MERIT MEDICAL SYSTEMS INC

Previous wording

For the year ended December 31, 2024, we reported sales of $1.357 billion, up $99.1 million or 7.9%, compared to 2023 sales of $1.257 billion. Our revenue results for the year ended December 31, 2024 were driven primarily by demand in the U.S. and favorable international sales trends, particularly in Europe, the Middle East and Africa (“EMEA”) and in the “Rest of World” (“ROW”) regions.

Current wording

For the year ended December 31, 2025, we reported sales of $1.516 billion, up $159.4 million or 11.8%, compared to 2024 sales of $1.357 billion. Our revenue results for the year ended December 31, 2025 were driven primarily by demand in the U.S. and favorable international sales trends, particularly in Europe, the Middle East and Africa (“EMEA”) region.

Previous wording

Gross profit as a percentage of sales was 47.4% for the year ended December 31, 2024 as compared to 46.4% for the year ended December 31, 2023.

Current wording

Gross profit as a percentage of sales was 48.7% for the year ended December 31, 2025 as compared to 47.4% for the year ended December 31, 2024.

Previous wording

Net income for the year ended December 31, 2024 was $120.4 million, or $2.03 per share, as compared to $94.4 million, or $1.62 per share, for the year ended December 31, 2023.

Current wording

Net income for the year ended December 31, 2025 was $128.5 million, or $2.13 per share, as compared to $120.4 million, or $2.03 per share, for the year ended December 31, 2024.

Previous wording

On February 28, 2024, we introduced our “Continued Growth initiatives” Program with muti-year financial targets for the three-year period ending December 31, 2026, which reflects our commitment to better-position Merit for long-term, sustainable growth and enhanced profitability.

Current wording

In February 2024, we introduced our “Continued Growth initiatives” Program with muti-year financial targets for the three-year period ending December 31, 2026, which reflects our commitment to better-position Merit for long-term, sustainable growth and enhanced profitability.

Previous wording

Cardiovascular Sales. Our cardiovascular sales for the year ended December 31, 2024 were $1.302 billion, up 6.7%, when compared to the year ended December 31, 2023 of $1.221 billion. Sales for the year ended December 31, 2024 were favorably affected by increased sales of:

Current wording

Cardiovascular Sales. Our cardiovascular sales for the year ended December 31, 2025 were $1.443 billion, up 10.9%, when compared to the year ended December 31, 2024 of $1.302 billion. Sales for the year ended December 31, 2025 were favorably affected by increased sales of:

Previous wording

Endoscopy Sales. Our endoscopy sales for the year ended December 31, 2024 were $54.8 million, up 48.8%, when compared to sales for the year ended December 31, 2023 of $36.8 million. Sales for the year ended December 31, 2024 were favorably affected by sales ofour recently-acquired EsophyX® Z+ Device.

Current wording

Endoscopy Sales. Our endoscopy sales for the year ended December 31, 2025 were $72.9 million, up 33.0%, when compared to sales for the year ended December 31, 2024 of $54.8 million. Sales for the year ended December 31, 2025 were favorably affected by increased sales of our EsophyX® Z+ device acquired from Endogastric Solutions, Inc. in July 2024.

Previous wording

United States Sales:* *U.S. sales for the year ended December 31, 2024 were $800.8 million, or 59.0% of net sales, up 10.2% when compared to 2023. The increase in our domestic sales in 2024 was driven primarily by our U.S. direct, OEM and endoscopy businesses.

Current wording

United States Sales:* *U.S. sales for the year ended December 31, 2025 were $909.5 million, or 60.0% of net sales, up 13.6% when compared to 2024. The increase in our domestic sales in 2025 was driven primarily by our U.S. direct, endoscopy, and OEM businesses.

Previous wording

International Sales. International sales for the year ended December 31, 2024 were $555.7 million, or 41.0% of net sales, up 4.8% when compared to 2023. The increase in our international sales during 2024 was primarily a result of higher sales in EMEA, which increased $11.2 million or 4.8%, higher ROW sales which increased $8.9 million or 18.1%, and higher sales in our Asia Pacific region, which increased $5.3 million or 2.1%, compared to the corresponding period of 2023.

