• Total Revenue: $355.2 million, up 9% year-over-year on a GAAP basis and 10% on a constant currency basis.
• Non-GAAP Operating Margin: 19.6% of sales, up approximately 305 basis points year-over-year.
• Non-GAAP Earnings Per Share: Increased 26% year-over-year.
• Non-GAAP Gross Margin: 53.5%, up 304 basis points year-over-year.
• Free Cash Flow: More than $185 million for fiscal year 2024, up 67% year-over-year.
• Cardiovascular Segment Revenue Growth: 8% year-over-year.
• Endoscopy Segment Revenue Growth: 88% year-over-year.
• Net Income: $56.3 million or $0.93 per share, compared to $43.1 million or $0.74 per share in the prior year period.
• Operating Expenses: Increased 9% year-over-year.
• Cash and Cash Equivalents: $376.7 million as of December 31, 2024.
• Total Debt Obligations: $747.5 million as of December 31, 2024.
• US Sales Growth: Increased nearly 14% on a constant currency basis.
• International Sales Growth: Increased 5% year-over-year on a constant currency basis.

• Warning! GuruFocus has detected 4 Warning Signs with SAM.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Merit Medical Systems Inc (NASDAQ:MMSI) reported a total revenue of $355.2 million for Q4 2024, marking a 9% year-over-year increase on a GAAP basis and a 10% increase on a constant currency basis.
• The company achieved a non-GAAP operating profit growth of 30% and a non-GAAP operating margin of 19.6%, up approximately 305 basis points year-over-year.
• Non-GAAP earnings per share grew by 26%, exceeding the high end of expectations.
• Merit Medical Systems Inc (NASDAQ:MMSI) generated strong free cash flow of more than $185 million in 2024, up 67% year-over-year.
• The Cardiovascular segment saw an 8% growth, and the Endoscopy segment experienced an 88% growth in Q4 2024.

Negative Points

• The company's EPS guidance for 2025 was perceived as conservative, partly due to accounting on the convertible note, which added $0.11 of dilution.
• International sales growth was softer than expected, particularly in the EMEA region, due to softness in Russia and distributor markets.
• Operating expenses increased by 9% in Q4 2024, driven by a 6% increase in SG&A expenses and a 26% increase in R&D expenses.
• The Endoscopy segment's guidance for 2025 was slightly lower than anticipated, attributed to the integration of two sales forces.
• Merit Medical Systems Inc (NASDAQ:MMSI) faces potential headwinds from tariffs, which are not factored into the 2025 financial guidance.

Q & A Highlights

Q: Raul, the EPS guidance seems lighter than expected. Are there factors influencing this conservative guidance? A: Raul Parra, CFO: The EPS guidance reflects two main factors: an additional $5 million in interest expense, which is about an $0.08 headwind, and a $0.11 impact from the convertible debt dilution. Excluding these, EPS growth would align more with expectations at 9% to 12%.

Q: Regarding the 2026 margin targets, does the business's current state suggest a better position within the 20% to 22% range? A: Raul Parra, CFO: We remain committed to a minimum of 5% organic constant currency growth, 20% operating margins, and $400 million in free cash flow. We are focused on executing our 2025 goals.

Q: Can you provide insights into the strong 22% OEM growth in Q4 and expectations for 2025? A: Fred Lampropoulos, CEO: OEM demand in the US remains strong, driven by reliability and quality. While we don't guide specific product categories, we have confidence in OEM's execution, and expectations are reflected in our numbers.

Q: What gross margin is implied in the 2025 operating margin guidance, and what are the drivers? A: Raul Parra, CFO: We don't provide gross margin guidance, but we expect 40 to 80 basis points improvement in operating margin. The fourth quarter saw a 300 basis point improvement due to strong execution across pricing, efficiencies, and logistics.

Q: How is the integration of Cook and EGS progressing, and are there any remaining operational tasks? A: Raul Parra, CFO: EGS is fully integrated, and the sales forces have been combined. For Cook, we continue under a TSA, with most order-to-cash processes done. Manufacturing integration is expected this year or early next year.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.