Boston Scientific’s Earnings Call Highlights Durable Growth

Boston Scientific ((BSX)) has held its Q4 earnings call. Read on for the main highlights of the call.

Boston Scientific’s 2025 Earnings Call Signals Confidence Despite Targeted Headwinds

Boston Scientific’s latest earnings call painted a distinctly upbeat picture, with management leaning into record 2025 results and a bullish 2026 outlook. Executives highlighted broad-based double‑digit organic growth, expanding margins, and surging free cash flow, arguing that the company’s high‑growth franchises in electrophysiology (EP), WATCHMAN, interventional oncology, and broader cardiovascular are more than offsetting discrete headwinds in Endoscopy, EMEA structural heart, and urology. While they acknowledged a sizable litigation charge, product disruptions, and rising competition in EP, the tone remained confident that these are manageable, time‑bounded issues rather than structural cracks in the growth story.

Record Revenue and Outperformance on Organic Growth

Boston Scientific delivered record full‑year 2025 revenue of $20.74 billion, up 19.9% year over year on a reported basis and 19.2% operationally. Organic revenue climbed 15.8%, slightly above the company’s own guidance, underscoring strong execution across most businesses. In the fourth quarter, reported revenue rose 15.9% to $5.286 billion, translating to 14.3% operational and 12.7% organic growth. Management emphasized that this level of sustained, broad‑based growth at Boston Scientific’s scale is a key differentiator versus many large medtech peers.

EPS Growth and Margin Expansion Underpin Profit Story

Profitability metrics were equally strong. Adjusted EPS rose 22% for the year to $3.06, with Q4 adjusted EPS up 15% to $0.80. The company expanded full‑year adjusted operating margin by 100 basis points to 28.0% and adjusted gross margin by 30 basis points to 70.6%. Management pointed to operating leverage from scale, mix shift toward higher‑margin franchises, and ongoing cost discipline. These margin gains are central to the investment case, signaling that Boston Scientific can convert its top‑line momentum into steadily improving earnings power.

Surging Free Cash Flow and a Solid Balance Sheet

Cash generation was a standout. Free cash flow reached $3.659 billion in 2025, up 38% versus 2024, with an impressive 80% free cash flow conversion. The company ended the year with $1.96 billion in cash and a gross debt leverage ratio of 1.9x, giving it meaningful flexibility for investment and acquisitions. Management guided 2026 free cash flow to roughly $4.2 billion, reinforcing the view that Boston Scientific’s growth engine is increasingly self‑funded and supportive of both internal R&D and external deals.

Electrophysiology and PFA: A High‑Growth Engine

Electrophysiology was one of the clear stars of the call. Global EP organic growth reached 35% in Q4 and an extraordinary 73% for the full year, powered by rapid adoption of pulsed‑field ablation (PFA) technology via the Farapulse system. Management highlighted that PFA now accounts for roughly 70% of atrial fibrillation ablations in the U.S., with strong demand for the company’s mapping systems and OPAL placements. With the EP market expected to grow around 15% in 2026, Boston Scientific believes it is well positioned to continue outgrowing the market, even as it prepares for new competitive entrants.

WATCHMAN Builds Momentum with Clinical Upside

The WATCHMAN left‑atrial appendage closure franchise continued to gain traction, posting 29% growth in Q4 and strong double‑digit growth for the full year across major geographies. More than 25,000 patients have now been treated concomitantly, indicating deeper clinical integration into practice. A key focus for investors is the CHAMPION trial, which has been accepted as a late‑breaking presentation at a major cardiology conference. Management suggested that positive results could materially expand the eligible patient pool—from an estimated 5 million to potentially around 20 million worldwide—creating a powerful multi‑year growth catalyst for WATCHMAN.

Cardiovascular and Interventional Oncology Drive Diversified Growth

Beyond EP and WATCHMAN, Boston Scientific’s cardiovascular portfolio showed robust performance. The cardiovascular segment delivered 16% organic growth in Q4 and 21% for the full year, underscoring the strength of the core franchise. Interventional Oncology & Embolization reported 12% organic growth in Q4 and nearly $1 billion in full‑year sales, with drug‑eluting technologies such as the Agent DCB growing more than 20% for the year. Management framed these businesses as durable, high‑growth pillars that help diversify the company’s revenue base and reduce dependence on any single product line.

Balanced 2026 Guidance and Reaffirmed Long‑Range Plan

The company’s 2026 guidance reflects confidence tempered by known headwinds. Boston Scientific is targeting 10.0%–11.0% organic revenue growth for the year, with Q1 organic growth of 8.5%–10.0% as it absorbs impacts from the ACURATE discontinuation and AXIOS issues. Full‑year adjusted EPS is expected in the $3.43–$3.49 range, representing 12%–14% growth over 2025, along with adjusted operating margin expansion of 50–75 basis points. Management reaffirmed its long‑range plan for at least 10% annual organic growth from 2026 to 2028 and a cumulative 150 basis points of operating margin expansion, signaling that the 2025 performance is not viewed as a one‑off spike but part of a sustained trajectory.

