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BOSTON SCIENTIFIC CORP (BSX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered strong top-line and non-GAAP bottom-line beats vs company guidance: revenue $4.561B (+22.4% reported, +19.5% organic) vs 14–16% organic guide, adjusted EPS $0.70 vs $0.64–$0.66; GAAP EPS of $0.38 missed $0.41–$0.43 guidance due to non-GAAP exclusions (amortization, impairments, acquisition-related) .
  • Cardiovascular remained the growth engine (+27.4% organic), led by exceptional EP (FARAPULSE) uptake and WATCHMAN momentum; U.S. sales grew 30.7% in Q4 .
  • 2025 outlook: organic revenue +10–12% (Q1 +14–16%), adjusted EPS $2.80–$2.87 (Q1 $0.66–$0.68); plan for 50–75 bps adjusted operating margin expansion with higher gross margin and leverage in SG&A while modestly stepping up R&D .
  • Stock reaction catalysts: sustained outgrowth from PFA/WATCHMAN ecosystem, initial 2025 guidance above medtech peers on growth/OP leverage, recent tuck-ins (Axonics, Cortex; agreed Bolt, Intera) broadening category leadership; watch competitive PFA entries, China VBP, FX and one fewer business day in Q1 .

What Went Well and What Went Wrong

  • What Went Well

    • Beat internal guide on Q4 organic growth (19.5% vs 14–16%) and adjusted EPS ($0.70 vs $0.64–$0.66) on strong execution and favorable tax; CEO: “2024 was one of the best years in the history of Boston Scientific” .
    • Electrophysiology surged: EP sales +172% in Q4; FARAPULSE surpassed $1B in 2024 with >200,000 patients treated globally, described as “the biggest transformation…in medtech” near-term; supply positioned to meet demand .
    • WATCHMAN strength with new concomitant reimbursement and positive OPTION data; U.S. growth +20% in Q4; management expects ~20% market CAGR supported by concomitant procedures and evidence .

  • What Went Wrong

    • GAAP EPS ($0.38) below guide ($0.41–$0.43) due to non-GAAP items (amortization, impairment, acquisition-related, EU MDR, restructuring, taxes) despite strong operations .
    • China VBP and lower-cost competition in MedSurg create pricing pressure; management still targets mid-teens China growth but flags tougher environment in 2025 .
    • Structural heart valve (TAVR) growth slowed to low single digits in Q4; EU performance impacted post-U.S. IDE readout; no U.S. update yet on ACURATE path; TRAPPER/TAVR commentary flagged investor concerns .

Financial Results

Headline results vs prior periods (all USD):

MetricQ4 2023Q3 2024Q4 2024
Revenue ($B)$3.725 $4.209 $4.561
GAAP Diluted EPS$0.34 $0.32 $0.38
Adjusted EPS$0.55 $0.63 $0.70

Margins and operating metrics:

MetricQ3 2024Q4 2024
Adjusted Gross Margin %70.4% 70.6%
Adjusted Operating Margin %27.2% 27.4%
GAAP Operating Margin %—14.8%

Q4 actuals vs company guidance:

MetricGuidanceActual
Reported Sales Growth YoY16.5–18.5% 22.4%
Organic Sales Growth YoY14–16% 19.5%
GAAP EPS$0.41–$0.43 $0.38
Adjusted EPS$0.64–$0.66 $0.70

Segment revenue (USD millions):

SegmentQ3 2024Q4 2024
Endoscopy678 690
Urology532 630
Neuromodulation268 299
MedSurg total1,479 1,619
Cardiology2,129 2,297
Peripheral Interventions602 645
Cardiovascular total2,731 2,942
Net Sales4,209 4,561

Regional revenue (USD millions):

RegionQ3 2024Q4 2024
U.S.2,593 2,893
EMEA773 830
APAC684 684
LACA159 155
Emerging Markets684 668
Net Sales4,209 4,561

KPIs and cash/returns:

KPIQ4 2024 / FY 2024
Free Cash Flow (Q4)$1.181B
FCF Conversion (FY)71%
Cash & Equivalents (12/31/24)$414M
Gross Debt Leverage2.2x
Adjusted Tax Rate (Q4 / FY)10.5% Q4; 11.9% FY
Diluted Shares (Q4 avg / FY avg)1.409B Q4; 1.486B FY

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Reported Sales GrowthQ1 2025—17–19% New
Organic Sales GrowthQ1 2025—14–16% New
GAAP EPSQ1 2025—$0.43–$0.45 New
Adjusted EPSQ1 2025—$0.66–$0.68 New
Reported Sales GrowthFY 2025—12.5–14.5% New
Organic Sales GrowthFY 2025—10–12% New
GAAP EPSFY 2025—$1.86–$1.93 New
Adjusted EPSFY 2025—$2.80–$2.87 New
Adj Operating Margin ExpansionFY 2025—+50–75 bps YoY New
Adjusted Below-the-line ExpenseFY 2025—≈$425M New
Operational Tax RateFY 2025—~13.5% New
Adjusted Tax RateFY 2025—~12.5% (Q1 ~11.5%) New
FX Headwind AssumptionFY 2025/Q1 2025—~100 bps New
Acquisitions Contribution to GrowthFY 2025/Q1 2025—~350–400 bps New