Current wording

International Sales. International sales for the year ended December 31, 2025 were $606.4 million, or 40.0% of net sales, up 9.1% when compared to 2024. The increase in our international sales during 2025 was primarily a result of higher sales in EMEA, which increased $37.9 million or 15.3%, higher Rest of World (“ROW”) sales which increased $7.0 million or 12.2%, and higher sales in our Asia Pacific region, which increased $5.8 million or 2.3%, compared to the corresponding period of 2024.

Previous wording

Our international sales are subject to foreign currency exchange rate fluctuations between the natural currency of a foreign country and the U.S. Dollar. Foreign currency exchange rate fluctuations, calculated by using the applicable average foreign exchange rates for the prior year decreased sales (0.6)% for the year ended December 31, 2024 compared to 2023.

Current wording

Our international sales are subject to foreign currency exchange rate fluctuations between the natural currency of a foreign country and the U.S. Dollar. Foreign currency exchange rate fluctuations, calculated by using the applicable average foreign exchange rates for the prior year increased sales 0.3% for the year ended December 31, 2025 compared to 2024.

Previous wording

Our gross profit as a percentage of sales was 47.4%, 46.4%, and 45.1% for the years ended December 31, 2024, 2023 and 2022, respectively. The increase in gross profit as a percentage of sales for 2024, as compared to 2023, was primarily due to increased sales combined with favorable changes in standard costs and product mix, partially offset by higher intangible amortization expense as a percentage of sales associated with acquisitions.

Current wording

Our gross profit as a percentage of sales was 48.7%, 47.4%, and 46.4% for the years ended December 31, 2025, 2024 and 2023, respectively. The increase in gross profit as a percentage of sales for 2025, as compared to 2024, was primarily due to favorable changes in pricing and product mix, partially offset by higher intangible amortization expense as a percentage of sales associated with acquisitions and unfavorable manufacturing variances.

Previous wording

Selling, General and Administrative Expenses. Our selling, general and administrative (“SG&A”) expenses as a percentage of sales were 29.5%, 29.7% and 29.8% for the years ended December 31, 2024, 2023 and 2022, respectively. SG&A expenses increased $26.1 million, or 7.0%, for the year ended December 31, 2024 compared to 2023. The increase in SG&A expenses for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily related to increased labor-related costs associated with an increase in headcount and higher variable compensation linked to company performance, an increase of stock-based compensation expense associated with new equity grants and variability in our stock price, and an increase in travel related costs associated with our sales and marketing activities, partially offset by a decrease in consulting costs primarily associated with our Foundations for Growth Program which ended in 2023.

Current wording

Selling, General and Administrative Expenses. Our selling, general and administrative (“SG&A”) expenses as a percentage of sales were 30.0%, 29.5% and 29.7% for the years ended December 31, 2025, 2024 and 2023, respectively. SG&A expenses increased $55.5 million, or 13.9%, for the year ended December 31, 2025 compared to 2024. The increase in SG&A expenses for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to an increase in labor-related costs including (i) variable compensation associated with performance-based bonus programs, commissions associated with sales growth, as well as an increase in expense associated with both performance and non-performance based equity awards; and (ii) headcount additions to support investment in the business and growth from acquisitions, including those in connection with the Cook Transaction and the Biolife Merger. In addition, higher marketing, advertising, and travel expenditures contributed to the year‑over‑year increase in 2025.

Previous wording

Research and Development Expenses. Our research and development (“R&D”) expenses as a percentage of sales were 6.4%, 6.6% and 6.6% for the years ended December 31 2024, 2023, and 2022, respectively. R&D expenses increased by $4.7 million or 5.7% to $87.5 million for the year ended December 31, 2024, compared to $82.7 million in 2023. The increase in R&D expenses for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily related to labor-related costs consistent with an increase in headcount and an increase materials and scrap utilized in R&D, partially offset by lower regulatory costs related to Medical Device Rgulation in the E.U.

