BSX · Q3 2025 Earnings

Bullish

Boston Scientific

Reported October 22, 2025

30-second summary

30-second take: Boston Scientific delivered 20.3% reported revenue growth to $5.07B and adjusted EPS of $0.75 (above the $0.70–$0.72 guide), then raised FY2025 adjusted EPS to $3.02–$3.04 and reported revenue growth to ~20%. The signal worth flagging is tonal: CFO escalated operating margin expansion from a target to a committed annual cadence ("every year, roughly 50 basis points"), while gross margin expanded YoY despite a sized $100M tariff drag. EMEA decelerated further to +2.6% reported (versus +6.8% last quarter) and a $30M Krakrod ERP-related back order shaved ~60bps off organic growth — neither dents the print, but both warrant tracking.

Headline numbers

EPS

Q3 FY2025

$0.75

Revenue

Q3 FY2025

$5.07B

+20.3% YoY

Gross margin

Q3 FY2025

69.9%

Operating margin

Q3 FY2025

20.7%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$5.07B	+20.3%	$5.06B	+0.1%
EPS	$0.75	—	$0.75	+0.0%
Gross margin	69.9%	—	67.7%	+220bps
Operating margin	20.7%	—	16.2%	+450bps

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
EPS (GAAP)	Q3 FY2025	$0.44 to $0.46	$0.51	+$0.05 above high end of guide	Beat
Adjusted EPS	Q3 FY2025	$0.70 to $0.72	$0.75	+$0.03 above high end of guide	Beat
Revenue growth (reported basis)	Q3 FY2025	17% to 19%	20.3%	+1.3–3.3 pts above guide range	Beat
Revenue growth (organic basis)	Q3 FY2025	12% to 14%	15.3%	+1.3–3.3 pts above guide range	Beat

New guidance

Metric	Period	Guide	YoY
EPS (GAAP)	Q4 FY2025	$0.48 to $0.52	—
Adjusted EPS	Q4 FY2025	$0.77 to $0.79	—
Revenue growth (reported basis)	Q4 FY2025	14.5% to 16.5%	14.5% to 16.5%
Revenue growth (organic basis)	Q4 FY2025	11% to 13%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
EPS (GAAP)	FY2025	$1.89 to $1.93	$1.97 to $2.01	+$0.08 to +$0.12 (4–6 cents midpoint increase)	Raised
Adjusted EPS	FY2025	$2.95 to $2.99	$3.02 to $3.04	+$0.07 to +$0.09 (4–5 cents midpoint increase)	Raised
Revenue growth (reported basis)	FY2025	18% to 19%	approximately 20%	+~1–2 pts (midpoint from 18.5% to 20%)	Raised
Revenue growth (organic basis)	FY2025	14% to 15%	approximately 15.5%	+~0.5–1.5 pts (midpoint from 14.5% to 15.5%)	Raised

Segment KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
MedSurg	$1.722B	+16.4%
Cardiovascular	$3.343B	+22.4%
Endoscopy	$0.747B	+10.1%
Urology	$0.682B	+28.1%
Neuromodulation	$0.293B	+9.1%
Cardiology	$2.641B	+24.0%
Peripheral Interventions	$0.702B	+16.7%
MedSurg Organic Growth	7.6%	—
Cardiovascular Organic Growth	19.4%	—

Other KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
United States	$3.294B	+27.0%
EMEA	$0.793B	+2.6%
APAC	$0.802B	+17.1%
LACA	$0.175B	+10.4%
Emerging Markets	$0.765B	+11.8%
Organic Revenue Growth	15.3%	—
Operational Revenue Growth	19.4%	—
U.S. Reported Growth	27.0%	—
EMEA Operational Growth	-2.0%	—
Adjusted EPS Beat vs Guidance	$0.75 vs $0.70-$0.72 guidance	—
Revenue Beat vs Guidance	$5.065B vs 17-19% reported growth guidance	—

Management tone

Narrative arc: Q1 ASC tailwind framing → Q2 ASC walk-back and tariff sizing → Q3 margin commitment and tariff-absorbed execution.

The headline tonal shift is on margin expansion cadence. Last quarter the FY2025 target of 75–100bps was framed as on-track-but-tight, with H2 tariff drag and a Q3 R&D step-up cited as the operating envelope. On this call, CFO escalated to a committed multi-year discipline: "do expect to expand operating margin each year, every year, targeted roughly 50 basis points a year." The shift from quarter-specific defense to a multi-year guarantee — combined with the candid 2026 tariff annualization caveat — is the kind of language medical device CFOs rarely volunteer unless they have line of sight to the next several quarters of mix and SG&A leverage.

The tariff narrative also reached a different stopping point this quarter. Two quarters ago tariffs were an unsized risk; last quarter they were sized at $100M concentrated in H2; this quarter they are reframed as a problem being out-executed: "gross margin has slightly improved year over year despite that $100 million tariff headwind." The Q3 gross margin of 69.9% (up from 67.7% in Q2) gives the claim teeth. Mix — Watchman +35%, EP, drug-coated coronary balloon — was explicitly upgraded from "incremental upside" to a structural ongoing tailwind.

