Medline (MDLN) Q1 2026 earnings summary

Executive summary

• Net sales reached $7.4 billion in Q1 2026, up 10.7%–11% year-over-year, driven by strong Supply Chain Solutions performance, new customer signings, and Prime Vendor relationships, including the first partnership in Canada.

• Adjusted EBITDA was $776 million, down 10.6%–11% due to higher costs, tariffs, and IPO-related expenses; net income was $239 million, with a margin of 3.3%.

• Advanced automation and AI initiatives, piloting Symbotic robotics, launching Pick Pack Pro, and expanding the Mpower digital supply chain platform.

• Free cash flow was $316 million, with capital expenditures of $96 million focused on automation and manufacturing expansion.

• Completed a secondary offering in March 2026, reducing noncontrolling interest by 3% and impacting net income.

Financial highlights

• Q1 net sales: $7.4 billion, up 10.7%–11% year-over-year; organic growth was the primary driver.

• Adjusted EBITDA: $776 million, down 10.6%–11%; margin declined to 10.6%–11% due to tariffs and higher costs.

• Free cash flow: $316 million; CapEx: $96 million; cash and equivalents: $2.2–$2.24 billion; net leverage: 3.1x.

• Gross profit margin dropped to 25.0% from 27.5%; operating income fell 26.1% to $422 million.

• Total debt was $12.76 billion as of March 28, 2026.

Outlook and guidance

• Full-year 2026 organic sales growth guidance raised to 8.5%–9.5% (from 8%–9%) based on strong Q1 performance.

• Adjusted EBITDA guidance maintained at $3.5–$3.6 billion, balancing tariff relief, operational investments, and inflationary headwinds.

• CapEx projected at ~$500 million for 2026; net interest expense expected at $575–$625 million; estimated GAAP tax rate of 17.5%–19.5%.

• Expect sequential adjusted EBITDA growth in H2 as mitigation actions and tariff benefits materialize; some moderation in same-store sales growth anticipated.

• Liquidity, cash flow, and credit facility access are sufficient for ongoing requirements for at least the next year.