Boston Scientific Stock

Okay. All right. Good morning, everyone. Welcome to day 3 of the Wells Fargo Healthcare Conference. I'm Larry Biegelsen, the med tech analyst here. And it's my pleasure to host this fireside chat with the management team from Boston Scientific. With us, we have Mike Mahoney, Chairman and CEO; and Dr. Ken Stein, Chief Medical Officer. Gentlemen, thanks so much for being here.

Pleasure, Larry.

Thanks, Larry.

I'd be remiss if I didn't say we also have Lauren Tengler, Head of Investor Relations, also with us.

So Mike, let's start with the unfortunate cyberattack. And hopefully, most people saw the update last night, which was very positive. Operations fully restored. Mike, just I think people would love to hear from you kind of the status update and the impact. You put out an 8-K earlier this week that said you are unlikely to meet the Q3 and the full year guidance. So how are you thinking about the financial impact and the recovery?

Yes. So certainly unfortunate event. Very proud of what our team has done the past 8 days to secure the IT systems globally to secure distribution to secure manufacturing, but it was an 8-day impact where we weren't able to ship or manufacture. So obviously disappointed there, but really impressed with what our team did to recover very, very quickly working around the clock over those 8 days to ensure that and also to ensure the integrity of the system with all our third-party suppliers, hospital connectivity, all the EDI capabilities. So it's all back to normal after that. It's fully restored. I was at our distribution center yesterday, and they're cranking through, working very hard and manufacturing is back up and running. So that's all really good news. The unfortunate news with the 8-day impact, we did indicate that it's unlikely that we would meet our third quarter and full year guidance.

And a big part of it is we just have to sift through what the recapture rate is, and that's still what we're working through now. It's -- we obviously lost procedures that day. Some areas or some regions or some businesses would have adequate supply, many didn't. Hospitals were unsure as we were at the time, how long it would be. And so some hospitals likely ordered from others during that time, which would be understandable. So it made sense for us to indicate that in our 8-K on the unlikely piece of it. But I'm very impressed with what our team has done to recover. And now our focus is on working closely with these customers to try to recapture as much as we can. But it's hard to pinpoint that exact dollar amount at this point. But by the October earnings call, October, whatever, 28, we'll certainly be able to give more precise information there.

The impact was broad-based across Boston Scientific.

Around the world, yes.

Any areas impacted more than others, geographies?

No, it was -- all of our plants were shut down and distribution centers are down globally.

And I know it's really early, but implications for 2027, you talked about 2% to 4%.

I think the big thing is the whole themes of the business, which we can talk about are unchanged based on the cyberattack. But we just have to get a better handle on your question on the recapture rate and the financial impact. And we'll know a lot more in the next 45 days. We'll be able to give a better sense. We won't give our official guide in October. We'll probably provide a better framework for '27 at that time.

All right. Let's move on to the business. I mean there's a ton of questions that get asked on the cyberattack, but I think there's...

It's back to normal.

It's good to hear. Yes. And sorry, you guys had to go through that. It's unfortunate.

So I would say on a positive note, maybe does help. The industry does help each other out on this one. There's a lot of competitors that we compete with, but we're all kind of under the same cyber risk despite all of our great efforts and investments. And so a lot of companies share best practices, share information. So it's a nice thing to see.

That's good to...

We're very thankful for that.

Yes. Good to hear. So let's touch on WATCHMAN or start with WATCHMAN. I guess the question really is the guidance, I think, implies in the U.S. mid- to high single-digit year-over-year decline in the second half. You said you expect the market to decline in '27 by a similar amount. I guess so the big picture question is, what needs to happen for the market to grow again, the LAAC market?

Sure. I'll touch on it. So in '27, we really don't want to call the market improving until we see it improving kind of based on what's happened this year. And so our aim, obviously, is for the market overall to improve based on the great clinical evidence of WATCHMAN in general in totality, the safety profile, the amount of patients who are unprotected to have AFib. So we think it's going to be a stronger market, but we don't want to call it until we start seeing that improvement. The last 8 days haven't helped that visibility, but we'll recapture that. So the big efforts we're doing is first is med affairs and education to our implanters, to our referrers to the -- based on the totality of evidence of CHAMPION because it's a bit with those 3 trials that are out at the same time, some kind of conflicting information. So that's a big effort in that area, and Ken can talk more about that.

Secondly, we're putting a lot more dedicated focus on the WATCHMAN product with our commercial team. Sometimes they had shared responsibilities for allocating more direct allocation of resources to that to deliver that message in the right way at the right level. We've increased our DTP, our direct-to-patient activation quite a bit because we've seen a benefit of that. And then hopefully, in 2027, based on the CHAMPION data, we'll have a label update, which will provide some additional support and confidence in the therapy. It's an amazing therapy, probably family members in this room have had it. It's safe. It protects patients. Many patients don't want to go -- stay on oral anticoagulation. It's well proven. And we have a big global opportunity over time if we can unlock that as well. But I don't know, Ken, if you want to add anything?

Yes. I mean I think really just to put a little more color around what Mike said, I just want to come back, right, to what the key data point is. And the key data point is no matter who you ask, somewhere between 30% and 40% of high-risk AFib patients in the United States and Western Europe today are left completely unprotected. And there ought to be no doubt, but that those patients are better off with some kind of protection against stroke. And WATCHMAN is by far and away the best approved option that there is out there. We just need to do a better job of articulating that. And that's on us.

I think this professional society, SCAI/HRS released a draft guideline update that we see as a positive. Again, reinforces the very high rate of evidence now that WATCHMAN provides equivalent stroke protection as compared to oral anticoagulation, reinforces the notion really that every patient who's high risk at AFib needs to have a conversation with their treating physician. Are they patients who can't? Are they patients who won't? Are they patients who shouldn't take long-term oral anticoagulation. And for those patients, right, they need to have an educated conversation with their physician is WATCHMAN the best option for them.

On the label change that you hope comes in '27, what does that look like versus the label today? What would be a good step forward?

Yes. Again, I first just want to reiterate, right? Our view is that the totality of the data and accumulating data around WATCHMAN do support an update to the label in 2027. And to me, right, the key is what I just said, right, that to make it clear that WATCHMAN ought to be a consideration for every high-risk patient with atrial fibrillation, if they can't, they won't or they shouldn't take long-term oral anticoagulants.

How is that different from today?

I think right, today, there's still a lot of confusion, right? I mean the label today is for patients who have an appropriate medical rationale to seek an alternative to long-term anticoagulation. Now -- and I almost feel like I'm playing a lawyer here and parsing semantics. But I think the issue here is that what that means is not very clear, both to implanting physicians and to referring physicians. And so there's a tendency here, right, that people believe that means, right, that this is only second-line therapy that you need to have had a life-threatening bleed on oral anticoagulants before we're going to consider you for this. And I think what to us would be a win and to us, we think is a win that the therapy deserves would be, again, to clarify, no that this ought to be something that every patient needs to consider and that they need to have a discussion with their treating physician. And again, are they someone who either can't or won't or shouldn't be taking drugs over the long term?

Okay. There's a couple of other cross currents in the market. You have a new competitor coming. So I mean, it sounds like it's safe to say that you think at least in '27, you'll grow below market. I'm sure you're not going to say, hey, here's how much share we're going to lose, here's how much below market. But you would imagine you would expect to grow below market. Is that fair?

Yes. With the new product coming out, it's fair to say we grow below market in '27.

Our job is to get the market stronger again. That's -- we are very confident in the data of WATCHMAN, the safety profile, the comprehensiveness of our support team and confidence that doctors have with it. New product will come out. We will take some share. We have 90% share. But our job is to drive the market to be strong and healthy again like it used to be, like we aim for it to become. And then we'll also -- we have product reiterations and new platforms coming. So we expect to be the very high strong leader in this market for a long time but '27 with a new product coming, likely to grow below market.

And to be fair, the first time the competitor came to the market, I think investor expectations were for you to lose more share than you did. So you definitely retained more share the first time than investors expected. And I would put myself in that camp. So congratulations.

Thank you.

So -- and then the physician fee is going to be cut again. And you've highlighted that this year as a factor for, I think, negatively impacting stand-alone procedures that there's a 20% proposed cut. Do you think that goes through? And does that have an impact on the stand-alone procedures, which have been declining?

I think Ken can answer the physician. I think maybe marginally, I think most physicians when patients are asking the right candidate for WATCHMAN, they do the right thing. Obviously, you'd like to have more of a tailwind there on physician reimbursement. The hospital reimbursement is quite strong and continues to get strong. So there's a lot of momentum from the hospital to build WATCHMAN programs and AFib programs and concomitant programs, add labs, invest in the team, all that kind of stuff. So marginally, it's not a tailwind for sure. But we typically see that most physicians do the right thing. And whether it's -- they run that 50% premium, but we typically don't see as -- the major stumbling block has been this confluence of confusion on data, I would say, and just some of the procedural inefficiencies that we've talked about with concomitant, which has been a boom for us, but also a bit of a lag in terms of productivity.

How important is -- Mike, you talked about getting the market to grow again. How important is that label update to achieving that? Or is it more of the education process around the...

It's all that stuff. More data comes out, longer-term data on CHAMPION comes out over time, more real-world evidence comes out. Your mix of concomitant and stand-alone gets better every quarter. That's helpful. New platforms help. So I think it's really the combination of all those things.

And maybe just to add. And again, it helps guideline update. And again, we do see the proposed guideline update from HRS and SCAI is positive. I think the bigger unlock then would be when CMS reaches national coverage determination, which is -- I think by the time that gets finalized, that's not going to be something that has any material impact in '27.

In terms of the data, we had a lot of data come out in the last year, ALONE-AF, OCEAN, CLOSURE and obviously, CHAMPION-AF. Where -- which data set is having the most impact on the market? I've heard from you maybe OCEAN and this ablate and weight, which CLOSURE-AF wasn't helpful a week before CHAMPION-AF. Which data set? Or is it the totality that's causing the issue?

Yes. I think it's what you just said. It's the totality. And it just takes people time to parse how do I put all these conflicting pieces of data together. So ablate and weight, by and large, right, the biggest impact that has -- is on patients whenever WATCHMAN candidates to begin with, right, the lower CHA2DS2-VASc risk patients. But in that sort of CHA2DS2-VASc 3 category, it's having an impact. Again, closure, I just wish we could get people to get behind beyond the headline and actually look at the data because, again, that failed its endpoint because the rate of complications was an order of magnitude higher than what we see in the U.S. And it was a trial, right, where the minority of devices were WATCHMAN FLX. But even in spite of that, it convincingly showed equivalence of stroke.

Again, CHAMPION, the haters, right, worry about the difference in stroke rate. Again, it's something I don't understand because the appropriate comparison isn't to the drugs, the appropriate comparison is what would happen to patients if we are getting nothing. And that's why I just keep coming back to, right? I mean, the size of that population that's currently left unprotected, that 30% to 40% of high-risk patients, right? I mean that's the patients who deserve some degree of protection. And that's the population that would, if we unlock it, right, get us back to the level of growth in WATCHMAN we aspire to.

