Executive Summary

MMSI delivered a strong Q3 2025: revenue $384.2M (+13.0% YoY), constant currency revenue +12.5%, and non-GAAP EPS $0.92 (+6.7% YoY), all ahead of internal expectations; GAAP EPS was $0.46 (-3.0% YoY) .
Non-GAAP gross margin reached a company record 53.6% (+267 bps YoY), with non-GAAP operating margin of 19.7% (+51 bps YoY); management attributed margin strength to mix, pricing, and lower freight/distribution costs, partially offset by ~90 bps tariff headwind .
Full-year 2025 guidance was raised: net sales to $1.502–$1.515B (11–12% YoY) and non-GAAP EPS to $3.66–$3.79 (6–10% YoY); Cardiovascular and Endoscopy segment guidance also nudged higher .
Key catalysts: NTAP for WRAPSODY CIE effective Oct 1 (inpatient), TPT application submitted for OPPS (outpatient) with list price cited at $8,000 (decision expected December; earliest effective Jan 1, 2026), plus continued product milestones (SCOUT 750k patients; Embosphere CE mark for GAE) .

What Went Well and What Went Wrong

What Went Well

Non-GAAP margins expanded: gross margin 53.6% (record), operating margin 19.7%; management highlighted favorable product/geography mix, pricing, and lower freight/distribution costs .
Revenue and EPS beat internal expectations; organic constant currency growth was 7.8% vs prior high-end of 6%, and non-GAAP EPS exceeded guidance by $0.07 .
Strategic/product milestones: NTAP effective for WRAPSODY CIE; SCOUT reached 750k patients; Embosphere CE mark for GAE in EU—broadening procedure adoption and portfolio strength .

Management quotes:

“Merit delivered better-than-expected financial performance in the third quarter, with top and bottom-line results exceeding the high-end of the company’s expectations.” — CEO Martha Aronson .
“Our gross margin was 53.6%, up 267 basis points year-over-year and representing the highest gross margin in the company’s history.” — CFO Raul Parra .
“Our application for TPT included Rhapsody’s list price of $8,000.” — CEO Martha Aronson .

What Went Wrong

GAAP EPS declined to $0.46 (-3.0% YoY) due to higher SG&A and R&D, performance-based stock comp, and other non-cash and regulatory costs; non-GAAP adjustments were material (e.g., amortization of intangibles, performance-based SBC) .
China softness: sales -1% YoY despite VBP impact improving; OEM demand outside the U.S. remained a macro headwind .
Tariffs remained a headwind; Q3 higher-than-expected tariff impact led to revising high-end full-year tariff assumption to ~$7.6M (COGS) and low-end assumption to ~$16M, introducing uncertainty into Q4 and FY25 .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$355.4	$382.5	$384.2
Non-GAAP EPS ($)	$0.86	$1.01	$0.92
GAAP Diluted EPS ($)	N/A	N/A	$0.46
Non-GAAP Gross Margin %	53.4%	53.2%	53.6%
Non-GAAP Operating Margin %	19.3%	21.2%	19.7%

Estimates vs Actuals (Wall Street consensus – S&P Global):

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue Consensus Mean ($USD Millions)*	$352.6	$375.0	$371.7
Revenue Actual ($USD Millions)	$355.4	$382.5	$384.2
Primary EPS Consensus Mean ($)*	$0.749	$0.851	$0.826
Non-GAAP EPS Actual ($)	$0.86	$1.01	$0.92
EBITDA Consensus Mean ($USD Millions)*	$71.6	$77.6	$76.7
EBITDA Actual ($USD Millions)*	$71.35	$78.04	$73.96

Values retrieved from S&P Global.*

Segment Revenue (Q3 2025 vs Q3 2024; Reported and Constant Currency):

