Edwards(EW) - 2025 Q2 - Quarterly Results

Financial and Operational Highlights Second Quarter 2025 Performance Edwards Lifesciences reported strong double-digit sales growth in the second quarter of 2025, with total sales reaching $1.53 billion, an 11.9% increase (10.6% adjusted), this growth was driven by strong performance across all product groups, particularly TMTT which grew over 60%, and adjusted EPS for the quarter was $0.67 Q2 2025 Key Financial Metrics | Metric | Value | Growth (YoY) | Adjusted Value | Adjusted Growth (YoY) | | :--- | :--- | :--- | :--- | :--- | | Total Sales | $1.53 billion | 11.9% | $1.53 billion | 10.6% | | TAVR Sales | $1.1 billion | 8.9% | $1.13 billion | 7.8% (Constant Currency) | | TMTT Sales | $134.5 million | 61.9% | $133.0 million | 57.1% | | Diluted EPS | $0.57 | - | $0.67 | - | - Key operational and clinical achievements in Q2 include: - The SAPIEN platform became the only TAVR approved for asymptomatic patients in both the U.S. and Europe - 10-year data from the PARTNER II study confirmed the long-term durability of Edwards TAVR - The SAPIEN M3 system received CE Mark approval, enhancing the TMTT portfolio[4] Full Year 2025 Outlook Buoyed by strong first-half performance, the company has raised its full-year 2025 guidance, projecting total sales growth of 9-10% (up from 8-10%) and increased TAVR sales growth, with adjusted EPS now expected at the high end of the $2.40 to $2.50 range - CEO Bernard Zovighian expressed confidence in the full-year outlook, citing better-than-expected first-half performance and multiple catalysts across the product portfolio[3] Updated Full-Year 2025 Guidance | Metric | Previous Guidance | Updated Guidance | | :--- | :--- | :--- | | Total Sales Growth | 8-10% | 9-10% | | Total Sales | - | $5.9B - $6.1B | | TAVR Sales Growth | 5-7% | 6-7% | | TAVR Sales | - | $4.3B - $4.5B | | Adjusted EPS | $2.40 - $2.50 | High-end of $2.40 - $2.50 | - For the third quarter of 2025, the company projects total sales between $1.46 and $1.54 billion and adjusted EPS of $0.54 to $0.60[17] Business Segment Performance Transcatheter Aortic Valve Replacement (TAVR) The TAVR segment reported sales of $1.1 billion, growing 8.9% (7.8% constant currency) in Q2, driven by continued SAPIEN technology adoption, a renewed focus on timely severe aortic stenosis treatment in the U.S., and market share gains in Europe following a competitor's exit TAVR Q2 2025 Performance | Metric | Value | Growth (YoY) | Constant Currency Growth (YoY) | | :--- | :--- | :--- | :--- | | Sales | $1.1 billion | 8.9% | 7.8% | - In the U.S., the EARLY TAVR trial data is encouraging more timely treatment of patients with severe aortic stenosis (AS) - In Europe, a competitor's exit led to a rebalancing of market share, modestly benefiting Edwards' sales - In Japan, TAVR sales grew in the mid-single digits, an improvement from the previous quarter[6][7] Transcatheter Mitral and Tricuspid Therapies (TMTT) The TMTT segment achieved impressive growth, with sales reaching $134.5 million (61.9% year-over-year increase), fueled by strong PASCAL technology adoption, a successful EVOQUE system launch, and portfolio strengthening via CE Mark approval for the SAPIEN M3 mitral valve replacement system TMTT Q2 2025 Performance | Metric | Value | Growth (YoY) | Adjusted Growth (YoY) | | :--- | :--- | :--- | :--- | | Sales | $134.5 million | 61.9% | 57.1% | - Strong adoption of PASCAL technology continues in new and existing centers - The EVOQUE system's commercial launch is progressing well in the U.S. and Europe, with high demand - The SAPIEN M3 mitral valve system received CE Mark approval in Q2, receiving positive early clinician feedback[9][10] Surgical The Surgical segment posted Q2 sales of $267 million (7.7% increase), supported