MERIT MEDICAL SYSTEMS INC (MMSI)

OVERVIEW

We are a leading manufacturer and marketer of proprietary medical devices used in interventional, diagnostic and therapeutic procedures, particularly in cardiology, radiology, oncology, critical care and endoscopy. Our business consists of two product categories: foundational and therapeutic. Within each of these product categories, we sell a variety of products organized as product platforms. Our foundational product category includes product platforms such as access devices, procedural solutions, OEM products, and vascular intervention. Our therapeutic product category includes product platforms such as cardiac therapies, oncology, renal therapies, vascular intervention, OEM products and endoscopy.

For the three-month period ended June 30, 2026, we reported sales of $418.8 million, an increase of $36.4 million or 10% compared to sales for the three-month period ended June 30, 2025 of $382.5 million. For the six-month period ended June 30, 2026, we reported sales of $800.7 million, an increase of $62.9 million or 9% compared to sales for the six-month period ended June 30, 2025 of $737.8 million. Foreign currency fluctuations (net of hedging) increased our net sales by $3.0 million and $10.9 million for the three and six-month periods ended June 30, 2026, respectively, assuming applicable foreign exchange rates in effect during the comparable prior-year periods.

Gross profit as a percentage of sales increased to 51.4% for the three-month period ended June 30, 2026 compared to 48.2% for the three-month period ended June 30, 2025. Gross profit as a percentage of sales increased to 50.0% for the six-month period ended June 30, 2026 compared to 48.3% for the six-month period ended June 30, 2025.

Net income for the three-month period ended June 30, 2026 was $38.8 million, or $0.65 per share, compared to net income of $32.6 million, or $0.54 per share, for the three-month period ended June 30, 2025. Net income for the six-month period ended June 30, 2026 was $79.8 million, or $1.33 per share, compared to net income of $62.7 million, or $1.03 per share, for the six-month period ended June 30, 2025.

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Recent Developments and Trends

In addition to the trends identified in the 2025 Annual Report on Form 10-K under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview,” our business in 2026 has been impacted, and we believe will continue to be impacted, by the following recent developments and trends:

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RESULTS OF OPERATIONS

The following table sets forth certain operational data as a percentage of sales for the periods indicated:

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Sales

Sales for the three-month period ended June 30, 2026 increased by 9.5%, or $36.4 million, compared to the corresponding period in 2025. Sales for the six-month period ended June 30, 2026 increased by 8.5%, or $62.9 million, compared to the corresponding period in 2025. Listed below are the sales by product category and platform for the three and six-month periods ended June 30, 2026 and 2025 (in thousands, other than percentage changes):

Foundational Sales. Our foundational sales for the three-month period ended June 30, 2026 were $281.0 million, up 7.1% when compared to the corresponding period of 2025 of $262.4 million. Sales for the three-month period ended June 30, 2026 were favorably affected by increased sales within the following platforms:

The foregoing increase in sales for the three-month period ended June 30, 2026 was partially offset by decreased sales within our Procedural Solutions platform, which decreased by $3.8 million, or 11.9%, from the corresponding period of 2025. This decrease was driven primarily by the sale of the DualCap® product line to Health Line, partially offset by increased sales of our trays.

Our foundational sales for the six-month period ended June 30, 2026 were $536.4 million, up 6.7% when compared to the corresponding period of 2025 of $502.8 million. Sales for the six-month period ended June 30, 2026 were favorably affected by increased sales within the following platforms:

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Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and related Notes thereto set forth in Item 8 of this report.

Discussion of the year ended December 31, 2024, compared to the year ended December 31, 2023 is included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024, and is incorporated by reference into this Form 10-K.

Overview

We design, develop, manufacture, market and sell medical products for interventional and diagnostic procedures. For financial reporting purposes, we report our operations in two operating segments: cardiovascular and endoscopy. Our cardiovascular segment consists of four product categories: peripheral intervention, cardiac intervention, custom procedural solutions, and OEM. Within these product categories, we sell a variety of products, including cardiology and radiology devices (which assist in diagnosing and treating coronary arterial disease, peripheral vascular disease and other nonvascular diseases), as well as embolotherapeutic, cardiac rhythm management, electrophysiology, critical care, breast cancer localization and guidance, biopsy, and interventional oncology and spine devices. Our endoscopy segment consists of gastroenterology and pulmonology devices which assist in the palliative treatment of expanding esophageal, tracheobronchial and biliary strictures caused by malignant tumors.

For the year ended December 31, 2025, we reported sales of $1.516 billion, up $159.4 million or 11.8%, compared to 2024 sales of $1.357 billion. Our revenue results for the year ended December 31, 2025 were driven primarily by demand in the U.S. and favorable international sales trends, particularly in Europe, the Middle East and Africa (“EMEA”) region.

