as of June 30, 2025, spending on acquisitions outpaced free cash flow (non-GAAP) in the first six months of 2025, pointing to an ongoing need for balance between investment and operational returns.
Looking Ahead: Updated Guidance and Investor Considerations
For FY2025, management raised expectations for both revenue and non-GAAP EPS. Revised revenue guidance stands at $1.495–$1.507 billion for FY2025, compared to the earlier range of $1.480–$1.501 billion. Non-GAAP EPS is now guided to $3.52–$3.72 for FY2025, up from the previous $3.28–$3.41. Product line projections call for the Cardiovascular segment to deliver $1.423–$1.434 billion (up 9–10%) for FY2025, and the Endoscopy segment to reach $72–$73 million (up 32–34%) for FY2025.
Leadership again emphasized that guidance excludes potential effects from unforeseen trade policy shifts, additional acquisitions, or major one-time events. The company continues to note possible risks from further integration-related costs, global policy changes, and recurring regulatory spending. As it approaches a leadership transition to a new CEO in October 2025, investors should monitor the pace of integration for recent acquisitions, any shifts in compliance costs, and the sustainability of margin and cash flow gains.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
