BSX · Q1 2026 Earnings

Bearish

Boston Scientific

Reported April 22, 2026

30-second summary

30-second take: Boston Scientific delivered Q1 revenue of $5.20B (+11.6% YoY reported, 9.4% organic) and adjusted EPS of $0.80 — both at the high end of the prior guide — but the print is a sideshow. FY2026 reported revenue growth was cut from 10.5–11.5% to 7.0–8.5% (a 300–350bps reduction), FY adjusted EPS lowered from $3.43–$3.49 to $3.34–$3.41, and management for the first time framed 2026 as "a more challenging year than we initially expected." Three franchises broke simultaneously: Watchman decelerated to 19% (US standalone pressured from mid-February onward), US EP is now guided flat-to-low-single-digit Q2–Q4 against accelerating Medtronic/J&J/Abbott share, and Urology grew 1% organic — and the FY adjusted operating margin guide was held at +50–75bps despite the topline cut, meaning gross margin is now expected slightly below FY2025.

Headline numbers

EPS

Q1 FY2026

$0.80

Revenue

Q1 FY2026

$5.20B

+11.6% YoY

Gross margin

Q1 FY2026

69.4%

Operating margin

Q1 FY2026

21.2%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$5.20B	+11.6%	$5.29B	-1.6%
EPS	$0.80	—	$0.80	+0.0%
Gross margin	69.4%	—	69.6%	-20bps
Operating margin	21.2%	—	15.6%	+560bps

Guidance

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Adjusted EPS	Q1 FY2026	$0.78 to $0.80	$0.80	at high end of guide	Beat
Revenue YoY growth (reported basis)	Q1 FY2026	10.5% to 12.0%	11.6%	in-line (midpoint of guide)	Beat
Revenue YoY growth (organic basis)	Q1 FY2026	8.5% to 10.0%	9.4%	in-line (midpoint of guide)	Met

New guidance

Metric	Period	Guide	YoY
Adjusted EPS growth YoY	FY2026	9% to 11%	9% to 11%
Adjusted EPS	Q2 FY2026	$0.82 to $0.84	—
Revenue YoY growth (reported basis)	Q2 FY2026	5.5% to 7.5%	+9.1% to +11.1%
Revenue YoY growth (organic basis)	Q2 FY2026	5.0% to 7.0%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS	FY2026	$3.43 to $3.49	$3.34 to $3.41	−$0.05–$0.08 at both ends	Lowered
Revenue YoY growth (reported basis)	FY2026	10.5% to 11.5%	7.0% to 8.5%	−350 to −300 bps	Lowered
Revenue YoY growth (organic basis)	FY2026	10.0% to 11.0%	6.5% to 8.0%	−350 to −300 bps	Lowered
Adjusted tax rate	FY2026	approximately 12	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Adjusted operating margin expansion (50 to 75 basis points)

Segment KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
MedSurg	$1.701B	+7.8%
Cardiovascular	$3.503B	+13.5%
Endoscopy	$0.736B	+9.4%
Urology	$0.646B	+2.1%
Neuromodulation	$0.318B	+17.4%
MedSurg organic growth	5.7%	—
Cardiovascular organic growth	11.2%	—

Other KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
United States	$3.284B	+10.9%
Europe, Middle East and Africa	$0.932B	+10.1%
Asia-Pacific	$0.803B	+14.7%
Latin America and Canada revenue	$185 million	—
EMEA operational growth	1.2%	—
APAC operational growth	12.0%	—
LACA operational growth	12.0%	—
Organic net sales growth	9.4%	—
Adjusted EPS FY 2026 guidance	$3.34–$3.41	—

Management tone

Narrative arc: Q2 ASC walk-back → Q3 margin commitment and tariff-absorbed execution → Q4 Penumbra-fueled portfolio reset and Champion-as-paradigm-shift → Q1 defensive guide cut and confidence reset.

