This article first appeared on GuruFocus .
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Total Revenue:$381.9 million, up 7% year-over-year on a GAAP basis and 5% on a constant currency basis.
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Organic Constant Currency Growth:2.7%, excluding divested revenue, 3.7%.
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Non-GAAP Operating Margin:Increased 47 basis points to 19.7%.
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Non-GAAP EPS Growth:9% growth, exceeding expectations.
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Free Cash Flow:$25 million, an increase of 26% year-over-year.
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Gross Margin:53.2%, down 20 basis points year-over-year.
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Operating Expenses:Increased 5%, driven by SG&A and R&D expenses.
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Net Income:$56.7 million, or $0.94 per share, compared to $52.9 million, or $0.86 per share in the prior year.
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Cash and Cash Equivalents:$488.1 million as of March 31, 2026.
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Total Debt Obligations:$747.5 million.
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Net Leverage Ratio:1.6 times on an adjusted basis.
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Viewpoint Medical Acquisition:$140 million, with $90 million paid in cash at closing.
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Fiscal Year 2026 Revenue Guidance:GAAP net revenue growth of 6.3% to 7.8% year-over-year.
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Fiscal Year 2026 Non-GAAP EPS Guidance:$4.01 to $4.15, up 5% to 8%.
Release Date: April 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Merit Medical Systems Inc ( NASDAQ:MMSI ) reported a total revenue of $381.9 million for Q1 2026, marking a 7% year-over-year increase on a GAAP basis.
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The company's non-GAAP operating margin increased by 47 basis points year-over-year to 19.7%, the highest first-quarter operating margin in its history.
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Merit Medical Systems Inc ( NASDAQ:MMSI ) achieved a 9% growth in non-GAAP EPS, exceeding the high end of expectations.
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The acquisition of Viewpoint Medical is expected to expand the annual addressable procedure opportunity for the oncology business by approximately three times.
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The introduction of the Resilience Through the Scope esophageal stent targets an attractive market opportunity in the United States, expected to contribute to growth in the endoscopy platform.
Negative Points
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The OEM sales declined 14% year-over-year in Q1, significantly lower than expected, due to inventory destocking dynamics and macroeconomic impacts.
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The acquisition of Viewpoint Medical is projected to be $0.05 dilutive to the 2026 non-GAAP EPS.
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Merit Medical Systems Inc ( NASDAQ:MMSI ) faces a 120-basis-point impact on gross margin due to tariffs, which affected Q1 results.
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The company left about $1.5 million of revenue on the table due to shipping issues related to geopolitical tensions in the Middle East.
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The company is experiencing challenges with the supply chain, which led to a recall in the cardiac business, although it is expected to be immaterial to 2026 financial results.
Q & A Highlights
Q: Are there any updates on the Rhapsody product's progress? A: Martha Aronson, President and CEO, stated that they are pleased with Rhapsody's progress. They reset their go-to-market strategy towards the end of last year and are tracking well with their 2026 guidance of $7 million for Rhapsody.
Q: Are you seeking refunds for the tariffs paid last year and earlier this year? A: An unidentified company representative confirmed that they have started the reimbursement process. However, the administration can still challenge the reimbursement through May. They are optimistic that if things remain as they are, the $15 million tariff impact could decrease.
Q: Can you explain the growth expectations for the Viewpoint Medical acquisition? A: Martha Aronson explained that the acquisition expands their market significantly, particularly in breast cancer biopsies. The OneMark system expands the addressable market three to four times. They expect sales to grow at least 20% per year, with strong gross margins.
Q: Is the worst behind for the OEM business, and how do you view its value to Merit? A: An unidentified company representative stated that they expect mid-single-digit growth for OEM in Q2. They emphasized that OEM is a valuable asset, selling their own products rather than being a contract manufacturer, and they are confident in its performance for the rest of the year.
Q: How are geopolitical issues in the Middle East affecting revenue and costs? A: An unidentified company representative mentioned that while they are seeing fuel surcharges, they have not received price increases from vendors. They left about $1.5 million in revenue on the table due to shipping issues but remain optimistic about their 2026 guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