Got it. Okay. Let's transition to EP. Obviously, Dr. Stein will stay involved in this conversation, too, as the CMO and a trained electrophysiologist. I guess the question is, well, there have been questions on the market. And I guess let's get that out of the way. We heard you -- I've heard secondhand, you've talked about maybe pricing having an impact on the market, which has been super robust, the growth. How are you thinking about the outlook for the market?

It will continue to be healthy. It's been hyper growth given the conversion of RF to PFA with pricing benefit there and the conversion to PFA has been very rapid in the U.S., like approaching 90% or so now, less so in Europe, less so in Asia Pac for sure. So there's more room to grow on conversion outside the U.S. In the U.S., it's more highly penetrated. Over time, maybe that additional 10% falls as products get better. So we still think this is going to be a very strong market. Will it grow mid-teens? Not clear. With a lot of competition out there, there will be a bit more pricing pressure likely, and you won't have that adoption curve. But again, I don't think this is a business where electrophysiologists make certain vendor selection. So it's not a price declining in this marketplace. Doctors are still choosing which catheter they want to use, which mapper, which clinical system they want to use. So it's still a very high preference -- physician preference item. So I don't think you'll see significant price decay, but likely some pressure on price. So we still think it's going to be a very strong market.

Double digits?

We believe so.

Mike, I guess I want to ask you a big picture question on EP. You've said, I think, that there was a time when you consider getting out of EP, I believe, and FARAPULSE was obviously a big success. And your strategy has been category leadership across Boston Scientific, which has served you well. When you came into EP with FARAPULSE, you weren't a category leader. Are there any lessons learned here? And how do you -- what's the path forward for EP?

The lesson learned is if you could find a FARAPULSE, you'd do it because we had a crappy EP business -- I'm sorry, we had a bad EP business, and now we have a strong #2 global EP business. So if you could find a diamond in a rough like that, you do it. And then at the same time, since we came from such a lack of girth in our portfolio, our focus 100% is on widening and shrinking that portfolio. And so I wouldn't -- we wouldn't have done it any other way. And now we have a cadence of products that are coming. We all want them faster from our ultra product, which will be here this time next year to entering the ICE market, which we're not in, to FLX and other things that we want to do. So we want to widen -- clearly want to widen just like many of our peers do, our EP offering, and that's the goal.

And the short-term issue has been your PFA share has eroded faster than you expected. You had a super high share. We estimate maybe now it's about 50%. People are trying to figure out where it troughs, and we see all the competition coming. I guess, are you -- I don't know if you'll share with us where you think if you can remain the leader, where you think it troughs? And how are you thinking about these competitive entrants in light of your pipeline, FARAWAVE Ultra and then FARAFLEX?

Yes. We spent a lot of time on it. So we undercalled the share erosion, as you know, we've talked about that this year. But very proud of what we've built, and we've built that capability globally now. And so when you're really relying on, for the most part, one platform with our OPAL Mapping System, which continues to make nice progress. We're confident with that. There's kind of one way to go with that share position. And despite that, most -- more often than not, doctors are still choosing FARAPULSE. And the work it does and the safety profile and the efficiency is very well proven out.

So that share will continue to decline a bit until we can widen that portfolio. And that happens -- starts to happen in second half '27 with our Ultra launch, which we think reinforces FARAPULSE as the ideal platform. It will tie our physicians more closely to the OPAL mapping system, providing more capabilities. It's a more efficient mapping and ablation catheter than FARAPULSE is today. And we won't require doctors to use it if they want to use competitive mapping systems. But we think that will accelerate OPAL adoption. It will secure the beachhead more for what FARAPULSE has already secured. And then we widen the portfolio with ICE and FLX.

FARAFLEX. FARAFLEX, you just started the IDE. It's a little -- there are competitive entrants coming before that just from a pure time line standpoint. I guess maybe the question is some of those -- there's excitement in the clinical community on some of those. NANOPULSE is one of those. What's your view on just that kind of that Waveform -- it's different. And they've been very public, they're a public company about partnering. Is there an opportunity to partner?

It's sure. There's always opportunities to partner with companies. But I think that the key is the market is going to be strong. It may not be as mid-teens, high-teens growth market, but it's going to be strong for a long time. And it's highly competitive, but we have a very, very strong share position and a very robust road map. So we're never going to get back to the growth rates that we saw when we launched FARAPULSE. But at minimum, if you can grow back to add market and ideally above market with our product launches, you've got a very accretive growth business.

And when do you think you can get back there? I mean, at market?

Well, we're aiming with the Ultra launch to -- and the ICE launch in the second half of '27 to improve our position.

Okay. And the competitive entrants, you're not.

There's a lot of them. You have to -- we obviously factor that in. And that's why I think overall, it's a healthy market. It's competitive, and we have a cadence of launches that aren't too far away. And so as long as that market stays healthy, it will be a nice accretive driver for us.

Okay. And so it sounds like you're satisfied with your internal pipeline, PFA catheters.

We are very happy with our internal pipeline. But as you know, we're always looking to make ourselves better.

You've never been shy about -- you've been agnostic to technology internal and external, right?

Yes.

Okay. Anything else on EP. Dr. Stein, do you want to add?

I mean I think maybe just to highlight for everyone, there is a very big difference in the dynamics, U.S. versus international. Again, a lot of what we're talking about, right, is U.S. where PFA penetration is mature, where PFA penetration outside is very far from mature. I think that that's a much bigger opportunity for us. And then maybe the only other thing that I think gets back to Mike's comment about Ultra and about whether there's price pressure. One of the advantages of catheters like FARAWAVE Ultra, right, is the ability, again, to do both high-definition mapping and do the ablation so that you don't need to pull a second mapping catheter, which, frankly, right now, more often than not is a competitive product. And that enables us to maintain premium price for the ablation catheter, while hospitals and physicians are able to control the total price of the procedure. And so what happens, right, is the dynamics of just the ablation catheter market growth will get a little bit decoupled from the dynamics of total EP market growth.

FARAWAVE Ultra, what's the timing on that? I know it's a '27 second half. Or what's the U.S. approval timing that you guys have disclosed?

Second half.

Second half.

Got it. I think... Is that right, Lauren? Okay. So there are other parts of Boston Scientific. Mike, Penumbra, just an update on the deal timing.

Yes, really happy with Adam and the team. They continue to execute really, really well. Nice product approvals that you know about. They've got a very strong pipeline. The benefit, if any, of a delayed closing is you get to know the team really, really well and get comfortable with both sides of it and secure their top leaders, and they continue to drive a lot of good momentum in the marketplace. And so we're very bullish on the transaction. We've learned a lot from history on the best way to integrate them without losing their magic with their commercial team and the R&D team, and we feel like we know how to do that. And we still aim to close it by the end of the year.

Any update? When would you know if the divestitures are required? When will you know?

Well we know what's going on, but we're aiming to close by the second half -- by the end of the year, ideally, and we'll update you more as we progress.

Okay. And so if divestitures are required, you'll disclose that.

Yes.

I don't know, will we? At the time of close.

Okay. Got it. Okay. And you have a new product coming in a big market, the SEISMIQ IVL for coronary. How are you thinking about your ability to take share from the single player there?

Yes. It's a great opportunity for us. I know you'll probably get to it, but we're really excited about beyond what we've talked about here, just kind of the future of the company as you progress a little bit further in time with about 8 platforms that enter well over $25 billion of new market spaces and TAVR and lots of other spots. And this is a near-term opportunity that we're very bullish on. We created the technology. We spun it out. We brought it back. So we really like the differentiation and capabilities, a good competitor there, but we're having nice success in the peripheral below-the-knee and above-the-knee approvals. And the trial went well as presented at PCR this year. and we're ramping up supply, ramping up capital capabilities, and that should be a nice driver for us in '27 and a more meaningful one in '28 as we continue to enhance the product and continue to drive supply capabilities. So it's a $1 billion market plus growing nicely, and it fits right into the sweet spot of our very broad cardiovascular call point.

So beyond that, what are the opportunities you're most excited about? You've got so renal denervation, TAVR. What are the ones besides IVL?

There's a bunch of them. I think as you look a bit more forward, the combination of our Interventional Cardiology business, our peripheral vascular business, our Penumbra business once that's closed, a likely entry into TAVI, which we think will be disruptive if that clinical trial goes well. So you said it. It's IVL in the near term. We'll finish enrolling our hypertension trial this year. As that market continues to strengthen over time and reimbursement economics, we think will improve and get better. We think that entry time is a good point for that one. We've got a big bet in circulatory support with shock. Penumbra will be organic, all those product launches in EP that you know about, which are markets that we're not playing in today. And then a bit longer term, the potential TAVR opportunity.

On Penumbra, you've been public about the challenges with Axonics. You've seen Stryker has been public about their challenges with Inari. What you -- what can you do to avoid that?

A lot of it is commercial. it's -- we had a lot of commercial disruption with Axonics. I can't speak to Stryker, but you really need to lock down because they have very strong relationships, and you really can't afford to have much turnover in that commercial team. And so that's been a big focus for us with Penumbra, retaining their sales leadership, retaining their incentives. And as mentioned before, we add to Penumbra. So we're a bunch of Penumbra sales reps here. Our portfolio is additive to their portfolio now. So it will be helpful to them. In accounts where they're not in, we likely have relationships with Silk Road and others. So it's -- we're complementary to each other, and we're supportive of each other as long as we retain them, which has been our goal.

You mentioned Silk Road. We've seen kind of some of the news on that. What's the update? When is that product coming back? Or what's the status?

Yes, I think that's a good example of how you can bounce back. That integration went poorly initially with commercial disruption. And again, this is a startup -- more of a start-up company with Penumbra, a more mature company with many commercial leaders who have worked for larger companies and so forth. The Silk Road will be fine. We had to move -- we're in the midst of moving manufacturing to Minnesota. That's in place. It's an immaterial impact on the company. And the team has done a really good job of rebounding there, which gives us hope with Axonics with the right commercial hiring and training, that business has done quite well.

That's good to hear. Mike, on '27, I don't know if it's kind of, I don't know, off the table at this point, but the 2% to 4% for the second half 2026, you said was a good starting point for '27, 2% to 4% organic growth. What -- I guess the question is really what would -- what are the factors that would drive you to the kind of the upside or downside on that?

Yes. We clearly have to do some more work on that based on what's happened with the cyber incident. And once we get through the recovery and get a better sense of some of the numbers, we'll give a bit more of a framework for 2027. I think the overall, the business dynamics are similar. We aim for our CRM business to get healthier with the launch of a defib platform ideally in the second half of this year. We talked a lot about the EP products that are coming as you get in the second half of 2027, which all point to stronger 2028. We do believe that our urology business will be better in '27 based on the product launches that we have, based on the more maturity of the commercial organization. But we do have some headwinds. We talked about WATCHMAN. We want the market to get better for all the reasons we talked through and all the actions we're taking. We have a competitor coming there. So WATCHMAN will likely be under some pressure and EP will be under some pressure until we get those product launches out. But we should be able to give you a better idea of that type of call, not our official guidance, but more generally.

