Edwards(EW) - 2025 Q1 - Quarterly Results

Q1 2025 Financial & Operational Overview Edwards Lifesciences reported strong Q1 2025 results, driven by its structural heart strategy, leading to increased sales guidance and key product approvals Recent Highlights & CEO Statement Edwards Lifesciences reported strong Q1 2025 results with significant sales growth and adjusted EPS, driven by its structural heart strategy and key product approvals Q1 2025 Key Performance Indicators | Metric | Value | Growth (YoY) | Growth (Constant Currency) | | :--- | :--- | :--- | :--- | | Total Sales | $1.41 billion | 6.2% | 7.9% (Adjusted) | | TAVR Sales | - | 3.8% | 5.4% | | TMTT Sales | $115 million | 58% | - | | EPS | $0.62 | - | - | | Adjusted EPS | $0.64 | - | - | - CEO Bernard Zovighian attributed the strong start to the year to the company's structural heart-focused strategy and unwavering dedication to innovation, expressing confidence in the 2025 outlook[3] - Key operational achievements include SAPIEN M3 CE Mark approval, a finalized National Coverage Determination (NCD) for EVOQUE to expand patient access, and positive data confirming the long-term durability of RESILIA tissue[4] - The company raised its full-year TMTT sales guidance to $530-$550 million and total sales guidance to $5.7-$6.1 billion, while reaffirming its adjusted EPS outlook of $2.40-$2.50[4] Business Segment Performance The company's business segments, including TAVR, TMTT, and Surgical, demonstrated varied growth, driven by product innovation and market expansion Transcatheter Aortic Valve Replacement (TAVR) The TAVR segment achieved $1.05 billion in sales, driven by the SAPIEN 3 Ultra RESILIA platform and therapy adoption, with anticipated asymptomatic indication approval TAVR Q1 2025 Sales Performance | Metric | Value (USD) | Growth (YoY) | Growth (Constant Currency) | | :--- | :--- | :--- | :--- | | Q1 Sales | $1.05 billion | 3.8% | 5.4% | - In the U.S., the SAPIEN 3 Ultra RESILIA platform continues to perform strongly. Edwards is focused on helping hospitals manage increasing procedure volumes and expects asymptomatic indication approval in Q2[6] - Outside the U.S., growth was supported by the expansion of SAPIEN 3 Ultra RESILIA in Europe and efforts to address the undertreatment of aortic stenosis in Japan[7] Transcatheter Mitral and Tricuspid Therapies (TMTT) The TMTT segment experienced exceptional growth, with sales rising 58% to $115 million, driven by global adoption of PASCAL and EVOQUE, and CE Mark approval for SAPIEN M3 TMTT Q1 2025 Sales Performance | Metric | Value (USD) | Growth (YoY) | Growth (Constant Currency) | | :--- | :--- | :--- | :--- | | Q1 Sales | $115 million | 58% | >60% | - Growth was led by increased adoption and balanced contribution from the PASCAL and EVOQUE systems in the U.S., Europe, and globally[8] - The portfolio was enhanced by the CE Mark approval of SAPIEN M3 in Europe, the world's first transcatheter mitral valve replacement system, which will benefit patients with limited treatment options[9][10] Surgical The Surgical segment reported global sales of $251 million, driven by positive procedure growth for the RESILIA tissue portfolio and key product launches Surgical Q1 2025 Sales Performance | Metric | Value (USD) | Growth (YoY) | Growth (Constant Currency) | | :--- | :--- | :--- | :--- | | Q1 Sales | $251 million | 1% | 3% | - Global procedure growth for the premium RESILIA tissue portfolio, including MITRIS, INSPIRIS, and KONECT, remains positive[11] - Key innovation milestones include the successful launch of MITRIS in China and the expected CE Mark approval for the KONECT aortic valved conduit in Europe before year-end[12] Detailed Financials & Outlook This section details Q1 2025 financial results, including improved gross profit margins and operating expenses, alongside updated 2025 guidance and comprehensive financial statements Additional Financial Results (Q1 2025) Q1 2025 saw improved gross profit margin to 78.7% and an adjusted operating margin of 29.1%, with $3.1 billion in cash and cash equivalents Q1 2025 Financial Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross Profit Margin | 78.7% | 78.4% | | SG&A (% of sales) | 33.0% | - | | R&D (% of sales) | 18.0% | - | | Operating Profit Margin | 27.9% | - | | Adjusted Operating Margin | 29.1% | - | - SG&A expenses were lower than expected due to the deferral of certain strategic investments originally planned for Q1[13] - The company ended the quarter with approximately $3.1 billion in cash and cash equivalents and $600 million in total debt[15] 2025 Outlook Edwards Lifesciences raised its full-year 2025 TMTT sales guidance to $530-$550 million and total sales to $5.7-$6.1 billion, while reaffirming adjusted EPS guidance Updated Full-Year 2025 Guidance | Metric | New Guidance | Previous Guidance | | :--- | :--- | :--- | | Total Company Sales | $5.7 - $6.1 billion | Increased by $100M | | TMTT Sales | $530 - $550 million | $500 - $530 million | | Adjusted EPS | $2.40 - $2.50 | Reaffirmed | Q2 2025 Guidance | Metric | Guidance | | :--- | :--- | | Total Sales | $1.45 - $1.53 billion | | Adjusted EPS | $0.59 - $0.65 | - The company is implementing plans to mitigate anticipated cost pressures from a weakening dollar, tariffs, and the expected close of the JenaValve acquisition to maintain its full-year operating margin guidance of 27% to 28%[16] Financial Statements and Reconciliations This section presents detailed unaudited financial statements for Q1 2025, including Consolidated Statements of Operations and reconciliations of GAAP to non-GAAP sales measures Unaudited Consolidated Statements of Operations (in millions) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $1,412.7 | $1,329.9 | | Gross profit | $1,111.1 | $1,043.0 | | Operating income, net | $394.8 | $349.0 | | Net income | $356.4 | $351.0 | | Diluted EPS | $0.61 | $0.58 | Reconciliation of Sales by Product Group (Constant Currency Growth) | Product Group | GAAP Growth | Constant Currency Growth | | :--- | :--- | :--- | | TAVR | 3.8% | 5.4% | | TMTT | 58.1% | 61.4% | | Surgical Structural Heart | 0.7% | 2.6% | | Total | 6.2% | 7.9% | Reconciliation of Sales by Region (Constant Currency Growth) | Region | GAAP Growth | Constant Currency Growth | | :--- | :--- | :--- | | United States | 7.3% | 7.2% | | Europe | 4.9% | 8.8% | | Japan | (4.9)% | (1.0)% | | Rest of World | 10.6% | 15.9% |