Current wording

Research and Development Expenses. Our research and development (“R&D”) expenses as a percentage of sales were 6.4%, 6.4% and 6.6% for the years ended December 31 2025, 2024, and 2023, respectively. R&D expenses increased by $9.9 million or 11.3% to $97.4 million for the year ended December 31, 2025, compared to $87.5 million in 2024. The increase in R&D expenses for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily related to increased labor-related costs including variable compensation associated with bonus and equity award programs and increased consulting services and clinical trials.

Previous wording

Contingent Consideration Expense. For the years ended December 31, 2024, 2023 and 2022, we recorded $0.4 million, $1.7 million and $4.6 million, respectively, of net contingent consideration expense from changes in the estimated fair value of our contingent consideration obligations stemming from our previously disclosed business acquisitions. The expense in each fiscal year relates to changes in the probability and timing of achieving certain revenue and operational milestones, as well as expense for the passage of time.

Current wording

Contingent Consideration Expense. For the years ended December 31, 2025, 2024 and 2023, we recorded $1.0 million, $0.4 million and $1.7 million, respectively, of net contingent consideration expense from changes in the estimated fair value of our contingent consideration obligations stemming from our previously disclosed business acquisitions. The expense in each fiscal year relates to changes in the probability and timing of achieving certain revenue and operational milestones, as well as expense for the passage of time.

Previous wording

Cardiovascular Operating Income. Our cardiovascular operating income for the year ended December 31, 2024 was $150.2 million, compared to cardiovascular operating income of $114.4 million for the year ended December 31, 2023. This increase in cardiovascular operating income was primarily related to higher sales and gross profit, decreased acquired in-process research and development charges, and decreased contingent consideration expense ($0.4 million in 2024 compared to $1.7 million in 2023), partially offset by higher SG&A and R&D expenses.

Current wording

Cardiovascular Operating Income. Our cardiovascular operating income for the year ended December 31, 2025 was $166.1 million, compared to cardiovascular operating income of $150.2 million for the year ended December 31, 2024. This increase in cardiovascular operating income was primarily related to increased sales and gross profit, partially offset by increased SG&A and R&D expenses.

Previous wording

Endoscopy Operating Income. Our endoscopy operating income for the year ended December 31, 2024 was $5.5 million, compared to operating income of $9.5 million for the year ended December 31, 2023. This decrease in endoscopy operating income relative to 2023 was primarily due to higher SG&A expense associated with the acquisition and integration of operations acquired from EGS and higher R&D expenses, partially offset by higher sales.

Current wording

Endoscopy Operating Income. Our endoscopy operating income for the year ended December 31, 2025 was $18.6 million, compared to operating income of $5.5 million for the year ended December 31, 2024. This increase in endoscopy operating income relative to 2024 was primarily due to increased sales and gross profit.

Previous wording

Our other expense for the years ended December 31, 2024, 2023 and 2022 was $5.7 million, $11.9 million, and $4.9 million, respectively. The decrease in other expense for 2024 compared to 2023 was principally the result of an increase in interest income associated with and increased cash and cash equivalents and reduced borrowings under the Amended Fourth A&R Credit Agreement, partially offset by interest expense associated with outstanding convertible debt.

Current wording

Our other expense for the years ended December 31, 2025, 2024 and 2023 was $13.8 million, $5.7 million, and $11.9 million, respectively. The increase in other expense for 2025 compared to 2024 was principally the result of a decrease in interest income associated with decreased average cash and cash equivalents during the period, partially offset by reduced interest expense associated with borrowings under the Amended Fourth A&R Credit Agreement.

Previous wording

Our provision for income taxes for the years ended December 31, 2024, 2023 and 2022 was a tax expense of $29.6 million, $17.7 million and $8.1 million, respectively, which resulted in an effective income tax rate of 19.8%, 15.8%, and 9.8%, respectively. The increase in the effective income tax rate for 2024 compared to 2023 was primarily the result of decreased benefit from items such as stock-based compensation and foreign tax credit utilization.

