Relentless Innovation Enduring Growth Investor Day 2025 September 30, 2025 Welcome Video 2 Relentless Innovation Enduring Growth Welcome Lauren Tengler | Vice President, Investor Relations Safe harbor for forward-looking statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words like "anticipate," "expect," "project," "believe," " ...

Core Insights - Boston Scientific (BSX) is expected to experience growth in the upcoming quarters due to strategic acquisitions, particularly in the oncology and hypertension sectors, while facing challenges from currency fluctuations and macroeconomic conditions [1][10]. Group 1: Company Performance - Boston Scientific has a market capitalization of $1543.77 billion and has consistently beaten earnings estimates over the past four quarters, achieving an average surprise of 8.11% [2]. - The company's shares have increased by 16.9% over the past year, outperforming the industry and the S&P 500, which grew by 0.3% and 18.8%, respectively [1]. Group 2: Strategic Acquisitions - Recent acquisitions, including Intera Oncology and SoniVie, have added significant potential products to Boston Scientific's portfolio, particularly in liver cancer and hypertension treatments [3][4]. - These acquisitions contributed approximately 450 basis points to the company's revenue growth in the second quarter of 2025 [4][8]. Group 3: Growth Drivers - The WATCHMAN device, a key product in Boston Scientific's structural heart programs, is gaining momentum, with a 28% growth in the WATCHMAN franchise in the second quarter of 2025, driven by increased adoption in the U.S. and the CE Mark approval of the WATCHMAN FLX Pro [5][6]. Group 4: Challenges - Boston Scientific is exposed to currency fluctuations, with 40% of its sales coming from international markets, leading to a 1.2% revenue headwind in the second quarter of 2025 due to unfavorable foreign exchange rates [7]. - The company is also facing macroeconomic pressures, including geopolitical tensions and supply chain disruptions, which have increased operating costs, with a 28.9% rise in product costs and an 18.7% increase in selling, general, and administrative expenses reported in the second quarter of 2025 [10][11].

Core Insights - Boston Scientific Corporation (NYSE:BSX) is recognized as a leading AI-powered biotech stock, integrating artificial intelligence into its medical device portfolio, particularly in cardiology [1][4] - The FDA has expanded approval for the FARAPULSE system, which treats atrial fibrillation, a condition affecting nearly 60 million people globally [2] - The company combines internal R&D with strategic acquisitions and early-stage investments to rapidly commercialize AI-enhanced technologies across various medical divisions [3] Group 1: AI Integration and Product Development - Boston Scientific's AI strategy focuses on embedding advanced algorithms into revenue-generating devices like WATCHMAN and FARAPULSE, enhancing clinical outcomes [1] - The partnership with AI platforms such as Anumana aims to leverage data from millions of patients to improve diagnostics and treatment outcomes in electrophysiology and left atrial appendage closure (LAAC) procedures [2] - The company reported a strong organic sales growth of 17% year-over-year, with a notable 28% growth in its WATCHMAN device [4] Group 2: Future Milestones and Market Position - Key upcoming milestones include the commercialization of the Cortex OptiMap system combined with FARAPULSE and further AI-driven product launches [4] - The approach of combining internal R&D with strategic acquisitions supports the scalability of AI initiatives beyond cardiology into areas such as endoscopy and urology [3] - Boston Scientific's leadership in AI-enabled medical technology is reinforced through ongoing partnerships and product innovations [4]

