Merit Medical Q3 Profit Rises 52%, 2026 EPS Outlook Increased

Merit Medical Systems (NASDAQ: MMSI) reported a 52.4% increase in third-quarter GAAP net income as revenue grew across domestic and international markets, while the medical-device company raised its full-year non-GAAP earnings outlook.

Revenue for the three months ended September 30 rose 8.4% year over year to $416.2 million. On a constant-currency organic basis, which excludes revenue from specified acquisitions and divestitures, sales increased 8.9% to $412.5 million.

GAAP net income climbed to $42.3 million from $27.8 million, and diluted earnings per share increased 51.3% to $0.70 from $0.46. Non-GAAP net income rose 22.7% to $67.4 million, producing non-GAAP EPS of $1.12, up from $0.92.

Profitability improved at the operating level despite lower gross margins. GAAP operating margin expanded to 14.1% from 11.1%, while non-GAAP operating margin increased to 21.3% from 19.7%. GAAP gross margin declined to 48.2% from 48.5%, and non-GAAP gross margin fell to 52.8% from 53.6%.

Domestic sales lead revenue growth

Domestic revenue increased 11.0% to $255.9 million, or 11.2% on a constant-currency basis. International revenue rose 4.4% to $160.3 million, equivalent to 3.3% constant-currency growth.

For the first nine months of 2026, total revenue advanced 8.5% to $1.217 billion. Constant-currency organic revenue grew 7.3% to $1.187 billion. Domestic sales increased 9.4% to $734.5 million, while international sales rose 7.0% to $482.5 million; on a constant-currency basis, the respective increases were 9.9% and 3.7%.

Nine-month GAAP net income increased 35.0% to $122.1 million, with EPS rising 36.0% to $2.03. Non-GAAP net income grew 15.7% to $195.3 million, and non-GAAP EPS increased 16.6% to $3.25.

Operating cash flow totaled $175.2 million for the first nine months, down from $198.9 million a year earlier. Capital expenditures declined to $45.7 million from $57.3 million, resulting in free cash flow of $129.5 million compared with $141.6 million in the prior-year period.

Full-year earnings outlook increased

Merit now expects 2026 revenue of $1.635 billion to $1.642 billion, compared with its previous range of $1.631 billion to $1.643 billion. The updated range represents reported growth of approximately 7.9% to 8.4% and constant-currency growth of 7.0% to 7.5%.

The company increased its full-year non-GAAP EPS forecast to $4.33 to $4.37 from $4.25 to $4.35. The new range implies year-over-year growth of approximately 13% to 14% and includes an estimated $0.01-per-share dilutive effect from Merit’s 3.00% convertible senior notes due in 2029.

Merit does not provide guidance for other GAAP financial measures because it said acquisition costs, amortization, performance-based stock compensation, litigation-related expenses and other items cannot be predicted with reasonable certainty.

The outlook remains subject to acquisition and integration risks, including those related to Solo Pace, View Point Medical, the C2 CryoBalloon assets and Biolife. Merit also identified tariffs and trade policy, geopolitical instability, supply-chain and sterilization disruptions, reimbursement and regulatory conditions, foreign-exchange movements, debt restrictions, product adoption and cybersecurity events among the factors that could cause actual results to differ from its expectations.