Current wording

Our provision for income taxes for the years ended December 31, 2025, 2024 and 2023 was a tax expense of $42.4 million, $29.6 million and $17.7 million, respectively, which resulted in an effective income tax rate of 24.8%, 19.8%, and 15.8%, respectively. The increase in the effective income tax rate for 2025 compared to 2024 was primarily the result of decreased benefit from discrete items such as share-based compensation and contingent liabilities and increased permanent tax differences in various jurisdictions and items related to the budget reconciliation package enacted during the period and retroactive to the beginning of the year.

Previous wording

Our net income for the years ended December 31, 2024, 2023 and 2022 was $120.4 million, $94.4 million, and $74.5 million, respectively. The increase in net income for 2024, when compared to 2023, was primarily related to higher sales, higher gross margin as a percentage of sales, decreased contingent consideration expense ($0.4 million in 2024 compared to $1.7 million in 2023), decreased acquired in-process research and development expense ($0 in 2024 compared to $1.6 million in 2023) and decreased other expenses; partially offset by higher SG&A, R&D, and income tax expense.

Current wording

Our net income for the years ended December 31, 2025, 2024 and 2023 was $128.5 million, $120.4 million, and $94.4 million, respectively. The increase in net income for 2025, when compared to 2024, was primarily related to higher sales and higher gross margin as a percentage of sales; partially offset by higher SG&A, R&D, other expense and income tax expense.

Previous wording

Our most significant contractual obligations as of December 31, 2024 included total long-term debt obligations of $747.5 million, interest payments on this debt, contingent consideration liabilities of $3.5 million, of which $0.4 million is recorded in current liabilities, and operating lease liabilities of $65.1 million, of which $10.3 million is recorded in current liabilities. Additional information about these obligations is contained in Notes 8, 15 and 17 to our consolidated financial statements set forth in Item 8 of this report.

Current wording

Our most significant contractual obligations as of December 31, 2025 included total long-term debt obligations of $747.5 million, interest payments on this debt, contingent consideration liabilities of $4.5 million, of which $3.2 million is recorded in current liabilities, and operating lease liabilities of $87.5 million, of which $10.9 million is recorded in current liabilities. Additional information about these obligations is contained in Notes 8, 15 and 17 to our consolidated financial statements set forth in Item 8 of this report.

Previous wording

At December 31, 2024 and 2023, we had cash, cash equivalents and restricted cash of $378.8 million and $589.1 million respectively, of which $50.6 million and $48.7 million, respectively, were held by foreign subsidiaries. We do not consider our foreign earnings to be permanently reinvested. As of December 31, 2024 and 2023, approximately $2.1 million and $2.1 million respectively, of our cash and cash equivalents represents restricted cash for the payment of certain import and other taxes for our subsidiary in China. Cash held by our subsidiary in China is subject to local laws and regulations that require government approval for the transfer of such funds to entities located outside of China. As of December 31, 2024 and 2023, we had cash and cash equivalents, including restricted cash, of $18.1 million and $17.6 million, respectively, held by our subsidiary in China.

Current wording

At December 31, 2025 and 2024, we had cash, cash equivalents and restricted cash of $448.5 million and $378.8 million respectively, of which $66.0 million and $50.6 million, respectively, were held by foreign subsidiaries. We do not consider our foreign earnings to be permanently reinvested. As of December 31, 2025 and 2024, approximately $2.1 million and $2.1 million respectively, of our cash and cash equivalents represents restricted cash for the payment of certain import and other taxes for our subsidiary in China. Cash held by our subsidiary in China is subject to local laws and regulations that require government approval for the transfer of such funds to entities located outside of China. As of December 31, 2025 and 2024, cash and cash equivalents, including restricted cash, held by our subsidiary in China was $20.0 million and $18.1 million, respectively.

