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BOSTON SCIENTIFIC CORP (BSX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was an exceptional start to the year: revenue $4.663B (+20.9% reported, +18.2% organic) and adjusted EPS $0.75, both above company guidance; adjusted gross margin reached 71.5% and adjusted operating margin 28.9% .
  • Strongest momentum in Cardiovascular (+26.2% reported; Electrophysiology sales +145%), with U.S. revenue up 31.1% and broad-based strength across WATCHMAN and FARAPULSE .
  • Management raised FY 2025 organic revenue growth to 12–14% (from 10–12%) and adjusted EPS to $2.87–$2.94 (from $2.80–$2.87), and guided Q2 organic growth to 13–15% and adjusted EPS to $0.71–$0.73 .
  • A ~$200M tariff headwind is expected, predominantly in H2; management plans to offset via stronger sales, discretionary spend reductions, and minor FX tailwinds—minimal Q2 impact given inventory accounting .

What Went Well and What Went Wrong

What Went Well

  • Cardiovascular momentum: EP sales up 145% globally; company now “#2 clear player in EP,” with mass PFA adoption and new mapping solutions (OPAL HDx) gaining traction .
  • WATCHMAN resurgence: +24% YoY with faster-than-expected concomitant adoption; management expects a U.S. label update in H2’25 for post-ablation and CHAMPION AF readout in H1’26 to expand addressable market .
  • U.S. demand and mix: U.S. revenue +31.1% operational; adjusted gross margin +170 bps YoY to 71.5%, driven by favorable product mix (FARAPULSE, WATCHMAN) .

Quoted management remarks:

  • “We delivered an exceptional quarter… and remain well-positioned for the future as we continue to focus on meaningful innovation, clinical science and the execution of our category leadership strategy” .
  • “We are guiding to organic growth of 13% to 15% for Q2’25 and raising our full year guidance… to 12% to 14% organic growth” .
  • “When FARAPULSE grows like it’s growing and you see WATCHMAN in the mid-20s—that’s a big driver of gross margin” .

What Went Wrong

  • Tariffs: ~$200M headwind in 2025, largely H2; gross margin trajectory adjusted to be roughly in line with 2024, requiring discretionary cost actions to sustain 50–75 bps operating margin expansion .
  • Urology supply chain: category-specific back orders pressured growth; management expects improvement but notes a headwind through 2025 .
  • CRM mixed: low-voltage grew high single digits but high-voltage declined low single digits; Empower leadless expected H2’25 approval and broader Denali refresh to ramp in 2026 .

Financial Results

Consolidated Revenue and EPS vs prior year, prior quarter, and estimates

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Billions)$3.856 $4.561 $4.663
GAAP Diluted EPS ($)$0.33 $0.38 $0.45
Adjusted EPS ($)$0.56 $0.70 $0.75
Revenue Consensus Mean ($)*$3.684$4.421$4.572
Primary EPS Consensus Mean ($)*$0.513$0.657$0.673

Values with asterisks retrieved from S&P Global.

Highlights vs estimates:

  • Revenue: beat by ~$91M in Q1 2025 ($4.663B actual vs $4.572B consensus*) .
  • Adjusted EPS: beat by ~$0.08 in Q1 2025 ($0.75 actual vs $0.673 consensus*) .
    Values with asterisks retrieved from S&P Global.

Margins and Operating Metrics

MetricQ1 2025
Adjusted Gross Margin %71.5%
Adjusted Operating Margin %28.9%
GAAP Operating Margin %19.8%

Commentary: Adjusted gross margin improved +170 bps YoY, primarily mix-driven (FARAPULSE, WATCHMAN) .

Segment Breakdown (Net Sales)

BusinessQ1 2024 ($MM)Q1 2025 ($MM)Reported GrowthOperational GrowthOrganic Growth
Endoscopy642 673 4.7% 5.9% 5.5%
Urology513 633 23.5% 24.5% 4.4%
Neuromodulation256 271 5.8% 6.8% 6.8%
MedSurg Total1,412 1,577 11.7% 12.8% 5.3%
Cardiology1,872 2,429 29.8% 31.2% 31.2%
Peripheral Interventions573 656 14.4% 15.8% 7.4%
Cardiovascular Total2,445 3,085 26.2% 27.6% 25.6%
Total Net Sales3,856 4,663 20.9% 22.2% 18.2%

Regional Breakdown (Net Sales)

RegionQ1 2024 ($MM)Q1 2025 ($MM)Reported GrowthOperational Growth
U.S.2,258 2,960 31.1% 31.1%
EMEA803 846 5.5% 7.9%
APAC647 701 8.2% 10.6%
LACA149 155 4.4% 14.1%
Emerging Markets648 690 6.5% 9.8%

KPIs

KPIQ1 2025
Free Cash Flow ($MM)354
Cash from Operations ($MM)541
Net Capex ($MM)187
Cash on Hand ($MM)725
Gross Debt Leverage (x)2.2x
Adjusted Tax Rate (%)9.8% (Q1); FY guide ~12.5%
Operational Tax Rate (%)13.6% (Q1); FY guide ~13.5%
Diluted Shares (MM)1,493.1

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Reported Net Sales GrowthFY 202512.5–14.5% 15–17% Raised
Organic Net Sales GrowthFY 202510–12% 12–14% Raised
Adjusted EPSFY 2025$2.80–$2.87 $2.87–$2.94 Raised
Adjusted Operating Margin ExpansionFY 2025N/A50–75 bps (target maintained despite tariffs) Maintained
Reported Net Sales GrowthQ2 2025N/A17.5–19.5% New
Organic Net Sales GrowthQ2 2025N/A13–15% New
Adjusted EPSQ2 2025N/A$0.71–$0.73 New
Adjusted Below-the-line ($MM)FY 2025N/A~$425 New
FX headwind to EPSFY 2025N/A~$0.04–$0.05 New
Tax Rate (Adjusted/Operational)FY 2025N/A~12.5% / ~13.5% Maintained
DividendsFY/Q2 2025None disclosedNone disclosedN/A

