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Edwards Lifesciences Corp (EW)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid top-line and margin execution: sales rose 6.2% to $1.41B (7.9% adjusted), GAAP diluted EPS from continuing ops was $0.62 and adjusted EPS was $0.64; TAVR growth was better than expected and TMTT accelerated to $115M (+58% YoY) .
  • Consensus was modestly beat: revenue $1,412.7M vs $1,400.6M consensus*, adjusted EPS $0.64 vs $0.5956 consensus*, helped by stronger mix and lower SG&A from deferred spending .
  • Guidance: raised FY2025 TMTT sales to $530–$550M and increased total company sales dollars by $100M to $5.7–$6.1B; maintained 8–10% sales growth, operating margin 27–28% and adjusted EPS $2.40–$2.50; Q2 2025 guidance: sales $1.45–$1.53B and adjusted EPS $0.59–$0.65 .
  • Catalysts: EVOQUE NCD finalized in March (coverage expansion), SAPIEN M3 received CE Mark (mitral replacement), and post-quarter FDA approval for asymptomatic severe AS expands the U.S. TAVR addressable market .

What Went Well and What Went Wrong

What Went Well

  • TAVR outperformed expectations: $1.05B sales (+3.8% GAAP, +5.4% cc; +6.5% billing-day adjusted), stable pricing and strong performance of SAPIEN 3 Ultra RESILIA; Europe momentum continued .
  • TMTT accelerated with balanced contributions from EVOQUE and PASCAL: $115M sales (+58% YoY; >60% cc), with broadening adoption in U.S. and Europe; SAPIEN M3 CE Mark strengthens a comprehensive replacement-and-repair portfolio .
  • Operating discipline: adjusted operating margin reached 29.1% (vs 26.9% PY), supported by favorable mix and deferred variable expenses; SG&A ran at 33.0% of sales, better than plan .

Quote: “We are pleased with our strong start to the year and have confidence in our 2025 outlook.” — Bernard Zovighian, CEO .

What Went Wrong

  • Japan softness persisted in TAVR: -4.9% GAAP growth with competitive pressure and weaker procedure growth environment; management is enhancing capabilities to reaccelerate .
  • Tariff and acquisition headwinds: CFO quantified ~$0.05 EPS headwind from 10% tariffs and ~$0.05–$0.10 EPS dilution from the planned JenaValve acquisition, requiring offsets to hold EPS guidance .
  • R&D/SG&A still elevated vs historical: Q4’s higher SG&A and 19.6% R&D ratio reflect growth investments; while Q1 R&D fell to 18.0%, management signaled pressure from FX, tariffs, and JenaValve near term .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$1.35 $1.39 $1.41
Diluted EPS - Continuing Ops ($)$0.61 $0.58 $0.62
Adjusted EPS ($)$0.67 $0.59 $0.64
Gross Profit Margin %80.6% 78.9% 78.7%
Operating Margin % (GAAP)25.9% 22.6% 27.9%
SG&A % of Sales31.1% 35.5% 33.0%
R&D % of Sales18.7% 19.6% 18.0%

Q1 2025 vs S&P Global consensus:

MetricConsensusActual
Revenue ($USD Millions)1,400.6*1,412.7
Adjusted EPS ($)0.5956*0.64
EPS - # of Estimates26*—
Revenue - # of Estimates23*—

Values retrieved from S&P Global.*

Segment sales ($USD Millions):

SegmentQ3 2024Q4 2024Q1 2025
TAVR$1,023.3 $1,036.3 $1,046.6
TMTT$91.1 $105.1 $115.2
Surgical Structural Heart$240.0 $244.4 $250.9

KPIs and growth:

