Edwards Lifesciences Corp Q2 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Robbie Marcus - JPMorgan Chase & Co - Analyst : Great. Good afternoon, and congrats on a very nice quarter. Maybe to start, two for me. First one, US TAVR looks like when I try and back in based on the color you gave, it was a little better than the Street expected. So what really drove that? Was there asymptomatic already coming into play? Or any other trends or color you could add would be helpful. Thanks.

Question: Robbie Marcus - JPMorgan Chase & Co - Analyst : Great. Maybe a follow-up for me. US TAVR obviously gets a lot of attention, and we hear less about outside US trends. So maybe you could talk about what you saw outside the US, in Japan, and particularly Europe with the exit of your competitor? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 9:00PM, EW.N - Q2 2025 Edwards Lifesciences Corp Earnings Call

Question: Travis Steed - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hey, thanks for the question. Congrats on the good quarter. I wanted to ask about EPS, both more kind of shorter term, why not maybe raise the EPS even more at this point. Tariffs are probably, what, a couple of cents better and you beat the Street by $0.05. And then kind of longer term, when you think about EPS leverage, do you think you can grow EPS faster and then the 10% revenue growth that you kind of laid out going forward?

Question: Travis Steed - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Great, thank you. Maybe just a question on the international competitor that's exited the market. When you think about the share you're capturing there? Is it kind of in line with your international share above or below? Just kind of get a sense for kind of that opportunity? Larry Wood - Edwards Lifesciences Corp - Corporate Vice President, Group President - Transcatheter Aortic Valve Replacement (TAVR) and Surgical Structural Heart Yeah. Thanks for the question, Travis. What I will say is our first order of business when our competitor exited the market was to make sure we reached out to the centers that we knew were heavy users of their technology and make sure that we had inventory there that we had people there that we were able to train folks and make sure that they were -- the patients didn't get delayed or denied access to high-quality care. So that was sort of really our focus, and that's what drove a little bit of the benefit that we saw there. I think longer term, they sold at a different price point than we did. So I think it's on us to speak to the value of our technology and why it's worth our price point, and that's what the team is focused on right now. And so we'll see how that plays out over the longer term. But certainly, we're optimistic that our platform has showed really well, and we continue to put data on the board that I think highlights the advantages and why our platform is what we charge for it.

Question: Larry Biegelsen - Wells Fargo Securities LLC - Analyst : Hi, good afternoon. Thanks for taking the question. Congrats on the nice quarter. Larry, congratulations on all your success at Edwards. You're going out on a high note and it's hard to imagine Edwards without you. It was a pleasure working with you, and I wish you the best of luck in your new role. So I'll start with a question for you. Larry, when do you expect CMS to reopen the NCD? And what's the likelihood of moving to a single operator? And if that happens, what do you think the implications are? And I had one follow-up. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 9:00PM, EW.N - Q2 2025 Edwards Lifesciences Corp Earnings Call Larry Wood - Edwards Lifesciences Corp - Corporate Vice President, Group President - Transcatheter Aortic Valve Replacement (TAVR) and Surgical Structural Heart Yeah. Thanks, Larry. Thanks for your kind words, and thanks for your question. We think the time to open the NCD is now. The ball is really in CMS's court, but we're going to continue to work with them. And provide information to them and hopefully, it open sooner rather than later because there's a number of changes that need to be made. The first one is making sure that asymptomatic gets covered so that all asymptomatic patients are eligible for therapy across the country. And so that's really important. But this technology has advanced so far at this point that I think everybody agrees, we could streamline the operator requirements and the facility requirements. And that's going to open up access for patients and improve care for patients because we know there's waiting list and there's other challenges, and that will relieve a lot of the capacity in the system challenges that we have now. I think the big advantage to, if we go to one specialty doing the procedure is, in essence, you would have two teams now that could do procedures. You could have a surgeon-led TAVR team and you can have a cardiology led over team, which would allow people to optimize their patient flow through. So I think that would be a big benefit. And when we look at the data, the conversion now from TAVR to surgery is the same rate as the conversion rate between PCI and surgery. And obviously, we don't have all these restrictions and requirements. So we think the time is now, we just need to continue to work with them and make the case for it. And hopefully, they open it sooner rather than later.

