Medical device company Merit Medical Systems (NASDAQ: MMSI) reported revenue ahead of Wall Street’s expectations in Q3 2026, with revenue rising 8.4% year on year to $416.2 million. The company expects the full year’s revenue to be around $1.64 billion, close to analysts’ consensus estimates. Its non-GAAP profit of $1.12 per share was 7.8% above analysts’ consensus estimates.

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“Merit delivered third quarter financial results that exceeded the high end of our expectations, driven primarily by 9% organic, constant currency revenue growth, excluding the impact of a strategic divestiture,” said Martha G. Aronson, Merit’s President and CEO. “We experienced strong revenue growth trends in the U.S. and better-than-expected demand for Merit’s products across both our Foundational and our Therapeutic platforms. We also delivered strong growth in both our non-GAAP operating profit and our non-GAAP earnings per share, which increased 17% and 22%, respectively, year-over-year.” Ms. Aronson continued: “We have raised our 2026 revenue and non-GAAP earnings per share guidance to reflect the stronger-than-expected results over the first nine months of 2026 and remain confident in our team’s ability to execute, with attractive constant currency growth, improving profitability, and solid cash flow generation this year. Our team remains focused on delivering our Continued Growth Initiative financial targets for the three-year period ending December 31, 2026, and, in parallel, we are finalizing our longer-term strategic plan focused on identifying opportunities to better position the company for sustainable growth, enhanced profitability and value creation for our shareholders.”

Revenue growth

Examining a company’s long-term performance can provide clues about its quality. Any business can post a good quarter or two, but many enduring ones grow for years. Over the last five years, Merit Medical Systems grew its revenue at a decent 8.8% compounded annual growth rate. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Merit Medical Systems’s annualized revenue growth of 10.2% over the last two years is above its five-year trend, suggesting some bright spots.

Organic revenue helps clarify the company’s revenue dynamics by stripping out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Merit Medical Systems’s organic revenue averaged 6.7% year-on-year growth. Total revenue growth outpaced organic growth over that period, indicating that some combination of acquisitions and foreign exchange rates boosted its headline results.

This quarter, Merit Medical Systems reported year-on-year revenue growth of 8.4%, and its $416.2 million of revenue exceeded Wall Street’s consensus estimates by 1.5%.

Looking ahead, sell-side analysts expect revenue to grow 6.3% over the next 12 months, according to S&P, a deceleration versus the last two years. Despite the slowdown, this projection is above average for the sector and implies the market is factoring in some success for its newer products and services.

Adjusted operating margin

Merit Medical Systems has managed its cost base well over the last five years. It demonstrated solid profitability for a healthcare business, producing an average adjusted operating margin of 18.4%.

Merit Medical Systems’s adjusted operating margin rose by 4.8 percentage points over the last five years, as its revenue growth provided operating leverage. More recently, the company’s trajectory has remained intact, with its margin increasing by 2 percentage points on a two-year basis.

In Q3, Merit Medical Systems reported an adjusted operating margin of 17.4%, down 2.3 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings per share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Merit Medical Systems’s EPS grew at a 14.3% compounded annual growth rate over the last five years, higher than its 8.8% annualized revenue growth. This indicates the company became more profitable on a per-share basis as it expanded.

A closer look at Merit Medical Systems’s earnings quality helps explain the drivers of its performance. As mentioned earlier, Merit Medical Systems’s adjusted operating margin declined this quarter but expanded by 4.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q3, Merit Medical Systems reported adjusted EPS of $1.12, up from $0.92 in the same quarter last year. This result beat analysts’ consensus estimates by 7.8%. Over the next 12 months, Wall Street expects Merit Medical Systems’s full-year EPS to grow 4.3% from $4.29 to $4.48, according to S&P.

Key takeaways from Merit Medical Systems’s Q3 results

Merit Medical Systems delivered some key positives in Q3: organic revenue beat analysts’ consensus estimates and EPS topped Wall Street’s expectations. Shares remained flat at $93.36 immediately after the results.

To assess Merit Medical Systems as an investment, consider its valuation, business quality and latest quarterly results. For more, read our full research report here (it’s free).