KPIQ3 2024Q4 2024Q1 2025
Cash & Equivalents ($USD Billions)~$3.5 ~$3.0 ~$3.1
Total Debt ($USD Billions)~$0.6 ~$0.6 ~$0.6
TAVR cc Growth Rate (%)7.2% 5.0% 5.4%
TAVR Billing Days Adjusted (%)5.6% —6.5%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Company Sales GrowthFY20258–10% 8–10% Maintained
Total Company Sales ($)FY2025Range increased by $100M (prior not quantified) $5.7–$6.1B Raised (FX)
Adjusted EPS ($)FY2025$2.40–$2.50 $2.40–$2.50 Maintained
Operating Margin (%)FY202527–28% 27–28% Maintained
TAVR Sales Growth (%)FY20255–7% 5–7% Maintained
Surgical Sales GrowthFY2025Mid-single-digit Mid-single-digit Maintained
TMTT Sales ($)FY2025$500–$530M $530–$550M Raised
Total Company Sales ($)Q2 2025—$1.45–$1.53B New
Adjusted EPS ($)Q2 2025—$0.59–$0.65 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2025)Trend
Capacity & workflowQ3: capacity constraints; hospitals investing to expand . Q4: focus on growth drivers (no new capacity color) .“Through the worst” of acute constraints; partnering on staffing, anesthesia, efficiency; advocating reopening TAVR NCD .Improving capacity; policy changes anticipated.
Tariffs & FXQ3/Q4: FX headwind cited; hedging offsets EPS .~$0.05 EPS tariff headwind; FX near neutral; JenaValve dilution $0.05–$0.10, offsets planned .Manageable headwinds with offsets.
TAVR label/NCDQ3: EARLY TAVR results forthcoming . Q4: mid-year asymptomatic approval expected .Asymptomatic indication expected Q2 (achieved May 1 post-quarter); CMS NCD likely to reopen later; broader center access .Regulatory momentum.
TMTT adoptionQ3: $91M, launches progressing . Q4: $105M, strong adoption .$115M; EVOQUE NCD finalized; M3 CE Mark; toolbox approach to serve more patients .Accelerating multi-therapy adoption.
Regional trendsQ3: Japan down; undertreatment noted . Q4: Japan +1.8% .Japan -4.9%, competitive pressure; capability build to reaccelerate .Persistent softness; remediation in progress.
R&D & SG&A profileQ3: R&D 18.7%, SG&A 31.1%; clinical investments . Q4: R&D 19.6%, SG&A 35.5% .R&D 18.0%, SG&A 33.0%; prioritizing structural heart investments; some spend deferred .Moderating ratios with prioritization.

Management Commentary

  • “TAVR growth in the quarter was better than expected as clinicians continue to adopt our best-in-class SAPIEN technology…” and “we are raising our 2025 TMTT sales guidance range to $530 million to $550 million” — Bernard Zovighian, CEO .
  • “We generated adjusted EPS of $0.64… We expect pressure on our operating margin as a result of the weakening dollar, the impact of announced tariffs and the expected midyear close of the JenaValve acquisition… and we maintain our full year operating margin guidance of 27% to 28% and our EPS guidance of $2.40 to $2.50.” — Scott Ullem, CFO .
  • “With the new NCD, EVOQUE is now covered for all Medicare beneficiaries who meet the criteria… expanding patient access to this important therapy.” — Daveen Chopra (TMTT) .
  • Post-quarter: “FDA has approved… SAPIEN 3 platform for severe AS patients without symptoms… based on EARLY TAVR trial” — Edwards press release (May 1) .

Q&A Highlights

  • Guidance durability: Management expects to offset ~$0.05 EPS tariff and ~$0.05–$0.10 EPS JenaValve dilution via spend prioritization and operational measures, supporting the $2.40–$2.50 EPS range .
  • TAVR modeling: To achieve mid-point FY TAVR growth (5–7%), model ~6% growth in Q2–Q4 with quarter-to-quarter variability tied to label expansion and policy changes .
  • EVOQUE ramp: Strong site training demand with multi-month booking; NCD ensures coverage for Medicare and MA; building a multiyear growth trajectory .
  • Mitral replacement (M3): Controlled EU launch aimed at TEER/surgery-ineligible patients; U.S. approval expected in 2026; adoption to complement TEER over time .
  • Japan outlook: Near-term softness acknowledged; investments to strengthen positioning and growth capability; long-term demographics supportive .

Estimates Context

  • Q1 2025 beat: revenue $1,412.7M vs $1,400.6M consensus*, adjusted EPS $0.64 vs $0.5956 consensus*; beats driven by better-than-expected TAVR growth, favorable mix, and deferred SG&A .
  • Q2 2025 setup: Guidance midpoint (~$1.49B sales; ~$0.62 EPS) aligns with consensus ($1,485.4M revenue*, $0.6225 EPS*), with upside from asymptomatic label/NCD execution .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Q1 2025 was a clean beat on revenue and adjusted EPS versus consensus*, supported by stronger TAVR and accelerating TMTT; margin execution was aided by mix and spend timing .
  • Structural heart catalysts are stacking: EVOQUE NCD finalized, SAPIEN M3 CE Mark, and post-quarter asymptomatic TAVR FDA approval expand the TAM and should support procedure growth and mix .
  • FY2025 guide is intact despite tariffs and acquisition dilution; offsets and prioritization indicate disciplined execution while investing for growth .
  • Watch Japan: persistent weakness requires execution; management is deploying capability builds to stabilize and reaccelerate .
  • Near-term trading lens: label approval/NCD updates and Q2 delivery versus guidance are likely stock drivers; TMTT adoption pace (sites, outcomes) remains a key sentiment lever .
  • Medium-term thesis: Edwards’ differentiated portfolio across repair and replacement (TAVR, EVOQUE, PASCAL, M3) positions it to unlock underpenetrated mitral/tricuspid segments while sustaining TAVR growth through expanded indications and policy evolution .
  • Financial resilience: strong cash ($3.1B) and modest debt ($0.6B) support continued investment and buybacks amid FX/tariff uncertainty .