The paragraph is an introduction to the Boston Scientific First Quarter 2025 Earnings Call. It begins with a note that the event is being recorded, then transitions to John Monson, the Senior Vice President of Investor Relations. He announces the presence of key executives, including CEO Mike Mahoney and CFO Dan Brennan, who will participate in the Q&A session alongside Chief Medical Officer Dr. Ken Stein. A press release with Q1 results and non-GAAP measures was issued earlier that morning and is available on the company's Investor Relations website. Operational revenue figures exclude foreign currency impacts, and organic revenue excludes acquisitions and divestitures without a full period of comparable net sales. Guidance excludes two pending acquisitions, which are set to close in Q2 2025. Forward-looking statements about financial performance and business plans are based on current beliefs and not guarantees.

In the second paragraph of the article, Michael Mahoney discusses Boston Scientific's strong financial performance in the first quarter of 2025. The company reported a 22% growth in operational sales and 18% in organic sales, surpassing their projected guidance. Their adjusted EPS increased by 34% to $0.75, and the adjusted operating margin was 28.9%. Mahoney attributes this success to their strategic focus on innovation, clinical evidence generation, and a dedicated global team. Looking ahead, the company has increased its full-year organic growth projection from 10%-12% to 12%-14%, driven by robust performance in their cardiology portfolio and strategic execution across business units.

In the second quarter, the company expects an adjusted EPS of $0.71 to $0.73, with a full-year forecast of $2.87 to $2.94, reflecting a 14% to 17% growth, despite a $200 million tariff impact. Efforts to mitigate this impact include sales increases and spending cuts. The company is committed to expanding its global manufacturing, particularly in the U.S., with new sites in Georgia and expanded capacity in Minnesota. In the first quarter, the U.S. market saw a 31% growth, driven by technologies like FARAPULSE and WATCHMAN. Europe, the Middle East, and Africa experienced an 8% operational growth, boosted by exceptional performance in EP and strong sales in anchor technologies. The Asia Pacific region grew 11%, with Japan showing significant growth thanks to FARAPULSE. In China, despite a challenging comparison from the previous year and pricing impacts, high single-digit growth was achieved, with double-digit growth anticipated.

In the first quarter, sales were impacted by having one less selling day, which affected growth by about 200 basis points. Urology sales increased by 25% operationally and 4% organically, driven by the core stone franchise and a successful fluid management case in Chile. The StoneSmart ecosystem is set for U.S. clearance in the second half of 2025. Endoscopy sales grew by 6% both operationally and organically, with significant growth in the Axios platform, OverStitch, and Mantis clip technologies. Neuromodulation sales rose by 7%, with notable growth in brain and pain franchises, supported by the launch of Cartesia leads and the Illumina 3D programming algorithm. The pain portfolio’s Intercept showed strong demand due to 5-year data on efficacy. Cardiology sales surged by 31%, with interventional cardiology growing by 9% and coronary therapies benefiting from double-digit growth in the imaging franchise and DCB technology.

The paragraph outlines the strong performance and strategic initiatives of a medical company in the U.S. It highlights strong reorder rates and new account openings for agent DCB, with established outpatient reimbursements and expected inpatient reimbursements. Positive results were reported for the VITALYST Circulatory support system. The company announced the acquisition of SoniVie, anticipated to close in Q2, and saw a 24% growth in its WATCHMAN product, gaining market share and enhancing customer procedures. Investments continue in global clinical trials, such as the Option A trial in Asia Pacific, and a new WATCHMAN FLEX PRO generation has been fully converted in the U.S. Future U.S. label updates are expected for 2025. Cardiac Rhythm Management sales increased by 1%, with diagnostics showing strong growth, while core CRM saw mixed results, with low-voltage growing and high-voltage declining slightly.

The company has launched next-generation lead delivery catheters for conduction system pacing, targeting the left bundle branch area, and expects FDA approval for power levels pacemakers by the second half of 2025. Electrophysiology sales increased by 145%, making the company the second-largest player globally in the field. They are focusing on expanding their position in pulsed field ablation (PFA) with clinical evidence and new innovations. There is high demand for their FARAPULSE system, with strong sales and new account openings. The CHAMPION clinical trial showed FARAPULSE to be more effective than cryoablation for treating paroxysmal atrial fibrillation. The company is also seeing strong adoption of its Opel HDX mapping solution and has completed enrollment in the AVANGAR trial for drug-naive persistent AF patients. Additionally, they've initiated the ELEVATE-PF trial and expect data from the ADVANTAGE Phase II trial to support FDA approval by the end of 2025.

