Q4 2024 Summary
Published Feb 28, 2025, 10:48 PM UTC- Strong growth trajectory in the Transcatheter Mitral and Tricuspid Therapies (TMTT) segment, with sales expected to increase from approximately $300 million in 2024 to over $500 million in 2025, and a vision to reach $2 billion by 2030. This growth is driven by the PASCAL and EVOQUE devices, which are seeing increased adoption in both the U.S. and Europe.
- Expansion into new markets and increasing adoption of TMTT therapies, as Edwards Lifesciences focuses on training physicians and adding new centers for implantation of their devices. The company is actively rolling out training programs, with continuous growth in the number of centers offering EVOQUE, indicating substantial future growth potential.
- Anticipated catalysts for growth in the Transcatheter Aortic Valve Replacement (TAVR) segment, including the expected asymptomatic TAVR approval mid-year 2025, which is projected to boost growth rates in subsequent quarters. The company also expresses confidence in higher TAVR growth rates later in the year.
- Edwards Lifesciences expects Q1 2025 total company and TAVR year-over-year growth rates to be below the low end of their full-year guidance ranges of 8% to 10% and 5% to 7%, respectively, indicating potential challenges in achieving their growth targets.
- The company experienced slower growth in Japan, a significant market, with sales growth in Q4 increasing sequentially and year-over-year but at a slower pace than in other major regions, and they were "not satisfied" with their growth in Japan.
- The company's reliance on midyear catalysts, such as the approval of asymptomatic TAVR in the U.S. and scaling of TMTT throughout the year, presents timing risks. If these catalysts are delayed or underperform, it could impact the company's ability to meet its full-year sales guidance.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | –10% (from $1,534.1M in Q4 2023 to $1,385.8M in Q4 2024) | Total revenue declined due to weaker sales performance in Q4 2024 relative to a robust Q4 2023, possibly reflecting market slowdowns or pricing pressures that reversed the previous period’s strong product adoption and geographic expansion. |
Operating Income | –22% (from $400.1M in Q4 2023 to $312.6M in Q4 2024) | A significant decline in operating income indicates higher operating expenses and margin pressure in Q4 2024, suggesting that cost increases (e.g., in SG&A, R&D, or restructuring) outweighed revenue gains, a contrast to the prior period’s performance. |
Net Income | –6% (from $366.9M in Q4 2023 to $345.0M in Q4 2024) | The moderate decline in net income compared to operating income reflects partial offsetting factors such as lower non‐operating expenses or tax adjustments, maintaining some resilience in profitability despite revenue and margin contractions. |
EPS – Basic/Diluted | –5% (from $0.61 in Q4 2023 to $0.58 in Q4 2024) | EPS decreased in line with net income reductions, underscoring the impact of lower operating margins and revenue on shareholder earnings, even as share count adjustments and prior period gains had supported earlier growth. |
Cash Flow Impact | N/A (Net change of –$624.6M in Q4 2024) | The net cash decline of –$624.6M in Q4 2024 is driven by substantial non-cash adjustments of $923.1M and increased share repurchases of $100.1M, marking a strategic shift in cash management compared to previous periods’ flows. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Total Company Sales | Q1 2025 | no prior guidance | $1.35B to $1.43B | no prior guidance |
Adjusted EPS | Q1 2025 | no prior guidance | $0.58 to $0.64 | no prior guidance |
Total Company Sales | FY 2025 | no prior guidance | $5.6B to $6B | no prior guidance |
TAVR Sales | FY 2025 | no prior guidance | $4.1B to $4.4B | no prior guidance |
TMTT Sales | FY 2025 | no prior guidance | $500M to $530M | no prior guidance |
Surgical Structural Heart Sales | FY 2025 | no prior guidance | $970M to $1.05B | no prior guidance |
Adjusted Gross Profit Margin | FY 2025 | no prior guidance | 78% to 79% | no prior guidance |
Operating Margins | FY 2025 | no prior guidance | 27% to 28% | no prior guidance |
Tax Rate | FY 2025 | no prior guidance | 15% to 18% | no prior guidance |
Average Diluted Shares Outstanding | FY 2025 | no prior guidance | 585M to 595M | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue | Q4 2024 | $1.33 billion to $1.39 billion | $1,385.8 million | Met |
EPS | Q4 2024 | $0.53 to $0.57 | $0.58 | Beat |
Operating Margin | Q4 2024 | Mid-20s percentage | ~22.6% = ($312.6 million ÷ $1,385.8 million) | Miss |
Gross Margin | Q4 2024 | High end of 76% to 78% | ~78.9% = (($1,385.8M – $292.2M) ÷ $1,385.8M) | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
TAVR Growth Trajectories | Q1 2024: Expected 8–10% growth with faster H2 ramp. Q3 2024: Maintained 5–7% full-year guidance. | Q4 2024: Full-year 6% growth; Q4 up 5.3%. Reiterated 5–7% for 2025. | Growth range narrowed vs. early-year. Steady outlook into 2025. |
Asymptomatic TAVR Approval | Q1 2024: EARLY TAVR trial data to be presented at TCT; significant market expansion potential. Q3 2024: Discussed trial but no new approval details. | Q4 2024: Approval anticipated mid-2025; viewed as multi-year growth catalyst. | Now a clearer mid-year 2025 catalyst with high impact potential. |
Expanding TMTT Segment with PASCAL and EVOQUE | Q1 2024: PASCAL driving initial TMTT growth; EVOQUE early launch. Q3 2024: Both technologies fueling strong TMTT uptake. | Q4 2024: TMTT expected to exceed $500M in 2025; expanded adoption of PASCAL/EVOQUE. | Consistently positive, with higher 2025 sales outlook. |
