FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2025

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

15.FAIR VALUE MEASUREMENTS

Assets (Liabilities) Measured at Fair Value on a Recurring Basis

Our financial assets and (liabilities) carried at fair value measured on a recurring basis as of December 31, 2025 and 2024, consisted of the following (in thousands):

			Fair Value Measurements Using
	Total Fair		Quoted prices in		Significant other		Significant
	Value at		active markets		observable inputs		unobservable inputs
	December 31, 2025		(Level 1)		(Level 2)		(Level 3)
Money market funds (1)	$	31,285	$	31,285	$	—	$	—
United States treasury debt securities (2)		5,230		5,230		—		—
Foreign currency contract assets, current and long-term (3)		5,608		—		5,608		—
Foreign currency contract liabilities, current and long-term (4)		(4,227)		—		(4,227)		—
Contingent consideration liabilities		(4,537)		—		—		(4,537)

			Fair Value Measurements Using
	Total Fair		Quoted prices in		Significant other		Significant
	Value at		active markets		observable inputs		unobservable inputs
	December 31, 2024		(Level 1)		(Level 2)		(Level 3)
Money market funds (1)	$	10,034	$	10,034	$	—	$	—
Marketable securities (5)		92		92		—		—
Foreign currency contract assets, current and long-term (3)		7,430		—		7,430		—
Foreign currency contract liabilities, current and long-term (4)		(2,907)		—		(2,907)		—
Contingent consideration liabilities		(3,486)		—		—		(3,486)

(1) Our money market fund represents a bank-managed money market fund which permits daily redemptions. The fund is recorded as cash equivalents in the consolidated balance sheets.

(2) The fair value of U.S. treasury debt securities are determined using quoted prices for identical assets in active markets and is recorded as cash and cash equivalents in the consolidated balance sheets.

(3) The fair value of the foreign currency contract assets (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as prepaid and other assets or other long-term assets in the consolidated balance sheets.

(4) The fair value of the foreign currency contract liabilities (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as accrued expenses or other long-term obligations in the consolidated balance sheets.

(5) Our marketable securities, which consist entirely of available-for-sale equity securities, are valued using market prices in active markets. Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets.

Certain of our business combinations involve the potential for the payment of future contingent consideration, generally based on a percentage of future product sales or upon attaining specified future revenue or other milestones. Contingent consideration liabilities are re-measured to fair value at each reporting period, with the change in fair value recognized within operating expenses in the accompanying consolidated statements of income. We measure the initial liability and re-measure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements. Changes in the fair value of our contingent consideration liabilities during the years ended December 31, 2025 and 2024, consisted of the following (in thousands):

	2025		2024
Beginning balance	$	3,486	$	3,447
Contingent consideration liability recorded as the result of acquisitions		2,876		—
Contingent consideration expense		984		443
Contingent payments made		(2,809)		(404)
Ending balance	$	4,537	$	3,486

As of December 31, 2025, $1.3 million in contingent consideration liability was included in other long-term obligations and $3.2 million in contingent consideration liability was included in accrued expenses in our consolidated balance sheet related to contingent liabilities. As of December 31, 2024, $3.1 million in contingent consideration liability was included in other long-term obligations and $0.4 million in contingent consideration liability was included in accrued expenses in our consolidated balance sheet related to contingent liabilities.

Cash payments related to the settlement of the contingent consideration liability recognized at fair value as of the applicable acquisition date have been reflected as a cash outflow from financing activities in the accompanying consolidated statements of cash flows. Payments related to increases in the contingent consideration liability subsequent to the date of acquisition of $0.1 million and $0.1 million for the years ended December 31, 2025 and 2024 are reflected as operating cash flows.

The recurring Level 3 measurement of our contingent consideration liabilities includes the following significant unobservable inputs at December 31, 2025 and 2024 (amounts in thousands):

	Fair value at
	December 31,		Valuation			Weighted
Contingent consideration liability	2025		technique	Unobservable inputs	Range	Average(1)
Revenue-based royalty payments contingent liability	$	1,533	Discounted cash flow	Discount rate	13.0%
				Projected year of payments	2026-2034	2029
Revenue milestones contingent liability	$	94	Monte Carlo simulation	Discount rate	11.0%
				Projected year of payments	2026-2041	2041
Acquisition-related milestone contingent liability	$	2,910	Scenario-based method	Discount rate	4.7% - 4.8%	4.7%
				Probability of milestone payment	95.0% - 100.0%	97.2%
				Projected year of payments	2026

(1) Unobservable inputs were weighted by the relative fair value of the instruments. No weighted average is reported for contingent consideration liabilities without a range of unobservable inputs.