But LRP, given this cyberattack, I imagine you're not going to give us a new LRP on the October call.

Probably not.

And the defib platform is second half of '26 or second half of '27.

'27.

'27. And EMPOWER, any update, the leadless pacemaker?

That's similar timing.

Second half '27?

Yes.

Got it. And then maybe a final point on EPS. And again, I don't -- because of the cyberattack, maybe everything is going to change. But the minimal EPS growth from the Q2 call was unclear if that was with or without the Penumbra dilution, which I think you said year 1 is $0.06 to $0.08.

Yes. So Lauren and Jon will have to help me out on this one. So we did say EPS growth essentially will be more of a challenge, we said on our earnings call last year, and that dynamic hasn't changed. We have some gross margin pressure with the -- based on the WATCHMAN and EP trend, we do expect these other businesses to get healthier. At the same time, Penumbra does have some additional dilution, but we've also in the midst right now of executing a pretty significant restructuring plan. And so that will provide some benefit as well. So 2027, we'll give a guide in January, but we expect to have minimal EPS growth in '27. And then we expect to get back to kind of a more traditional growing closer to WAMGR, if not better, in '28 and traditional margin improvement that we delivered and traditional EPS growth in '28.

Closer to your WAMGR in '28.

That's the goal.

And Mike, the -- you had an amazing run. You've had some short-term challenges. Are these challenges having an impact on how you manage the company?

I think I'm just -- I would say the challenges are healthy, not for financially, the challenges are healthy just to bring additional muscle to the team. You learn a lot when you go through challenges, you learn less when things are going so great. And our team is very, very resilient. They're very talented. They're highly committed. And you saw that with the cyber response. We've got a very, very strong platform that we invest for the long term of the company. We want to make the company incredibly special for many, many years. We are protecting those growth drivers despite the restructuring. Restructuring is not fun, but it's needed to do. And we feel like we're doing all the right things for the company, for patients and for long-term shareholders to ensure that we have a differentiated pipeline for the future and a team that's highly motivated to execute. And nobody likes to have a bit of a frustrating year to say the least. But you either respond to that by getting after it or you go in the shell. And our team is very, very aggressive on proving the skeptics wrong.

Okay. Well, we're just about out of time. I want to give you the last word if you want to make any other concluding remarks, but I appreciate both of you being here. Anything else?

No, I think that's it. Thank you very much.

Thanks for being here.

Thank you.

Good morning, and welcome to the Boston Scientific Second Quarter 2026 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Lauren Tengler, Vice President, Investor Relations.

Thank you, Drew, and thanks to everyone for joining us. With me on today's call are Mike Mahoney, Chairman and Chief Executive Officer; and Jon Monson, Executive Vice President and Chief Financial Officer. During the Q&A session, Mike and Jon will be joined by our Chief Medical Officer, Dr. Ken Stein.

We issued a press release earlier this morning announcing our Q2 2026 results, which included reconciliations of the non-GAAP measures used in this release. The release as well as the reconciliations of non-GAAP measures used in today's call can be found on the Investor Relations section of our website. Please note that on the call, operational revenue excludes the impact of foreign currency fluctuations, and organic revenue further excludes certain acquisitions and divestitures for which there is less than a full period of comparable net sales. Guidance excludes the previously announced agreement to acquire Penumbra, which is expected to close in the second half of 2026, subject to customary closing conditions. For more information, please refer to the Q2 financial and operating highlights deck which may be found on the Investor Relations section of our website.

On this call, all references to sales and revenue, are organic and relative growth as compared to the same quarter of prior year unless otherwise specified. This call contains forward-looking statements regarding, among other things, our financial performance, business plans, market expectations and product performance and development. These statements are based on our current beliefs using information available to us as of today's date and are not intended to be guarantees of future events or performance.

If our underlying assumptions turn out to be incorrect or certain risks or uncertainties materialize, actual results could vary materially from those projected by forward-looking statements. Factors that may cause such differences are discussed in our periodic reports and other filings with the SEC, including the Risk Factors section of our most recent annual report on Form 10-K. Boston Scientific disclaims any intention or obligation to update these forward-looking statements except as required by law.

In addition, this call does not constitute an offer to sell or the solicitation of any offer to buy any securities or solicitation of any vote or approval in connection with the proposed transaction with Penumbra. Boston Scientific has filed the SEC registration statement on Form S-4 containing a proxy statement of Penumbra and the perspective of Boston Scientific that contains important information about Penumbra, Boston Scientific, the proposed transaction and related matters.

At this point, I'll turn it over to Mike.

Thank you, Lauren. Thank you, everyone, for joining us today. Second quarter represented a solid quarter for Boston Scientific, while we continue to navigate a dynamic environment. Total company organic sales grew 7% versus our guide of 5% to 7%, driven by our Interventional Cardiology, Endoscopy and Neuromodulation business. Q2 adjusted EPS of $0.86 grew 15% and exceeded the high end of the guidance range of $0.82 to $0.84, driven primarily by some favorable tax results. Second quarter adjusted operating margin was 28.4%.

Turning to our outlook. We now expect the second half to be more pressured than we originally anticipated. To that end, we are updating our full year 2026 guidance for organic revenue of 5% to 6% and with our full year adjusted EPS now $3.28 to $3.32, representing growth of 7% to 8%. For the third quarter, we're guiding to organic revenue growth of 3% to 5% and adjusted EPS of $0.80 to $0.82.

We updated our guidance in Q1 with the goal of establishing the right baseline for the year. This update today is not the outcome we planned or what you've come to expect from us. Boston Scientific has had a strong record of growing above our weighted average market growth rates while delivering double-digit adjusted EPS growth. However, market conditions have evolved quickly and has been challenged to forecast effectively.

Our guidance reduction is concentrated in two areas: First, WATCHMAN where the U.S. market has slowed sharply and unexpectedly, primarily driven by compounding clinical evidence, which has impacted referral patterns. And second, EP, where we did not anticipate the degree of competitive share movement, we're now seeing in the U.S. market.

While we are sharpening our forecasting processes and taking action to address controllable headwinds, our underlying assumptions that these dynamics continue in '27. Resulting in revenue growth below our WAMGR and limited adjusted EPS growth. We expect our revenue and EPS growth profile to improve meaningfully in 2028, supported by key catalysts across Boston Scientific.

In the meantime, we're focused on execution, delivering our 2026 guide, staying disciplined on spending and continuing to fund the areas of the portfolio where we see the strongest long-term opportunity. As part of that effort, we just announced a restructuring program aimed to deliver approximately $500 million in run rate savings exiting '29. This program will enable us to drive sustainable cost efficiencies while strategically reinvesting in our business to support a return to adjusted -- to a strong adjusted EPS growth in '28 and beyond.

So before I provide more information in regards to our second quarter performance and full year outlook, I want to reiterate my confidence in the future of Boston Scientific. While EP and WATCHMAN have been tremendous growth drivers for the company, our other business units, which represent roughly 75% of our revenue, are expected to grow approximately 6% in the second half of the year, consistent with our historical performance over many quarters.

Turning to our regional performance. The U.S. grew 6% on an operational basis, driven by [ ICVT ] Interventional Oncology and Neuromodulation. Europe, Middle East, Africa grew 4% on an operational basis driven by EP Vascular and Neuromod. And Asia Pac grew 11% operationally, led by double-digit growth in Japan, China and Korea. Across the region, performance was driven by our Interventional Cardiology EP and [indiscernible] businesses.

Now some additional color on our business units. Neuromodulation sales grew 12% with double-digit growth in both pain and brain. Within Pain, growth was lying across the portfolio, including a full quarter of contribution from [ Nalu ], which performed well in the second quarter with integration progressing nicely. In brain, we saw strong growth across the globe enabled by differentiated products, including our [ Cartesia ] leads, [ Alumina ] programming and [ DBS ] patient controller.

Urology grew 1% this quarter, falling short of our expectations, driven by [ sickle ] neuromodulation with the recovery in that business taking longer than we had anticipated. In stone management, we continue to see pressure in the market with key portfolio gaps that we aim to fill over the next 3 quarters. We now expect our full year urology growth to be flat to low single digits.

Endoscopy sales grew 7% with strong results across our business another quarter of better-than-anticipated performance from [ Axios ]. Within the quarter, we received FDA clearance for [ Rivos ], a first-of-its-kind single device design to consolidate multiple exchanges enable physicians to streamline procedural steps while reforming endoscopic ultrasound biliary drainage with positive feedback received on initial cases.

Turning to Cardiovascular. Cardiovascular sales grew in the quarter. Interventional Cardiology and Vascular Therapies grew 12%. Our Interventional Cardiology business had another excellent quarter, growing 15%, driven by double-digit growth in our coronary therapies with continued strength in [ DCB ], Imaging and Complex PCI. In May, data from the fracture trial is presented as a late breaker at [ EuroPCR ], achieving all endpoints with the SEISMIQ Force Coronary IVL Catheter, demonstrating high rates of freedom from major adverse cardiac events at 30 days, as well as procedural success in patients with severely calcified coronary artery disease. We look forward to bringing SEISMIQ Force to market in the first half of '27.

Earlier this quarter, we announced our intent to potentially reenter the market through an investment in [ Mirus ] in their differentiated SIEGEL TAVR Valve. The SIEGEL Valve is currently enrolling in the STAR clinical trial and upon achievement of certain clinical and reg milestones, Boston Scientific has the option to acquire 100% of the TAVR assets. This valve has been built on years of research and proprietary technology, we believe the distinctive design and impressive early clinical results of the SIEGEL Valve may set it apart from currently available technologies.

We're making great progress in our THRIVE trial enrollment and valuating the TIVUS Ultrasound System for renal literation and the treatment of hypertension and continue to anticipate bringing our technology to market in '28.

As we look ahead, we believe that our IC business and [ ICVT ] broadly will be our strongest growth driver for Boston Scientific as we enter a number of high-growth adjacent markets over the coming years.

Our Vascular Therapies business grew 8% driven by broader adoption of [ Varithena ] and our [ drug-eluting ] portfolio. We're pleased with the performance of our SEISMIQ IVL launch with strong reception for the clinical differentiation of the device, we continue to ramp supply.

We remain excited about the opportunity to add the Penumbra team and a highly differentiated and complementary portfolio to Boston Scientific. We anticipate the deal will close in the second half of '26, subject to the receipt of the remaining regulatory clearances.