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Tariffs/MacroNot highlighted in Q3/Q4 releases ~$200M 2025 tariff headwind; minimal Q2 impact; offset via sales, spend reductions, FX New headwind, offset plan in place
Supply ChainNot prominent Urology: category-specific back orders; expected improvement but a headwind in 2025 Emerging operational constraint
EP/PFA AdoptionFARAWAVE NAV FDA; FARAVIEW software; PMDA approval in Japan (Q3) EP +145%; clear #2; mass PFA adoption; OPAL HDx mapping uptake; new trials ELEVATE-PF Accelerating
WATCHMANOption trial positive (Q4) +24% YoY; concomitant procedures faster-than-expected; label update expected H2’25; CHAMPION AF readout H1’26 Strengthening
Regional TrendsU.S. +23.5% (Q3), +30.7% (Q4) U.S. +31.1%; EMEA +7.9% operational; APAC +10.6% operational; China expected DD growth despite VBP U.S. momentum; OUS steady
Regulatory/TAVRACURATE Prime CE mark (Q3) No new U.S. TAVR update; focus continues; Prime valve performing well in Europe Pending U.S. progress
R&D ExecutionOption and ADVANTAGE AF Phase I data (Q4) ADVANTAGE AF Phase II positive results; ELEVATE-PF enrollment; OPTION-A in APAC Robust pipeline
Manufacturing FootprintNot highlighted Continued U.S. investments (Georgia, Minnesota); no manufacturing shifts despite tariffs Capacity building

Management Commentary

  • Mike Mahoney: “We delivered an exceptional quarter… and remain well-positioned for the future as we continue to focus on meaningful innovation… and the execution of our category leadership strategy” .
  • Mike Mahoney: “We are guiding to organic growth of 13% to 15% for Q2’25 and raising our full year guidance… to 12% to 14% organic growth” .
  • Dan Brennan (CFO): “Adjusted gross margin… 71.5%, a 170 bps improvement vs Q1 2024, primarily driven by favorable product mix… Q1 adjusted operating margin was 28.9%” .
  • Dan Brennan on tariffs: “We forecast an approximate $200 million impact in 2025… minimal Q2 impact… fully offset via sales guidance raise, discretionary spend reductions and $0.01 FX benefit” .
  • CFO transition announced: Dan Brennan retiring; Jon Monson to succeed as CFO (effective June 30, 2025) .

Q&A Highlights

  • Tariffs and offsets: ~$200M headwind largely in H2; offset by raised sales guidance, spend cuts, and FX benefit; no plans to move manufacturing footprint .
  • EP market share: Aim to overtake J&J over time; strong execution across U.S., Europe, Japan; building capabilities in China .
  • WATCHMAN concomitant adoption: Faster-than-expected uptake due to workflow efficiency, economics, and strong OPTION data; share gains in LAA closure .
  • Margins: Strong Q1 margins driven by FARAPULSE/WATCHMAN mix; 2025 gross margin to be roughly in line with 2024 due to tariffs; still targeting 50–75 bps operating margin expansion .
  • CRM pipeline: Empower leadless pacemaker expected H2’25 approval; Denali S-ICD/tachy/brady refresh in 2026 to drive growth .

Estimates Context

  • Q1 2025: Revenue $4.663B vs consensus $4.572B*; Adjusted EPS $0.75 vs consensus $0.673*—beat on both .
  • Q4 2024: Revenue $4.561B vs consensus $4.421B*; Adjusted EPS $0.70 vs consensus $0.657*—beat on both .
  • Q1 2024: Revenue $3.856B vs consensus $3.684B*; Adjusted EPS $0.56 vs consensus $0.513*—beat on both .
  • Q2 2025 guidance: Adjusted EPS $0.71–$0.73 vs consensus $0.725*; Organic growth 13–15% .
    Values with asterisks retrieved from S&P Global.
MetricQ1 2024Q4 2024Q1 2025
Revenue Consensus Mean ($USD Billions)*3.6844.4214.572
Revenue Actual ($USD Billions)3.856 4.561 4.663
EPS Consensus Mean ($)*0.5130.6570.673
Adjusted EPS Actual ($)0.56 0.70 0.75

Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Broadened growth algorithm: Cardiovascular (EP, WATCHMAN) is the primary engine; U.S. demand and favorable mix are lifting margins despite tariff headwinds .
  • Guidance momentum: FY 2025 organic growth and adjusted EPS raised; Q2 guide brackets consensus—supports estimate revisions higher for full-year .
  • Tariffs manageable: ~$200M H2 burden is operationally offset; watch H2 margin cadence and discretionary spend trajectory for execution signals .
  • Pipeline catalysts: FARAPULSE persistent AF label expansion anticipated H2’25; Empower leadless (H2’25), CHAMPION AF readout (H1’26), and Denali (2026) underpin medium-term thesis .
  • WATCHMAN durability: Concomitant procedures and prospective label update should sustain 20%+ growth near term, with CHAMPION AF potentially tripling TAM longer term .
  • CRM inflection likely 2026: Expect near-term lag, but 2026 product cycle should re-accelerate growth .
  • Monitor China/VBP and supply chain: Management still targets DD growth in China despite VBP; urology back orders are a 2025 headwind—track resolution pace .