The paragraph highlights the significant growth in Boston Scientific's peripheral interventions, including double-digit increases in their Interventional Oncology franchise. The company received FDA approval for expanding a brain trial and conducted an early feasibility study for TheraSphere. The acquisition of Antero Oncology is expected in the second quarter, and there was notable growth in their vascular franchise. They completed the acquisition of Bolt Medical and received FDA clearance for the IVL system, planning a limited launch by 2025. In coronary, they advanced the fracture trial with U.S. patient enrollment. Additionally, Dan Brennan is retiring as CFO after 30 years, to be succeeded by John Monson, with Lauren Tengler returning to Investor Relations.

The paragraph details the financial performance of a company in the first quarter of 2025. Consolidated revenue was $4.663 billion, marking a 20.9% growth compared to the first quarter of 2024, despite a negative foreign exchange impact. Organic revenue growth was 18.2%, surpassing the predicted range. Adjusted earnings per share increased by 34% to $0.75, exceeding projections. Adjusted gross margin improved due to a favorable product mix, and adjusted operating margin was 28.9%, higher than expected. The adjusted tax rate was 9.8%, influenced by stock compensation benefits, and operational tax rate was 13.6%. The company had 1,493 million fully diluted weighted average shares outstanding.

In the first quarter, the company reported free cash flow of $354 million, derived from $541 million in operating activities minus $187 million in net capital expenditures. They anticipate full-year 2025 free cash flow to exceed $3 billion. As of March 31, 2025, the company had $725 million in cash and used $1 billion of a euro-denominated note offering to repay maturing notes. They received credit rating upgrades to A- from Standard & Poor's and Fitch, with a gross debt leverage ratio of 2.2x. Their main capital allocation priorities are strategic acquisitions and share repurchases, recently acquiring Bolt Medical to enhance their cardiology portfolio. A legal reserve stands at $316 million, with $48 million funded. For 2025, they project reported revenue growth between 15%-17%, operational growth between 15.5%-17.5%, and organic growth between 12%-14%, excluding various factors. For Q2 2025, they expect reported revenue growth of 17.5%-19.5% and organic growth of 13%-15%.

The paragraph provides financial projections and impacts due to newly enacted tariffs for the company. The full-year adjusted gross margin is expected to align with 2024, with an adjusted operating margin expansion of 50 to 75 basis points. In 2025, the company anticipates below the line expenses of approximately $425 million and an operational tax rate of about 13.5%. Earnings per share (EPS) is projected to grow 14% to 17% compared to 2024, despite a foreign exchange headwind. Second quarter EPS is expected to range between $0.71 and $0.73. Tariffs are expected to have a $200 million impact in 2025, which will be offset through sales guidance raises, spending cuts, and a foreign exchange benefit. The tariff effects will mainly impact the second half of the year. The speaker concludes by thanking teammates and a special thanks to Mike for their role.

The paragraph discusses a discussion between senior executives during an earnings call. Jonathan Monson mentions opening the floor for questions, with Robbie Marcus from JPMorgan posing the first one. Robbie congratulates the company on its successful quarter and addresses a question about tariffs, acknowledging their ability to offset some costs despite the challenge. Daniel Brennan clarifies that they are facing a $200 million tariff headwind for 2025 but will manage the impact in the second half by increasing revenue performance, reducing discretionary spending, and gaining some benefits from foreign exchange.

In the paragraph, the speaker discusses the company's financial performance, noting that revenue and foreign exchange factors offset half of their challenges, while discretionary spending reductions help offset the other half, allowing them to raise both revenue and adjusted EPS guidance. They mention that the company is not planning to move manufacturing or infrastructure globally, as they have recently invested in facilities in Minnesota and Georgia and maintain a well-optimized supply chain. Additionally, Michael Mahoney from the company responds to a question about market position, stating their goal to become the number one player in electrophysiology (EP) by leveraging their global momentum, PFA leadership, and significant investments, while acknowledging that this could take a few years.