Previous wording

Cash flows provided by operating activities. We generated cash from operating activities of $220.8 million, $145.2 million and $114.3 million during the years ended December 31, 2024, 2023 and 2022, respectively. Net cash provided by operating activities increased $75.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. Significant changes in operating assets and liabilities affecting cash flows during these years included:

Current wording

Cash flows provided by operating activities. We generated cash from operating activities of $297.4 million, $220.8 million and $145.2 million during the years ended December 31, 2025, 2024 and 2023, respectively. Net cash provided by operating activities increased $76.6 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. Significant changes in operating assets and liabilities affecting cash flows during these years included:

Previous wording

Cash flows used in investing activities. We used cash in investing activities of $368.7 million, $175.3 million, and $57.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. We invested in capital expenditures for property and equipment of $35.1 million, $34.3 million, and $45.0 million for the years ended December 31, 2024, 2023 and 2022, respectively. Capital expenditures in each period were primarily related to investment in property and equipment to support development and production of our products. Historically, we have incurred significant expenses in connection with facility construction, production automation, product development and the introduction of new products. We anticipate that we will spend approximately $55 to $60 million in 2025 for property and equipment.

Current wording

Cash flows used in investing activities. We used cash in investing activities of $247.4 million, $368.7 million, and $175.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. We invested in capital expenditures for property and equipment of $81.7 million, $35.1 million, and $34.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. Capital expenditures in each period were primarily related to investment in property and equipment to support development and production of our products and in 2025 includes costs for the construction of a new distribution facility in South Jordan, Utah. Historically, we have incurred significant expenses in connection with facility construction, production automation, product development and the introduction of new products. We anticipate that we will spend approximately $80 to $100 million in 2026 for property and equipment.

Previous wording

Cash outflows invested in acquisitions and other equity investments for the year ended December 31, 2024 were $320.2 million and were primarily related to payments required by our asset purchase agreements with Cook Medical Holdings LLC ($210.0 million), Endogastric Solutions, Inc. ($105.0 million) and Scholten Surgical Instruments, Inc. ($3.0 million). Cash outflows invested in acquisitions for the year ended December 31, 2023 were $134.5 million and were primarily related to payments required by our asset purchase agreements with AngioDynamics, Inc. ($100 million), Bluegrass Vascular Technologies, Inc. ($32.7 million) and ART ($1.5 million). Cash outflows invested in acquisitions for the year ended December 31, 2022 were $6.9 million and were primarily related to our $3.0 million upfront payment in our purchase of Restore Endosystems LLC and our $2.5 million payment in our purchase of BioTrace Medical, Inc.

Current wording

Cash outflows invested in acquisitions for the year ended December 31, 2025 were $144.8 million and were primarily related to payments required by our merger agreement with Biolife LLC ($120.0 million) and our asset purchase agreement with Pentax of America, Inc. ($19 million). Cash outlfows invested in acquisitions for the year ended December 31, 2024 were $320.2 million and were primarily related to payments required by our asset purchase agreements with Cook Medical Holdings LLC ($210.0 million), Endogastric Solutions, Inc. ($105.0 million) and Scholten Surgical Instruments, Inc. ($3.0 million). Cash outflows invested in acquisitions for the year ended December 31, 2023 were $134.5 million and were primarily related to payments required by our asset purchase agreements with AngioDynamics, Inc. ($100 million), Bluegrass Vascular Technologies, Inc. ($32.7 million) and ART ($1.5 million).

Previous wording

Cash flows provided by (used in) financing activities. Cash (used in) provided by financing activities for the years ended December 31, 2024, 2023 and 2022 was $(60.0) million, $559.3 million, and $(60.3) million, respectively. In 2024 we decreased our net borrowings under our Amended Fourth A&R Credit Agreement by $99.1 million and had cash proceeds from the issuance of common stock of $40.9 million. In 2023 we issued convertible debt of $747.5 million, paid $66.5 million for the purchase of capped call options, and decreased our net borrowings under our Amended Fourth A&R Credit Agreement by $99.1 million. In 2022 we decreased our net borrowings under our Third Amended Credit Agreement by $44.9 million and paid contingent consideration of $32.9 million, which is classified as a financing activity, principally related to our acquisitions of Cianna Medical Inc. (“Cianna Medical”) and Vascular Insights LLC (“Vascular Insights”).

