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EL

Edwards Lifesciences Corp (EW)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered double-digit growth: revenue $1.553B (+14.7% reported; +12.6% adjusted) with strength across TAVR, TMTT, and Surgical; adjusted EPS $0.67; GAAP EPS $0.50 .
  • Results beat Street consensus: revenue $1.553B vs $1.497B* and adjusted EPS $0.67 vs $0.5959*; EBITDA also ahead of consensus (actual $464.3M vs $422.3M*) .
  • Guidance raised: FY TAVR growth to 7–8% (from 6–7%), adjusted EPS to $2.56–$2.62 (from prior high-end $2.45–$2.55); total company FY sales growth targeted at the high end of 9–10% .
  • Near-term catalysts: robust TAVR durability evidence (PARTNER 3 seven-year, PARTNER 2 ten-year), updated ESC/EACTS guidelines including asymptomatic severe AS, and strong tricuspid/mitral data; CFO succession announced (transition by mid-2026) .

What Went Well and What Went Wrong

What Went Well

  • TAVR strength: $1.15B sales (+12.4% reported; +10.6% CC), with comparable CC growth in U.S. and OUS; Europe benefited modestly from a competitor exit; Japan improved as market recovers .
  • TMTT momentum: $145.2M sales (+59.3% YoY; +53.2% adjusted) driven by PASCAL and EVOQUE; early SAPIEN M3 results in Europe positive; new guidelines support broader use .
  • Adjusted operating margin outperformed expectations at 27.5% (helped by stronger sales and deferred spending); Q4 guidance provided for revenue ($1.51–$1.59B) and adjusted EPS ($0.58–$0.64) .

What Went Wrong

  • Gross margin contraction: adjusted GM 77.9% vs 80.7% last year, primarily FX-driven; FX lifted reported sales by ~210 bps ($24M) but pressured margins by ~110 bps .
  • Elevated non-GAAP adjustments: litigation expense $90.4M and a $40.0M intangible impairment affected GAAP results; adjusted EPS held at $0.67 YoY despite strong top-line growth .
  • SG&A intensity rose to 33.1% of sales (vs 31.1% YoY) on investments to support transcatheter therapy growth; management flagged higher second-half OpEx and mid-20s Q4 operating margin .

Financial Results

Revenue and EPS vs prior periods and estimates

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$1,412.7 $1,532.2 $1,553.1
Revenue Consensus Mean ($USD Millions)$1,400.6*$1,485.4*$1,497.0*
Diluted EPS (GAAP) ($)$0.61 $0.56 $0.50
Adjusted EPS ($)$0.64 $0.67 $0.67
Primary EPS Consensus Mean ($)$0.5956*$0.6225*$0.5949*
Revenue vs ConsensusBeatBeatBeat
EPS (Adjusted) vs ConsensusBeatBeatBeat

Note: Consensus values marked with * are values retrieved from S&P Global.

Margins and OpEx

MetricQ1 2025Q2 2025Q3 2025
Gross Profit Margin % (GAAP)78.7% 77.5% 77.8%
Gross Profit Margin % (Adjusted)78.7% 77.6% 77.9%
Operating Margin % (GAAP)27.9% 26.8% 19.8%
Operating Margin % (Adjusted)29.1% 28.2% 27.5%
SG&A % of Sales33.0% 32.8% 33.1%
R&D % of Sales18.0% 18.0% 18.1%

Segment sales by quarter

Segment ($USD Millions)Q1 2025Q2 2025Q3 2025
TAVR$1,046.6 $1,130.9 $1,149.9
TMTT$115.2 $134.5 $145.2
Surgical Structural Heart$250.9 $266.8 $258.0

Regional sales by quarter

Region ($USD Millions)Q1 2025Q2 2025Q3 2025
United States$838.9 $889.7 $907.5
Europe$341.8 $378.2 $387.9
Japan$81.8 $95.3 $90.1
Rest of World$150.2 $169.0 $167.6

KPIs

KPIQ1 2025Q2 2025Q3 2025
Cash & Equivalents ($USD Billions)$3.1 ~$3.0 ~$3.0
Total Debt ($USD Millions)~$600 ~$600 ~$600
Diluted Shares Outstanding (Avg, Millions)587.8 587.9 586.0
Share Repurchase Authorization ($USD Billions)——$2.1