Our Interventional Oncology and Embolization business grew 12%, driven by strong global growth with our broad offering of innovative technologies. Earlier this month, results from the [ Proactive ], which is a large prospective real-world study evaluating [ TheraSphere ] in the treatment of liver and malignancies were published. The study demonstrated meaningful survival outcomes across all stages of disease, including patients with larger or more advanced tumors, further supporting the use of [ TheraSphere ] in these populations.

Additionally, we received FDA clearance for a TruSelect which is a microcatheter that combines precise navigation and efficient [ Embola ] delivery.

Cardiac Rhythm Management sales declined 2% in the quarter. In core CRM, our low-voltage business declined high single digits, and our high-voltage business declined mid-single digits. Across our CRM franchise, we are seeing competitive pressure with some portfolio gaps and we expect to make progress against these portfolio gaps with [ Precedent ], which is a new [ defib ] platform to be launched in second half 2027.

In Q2, our Diagnostics franchise grew low double digits with continued strength across our broad diagnostic portfolio.

Overall, we anticipate that our CRM growth will be flat on a full year basis, with a slight improvement in the second half of the year with contribution from [ Elucro ], which is now a full launch.

Turning to WATCHMAN. Our goal here is provide you with more details on the LAAC market dynamics, the impact and expectations going forward. In second quarter, WATCHMAN grew 4%, with international growth of 18% and U.S. growth of 3%. The adoption of concomitant has been swift, and we now estimate that 1/3 of WATCHMAN procedures in the U.S. are done concomitantly.

In second quarter, concomitant procedures grew over 60% with sequential growth of 11% versus first quarter 2026. For the remaining 2/3 of the procedures that are standalone, we saw low teens declines versus second quarter 2025.

We believe the overall LAAC market slowdown is driven by two main factors. First, there has been a significant amount of clinical evidence regarding stroke risk in AF patients, published over the last 9 months, and integrating this evidence into practice takes time, which is impacting patient identification and [ floor ] patterns.

Second, the focus on the fast adoption of concomitant procedures has created inefficiencies in the system with regards to operationalize both stand-alone and concomitant and allowing for sustained growth.

With these key challenges understood, we are executing against three priorities to reaccelerate growth. First, we are driving greater clinical understanding through expanded physician education and evident dissemination, which we expect will help refers and implanters more easily identify patients appropriate for WATCHMAN.

Second, we're also strategically investing in our commercial organization to increase account engagement and unlock growth across both concomitant and stand-alone segments.

And finally, we're accelerating direct-to-patient investments to stimulate demand, increase patient activation to reach more patients in the state of care journey -- in the start of care journey. Together, these actions are designed to increase the number of patients treated and approved the LAAC market over time.

So given these market dynamics we are seeing, we are updating our full year outlook for global WATCHMAN growth to be flat to low single digits with the second half of 2026 declining mid- to high single digits on a year-over-year basis. In the U.S., we anticipate that Q3 sales will decline mid-single digits sequentially versus second quarter, resulting in flat full year growth. We anticipate that year-over-year concomitant growth will materially slow in the second half due to higher comps from 2025.

Our outlook does not anticipate any improvement in stand-alone procedure growth trends in the second half. We absolutely believe in this therapy and that WATCHMAN is the best treatment for patients who can't, won't or shouldn't take oral anticoagulation for stroke prevention. We expect that the actions we are taking to say will support the LAAC market over time. However, we are not assuming improved WATCHMAN growth in 2027 until we see these dynamics actually change.

Electrophysiology sales grew 9% with 3% growth in the U.S. and 23% internationally. Growth was driven by our innovative portfolio, including our continued expansion of our OPAL mapping footprint, strong catheter utilization and continued momentum with our FARAPOINT launch. We continue to be pleased with the progress of expanding our OPAL [indiscernible] footprint, supported by the OPAL [ HDX-70 ] software release, which improved map quality, our software releases every 6 months continue to enhance capabilities and support the expanding FARAPULSE platform.

We have seen significant growth in our EP business with our differentiated FARAPULSE technology enabling the transition to PFA faster than we anticipated. We believe that the U.S. PFA revenue now makes up approximately 80% of the AFib market, which does limit our ability to offset some competitive pressures.

Going forward, we have adjusted our market share assumptions to ensure a more realistic outlook given these developments, while our team continues to focus on bringing our leading PFA ecosystem to more physicians and their patients who may benefit from the therapy.

In light of this, we now expect our second half '26 global growth for EP to be flat. In the U.S., we anticipate our Q3 sales will sequentially decline mid-single digits versus second quarter resulting in full year growth of flat to low single digits. We expect continued strength internationally with full year growth of approximately 20%.

As we look ahead, we anticipate that our U.S. EP performance will improve in the second half of 2027 after the introduction of FARAWAVE Ultra, which is a high-density mapping and ablation catheter as well as our entry into the [ ICE ] market. We expect further improvement in 2028 as FARAFLEX our novel large focal, high density map and ablate catheter becomes available.

And importantly, earlier this month, we commenced enrollment in the pivotal PARADIGM trial, evaluating the safety and effectiveness of FARAFLEX mapping and PFA catheter for the treatment of patients with paroxysmal and persistent AF.

So in closing, we're not satisfied with our near-term outlook. We believe we now have a clear picture of the dynamics in our business and our updated guidance reflects a realistic view of the second half of '26.

I remain confident in our long-term outlook for a number of reasons. Our performance is strong across many business units with Interventional Cardiology, Neuromodulation, [ IOE ] and Vascular, all delivering double-digit growth in the first half of the year. We also have an impactful cadence of Catalyst in '27 that we expect to drive a significant improvement to our growth profile in 2028 and beyond. And even as we work through near-term top line pressures, we continue to be disciplined with our spending while investing in future growth drivers to ensure a return to meaningful adjusted operating margin expansion and adjusted EPS growth in '28 and beyond.

So while we continue to navigate current challenges, our foundation, values and purpose haven't changed. Boston Scientific focused on improving patient lives through our relentless pursuit of innovation, and we are confident that the qualities that have defined this company over many years will continue to shape our future as we evolve and build on those strengths with a highly skilled global team and a winning spirit.

So with that, I'll hand over to Jon for more commentary.

Thanks, Mike. Second quarter consolidated revenue of $5.44 billion represents 7.5% reported growth versus second quarter 2025. And includes a 50 basis point tailwind from foreign exchange, which was in line with our expectations. Excluding this $28 million foreign exchange tailwind, operating revenue growth was 7.0% in the quarter, Organic revenue growth was also 7.0% versus our second quarter guidance range of 5% to 7%.

Second quarter 2026, adjusted earnings per share of $0.06 and grew 15% versus 2025, exceeding the high end of our guidance range of $0.82 to $0.84, primarily driven by favorable [indiscernible] items. Adjusted gross margin for the second quarter was 70.3%, which represented an 80 basis point increase versus the second quarter of 2025.

Second quarter adjusted operating margin was 28.4% and which was in line with expectations and represented 70 basis points of expansion versus the second quarter of 2025. On a GAAP basis, second quarter operating margin was 21.6%, these results include an approximate $75 million charge related to certain product liability cases as well as the recognition of approximately $80 million of refunds on previously paid [ AIBA ] tariffs representing substantially all of the refunds that we expect to receive.

Moving to below the line. Second quarter adjusted interest and other expenses totaled $120 million which was slightly unfavorable to expectations driven by FX volatility and certain unhedged currencies. On an adjusted basis, our tax rate for the second quarter was 10.4% and which were better than expected and includes favorable discrete tax items. Fully diluted weighted average shares outstanding ended at $1.475 billion in the second quarter reflecting the repurchase of approximately 40 million shares under our previously announced accelerated share repurchase agreement, which reduced our share count more than initially anticipated. As a result, we now expect full year 2026 weighted average shares outstanding to be approximately $1.475 billion.

Free cash flow for the second quarter was $1.29 billion with $1.475 billion from operating activities, less $184 million in net capital expenditures. We now expect full year 2026 free cash flow to be approximately $3.8 billion. At June 30, 2026, we had cash on hand of $539 million our gross debt leverage ratio was 2.0x.

Our capital allocation approach is disciplined and growth oriented. Our top priorities remain strategic tuck-in M&A and opportunistic share repurchases. While we continue to evaluate and fund the opportunities that we believe will create the greatest long-term value for our shareholders.

Consistent with that framework, we announced a $1.5 billion investment in [ Mirus ], which includes an exclusive option to acquire its TAVR business, and we completed our previously announced $2 billion accelerated share repurchase program. In addition, we look forward to the close of Penumbra in the second half, which we believe will strengthen our long-term growth profile through its innovative portfolio and strong strategic fit within our Cardiovascular business.

I'll now walk through guidance for the third quarter and full year 2026. We now expect full year 2026 reported revenue growth to be in a range of 5.5% to 6.5% versus 2025. Excluding an approximate 50 basis point tailwind from foreign exchange based on current rates, we expect full year 2026 operational and organic growth to be in a range of 5% to 6%, we believe this guidance reflects a comprehensive and realistic view of our end market dynamics.

For the second half of 2026, this outlook contemplates approximately flat growth in our global electrophysiology business, a mid- to high single-digit decline in our global WATCHMAN business and a steady base business growing approximately 6%, consistent with our historical performance over many quarters.

We expect third quarter 2026 reported revenue growth to be in a range of 3% to 5% versus third quarter 2025. We anticipate no impact from foreign exchange based on current rates and therefore, expect third quarter 2026, operational and organic growth to also be in a range of 3% to 5%.

We expect full year 2026 adjusted gross margin to be below full year 2025, reflecting a less favorable product mix than previously anticipated primarily driven by our lower sales outlook for WATCHMAN and electrophysiology. Additionally, we continue to make incremental investments in our global supply chain and quality systems.

We now expect to expand full year 2026 adjusted operating margin by 0 to 25 basis points. Despite pressure on margins this year, we remain disciplined on spending while continuing to invest in our highest priority growth opportunities, supported by our recently announced restructuring program. We anticipate this comprehensive company-wide program will deliver run rate savings of approximately $500 million exiting 2029 in the areas of supply chain optimization, targeted functional transformation, org structure evolution as well as focused reductions in indirect spending to drive sustained cost efficiencies. We expect to realize over half of our run rate savings and incur over half of our program spend exiting 2027.

This will position the company to return to meaningful operating margin expansion and strong adjusted EPS growth in 2028 and beyond.

We now expect full year 2026 adjusted below the line expense to be approximately $485 million, reflecting the financing impact associated with our strategic investment in [ Mirus ] in our accelerated share repurchase agreement. Under current legislation, including enacted laws and issue guidance, we now expect a full year 2026 adjusted tax rate of approximately 11.5%.

We expect full year 2026 adjusted earnings per share to be in a range of $3.28 to $3.32, representing 7% to 8% growth versus 2025, including an approximate $0.05 headwind from foreign exchange. We expect third quarter adjusted earnings per share to be in a range of $0.80 to $0.82.

