Boston Scientific Corporation Q3 FY2025 earnings call

• Third quarter results exceeded expectations with organic sales growth 15% and adjusted EPS $0.75. - Regional performance: U.S. grew 27%, EMEA declined 2% due to ACURATE valve discontinuation and ERP system issue at Kerkrade distribution center, Asia Pac grew 17%. - Business units: Urology sales grew 27% operationally and 5% organically; Endoscopy grew 9%; Neuromodulation grew 9%; Peripheral Interventions had 16% operational and 6% organic growth; Interventional Oncology & Embolization grew double digits; Cardiology sales grew 23%; EP sales grew 63% with FARAPULSE leading; WATCHMAN grew 35%. - Acquisitions: Closed acquisition of Elutia BioEnvelope assets and announced acquisition of Nalu Medical.

Cardiovascular: Sales grew 23%. Interventional cardiology therapy sales grew 3% (including impact of ACURATE withdrawal), with double-digit growth in coronary therapies. MedSurg: Endoscopy grew 9%, Neuromodulation grew 9%, Peripheral Interventions had 16% operational growth, Interventional Oncology & Embolization grew double digits, Urology had 27% operational growth. EP: Sales grew 63%, with FARAPULSE as leading PFA technology. WATCHMAN: Grew 35%, surpassed 600,000 patients, expected 20% growth over the years. Revenue contribution percentages were not explicitly stated in absolute terms but each segment's performance was highlighted.

• Full year 2025 organic growth expected 15.5%. - Fourth quarter 2025 organic growth guided 11%-13%. - Full year 2025 adjusted EPS guided $3.02-$3.04, representing 20%-21% growth. - Fourth quarter 2025 adjusted EPS guided $0.77-$0.79.

• Foreign currency fluctuations impact sales. - Discontinuation of ACURATE valve in EMEA had negative impact. - ERP system implementation issues caused backorders in EMEA. - Competition in various segments and regulatory changes affecting product launches and reimbursements.

Q: Congrats on a good quarter, especially on EP and WATCHMAN. Do you think of WATCHMAN as a key growth driver and how will growth and dollar contribution progress assuming CHAMPION data is positive?

A: Michael Mahoney said WATCHMAN is a gem, with concomitant uptake exceeding expectations, expecting 20% market CAGR over LRP, and China launch of WATCHMAN FLX Pro as tailwind.

Q: Impression on China business and procedure pull forward?

A: Michael Mahoney said China business grew mid-teens, offsetting VBP headwinds, and no signals of procedural pull forward in third quarter.

Q: Concerns on studies like ALONE-AF and OCEAN affecting WATCHMAN growth?

A: Ken Stein said CLOSURE-AF not a good read-through for CHAMPION, but other trials give confidence, and OCEAN if confirmatory of ALONE-AF is great news.

Q: Margin performance and future drivers?

A: Jonathan Monson said mix driving gross margin, expecting operating margin expansion 100 basis points, with mix, tariff annualization, SG&A leverage, and R&D investment as drivers.

Q: Dynamics in other businesses besides EP and WATCHMAN?

A: Michael Mahoney said MedSurg had 8% growth, Endoscopy, Neuromodulation, Axonics, and Euro expected to improve, with ICTx and other businesses performing well.

Q: PFA and persistent AF penetration?

A: Ken Stein said FARAPULSE well suited for de novo persistent AF, with FARAPOINT to aid redo procedures, and high uptake in de novo persistent AF.

Q: Nalu Medical acquisition details?

A: Michael Mahoney said Nalu has solid clinical evidence and reimbursement, fits neuromodulation and pain business, and will accelerate Neuromod growth in 2026.

Q: CRM business growth outlook?

A: Michael Mahoney said CRM investing in Denali platform, EMPOWER leadless pacemaker, and Elutia acquisition, confident CRM will strengthen over LRP.

Q: AGENT drug-coated balloon growth?

A: Ken Stein said AGENT has room for growth before STANCE reads out, sees real world outcomes and TCT data, and comfortable with AGENT's position as long-term driver.

Q: AF ablations in ASCs and market growth?

A: Michael Mahoney said seeing interest in states without certificate of need, with ASCs potentially aiding market growth by increasing capacity.