EW — Edwards Lifesciences Corporation

Summary of Edwards Lifesciences Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Q4 Sales: $1.57 billion, reflecting an 11.6% year-over-year growth.
• TAVR Sales: $1.16 billion, up 10.6% year-over-year.
• TMTT Sales: $156 million, growing over 40%.
• Surgical Sales: $254 million, a 2% increase.
• Adjusted EPS: $0.58, lower than expected due to increased spending on patient access initiatives and a higher tax rate.
• GAAP EPS: $0.11, impacted by one-time charges related to the GennaValve acquisition and litigation expenses.
• Adjusted Gross Profit Margin: 78.3%, slightly down from 79% year-over-year.
• Operating Profit Margin: 23.7% in Q4, with a full-year adjusted operating profit margin of 27%.

2. Strategic Updates and Business Highlights:

• Focus on the Structural Heart segment, with a commitment to innovation and addressing complex patient needs.
• Strong momentum in TAVR, driven by long-term clinical data supporting the SAPIEN platform, including the Partner 2 and Partner 3 studies.
• Expansion of TMTT offerings, including the launch of SAPIEN M3 and upcoming NextGen PASCAL for U.S. Tricuspid patients.
• Partnership with the American Heart Association to enhance awareness and treatment of heart valve disease.
• Increased focus on early TAVR trials, which are changing treatment paradigms in Europe.

3. Forward Guidance and Outlook:

• 2026 Sales Growth Guidance: 8% to 10%.
• EPS Guidance for 2026: $2.90 to $3.05.
• Anticipation of a potential tailwind from an updated national coverage determination (NCD) for TAVR later in 2026.
• Expected mid-single-digit sales growth in the Surgical product group for 2026.

4. Bad News, Challenges, or Points of Concern:

• Adjusted EPS was lower than expected, primarily due to increased SG&A spending and a higher tax rate.
• The company experienced a significant rise in SG&A expenses, which could impact future profitability if not managed.
• Competitive pressures remain, particularly in the TAVR market, although the exit of Boston Scientific has provided some share gains.
• Uncertainty surrounding the outcomes of ongoing clinical trials, especially regarding moderate aortic stenosis, which could affect future growth opportunities.

5. Notable Q&A Insights:

• Management confirmed that TAVR growth was supported by strong clinical evidence and a shift towards urgent treatment of symptomatic patients.
• Increased SG&A spending in Q4 was strategic, aimed at amplifying patient access and education initiatives, with a moderated growth plan for 2026.
• The potential impact of the TAVR NCD was discussed, with expectations that it may lead to improved patient access and treatment pathways.
• The company is cautiously optimistic about the moderate aortic stenosis market but is awaiting clinical trial results before making definitive statements about its potential.

Overall, Edwards Lifesciences reported a strong performance in Q4 2025, driven by its focus on structural heart solutions, while navigating challenges related to increased expenses and competitive pressures. The outlook for 2026 remains positive, with strategic initiatives aimed at sustaining growth.