For three consecutive quarters management's central message has been the durability of guidance execution — the Q3 CFO commitment to "every year, roughly 50 basis points" of margin expansion, the Q4 beat-and-raise close, the repeated framing of BSX as a company that out-delivers its print. This quarter that posture broke. The CEO's verbatim anchor: "I and our company does not take this change lightly, as I and Boston Scientific take great pride in ourselves in consistently executing against the guidance and goals we provide." That is a CEO acknowledging that the franchise's defining institutional claim — guidance reliability — has been compromised. The accompanying "2026 has proven to be a more challenging year than we initially expected...reflecting unanticipated headwinds and changing business patterns" is the most explicit forecast-control concession this management team has made across the four quarters covered.

The EP narrative has now reversed completely. Two quarters ago management was volunteering Street-consensus contradictions in the bull direction — sizing the 2025 EP market at 18–20% (not 25%) while claiming above-market share at ~65% exit. Last quarter Champion was framed as a 4x TAM event. This quarter, in Q&A with Wells Fargo: US EP is guided flat to low-single-digit Q2–Q4 with mid-single-digit full-year growth, and management explicitly named Medtronic, J&J, and Abbott as taking share. The shift from "we are setting the EP market growth rate" to "three competitors are simultaneously gaining share against us" is roughly six months in elapsed time. The recovery thesis now leans on three product launches positioned across "the next 2.5 years" — a timeline that was not in any prior quarter's prepared remarks. (Product names as rendered in transcript — third-generation FARAPULSE, a differentiated ice platform, and the FARAFLEX large-focal-mass catheter — pending canonical-name verification against BSX nomenclature.)

The Watchman framing also recalibrated. Last quarter Champion was the engine that would expand the addressable population from 5M to 20M globally. This quarter management redirected the narrative away from absolute demand and toward mix shift: concomitant grew 30% in 2025 and the category is now expected to reach 50% of all Watchman procedures by end of LRP, while standalone procedures are under pressure from reimbursement cuts and shifting practice patterns. The verbatim from Stifel's Q&A — concomitant currently at 25% of procedures, growing to 50% over the LRP — is the new framing under which the +19% Q1 print (versus +29% in Q4 and ~30% for full-year 2025) is supposed to be read constructively. Read less constructively: the standalone business is shrinking and management is hoping concomitant grows fast enough to absorb it.

Gross margin guidance reversed direction for the first time. Through 2025 management defended gross margin expansion against the $100M tariff drag and pointed to mix as a structural tailwind. This quarter: "We now expect full year 2026 adjusted gross margin to be slightly below full year 2025, largely driven by lower than expected product mix benefit and incremental investments in our global supply chain and quality systems." The Q1 print itself was 70.5%, a 100bps decline versus Q1 FY2025's 71.5%, primarily driven by tariffs and PolarX discontinuation inventory charges. The product mix tailwind — the central margin lever for the past four quarters — is being walked back at the same moment the topline cracks. The fact that the +50–75bps operating margin expansion guide is being held anyway tells you SG&A and R&D will absorb the entire delta. R&D was framed as untouchable last quarter ("a good place for us to live moving forward" at 9–10%); that commitment is now under pressure even if management hasn't said so.

What did NOT change: management still framed Penumbra as the strategic offset and described the company as "uniquely positioned to drive differentiated top-line growth." But the language "we remain convicted in the future of Boston Scientific" — when a management team feels the need to assert conviction in its own future on the print, the reader has the answer.

Recurring themes management leaned on this quarter:

Guidance reduction driven by unanticipated headwinds and changing business patternsCompetitive dynamics pressuring high-growth franchises (EP, Watchman, Urology)Commercial execution challenges in sacral neuromodulation and stone managementSupply chain disruptions impacting near-term results with expected mid-year improvementPolarX discontinuation and portfolio transitions creating near-term headwindsPenumbra acquisition as strategic offset to organic growth deceleration

Risks management surfaced:

Unanticipated competitive dynamics in EP market pressuring US growth trajectoryHospital capacity constraints and procedure prioritization impacting Watchman volumesEvolving reimbursement dynamics creating headwinds for standalone Watchman adoptionSupply chain disruptions in Endoscopy and other business units extending into Q2Commercial model disruptions and talent retention issues in sacral neuromodulationChina VBP and pricing pressure impacting stone management and vascular therapiesTariff impacts and inventory charges from PolarX discontinuation reducing gross margin

Q&A highlights

Robbie Marcus · JP Morgan

What happened in Q1 that prompted the guidance reduction? When was the issue identified? What gives confidence that the LRP is still valid given deceleration throughout the year?

