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Merit Medical Systems, Inc. MMSI reported first-quarter 2025 adjusted earnings per share (EPS) of 86 cents, up 14.7% from the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate by 14.7%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
GAAP EPS for the quarter was 49 cents, down by a penny year over year.
Revenues grossed $355.4 million in the reported quarter, up 9.8% year over year on a reported basis. The metric topped the Zacks Consensus Estimate by 0.9%.
Total revenues at constant exchange rate (CER) increased 10.9% year over year, whereas CER, organic revenues increased 6%.
Per management, total revenue results included $9.2 million from the acquisition of Cook Medical's lead management product portfolio and $6.6 million from the acquisition of EndoGastric Solutions' assets.
Shares of this company lost nearly 4.9% in yesterday’s after-hours trading.
The U.S. sales amounted to $213.6 million, which increased 14.8% year over year on a reported basis and 14.4% at CER. This figure compares to our first-quarter projection of $207 million.
Per management, MMSI continued to witness strong demand from its U.S. customers in the first quarter.
International sales amounted to $141.8 million, up 3.2% year over year on a reported basis and 6.1% at CER. This figure compares to our first-quarter projection of $144.4 million.
Revenues from the Asia-Pacific (APAC) region were $62.6 million (down 0.5% year over year on a reported basis but up 1.6% at CER). This figure compares to our first-quarter projection of $64 million.
Revenues from Europe, the Middle East and Africa region were $63.3 million (up 3.7% and 5.6% year over year on a reported basis and CER, respectively). This figure compares to our first-quarter projection of $66.4 million.
Revenues from the Rest of World region were $15.9 million (up 17.7% and 29.3% year over year on a reported basis and CER, respectively). This figure compares to our first-quarter projection of $14 million.
Merit Medical operates through two segments — Cardiovascular and Endoscopy.
The Cardiovascular unit reported first-quarter revenues of $338.7 million, up 8.1% on a reported basis and 9.2% at CER year over year. This figure compares to our segmental projection of $338 million for the first quarter.
The Cardiovascular segment includes the following product categories: Peripheral Intervention (PI), Cardiac Intervention (CI), Custom Procedural Solutions (CPS) and original equipment manufacturer (OEM).
PI product line revenues were $137.3 million, up 5.5% on a reported basis and 6.8% at CER year over year. This compares to our projection of $148.6 million.
CI revenues of $99.7 million rose 10.6% on a reported basis and 12% at CER year over year. This compares to our projection of $93.5 million.
CPS revenues declined 1.2% on a reported basis and 0.3% at CER year over year to $47.9 million. This compares to our projection of $52.4 million.
OEM revenues improved 20.5% on a reported basis and 20.7% at CER year over year to $53.8 million. This compares to our projection of $43.4 million.
Endoscopy devices’ revenues totaled $16.6 million, up 64.2% year over year on a reported basis and 64.4% at CER. This figure compares to our segmental projection of $13.4 million for the first quarter.
Merit Medical Systems, Inc. price-consensus-eps-surprise-chart | Merit Medical Systems, Inc. Quote
In the quarter under review, Merit Medical’s gross profit increased 13.4% year over year to $172 million. The gross margin expanded 151 basis points (bps) to 48.4%. We had projected a 45.5% gross margin for the first quarter.
Selling, general & administrative expenses increased 13.8% year over year to $107.5 million. Research and development expenses rose 4.6% year over year to $22.5 million. Adjusted operating expenses of $129.9 million rose 12.1% year over year.
Adjusted operating profit totaled $42.1 million, reflecting a 17.5% increase from the prior-year quarter. The adjusted operating margin in the first quarter expanded 77 bps to 11.8%.
Merit Medical exited first-quarter 2025 with cash and cash equivalents of $395.5 million compared with $376.7 million at 2024-end. Total long-term debt at the end of first-quarter 2025 was $730.7 million compared with $729.6 million at 2024-end.
Net cash provided by operating activities at the end of first-quarter 2025 was $40.6 million compared with $36.2 million a year ago.
MMSI has revised its outlook for 2025.
Net revenues for 2025 are continued to be projected between $1.470 billion and $1.490 billion (reflecting an increase of 8.4-9.8% on a reported basis over the comparable reported figures of 2024). The Zacks Consensus Estimate is pegged at $1.48 billion.
However, the revenues are now expected to be up 8.7-10.2% at CER in 2025, up from the prior outlook of 8.6-10.1% over the comparable figures of 2024.
Net revenues from the Cardiovascular segment are now expected to be in the range of $1.397 billion-$1.415 billion (representing an increase of 7-9% over the comparable reported figures of 2024), up from the previous outlook of $1.395 billion-$1.413 billion (representing an increase of 7-9% over the comparable reported figures of 2024).
The Endoscopy segment’s net revenues are now projected to be between $73 million and $75 million (representing an increase of 34-37% over the comparable reported figures of 2024), down from the earlier guidance of $74.6 million and $76.7 million (representing an increase of 36-40% over the comparable reported figures of 2024).
Adjusted EPS for 2025 is now projected to be in the range of $3.29-$3.42 (representing a decrease of 5-1% over the comparable reported figures of 2024), down from the prior outlook of $3.58-$3.70 (representing an increase of 4-7% over the comparable reported figures of 2024). The Zacks Consensus Estimate is pegged at $3.66.
Merit Medical exited the first quarter of 2025 with better-than-expected results. The year-over-year uptick in the top line was impressive. The company saw revenue growth in both its segments and across the majority of the product categories within its Cardiovascular unit. Robust revenue growth in the United States and outside was impressive. The expansion of both margins bodes well for the stock.
This month, Merit Medical announced the U.S. commercial release of its Ventrax Delivery System, the latest addition to its growing electrophysiology and cardiac rhythm management portfolio. Last month, the company announced the enrollment of the first patient in its multicenter, prospective study of the Bloom Micro Occluder System for the treatment of patent ductus arteriosus in premature infants (PREEMIE study). These look promising for the stock.
However, lower revenues in the APAC region on a reported basis and CPS revenues during the quarter were disappointing. With respect to China specifically, sales decreased 10% during the quarter against a low-single-digit growth rate assumed in MMSI’s guidance. The company continues to see quarter to quarter variability in growth trends related to volume-based procurement programs as was previously cautioned by management. The tariff situation and potential retaliatory measures by other countries remain unclear, which further raises our apprehension.
Merit Medical currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Encompass Health Corporation EHC, ResMed Inc. RMD and Boston Scientific Corporation BSX.
Encompass Health, carrying a Zacks Rank #2 (Buy), reported first-quarter 2025 adjusted EPS of $1.37, beating the Zacks Consensus Estimate by 15.1%. Revenues of $1.46 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Encompass Health has a long-term estimated growth rate of 9%. EHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.3%.
ResMed reported third-quarter fiscal 2025 adjusted EPS of $2.37, beating the Zacks Consensus Estimate by 0.4%. Revenues of $1.29 billion surpassed the Zacks Consensus Estimate by 0.5%. It currently carries a Zacks Rank #2.
ResMed has a long-term estimated growth rate of 14.7%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 4.2%.
Boston Scientific reported first-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 11.9%. Revenues of $4.66 billion surpassed the Zacks Consensus Estimate by 2.3%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 13.3%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.8%.
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This article originally published on Zacks Investment Research (zacks.com).
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