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BOSTON SCIENTIFIC CORP (BSX)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered broad-based upside: revenue $5.065B (+20.3% reported, +15.3% organic) and adjusted EPS $0.75, both above guidance and beating consensus; strength was led by EP (+63%) and Watchman (+35%) with favorable mix lifting gross margin .
  • Guidance raised: FY 2025 adjusted EPS to $3.02–$3.04 (from $2.95–$2.99) and organic growth to ~15.5% (from 14–15%); Q4 adjusted EPS $0.77–$0.79 and organic growth 11–13% .
  • Transient headwinds: EMEA declined 2% operationally due to ACURATE TAVR discontinuation (~$50M prior-year Q3 sales) and an ERP-related $30M backorder expected to unwind in Q4 .
  • Margin/cash cadence supportive: adjusted gross margin 71% (+60bps YoY), adjusted operating margin 28% (+80bps YoY), Q3 FCF $1.163B; tariff headwind ~$100M for FY remains but FY operating margin expansion now ~100bps .

What Went Well and What Went Wrong

What Went Well

  • Electrophysiology leadership compounding: EP sales +63% with continued global PFA adoption; Therapulse treated >500,000 patients with strong data (TheraDyS) and expanded features (Opal HDX, contact sensing) .
  • Watchman momentum and concomitant adoption: +35% growth, >600,000 patients targeted cumulatively; management expects ~25% of U.S. procedures to be concomitant exiting 2025 and sees sustained ~20% market CAGR over LRP, pending CHAMPION data in 1H26 .
  • Mix-driven margin and cash strength: adjusted gross margin 71% (+60bps YoY), operating margin 28% (+80bps YoY); Q3 FCF $1.163B with disciplined working capital .

Management quotes:

  • “Our quarterly results again exceed our expectations, led by our innovative portfolio, strong execution, and a winning spirit of our global team” — Mike Mahoney .
  • “Adjusted gross margin was 71%...primarily due to favorable product mix driven by strong growth in electrophysiology and Watchman” — CFO Jon Monson .

What Went Wrong

  • EMEA softness: operational decline of 2% driven by ACURATE valve discontinuation ($50M prior-year Q3 sales) and an ERP upgrade backorder ($30M); remediation ongoing with improvement expected through Q4 .
  • China VBP pressure in peripheral arterial: arterial segment down low single digits; offset by strong ICTx and EP growth, plus Enroute launch and IVL plans .
  • Urology execution challenges (Exonics): performance “below expectations” post commercial disruption; focus on rebuilding team and patient activation, expecting improvement through 2026 .

Financial Results

Revenue and EPS progression

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$4.663 $5.061 $5.065
GAAP EPS ($)$0.45 $0.53 $0.51
Adjusted EPS ($)$0.75 $0.75 $0.75

Q3 2025 actual vs consensus and guidance

MetricQ3 2025 ActualQ3 2025 Consensus*Q3 2025 Guidance (as of Q2)
Revenue ($USD Billions)$5.065 $4.974*Organic +12% to +14%
Adjusted EPS ($)$0.75 $0.714*$0.70 to $0.72

Values retrieved from S&P Global.
Consensus counts: EPS (26), Revenue (26) [GetEstimates].

Margins and operating metrics

MetricQ3 2024Q3 2025YoY Change
Adjusted Gross Margin (%)N/A71% +60 bps
Adjusted Operating Margin (%)N/A28% +80 bps
Free Cash Flow ($USD Billions)N/A$1.163 N/A
Diluted Shares (Billions)N/A1.495 N/A

Segment breakdown (Q3 2025)

SegmentNet Sales ($USD Millions)Reported YoYOrganic YoY
Endoscopy$747 +10.1% +9.0%
Urology$682 +28.1% +5.4%
Neuromodulation$293 +9.1% +8.6%
MedSurg Total$1,722 +16.4% +7.6%
Cardiology$2,641 +24.0% +23.1%
Peripheral Interventions$702 +16.7% +6.3%
Cardiovascular Total$3,343 +22.4% +19.4%
Total Company$5,065 +20.3% +15.3%

Regional breakdown (Q3 2025)

RegionNet Sales ($USD Millions)Reported YoYOperational YoY
U.S.$3,294 +27.0% +27.0%
EMEA$793 +2.6% -2.0%
APAC$802 +17.1% +16.9%
LACA$175 +10.4% +9.6%
Emerging Markets$765 +11.8% +11.5%

KPIs (Q3 2025)