In closing, I'm confident in the long-term outlook for the company and our team's ability to navigate the current environment. While the challenges we face today will weigh on near-term financial performance, we are taking decisive actions to sharpen our organizational focus, adjust our cost structure and position the business for the future. We remain focused on executing our full year 2026 guidance of 5% to 6% organic revenue growth to 25 basis points of adjusted operating margin expansion and 7% to 8% adjusted earnings per share growth.

Importantly, we remain confident that the actions we are taking today will position Boston Scientific to return to differentiated financial performance in 2028 and beyond.

For more information, please check our Investor Relations website for second quarter 2026 financial and operational highlights, which outlines more details on second quarter results and 2026 guidance.

And with that, I'll turn it back to Lauren who'll moderate the Q&A.

Thanks, Jon. Drew, let's open it up for questions for the next 30 minutes or so in order for us to take as many questions as possible, please limit yourself to one question.

[Operator Instructions] The first question comes from Robbie Marcus with JPMorgan.

I wanted to ask -- we're coming off a beat in second quarter here. And I realize there has been a number of downward revisions over the past few quarters as some of the end markets have been moving. How do you frame this latest guidance update, particularly with respect to EP and WATCHMAN. Is this based on a level of conservatism where you can eliminate, hopefully, any future negative revisions? Or is this based more on trends you're seeing exiting second quarter and so far into third quarter? And any early commentary you could give on 2027, I believe buy side is settling out somewhere around 5% organic growth coming into today. How does that sound to you going into second half of this year?

Yes, we are pleased with our second quarter results. And we did mention in the script that basically 75% of our business continues to grow 6%. And consistent with 2025, and we anticipate that set of businesses that are 75% will improve over the coming years. as we strengthen our Urology business, launched CRM and continued momentum there. So 75% of the business kind of growing 6%, and we aim for that to improve in the future.

The challenge, as you know, has been in the two areas, EP and WATCHMAN that had hyper growth unusually differentiated growth in '24 and '25, and now we expect more pressure in '26 and '27. And specific to EP, we see that rebounding in second half '27 and we expect to get back to kind of at market or above market growth in EP in '28.

So when you look at the second half, really, it's the EP and WATCHMAN is driving the bulk of the guidance reduction. And we're clearly not pleased with this change. It's not the outcome that we plan for. It's not what you expect from us, and I do take responsibility for the guidance reduction and it's primarily driven by EP and WATCHMAN.

As I mentioned in the script, on the WATCHMAN side itself, we do expect second half declines globally in the mid-single-digit to high single-digit results. And that is based on trend that we've seen we have not seen uptick in the first half of the year. So we think that's the appropriate prudent conservative guide for WATCHMAN based on the existing market that we're seeing.

Now we're assuming in the WATCHMAN guide that despite the efforts we are making, which we aim to improve that those do not benefit the existing WATCHMAN market. So the three things that we laid out today, continue to enhance. And if labeling occurs in 2027, there obviously could be some upside to those numbers. But for guidance purposes, we're assuming the existing market that we're seeing today does not change.

In that market change is very dramatic and pretty sudden over the past 6 months. So the WATCHMAN is the biggest piece of it. And secondly, on EP, we're overall in EP, we're actually quite pleased with the performance in the quarter. And we're quite pleased with the portfolio road map that we have with Ultra being launched in kind of this time next year. The entry into [ ICE ] in the ultra platform just initial ID. So that team is executing well.

But with a specific EP, we did undercall the competitive pressures in the U.S. in terms of share taking. We continue to be the PFA leader, but our share has come down. And the second attribute there is the PFA market has really accelerated to about 80%, 85% of the market share. We don't see that in Europe and Asia where we continue to grow about 20% of our EP business.

So the second half guide down is primarily driven by WATCHMAN and EP for the reason stated. In 2027, to be appropriately conservative again, we would say that in 2027, we aim to do better than our guide for the second half of 2026. So assuming our 2027 we're being appropriately conservative with our WATCHMAN market call, and we aim to get back to stronger performance in EP, and we're confident that 75% of the business, which is growing 6%, will improve over time with Urology and CRM specifically. I hope that answered some of your questions.

The next question comes from Larry Biegelsen with Wells Fargo.

Mike, regarding WATCHMAN, I think you said mid- to high single-digit decline in the second half of '26. So when you say no improvement in '27, are you referring to the full year guide of flat to low single-digit growth? Or second half guidance? And how are you thinking about new competition next year, the 20% cut to the physician fee? And just lastly, do you still expect the first-line label based on the 3-year CHAMPION data?

Yes. The -- again, on EP, we undercalled the share. The WATCHMAN, we're not looking for a pass, but it has changed dramatically over the past 6 months. So when we look at second half, our assumption for the -- we're talking about the market here because we're about 91% share of the market. We do think the market declines that mid- high single-digit range -- it's primarily based on high comps with concomitants. And as I mentioned, declining stand-alone share of about -- or stand-alone growth of about mid-teens growth negative. So that's the call for second half.

In terms of the market in 2027, we obviously aim for that to get better based on educating the referral community, the clinical messaging, expanded commercial coverage and increase in [ GTPA ] but for now, we think it's prudent to assume that the '27 market is consistent with the trends that we're seeing now. And we'll be happy to change that call once we see improvement in the WATCHMAN market if that occurs.

As you mentioned, we do anticipate a competitor at some point in 2027. We have high confidence that WATCHMAN will continue to be clearly the market leader but likely we'll have some share erosion in 2027 with the introduction of a new competitor. So WATCHMAN will be absent a change in the market, which we have not assumed in this guidance. despite the efforts that we are taking. We expect WATCHMAN will be difficult in 2027.

The next question comes from Joanne Wuensch with Citibank.

If I heard you correctly, 2026 revenue growth of 5% to 6% organic is probably a good starting place to think about 2027 and then reaccelerating in 2028. Could you sort of confirm that the right parameters to think about? And then if you could comment on what the new products are that you think will be the main drivers as we think about going into 2028?

Yes. So it's -- we gave our guide for '26. It's difficult to give you a precise guide, which we won't in 2027 until January. But for now, at least want to give a framework that we aim to improve 2027 versus our second half 2026 guidance. And again, that's kind of assuming that the WATCHMAN markets don't change, which we obviously aim for them to improve.

When you look to the 2028 and beyond, so I guess I would say, first of all, we are taking action, the company has delivered very, very high performance over many, many years, last 4 or 5 years. We had a decent first half of this year, growing 8% top line 10% EPS growth for the first half, and we've given our guide for 2026. We do expect a challenging 2027.

But if I could just touch on the future there in 2028 and beyond. So we are restructuring this year to help take some cost out. But why we're so confident in improvement as you point to the second half of '27, '28 is one -- the WAMGR that we compete in are 7% to 8%. We have a number of businesses now that are growing double digits. We expect that 75% of our business that's growing 6% and will improve over the coming 2 years.

In addition to that, based on investments that we've made over the past 2 or 3 years, we'll be entering seven new meaningful launches that exceed about a $25 billion TAM in 2028. And those launches basically are highlighted in our press release there, or IVL hypertension, the closing of Penumbra, entry into [ ICE ] imaging, FARAWAVE Ultra. And if the [ Mirus ] clinical trial continues to go as planned, the future acquisition of [ Mirus ], as well as the additional of circuitry support. So we really see the ICTx sector being a significant growth driver for the company in '28, '29, '30 and we expect that core 75% of our business to strengthen over that time period. And then on top of that, you layer in seven meaningful platforms that exceed about a $25 billion TAM market opportunity.

In addition to that, we're confident that the EP business will get back to at market or beyond growth in 2028 and improved nicely in second half 2027. The WATCHMAN market is tougher to call. We'll keep you as updated as we can. But we feel like the combination of all those elements will drive us to high-performance and peer-leading performance again in '28 and beyond.

The next question comes from Rick Wise with Stifel.

I have two questions. First -- my first question is I was hoping you could expand on your restructuring comments. We all read the release, the 8-K earlier this week. And you spoke about the some of the benefits and the efficiencies in the time frame. But could you talk a little bit more about the impact as we think about the next several years on the P&L, where will we see it? To what extent are you going to reinvest some of those savings, which I think was some of the language in the K, where are you going to reinvest them in your growth initiatives? How do we think about that?

It's Jon. Yes. So a comprehensive enterprise-wide program that we're initiating. So goal of driving better speed and cost efficiency targeting $500 million of savings within the next 3 years based off of the phasing of that program, I would expect to realize over half of those savings exiting 2027. So we'll start to see those savings come in 2027. And that will position us to drive more meaningful operating margin expansion and strong EPS growth in 2028 and beyond, as Mike has indicated, as well as continuing to fully fund those high-growth opportunities and might just tick through several of those, but we have them across the businesses.

So broad program as far as where we'll see those savings, I'd expect to see them materialize in SG&A first and then COGS later over time. So I feel like it's the right program for Boston Scientific, given where we are and will help position us to return to strong growth and meaningful EPS expansion and growth in '28 and beyond.

The next question comes from Michael Polark with Wolfe Research.

Follow-up on WATCHMAN and the topic of compounding clinical evidence impacting referral patterns. I think we've all seen these studies, obviously, closure CHAMPION ocean alone. The question is, what can you do to change that? Is it a new round of clinical evidence generation? Is it the form factor innovation? Just talk to me about the fixed playbook for those shifting referral patterns for WATCHMAN.

Dr. Stein, if you want to take that one?

Yes. Yes, sure, Mike. And again, I think it's pretty clear that there was a much bigger impact than we anticipated dating back to last November, the release of ocean closure. And then I think some of the confusion around CHAMPION certainly hasn't helped with that.

We have seen, for instance, a much greater use of the so-called wait and weight strategy in patients with the [ TRANZACT ] score of three following ablation and while concomitant is continuing to grow, that has affected the growth trajectory of concomitant. When we look at stand-alone WATCHMAN procedures we're really seeing more than anything else is a drop-off in referrals for the so-called soft indications for the device, patients who really just prefer not to be on an oral anticoagulant without having a really well-defined reason to seek an alternative.

And I think the solution is sort of everything that you listed and everything that Mike listed that we're doing. It's continuing to educate on the totality of clinical data.

To come back to what Mike said in the prepared remarks, right, that this is still the only proven and the best option for patients who can't, or who won't or who shouldn't beyond long-term blood thinners. I'd remind all of you, right, that somewhere between 30% and 40% of patients who need stroke prevention and atrial fibrillation currently don't get anything. So there's, again, a very sizable unmet medical need that the WATCHMAN device serves.

In addition to continuing our education on the current data, there's more data to come. I'd highlight our SIMPLIFY trial, which we expect to be released second half of this year, which, if it meets its endpoints, could help simplify the drug regimen post implant, deal with some of the concern around a media post-procedure bleeding.

We've talked about continuing to iterate our device platforms with the upcoming clinical trial evaluating the WATCHMAN ELITE device. And again, we continue to believe that the data CHAMPION and the overall totality of the clinical data merit an update to our labeling from FDA and merit of reconsideration of the CMS national coverage decision.