CFO also pre-empted an inevitable investor question about whether R&D could be the source of further margin expansion: "roughly between 9% and 10%... that's a nice level of investment at the high end of our peer set. So I think that's a good place for us to live moving forward." This is uncharacteristically firm. It tells the buyside not to model R&D rationalization as a margin lever, which in turn implies management is confident gross margin mix and SG&A leverage are sufficient on their own — a more durable composition of margin expansion than cost-out.

What did NOT come up: the ASC migration story that dominated Q2. Last quarter management spent meaningful airtime qualifying the ASC tailwind ("much more gradual," CON-state limited to 40% of US, attach-rate dilution risk on Watchman). This quarter, with Watchman growing 35%, the topic essentially disappeared from prepared remarks. Either the narrative has stabilized or management has chosen to stop drawing attention to it — both readings are constructive in the near term.

Recurring themes management leaned on this quarter:

Margin expansion momentum driven by favorable product mix (Watchman 35% growth, EP, Drug-Coded Coronary Balloon)Tariff headwinds quantified and being offset by operational performanceCommitted annual operating margin expansion cadence ('every year')SG&A leverage as margin driver alongside gross margin mixR&D investment discipline at 9-10% as sustainable competitive positionStrong revenue outperformance translating to drop-through to bottom line

Risks management surfaced:

Tariff headwind of approximately $100 million in 2025 with annualization expected in 2026Mix benefit sustainability (reliance on specific high-growth products)R&D investment requirements to maintain competitive position

Q&A highlights

David Roman · Goldman Sachs

Asked management to expand on business dynamics outside EP and Watchman, given their disproportionate focus. Requested clarity on growth drivers and outlook for neuromodulation, endoscopy, and other portfolio segments.

Management highlighted strong composite growth across divisions exceeding 9% WAMGR. Med-surg grew 8%, endoscopy showed very strong growth with 2026 launches planned, Euro expected to accelerate with easier comps, neuromod delivered 9% growth with NALU acquisition closing, ICTX transformed to high-growth business led by imaging, IVL product launching end-2025, IO and Venus growing double digits. Emphasized continuous organic R&D and tuck-in M&A to sustain above-market growth.

Composite portfolio growth exceeds 9% WAMGRMed-surg growth: 8%Neuromod growth: 9%NALU acquisition signed

Michael Pollard · Wolf Research

Asked about FarraWave persistent AF label (July FDA approval), FarraPoint year-end 2025 launch timing, and whether 2026 will be the year persistent AF penetration accelerates given currently estimated 50% PFA penetration with lower rates in complex cases.

Management stated de novo persistent AF is already in high gear with Advantage trial showing best long-term outcomes in de novo persistent ablation with single-digit redo rates. Positioned Advantage results as demonstrating persistent AF ablation is not particularly complicated with current strategy. For complex redo cases, discussed FarraPoint, FarraFlex, and Cortex technology acquisition as adjuncts. Expects continued high uptake of FarraWave in de novo persistent population.

Advantage trial: best long-term freedom from symptomatic AF in de novo persistent ablationRedo rates post de novo persistent AF ablation: single-digit levelsFarraWave + posterior wall ablation strategy showing high efficacyFarraPoint positioned as adjunct for complex redo procedures

Travis Steed · Bank of America

Asked about the $30 million back order called out in results: which businesses were impacted most, magnitude of impact in the quarter, and expected recovery timing into Q4.

Management explained back order resulted from Krakrod distribution facility ERP implementation that underperformed but is recovering. Impact was significant and fairly broad-based, trending more toward med-surg and PI businesses with less impact on EP and Watchman. Team made good progress and situation improved notably over prior 60 days. Expected back order to decline to acceptable levels by year-end.

$30 million back order impactKrakrod distribution facility ERP implementation issueImpact: broad-based, heavier on med-surg and PI, lighter on EP and WatchmanBack order expected to reach acceptable levels by end of 2025

Patrick Wood · Morgan Stanley

Asked why management decided to acquire NALU now (noting Boston Scientific was a VC investor historically), particularly regarding timing, commercial coverage expansion, and integration confidence given small market.

Management stated timing was right given: (1) Boston Scientific's long-standing VC investor relationship with NALU team, (2) NALU's buildout of solid clinical evidence driving Medicare reimbursement and improving commercial payer coverage, (3) strong neuromod team execution on Relievant integration 18 months prior demonstrating integration capability, and (4) NALU as differentiated portfolio piece in peripheral nerve stem versus competitors focused on SCS. Described integration timing as optimal puzzle piece.

