Boston Scientific(BSX) - 2024 Q2 - Quarterly Results

Second Quarter 2024 Financial Performance Boston Scientific delivered robust financial results in Q2 2024, marked by significant net sales growth and increased adjusted EPS, exceeding prior guidance Overall Performance Summary Boston Scientific reported strong Q2 2024 results, exceeding guidance with net sales of $4.120 billion, representing 14.7% organic growth, and adjusted EPS grew to $0.62, up from $0.53 in the prior year, also surpassing company guidance Q2 2024 Key Financial Metrics | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $4.120 billion | $3.599 billion | +14.5% (Reported) | | Organic Sales Growth | 14.7% | N/A | N/A | | GAAP EPS | $0.22 | $0.18 | +22.2% | | Adjusted EPS | $0.62 | $0.53 | +17.0% | - The company's performance significantly exceeded its guidance, with reported net sales growth of 14.5% against a guidance of 10.5-12.5%, organic growth of 14.7% against a guidance of 10-12%, and adjusted EPS of $0.62 against a guidance of $0.57-$0.59[2] Performance by Business Segment The Cardiovascular segment was the primary growth driver with 19.0% organic growth, significantly outpacing the MedSurg segment's 7.6% organic growth, and within Cardiovascular, the Cardiology business grew 22.0% organically, showing exceptional strength Q2 2024 Net Sales Growth by Reportable Segment (vs. Q2 2023) | Segment | Reported Growth | Operational Growth | Organic Growth | | :--- | :--- | :--- | :--- | | MedSurg | 9.0% | 10.1% | 7.6% | | Cardiovascular | 17.8% | 19.7% | 19.0% | Q2 2024 Net Sales by Business (in millions) | Business | Q2 2024 Sales | Organic Growth | | :--- | :--- | :--- | | Endoscopy | $676 | 7.9% | | Urology | $525 | 9.1% | | Neuromodulation | $282 | 3.7% | | Total MedSurg | $1,483 | 7.6% | | Cardiology | $2,047 | 22.0% | | Peripheral Interventions | $590 | 9.4% | | Total Cardiovascular | $2,637 | 19.0% | Performance by Geographic Region All regions demonstrated strong double-digit operational growth, led by Emerging Markets at 19.3% and the United States at 16.9%, with the U.S. remaining the largest market, contributing $2.466 billion in net sales Q2 2024 Net Sales Growth by Region (vs. Q2 2023) | Region | Q2 2024 Sales (millions) | Reported Growth | Operational Growth | | :--- | :--- | :--- | :--- | | United States | $2,466 | 16.9% | 16.9% | | EMEA | $822 | 13.7% | 16.1% | | APAC | $670 | 7.0% | 13.2% | | LACA | $162 | 15.3% | 15.7% | | Emerging Markets | $680 | 14.8% | 19.3% | Recent Business Developments Boston Scientific advanced its portfolio through key product approvals, positive clinical trial outcomes, and strategic corporate acquisitions Product Approvals and Launches The company achieved key regulatory milestones, including NMPA approval in China for the FARAPULSE™ PFA System and the AGENT™ Drug-Coated Balloon, and also initiated the U.S. launch of the AGENT™ balloon for treating in-stent restenosis - Received National Medical Products Administration (NMPA) approval in China for the FARAPULSE™ Pulsed Field Ablation (PFA) System, expanding its availability in a key market[3] - Initiated the U.S. launch of the AGENT™ Drug-Coated Balloon for treating in-stent restenosis in coronary artery disease patients and also received NMPA approval for the device in China[4] Clinical Trial Data and Presentations Boston Scientific presented positive clinical data for several key products, including superior outcomes for the FARAPULSE PFA System compared to thermal ablation, favorable 30-day results from the FARADISE registry, and positive pivotal trial results for the Modular CRM (mCRM™) System - Presented data from the ADVENT clinical trial showing the FARAPULSE PFA System resulted in a significantly lower atrial arrhythmia burden (<0.1%) compared to thermal ablation[4] - The pivotal MODULAR ATP clinical trial for the Modular