by positive global procedure trends for its premium RESILIA tissue portfolio, including INSPIRIS, MITRIS, and KONECT technologies, with the KONECT aortic valved conduit also receiving CE Mark approval in Europe during the quarter Surgical Q2 2025 Performance | Metric | Value | Growth (YoY) | Constant Currency Growth (YoY) | | :--- | :--- | :--- | :--- | | Sales | $267 million | 7.7% | 6.8% | - The company's KONECT aortic valved conduit received CE Mark approval in Europe during the second quarter[12] Detailed Financial Results Consolidated Statements of Operations For Q2 2025, net sales increased to $1.53 billion from $1.37 billion, gross profit rose to $1.19 billion despite a gross margin decline to 77.5%, and operating income increased to $411.2 million, though net income from continuing operations decreased to $335.9 million primarily due to higher income taxes and an impairment loss Q2 Statement of Operations (in millions) | Account | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net sales | $1,532.2 | $1,369.4 | +11.9% | | Gross profit | $1,187.8 | $1,093.9 | +8.6% | | Operating income, net | $411.2 | $366.5 | +12.2% | | Net income from continuing operations | $335.9 | $364.0 | -7.7% | Operating Expenses and Margins The Q2 gross profit margin was 77.5% (down from 79.9%) due to manufacturing expenses and foreign exchange, while SG&A expenses rose to $502 million (32.8% of sales) and R&D expenses were $276 million (18.0% of sales), reflecting strategic investment prioritization, resulting in an adjusted operating margin of 28.2% Q2 2025 Key Margins and Expenses | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Gross Profit Margin | 77.5% | 79.9% | | SG&A (% of Sales) | 32.8% | 32.7% | | R&D (% of Sales) | 18.0% | 19.8% | | Operating Profit Margin | 26.8% | 26.8% | | Adjusted Operating Profit Margin | 28.2% | 27.4% | - The year-over-year decrease in gross margin was driven by additional manufacturing expenses for new therapies and foreign exchange effects[13] Balance Sheet and Cash Position As of June 30, 2025, Edwards Lifesciences maintained a strong liquidity position with approximately $3 billion in cash and cash equivalents and total debt of approximately $600 million Key Balance Sheet Items (as of June 30, 2025) | Item | Amount | | :--- | :--- | | Cash and cash equivalents | ~$3 billion | | Total debt | ~$600 million | Non-GAAP Reconciliation The company uses non-GAAP measures to exclude items like certain litigation expenses, amortization, separation costs, and impairment losses, providing a clearer view of core operational performance, which for Q2 2025 resulted in a non-GAAP adjusted EPS of $0.67 from a GAAP diluted EPS of $0.57 - Management uses non-GAAP measures for internal decision-making and to enhance comparability with industry peers by excluding items that do not reflect core operational activities[27][28] Q2 2025 GAAP to Non-GAAP EPS Reconciliation | Description | Per Share Amount | | :--- | :--- | | GAAP Diluted EPS from Continuing Operations | $0.57 | | Certain litigation expenses | $0.03 | | Separation costs | $0.01 | | Loss on impairment | $0.06 | | Adjusted Diluted EPS | $0.67 | Sales by Product Group and Region On a constant currency basis for Q2 2025, TAVR grew 7.8%, TMTT grew 57.1%, and Surgical grew 6.8%, while regionally, the U.S. saw 10.1% adjusted growth and sales outside the U.S. grew 11.3% on a constant currency basis, led by strong performance in the Rest of World category Q2 2025 Constant Currency Growth (YoY) | Category | Constant Currency Growth Rate | | :--- | :--- | | Product Groups | | | TAVR | 7.8% | | TMTT (Adjusted) | 57.1% | | Surgical | 6.8% | | Regions (Adjusted) | | | United States | 10.1% | | Europe | 9.6% | | Japan | 4.2% | | Rest of World | 19.5% |