	Fair value at
	December 31,		Valuation			Weighted
Contingent consideration liability	2024		technique	Unobservable inputs	Range	Average(1)
Revenue-based royalty payments contingent liability	$	2,217	Discounted cash flow	Discount rate	14.0% - 16.0%	14.6%
				Projected year of payments	2025-2034	2028
Revenue milestones contingent liability	$	88	Monte Carlo simulation	Discount rate	13.0%
				Projected year of payments	2025-2040	2039
Regulatory approval contingent liability	$	1,181	Scenario-based method	Discount rate	6.0%
				Probability of milestone payment	50.0%
				Projected year of payment	2025-2026	2025

(1) Unobservable inputs were weighted by the relative fair value of the instruments. No weighted average is reported for contingent consideration liabilities without a range of unobservable inputs.

The contingent consideration liabilities are re-measured to fair value each reporting period using projected revenues, discount rates, probabilities of payment, and projected payment dates. Projected contingent payment amounts are discounted back to the current period using a discounted cash flow model. Projected revenues are based on our most recent internal operational budgets and long-range strategic plans. An increase (decrease) in either the discount rate or the time to payment, in isolation, may result in a significantly lower (higher) fair value measurement. A decrease (increase) in the probability of any milestone payment may result in lower (higher) fair value measurements. Our determination of the fair value of contingent consideration liabilities could change in future periods based upon our ongoing evaluation of these significant unobservable inputs. We intend to record any such change in fair value to operating expenses in our consolidated statements of income.

Contingent Payments to Related Parties. As a former shareholder of Cianna Medical, a former Merit director was eligible for payments for the achievement of sales milestones specified in our merger agreement with Cianna Medical completed in 2018. The terms of the acquisition, including contingent consideration payments, were determined prior to the appointment of the former Cianna Medical shareholder as a Merit director. During 2023, we made the final contingent payment to Cianna Medical Shareholders, including $0.9 million paid to the former Merit director who is a former Cianna Medical shareholder.

Fair Value of Other Financial Instruments

The carrying amount of cash and cash equivalents, receivables, and trade payables approximate fair value because of the immediate, short-term maturity of these financial instruments. Our long-term debt under our Amended Fourth A&R Credit Agreement re-prices frequently due to variable rates and entails no significant changes in credit risk and, as a result, we believe the fair value of long-term debt approximates carrying value. The fair value our long-term debt under our convertible notes was $900.7 million as of December 31, 2025 and was determined based on quoted prices in markets that are not active, which is considered a Level 2 valuation input. The fair value of assets and liabilities whose carrying value approximates fair value is determined using Level 2 inputs, with the exception of cash and cash equivalents, which are Level 1 inputs.

Impairment Charges

We recognize or disclose the fair value of certain assets, such as non-financial assets, primarily property and equipment, right-of-use operating lease assets, equity investments in privately held companies, intangible assets and goodwill in connection with impairment evaluations. All of our nonrecurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy.

Equity Investments, Purchase Options and Notes Receivable. During the year ended December 31, 2023, we recorded impairment charges of $0.3 million associated with our previously held equity investment in Bluegrass in connection with the Bluegrass asset acquisition completed on May 4, 2023 (see Note 3 Acquisitions and Other Strategic Transactions). We had no such losses during the years ended December 31, 2025 and 2024. Our equity investments in privately held companies were $28.7 million and $22.8 million at December 31, 2025 and 2024, respectively, which are included within other long-term assets in our consolidated balance sheets. We analyze our investments in privately held companies to determine if they should be accounted for using the equity method based on our ability to exercise significant influence over operating and financial policies of the investment. Investments not accounted for under the equity method of accounting are accounted for at cost minus impairment, if applicable, plus or minus changes in valuation resulting from observable transactions for identical or similar investments.

Current Expected Credit Losses

Our outstanding notes receivable, including accrued interest and our allowance for current expected credit losses, were $21.6 million and $9.4 million, as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, we had an allowance for current expected credit losses of $2.6 million and $1.4 million, respectively, associated with these notes receivable. We assess the allowance for current expected credit losses on an individual security basis, due to the limited number of securities, using a probability of default model, which is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the expected collectability of securities.

The table below presents a rollforward of the allowance for current expected credit losses on our notes receivable for the years ended December 31, 2025 and 2024 (in thousands):

	2025		2024
Beginning balance	$	1,366	$	568
Provision for credit loss expense		1,259		798
Ending balance	$	2,625	$	1,366