CRM (mCRM™) System, which includes the EMBLEM™ S-ICD and EMPOWER™ Leadless Pacemaker, met all pre-specified six-month safety and effectiveness endpoints[4] - Follow-up studies of the Intracept™ Intraosseous Nerve Ablation System demonstrated significant improvements in vertebrogenic pain, with nearly one-third of patients being 100% pain-free after five years[5] Corporate Developments The company announced a strategic agreement to acquire Silk Road Medical, Inc. to enhance its stroke prevention portfolio, and additionally, Dr. Cheryl Pegus was elected to the board of directors - Announced an agreement to acquire Silk Road Medical, Inc., a company that commercialized a platform of products to prevent stroke in patients with carotid artery disease[5] - Dr. Cheryl Pegus, former partner at Morgan Health and EVP at Walmart, was elected to the company's board of directors[5] Financial Outlook for 2024 Boston Scientific updated its financial guidance for both the full year and the third quarter of 2024, reflecting strong anticipated sales growth and adjusted EPS Full Year 2024 Guidance The company raised its full-year 2024 guidance, now expecting net sales growth of 13.5% to 14.5% on a reported basis and 13% to 14% organically, with adjusted EPS projected to be between $2.38 and $2.42 Full Year 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | Reported Net Sales Growth | 13.5% to 14.5% | | Organic Net Sales Growth | 13.0% to 14.0% | | GAAP EPS | $1.34 to $1.38 | | Adjusted EPS | $2.38 to $2.42 | Third Quarter 2024 Guidance For Q3 2024, Boston Scientific anticipates net sales growth of 13% to 15% on both a reported and organic basis, projecting GAAP EPS of $0.36 to $0.38 and adjusted EPS of $0.57 to $0.59 Third Quarter 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | Reported Net Sales Growth | 13.0% to 15.0% | | Organic Net Sales Growth | 13.0% to 15.0% | | GAAP EPS | $0.36 to $0.38 | | Adjusted EPS | $0.57 to $0.59 | Financial Statements and Reconciliations This section provides detailed unaudited consolidated financial statements and reconciliations of GAAP to non-GAAP financial measures for the reported period Consolidated Statements of Operations (Unaudited) The Q2 2024 income statement shows a gross profit of $2.850 billion on net sales of $4.120 billion, with operating income at $520 million and net income attributable to common stockholders at $324 million, or $0.22 per diluted share, up from $261 million or $0.18 per share in Q2 2023 Q2 2024 vs. Q2 2023 Statement of Operations (in millions, except EPS) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net Sales | $4,120 | $3,599 | | Gross Profit | $2,850 | $2,542 | | Operating Income | $520 | $514 | | Net Income Attributable to BSX | $324 | $261 | | Diluted EPS | $0.22 | $0.18 | Non-GAAP Financial Measures Reconciliation The company provides detailed reconciliations of GAAP to non-GAAP financial measures, with significant Q2 2024 adjustments to GAAP net income including amortization expense ($182 million), intangible asset impairment charges ($243 million), and acquisition/divestiture-related charges ($38 million), leading to an adjusted net income of $914 million attributable to common stockholders - Management uses non-GAAP measures like operational net sales, organic net sales, and adjusted EPS to evaluate performance, excluding items such as amortization, impairment charges, acquisition-related costs, and restructuring charges[26][27][29] Q2 2024 GAAP to Adjusted Net Income Reconciliation (in millions) | Description | Amount | | :--- | :--- | | Reported GAAP Net Income (to BSX) | $324 | | Amortization expense | $182 | | Intangible asset impairment charges | $243 | | Acquisition/divestiture-related net charges | $38 | | Restructuring and related net charges | $44 | | Other adjustments | $83 | | Adjusted Net Income (to BSX) | $914 |