stockrowWhat it does
Medline makes and distributes medical-surgical supplies and provides supply chain services to healthcare organizations. Its customers include hospitals, surgery centers, physician offices and post-acute facilities. These organizations use its products in patient care, operations and laboratories.
The company operates through two segments. Medline Brand sells products bearing its own brands, including gloves, wound care supplies, surgical trays and diagnostic products. Supply Chain Solutions distributes products from other manufacturers and offers services to help customers manage inventory, warehouses and deliveries. Across the two segments, Medline offers approximately 335,000 med-surg products.
A central part of the business is its Prime Vendor model. Under these arrangements, a customer agrees to use Medline for the vast majority of its medical-surgical product needs under a multi-year distribution agreement. Medline delivers both its own products and other suppliers’ products, and may help the customer change to Medline Brand alternatives over time.
The company uses a network of distribution facilities and its own MedTrans truck fleet to deliver supplies. It also manufactures some of its branded products and works with outside partners to source others. Medline was founded in 1966. James M. Boyle is chief executive officer.
How it makes money
Medline earns revenue by selling its own branded supplies and distributing products made by other companies. It also offers supply chain services, including consulting, outsourced warehouse and technology management, inventory rationalization and route planning.
Medline Brand products span patient-facing supplies such as exam gloves and wound care, operating-room products such as procedure trays and gowns, and laboratory and diagnostic supplies. Supply Chain Solutions carries products from over 1,300 third-party suppliers. Both businesses serve Prime Vendor and other customers.
Prime Vendor agreements are typically structured with five-year terms. Customers consolidate most of their medical-surgical purchases with Medline, which acts as their primary logistics partner. Medline reported a greater than 98% average Prime Vendor retention rate over the past five years.
Medline Brand products historically have earned higher margins than equivalent third-party products. When a customer switches from a third-party product to a like-for-like Medline Brand product, however, the lower average price of the Medline product typically reduces net sales if volume stays constant. In fiscal 2025, Medline Brand represented 80.6% of Segment Adjusted EBITDA; Segment Adjusted EBITDA is a non-GAAP measure.
Medline says its contracts allow it to discuss price increases with customers. It makes increases on January 1 and July 1 and gives customers 30 to 60 days’ notice under the contract. The company says it uses price increases to offset a portion of sustained cost increases, rather than as a lever for growth.
For fiscal 2025, net sales were $28.4 billion; in the third quarter of 2026, net sales increased 10% compared with the third quarter of 2025.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Supply Chain Solutions | $14.7 billion | 51.7% | 13.2% |
| Medline Brand | $13.7 billion | 48.3% | 9.63% |
Customers and how it sells
Medline serves healthcare providers across different settings, from hospitals and surgery centers to physician offices and post-acute facilities. Its U.S. commercial teams are organized by customer channel, while international teams are organized by region or country. Account managers, product specialists, clinical resources and supply chain specialists work with customers.
As of December 31, 2025, Medline had over 1,600 Prime Vendor relationships. Those relationships represented $18.0 billion of net sales for the year ended December 31, 2025. The company also sells products to customers that do not have a Prime Vendor agreement.
The United States accounted for 93.1% of fiscal 2025 revenue, or $26.5 billion. International revenue was $2.0 billion, or 6.87% of the total. Medline says no individual international market represented more than 3% of its net sales.
Medline has begun its first Canadian Prime Vendor partnership with Mohawk Medbuy. The company says it is serving 5 hospitals under the agreement and expects to finish the rollout by the end of the first quarter of 2027. It says Canadian reimbursement, contracting and product conversion differ from those in the United States.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| United States | $26.5 billion | 93.1% | 11.5% |
| International | $2.0 billion | 6.87% | 11.0% |
Suppliers and costs
Medline manufactures approximately one-third of its Medline Brand products at 30 manufacturing facilities, 24 of which are in North America. For the vast majority of its other branded products, it works with more than 600 global partners across approximately 40 countries. As of December 31, 2025, no single sourcing partner accounted for more than 5% of total spend.
Supply Chain Solutions offers products from over 1,300 third-party suppliers. Those suppliers are primarily responsible for import and inbound freight costs, while Medline is primarily responsible for outbound freight from its distribution centers. The company also buys components and raw materials for its own manufacturing.
Product purchases, operating costs, personnel, capital expenditures and debt interest are among Medline’s primary uses of cash. Supply disruptions, shortages and inflation can increase sourcing, production and distribution costs. Tariffs and tariff developments had an approximately $290 million net adverse impact on income before taxes for the year ended December 31, 2025.