Strategic M&A and Credit Quality Support Long‑Term Growth

Boston Scientific continued to lean into strategic acquisitions to bolster its pipeline and portfolio. It closed the acquisition of Nalu Medical and announced agreements to acquire Valencia Technologies and Penumbra, both expected to close in 2026. These deals are designed to strengthen the company’s position in neuromodulation and related high‑growth markets. Importantly, all three major rating agencies maintained an A‑equivalent credit rating, and Fitch upgraded its outlook to positive. Management argued this underscores the company’s capacity to execute M&A while preserving balance sheet strength.

AXIOS Product Removal Clouds Near‑Term Endoscopy

One of the more notable operational issues was the AXIOS product removal within Endoscopy. In December, Boston Scientific initiated removal of certain AXIOS sizes due to a manufacturing variation. Management expects this to dampen Endoscopy growth in the first half of 2026, but stressed that the issue is quality‑driven rather than demand‑related and that the full AXIOS portfolio should be back on the market by midyear. The company framed this as a temporary setback with clear remediation steps and limited long‑term strategic impact.

ACURATE Discontinuation Weighs on EMEA and Early 2026

The discontinuation of the ACURATE valve has been a visible drag on European performance and will continue to influence results in early 2026. EMEA operational growth was 5% in Q4 and 3% for the full year, but management emphasized that growth would have been in the high‑single digits without ACURATE. For Q1 2026, the company expects roughly a 150‑basis‑point headwind to organic growth from this discontinuation. While the ACURATE exit is a structural change, management stressed that its impact is isolated and already incorporated into the company’s guidance framework.

Urology Underperformance and Integration Challenges

Urology results lagged management’s expectations despite a seemingly healthy Q4. The segment posted 13% operational growth in the quarter but only 5% organic growth for the full year, which management described as below plan. They cited supply chain issues and commercial disruption tied to the integration of Axonics as key factors. Leadership guided toward a return to market‑level growth in 2026 as these issues are resolved, but investors will likely watch this business closely as a litmus test for Boston Scientific’s ability to integrate acquisitions without sacrificing momentum.

CRM and Select Businesses Face Slower Growth

The Cardiac Rhythm Management (CRM) franchise showed more modest trends. Organic sales were up just 1% in both Q4 and full‑year 2025, with the low‑voltage segment flat in the quarter. Management acknowledged that CRM is growing below the pace of the company’s high‑flyer franchises and expects it to track closer to market growth in 2026 rather than emerge as a major growth driver. This creates a contrast within the portfolio—highlighting the importance of high‑growth platforms like EP, WATCHMAN, and IO to the overall story—while still providing a stable, cash‑generative base.

Litigation Charge Temporarily Dampens GAAP Results

On the GAAP side, results were affected by a sizable litigation charge. Boston Scientific recorded a $194 million charge related to the resolution of a legacy intellectual property matter, pulling full‑year GAAP operating margin down to 18.0%. As of year‑end, the legal reserve totaled $242 million, with $46 million already funded. Management framed the charge as a one‑time clean‑up of historical exposure rather than an ongoing earnings drag, emphasizing that the underlying adjusted performance and cash generation remain strong.

EP Competition and Near‑Term Share Dynamics

Despite exceptional EP growth, management acknowledged rising competitive intensity in PFA and related technologies. They cautioned that while absolute EP revenue should continue to grow solidly, Boston Scientific may cede some share as new entrants launch competing platforms. U.S. EP trends were described as flat on some sequential comparisons, prompting investor questions about the near‑term cadence of growth and share shifts. The company’s message was that its installed base, mapping systems, and continued innovation should keep EP a high‑growth franchise, even with some incremental share pressure.

Guidance and Outlook: Sustaining Double‑Digit Growth

For 2026, Boston Scientific is guiding to 10.5%–12% reported revenue growth in the first quarter, translating to 8.5%–10% operational and organic growth after an approximate 200‑basis‑point foreign exchange tailwind. Q1 adjusted EPS is expected between $0.78 and $0.80, with an adjusted tax rate around 12% and explicit headwinds from the ACURATE discontinuation and a temporary AXIOS impact. For the full year, the company projects 10.5%–11.5% reported revenue growth, with 10%–11% operational and organic growth excluding a roughly 50‑basis‑point FX tailwind. Adjusted EPS should land between $3.43 and $3.49, up 12%–14% versus 2025 despite an estimated $0.03 FX headwind, alongside 50–75 basis points of adjusted operating margin expansion and gross margins roughly flat to 2025’s 70.6%. Management also forecasts approximately $4.2 billion of 2026 free cash flow, targeting free cash flow conversion of 70%–80% over the long‑range plan, with guidance excluding the impact of the announced Valencia and Penumbra deals.

In closing, Boston Scientific’s earnings call reinforced a narrative of strong, diversified growth backed by expanding margins and powerful cash generation, even as the company navigates product‑specific issues and rising competition. High‑growth franchises in EP, WATCHMAN, cardiovascular, and interventional oncology are carrying the portfolio, while underperforming areas like urology, CRM, and Endoscopy are being actively addressed with clear remediation plans and timelines. For investors, the key takeaways are sustained double‑digit organic growth guidance, disciplined capital deployment, and a management team confident in its ability to convert today’s clinical and commercial momentum into multi‑year value creation.