The next question comes from Travis Steed with Bank of America.

I wanted to ask about the limited EPS growth comment in 2027. Is that flat EPS? Is that EPS growth kind of in line with the 3% revenue growth in '27? Or is there some leverage still? And then 2028, do we get back to double-digit growth? And maybe also maybe address like why the lack of EPS growth in '27 is just a lack of higher-margin revenue growth or needing to invest more in growth drivers?

We'll get into much more detail on '27 expectations as we always do in earnings call. But based on what we're assuming today and you heard Mike outline WATCHMAN and EP Dynamics, we expect those to extend into 2027. We expect limited EPS growth in 2027 and improving op margins will be a challenge. That is due to gross margin pressure from continued softness in WATCHMAN and EP, as well as the initial impacts of Penumbra. I anticipate that will close in the second half of this year. Excited to add Penumbra. But as we've previously disclosed, expect Penumbra to be slightly dilutive to our op margins and EPS in 2026.

Now again, we are taking action to ensure a return to meaningful operating margin expansion and strong EPS growth. We'll maintain a disciplined approach to spending across Boston Scientific. Again, we'll continue to fully fund those areas of the portfolio that we see driving our long-term growth. And again, as we discussed, we initiated a company-wide restructuring program, which, along with those growth catalysts that Mike laid out a moment ago, that will start to hit in '27 that will position us to return to strong revenue growth and strong adjusted EPS growth in 2028 and beyond.

The next question comes from Matt Taylor with Jefferies.

I wanted to see if you could be a little bit more specific on 2027 assumptions for EP growth. You talked a little bit about the WATCHMAN outlook. Could you discuss EP as well? And I guess when do you expect some of these pipeline contributions to help the EP growth outlook?

Sure, I mentioned it a little bit earlier, really pleased with the momentum and execution of our R&D innovation team broadly speaking. And as we know, we have FARAPOINT that we're launching or launched this year, but the big meaningful launches that will widen our ecosystem and widen the number of patients that we can treat and provide a more full comprehensive solution beyond current FARAPULSE really start in 2027, where we launched our next-generation FARAPULSE Ultra device, which we anticipate launching right around this time next year at scale and then entry into the -- really the greater than $1 billion, so growing quickly, [ ICE ] market. It will happen again in 2027, where we're not currently playing.

So those two launches will help us considerably as we look at second half of '27. So we basically see the first half of '27 looking like similar dynamics that we see today in second half '26. But we do see improvement in 2027. And then in 2028, we have our Ultra device, which is now in clinical trial, which we think is a breakthrough device for us, which will again widen the patient indication and kind of full-service solution that we could offer an EP customer. So we're very confident in 2028 getting to at or above market growth again in EP based on that portfolio of ultra [ ICE ] and FARAWAVE -- FARAFLEX. I'm sorry, FARAFLEX.

The next question comes from Marie Thibault with BTIG.

I wanted to ask a question here on one of the bright spots for your business, which has been the ICTx segment. what are the products that are doing best? What are sort of the catalysts to look for in that business? And how can we sort of have confidence in the sustainability of some of the above WAMGR growth that you've been showing there?

Yes. We think that this will be our largest set of businesses in the company in the future here. If you look at interventional cardiology, vascular, the ideally close by the end of this year, in addition to Penumbra and the adjacencies that we may enter, I talked about the [ Mirus ] valve in my script.

So there's just numerous -- first of all, they have excellent momentum now, and that's being driven by our complex PCI portfolio our imaging capabilities and our agent drug-coated balloon, which we're looking to continue to widen indication and expansions with our current trial. So that business is performing at a very high level. And then as we look over the years here, we're excited to enter the IVL market, which is a multibillion-dollar market in 2027 in Coronary. We're making a lot of momentum on our hypertension enrollment in our trial, and we expect to finish that hopefully by the end of this year or first quarter 2028 and so we expect to launch that product no later than 2028, which we think will be a very nice timing based on potential enhancements that continue to need to be made in the reimbursement landscape.

And then we'll have the closing of Penumbra. So there's just a number of large adjacencies that we're moving into in that sector. and the right continued momentum. And as Jon said, with this restructuring, we are clearly protecting these high-growth markets that allow us to enable to grow to high-end performance again in '28 and beyond.

Thank you. The next question comes from Jayson Bedford with Raymond James.

I may have missed this in answering an earlier question, but what do you think your WAMGR is today, just given the slowdown in the LAAC market? And then just a quick one what can be done in [ sacral ] neuromodulation. I'm just curious, is it more market or share related?

Yes. We would estimate our WAMGR is probably 7% to 8%, so it ticked down probably 1 point. Keep in mind, WATCHMAN is a great product for us, but it's less than 10% of our revenue. So we call our WAMGR in the 7% to 8% range. And hopefully, that will enhance over time. based on the closing of Penumbra and the potential entry in some of these other markets that I mentioned.

On Urology, we're frustrated with our results year-to-date, we do anticipate kind of flattish growth, maybe up 1% for the full year. And that business, we're confident, and we've been saying this for a while, but we're confident that's going to improve in 2027. We have three key launches in our core stone portfolio over the coming 2 or 3 quarters. We expect to get closer to at market growth in 2027 in that area.

And in [ sickle ] neuromodulation, as we've discussed on numerous calls, we had a significant kind of disruption of the commercial capabilities and those gaps have been filled. We've trained and hired and are now in the field activating a number of new clinical and sales reps. So we anticipate that business should get better as the quarters progress here in '26 and with a more mature team in 2027. So we aim for our urology business to kind of get closer to their urology market growth rate in 2027.

I understand that there is time for one last questioner, that will come from Josh Jennings with TD Cowen.

I wanted to follow up on Jayson's WAMGR question. It sounds, does that hold for 2027? And just hoping for an updated outlook on the U.S. EP market growth. And does Boston expect FARAWAVE to maintain leadership in the AFib Ablation Catheter segment in front of the FARAWAVE Ultra launch, just an update on how Boston is doing in the non-plain catheter segment of the USP market, sorry, multilayered, but I appreciate you taking it.

I think the 7% to 8% call for the WAMGR is, I think, the appropriate number. In terms of PFA leadership, we have it now -- we have lost some share in the U.S. We continue to do extremely well in Europe and Asia Pac, where the PFA penetration is not quite as high. And we've seen all the competitive launches there. But we do continue to expect some competitive launches will impact performance in second half '26, which is the guide. And then we see that continued trend occurring through first half '27 and that's when we launched our next-generation Ultra and eventually are [ ICE ] device. So we expect that business to strengthen in second half '27 and in '28.

This concludes our question-and-answer session. I would like to turn the conference back over to Lauren Tengler for any closing remarks.

Thanks for joining us today. We appreciate your interest in Boston Scientific. If we were unable to get to your question or you have any additional follow-ups, please don't hesitate to reach out to the Investor Relations team.

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Thank you. Please note a recording will be available in 1 hour by dialing either 1 (877) 344-7529 and or 1 (412) 317-0088 using replay code 114-7211 until August 5, 2026, and at 11:59 p.m. Eastern Time.

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Hi, everybody. I'm Lee Hambright, U.S. medtech analyst at Bernstein. We're very pleased to kick off the strategic decision conference again with Boston Scientific. We've got Mike Mahoney, Chairman and CEO; and Ken Stein, Chief Medical Officer. Thanks so much guys for being here.

Thank you for having us.

For those of you in the audience, if you have questions, we can -- you can enter them in the pigeon hole tool. I will try to work in as many as I can. Mike, kicking off your 15th year at Boston Scientific and you've transformed the company from flattish growth when you joined to 16% organic growth over the past couple of years. 2026 is a little bit of a transition year. Maybe you could kick us off with a few thoughts on the state of the business.

Sure. Good morning. Thanks for coming, everybody. As you said, we're very proud of the company and what we've built over the years. The markets that we're competing in. We think we still compete in markets that grow at least 8% as we said at our Investor Day last year. So we've really positioned ourselves in the right growth markets. You've seen some recent announcements with the Penumbra shareholder vote investment in MiRus and other investments.

So we really invest for the company to be differentiated for the long term. Proud of the results the last couple of years, this year has been a bit more of a challenge than we anticipated. As you know, unfortunately, we did take our guide down earlier in the year to 6% for full year. And so at those levels, and 5% to 7% for second quarter, 6.8% for the full year. So we're comfortable within those guidance ranges for the second quarter and for the full year, and we continue to invest for the future across our businesses.

And our goal always is to grow faster than our WAMGR, to drive double-digit EPS growth to improve margins every year, which we've done every year and with that guide that we said, we're still comfortable that we can deliver the margin improvement and the EPS goals that investors expect as we invest for the future and to get back to a differentiated growth profile.

Great. Great. Okay. Maybe you could just comment a little bit on the health of underlying markets. There's been some questions about utilization trends and potential headwinds from Medicaid cuts or expiration of the ACA exchange subsidies. What are you seeing in terms of just general market trends?

In the markets that we're in, we don't see any slowdowns or a significant impact by those events. We have actually seen a bit of an increase in backlog with WATCHMAN, which we'll talk further on we see healthy volumes in EP, healthy volumes across inventional cardiology. So we haven't seen a slowdown in the overall procedure mix and rate globally for Boston.

Yes. Great. Okay. As you mentioned, you're guiding to 5% to 7% organic growth for Q2, 6.5% to 8% for the fiscal year. What -- you took the guidance down, as you said, and I know you don't take that lightly. What changed from early Feb late April? And what's your level of confidence in those growth ranges today?

Yes. As I said, we're comfortable within the guidance range for 2Q and full year. The 3 impacts that we saw that -- we're a bit unanticipated. The first one that was the largest unanticipated one, really is WATCHMAN. We are the 91% share leader in WATCHMAN. We do have another competitor, but we're primarily the market at this point in time. And we're coming off multiple years 2025 of, I think it's about 30% growth or so and tremendous growth in Concomitant.

And so what we saw what we've seen with the -- post the earnings call is a decline in stand-alone WATCHMAN growth and increasing concomitant growth. So we've taken our number down in WATCHMAN internally to match that guide. And we obviously aim to cure that over time. And we'll talk more about that. The second area is EP, our EP business, really proud of what we've done. We went from a distant fourth place, really nonplayer NEP to a strong #2 globally. We expect to continue to be the PFA market share leader.

And we have some really robust launches, I'm sure we'll get into coming up here. But essentially, we provided more space for some additional market share reduction as competitors continue to launch. And we're seeing that now. So we took our guide down a bit in EP. And the third primary one is urology. We're the #1 global share leader in urology, but we saw some softness in our performance in that area. So really a combination of those 3 things we felt it was prudent to take the guide down.

Got you. Okay. Great. We'll dig into all this. Consensus growth forecasts have reset to around 8.5% for fiscal '27 and '28. I don't know if you're ready to comment on those at this point. But I wonder if you could just help us think about the key drivers across the company that are rating or decelerating into 2027?