Segment	Q3 2024 Reported ($000s)	Q3 2025 Reported ($000s)	Reported % Chg	CC Adj ($000s)	Q3 2025 CC ($000s)	CC % Chg
Peripheral Intervention	133,083	144,781	+8.8%	(602)	144,179	+8.3%
Cardiac Intervention	90,240	116,682	+29.3%	(719)	115,963	+28.5%
Custom Procedural Solutions	50,455	54,136	+7.3%	(441)	53,695	+6.4%
OEM	49,077	50,826	+3.6%	(150)	50,676	+3.3%
Cardiovascular Total	322,855	366,425	+13.5%	(1,912)	364,513	+12.9%
Endoscopy Devices	16,990	17,732	+4.4%	(14)	17,718	+4.3%
Total Company	339,845	384,157	+13.0%	(1,926)	382,231	+12.5%

KPIs (Q3 2025 vs Q3 2024):

KPI (In $USD Millions unless noted)	Q3 2024	Q3 2025
Depreciation & Amortization	$26.4	$31.3
Stock Comp (performance-based)	$3.7	$9.0
Stock Comp (not performance-based)	$3.1	$4.6
Operating Cash Flow	$47.3	$75.0
Capex – Property & Equipment	$9.4	$22.4

Balance Sheet (selected):

Cash & Equivalents: $392.5M (Sep 30, 2025); Total Debt: $747.5M; Available borrowing capacity ~$697M .

Guidance Changes

Metric	Period	Previous Guidance (Jul 30, 2025)	Current Guidance (Oct 30, 2025)	Change
Net Sales ($B)	FY 2025	$1.495 – $1.507	$1.502 – $1.515	Raised
Cardiovascular Segment ($B)	FY 2025	$1.423 – $1.434	$1.430 – $1.441	Raised
Endoscopy Segment ($M)	FY 2025	$72.0 – $73.0	$72.0 – $74.0	Upper end raised
Non-GAAP EPS ($)	FY 2025	$3.52 – $3.72	$3.66 – $3.79	Raised
Net Sales CC growth (%)	FY 2025	9.7% – 10.6%	10.3% – 11.2%	Raised
Non-GAAP Op Margin (%)	FY 2025	19% – 20%	19.7% – 20.25%	Raised
Free Cash Flow ($M)	FY 2025	≥ $150	≥ $175	Raised
Non-GAAP tax rate (%)	FY 2025	22.5%	~23%	Raised
Tariff assumption (COGS, high-end)	FY 2025	~$7.0M	~$7.6M	Raised slightly
Tariff assumption (COGS, low-end)	FY 2025	~$26.3M	~$16.0M	Lowered

Q4 2025 color: constant currency sales growth +5.5% to +9.1%; non-GAAP OM ~18.8% to 20.8%; non-GAAP EPS $0.87–$1.01 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025, Q2 2025)	Current Period (Q3 2025)	Trend
WRAPSODY CIE reimbursement	Q1: NTAP proposed approved; TPT path outlined; target $5,800 inpatient cost coverage . Q2: Clarified APC vs TPT filing; TPT submission planned by Sep 1; outpatient add-on delayed 6 months .	NTAP effective Oct 1 (inpatient); TPT application submitted with $8,000 list price; decision expected Dec; earliest effective Jan 1, 2026 .	Positive progress; clarity and execution improving
Margins	Q1: non-GAAP GM 53.4%; OM 19.3% . Q2: non-GAAP GM 53.2%; OM 21.2% (record) .	Non-GAAP GM 53.6% (record); OM 19.7%; beat internal expectations .	Sustained strength with record gross margin
Tariffs/Macro	Q1: FY25 tariff impact est. $26.3M; mitigation plans (CGI) . Q2: high-end assumption ~$7.0M; low-end ~$26.3M; uncertainty noted .	Revised high-end ~$7.6M; low-end ~$16M; Q3 tariff headwind ~90 bps on GM; Q4 assumptions unchanged .	Headwind persists but assumptions refined
China demand	Q1: -10% sales; macro softness; OEM variability . Q2: -6% sales; OEM ex-U.S. soft .	-1% sales; VBP impact better than expected; OEM ex-U.S. still soft .	Stabilizing; still soft ex-U.S. OEM
Cardiac Intervention	Q1: CI +12% (organic +2%); Cook portfolio contributed . Q2: CI +23%; organic ~10% .	CI +29%; organic +10.9%; strong EP/CRM and intervention categories .	Accelerating organic growth
Product milestones	Q1: WAVE data cadence; SIR 12-mo AVF data . Q2: VIVA 24-mo data upcoming; ongoing clinical programs .	SCOUT 750k patients; Embosphere CE mark for GAE; RAP registries advancing .	Expanding clinical/market footprint
MDR/regulatory costs	Q1/Q2: Ongoing MDR expenses .	MDR expenses persist; management hopes for regulatory improvements; continued compliance .	Ongoing cost; watching policy