Question: David Roman - Goldman Sachs - Analyst : Thank you, and congrats, everybody. I wanted to start on the TMTT business and maybe very specifically around EVOQUE. There have been a variety of publications. I wouldn't call them studies necessarily questioning some of the safety and real-world outcomes around EVOQUE. But I think when we last engaged with you, you talked about the impact that learning curve has had on centers and those centers that had greater experience we're seeing better outcomes. Can you maybe just elaborate a little bit on what you're seeing from a real-world evidence standpoint as it relates to adverse events surrounding EVOQUE and when we might be able to see some of that data in a more public setting?

Question: David Roman - Goldman Sachs - Analyst : Okay. Very helpful. And then maybe, Scott, I appreciate the continued emphasis on the P&L. And maybe just kind of summarizing things longer term. I think if you look back over Edwards the past several years, at one point in time, the company was generating 10% plus top line growth with low-30s operating margins. Is it realistic to think that, that is the direction you aim to take the business now and that the company did operate at 30%-plus at 1 point and 10% and given the totality of drivers you have here that, that's a reasonable profile to think about longer term?

Question: Anthony Petrone - Mizuho Securities USA LLC - Analyst : Thanks. And I'll echo Larry, congratulations. Great working with you, and good luck on the next chapter year. Maybe a little bit on the US TAVR backlog. It typically sits at around somewhere in the three- to six-month range and with asymptomatic not being in there in this quarter, it seems like at least something changed that the backlog was able to be mined a little bit more efficiently. So maybe just a little bit on TAVR backlog in the US? And maybe did you see any workflow improvements. And I'll have one quick follow-up on mitral. Larry Wood - Edwards Lifesciences Corp - Corporate Vice President, Group President - Transcatheter Aortic Valve Replacement (TAVR) and Surgical Structural Heart Thanks, Anthony, and thanks for your kind words. I think what you're calling a little bit of backlog there. I don't know that we would necessarily use that terminology. I think as patients move through the system, there's just a lot of steps they have to go through. They have to see two specialties. They have to be scheduled for multiple visits. They have to get a CT, and there's all those things that they have to go through the process. And depending on the center and depending on what their image capacity is and the waiting times to get imaging, it can easily take a patient three to six months to work through that system, and that's just what it takes to do. I think what I referenced earlier and what I think we are seeing now is just a real renewed focus on these patients. I don't think we've seen a marked reduction in the time that patients are moving through the system. I think we're probably hopefully seeing an uptick in referrals and just a renewed focus on making sure these patients get timely referral and timely treatment. So I think that's what we're seeing now. But it's going to take a couple of quarters to really quantify this and that's what we're waiting for. But clearly, we've seen some momentum here and a lot of attention. If you were at the New York valve meeting, they opened the meeting with the early TAVR data. There was a huge debate about how patients should be referred. And then Samuel talked about the tech AS and that, that completely normalized the gender bias that we see in treatment rates. So there's just a tremendous amount of attention on this, and I think that's what's really driving things from a mind share standpoint. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 9:00PM, EW.N - Q2 2025 Edwards Lifesciences Corp Earnings Call

Question: Vijay Kumar - Evercore ISI - Analyst : Hey, guys. Thanks for taking my questions. Larry, I wish you all the best in your transition. Maybe my first question, Scott, for you on the back half margins here is -- I know there are moving parts between FX tariff. Can you just walk us through what the implied back half gross margins? And I think the EPS guidance for 3Q in place, maybe a 25%-ish kind of operating margins. Am I looking at the right way on margins. And if 25% is the right number, are you assuming a full quarter of JenaValve impact? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 9:00PM, EW.N - Q2 2025 Edwards Lifesciences Corp Earnings Call

Question: Vijay Kumar - Evercore ISI - Analyst : Tariff, what is the tariff impact essentially?

Question: Vijay Kumar - Evercore ISI - Analyst : That's helpful, Scott. And if I may, one more. You said double-digit revenues and EPS for 2016. Do you expect operating leverage for 2026?

