Medline — Third Quarter and Nine Months 2026 Earnings Summary

Financial Performance:

• Third quarter 2026 net sales reached $7.9 billion, a 10.4% increase from $7.1 billion in the same period in 2025; nine months 2026 net sales totaled $22.9 billion, up 10.9% from $20.6 billion in 2025.
• Third quarter 2026 net income was $318 million, a 1.2% decrease from $322 million in 2025; nine months 2026 net income was $696 million, a 28.8% decrease from $977 million in 2025.
• Third quarter 2026 Adjusted EBITDA increased 11.8% to $960 million from $859 million in 2025; nine months 2026 Adjusted EBITDA rose 5.0% to $2.8 billion from $2.7 billion in 2025.
• Third quarter 2026 diluted earnings per share (EPS) were $0.22 and Adjusted Diluted EPS were $0.44; nine months 2026 diluted EPS were $0.45 and Adjusted Diluted EPS were $1.27.
• Net cash provided by operating activities for the first nine months of 2026 was $2.2 billion, compared to $1.5 billion in 2025.
• Free Cash Flow for the first nine months of 2026 was $1.8 billion, driven by operating cash flow partially offset by $348 million in capital expenditures.
• Gross margin percentage for the third quarter was 24.5% compared to 26.4% in 2025; for the nine months, it was 26.1% compared to 27.1% in 2025.
• Total debt as of September 26, 2026, was $12.7 billion; net debt was $9.1 billion, resulting in a net leverage ratio of 2.5x based on trailing twelve-month Adjusted EBITDA.

Guidance and Future Outlook:

• The Company raised full-year 2026 Organic Sales guidance to 10.0% to 10.5%, up from the previous range of 9.0% to 10.0%.
• The Company reaffirmed full-year 2026 Adjusted EBITDA guidance of $3.3 billion to $3.4 billion.
• The Adjusted EBITDA guidance excludes $324 million of net IEEPA tariff refunds recognized through the first nine months of 2026.

Business Segments and Product Lines:

• Medline Brand segment net sales increased 6.6% to $3.6 billion in the third quarter and 6.5% to $10.6 billion in the first nine months; Adjusted EBITDA margin was 25.9% and 26.1% respectively.
• Supply Chain Solutions segment net sales increased 13.9% to $4.2 billion in the third quarter and 15.1% to $12.3 billion in the first nine months; Adjusted EBITDA margin was 4.4% and 4.7% respectively.
• Corporate & Other expenses were $167 million in the third quarter and $554 million in the first nine months.
• Capital expenditures of $348 million in the first nine months were primarily allocated to automation across the distribution network, construction of new distribution centers, and expansion of kitting manufacturing capacity.

Market and Competitive Landscape:

• Organic sales growth was driven by existing customer growth and the implementation of new customer signings from 2025.
• The Company reported progress toward its annual total new customer signings goal.
• Medline is identified as the largest provider of medical-surgical products and supply chain solutions serving all points of care.

Risks and Challenges:

• Net income for the nine months was negatively impacted by a $316 million net loss related to a fire at the Company's distribution center in Tracy, California.
• Net income was also affected by higher operating expenses, increased inventory costs due to inflation, higher cost of goods sold including tariff impacts, and customer mix.
• Nine months 2026 net sales included a $78 million reduction related to accrued customer repayments associated with IEEPA tariff refunds.
• Forward-looking statements highlight risks including global geopolitical conflicts, supply chain disruptions, regulatory actions, and cyber-attacks.

Management Commentary and Tone:

• CEO Jim Boyle described the quarter as "strong" with "double-digit net sales growth" and "continued momentum across our business."
• Management highlighted strong commercial execution, progress on capacity expansion, new technology in the distribution network, and global quality initiatives.
• The tone emphasized a focus on serving customers, advancing strategic priorities, and driving sustainable long-term growth.

Other Key Points:

• The Board of Directors authorized a $1 billion share repurchase program for Class A common stock and/or units of Medline Holdings, LP.
• The Company prepaid $750 million in aggregate principal amount of the 2033 Refinancing Term Loan Facility.
• The Company recognized $81 million of net IEEPA tariff refund benefits in the third quarter and $324 million in the first nine months of 2026.
• The IEEPA tariff refund benefits included an $11 million increase in net sales from customer repayment adjustments in the third quarter and a $78 million reduction in net sales from accrued repayments in the nine-month period.
• The Company employs more than 45,000 people worldwide and operates in over 100 countries.