Current wording

Cash flows provided by (used in) financing activities. Cash provided by (used in) financing activities for the years ended December 31, 2025, 2024 and 2023 was $16.0 million, $(60.0) million, and $559.3 million, respectively. In 2025 we had cash proceeds from the issuance of common stock of $28.2 million. In 2024 we decreased our net borrowings under our Amended Fourth A&R Credit Agreement by $99.1 million and had cash proceeds from the issuance of common stock of $40.9 million. In 2023 we issued convertible debt of $747.5 million, paid $66.5 million for the purchase of capped call options, and decreased our net borrowings under our Amended Fourth A&R Credit Agreement by $99.1 million.

Previous wording

As of December 31, 2024, we had outstanding borrowings of $747.5 million and issued letter of credit guarantees of $2.9 million, with additional available borrowings of approximately $697 million under the Amended Fourth A&R Credit Agreement, based on the leverage ratio required pursuant to the Amended Fourth A&R Credit Agreement. Our interest rate as of December 31, 2024 was a fixed rate of 3.0% on our Convertible Notes. Our interest rate as of December 31, 2023 was a fixed rate of 3.0% on our Convertible Notes, a fixed rate of 3.39% on $75 million as a result of an interest rate swap, and a variable floating rate of 7.21%% on $24.1 million. The foregoing fixed rates are exclusive of potential future changes in the applicable margin associated with our variable rate debt under the Amended Fourth A&R Credit Agreement. See Note 8Debt and Note 9Derivatives to our consolidated financial statements set forth in Item 8 of this report for additional details regarding the Amended Fourth A&R Credit Agreement, Convertible Notes, and our interest rate swap.

Current wording

As of December 31, 2025, we had outstanding borrowings of $747.5 million and issued letter of credit guarantees of $2.8 million, with additional available borrowings of approximately $697 million under the Amended Fourth A&R Credit Agreement, based on the leverage ratio required pursuant to the Amended Fourth A&R Credit Agreement. Our interest rate as of December 31, 2025 and 2024 was a fixed rate of 3.0% on our Convertible Notes. See Note 8Debt to our consolidated financial statements set forth in Item 8 of this report for additional details regarding the Amended Fourth A&R Credit Agreement and our Convertible Notes.

Previous wording

Inventory Obsolescence.* *Our management reviews inventory quantities on hand and records provisions for estimated excess, slow moving and obsolete inventory. Based on this review, we provide adjustments for any slow-moving finished good products or raw materials that we believe will expire prior to being sold or used to produce a finished good and any products that are unmarketable. This review of inventory quantities for unmarketable and/or slow moving products is based on forecasted product demand derived from our historical experience of product sales and production raw material usage. If market conditions become less favorable than those projected by our management, additional inventory write-downs may be required. During the years ended December 31, 2024, 2023 and 2022, we recorded obsolescence expense of approximately $10.6 million, $11.5 million, and $9.8 million, respectively, and wrote off approximately $12.0 million, $11.9 million, and $10.2 million, respectively. Based on this historical trend, we believe that our inventory balances as of December 31, 2024 have been accurately adjusted for any unmarketable and/or slow moving products that may expire prior to being sold.

Current wording

Inventory Obsolescence.* *Our management reviews inventory quantities on hand and records provisions for estimated excess, slow moving and obsolete inventory. Based on this review, we provide adjustments for any slow-moving finished good products or raw materials that we believe will expire prior to being sold or used to produce a finished good and any products that are unmarketable. This review of inventory quantities for unmarketable and/or slow moving products is based on forecasted product demand derived from our historical experience of product sales and production raw material usage. If market conditions become less favorable than those projected by our management, additional inventory write-downs may be required. During the years ended December 31, 2025, 2024 and 2023, we recorded obsolescence expense of approximately $11.2 million, $10.6 million, and $11.5 million, respectively, and wrote off approximately $9.0 million, $12.0 million, and $11.9 million, respectively. Based on this historical trend, we believe that our inventory balances as of December 31, 2025 have been accurately adjusted for any unmarketable and/or slow moving products that may expire prior to being sold.