Boston Scientific VC investor in NALU for many yearsNALU has solid Medicare reimbursement and improving commercial coverageRelievant acquired ~18 months prior, driving considerable growthNeuromod team (Jim Cassidy, Ryan Betts) successfully executing integrations

Danielle Antelfi · UBS

Asked about CRM business growth trajectory given below-market performance while competitor enters new product cycle with sustainable double-digit growth guidance. How should analyst model cadence as Boston Scientific launches new products (Denali platform, Empower leadless, Aleutia acquisition)?

Management stated they are pleased with overall CRM performance and Lux segment. Denali platform will launch second half 2026 through LRP period representing complete platform refresh for pacemaker/defibrillator business. Empower is entry into leadless pacemaker combined with SICD. Currently growing on unit basis at market but below market on dollar basis due to leadless gap/ASP pressure. Confident CRM will strengthen versus current state through LRP period and become larger contributor. Also highlighted Aleutia acquisition as adjunctive technology preventing complications and conduction system pacing showing fantastic growth.

Denali platform launch: second half 2026 through LRP periodDenali: complete refresh of core pacemaker/defibrillator platformsEmpower: leadless pacemaker + SICD entryCurrent unit growth: at market; dollar growth: below market due to leadless gap

Answers to last quarter's watch list

Watchman concomitant attach rate trajectory — Not directly addressed; management did not quantify attach rates by setting (hospital vs ASC) and the broader ASC narrative was absent from prepared remarks. Watchman grew +35% on the quarter, which mutes the urgency but doesn't answer the structural question.

Continue monitoring

H2 operating margin against the $100M tariff drag — Resolved positively. Gross margin expanded YoY to 69.9% despite the sized $100M tariff impact, and FY2025 adjusted EPS guidance was raised to $3.02–$3.04 (from $2.95–$2.99) rather than narrowed. CFO also committed to ~50bps annual operating margin expansion "every year.".

Resolved positively

EMEA and LACA re-acceleration — Resolved negatively for EMEA, neutral for LACA. EMEA decelerated further to +2.6% reported (-2.0% operational) from +6.8% in Q2 — a second consecutive single-digit quarter and worsening, not stabilizing. LACA was steadier at +10.4% from +4.0%.

Resolved negatively

Neuromodulation inflection — Partial answer. Growth ticked up to +9.1% from +7.2%, and management framed the closing NALU acquisition plus Relievant momentum as the 2026 acceleration vector. Still below the company average by ~11 points but trending right.

Continue monitoring

FARAPOINT approval and FARAFLEX trial readouts — Resolved positively. FarraPoint on track for year-end 2025 launch; FarraFlex in first human use clinical trials; Cortex acquisition added for AF source mapping. The second-gen EP roadmap is intact and progressing on the timeline implied last quarter.

Resolved positively

Proposed ASC rule finalization — Not resolved on the call. Management did not revisit the regulatory framing from Q2, and the topic was conspicuously absent. With Watchman +35%, the omission may simply reflect that the rule is no longer the dominant near-term variable.

Continue monitoring

What to watch into next quarter

EMEA inflection or share-loss confirmation — EMEA operational at -2.0% in Q3 (from +5% in Q2 operationally) is now a two-quarter deceleration in a region that was high-single-digits for most of 2024. A third consecutive sub-5% reported quarter would force the share-loss conversation; watch for any management commentary on Acurate discontinuation rolling off vs underlying weakness.

Krakrod back-order resolution — Management said back to acceptable levels by year-end. Watch for whether Q4 organic growth lands at the high end (13%) of the 11–13% guide, which would imply clean recovery, or at the low end, which would imply ERP issues lingered.

2026 tariff annualization quantification — CFO flagged annualization as a "further headwind" without sizing it. Expect Investor Day or Q4 call to put a number on it; anything materially above the $100M 2025 impact would compress the "50bps every year" margin commitment.

Watchman growth durability — +35% in Q3 is the engine carrying Cardiology and absorbing the EMEA drag. Watch whether Q4 sustains above +25% YoY or normalizes into the +15–20% band as the OPTION-driven concomitant ramp matures.

Neuromodulation post-NALU print — With NALU now closed, Q4 will be the first quarter with contribution. Watch whether Neuromod reported growth exits 2025 in the mid-teens — the threshold that would validate management's 2026 acceleration narrative.

CRM dollar-vs-unit gap — Management's candor that CRM is at-market on units but below on dollars is the medium-term setup for the Denali H2 2026 launch. Watch for any sequential improvement in CRM growth or commentary on leadless ASP stabilization ahead of Denali.

Sources

Boston Scientific Q3 2025 Earnings Release (SEC EDGAR): https://www.sec.gov/Archives/edgar/data/885725/000088572525000046/q32025earningsrelease.htm
Q3 2025 earnings call Q&A (Goldman Sachs, Wolfe Research, Bank of America, Morgan Stanley, UBS exchanges)
Boston Scientific Q2 2025 earnings brief (Tapebrief, internal — prior quarter reference for watch-list and tone comparison)

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