Core Insights - A favorable product mix shift is a significant driver of earnings quality in MedTech companies, leading to margin expansion and cash flow durability [1][2] Group 1: Industry Dynamics - The medical device sector is experiencing a positive shift in product mix, with companies focusing on clinically differentiated platforms and premium technologies to achieve consistent earnings growth [2] - Improving hospital capital expenditures and normalizing procedural growth are contributing to this favorable environment [2] Group 2: Company-Specific Analysis AngioDynamics (ANGO) - AngioDynamics is strategically reshaping its portfolio by exiting lower-growth product lines and focusing on higher-growth MedTech segments, resulting in a 13% year-over-year revenue growth in MedTech for Q2 fiscal 2026 [6][7] - MedTech revenues now account for 45% of total revenues, up from 43% a year ago, with adjusted gross margin increasing by 170 basis points to 56.4% [7][10] - The company has seen significant growth in its Auryon platform, achieving 18 consecutive quarters of double-digit growth [8] Boston Scientific (BSX) - Boston Scientific is benefiting from a mix shift towards premium, innovation-led franchises, particularly in electrophysiology and structural heart, which are driving margin expansion [12][14] - In Q3 2025, adjusted gross margin improved to 71%, up 60 basis points year-over-year, attributed to strong growth in its electrophysiology and WATCHMAN franchises [13][16] - Electrophysiology sales grew by 63% year-over-year, while WATCHMAN saw a 35% increase, both contributing to the favorable product mix [14] Medtronic (MDT) - Medtronic's product mix is improving, with a 5.5% organic revenue growth in Q2 fiscal 2026, driven by strong performance in Cardiac Ablation, where pulsed-field ablation now represents 75% of revenues [19] - The company anticipates that pressures on gross margin from capital-heavy platforms will ease as consumables scale, leading to an improved mix over time [20][21] - Medtronic's gradual shift towards faster-growing segments supports its long-term EPS growth guidance, despite near-term margin fluctuations [21][22]