Earnings Call Themes & Trends

TopicQ-2 (Q2’24)Q-1 (Q3’24)Current (Q4’24)Trend
PFA (FARAPULSE)NMPA China approval; strong data at HRS; launch momentum building EP +177% YoY; U.S. launch in full swing; Japan/China approvals; PFA share likely to exceed 40–60% by 2026 EP +172% YoY; >200k patients treated; $1B ’24 revenue; persistent AF label expansion anticipated H2’25; FARAWAVE NAV + OPAL mapping feedback positive Strong, accelerating
WATCHMAN/concomitantOngoing strength; pipeline and evidence Concomitant DRG effective Oct 1 expected to sustain growth; OPTION LBT planned Nov U.S. +20% Q4; OPTION 36-mo bleeding reduction; concomitant uptick; ~20% market CAGR assumed Positive, sustained
Mapping strategy—OPL HDx/FARAVIEW introduced; open platform approach reiterated Maintain open platform; OPAL provides dynamic visualization/field tagging; Cortex mapping acquisition closed Building ecosystem
Margins/OP leverage—Adj OM ~27% FY; GM slightly below 2023 on FX Adj GM 70.6% (+20 bps q/q); plan 50–75 bps FY25 OM expansion with higher GM, SG&A leverage, modest R&D uptick Improving mix/scale
China VBP / Japan pricing—China mid-teens growth despite VBP; Japan FARAPULSE launch pending China VBP more extensive in ’25; still targeting mid-teens; Japan to have “really nice year” with FARAPULSE Manageable headwind
Structural Heart (TAVR)ACURATE Prime CE Mark; EU launch initiated ACURATE Prime EU launch; U.S. IDE data at TCT Oct 30 Low single-digit Q4 growth; EU impacted; U.S. path pending Mixed
M&AAnnounced Silk Road deal Closed Silk Road; Axonics pending close Closed Axonics, Cortex; announced Bolt, Intera agreements Active tuck-ins

Management Commentary

  • “In fourth quarter '24, company operational sales grew 23% and organic sales grew 20%, exceeding the high end of our guidance... Fourth quarter adjusted EPS of $0.70 grew 26%” – Mike Mahoney, CEO .
  • “We expect to expand adjusted operating margin in 2025 by another 50 to 75 basis points... and we expect full year adjusted EPS to be $2.80 to $2.87” – Dan Brennan, CFO .
  • “We don’t anticipate supply challenges [for FARAPULSE] given the investments that we made throughout the year” – Mike Mahoney .
  • “The ability to do concomitant procedures and get reimbursed... is positive for patients, the health care system and hospitals” – Ken Stein, CMO .
  • “As it relates to tariffs... headwinds are manageable and contemplated in our guidance ranges” – Dan Brennan .

Q&A Highlights

  • PFA and WATCHMAN: Concomitant reimbursement is already lifting volumes; management assumes ~20% LAAC market CAGR and sees PFA as a major multiyear conversion with persistent AF label expansion expected H2’25 (ADVANTAGE AF), FARAPOINT Phase II readout 1H’25; supply positioned to meet demand .
  • Mapping: Open platform commitment; OPAL/FARAVIEW adds PFA-specific advantages (dynamic visualization, field tagging); Cortex mapping augments complex AF capability; FARAWAVE NAV integrates with OPAL but legacy catheter remains usable with competitor mappers .
  • Margins and cash: 2025 margin expansion driven by gross margin accretion (mix), SG&A leverage; R&D up modestly (20–30 bps); FY24 FCF conversion 71% with >$3B FCF expected in 2025 .
  • Macro/geo: China VBP broader in 2025 but offset by innovation and diversification; Japan to benefit from FARAPULSE launch; tariffs/FX modeled in guidance .
  • TAVR: Low-single-digit Q4 growth; EU impacted post-U.S. IDE; U.S. regulatory/launch pathway update pending .

Estimates Context

  • S&P Global consensus (revenue, EPS) for Q4 2024 and forward periods was not retrievable due to access limits at the time of analysis; comparisons to Street estimates are therefore unavailable and omitted. Values from S&P Global were unavailable at query time.
  • Relative to company guidance, Q4 revenue and adjusted EPS exceeded the high end, while GAAP EPS was below the guided range due to non-GAAP adjustments (amortization, impairment, acquisition-related, EU MDR, restructuring, taxes) .

Key Takeaways for Investors

  • PFA leadership and scaling: FARAPULSE remains the core growth flywheel with accelerating global adoption, incremental mapping integration (OPAL/FARAVIEW), and label expansion catalysts in 2025—key driver of outgrowth and mix-led gross margin accretion .
  • Dual-therapy synergy: Concomitant FARAPULSE + WATCHMAN is a unique workflow/economic advantage, reinforced by OPTION data and reimbursement; expect WATCHMAN ~20% market growth sustained through 2025 .
  • 2025 setup: Initial guide calls for double-digit organic growth (10–12%) and adjusted EPS growth (12–14%) with 50–75 bps OM expansion—credible given portfolio momentum and operating discipline .
  • Execution and cash: Strong FCF conversion (71% FY) and leverage at 2.2x support continued tuck-ins; integration of Axonics, Cortex and expected Bolt/Intera close broaden category leadership across Urology, EP, and Interventional Oncology .
  • Watch risks: China VBP/pricing, PFA competition, FX and one fewer business day in Q1; management has modeled these and maintained an open-platform mapping strategy to preserve customer flexibility .
  • Trading angle: Non-GAAP beats vs guidance and initial FY25 guide with OM expansion are supportive; incremental data/readouts (ADVANTAGE AF Phase II, AVANT GUARD progress) and concomitant WATCHMAN adoption are likely near-term narrative drivers .