Financial Data and Key Metrics Changes - In Q2 2025, total company operational sales grew 22% and organic sales grew 17%, exceeding the guidance range of 13% to 15% [6][23] - Adjusted EPS for Q2 was $0.75, representing a 23% increase, also surpassing the guidance range of $0.71 to $0.73 [6][23] - Adjusted operating margin was 27.6%, an increase of 50 basis points compared to Q2 2024 [7][24] Business Line Data and Key Metrics Changes - Urology sales grew 28% operationally and 6% organically, driven by stone management and prosthetic urology franchises [11] - Endoscopy grew 8% globally, with double-digit growth in the U.S., supported by strong performance in key products [12] - Cardiology sales increased by 28%, with interventional cardiology therapy sales growing 9% [13] Market Data and Key Metrics Changes - U.S. operational growth was 31%, primarily driven by the cardiovascular portfolio [8][9] - EMEA grew 2% operationally, with 7% growth excluding the Accurate Valve discontinuation [9] - Asia Pacific saw a 15% operational growth, led by strong performance in Japan, China, and Australia [10] Company Strategy and Development Direction - The company is focusing on expanding its portfolio and investing in clinical evidence to support new technologies [15][21] - There is a commitment to strategic acquisitions and high-growth adjacencies, with recent acquisitions of Sonae V and Entera Medical [26] - The company aims to continue outpacing market growth through organic portfolio enhancements and strategic M&A [94] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, expecting full-year organic growth to be in the range of 14% to 15% [28][29] - The anticipated impact of tariffs and the Accurate Valve discontinuation was discussed, with expectations for gross margin to remain flat for the year [24][45] - Management highlighted the importance of clinical data and reimbursement developments in driving future growth [72][75] Other Important Information - The company received a credit rating upgrade from Moody's to A3, reflecting improved financial stability [26] - Free cash flow for Q2 was $1,129 million, with expectations for full-year free cash flow to be approximately $3,500 million [26] Q&A Session Summary Question: WATCHMAN growth and durability - Management noted strong growth in WATCHMAN, driven by safety and efficacy, with expectations for continued growth in the future [35][38] Question: Gross margin concerns - Management addressed the impact of the Accurate Valve discontinuation on gross margin, emphasizing strong sales performance and cost controls [42][44] Question: Growth vectors for EP business - Management highlighted market growth, PFA adoption, and new product introductions as key growth drivers for the electrophysiology business [49][50] Question: MedSurg business performance - Management emphasized strong performance in Endoscopy and Neuromodulation, with expectations for continued growth despite some competitive pressures [55][60] Question: ASC setting and growth implications - Management expressed optimism about the ASC setting, viewing it as a positive development for future growth despite potential challenges [64][68] Question: Renal denervation market potential - Management discussed the potential of the renal denervation market, emphasizing the importance of clinical trials and market positioning [71][75] Question: Evolution of the EP portfolio - Management outlined plans for expanding the EP portfolio, including new product launches and indication expansions [78][82]

Financial Data and Key Metrics Changes - In Q2 2025, total company operational sales grew 22% and organic sales grew 17%, exceeding the guidance range of 13% to 15% [5][20] - Adjusted EPS for Q2 was $0.75, a 23% increase, surpassing the guidance range of $0.71 to $0.73 [5][20] - Adjusted operating margin was 27.6%, reflecting a 50 basis point increase compared to Q2 2024 [5][21] Business Line Data and Key Metrics Changes - Urology sales grew 28% operationally and 6% organically, driven by stone management and prosthetic urology franchises [9] - Endoscopy grew 8% globally, with double-digit growth in the U.S., supported by strong performance in key products [10] - Cardiology sales increased by 28%, with interventional cardiology therapy sales growing 9% [11] Market Data and Key Metrics Changes - U.S. operational growth was 31%, primarily from the cardiovascular portfolio [7] - EMEA grew 2% operationally, with 7% growth excluding the Accurate Valve discontinuation [7] - Asia Pacific saw a 15% operational growth, led by strong performance in Japan, China, and Australia [8] Company Strategy and Development Direction - The company is focused on expanding its portfolio and investing in clinical evidence to drive growth, particularly in the electrophysiology market [17][18] - Strategic acquisitions, such as Entera Medical, are aimed at enhancing the interventional oncology portfolio [19][23] - The company anticipates continued high single-digit growth in the second half of the year, driven by proprietary technologies and strategic partnerships [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving organic growth of 14% to 15% for the full year 2025, reflecting strong momentum across global businesses [6][24] - The anticipated impact of tariffs has been revised down to approximately $100 million for the full year [21][24] - Management highlighted the importance of clinical data and reimbursement decisions in shaping future growth, particularly in the WATCHMAN and FerriPulse markets [36][99] Other Important Information - The company received a credit rating upgrade from Moody's to A3, indicating improved financial stability [23] - Free cash flow for Q2 was $1.129 billion, with expectations of approximately $3.5 billion for the full year 2025 [23][24] Q&A Session Summary Question: WATCHMAN growth and durability - Management noted a 28% growth in WATCHMAN, driven by its safety and efficacy profile, and expects continued growth as more physicians adopt concomitant procedures [34][36] Question: Gross margin concerns - Management acknowledged a $130 million write-down related to the Accurate exit but emphasized strong sales performance and cost controls that offset this impact [40][43] Question: Growth vectors for electrophysiology business - Management highlighted market growth, PFA adoption, and new product launches as key growth drivers for the electrophysiology segment [48][50] Question: Capacity issues with WATCHMAN and FerriPulse - Management indicated no current capacity constraints but noted that hospitals are investing in additional labs to accommodate growing demand [102][106] Question: Impact of Medicare rule changes - Management expressed concerns about proposed reimbursement cuts but remains confident that physicians will prioritize appropriate treatments for patients [98][99]

