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BOSTON SCIENTIFIC CORP (BSX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered strong top-line and earnings outperformance: net sales $5.061B (+22.8% reported; +17.4% organic) and adjusted EPS $0.75, both above company guidance ranges; GAAP diluted EPS was $0.53 .
  • Segment breadth led by Cardiovascular (+26.8% reported; +23.2% organic) with Watchman (+28%), Farapulse momentum and broad coronary/imaging strength; MedSurg grew +15.7% reported (+7.0% organic) .
  • Management raised full-year guidance to 18–19% reported revenue growth (14–15% organic) and adjusted EPS $2.95–$2.99; Q3 guidance: 17–19% reported growth, 12–14% organic, adjusted EPS $0.70–$0.72 .
  • Key narrative catalysts: expanded U.S. labeling for Farapulse to persistent AF (7/7), CE mark for Watchman FLX Pro, and tuck-in acquisitions (Intera Oncology, SoniVie) enhancing interventional oncology and RDN optionality .

What Went Well and What Went Wrong

  • What Went Well

    • Cardiovascular strength: 26.8% reported growth; Electrophysiology sales +94% y/y with accelerated Farapulse uptake and concomitant procedures; Watchman +28% globally .
    • Margin execution despite headwinds: adjusted operating margin 27.6% with spend discipline and favorable mix (Farapulse, Watchman) offsetting Acurate charge and tariffs; Q2 free cash flow $1.129B .
    • Strategic momentum: FDA expanded Farapulse label to persistent AF; CE mark for Watchman FLX Pro; closed Intera and SoniVie acquisitions .

  • What Went Wrong

    • Acurate exit cost: ~$100M adjusted P&L impact (inventory/returns) and ~$130M GAAP-only restructuring/impairment; adjusted gross margin -100 bps y/y partly from write-downs .
    • Tariff headwind: full-year expected ~$100M (down from ~$200M in Q1 outlook) primarily impacting H2; margins guided roughly flat vs 2024 .
    • Regional/product pockets: EMEA operational growth +1.8% (excluding Acurate +7%); CRM flat-to-low growth with portfolio transition; MedSurg facing low-cost competitors and select supply constraints in Urology .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Billions)$4.120 $4.663 $5.061
GAAP Diluted EPS ($)$0.22 $0.45 $0.53
Adjusted EPS ($)$0.62 $0.75 $0.75
Adjusted Gross Margin (%)—71.5% 69.4%
Adjusted Operating Margin (%)—28.9% 27.6%
Free Cash Flow ($USD Billions)——$1.129

Segment net sales and growth (Q2 2025 vs Q2 2024):

SegmentQ2 2024 ($MM)Q2 2025 ($MM)Reported GrowthOperationalOrganic
Endoscopy$676 $737 +9.1% +7.8% +7.8%
Urology$525 $676 +28.9% +28.0% +6.3%
Neuromodulation$282 $303 +7.2% +6.6% +6.6%
MedSurg$1,483 $1,716 +15.7% +14.7% +7.0%
Cardiology$2,047 $2,647 +29.3% +27.9% +27.9%
Peripheral Interventions$590 $698 +18.3% +17.1% +7.0%
Cardiovascular$2,637 $3,345 +26.8% +25.5% +23.2%
Total Net Sales$4,120 $5,061 +22.8% +21.6% +17.4%

Regional net sales and growth (Q2 2025 vs Q2 2024):

RegionQ2 2024 ($MM)Q2 2025 ($MM)Reported GrowthOperational
U.S.$2,466 $3,224 +30.7% +30.7%
EMEA$822 $878 +6.8% +1.8%
APAC$670 $790 +18.0% +15.4%
LACA$162 $169 +4.0% +8.9%
Emerging Markets$680 $758 +11.6% +12.1%

Versus Wall Street consensus (S&P Global):

MetricConsensusActualSurprise
Adjusted EPS ($)$0.714*$0.75 +$0.036*
Revenue ($USD Billions)$4.974*$5.061 +$0.087*
EBITDA ($USD Billions)$1.462*$1.392*-$0.070*

Values marked with * retrieved from S&P Global; actuals otherwise cited above.

Guidance Changes

MetricPeriodPrevious Guidance (as of Q1)Current Guidance (Q2)Change
Reported Revenue GrowthFY 202515–17% 18–19% Raised
Organic Revenue GrowthFY 202512–14% 14–15% Raised
Adjusted EPS ($)FY 2025$2.87–$2.94 $2.95–$2.99 Raised
GAAP EPS ($)FY 2025$1.86–$1.93 $1.89–$1.93 Maintained/Up Slightly
Reported Revenue GrowthQ3 2025—17–19% New
Organic Revenue GrowthQ3 2025—12–14% New
Adjusted EPS ($)Q3 2025—$0.70–$0.72 New
Operational Growth ReconciliationFY/Q3Detailed growth bridges provided Detailed growth bridges provided Updated bridges