In the paragraph, the company reports strong growth across its global operations, particularly with the FARAPULSE product in Europe, and anticipates continued growth in China, which is expected to become a billion-dollar market. The company highlights its leadership in Pulsed Field Ablation (PFA), with successful launches and approvals in Japan contributing to this status. It's also making strategic investments in China. There's a positive report on the WATCHMAN franchise, which saw a significant 24% year-over-year growth and strong adoption due to its safety profile and benefits to hospitals, patients, and physicians. Overall, the company expresses confidence in maintaining momentum and leadership in its product lines.

The paragraph discusses the success and growth of medical products in the LAC and PFA categories, highlighting the increased market share and ongoing investments in clinical trials and next-generation products like WATCHMAN. Dr. Ken Stein notes that physicians are recognizing the strong data from recent clinical trials and are becoming accustomed to efficient workflows and economic benefits associated with concomitant procedures, particularly using FARAPULSE. This has led to a faster uptake of these procedures, benefiting patients, doctors, hospitals, and the broader healthcare system. Additionally, despite trade challenges, there remains optimism for double-digit growth in China. The paragraph ends with a transition to a question from Rick Wise regarding the impact of trade wars on Boston.

In this paragraph, Michael Mahoney discusses how Boston Scientific is handling trade battles and potential supply chain disruptions. Despite a $200 million impact from tariffs, the company is performing well financially due to its strong growth and global manufacturing presence. Mahoney highlights that Boston Scientific's operations team is effective and that investments are being made to support long-term growth, with manufacturing facilities in the U.S., Malaysia, and China, which represents 7-8% of their sales. Despite challenges in China, the company continues to achieve double-digit growth, benefiting from local partnerships and a strategic manufacturing footprint. Overall, Boston Scientific is successfully navigating a complex market environment through innovation and strategic planning.

In this discussion, David Roman from Goldman Sachs asks about the growth potential of the MedSurg business, specifically regarding neuromodulation. Michael Mahoney responds by noting that while the reported 5% growth appears modest, it actually translates to 7% when accounting for certain factors. He emphasizes the strength and consistent performance of the Endo team and highlights the improving capabilities of the Neuromod team, which has turned organic. Mahoney also mentions continued investments in the neuromodulation platform and enhanced commercial capabilities. He notes the successful integration of Axonics, an addition expected to go organic by the fourth quarter, contributing to the business's expected growth and improved results throughout the year.

The paragraph discusses the current state of the urology business, mentioning supply chain issues affecting specific categories and resulting in back orders. These issues are expected to improve but may still pose challenges in 2025 as the company continues to invest in the urology portfolio. The business is expected to grow at market rates in 2025, with endoscopy and neuromodulation sectors projected to grow above market rates, contributing positively to the company's cardiology growth. Additionally, there's a discussion about tariffs, with a forecasted $200 million tariff impact for 2025, primarily in the second half. The paragraph also mentions installed reciprocal tariffs and assumptions for their continuation in Q3. A question from Travis Steed of Bank of America also highlights strong margins this quarter and inquires about their relationship with EP growth and offset plans for tariff headwinds.

The paragraph discusses the company's financial outlook and strategic responses to a $200 million unexpected challenge, primarily from China. Despite this setback, the company anticipates achieving 12% to 14% revenue growth, 14% to 17% EPS growth, and a 50 to 75 basis point margin expansion. Factors like FARAPULSE and WATCHMAN growth have driven gross margins to 71.5%, though tariffs pose future challenges. They initially expected gross margin increases but now foresee reductions due to tariffs. Consequently, they plan to reduce discretionary spending to maintain their margin expansion goal of 50 to 75 basis points, adjusting their targets to achieve 27.5 to 27.75 by year-end.

The paragraph discusses the outlook for the CRM (Cardiac Rhythm Management) division. Michael Mahoney expresses optimism about CRM's future despite being slightly below market expectations at present. While there might be a performance lag in 2025, he anticipates improvement by the fourth quarter and further acceleration in 2026. Key factors include investments in CSP labeling, new CSP catheters, and a total product refresh of the S-ICD tachy brady portfolio called Denali. The approval of Empower in the second half of 2025 is expected to significantly impact growth in 2026. Overall, strong investments and product developments are expected to drive momentum throughout the strategic plan period.

