Boston Scientific(BSX) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2025, total company operational sales grew 22% and organic sales grew 18%, exceeding the guidance range of 14% to 16% [10][34] - Adjusted EPS for Q1 was $0.75, a 34% increase, surpassing the guidance range of$ 0.66 to $0.68 [11][35] - Adjusted operating margin for Q1 was 28.9%, with adjusted gross margin at 71.5%, reflecting a 170 basis point improvement year-over-year [11][35][36] Business Line Data and Key Metrics Changes - Urology sales grew 25% operationally and 4% organically, driven by the core stone franchise [17] - Endoscopy sales increased by 6% both operationally and organically, with strong performance from the Axios platform [18] - Cardiology sales grew 31%, with interventional cardiology therapies sales up 9% [19][20] - Electrophysiology sales surged 145%, establishing the company as the 2 player in the market [24][25] Market Data and Key Metrics Changes - U.S. operational sales grew 31%, with double-digit growth in five of eight business units [13] - Europe, Middle East, and Africa saw 8% operational growth, led by exceptional performance in electrophysiology [14] - Asia Pacific grew 11% operationally, with Japan showing strong uptake of FARAPULSE [15] Company Strategy and Development Direction - The company remains committed to a diversified global manufacturing footprint, with significant investments in the U.S. [12][13] - The acquisition of SoniVie is expected to close in Q2 2025, enhancing the company's portfolio in ultrasound-based renal denervation technology [21][112] - The company aims to continue expanding its leadership in electrophysiology through clinical evidence and innovation [25][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving organic growth of 12% to 14% for the full year, despite a$ 200 million tariff impact [11][45] - The company anticipates continued strong performance in the cardiology portfolio and expects to offset tariff impacts through sales growth and cost reductions [12][45] - Management highlighted the importance of ongoing investments in clinical trials and product development to support future growth [21][60] Other Important Information - Dan Brennan, the CFO, announced his retirement after 30 years with the company, with John Monson set to succeed him [31][47] - The company received credit rating upgrades to single A- from both Standard & Poor's and Fitch ratings [39] Q&A Session Summary Question: Impact of tariffs on performance - Management confirmed a $200 million tariff headwind for 2025, primarily affecting the second half, and outlined strategies to offset this through revenue performance and discretionary spending reductions [51][53] Question: Market share in electrophysiology - Management expressed ambition to become the 1 player in electrophysiology, supported by strong clinical science and investments in the market [58][60] Question: WATCHMAN franchise growth - Management reported a 24% growth in WATCHMAN sales, driven by strong adoption of concomitant procedures and positive clinical data [64][66] Question: Trade environment and supply chain concerns - Management acknowledged challenges in the trade environment but emphasized the company's ability to absorb tariff impacts and maintain strong performance [74][76] Question: Outlook for CRM division - Management expressed confidence in the CRM division's future, with expected approval of the Empower device in the second half of 2025, which will enhance growth [100][102]