Medline keeps a substantial inventory position to support customer service. It is also investing in distribution capacity, automation and manufacturing facilities.
- Revenue$28.4B
- Cost of revenue−$20.9B
- Selling, general and administrative−$4.5B
- Other operating costs−$782.0M
- Operating income$2.2B
Competitive position
Medline competes with both medical-surgical product manufacturers and distributors. Manufacturers make a range of supplies, while distributors connect suppliers with healthcare providers and compete for Prime Vendor agreements. Medline names McKesson, Cardinal Health, Owens & Minor and Henry Schein among the distributors competing with it.
Medline combines its branded products with third-party distribution and manages customer relationships directly. Its Prime Vendor agreements generally run for multiple years and consolidate much of a customer’s purchasing with one partner. The company says its own branded products can offer customers lower prices than third-party alternatives.
Our reading: The combination of distribution and long-term customer contracts supports Medline’s competitive position, although other distributors also compete for those agreements. Its reported retention rate indicates that it has kept many existing Prime Vendor relationships.
The distribution network included 70 global distribution centers, warehouses, cross-docks and transship facilities, with 45 in the United States. Medline says the network is located to provide next-day delivery to 95% of its U.S. customer base. It also has more than 2,300 granted patents; no single patent or related group is material to the business as a whole.
Our reading: The network and product breadth give Medline a way to serve a wide range of customer needs, while its patents collectively support the business rather than creating dependence on one protected product.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| McKesson | Medical-surgical distribution and Prime Vendor agreements | High |
| Cardinal Health | Medical-surgical distribution and Prime Vendor agreements | High |
| Owens & Minor | Medical-surgical distribution and Prime Vendor agreements | High |
| Henry Schein | Medical-surgical distribution and Prime Vendor agreements | High |
Growth opportunities
Medline expects an aging population and a growing prevalence of chronic conditions to support long-term demand for medical-surgical supplies. It also says a shift of higher-acuity procedures to lower-cost care settings and consolidation of healthcare providers have increased volumes in non-acute settings.
The company seeks growth by winning Prime Vendor customers, expanding sales to existing customers and selling more Medline Brand products. As of December 31, 2025, its Prime Vendor agreements had an approximate average mix of 65% Supply Chain Solutions and 35% Medline Brand. Medline sees an opportunity to replace some third-party products with equivalent Medline Brand items, although such conversions typically reduce net sales at constant volume because the branded alternatives have lower average prices.
In the third quarter of 2026, Medline Brand net sales grew 7% and Supply Chain Solutions grew 14%. The company attributed Supply Chain Solutions growth to new customer implementations and growth within existing customers. It said it was confident in reaching its full-year goal of $1 billion in total new customer signings.
Medline is expanding distribution capacity. After a fire at its previous Tracy facility, the company said its replacement distribution center was on track to open by year end. It also announced plans for facilities in Dallas–Fort Worth, Southern California and Michigan. In Canada, Medline expects to complete the rollout of its first Prime Vendor partnership by the end of the first quarter of 2027.
- $23.2BFY2023
- $25.5BFY2024
- $28.4BFY2025
Structural risks
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Debt and financial flexibility: Medline’s substantial indebtedness could divert operating cash flow to debt payments and limit its ability to finance operations, capital expenditures or acquisitions. Its financing agreements also impose operating and financial restrictions.
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Supply and trade disruption: Medline relies on global sourcing and manufacturing. Tariffs, import restrictions, raw material shortages or supplier issues can increase costs or constrain operations. Regulatory requirements may prevent it from quickly establishing replacement sources for certain materials or processes.
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Customer relationships and conversion: Failure to establish and maintain Prime Vendor relationships may cause revenue to decline. Switching customers to lower-priced Medline Brand equivalents has historically improved margins but typically reduces net sales at constant volume.
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Product quality and regulation: Regulators can restrict distribution, order recalls or impose penalties. Medline has engaged independent parties to assess manufacturing sites under its global quality action plan and is remediating affected products. It exited the home-care bed business and launched a repair-or-replace program.
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Information systems and privacy: Medline depends on its own and third parties’ information systems throughout its supply chain. Security incidents or failures to comply with privacy requirements may lead to claims, penalties, remediation costs and reputational harm.
Bottom line
Our reading
Our reading: Medline combines recurring distribution relationships with a branded-product business that has historically earned higher margins; converting customers to its own products can improve profitability while reducing sales at constant volume. [item1] Its reach rests on contracts, inventory and distribution capacity, while debt, global sourcing costs and quality remediation place demands on cash and operations. [item1; item1a; item7; call_prepared]