Gross profit as a percentage of sales was 48.7% for the year ended December 31, 2025 as compared to 47.4% for the year ended December 31, 2024.

Net income for the year ended December 31, 2025 was $128.5 million, or $2.13 per share, as compared to $120.4 million, or $2.03 per share, for the year ended December 31, 2024.

In May 2025, we completed a merger transaction with Biolife Delaware, L.L.C. (“Biolife”), a manufacturer of unique patented hemostatic devices under the brand names StatSeal® and WoundSeal®. In November 2025, pursuant to the terms of an asset purchase agreement between Merit and Pentax of America, Inc., we acquired the C2 CryoBalloon® device and related technology.

In February 2024, we introduced our “Continued Growth initiatives” Program with muti-year financial targets for the three-year period ending December 31, 2026, which reflects our commitment to better-position Merit for long-term, sustainable growth and enhanced profitability.

Results of Operations

The following table sets forth certain operational data as a percentage of sales for the years indicated:

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Sales

Listed below are the sales by product category within each operating segment for the years ended December 31, 2025, 2024 and 2023 (in thousands, other than percentage changes):

*Commencing January 1, 2025, we reorganized our sales teams and product categories to include revenues from the sale of our spine devices under our OEM product category. Revenue figures for 2024 and 2023 have been recast to reflect this realignment of our portfolio of spine products, representing approximately $22.6 million and $22.4 million in revenue, respectively, within the OEM product category to provide comparability between the reported periods.

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Cardiovascular Sales. Our cardiovascular sales for the year ended December 31, 2025 were $1.443 billion, up 10.9%, when compared to the year ended December 31, 2024 of $1.302 billion. Sales for the year ended December 31, 2025 were favorably affected by increased sales of:

Endoscopy Sales. Our endoscopy sales for the year ended December 31, 2025 were $72.9 million, up 33.0%, when compared to sales for the year ended December 31, 2024 of $54.8 million. Sales for the year ended December 31, 2025 were favorably affected by increased sales of our EsophyX® Z+ device acquired from Endogastric Solutions, Inc. in July 2024.

Geographic Sales

Listed below are sales by geography for the years ended December 31, 2025, 2024 and 2023 (in thousands, other than percentage changes):

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United States Sales: U.S. sales for the year ended December 31, 2025 were $909.5 million, or 60.0% of net sales, up 13.6% when compared to 2024. The increase in our domestic sales in 2025 was driven primarily by our U.S. direct, endoscopy, and OEM businesses.

International Sales. International sales for the year ended December 31, 2025 were $606.4 million, or 40.0% of net sales, up 9.1% when compared to 2024. The increase in our international sales during 2025 was primarily a result of higher sales in EMEA, which increased $37.9 million or 15.3%, higher Rest of World (“ROW”) sales which increased $7.0 million or 12.2%, and higher sales in our Asia Pacific region, which increased $5.8 million or 2.3%, compared to the corresponding period of 2024.

Our international sales are subject to foreign currency exchange rate fluctuations between the natural currency of a foreign country and the U.S. Dollar. Foreign currency exchange rate fluctuations, calculated by using the applicable average foreign exchange rates for the prior year increased sales 0.3% for the year ended December 31, 2025 compared to 2024.

Gross Profit

Our gross profit as a percentage of sales was 48.7%, 47.4%, and 46.4% for the years ended December 31, 2025, 2024 and 2023, respectively. The increase in gross profit as a percentage of sales for 2025, as compared to 2024, was primarily due to favorable changes in pricing and product mix, partially offset by higher intangible amortization expense as a percentage of sales associated with acquisitions and unfavorable manufacturing variances.

Operating Expenses

Selling, General and Administrative Expenses. Our selling, general and administrative (“SG&A”) expenses as a percentage of sales were 30.0%, 29.5% and 29.7% for the years ended December 31, 2025, 2024 and 2023, respectively. SG&A expenses increased $55.5 million, or 13.9%, for the year ended December 31, 2025 compared to 2024. The increase in SG&A expenses for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to an increase in labor-related costs including (i) variable compensation associated with performance-based bonus programs, commissions associated with sales growth, as well as an increase in expense associated with both performance and non-performance based equity awards; and (ii) headcount additions to support investment in the business and growth from acquisitions, including those in connection with the Cook Transaction and the Biolife Merger. In addition, higher marketing, advertising, and travel expenditures contributed to the year‑over‑year increase in 2025.

Research and Development Expenses. Our research and development (“R&D”) expenses as a percentage of sales were 6.4%, 6.4% and 6.6% for the years ended December 31 2025, 2024, and 2023, respectively. R&D expenses increased by $9.9 million or 11.3% to $97.4 million for the year ended December 31, 2025, compared to $87.5 million in 2024. The increase in R&D expenses for the ye

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