Yes. We'll provide an update on our 3-year LRP likely after the third quarter earnings call. So we're not going to give any numbers on '27 or '28. But if you just look at the -- our business is all about our people and our portfolio. And we have a lot of super exciting portfolio initiatives happening in those time periods. We'll talk about EP quite a bit.

Remember, our next-gen FARAWAVE Ultra product coming out. We have a FARAPOINT product now. We'll enter the ICE market. And we'll start our IDE with FARAFLEX. So we really expect to expand the scope of procedures we are in EP. That market is growing very healthy. And we expect to maintain PFA leadership and get back to share taking over that time period. So a lot of key launches there. We'll also launch the next-generation WATCHMAN platform in that area. But I think the biggest business impact you'll see besides ongoing discussion on EP and WATCHMAN, as you look to the future, it really is across our interventional cardiology, vascular and assuming Penumbra closes, the combination of those businesses. will be very powerful for the individual cardiologists factor the surgeon, interventional radiologist.

And we have a lot of launches to compete in the IBL offering which will start in 2027 at coronary. You saw the PCR, the FRACTURE results, which is really encouraging. So we expect to have the big years with FRACTURE. We've got a differentiated hypertension device that we expect to be launching in '28, invest a lot in circuitory support for high risk PCI and shock. We have the Penumbra acquisition in the future. And you saw a recent investment that we've made in MiRus to enter the TAVR space.

So there's a lot of significant growth drivers in that time period.

Excellent. Okay. One last 1 before we get into the businesses, Boston Scientific can be a little bit intimidating for generalist investors. You've got a lot of products -- so maybe for the generalists in the audience, how do you simplify Boston side, simplify the story, explain what's different about you versus your medtech peers?

Sure. I think it's a great company. biased. We're primarily interventional medicine company. So the vast high majority of our products are procedures that are done where patients in and out of the hospital or the surgery center same day. And we really disrupt a lot of the former surgical procedures. And so the makeup of the company is 8 business units. Think of 5 of them cardiology, including oncology and then 3 of them.

MedSurg. And what we try to do for many, many years is a combination of our internal organic R&D, which we invest about a little over 9% in -- we've got the largest venture fund in medtech. We leverage that capability, and we acquire companies and invest in companies from the venture portfolio, and we are pretty active in M&A. So the combination of those 3 things, we use to fill in any product gaps. And to move into higher growth markets, but all within a common call point.

So we call that category leadership. So if you're a urologist, we want to have the widest portfolio covering urology groups and differentiated technology. And that's the same thing whether you're in endoscopy, neuromodulation or our cardiology divisions. So we really try to provide a suite of products across that call point with differentiation in there. And we continue to find faster growth markets that leverage those call points. And that's why our WAMGR consistently grows over many, many years.

Great Okay. Excellent. So let's get into WATCHMAN. Mike, on the Q1 call, you touched on several factors that might be contributing to the decelerating growth for stand-alone WATCHMAN. Are you still seeing that deceleration? And can you share your latest thinking on what's driving that trend to.

Yes. It's a bit -- it's been a challenge for us because I said we're really about the 90%, 91% market share leader in that area. We're coming off about 30% growth rate, and we're very excited Ken can talk about our Champion results, which was a significant trial, which we think over time will give us a label change and hopefully, over time, reimbursement and also triple the size of the market.

So it's a very important trial that we're very pleased with the results there. What's happened in 2026 as we've seen a declining usage of WATCHMAN stand-alone procedures. And we've seen an increase in concomitant procedures. So the good news is the concomitant continues to grow, and that's where we have our FARAPULSE and our WATCHMAN combination and based on option and Champion continues to go up. But the issue we're seeing where we're seeing a continued declining trend as a stand-alone WATCHMAN and across the interventional cardiologists and EP. And part of it is workflow-oriented where EPs are very, very busy with ablation. Now they're doing more and more concomitant.

And as a result, so far, they're doing less stand-alone procedures in a week. So we need to get back to stand-alone WATCHMAN days for EPs and we've seen a decrease in stand-alone procedures for the interventional cardiologists. They may not be seen as many referrals, there's some other structural options out there. And so we are reengaging the interventional cardiologists with more dedicated focused specialists in the field, more medidevents. But as a result, with the declining stand-alone WATCHMAN and growing concomitant -- we basically want to set an expectation of flat dollar growth from first quarter to second quarter and likely in the third quarter given the dollar sequential comps in those quarters. So we're comfortable with our second quarter guidance within that range and for the full year guidance within the range with that WATCHMAN slowdown in stand-alone.

Got it. Okay. So I know you've cranked up commercial intensity, as you said, on interventional cardiologists to get the focus back to stand-alone WATCHMAN procedures. What are the key messages you're working to get across at this point? And what kind of reception are you getting there?

Do you want to highlight Champion there.

Yes, why don't I take that. I think we are still very [Technical Difficulty]

Again, it's issues to date in terms of operational issues and operationalizing concomitant pre -- we do believe that there are fixes to that. We do need to get more folks trained in doing WATCHMAN. We see a lot of demand for training at this point from folks who have them doing procedures previously. And the thing that drives that strength and that demand, and we still really do see very robust demand from patients for this procedure is data from trials like option like Champion.

And these trials do prove, I think, to everyone's satisfaction in the implanting community and in the referring community, that Watchman is a reasonable alternative to lifelong blood thinners for patients who are at high risk of stroke, that it provides equivalent or near equivalent protections for stroke with a much lower risk of clinically important bleeding. And the one headline number from Champion that I don't think people have given enough attention yet.

Actually, it doesn't come from the WATCHMAN results. It's the blood in our results. So this is a group of patients who are picked because they believed to be low risk of bleeding, great candidates for being on blood thinning medications, all right? And 1 in 5 of those patients have a clinically significant bleeding event within 3 years, right? We talk a lot about the opportunity for indication expansion.

But even if we look within the existing indication, this therapy is still underpenetrated. And there's still a lot of patients out there who just can't tolerate these medications over the long run.

Yes. Got it. Excellent. Ken, I know you talked about hospital capacity is one of the headwinds that you mentioned related to slower stand-alone WATCHMAN. Edwards ran into a capacity issue a while back, and it took them 3 quarters or so to bounce back -- is that the right expectation here? Can you just talk a little bit more about the capacity issues?

Yes. I don't know that I'd compare one versus the other. It's a bit of apples and orange. It's a very different kind of set of procedures. I think what is fair to say are -- again, first of all, doing concomitant procedures does raise a host of operational challenges that, frankly, hospitals cathlab hadn't had a confront before. So people are just still thinking through how do we do these procedures together. We love concomitant FARAWATCH procedures because both FARAWAVE and WATCHMAN together give us a fantastic protection around that procedure.

If you're going to do that procedure, you want to do it with the fastest, safest, most reliable technique, and that's both FARAPULSE for the ablation part of the procedure and WATCHMAN for the appendage closure part of the procedure, but it does complicate scheduling, right? And so we are now working with hospitals, how do we unlock that, right? What can we do to improve the operational efficiency of the concomitant procedure.

The other thing that we are dealing with right now is there's competition for space, not just doing WATCHMAN, but the other kinds of procedures that are done in those labs. And so for electrophysiologists, that's ablation. We are still seeing robust growth in the AF ablation market. One of the safety valves for that is the move for the more simple ablation procedures into the ASC, ambulatory surgical center.

But that will take time to play out. And so I think the key message here, right, is that's not going to be an overnight solution to any of this. This does take years to play through as well as right, taking years to play through getting better presentation the guidelines based on Champion results and option, getting better or revision of the national coverage decision in the United States for payment for procedures.

And I think that's why what Mike says is it's -- again, it's going to have that deceleration over the short term. But that's why we're still confident over the long run in this return to a very fast-growing market.

Yes. Excellent. Okay. how much pushback are you getting regarding closure data? And do you think your key messages on Champion are kind of fully offsetting that pressure?

Yes. I think the closure is a difficult study. It did get published in a journal medicine a week ahead of Champion, and that did have some impact. And frankly, more impact than I had expected based on the quality of that data and based on what's actually in that data. And the other thing that hit us is WATCHMAN has always been polarizing. And there's a very small but very vocal group of people out there who are Watchman haters.

And they were out trashing Champion even before the data were out. whereas we had our hands tied behind our back. We couldn't prepromote the data. We couldn't talk about the results until the data were out there, all right? But now we are out educating people. And when you educate people about closure, right? Again, closure, fewer than half of the devices in that trial were WATCHMAN FLX. It was mostly done with legacy devices and with competitive devices. In spite of that, it actually showed equivalent protection from stroke in a very high-risk group of patients. Trial failed because they had bleeding events and procedural complication rates that are a literal log order of magnitude higher than what we see with WATCHMAN FLX. What we actually saw and published in Champion.

So again, I think we have confidence that we can get out there now and through our professional education events through our marketing, get out there and combat this narrative around closure and get people to focus on what's really important, which is right, there are patients out there who are at high risk of stroke who have a very high rate of clinically important bleeding when they're treated with blood thinners. And they can be managed very safely, very effectively with WATCHMAN.

Got it. Can you just talk about the time lines? Have you submitted Champion to the FDA? Can you give your just latest thoughts on timing for label expansion and guideline updates changes to NCD?

Yes. We have submitted to the FDA. If you figure call it, 9 to 12 months when you have a PMA supplement to get approval, that's a reasonable time line to expect again, based on the strength of the data, we are confident that we will get that label update. Guidelines probably work out in parallel, the guideline process is a very slow bureaucratic encumbersome one, but we have been talking to the societies. The last step in that unlock is getting CMS to revise the national coverage determination. And we won't approach them about that formally until we have the label update.

Yes. Got it. Okay. Maybe wrapping up on WATCHMAN. You've got over 90% share, as you mentioned, in left atrial appendage closure, but you do have a competitor coming with a next-gen product next year. Also, some investors worry about next-gen anticoagulants. What's your level of confidence in the market kind of getting back to 20%-plus growth?

Yes. We -- again, based on the strength of data from trials like Champion, we do believe that in the long run, we can get back to that kind of hyper growth, if you will. Having a competitor, it raises challenges, but frankly, it also helps sometimes in terms of getting the messaging out there about the utility of this kind of therapy.

Likewise, I know there are folks out there concerned about the next generation of blood thinning medications is the so-called Factor XII inhibitors. There's 1 -- there have been 2 oral agents that have been studied. One was studied for this indication, stroke reduction in atrial fibrillation and failed. So I don't think there's any guarantee that the other agent is actually going to pass its trial. Even if it does, I think, a, it raises the awareness around the importance of bleeding reduction in terms of addressing patients with Afib or at high risk of stroke.

