Merion Technologies (MIR) Q3 2025: Nuclear Orders Surge 21% as Installed Base Drives Margin Expansion

October 29, 2025 | By EarningsIQ Research

Merion’s third quarter underscored the company’s nuclear power end market momentum, with orders up 21% and margins expanding across both core segments. Strategic M&A, robust installed base exposure, and disciplined cost actions are positioning Merion for outsized benefit from the nuclear supercycle, even as medical segment growth moderates amid U.S. healthcare uncertainty. With a swelling pipeline and enhanced cash flow guidance, Merion is entering year-end with clear visibility and multiple levers for compounding growth.

Summary

• Nuclear Power Tailwind: Installed base and SMR activity drove double-digit order and revenue growth.
• Margin Expansion: Procurement initiatives and segment mix delivered significant EBITDA margin gains.
• Pipeline Visibility: Large project funnel and M&A broaden Merion’s positioning for long-term nuclear demand.

Performance Analysis

Merion delivered broad-based revenue and profit growth in Q3, led by its nuclear and safety segment, which contributed the majority of incremental revenue and drove margin expansion. Nuclear power end market organic revenue grew 9% in the quarter, with adjusted orders up 21% (16% ex-FX), reflecting strength across new builds, SMRs, and the installed reactor base. The nuclear and safety segment’s EBITDA margin rose to 28.1%, up 180 basis points, aided by procurement savings and operational leverage. Medical segment revenue increased mid-single digits, but order softness in the U.S. RTQA business—due to healthcare funding uncertainty—tempered overall momentum.

Free cash flow conversion improved sharply, with year-to-date adjusted free cash flow at $53 million and management raising full-year guidance. The company’s blended cost of debt fell to 2.8%, supporting future capital flexibility. Notably, the quarter’s order book was driven by diverse flow orders rather than outsized one-time deals, underscoring the resilience of Merion’s core business model.

• Nuclear Orders Drive Growth: Nuclear power end market orders rose 21%, with SMR-related orders totaling $17 million in Q3.
• Margin Leverage: Procurement and pricing actions, along with segment mix, expanded EBITDA margins in both nuclear and medical segments.
• Cash Flow Acceleration: Adjusted free cash flow guidance was raised, with conversion targets trending toward long-term goals.

While U.S. medical segment headwinds persist, international and digital dosimetry businesses offset some softness. The company’s capital allocation remains disciplined, with recent equity issuance to fund the Paragon acquisition having minimal Q3 impact.

Executive Commentary

Strategic Positioning

1. Installed Base Anchors Nuclear Growth

Merion’s nuclear revenue is anchored by the operating reactor installed base, with 80% of nuclear sales derived from currently running reactors. The upcoming Paragon acquisition will push installed base exposure to 94% within that business, reducing reliance on speculative new build projects and providing recurring revenue streams.

2. SMR and New Build Pipeline Expands

Small Modular Reactor (SMR, next-gen compact nuclear technology) order activity accelerated, with $26 million booked year-to-date, up from $17 million over the prior two years. Management emphasized a broad solution set—spanning instrumentation, software, and regulatory support—positioning Merion as a critical supplier across the SMR ecosystem. The large project pipeline remains robust, with $285 million in opportunities, $175 million expected to be awarded by year-end, and government funding acting as a key timing variable.

3. Medical Segment Resilience Amid U.S. Uncertainty

While the U.S. RTQA (Radiation Therapy Quality Assurance) market faces funding headwinds, international and digital dosimetry offerings are growing. The medical segment’s margin expansion is being driven by software and service adoption, even as revenue growth is expected to be flattish in Q4 due to tough comps and delayed U.S. healthcare spending.

4. M&A and Portfolio Diversification

Strategic acquisitions (Paragon, SIRTREC) are enhancing Merion’s talent bench and broadening its product suite, especially in regulatory compliance and safety-critical systems. These moves are intended to deepen customer relationships, increase solution stickiness, and open new avenues for growth in both the U.S. and international nuclear markets.

5. Cost Discipline and Capital Structure Optimization

Procurement initiatives, supplier consolidation, and a lower cost of debt have expanded margins and improved cash flow conversion. The company’s capital structure is now more diversified, with cap calls in place to limit convertible dilution, providing flexibility for future M&A or organic investment.

Key Considerations

Merion’s Q3 results highlight a business in transition, leveraging its installed nuclear base for stability while building optionality through SMR and new build exposure. The company is executing on cost and margin levers, but faces near-term uncertainty in U.S. healthcare and government-related project timing.

Key Considerations:

• Nuclear Supercycle Exposure: Merion is positioned for upside as nuclear capacity factors rise and global policy support accelerates new builds and SMR adoption.
• Order Book Diversity: Q3 order growth was driven by recurring flow orders, not just large one-time wins, supporting business model resilience.
• Medical Segment Watchpoints: U.S. healthcare funding delays are impacting RTQA hardware orders, though international and digital businesses remain growth drivers.
• Pipeline Conversion Risk: The $285 million opportunity pipeline is subject to government funding cycles and customer approval timelines, with some awards likely to slip into 2026.
• Margin Sustainability: Management reiterated its commitment to a 30% EBITDA margin target, even as new build work typically carries lower margins than installed base activity.

Risks

Timing of large nuclear project awards remains unpredictable, with government shutdowns and regulatory approval cycles introducing volatility to backlog conversion. U.S. healthcare market softness could persist longer than expected, impacting medical segment growth. While procurement and pricing actions are driving margin gains, competitive intensity and supply chain constraints could pressure future profitability. Management’s long-term guidance relies on continued nuclear policy support and successful integration of recent acquisitions.

Forward Outlook

For Q4 2025, Merion expects:

• Strong double-digit order growth, especially in nuclear power, as large pipeline awards materialize.
• Flattish medical segment revenue due to tough Q4 comps and U.S. funding delays.

For full-year 2025, management raised adjusted free cash flow guidance to $100-115 million, with EBITDA conversion targeted at 45-49%. Factors influencing the outlook include:

• Timing and magnitude of large nuclear project awards
• Normalization of U.S. medical market demand

Takeaways

Merion is delivering on its nuclear power thesis, with installed base exposure and SMR momentum driving resilient growth. Cost discipline and capital structure optimization are expanding margins and free cash flow. Medical segment growth is moderating, but software and digital offerings provide margin support.

• Nuclear Tailwinds: Installed base and SMR activity provide a durable growth platform, with policy and regulatory support accelerating project visibility.
• Margin Expansion: Procurement, pricing, and mix are driving sustainable margin gains, even as new build work introduces some variability.
• Medical Segment Watch: Investors should monitor timing of U.S. healthcare recovery and the pace of digital adoption for incremental upside.

Conclusion

Merion’s Q3 demonstrated the power of its installed nuclear base and the early benefits of SMR and new build activity, with disciplined execution on cost and capital structure. While medical segment headwinds persist, the company’s broad pipeline and strategic M&A set the stage for continued compounding growth as the nuclear supercycle unfolds.

Industry Read-Through

Merion’s results reinforce the reality of a global nuclear power resurgence, with rising capacity factors, government support, and SMR adoption benefiting suppliers with installed base exposure and comprehensive solution portfolios. The company’s experience highlights the importance of recurring revenue streams, cost discipline, and strategic M&A in capturing long-cycle infrastructure tailwinds. For the broader industrial and medtech sectors, Merion’s margin expansion and cash flow conversion offer a blueprint for navigating policy-driven demand cycles and supply chain complexity.

MIR Industrials Nuclear Installed base SMR Margin expansion Free cash flow