Medline (MDLN) Q2 2026 earnings summary

Executive summary

• Q2 2026 net sales rose 11.6% year-over-year to $7.7 billion, with organic sales up 11.5% and strong gains in U.S. Acute and Supply Chain Solutions.

• Adjusted EBITDA for Q2 increased 13.4% to $1.1 billion, benefiting from IEEPA tariff refund gains.

• Net income for Q2 was $139 million, down 58.3% year-over-year, mainly due to a $336 million loss from the Tracy, California distribution center fire.

• Over 65% of the annual new customer signing goal was secured in the first half of 2026, demonstrating commercial momentum.

• Growth was primarily volume-driven, with minimal impact from pricing or foreign exchange.

Financial highlights

• Gross profit for Q2 2026 was $2.2 billion, up 16.3% year-over-year, with gross margin at 28.8% due to tariff refunds.

• Operating income for Q2 was $395 million, down 38.5% year-over-year, with a 5.1% operating margin.

• Free cash flow for the first six months was $920 million; net cash provided by operating activities was $1.1 billion.

• Adjusted diluted EPS for Q2 was $0.50; for the first six months, $0.83.

• Cash and equivalents stood at $2.3 billion as of June 27, 2026, with $946 million available under the revolving credit facility.

Outlook and guidance

• Full-year 2026 organic sales growth guidance raised to 9.0%-10.0%; adjusted EBITDA guidance lowered to $3.3-$3.4 billion due to inflation, Tracy fire, and operational investments.

• Guidance reflects $89 million in customer repayments for tariff refunds and excludes $243 million in net tariff refund benefits.

• Management expects continued volume-driven growth, ongoing investments in automation and distribution, and further capital expenditures up to $600 million for 2026.

• Sequential sales expected to be flat in Q3, rising in Q4; adjusted EBITDA to increase each quarter.

• Additional IEEPA tariff refunds are expected, with $70 million in new claims submitted in Q3 2026.