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Edwards Lifesciences Corp (EW)·Q2 2025 Earnings Summary

Executive Summary

  • Double-digit top-line and estimate beats: Q2 revenue $1.53B (+11.9% YoY) and adjusted EPS $0.67 beat S&P Global consensus; management cited broad-based strength and raised FY sales growth to 9–10% and TAVR growth to 6–7% . Results outperformed Street revenue and EPS estimates for the last three quarters (see Estimates Context). Values retrieved from S&P Global.*
  • Mix tailwind from TMTT and resilient TAVR: TMTT grew 61.9% to $134.5M on PASCAL and EVOQUE; TAVR rose 8.9% to $1.13B with stable competitive/pricing dynamics; a competitor exit in Europe modestly aided share .
  • Guidance raised; Q3 guide set: FY total sales to $5.9–$6.1B (9–10% growth), TAVR to $4.3–$4.5B (6–7% growth), FY adjusted EPS to high end of $2.40–$2.50; Q3 sales $1.46–$1.54B and adjusted EPS $0.54–$0.60 .
  • Margins mixed near-term: Gross margin contracted 240 bps YoY to 77.5% on manufacturing ramp and FX; CFO flagged mid-20% operating margins in 2H due to deferred spend and expected Genovalve/JenaValve costs, though FY EBIT margin remains 27–28% target .

What Went Well and What Went Wrong

What Went Well

  • Broad-based beat and raise: “We are pleased to report strong second quarter results… raising our sales and EPS guidance” .
  • TAVR execution and catalysts: Better-than-expected TAVR, with asymptomatic indication now approved in U.S. and Europe; “competitive position and pricing remained stable” .
  • TMTT momentum: PASCAL adoption and EVOQUE real-world outcomes consistent with TRISCEND II; SAPIEN M3 received CE Mark, positioning a comprehensive repair/replacement portfolio .

What Went Wrong

  • Gross margin pressure: GM fell to 77.5% vs 79.9% YoY on manufacturing expenses for new therapies and FX headwinds .
  • Elevated opex and 2H step-up: SG&A rose to 32.8% of sales (vs 32.7% LY) with expected spending increase in 2H, including anticipated JenaValve-related spend; CFO reiterated lower 2H operating margins (~mid-20s) .
  • Impairment charge and higher tax rate: Recorded a $47.1M impairment (net $37.6M) and an effective tax rate of 16.1% vs 5.2% LY, diluting GAAP EPS vs LY .

Financial Results

Revenue, EPS and Estimate Comparison (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($B)$1.386 $1.413 $1.532
Revenue Consensus ($B)$1.358*$1.401*$1.485*
Surprise ($B)+$0.028*+$0.011*+$0.047*
Diluted EPS (GAAP)$0.58 $0.61 $0.56
Adjusted EPS$0.59 $0.64 $0.67
EPS Consensus$0.555*$0.596*$0.622*
Surprise ($)+$0.035*+$0.044*+$0.048*
Revenue YoY Growth %9.4% 6.2% 11.9%

Values retrieved from S&P Global.*

Margins (GAAP and Adjusted)

MarginQ4 2024Q1 2025Q2 2025
Gross Margin % (GAAP)78.9% 78.7% 77.5%
Gross Margin % (Adjusted)79.0% 78.7% 77.6%
Operating Margin % (GAAP)22.6% 27.9% 26.8%
Operating Margin % (Adjusted)25.6% 29.1% 28.2%

Segment Revenue (oldest → newest)

Segment ($M)Q4 2024Q1 2025Q2 2025
TAVR$1,036.3 $1,046.6 $1,130.9
TMTT$105.1 $115.2 $134.5
Surgical Structural Heart$244.4 $250.9 $266.8

KPIs

KPIQ4 2024Q1 2025Q2 2025
TAVR Constant Currency Growth %5.3% 5.4% 7.8%
TMTT YoY Growth %87.7% 58.1% 61.9%
Cash & Equivalents ($B)$3.0 $3.1 ~$3.0
Total Debt ($B)~$0.6 ~$0.6 ~$0.6