Previous wording

Valuation of Goodwill and Intangible Assets.** **We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination to goodwill. We base the fair value of identifiable intangible assets acquired in a business combination on valuations that use information and assumptions that a market

Current wording

Valuation of Goodwill and Intangible Assets.** **We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination to goodwill. We base the fair value of identifiable intangible assets acquired in a business combination on valuations that use information and assumptions that a market participant would use, including assumptions for estimated revenue projections, growth rates, cash flows, discount rates, useful life, and other relevant assumptions.

Previous wording

We test our goodwill balances for impairment annually as of July 1, or whenever impairment indicators arise. When impairment indicators are identified, we may elect to perform an optional qualitative assessment to determine whether it is more likely than not that the fair value of our reporting units has fallen below their carrying value. During our annual impairment test performed as of July 1, we utilized four reporting units in evaluating goodwill for impairment using a quantitative assessment, which uses a combination of a guideline public company market-based approach and a discounted cash flow income-based approach. The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to the extent the reporting unit’s carrying value exceeds its fair value. This analysis requires significant judgment, including estimation of the amount, timing and duration of future cash flows, which is based on internal forecasts, and a determination of a discount rate based on our weighted average cost of capital. During our annual test of goodwill balances in 2024, which was completed during the third quarter of 2024, we determined that the fair value of each reporting unit with goodwill exceeded the carrying amount by a significant amount.

Current wording

We test our goodwill balances for impairment annually as of July 1, or whenever impairment indicators arise. When impairment indicators are identified, we may elect to perform an optional qualitative assessment to determine whether it is more likely than not that the fair value of our reporting units has fallen below their carrying value. Our election to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, including, but not limited to, the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date, the amount of time since the last quantitative analysis was performed, and other performance and market indicators. During a qualitative assessment, if we determine that it is not more likely than not that the implied fair value of the goodwill is less than its carrying amount, no further testing is necessary. If we do not perform a qualitative assesment, or we determine that it is more likely than not that the implied fair value of the goodwill is less than its carrying amount, we perform a quantitative assessment, which uses a combination of a guideline public company market-based approach and a discounted cash flow income-based approach. The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to the extent the reporting unit’s carrying value exceeds its fair value. This analysis requires significant judgment, including estimation of the amount, timing and duration of future cash flows, which is based on internal forecasts, and a determination of a discount rate based on our weighted average cost of capital. During our annual impairment test performed during the third quarter of 2025, we evaluated each of our four reporting units using a qualitative assessment. As a result of the assessment, we determined that it was not more likely than not that the implied fair value was less than its carrying amount for each of our four reporting units, and no detailed quantitative assessment was necessary.

Previous wording

During the year ended December 31, 2022, we identified indicators of impairment associated with certain acquired intangible assets within the asset groups based on our qualitative assessment. During the year ended December 31, 2022, we recorded total impairment charges associated with intangible assets in our cardiovascular segment of $1.7 million. We did not have any goodwill or intangible asset impairments for the years ended December 31, 2024 and 2023. These expenses are reflected within impairment charges in our consolidated statements of income. The primary factors driving impairment of certain intangible assets were planned closure and restructuring activities and uncertainty about future product development and commercialization associated with certain acquired technologies. See Note 5Goodwill and Intangible Assets to our consolidated financial statements set forth in Item 8 of this report for additional details regarding impairments of intangible assets.

Current wording

We did not have any goodwill or intangible asset impairments for the years ended December 31, 2025, 2024 and 2023. See Note 5 Goodwill and Intangible Assets to our consolidated financial statements set forth in Item 8 of this report for additional details regarding goodwill and intangible asset balances.