KPIValue
Watchman YoY growth+35%
EP YoY growth+63%
Adjusted Interest & Other ($USD Millions)$116
Cash & Equivalents ($USD Billions)$1.275
Gross Debt Leverage (x)2.0x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Reported Revenue GrowthFY 202518–19% ~20% Raised
Organic Revenue GrowthFY 202514–15% ~15.5% Raised
Adjusted EPS ($)FY 2025$2.95–$2.99 $3.02–$3.04 Raised
GAAP EPS ($)FY 2025$1.89–$1.93 $1.97–$2.01 Raised
Reported Revenue GrowthQ4 2025N/A14.5–16.5% New
Organic Revenue GrowthQ4 2025N/A11–13% New
Adjusted EPS ($)Q4 2025N/A$0.77–$0.79 New
GAAP EPS ($)Q4 2025N/A$0.48–$0.52 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
PFA/EP leadershipPersistent AF label expansion (FDA), trials ELEVATE-PF/OPTION-A; strong portfolio momentum EP +63%; Opal HDX adoption, contact sensing launch; aim to lead overall EP market, PFA penetration to ~50% exit-2025 Strengthening leadership
Watchman & concomitantCE mark for Watchman FLX Pro; OPTION-A initiated +35% growth; ~25% U.S. concomitant by YE; 20% market CAGR over LRP; CHAMPION readout 1H26 Accelerating adoption
China dynamics & VBPAPAC +10.6% operational (Q1); +15.4% operational (Q2); acquisitions support portfolio China mid-teens growth; VBP pressure in peripheral arterial offset by ICTx/EP; Watchman Flex Pro approval Resilient growth amid pricing
Tariffs/marginsN/A explicitly quantifiedAdj. gross margin 71% (+60bps YoY) and op margin 28% (+80bps YoY); ~$100M tariff headwind expected FY Mix tailwind, tariffs manageable
EMEA headwindsN/AOperational -2% on ACURATE withdrawal (~$50M prior-year Q3) and $30M ERP backorder (improving in Q4) Transient, easing
Urology/ExonicsQ1/Q2 organic ~4–6%; ongoing investment Exonics below expectations post disruption; rebuilding; improvement targeted in 2026 Near-term headwind
Agent DCBU.S. launch and TPT payment; STANCE trial started Strong growth; real-world data at TCT; pathway to de novo lesions and indication expansion Expanding TAM
IVL (peripheral/coronary)Bolt acquisition; pipeline investments Limited peripheral launch end-2025; FRACTURE trial for coronary IVL to complete in Q1’26; U.S. launch early 2027 Pipeline progressing
Neuromod/PNSSolid growth; portfolio breadth Agreement to acquire Nalu PNS (PNS market adjacency; $60M+ 2025 sales; accretive beyond 2027) Portfolio expansion
CRM product cycleInvestment in Denali platform; Empower planned Denali refresh starts 2H26; Empower leadless + SICD; Alucia BioEnvelope asset adds adjunct infection prevention Cycle turning 2026+

Management Commentary

  • “We are guiding to organic growth of 11% to 13% for fourth quarter 2025… and raising our full year adjusted EPS guidance to $3.02 to $3.04” — Mike Mahoney .
  • “Adjusted gross margin was 71%… primarily due to favorable product mix… We now anticipate full-year adjusted gross margin to slightly improve versus 2024, inclusive of an approximate $100 million tariff headwind” — CFO Jon Monson .
  • “We expect global PFA penetration to continue to expand… exit 2025 at 50% penetration and grow to approximately 80% by 2028” — Dr. Ken Stein .

Q&A Highlights

  • Watchman/Concomitant trajectory: Management reiterated ~20% LRP market CAGR and ~25% U.S. concomitant mix by YE 2025; CHAMPION readout 1H26 could further expand indications .
  • China outlook: No evidence of procedural pull-forward; sustained mid-teens growth; EP and Watchman Flex Pro approval support 2026 momentum despite VBP .
  • Margins path: Mix (EP, Watchman, Agent) drove Q3 gross margin tailwind; FY adjusted operating margin expansion ~100bps; tariffs annualizing in 2026 but leverage expected to continue .
  • Agent DCB: Strong interim growth with TPT reimbursement; real-world post-approval data at TCT; STANCE trial to expand de novo lesion indications .
  • ASC reimbursement for AF ablation: Initial build-out concentrated in non-CON states; minimal impact in 2026, gradual over LRP; portfolio well suited for ASC economics .

Estimates Context

PeriodMetricConsensus*Actual/Guidance
Q3 2025Adjusted EPS ($)0.7137*$0.75
Q3 2025Revenue ($USD Billions)$4.974*$5.065
Q4 2025Adjusted EPS ($)0.7807*$0.77–$0.79 (company guidance)
Q4 2025Revenue ($USD Billions)$5.278*14.5–16.5% reported growth (company guidance)
FY 2025Adjusted EPS ($)3.0343*$3.02–$3.04 (company guidance)
FY 2025Revenue ($USD Billions)$20.075*~20% reported growth (company guidance)

Values retrieved from S&P Global.
Consensus counts: Q3 EPS (26), Q3 Revenue (26), Q4 EPS (27), Q4 Revenue (26), FY EPS (32), FY Revenue (31) [GetEstimates].

Key Takeaways for Investors

  • Broad-based beat with raised FY outlook: Strong EP and Watchman mix drove both top-line and margin upside; guidance reset supports continued estimate upward revisions .
  • Near-term catalysts: EP feature launches (Opal HDX, contact sensing), peripheral IVL limited launch in 2025, China Watchman Flex Pro ramp; CHAMPION data in 1H26 is a major inflection event .
  • Watchman remains core growth engine: Concomitant adoption and globalization underpin management’s ~20% market CAGR through LRP, offering sustained revenue/mix benefits .
  • Transient EMEA headwinds should fade: ERP backorder and ACURATE withdrawal impacted Q3 but are expected to improve through Q4, limiting regional drag .
  • Cash and leverage provide strategic flexibility: Q3 FCF $1.163B and 2.0x gross leverage enable tuck-in M&A (e.g., Nalu PNS) and potential buybacks as priorities .
  • Margin trajectory intact despite tariffs: Mix tailwinds offset ~$100M FY tariff headwind; management targets ongoing operating margin expansion and leveraged EPS growth .
  • Trading setup: Continued EP/Watchman momentum and raised FY guide are positive; monitor EMEA normalization and Urology/Exonics execution and tariff annualization in 2026 for durability .

Appendix: Non-GAAP adjustments (Q3 2025)

  • Adjusted EPS reconciliation: Major items included amortization ($0.13 per share), acquisition/divestiture-related charges ($0.06), restructuring ($0.02), EU MDR ($0.01), and deferred tax ($0.03) .