Edwards Lifesciences Corporation Q4 FY2025 earnings call

Management Statement and Operational Highlights

• Strategy: Focus on Structural Heart, addressing large patient needs with innovation. TAVR had renewed focus on SAPIEN with long-term durability data. TMTT expanded with new therapies, and Surgical maintained strong fundamentals.
• Initiatives: Partnership with American Heart Association for heart valve initiative to improve diagnosis/treatment of heart valve disease. Invested in patient access, field resources, and education, including early TAVR education and guideline support.
• Data and Evidence: Long-term data from Partner 3 and 2, early TAVR trial results, and guideline changes (e.g., European Society of Cardiology) supported proactive disease management and expanded SAPIEN platform globally.

Segment Performance

• TAVR: Fourth quarter global sales reached $1.16 billion, up 10.6% year over year. Procedural growth in the quarter was in the high single digit. The SAPIEN platform benefited from long-term data (Partner 3 seven-year and Partner 2 ten-year) and the early TAVR trial, with SAPIEN 3 Ultra Resilia showing strong adoption. Share gain from Boston Scientific's exit contributed, with sticky share gain from Q3 to Q4.
• TMTT: Grew over 40% to $156 million in the quarter, with full-year sales exceeding $500 million. Growth was driven by global adoption of PASCAL and EVOQUE, and the launch of SAPIEN M3, expanding the mitral portfolio. NextGen PASCAL and PASCAL for U.S. tricuspid patients are upcoming catalysts.
• Surgical: Fourth-quarter global sales were $254 million, up 2% year over year. Impacted by end-of-year distributor inventory adjustments in one country. Full-year surgical sales grew 4.3% and exceeded $1 billion, with mid-single-digit growth expected in 2026 driven by RESILIA therapies.

Guidance

• 2026 sales growth guidance is 8% to 10%, with EPS guidance of $2.90 to $3.05. Confidence in meeting guidance due to growth catalysts like TAVR NCD update potential and new therapy launches.
• First quarter sales projected at $1.55 billion to $1.63 billion, with adjusted EPS expected to be $0.70 to $0.76. FX rates expected to provide approximately $40 million upside to 2026 sales compared to prior year.

Risks

• Factors causing actual results to differ from forward-looking statements, including risks in SEC filings (e.g., market access challenges, competitive landscape). Uncertainties related to regulatory approvals and payer coverage, such as TAVR NCD process outcomes.

Question and Answer

• Q: Robbie Marcus on TAVR strength and share gain A: Bernard and Daniel discuss TAVR growth, noting share gain from Boston Scientific exit contributed, with SAPIEN 3 Ultra Resilia adoption supporting performance.
• Q: Travis Steed on TAVR and Q1 cadence A: Scott and Daniel talk about Q1 sales projection, FX impact, and January trends supporting confidence in guidance.
• Q: Larry Biegelsen on LAA opportunity A: Bernard and Daveen discuss LAA market potential, differentiation of Edwards' technology, and planned mid-2026 launch.
• Q: David Roman on lifetime management and capital allocation A: Daniel and Scott talk about lifetime management implications for TAVR and capital allocation priorities, including investment in business growth and share repurchases.
• Q: Joanne Wuensch on SAPIEN M3 and European guidelines A: Daveen and Daniel discuss SAPIEN M3 launch progress in U.S. and Europe, and impact of European guideline changes on TAVR and mitral/tricuspid therapies.
• Q: Matt Taylor on TAVR growth in U.S. A: Daniel discusses U.S. TAVR growth drivers, including early TAVR trial results, SAPIEN 3 Ultra Resilia adoption, and guideline shifts supporting proactive disease management.
• Q: Vijay Kumar on surgical distributor impact and Moderate AS A: Scott and Bernard discuss surgical inventory adjustment as a one-time event and Moderate AS study progress, awaiting TCT data for more details.