Management identified three primary drivers of guidance reduction: Watchman (decline in standalone procedures starting early-mid February despite strong January), EP (greater share erosion than anticipated), and Urology (below-market growth). Company expects improvement in 2027 due to easier comps and key product launches. Confident in 150bps margin improvement and WGPS growth within LRP despite pressure on top-line growth.

Q1 growth: 9.4%Watchman grew ~30% in 2025, expected mid-teens in 2026EP guidance: global ~10%, US mid-single digitGuidance range: 6.5-8% for full year

Joanne Winch · Citi

How should we think about quarterly sequencing through the rest of 2026 and into 2027, particularly for EP, Watchman, and Urology?

Q2 is the toughest quarter due to difficult dollar-based comps in EP and Watchman. Global EP expected mid-teens for year implies low double-digit growth rest of year. Watchman implies low double-digit growth rest of year after mid-teens for full year guidance. Rest of business mid-single digit, with slight uptick H2 as Euro and CRM accelerate. Overall slightly above 7% run-rate in H2.

Q2 is toughest quarter of year (5-7% growth guidance)Global EP mid-teens growth for yearGlobal Watchman low to mid-teens growth for yearEP: global 10% guidance implies mid to high single-digit growth rest of year

Larry Beagleson · Wells Fargo

What is driving EP share pressure? Where is it coming from? Should we expect flat US EP sales for rest of year? When can EP return to market growth?

EP market facing increased competition from Medtronic, J&J, and Abbott. US EP expected flat to low single-digit growth (flat Q2-Q4) with mid-single-digit full year guidance. International EP ~20% growth. Management maintains confidence in maintaining PFA leadership and is investing in mapping capabilities and catheter portfolio. Three major product launches coming in next 2.5 years expected to drive future growth.

US EP: flat to low single-digit Q2-Q4, mid-single digit for full yearInternational EP: ~20% growthGlobal EP: approximately 10% guidanceThree competitors gaining share: Medtronic, J&J, Abbott

Rick Wise · Stifel

Talk in more detail about Watchman outlook. Champion data was strong but controversial. How are you addressing concerns? How will you tackle the growth rate factors that impacted this quarter?

Practice patterns shifting toward concomitant procedures (EP-led) and away from standalone interventional cardiology procedures. Concomitant grew 30%, now expected to reach 50% of all procedures by end of LRP. Company addressing through commercial investments focused on Watchman, marketing leveraging Champion data, and supporting hospital operational investments. Standalone pressure due to shift to EP operators, structural heart competition, and reimbursement headwinds.

Concomitant Watchman growth: 30% in 2025, expected to grow to 50% of all procedures by LRP endCurrently 25% of procedures are concomitantStandalone Watchman experiencing pressure from reimbursement cuts and procedural shiftsChampion trial met all primary safety/efficacy endpoints and secondary endpoints

David Roman · Goldman Sachs

Unpack the non-EP/Watchman 70%+ of business. Where is that cohort going? What product launches in 26-27? When can it return to 8% growth level pre-Acurate?

Interventional Cardiology & Vascular: double-digit growth in China despite macro headwinds, imaging exceeding expectations. Seismic launch (small-scale, well-received, fracture trial reading at PCR soon) expected coronary approval entering 2027. Interventional Oncology: mid-teens growth. Penumbra acquisition expected to be powerful growth driver. Med-Surge: challenged in 2026 (1% urology growth) but improving trajectory; Endoscopy doing well; Neuromod double-digit. Overall med-surge lighter in 2026 but expected to improve in 2027.

Interventional Cardiology & Vascular: double-digit China growth despite macro headwindsSeismic fracture trial reading at PCR in one month, coronary approval expected entering 2027Seismic being positioned for coronary, below-knee, above-knee applicationsInterventional Oncology: mid-teens growth

Answers to last quarter's watch list

Q1 2026 organic growth landing point — Resolved positively on the narrow question, negatively on the broader read. Organic growth printed 9.4%, within the 8.5–10% guide and near the midpoint. But the FY guide cut of 300–350bps means the Q1 in-line print was the last quarter management had visibility into — the deterioration began in mid-February and worsened through the quarter.