Note: Numbers may not calculate due to rounding per company disclosures.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Company Sales GrowthFY 20258–10% 9–10% Raised
Total Company Sales ($B)FY 2025$5.7–$6.1 $5.9–$6.1 Raised midpt
Adjusted EPSFY 2025$2.40–$2.50 High end of $2.40–$2.50 Raised (to high end)
TAVR GrowthFY 20255–7% (reiterated in Q1) 6–7% Raised
TAVR Sales ($B)FY 2025Not specified$4.3–$4.5 Introduced/Updated
TMTT Sales ($M)FY 2025$530–$550 (raised in Q1) $530–$550 Maintained
Surgical GrowthFY 2025Reiterated in Q1 Maintained (mid-single digits) Maintained
Operating Margin (Adj)FY 202527–28% 27–28% (2H lower than 1H) Maintained (timing mix)
Tax Rate (Adj)FY 202515–18% 15–18% Maintained
Q3 Sales ($B)Q3 2025—$1.46–$1.54 New
Q3 Adjusted EPSQ3 2025—$0.54–$0.60 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24)Previous Mentions (Q1’25)Current Period (Q2’25)Trend
Policy/NCD & Asymptomatic TAVREARLY TAVR expected mid-’25 approval Expect asymptomatic approval Q2; push for NCD/guidelines Asymptomatic approved U.S. & EU; advocating NCD updates; slow-burn adoption Positive catalysts building
TAVR Demand & Backlog/WorkflowStable competitive/pricing Capacity initiatives, hospital scaling Better-than-expected TAVR; renewed focus post EARLY TAVR; seasonality in Q3 Improving momentum with seasonal caution
Tariffs/FX/Margins2025 GM 78–79% Tariffs ~$0.05 EPS headwind; hedging offsets FX on EPS 2H mid-20s EBIT margins; FX +$30M sales tailwind FY; GM pressure continues Margin headwinds near-term
Competition/EuropeS3 Ultra RESILIA expansion EU momentum Competitor exit → modest share rebalancing Share opportunity EU
TMTT Portfolio & RWETMTT +88% in Q4; M3 CE by mid-’25 Raised TMTT guide; NCD finalized for EVOQUE PASCAL/EVOQUE scale; EVOQUE RWE similar/better than TRISCEND II; M3 CE with US approval expected 1H26 Strong, multi-year runway
Regional TrendsU.S./OUS similar; Japan soft Japan weaker; actions to recapture U.S./OUS comparable cc; Japan mid-single-digit growth; ROW strong Improving JP/ROW trajectory

Management Commentary

  • “We are pleased to report strong second quarter results that delivered double-digit sales growth… raising our sales and EPS guidance” — Bernard Zovighian, CEO .
  • “Our adjusted gross profit margin was 77.6%… driven by additional manufacturing expenses… and foreign exchange… We continue to expect our full year 2025 adjusted gross profit margin to be within 78%–79%” — Scott Ullem, CFO .
  • “We are raising our underlying growth rate guidance for TAVR to 6%–7%… We now expect full-year adjusted EPS… at the high end of $2.40–$2.50” — Scott Ullem, CFO .
  • “Pascal and EVOQUE were both significant contributors to growth… SAPIEN M3… received CE mark approval in Q2… Clinical feedback, while early, has been positive” — CEO .
  • “In Europe, the exit of a competitor resulted in a rebalancing of market share and a modest contribution to our sales” — CEO .

Q&A Highlights

  • TAVR upside drivers: Management attributes strength to renewed attention to severe AS management post EARLY TAVR, not yet major asymptomatic volumes; broader focus on timely referrals .
  • OUS dynamics and EU competitor exit: First priority was ensuring patient access; long-term share capture will depend on value vs prior lower-priced alternatives .
  • EPS guidance posture: Raised to high end despite 2H headwinds (tariffs, Genovalve); intent to deliver sustainable EPS growth beyond 2025 .
  • EVOQUE safety/outcomes: Company cites real-world European data with outcomes similar/better than TRISCEND II; further registry analyses forthcoming .
  • Margins/2H cadence: Modeling mid-20% operating margins in 2H due to deferred spend and Genovalve timing; tariff EPS impact likely < ~$0.025 vs prior ~$0.05 for FY .

Estimates Context

  • Q2 2025: Revenue $1.532B vs $1.485B est; adjusted EPS $0.67 vs $0.622 est — both beats. Q1 2025 and Q4 2024 also beat on revenue and EPS (see table above). Values retrieved from S&P Global.*
  • Implication: Street models likely need to reflect higher FY sales (raised to 9–10%) and TAVR growth (6–7%), while trimming 2H margin assumptions per management’s 2H opex/margin commentary .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Broad-based execution with visible catalysts: Raised FY sales/EPS targets alongside asymptomatic TAVR approvals and robust TMTT adoption — supports positive estimate revisions and multiple stability .
  • Mix and innovation drive the story: TMTT +62% with expanding evidence and M3 CE Mark; unique repair/replacement portfolio should compound over multi-years .
  • Near-term margin cadence matters: Expect 2H operating margins in the mid-20s; FX/tariffs and integration costs temper flow-through despite higher sales — watch for 2026+ EBIT expansion path (50–100 bps target) .
  • EU competitive reshuffle a tailwind: Modest share rebalancing from competitor exit and stable pricing reinforce TAVR durability OUS .
  • Japan showing improvement: Mid-single-digit TAVR growth and actions to recapture share; sustained progress would bolster OUS growth quality .
  • Q3 setup: Seasonal Q3 softness (especially Europe) embedded in guide; execution vs $1.46–$1.54B sales and $0.54–$0.60 adj. EPS will be key to sustaining momentum .
  • Watch policy milestones: Potential CMS NCD updates and guideline changes could be multi-year TAVR capacity catalysts; asymptomatic uptake expected to be gradual but durable .

Sources

  • Q2 2025 8-K 2.02 and Exhibit 99.1 (press release) ; Q2 2025 press release mirror –.
  • Q2 2025 earnings call transcript (prepared remarks and Q&A) –.
  • Q1 2025 8-K 2.02 (press release) .
  • Q1 2025 earnings call transcript –.
  • Q4 2024 8-K 2.02 (press release) .

Values retrieved from S&P Global.*