Edwards(US:EW)2025-11-05 21:12Financial Performance - Net sales for the first nine months of 2025 were $4.5 billion, an increase of $444.3 million or 11.0% compared to the same period in 2024, primarily driven by TAVR and TMTT product sales [145]. - Gross profit increased in the nine months ended September 30, 2025, but as a percentage of sales decreased due to foreign currency fluctuations and higher operational expenses [146]. - Net sales in the United States for the three months ended September 30, 2025, were $907.5 million, a 12.8% increase from $804.6 million in 2024 [150]. - TAVR product sales for the three months ended September 30, 2025, were $1,149.9 million, a 12.4% increase from $1,023.3 million in 2024 [151]. - TMTT product sales increased by 59.3% for the three months ended September 30, 2025, reaching $145.2 million compared to $91.1 million in 2024 [151]. Expenses - SG&A expenses increased due to higher personnel-related costs and performance-based compensation, with foreign currency fluctuations adding $7.3 million to expenses for the three months ended September 30, 2025 [172]. - R&D expenses increased due to heightened clinical activity related to heart failure management innovations [175]. Taxation - The effective income tax rate for the nine months ended September 30, 2025, was 16.1%, up from 9.2% in 2024, primarily due to global minimum tax increases and reduced tax benefits from employee share-based compensation [183]. - The company expects an additional tax expense of approximately $50 million in 2025 due to the implementation of the OECD's Pillar Two rules, which impose a global minimum tax of 15% on reported profits [184]. - The IRS proposed a substantial increase to the company's taxable income for the 2015 through 2017 tax years, potentially resulting in an additional tax expense of approximately $255 million [188]. - The company plans to contest the IRS's claim for an additional tax of $269.3 million for the 2015 through 2017 tax years through the judicial process [189]. Cash and Investments - As of September 30, 2025, the company had cash and cash equivalents of $3.4 billion in the United States and $438.0 million outside the United States [196]. - The company had $1,223.2 million in investments in debt securities and $207.9 million in investments in equity instruments as of September 30, 2025, exposing it to investment risks [211]. Shareholder Actions - The company repurchased 11.2 million shares at an aggregate cost of $844.9 million during the nine months ended September 30, 2025, with remaining authority to purchase $2.1 billion of common stock [199]. Acquisitions and Divestitures - The company entered into a definitive agreement to sell a non-core product group for $85 million, with additional earnouts of up to $40 million expected to close in Q4 2025 [141]. - The company entered into agreements to acquire multiple medical device companies for a total cash purchase price of $1.5 billion, with three transactions closed in 2024 for $1.1 billion [200]. Cash Flow - Net cash flows provided by operating activities increased by $474.5 million to $1,144.3 million for the nine months ended September 30, 2025, primarily due to lower tax payments and improved operating performance [204]. - Net cash used in investing activities was $514.6 million for the nine months ended September 30, 2025, primarily due to net purchases of investments and capital expenditures [205]. - Net cash used in financing activities was $945.4 million for the nine months ended September 30, 2025, primarily due to purchases of treasury stock [207]. Regulatory Approvals - The company received FDA approval for the SAPIEN 3 platform for severe aortic stenosis patients without symptoms in April 2025 [155].