Resolved positively

Penumbra and Valencia closing milestones — Continue monitoring. Valencia closed in April. Penumbra shareholder vote scheduled for early May 2026 (management referenced both May 6 and May 7 in the call), with deal close now expected in the second half of 2026 per the CFO, subject to customary closing conditions. FY2026 guidance still excludes the contribution.

Continue monitoring

EP share trajectory and FARAPOINT contribution — Resolved negatively. Management explicitly guided US EP to flat-to-low-single-digit Q2–Q4 against named competitive pressure from Medtronic, J&J, and Abbott. Global EP guide of ~10% sits below the 15% market growth rate the company was claiming to outpace last quarter. The "above-market" claim is broken for 2026 in the US specifically.

Resolved negatively

2026 tariff annualization disclosure — Partially resolved. Tariff annualization was not quantified explicitly, but tariffs were named as the primary driver of the 100bps Q1 adjusted gross margin decline. Adjusted tax rate guidance moved from ~12.5% to ~12.0%. Modelability remains constrained on the tariff line specifically.

Continue monitoring

EMEA operational growth direction — Resolved negatively. EMEA operational growth printed +1.2%, the fourth consecutive sub-5% operational quarter and worse than Q4's +4.8%. The Acurate annualization thesis has not produced an inflection, confirming structural weakness.

Resolved negatively

Champion trial readout signaling — Continue monitoring. Champion data was discussed as having met all primary safety/efficacy and secondary endpoints, with label updates and guideline changes still pending. Management did not pre-announce a specific FDA timing or coverage decision date. The 20M-patient TAM thesis is intact but the timeline for activation has not been sharpened.

Continue monitoring

What to watch into next quarter

Q2 organic growth landing within the 5.0–7.0% guide — Management framed Q2 as the trough. A print below 5% organic would imply the deterioration is still expanding rather than stabilizing, and would force a second FY cut. A print at the high end is the precondition for the H2 "slightly above 7%" run-rate story.

US EP quarterly growth direction — Guidance implies flat-to-low-single-digit US EP Q2–Q4. Watch whether Q2 US EP prints positive or negative; a negative print would mean the +10% global EP guide depends entirely on +20% international growth holding, which is itself competitively contested.

Watchman standalone vs concomitant disclosure — Management's new framing rests on concomitant moving from 25% to 50% of procedures by end of LRP. Watch whether Q2 disclosure quantifies the standalone/concomitant split explicitly. A refusal to break out the mix would itself be a tell that standalone is degrading faster than concomitant is offsetting.

Penumbra vote and H2 close timing — Early-May shareholder vote, with close now guided to the second half of 2026. A clean vote keeps the H2 close path intact; any slippage past the H2 window would push the Penumbra-inclusive guide reset into 2027 and force the market to evaluate the 7.0–8.5% reported growth base on an organic-only basis for the entirety of FY2026.

Gross margin trajectory — Q1 adjusted GM printed 70.5% (−100bps YoY), and FY is now guided "slightly below" FY2025's 71.5%. Watch whether Q2 gross margin stabilizes near the 70.5% Q1 level or steps down further; a Q2 print materially below 70% would put the +50–75bps operating margin expansion commitment under real pressure given R&D and SG&A are now the only remaining levers.

Urology recovery framing at Q2 print — Management said "clear line of sight" to improvement from +1% organic, but did not commit to a quarter. A second consecutive sub-3% Urology quarter would suggest commercial-model and talent-retention issues in sacral neuromodulation are more structural than transitional.

Sources

Boston Scientific Q1 2026 Earnings Release (SEC EDGAR): https://www.sec.gov/Archives/edgar/data/885725/000088572526000031/q12026earningsrelease.htm
Q1 2026 earnings call Q&A (JP Morgan, Citi, Wells Fargo, Stifel, Goldman Sachs exchanges)
Boston Scientific Q4 2025, Q3 2025, and Q2 2025 earnings briefs (Tapebrief, internal — prior quarter references for tone arc and watch-list resolution)

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