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
PFA/Farapulse adoptionGlobal conversion; U.S. launch momentum; >$1B 2024 revenue #2 EP position; strong demand; Opal mapping uptake; new catheter programs (Faraflex, Farapoint) EP +94% y/y; expanded U.S. label to persistent AF; accelerating Opal placements Strengthening
Concomitant Watchman + FarapulseDRG enabled; 20% LAAC market CAGR outlook >50% EP implanters performed at least one concomitant; label expansion anticipated 60% of EP implanters have performed concomitant; CE mark for FLX Pro; strong global growth Broadening adoption
Tariffs/macroAnticipated manageable headwinds ~$200M full-year headwind planned to offset; H2 timing ~$100M full-year headwind; gross margin roughly flat vs 2024 Improving vs plan
Acurate valve discontinuationEU product transition noted —~$100M adjusted P&L impact; ~$130M GAAP-only charges; EMEA ex-Acurate +7% Winding down
Regional trends (Japan/China)Double-digit Japan; China mid-teens despite DBP Japan strong; China double-digit despite pricing pressures Japan leading in PFA; China mid-teens expected H2 Sustained growth
R&D/PortfolioIVL (Bolt), interventional oncology expansion Pipeline: Farapoint approval H2 2025; Faraflex FHU; Empower leadless in H2 2025 ReMATCH IDE, Advantage AF phase II positive; acquisitions SoniVie/Intera Multiple catalysts

Management Commentary

  • “Our second-quarter results outperformed our expectations, led by our cardiovascular segment… we’re guiding to organic growth of 12–14% for Q3, and raising our full year guidance from 12–14% to 14–15%.”
  • “Adjusted operating margin was 27.6%. We now expect full year adjusted operating margin to expand by 75–100 basis points while increasing R&D to fuel durable differentiated revenue growth.”
  • “Electrophysiology sales grew 94%, supported by accelerated placements of the Opal mapping system and uptake of concomitant procedures… we recently received expanded labeling in the U.S.”
  • “In Watchman, we continue to see considerable physician interest in concomitant procedures, with over 60% of U.S. EPs having performed a concomitant procedure.”
  • “Within adjusted P&L, we had inventory charges and sales return reserves related to Acurate totaling approximately $100M… restructuring and intangible impairment charges impacted GAAP-only P&L (~$130M).”
  • “We now anticipate a full-year headwind of approximately $100M from tariffs… offset by favorable mix and spend control.”

Q&A Highlights

  • Watchman durability and concomitant uptake: 28% global growth; 60% of EP implanters doing concomitant; label update as first-line post-ablation and upcoming Champion data could broaden adoption .
  • Gross margin mechanics: ~100M Acurate-related adjusted P&L hit; GAAP charges ~$130M; mix (Watchman, Farapulse) offsetting tariffs to keep FY gross margin roughly flat .
  • EP capacity and ASC setting: Proposed ASC rule seen as net positive; initial migration of simpler cases; Farapulse safety/efficiency supports shift without compromising concomitant strategy in hospital setting .
  • Renal denervation (SoniVie): Ultrasound modality favored; pivotal in progress; significant TAM over time contingent on reimbursement and clinical milestones .
  • Mapping and portfolio breadth: Open mapping strategy (Opal/Faraview), continued catheter iterations (Farapoint H2 2025; Faraflex FHU); aim to be overall EP leader .

Estimates Context

  • Q2 2025 beat vs S&P Global consensus: adjusted EPS $0.75 vs $0.714* and revenue $5.061B vs $4.974B*; EBITDA slightly below consensus $1.392B vs $1.462B* (mix/headwinds) .
  • Management raised FY guidance, implying upward estimate revisions for revenue, EPS, and operating margin; tariff headwind revised to ~$100M could temper gross margin expansion trajectory .
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Broad-based growth continues to outpace markets, led by Cardiovascular and EP; expanded Farapulse labeling and Watchman concomitant drive durable multi-year tailwinds .
  • FY 2025 guidance raised across revenue and EPS; Q3 guide remains robust, supporting positive estimate momentum and likely continued multiple support .
  • Margin algorithm resilient: adjusted operating margin expansion despite Acurate exit and tariffs; mix (Farapulse/Watchman) remains accretive .
  • Concomitant strategy is a differentiated moat: unique combination of Farapulse + Watchman with growing reimbursement support and label expansion .
  • Pipeline optionality: Farapoint approval H2 2025, Faraflex, Empower leadless, IVL (Bolt), interventional oncology (Intera), hypertension RDN (SoniVie) expand TAM and sustain premium growth .
  • Watch pockets of risk: tariffs (~$100M), EMEA impact from Acurate, low-cost competitors in MedSurg, and CRM portfolio transition; management is actively mitigating via mix and spend controls .
  • Near-term trading: Focus on Q3 execution vs raised guide, continued Farapulse/Watchman momentum, any incremental regulatory catalysts (Japan/China labels) and Investor Day updates on LRP .