Management Commentary

“We have increased our 2025 revenue and non-GAAP earnings per share guidance to reflect the stronger-than-expected third quarter results and remain confident in our team’s ability to deliver strong execution…” — CEO Martha Aronson .
“Our gross margin was 53.6%, up 267 basis points year-over-year… driven primarily by mix, pricing and freight/distribution expense improvements” — CFO Raul Parra .
“We believe we meet the required cost criteria. Our application for TPT included Rhapsody’s list price of $8,000.” — CEO Martha Aronson .
“We now expect to generate free cash flow of at least $175 million in 2025, inclusive of ~$90–$100 million in capex.” — CFO Raul Parra .

Q&A Highlights

WRAPSODY CIE: Management reiterated confidence in meeting TPT cost criteria and disclosed $8,000 list price; NTAP started Oct 1. Outpatient add-on earliest effective Jan 1, 2026, pending CMS decision .
Gross margin durability: Kitchen-sink approach via mix, pricing, ops efficiency; acknowledged ~90 bps tariff drag in Q3 but reiterated focus on CGI to sustain margin trajectory .
Cardiac Intervention strength: Focused sales groups and Cook integration driving EP/CRM and intervention growth; CPS above expectations; OEM ex-U.S. soft .
China: Soft macro conditions; VBP impact improved; OEM variability expected; no major customer losses noted .
SG&A uptick: Higher commissions on stronger sales, variable bonus accrual true-up, earlier-than-expected distributor buyout in Europe; continued investment with discipline .

Estimates Context

Q3 results beat consensus revenue ($384.2M actual vs $371.7M estimate*) and beat consensus EPS ($0.92 non-GAAP actual vs $0.826 estimate*). EBITDA was slightly below consensus ($73.96M actual* vs $76.7M estimate*). Q1 and Q2 also beat revenue and EPS consensus, supporting momentum into Q4 .
Values retrieved from S&P Global.*

Implications: Consensus likely moves up for FY25 revenue and EPS following guidance raise; near-term models should incorporate NTAP contribution, margin strength, and updated tariff assumptions .

Key Takeaways for Investors

Non-GAAP margins continue to trend above plan; record gross margin underscores pricing discipline and favorable mix amid tariff headwinds .
Guidance raise across revenue, EPS, and operating margin reflects Q3 outperformance; management’s Q4 outlook suggests continued execution, albeit with typical seasonality .
WRAPSODY CIE reimbursement path is progressing: NTAP live for inpatient; TPT application submitted with supportive pricing; potential outpatient add-on from Jan 2026—key multi-year growth lever .
Portfolio momentum in Cardiac Intervention, plus milestones in SCOUT and Embosphere GAE, enhance competitive positioning across high-margin categories .
China remains a watch item; softness tied to macro and OEM ex-U.S.; VBP impact improved—monitor trajectory into 2026 .
FCF outlook raised to ≥$175M supports continued tuck-ins and internal investments (distribution center, R&D), balancing growth and shareholder value .
Tariff uncertainty persists, but assumptions refined; models should bracket outcomes using updated high-/low-end scenarios and consider CGI mitigation efforts .

Additional Press Releases (Q3 2025)

SCOUT Radar Localization reached 750,000 patients globally; expanding adoption and capabilities (SCOUT MD) .
Embosphere microspheres received CE mark for genicular artery embolization in EU for knee osteoarthritis, with durable pain relief evidence .

Non-GAAP Adjustments and Reconciliations

Notable Q3 non-GAAP adjustments included amortization of intangibles ($19.2M pre-tax in cost of sales), performance-based SBC ($9.0M pre-tax), and amortization of long-term debt issuance costs ($1.4M pre-tax), among others .

MERIT MEDICAL SYSTEMS INC (MMSI)·Q3 2025 Earnings Summary