Question: Matt Miksic - Barclays Services Corp - Analyst : Hey. Thanks so much for taking questions. Congrats on a really strong quarter. echo everyone's comments. Larry, and it's been great with you. Hope we could continue to connect in your ventures. So maybe following up on some of the questions on average strength in the quarter. How should we think about that Q2 strength as we move into what's kind of a typical seasonal Q3? And then also just any comments on Japan is bounced back nice, Europe is strong, but rest of world really looked like it accelerated this year -- from last year. Maybe any comments on that? I have one follow-up on TMTT, if I could. Larry Wood - Edwards Lifesciences Corp - Corporate Vice President, Group President - Transcatheter Aortic Valve Replacement (TAVR) and Surgical Structural Heart Yeah. Thanks, Matt. Thanks for your kind words. I think we adjust our guidance accordingly, so we tried to account for all of the things that we know right now and where our confidence is. And so we do typically see seasonality in Q3 probably more pronounced in Europe than it is in the US, but we tend to see it a little bit globally. But all of that is factored near our guidance, and I think we feel great about the momentum and where we're going. And so hopefully, that continues, and that's what we expect. Japan, we remain focused on a little bit of share recapture there and reaccelerating that market. And that's really where we are there, and we're continuing to work on that. And I think we're all committed to driving that in that manner.

Question: Matt Miksic - Barclays Services Corp - Analyst : Quick. And then just cut on TMTT. A lot of enthusiasm coming out of our valves, it's obvious that you have a lot of broadway here as you'll be the only provider, I think, for some time on repair replacement in tricuspid or mitral. I know you're getting a lot of attention to those accounts. Maybe talk about what it is not competition at the moment anyway across all of those indications. What are some of the places you're spending your time? Is it new centers? Is it imaging and radiology support training? Maybe help us understand what are the gating factors to growth as you kind of -- as you say, work as fast as you can to meet that demand.

Question: Chris Pasquale - Nephron Research - Analyst : Thanks for squeezing me in. I wanted to circle back to the NCD and how that could change things from a practical perspective when it does come. I'm curious what you're seeing so far from the local MACs when asymptomatic cases do get submitted. Are they getting paid for smoothly or is that a meaningful friction point in certain regions? And then maybe help frame the situation over in Europe for us. Does having the indication over there ensure broad access, or are there other states steps that need to take place. And if it's the latter, what's the time line we should think about for those? Larry Wood - Edwards Lifesciences Corp - Corporate Vice President, Group President - Transcatheter Aortic Valve Replacement (TAVR) and Surgical Structural Heart Yeah. Thanks for your question, Chris. In terms of how things could change from a practical perspective, I think it's a lot of things we talked about before in terms of operator requirements in terms of the patient flow, in terms of the facility requirements. And so I don't know I have a lot more to add to that. In terms of how the local MACs cover this, when something is not covered in a national coverage decision, people submit on a case-by-case basis and those get evaluated individually by local MACs. I will say, in the early TAVR clinical trial, I'm not aware of anybody having difficulty getting their patients covered. So I don't know how much of a headwind it is. But that being said, we do REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 9:00PM, EW.N - Q2 2025 Edwards Lifesciences Corp Earnings Call know that there are some big hospital systems that are saying, we're going to wait until the NCDs updated because we simply don't want to take the risk of having cases rejected by a local MAC. And so this is why we've always said that asymptomatic is going to be a little bit of a slow burn. First, you're going to get the indication, the next thing that we need to do is the NCD and guidelines, and we'll see which of those go first. But each one of these things, I think, is incrementally going to change how patients get managed. And that's why we've always said that we think this has it's not going to be a step function, but it's going to be a long-time contributor to what we're doing as we streamline these things. In terms of Europe, they -- talking about Europe, it's not a homogeneous place. Every country has their own different reimbursement systems. I think much like the US, getting the indication first is the number one thing. And so we do have the CE mark. We just recently received that. And so that really is what starts the process. And so having those approvals, both FDA and CE mark give us a unique opportunity to engage on guidelines. It gives us the opportunity to engage with the reimbursement groups and make sure this gets covered for patients. But we just got this approval literally like a week ago. So it's probably a little early in the process for us to be very definitive, but it gives us a license to go start having those conversations because it's now on label.