MMSI Q2 Earnings & Revenues Beat Estimates, '26 Guidance Raised

Shares of MMSI were up 4.4% during after-market trading following the second-quarter results. Year to date, the company’s shares have lost 5.5%, underperforming the industry’s gain of 1.9% and the broader S&P 500 Index’s increase of 8.2%.

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MMSI's Q2 Revenue Growth Accelerates

Revenues totaled $418.8 million in the second quarter of 2026, up 9.5% year over year on a reported basis. The metric surpassed the Zacks Consensus Estimate by 3.5%. Total revenues increased 8.7% at constant currency, while organic revenues improved 9% at constant currency.

The U.S. sales amounted to $252.1 million, increasing 11% year over year on a reported basis and 11.5% at constant currency. International revenues totaled $166.8 million, up 7.3% on a reported basis and 4.7% at constant currency.

Merit Medical's Product Mix Stays Balanced

Foundational product revenues totaled $280.9 million in the second quarter, up 7% year over year on a reported basis and 6% at constant currency. Excluding contributions from acquired products and the impact of the DualCap divestiture, organic sales increased 7.8%, driven primarily by strength in the Access and Vascular Intervention platforms.

OEM sales increased 15% year over year, reflecting a notable improvement from the first quarter. Procedural Solutions revenues declined 12% due to the DualCap divestiture but increased 5% on an organic basis. Renal Therapies revenues fell 2% at constant currency, while increasing approximately 10% excluding the impact of a product recall.

Therapeutic product revenues amounted to $137.9 million, increasing 15% year over year on a reported basis and 14% at constant currency. Organic sales advanced 11.7%, supported by solid growth across Cardiac Therapies, Endoscopy, Vascular Intervention and Oncology. Cardiac Therapies and Endoscopy revenues rose 24% and 29%, respectively, on a reported basis.

MMSI's Q2 Margin Performance Strengthens

In the quarter under review, Merit Medical’s gross profit increased 16.6% year over year to $215.2 million. The adjusted gross margin expanded 260 basis points (bps) to 55.8%. Excluding tariff refunds recognized during the quarter, the adjusted gross margin was 54.2%, up 98 bps year over year.

Management attributed gross-margin progress to pricing, product mix, acquisition performance, manufacturing transfers, automation and lower reliance on air freight. These gains helped offset tariff pressure while supporting continued investment in the business.

Selling, general and administrative expenses increased 14.3% year over year to $129.2 million. Research and development expenses rose 4.2% to $25.4 million.

Operating profit totaled $60.4 million, reflecting a 28.8% increase from the prior-year quarter. The adjusted operating margin expanded 140 bps to 22.6%. Excluding the tariff refund benefit, the adjusted operating margin was 20.9%, up 22 bps year over year.

Merit Medical's Financial Position

Merit Medical exited second-quarter 2026 with cash and cash equivalents of $448.7 million compared with $488.1 million at the end of the first quarter of 2026. Total long-term debt at the end of the first quarter was $736.3 million compared with $735.2 million in the previous quarter.

Cumulative net cash provided by operating activities at the end of second-quarter 2026 was $109.9 million compared with $123.9 million a year ago.

Merit Medical Raises 2026 Outlook

MMSI has initiated its outlook for third quarter 2026 and raised its outlook for 2026.

For the third quarter of 2026, management expects revenues of $408-$413 million, an adjusted operating margin of 19.6-21.5% and adjusted earnings of $0.98 to $1.08 per share.

For 2026, MMSI raised its revenue guidance to $1.631-$1.643 billion from $1.612-$1.634 billion. The updated range implies reported growth of 7.6-8.4% and constant-currency growth of 6.8-7.6%. Adjusted EPS guidance increased to $4.25-$4.35 from $4.01-$4.15. The Zacks Consensus Estimate for revenues and adjusted EPS is pegged at $1.62 billion and $4.07, respectively.

Wrapping Up

Merit Medical continued to advance its oncology platform with the commercial launch of SCOUT MD and preparations for the U.S. rollout of the OneMark Detection Imaging System. Together, the technologies broaden the company’s breast-care offering across diagnosis, localization and surgery. MMSI also progressed with its 2027-2029 strategic planning, focusing on product-pipeline investments, tuck-in acquisitions, portfolio rationalization, productivity and capital allocation.

On the positive side, the integrations of Biolife and the C2 CryoBalloon advanced well, with both businesses contributing above expectations in the second quarter. Merit Medical now expects Biolife to generate approximately $23 million in annualized 2026 revenues, above its initial $18-$20 million view, while C2 CryoBalloon revenues remain projected at approximately $8-$9 million.

However, execution risks remain. The company must successfully integrate View Point Medical and commercialize OneMark while managing tariff uncertainty, acquisition-related risks and potential supply-chain disruptions. Portfolio rationalization and the development of the next three-year growth plan could also require disciplined investment and operating execution.

Merit Medical’s Zacks Rank & Key Picks

Merit Medical currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks from the broader medical space are West Pharmaceutical WST, McKesson MCK and Cardinal Health CAH, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

West Pharmaceutical reported second-quarter 2026 adjusted earnings per share (EPS) of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%.

West Pharmaceutical has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.4%.

McKesson reported a fourth-quarter fiscal 2026 adjusted EPS of $11.69, which beat the Zacks Consensus Estimate by 1.1%. Revenues of $96.3 billion missed the Zacks Consensus Estimate by 5.5%.

McKesson has an estimated long-term earnings growth rate of 13.7%. MCK’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.1%.

Cardinal Health reported a third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%.

Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 10.3%.

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