Medical device company Merit Medical Systems (NASDAQ: MMSI) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 13% year on year to $384.2 million. The company’s full-year revenue guidance of $1.51 billion at the midpoint came in 0.6% above analysts’ estimates. Its non-GAAP profit of $0.92 per share was 11.4% above analysts’ consensus estimates.
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Merit Medical Systems (MMSI) Q3 CY2025 Highlights:
- Revenue: $384.2 million vs analyst estimates of $372.1 million (13% year-on-year growth, 3.2% beat)
- Adjusted EPS: $0.92 vs analyst estimates of $0.83 (11.4% beat)
- Adjusted EBITDA: $87.54 million vs analyst estimates of $76.69 million (22.8% margin, 14.2% beat)
- The company slightly lifted its revenue guidance for the full year to $1.51 billion at the midpoint from $1.50 billion
- Management raised its full-year Adjusted EPS guidance to $3.73 at the midpoint, a 2.9% increase
- Operating Margin: 11.1%, in line with the same quarter last year
- Organic Revenue rose 7.8% year on year vs analyst estimates of 4.8% growth (302.9 basis point beat)
- Market Capitalization: $4.92 billion
StockStory’s Take
Merit Medical Systems delivered a positive third quarter, with results that exceeded Wall Street’s expectations and a strong market response. Management cited robust demand across the cardiovascular segment, meaningful progress in new product commercialization, and operational execution as the main drivers. President and CEO Martha Aronson highlighted the successful U.S. launch of the Prelude Wave hydrophilic sheath introducer and the ongoing market adoption of WRAPSODY CIE, emphasizing that “the better-than-expected constant currency revenue results were driven by 7.8% constant currency organic growth.”
Looking ahead, Merit Medical Systems’ updated guidance is underpinned by continued investments in product development, expanded reimbursement for key therapies, and the integration of recent acquisitions. Management pointed to the anticipated approval of new outpatient reimbursement for WRAPSODY CIE and the addition of the C2 CryoBalloon technology as opportunities to support growth. Aronson explained that the company remains “focused on delivering continued strong execution, solid constant currency growth and strong free cash flow generation,” while closely monitoring tariff impacts and scaling recent product launches.
Key Insights from Management’s Remarks
Management attributed third quarter momentum to product innovation, targeted commercialization, and effective integration of recent acquisitions, while also noting a supportive reimbursement environment for core therapies.
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Cardiovascular segment strength: Growth in the cardiovascular segment was led by demand for peripheral intervention and cardiac intervention products, notably the WRAPSODY CIE, Embosphere, and SwiftNinja microcatheter. Focused sales organizations and recent product launches contributed to share gains in key categories.
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New product launches: The U.S. commercial release of the Prelude Wave hydrophilic sheath introducer, featuring SnapFix securement technology, enhanced the access portfolio and was highlighted as a key driver of competitive differentiation and customer adoption.
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WRAPSODY CIE adoption: The early success of WRAPSODY CIE in the inpatient hospital setting, supported by new reimbursement (NTAP), led to increased physician training and utilization. Over 500 physicians have been trained, and clinical evidence continues to expand with new registry studies and upcoming long-term data releases.
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Strategic tuck-in acquisitions: The announced acquisition of the C2 CryoBalloon device from Pentax is expected to strengthen the gastroenterology portfolio and provide additional growth opportunities, complementing earlier acquisitions and ongoing integration efforts.
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Margin expansion and cost management: Gross margin improvement was attributed to favorable product and geographic mix, pricing improvements, and operational discipline, even as tariffs remained a material headwind. Management emphasized that strong free cash flow supports both internal investment and opportunistic M&A.
Drivers of Future Performance
Management expects future performance to be driven by expanded product reimbursement, new technology integration, and ongoing focus on margin improvement amid external cost pressures.
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Expanded reimbursement and adoption: The company anticipates further growth from WRAPSODY CIE pending approval for additional outpatient reimbursement, which management believes will broaden its use and support incremental sales across the dialysis portfolio. Physician training and clinical evidence generation are expected to reinforce adoption.
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Product and portfolio expansion: Recent acquisitions, including the C2 CryoBalloon, are expected to enhance Merit Medical Systems’ presence in gastroenterology and endoscopy. Management plans to leverage its global sales footprint to accelerate integration and cross-selling of new technologies.
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Operational discipline vs. headwinds: Management noted ongoing investments in research and development and sales capacity, while also highlighting tariff-related cost pressures as a source of potential margin variability. Efforts to manage operating expenses and optimize geographic and product mix are expected to support operating margin targets.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the progress of WRAPSODY CIE’s reimbursement expansion and its impact on portfolio adoption, (2) successful integration and commercialization of the C2 CryoBalloon and other recent acquisitions, and (3) the ability to sustain gross margin improvements despite ongoing tariff and cost headwinds. Developments in international markets and execution on product launches will also be key indicators.
Merit Medical Systems currently trades at $88, up from $83.03 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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