Competition in TAVR | Q1 2024: Brief mention of competitor’s aggressive pricing in Europe. Q3 2024: Addressed potential 4th valve; confident in SAPIEN 3 Ultra RESILIA. | Q4 2024: No specific mention [—]. | Not discussed in latest period; emphasis remained on Edwards’ own offerings. |
Operating Margin Pressures and EPS Guidance Constraints | Q1 2024: Not explicitly discussed; noted SG&A/R&D costs. Q3 2024: 31.4% margin, set to dip in Q4; Critical Care sale impacted EPS. | Q4 2024: 25.6% margin, guiding 27–28% for 2025; Q1 2025 EPS of $0.58–$0.64. | Margins pressured but expected to improve in 2025. |
Slower Growth in Japan | Q1 2024: Japan showed strong TAVR adoption. Q3 2024: Slower market growth noted. | Q4 2024: Big opportunity but underperformed expectations; focus on improvement. | Shift from strong start to slower pace; remains a strategic priority. |
Critical Care Segment Fluctuations | Q1 2024: $251M in sales; raised guidance. Q3 2024: Sold in early September, reducing EPS by ~$0.35. | Q4 2024: No longer contributes; sale completed in Q3. | Segment fully divested; no longer part of results. |
Reliance on Mid-Year Catalysts and Timing Risks | Q1 2024: Not discussed [—]. Q3 2024: Not discussed [—]. | Q4 2024: Mid-2025 asymptomatic TAVR approval presented as key driver. | New focus on mid-2025 for TAVR catalyst; timing pivotal for growth. |
New Product Launches (SAPIEN 3 Ultra RESILIA) | Q1 2024: Majority of U.S. TAVR sales; EU launch expected in Q2. Q3 2024: Launch progressed in Europe; stable pricing. | Q4 2024: Key sales driver in U.S. and Europe; robust momentum. | Broadening adoption; remains a core growth engine. |
Shifts in European TAVR Pricing Dynamics | Q1 2024: Aggressive competitor pricing led to some trialing. Q3 2024: Primarily stable pricing [—]. | Q4 2024: Generally stable, minor regional pressures noted. | Competitive pricing headwinds subsided; stable but watched. |
Expansion of Physician Training and New Centers | Q1 2024: Ongoing new site launches, emphasis on targeted training. Q3 2024: Focus on EVOQUE/PASCAL center activations. | Q4 2024: Monthly trainings in Irvine for EVOQUE, ~50 U.S. centers initially. | Steady expansion effort; key to therapy adoption and growth. |
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TAVR Growth and Guidance
Q: Why does Q1 TAVR growth guidance show deceleration from Q4?
A: Although we finished Q4 strong, we expect Q1 growth rates for TAVR to be below our full-year guidance range due to a typical slowdown in patient screenings during late December, which affects January. This seasonality is factored into our guidance, and we anticipate higher growth rates in subsequent quarters. -
TMTT Growth Drivers
Q: How will you accelerate TMTT revenue from $420 million annualized in Q4 to over $500 million?
A: TMTT growth will be driven by continued expansion of EVOQUE and PASCAL in both the U.S. and Europe. EVOQUE will continue to grow as we treat more patients and enter new centers, while PASCAL's adoption increases with more centers opening worldwide. Both products are key growth drivers, and we expect linear revenue growth throughout 2025, leading to our guidance. -
Impact of NCD on EVOQUE
Q: How will the upcoming NCD affect EVOQUE's growth?
A: We anticipate a positive NCD at the end of Q1, which is built into our guidance. The NCD will provide timely access to Medicare patients and continue the growth we're seeing. If it doesn't go as planned, it could slow us down, but we are confident it aligns with our expectations and won't affect our rollout plans. -
Operating Expenses and Margin Outlook
Q: How should we think about SG&A and R&D expenses for 2025?
A: We expect an improvement of about 200 basis points in operating profit versus Q4, with 100 basis points from R&D and 100 basis points from SG&A as a percentage of sales. Spending in 2025 will grow at a lower rate than revenue, contributing to margin improvement. Beyond 2025, we anticipate EPS growing faster than top-line growth. -
Early TAVR Adoption
Q: When will early TAVR data positively impact procedures?
A: Early TAVR is a multi-year catalyst. Impact will come from education, gaining label indication, guideline updates, and policy changes. Collectively, these factors will motivate hospitals to invest in capacity and treat more patients over time. -
Regional Pressures and Japan Outlook
Q: What regional pressures are you experiencing, and what's the outlook for Japan?
A: We're seeing pressure in regions like Japan, where Q4 growth was unsatisfactory. However, we view Japan as a big growth opportunity due to its aging population with unmet needs. We're committed to enhancing our capabilities and bringing our innovations faster to the region to realize this potential. -
CLASP Trials Update
Q: What's the status of the CLASP IIF and CLASP II TR trials?
A: The CLASP IIF pivotal trial will continue enrolling throughout 2025. The CLASP II TR trial completed enrollment in Q4 2024 and requires a 12-month follow-up. PMA submission will follow, with FDA approval taking at least six months after submission. -
M3 Market Opportunity
Q: Why is M3 important, and what's its market opportunity?
A: M3, our mitral replacement technology, is on track for CE Mark approval in mid-2025 and U.S. approval in 2026. It targets patients unsuitable for transcatheter repair, addressing a large group with unmet needs. M3 will become a new growth driver, complementing PASCAL and EVOQUE in our TMTT portfolio.