Q3 YoY comparison

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$1,354.4 $1,553.1
Adjusted EPS ($)$0.67 $0.67
Gross Margin % (Adjusted)80.7% 77.9%
Operating Margin % (Adjusted)31.4% 27.5%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Company Sales GrowthFY 20259–10% High end of 9–10% Maintained, targeting high end
TAVR Sales GrowthFY 20256–7% 7–8% Raised
Adjusted EPSFY 2025High end of $2.45–$2.55 $2.56–$2.62 Raised
TMTT SalesFY 2025$530–$550M Unchanged Maintained
Surgical Sales GrowthFY 2025Mid-single-digit (company commentary) Mid-single-digit Maintained
Operating Margin (Adjusted)FY 202527–28% 27–28% Maintained
Tax Rate (Adjusted)FY 202515–18% 15–18% Maintained
Q4 RevenueQ4 2025—$1.51–$1.59B New
Q4 Adjusted EPSQ4 2025—$0.58–$0.64 New
Diluted Shares (Avg)FY 2025585–595M (original) 585–590M Lower expected share count
DividendsFY 2025——No dividend announced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q1 2025; Q-1: Q2 2025)Current Period (Q3 2025)Trend
AI/technology initiativesNot highlighted in Q1/Q2 PRsPartnerships with tech and AI-based companies for echo screening, upstream identification, workflow; capacity programs (Benchmark) Building digital/AI-enabled referral efficiency
Tariffs/macro (FX)Tariff impact flagged; FX moved sales guidance; R&D/SG&A pressures FX boosted sales by ~210 bps ($24M) but pressured GM by ~110 bps FX a headwind to margins; managed via programs
Product performance (TAVR)Q1: +3.8% reported; Q2: +8.9% reported Q3: $1.15B, +12.4% reported; renewed treatment focus; durability evidence Accelerating growth on evidence/guidelines
Product performance (TMTT)Q1: $115M (+58%); Q2: $134.5M (+61.9%) Q3: $145.2M (+59.3%); strong EVOQUE outcomes; M3 early Europe launch Sustained high growth with expanding toolbox
Regional trendsEurope: competitor exit tailwind; Japan improving Europe: rebalanced market; Japan gradual recovery; U.S. focus on timely intervention Broad-based global adoption
Regulatory/legalNCD finalized for tricuspid; SAPIEN M3 CE mark ESC/EACTS guideline updates incl. asymptomatic severe AS; long-term TAVR durability (PARTNER 3/2) Expanding indications/guidelines support growth
R&D executionR&D ~18% of sales; prioritization noted R&D 18.1%; disciplined prioritization; top-line growth to outpace R&D Efficient investment, focus on structural heart

Management Commentary

  • “Our strong results represent another quarter of double-digit sales growth… Based on our better-than-expected performance… we are raising our 2025 sales and EPS guidance.” — Bernard Zovighian, CEO .
  • “Third-quarter adjusted operating profit margin of 27.5% benefited from our better-than-expected sales performance and the deferral of certain spending to the fourth quarter… we continue to anticipate full-year 2025 operating margin of 27% to 28%.” — Scott Ullem, CFO .
  • On guidelines: “These guidelines… enable a proactive approach to disease management… intervention should be considered for asymptomatic patients… a meaningful step forward from the prior practice of watchful waiting.” .
  • On durability: “SAPIEN 3… performance is now proven at 7 years… supported by the 10-year results of the PARTNER 2 trials… sets the stage for continued long-term adoption.” .
  • CFO transition: “Scott Ullem… will transition from his role by midyear 2026… will continue in an advisory role.” .

Q&A Highlights

  • TAVR strength drivers: unusual lack of typical summer seasonality, renewed clinical focus, extensive new evidence; management does not view Q3 as the “new normal” for TAVR growth trajectory .
  • Asymptomatic severe AS: evidence and indication are catalysts; growth in Q3 not yet driven by asymptomatic treatments given coverage constraints; opportunity ahead .
  • SAPIEN M3: U.S. approval expected early 2026; controlled launch in Europe focusing on high-quality outcomes and physician training .
  • Capacity/efficiency: active programs (Benchmark), AI partnerships for echo screening and workflow to expand cath lab capacity and referrals .
  • Pipeline and succession: Alliance/X4 trial completed enrollment end-2024; follow-up ongoing; CFO succession process underway; transition planned by mid-2026 .

Estimates Context

  • Revenue and EPS beat Street in Q1–Q3; EBITDA also ahead of consensus in Q3.
MetricQ1 2025Q2 2025Q3 2025
Revenue Actual ($USD Millions)$1,412.7 $1,532.2 $1,553.1
Revenue Consensus ($USD Millions)$1,400.6*$1,485.4*$1,497.0*
Result vs Revenue ConsensusBeatBeatBeat
Adjusted EPS Actual ($)$0.64 $0.67 $0.67
EPS Consensus ($)$0.5956*$0.6225*$0.5949*
Result vs EPS ConsensusBeatBeatBeat
EBITDA Actual ($USD Millions)$446.5*$469.0*$464.3*
EBITDA Consensus ($USD Millions)$424.3*$444.0*$422.3*
Result vs EBITDA ConsensusBeatBeatBeat

Note: Values marked with * retrieved from S&P Global.

Where estimates may need to adjust:

  • FY adjusted EPS and TAVR growth likely revised upward to reflect raised guidance ($2.56–$2.62 and 7–8% TAVR), and Q4 revenue/EPS guardrails ($1.51–$1.59B; $0.58–$0.64) .
  • Margins: expect step-down in Q4 operating margin (mid-20s) given timing of investments; Street models should reflect higher SG&A and FX pressure on GM .

Key Takeaways for Investors

  • Durable TAVR evidence plus guideline updates are reinforcing demand; Q3 outperformance broad-based across regions with modest Europe tailwind from competitor exit .
  • Guidance raised across EPS and TAVR growth; Q4 brackets help frame year-end cadence—watch operating margin step-down from deferred spending .
  • TMTT growing >50% YoY with EVOQUE real-world outcomes and early M3 traction; toolbox strategy is compounding adoption across mitral/tricuspid .
  • FX remains a margin headwind even as it aids reported sales; hedging/programs mitigate EPS impact vs initial guidance .
  • Capacity/AI initiatives (Benchmark, echo screening/workflow partnerships) are tangible levers to sustain procedure growth and referral activation .
  • Governance: CFO transition planned by mid-2026 with advisory continuity; share repurchase authorization increased to ~$2.1B supporting capital return flexibility .
  • Near-term events: Dec 4 investor conference (2026 outlook), potential U.S. approval for M3 in early 2026; monitor asymptomatic coverage/NCD developments for incremental U.S. TAVR catalysts .