Core Insights - Boston Scientific (BSX) is expected to report its second-quarter 2025 results on July 23, with prior EPS of 75 cents exceeding estimates by 11.94% [1] - The company has consistently surpassed earnings estimates over the last four quarters, with an average surprise of 8.79% [1] Revenue and EPS Estimates - The Zacks Consensus Estimate for BSX's Q2 2025 revenues is $4.89 billion, reflecting an 18.7% increase year-over-year [2] - The EPS estimate for Q2 2025 is projected at 72 cents, indicating a 16.1% rise compared to the previous year [2] Performance Influencers - The MedSurg division is anticipated to maintain strong sales momentum, particularly in the Endoscopy business, driven by the Axios platform and technologies like OverStitch and Mantis clip [4] - The Urology business is expected to benefit from its core stone management franchise and the integration of the Axonics acquisition [5] - Neuromodulation growth is likely supported by the Brain and Pain franchises, with positive trends from Deep Brain Stimulation and the Intercept product [6] Segment Performance - MedSurg revenues are estimated at $1.68 billion, a 13.1% year-over-year increase [7] - The Cardiovascular unit is projected to perform well, with revenues expected to rise 8.3% year-over-year to $719.95 million [14] - Key contributors to Cardiovascular growth include the AGENT Drug-Coated Balloon and the completion of the SoniVie acquisition [10][11] Earnings Expectations - Boston Scientific has an Earnings ESP of +0.88%, indicating a higher likelihood of beating estimates [15] - The company holds a Zacks Rank of 2 (Buy), suggesting favorable conditions for earnings performance [16]

Core Insights - Boston Scientific's MedSurg segment is experiencing robust growth, particularly in endoscopy, neuromodulation, and urology, with promising long-term prospects for WATCHMAN devices [1][5][8] - The company's stock has outperformed the industry and S&P 500, with a 33.6% increase over the past year [2] - Strategic acquisitions have significantly contributed to revenue growth, with recent buyouts adding 400 basis points to Q1 sales and driving 18.2% organic revenue growth [6][9] MedSurg Segment Performance - The Endoscopy business is gaining market share due to strong growth in endoluminal surgery and single-use imaging franchises, alongside the AXIOS platform [3] - Urology market share is expanding globally, driven by successful product launches like the TENACIO pump and the LithoVue portfolio [4] - Neuromodulation is also seeing growth, particularly in pain and brain businesses, with expectations for improved growth in deep brain stimulation by 2025 [4] WATCHMAN Device Growth - The WATCHMAN device is gaining momentum as a leading non-pharmacologic alternative to oral anti-coagulants, with a 24% year-over-year sales increase in Q1 2025 [5][8] - The next-generation WATCHMAN FLX and FLX Pro are capturing significant market share [5] Strategic Acquisitions - Recent acquisitions, including Bolt Medical and Cortex, have added valuable products to Boston Scientific's portfolio [6] - The acquisition of Axonics in Q4 2024 has also contributed positively to sales growth [9] Financial Performance - The company has consistently beaten earnings estimates, with an average surprise of 8.79% over the last four quarters [2] - The Zacks Consensus Estimate for 2025 earnings per share is $2.91, with revenues expected to rise by 16.4% to $19.50 billion [11] Currency Exposure - Boston Scientific faces risks from currency fluctuations, with 40% of sales coming from international markets, which could impact revenues by 50 basis points in 2025 [10]

Core Insights - Boston Scientific (BSX) has achieved a remarkable 40.5% increase in share price over the past year, significantly outperforming the industry and S&P 500 [1][9] - The company is currently ranked 2 (Buy) by Zacks, benefiting from the success of its WATCHMAN device and strong market share gains in the MedSurg segment [2][9] Company Overview - Boston Scientific, based in Marlborough, MA, specializes in developing, manufacturing, and marketing medical devices across various interventional medical specialties, focusing on less-invasive medical practices [3] - The company's R&D efforts are directed towards breakthrough technologies aimed at expanding existing markets and entering adjacent ones [3] Growth Catalysts - The growth in share price is attributed to the strong performance of the WATCHMAN left atrial appendage closure device, with sales increasing by 24% year-over-year in Q1 2025 [4] - The MedSurg segment is capturing market share, with notable growth in endoscopy, urology, and neuromodulation areas [5] - Electrophysiology growth accelerated in Q1 2025, with a 145% organic growth rate driven by the FARAPULSE PFA System, which surpassed $1 billion in global revenues [6] - Recent acquisitions, including Bolt Medical, Cortex, and Axonics, have expanded the product portfolio and contributed to organic revenue growth [7][9] Emerging Markets and Sales Growth - The company is actively expanding its presence in emerging markets, which saw a 9.8% operational growth year-over-year in Q1 2025, despite geopolitical challenges [11] - The Zacks Consensus Estimate projects a 16.4% revenue growth to $19.50 billion in 2025, followed by a 10.7% increase to $21.58 billion in 2026 [13]

