Financial Data and Key Metrics Changes - Fourth quarter consolidated revenue reached $5.286 billion, representing a 15.9% reported growth compared to Q4 2024, with operational revenue growth of 14.3% after excluding a $74 million foreign exchange tailwind [19] - Full year 2025 consolidated revenue was $20.074 billion, marking a 19.9% reported growth versus 2024, with operational revenue growth of 19.2% after excluding a $114 million foreign exchange tailwind [20] - Adjusted EPS for Q4 was $0.80, growing 15% year-over-year, exceeding guidance [19] - Full year 2025 adjusted EPS was $3.06, reflecting a 22% increase compared to 2024, marking the third consecutive year of 20%+ adjusted EPS growth [20] Business Line Data and Key Metrics Changes - Urology sales grew 13% operationally in Q4 and 23% operationally for the full year, but performance was below expectations [5] - Endoscopy achieved 8% organic growth in both Q4 and for the full year, driven by endoluminal surgery and imaging systems [5] - Neuromodulation grew 10% in Q4 and 8% organically for the full year, with strong performance from the brain franchise [6] - Cardiovascular segment delivered 16% operational growth in Q4 and 22% operational growth for the full year [7] - Watchman business grew 29% in Q4 and strong double-digit growth for the full year, driven by concomitant procedures [13] Market Data and Key Metrics Changes - U.S. market grew 17% in Q4 and 26% for the full year, with strong performance in EP, Watchman, and ICTX [3] - Asia Pacific region grew 15% operationally in Q4 and 14% for the full year, led by Japan and China [4] - Europe, Middle East, and Africa grew 5% in Q4 and 3% for the full year, with high single-digit growth excluding Acclarent discontinuation [3] Company Strategy and Development Direction - The company anticipates continued momentum in EP and Watchman, with expectations for higher growth in the second half of 2026 [4] - Strategic acquisitions, including Penumbra and Valencia Technologies, are aimed at entering high-growth segments and expanding product offerings [24][25] - The company is focused on maintaining a strong pipeline of innovative products and expanding its market share in key areas [52][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 10%-11% organic revenue growth for 2026, with adjusted EPS growth of 12%-14% [27][28] - The company expects to face challenges in the first half of 2026 due to product discontinuations but anticipates a stronger performance in the second half [46] - Management highlighted the importance of ongoing investments in R&D and strategic M&A to drive future growth [63] Other Important Information - The company expects full-year 2026 adjusted gross margin to be in line with 2025, with a slight expansion in operating margin anticipated [21] - Free cash flow for 2025 was $3.659 billion, exceeding expectations, with a target of approximately $4.2 billion for 2026 [24] Q&A Session Summary Question: Concerns about U.S. EP and Watchman performance - Management noted that U.S. EP grew 35% in Q4, exceeding internal targets, and Watchman grew 29%, indicating strong market performance despite concerns [34][36] Question: Impact of recent trials on Watchman - Management confirmed no negative impact from recent trials on Watchman uptake, with robust growth continuing [41] Question: Expectations for EP growth in 2026 - Management expects EP growth to be around 15%, with confidence in maintaining market leadership despite increased competition [44][51] Question: Diversification of growth drivers - Management emphasized ongoing investments in various business units, including Neuromodulation and Urology, to ensure consistent performance across the portfolio [60][62] Question: Confidence in long-term growth targets - Management reaffirmed confidence in achieving long-term revenue growth targets of 10%+, supported by strategic acquisitions and market leadership [86]

Financial Data and Key Metrics Changes - Fourth quarter consolidated revenue reached $5.286 billion, representing a 15.9% reported growth compared to Q4 2024, with operational revenue growth of 14.3% after excluding a $74 million foreign exchange tailwind [18] - Full year 2025 consolidated revenue was $20.074 billion, marking a 19.9% reported growth versus 2024, with operational revenue growth of 19.2% after excluding a $114 million foreign exchange tailwind [19] - Adjusted EPS for Q4 2025 was $0.80, a 15% increase from 2024, exceeding guidance [18] - Full year 2025 adjusted EPS was $3.06, growing 22% versus 2024, also exceeding guidance [19] - Adjusted gross margin for Q4 was 70.7%, with a full year adjusted gross margin of 70.6%, reflecting a 30 basis point expansion [20] Business Line Data and Key Metrics Changes - Urology sales grew 13% operationally in Q4 and 23% operationally for the full year, but performance was below expectations [4] - Endoscopy achieved organic growth of 8% in both Q4 and for the full year, driven by endoluminal surgery and imaging systems [4] - Neuromodulation grew 10% in Q4 and delivered 8% organic growth for the full year, with strong performance from the brain franchise [5] - Cardiovascular segment delivered 16% growth operationally in Q4 and 22% operationally for the full year [6] - Watchman business grew 29% in Q4 and maintained strong double-digit growth for the full year [12] Market Data and Key Metrics Changes - U.S. operational growth was 17% in Q4 and 26% for the full year, with strong performance in EP, Watchman, and ICTX [2] - Asia Pacific region grew 15% operationally in Q4 and 14% for the full year, led by Japan and China [3] - Europe, Middle East, and Africa grew 5% in Q4 and 3% for the full year, with high single-digit growth excluding Acclarent discontinuation [2] Company Strategy and Development Direction - The company anticipates continued momentum in EP and Watchman, with expectations for higher growth in the second half of 2026 [3] - Strategic acquisitions, including Penumbra and Valencia Technologies, are aimed at entering high-growth markets and expanding product offerings [24][6] - The company is focused on maintaining a strong pipeline of innovative products and expanding its market share in key segments [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 10%-11% organic revenue growth for 2026, with adjusted EPS growth of 12%-14% [27] - The company expects to face challenges in the first half of 2026 due to product removals and market adjustments but anticipates stronger performance in the latter half [25][43] - Management highlighted the importance of ongoing investments in R&D and strategic M&A to drive long-term growth [61] Other Important Information - The company reported free cash flow of $3,659 million for the full year 2025, exceeding expectations [22] - The legal reserve was $242 million as of December 31, with $46 million already funded [24] - The company maintains a strong balance sheet with cash on hand of $1.965 billion and a gross debt leverage ratio of 1.9 times [23] Q&A Session Summary Question: Concerns about U.S. EP and Watchman performance - Management reassured that Q4 results exceeded internal targets, with EP growing 35% and Watchman growing 29%, indicating strong market share gains [30][34] Question: Impact of recent trials on Watchman - Management confirmed no negative impact from recent trials and emphasized robust uptake of Watchman procedures [36][38] Question: Expectations for EP growth in 2026 - Management expects EP growth to exceed 15%, driven by new product approvals and market expansion [41][42] Question: Diversification of growth drivers - Management highlighted strong performance expected in Neuromod, Urology, and Endoscopy, with ongoing investments to ensure consistent growth across all business units [59][60]