In the paragraph, Ken Stein discusses the significance of the Empower device in the leadless pacing space, highlighting its ability to communicate with the SICD for patients needing brady or antitachycardia pacing. He emphasizes its importance as an unmet need in high-voltage therapy and its potential to broaden the use of S-ICD in primary prevention patients. Following this, Danielle Antalffy from UBS addresses Daniel Brennan, expressing her fondness for their sports discussions and her dislike for Boston sports teams. She looks forward to working with John and notes interest in recent acquisitions, particularly SoniVie.

The paragraph discusses an upcoming acquisition of the company SoniVie, expected to close in the second quarter. Michael Mahoney expresses optimism about SoniVie's ultrasound technology for hypertension relief and acknowledges the challenges and developments needed in terms of clinical trials, reimbursement, and payer support. The clinical trials for the technology are in the early stages in the U.S., and while the company is excited about the market potential, approval and reimbursement details are still developing.

The paragraph discusses the unmet medical need of treating high blood pressure, which affects half of U.S. adults and leads to significant healthcare costs and cardiovascular diseases globally. Ken Stein emphasizes the potential advantages of SoniVie's ultrasound modality for renal denervation, noting its ability to penetrate tissue effectively and avoid vascular complications by not obstructing blood flow. He is optimistic about SoniVie's clinical differentiation and its potential to address this critical health issue if all necessary conditions align. Additionally, a question is raised regarding the capacity within the electrophysiology sector and the growth prospects for PFA and WATCHMAN technologies.

The paragraph discusses the current state and future pathway for accommodating atrial fibrillation (AFib) cases and procedures in ambulatory surgery centers (ASCs). Michael Mahoney notes that there are no major capacity issues at present due to the efficiency and strong reimbursement for these procedures. CMS is considering a 10% reimbursement increase, making these financially attractive for hospitals and prompting investment in new labs. However, rapid growth in these procedure categories could lead to future capacity constraints. Ken Stein adds that moving procedures to outpatient settings depends on factors like reimbursement and ensuring the procedures are safe, efficient, and predictable, highlighting FARAPULSE's strengths in these areas.

The paragraph discusses the tax rate situation for Boston's operations, highlighting reasons for its low and durable rate, including factors like manufacturing sources, geographic business mix, and IP location. Daniel Brennan explains the 13.5% operational and 12.5% adjusted tax rates and notes potential future headwinds from the sunsetting of the TCJA in 2026, which could increase the tax rate by 200 to 300 basis points. Brennan is cautiously optimistic about ongoing developments in Washington that might mitigate this impact.

The paragraph discusses updates on the TAVR and WATCHMAN medical devices. There is no new information about TAVR's U.S. FDA submission, but its Prime valve is performing well in Europe. The CHAMPION trial for WATCHMAN is expected to have data readouts in the first half of next year. A positive outcome is anticipated to support over 20% growth for WATCHMAN and potentially triple its addressable market. The paragraph notes that patients with atrial fibrillation (Afib) desire to discontinue blood thinners, which WATCHMAN may facilitate.

In the paragraph, Michael Mahoney discusses the company's active strategic investments and acquisitions. He highlights the integration and future growth potential of recent acquisitions, including [indiscernible], Axonics, and Antara, within their respective business areas. Mahoney also mentions the company's excitement about entering the IVL space with Bolt and their ongoing clinical trials. Additionally, he emphasizes their commitment to maintaining the largest venture fund in med tech, which continues to be a significant source of acquisition growth for the company. Overall, the focus is on strengthening and expanding their category leadership through strategic investments and acquisitions.

The paragraph discusses Boston Scientific's commitment to delivering excellent performance, fostering innovation, and creating a great work environment. Jonathan Monson thanks participants for their interest and informs them to contact Investor Relations for unanswered questions. A replay of the conference will be available for a limited time, with details provided by Drew. The conference has concluded, and attendees are thanked and informed they may disconnect.

This summary was generated with AI and may contain some inaccuracies.