Industry Overview - The MedSurg equipment market is projected to grow at a compound annual growth rate (CAGR) of 9.54% from 2025 to 2030 [1] - The growth is driven by an aging population, rising chronic diseases, and rapid technological advancements [3] Boston Scientific (BSX) - Boston Scientific's MedSurg segment is gaining market share, particularly in Endoscopy, Urology, and Neuromodulation [4] - The Endoscopy segment is experiencing growth due to endoluminal surgery and single-use imaging [4] - Urology is benefiting from strong contributions from the Core Stone and prosthetic urology franchises [4] - Neuromodulation is boosted by new products like Cartesia leads and Lumina 3D programming algorithm [4] - The structural heart segment is also performing well, with a 24% growth in WATCHMAN sales [5] - Emerging markets are a vital growth engine, with net sales growing nearly 9.8% year-over-year [6] - In Q1, Boston Scientific reported an adjusted gross margin increase of 19 basis points and an operating margin improvement of 127 basis points [7] - The company raised its full-year 2025 outlook, projecting 15-17% reported net sales growth and adjusted EPS of $2.87-$2.94 [7] Medtronic (MDT) - Medtronic's MedSurg portfolio is benefiting from positive sales momentum in Surgical Robotics, particularly the Hugo robotic-assisted surgery system [8] - The Hugo RAS system has expanded its installed base to 30 countries, with growth in procedure volumes and utilization [8] - Medtronic is seeing significant growth in Cardiac Ablation Solutions, with nearly 30% growth in the fiscal fourth quarter [9] - The company is focused on expansion in emerging markets, which grew mid-single digits in the quarter [11] - Medtronic's operational performance in Q1 showed gross margin improvement of 19 basis points and operating margin growth of 210 basis points [12] - For fiscal 2026, Medtronic projects organic revenue growth of 5% over fiscal 2025 [12] Stock Performance - Over the past year, Boston Scientific's shares have risen by 35.2%, while Medtronic's shares have gained only 7.4% [13] - Boston Scientific is trading at a forward five-year price-to-sales (P/S) ratio of 7.5X, compared to Medtronic's 3.1X [15] - The Zacks Consensus Estimate for Boston Scientific's 2025 EPS implies a year-over-year improvement of 15.9% [17] - Analysts have shown declining confidence in Medtronic, with downward EPS estimate revisions in the last 60 days [18] Investment Outlook - Boston Scientific is gaining strength across MedSurg and structural heart segments, supported by innovation and global expansion [19] - Despite expected tariff impacts, Boston Scientific's raised guidance reflects confidence in sustained growth [19] - Medtronic, while carrying a Zacks Rank 4 (Sell), may attract value-focused investors due to its discounted P/S ratio [20]

Core Insights - Boston Scientific (BSX) has raised its full-year 2025 guidance for net sales growth to approximately 15-17% on a reported basis and nearly 12-14% on an organic basis, reflecting strong first-quarter results and ongoing momentum in key growth areas [1][8] - The company reported an organic sales growth of 18% in the first quarter, exceeding the guided range of 14-16%, with adjusted EPS at $0.75, a 34% year-over-year increase [2] - The Cardiology segment saw a significant sales increase of 31%, driven by products like WATCHMAN and AGENT drug-coated balloon, while the Electrophysiology business experienced a remarkable 145% year-over-year growth [3][8] Financial Performance - Full-year adjusted earnings per share are now expected to be in the range of $2.87-$2.94, up from the previous estimate of $2.80-$2.87 [1] - The company anticipates a $200 million tariff impact in 2025, primarily in the second half, but plans to offset this through organic sales growth and discretionary spending reductions [4] Competitive Landscape - Competitors like Edwards Lifesciences and Stryker have also adjusted their sales forecasts, with Edwards maintaining an 8-10% growth forecast and Stryker raising its guidance to 8.5-9.5% organic growth [5][6] - Boston Scientific's stock has outperformed the industry, gaining 33.4% over the past year compared to the industry's 8.8% growth [7] Valuation Metrics - Boston Scientific currently trades at a forward 12-month price-to-earnings ratio of 33.19X, which is above the industry average of 20.83X [9]