Depending on where those things get priced, are those just going to be used as second-line agents in patients who fail oral anticoagulants. If so, there are still a lot of patients out there who would prefer a one-and-done approach as opposed to taking a lifelong of drugs that still have a risk of bleeding that are still expensive. And if you're a 60-year-old with atrial fibrillation, you're talking about taking these kinds of pills for 20, 30, 40 years. Do you really want that?

Yes. Got you. Okay. Great. Okay. Let's move to EP. Maybe starting with Mike, you've got a vision of the world where PFA becomes the dominant energy source. Yes, there's been some pretty strong interest in dual energy catheters in the early days. How do you compete with dual energy catheters? Does FARAPOINT fill that gap?

Yes. We think PFA clearly has become the market-leading therapeutic catheter. We estimate utilization in the U.S. went probably like close to 70% last year, probably approaching 80% this year. So I think that rate has kind of been won by PFA. -- outside the U.S., it's not quite as high as that, maybe 50% and very low penetration so far in China, which we're working on as well as other companies are. In Japan, similar, a little bit less in the U.S. but high numbers. So we think PFA will continue to expand.

And our key for Boston is to expand our portfolio to really to be the PFA choice for across all the different clinical needs based on the FARAPOINT product that we have. We have a next-gen FARAPULSE ultra coming. And then we have a FARAFLEX, which we expect to be an ID this year. So our goal is to continue to broaden the portfolio and I think you'll continue to see a PFA usage continue to increase that utilization. We'll get over to 90%. I'm not sure. But at least 80% likely by the end of this year or in 2027.

Yes. Okay. Got it.

And maybe just to add to, again, when Mike ran through that was to catheters. So our focus is on continuing to have the world's best portfolio of PFA catheters. And we're starting to see now with some of our competitors as they're getting more clinical use. There are issues that can arise with trying to push RF onto a catheter that's designed to be a PFA catheter. Likewise, we've seen with competitors issues when they take a catheter that was designed to be an RF catheter and try to push PF through it. And so we -- just remind everyone, all PF is not created equal.

And getting safe and durably effective results require a combination of optimizing the waveform optimizing catheter design and optimizing the recipe, just the actual where do you deliver lesions and how many do you deliver? And we are laser-focused on all 3 of those in terms of evolving our PFA catheter portfolio.

Excellent. Okay. You've got a competitor who's in the early days of a single-shot balloon catheter launch in the U.S. There's also some upstart nanosecond PFA technologies we hear about sometimes. How do you think about the competitive environment and how it evolves in the PFA space?

I mean it's certainly a challenging competitive environment. I think everyone here who's following this space, recognizes that. In terms of the balloon catheter, one of the things that's been one of the big advantages of the FARAPULSE platform has been its versatility. And the ability to use FARAPULSE not just for pulmonary vein isolation, but for doing other lesions, particularly putting lesions in on the backlog post your wall, the left atrium.

And balloon catheters just intrinsically don't have that degree of flexibility. So in Europe, where that catheter has been available for some time now, we really still do see continued robust usage of FARAPULSE. In terms of some of the other novel technologies out there, a, you can imagine, we remain very engaged as we look at our business development opportunities. Mike mentioned, RVC portfolio, but we also have a lot of internal expertise at this point in how do you optimize wave forms forgetting the best possible results with any individual catheter form factor.

It's an advantage that we have that sort of that first-mover advantage, the huge number of patients who've already been treated with FARAPULSE system. We've got a lot of internal knowledge now that we think puts us in pretty good shape versus some of these start-ups.

Great. Okay. How important is integrated imaging and mapping? And can you just remind us where you are with new launches on that front?

It's very important. So we've said for a number of years. So we've really built up a significant presence around the world with our mapping capability with OPAL. Every quarter, we're placing more and more OPAL units. Every quarter, we're having higher certification levels of our mappers. And so that momentum continues to build and continues to be our focus. So as we continue to broaden the portfolio, as Ken talked about, with our FARAPOINT launch we have now with integrated ICE with FARAPULSE Ultra and with FLX, you broaden the portfolio mix of procedures you can do in that lab. -- beyond PVI and posterior wall, which is a great place to start from, with a market share leader.

So as you continue to broaden the portfolio, you continue to enhance the mapping capabilities. You can continue to extend the type of procedures you can do and you develop strong relationships in the lab. So we've put significant investment in the U.S., Japan, China, all over Europe. And every quarter, we would launch more OPAL mapping systems a quarter. We advanced our software. Every quarter, we advanced our pipeline. And so we're really proud of our market share position today. and feel like the mapping component is as important as our therapeutic catheter cadence that we have.

Great. When does ASC start to move the needle?

It's going to be small numbers. What I would say, 10% to 15%, Lauren, over maybe 2 years of the AF ablation. So you're seeing some activity now for sure. Obviously, in the U.S. in certain states that allow for cert need or reimbursement. So you're seeing some activity now, contracts being written, and that will help some of the workflow issues or items or opportunities, I should say, that Ken outlined that we discussed earlier. So you'll see more and more of that in '26, '27, '28. We estimate maybe 10%, 15% of the market.

Yes. Got it. Okay. Mike, what's your -- maybe punchline on EP, what's your level of confidence that this is a low year for Boston Scientific EP growth and can you get back to a share-taking position in 2027.

That's obviously our goal. This year, as the PFA leader, we have lost some market share as competitors are launching and the whole key there is the cadence of portfolio that we have that we've outlined. And so as you continue to extend out in '27, '28, '29, that portfolio comes through and you have increased scale of mapping. So we're quite comfortable that we'll continue to be the play market share leader as we continue to -- I think the R&D teams have done an excellent job in that area. We know all the start-ups you're talking about.

We have a lot of confidence in our pipeline and the momentum that we have.

Great. SP1 Okay. Let me just touch on urology. Urology organic growth has decelerated for 3 quarters in a row. I know you've got a lot going on there. What gives you confidence that Q1 was kind of the trough there and that things are looking up from here?

Yes. Urology is a really nice business for us. It's traditionally been a 7% to 8% grower. We think the market grows 7%. We're not used to growing below market in that category, we will this year. We're fixing a couple of specific areas. One in our core stone portfolio, where we've seen some niche competitors come in and sometimes the price competitors. And we aim to fill some product apps with pressure sensing in suction and other improvements to our core stone portfolio. One has been launched recently and you'll see a cadence of launches over the next 9 months to really improve our performance in core stone.

And the second big area has been Axonics, a really nice technology to treat overactive bladder for women. We had a lot of commercial disruption in that category. You need highly trained clinical reps and sales reps to implement that strategy. So we've hired about 100 of them. And they continue to be comfortable impact improve the performance of Axonics as we go throughout the year. So we're comfortable that urology won't be back to market growth this year but should improve from the first quarter performance.

Okay. Great. Let's touch on TAVR. So you've had a couple of high-profile disappointments in the TAVR space strategically. Why do you need to be in the TAVR market? And what did you learn from LOTUS and ACURATE.

Well, we've learned a lot from LOTUS and ACURATE. But we also learned a lot from our EP days. They weren't maybe as big, but we had 2 big failures in EP before we found FARAPULSE. And FARAPULSE really changed the game for EP. And with TAVR, it's a fantastic market with mitral and tricuspid as well. That is one large competitor and we see -- and we've stated all along that we wouldn't want to enter the TAVR market unless it was a bloom expandable unless we had the potential to disrupt similar to how FARAPULSE has disrupted a very big mature where there was a clear dominant market leader in EP.

So we see similar traits to what's happened with FARAPULSE and EP with TAVR. But that product -- to find that product that's differentiated is hard to do. And so we've had 2 ifs at it with LOTUS and ACURATE. We've been following MiRus for many, many years. It's a very unique company that started off. It's got a special alloy called Rhenium and he is very smart and playing for the long term and created the spine company, leveraging this material to prove to the FDA the capabilities of this new metal alloy all with the goal of creating a disruptive TAVR company.

And so we've known the company for quite a while. Our competitors have known the company. There's really outstanding clinical results early on, and then now they're approved for all 3 sizes in all 3 risk indications and roll in the clinical trial now. So we see MiRus with the potential to really disrupt what is a very large fast-growing market that's right in our wheelhouse and cardiology.

Great. Ken, maybe one that Siegel valve does come to the market in late '28, early '29, it will have been over 20 years since TAVR was first approved in Europe. Clinicians are obviously increasingly focused on durability. How can you compete on durability with limited data at launch?

Yes. Well, I think we just come back to what the advantages are of the Siegel valve, and that's the valve that MiRus is developing. And of course, this all does need to get proven in the technical trial that is currently enrolling. But using that Rhenium alloy, this is not just evolutionary. This is a truly revolutionary step change in these valves.

The alloy gives you a huge number of advantages based on its durability as a metal and its strength. And so to begin with, this valve is dramatically smaller profile than the conventional valves, whether it's Edwards, whether it's Medtronic. This has delivered an 8 French system, whereas today's conventional valves are the 14 French or higher. And with the huge issues you have today with TAVR vascular complications, you can anticipate that with smaller size, you have to end up with a lower rate of vascular complications, better ability to deliver the valve through Tortuous anatomy. In addition, the valve doesn't force shorten when you expand.

And so what happens in today's valves is they shrink down a little bit when you expand the valve, makes placement a lot more difficult as an operator, it can be much more precise with the implantation of this valve because of the strength of the uranium alloy, you have much better concentricity and cylindricity of the valve. We do believe that the valve as a result, we'll have much clinically importantly, lower valve gradient so as obstruction to flow through the valve. We believe because of all of these is that there'll be a lower rate of permanent pacemaker implantation.

So we're talking about a valve that based on its design, we anticipate will be easier to implant, will be associated with a lower risk of operative complications and will be associated with better hemodynamic results over the long term. And it gets back to what Mike was saying, right? This is, again, not just a small evolutionary change or me-too valve. This is something that's just dramatically different and tangible differences that will be obvious to operators and have been obvious operators who've participated in the clinical trials from day 1.

Again, established competitors, it takes time to displace them. But with that long laundry list of advantages, we're extremely optimistic about this valve.

Okay. Great. Maybe just 1 quick word on the clinical trial. The STAR pivotal trial, 1,000 patients head-to-head powered for noninferiority. It's got secondary endpoints on vascular complications and hemodynamics, as you mentioned. What data do you need to see from that trial to give you confidence that the valve can compete?

So I think, again, the key is being able to show the noninferiority and being able to get labeling approval. And with that, again, the folks who've handled this valve the advantages are just so -- I mean, I'm trying to think of a nice way of saying this, but they are just blindingly obvious, right? It's -- there are very few things that substitute for operator experience, putting in something or using something. And the operator experience using the Siegel valve is a step change versus using today's incumbent technologies.

SP1 Okay. Excellent. Okay. Let's talk about some other drivers across the business. Mike, the ICBT business was very strong in Q1. Can you just talk a little bit about the outlook for that business?

It's very strong. really impressed with what that team has done. They continue to really enhance that portfolio globally. It's one of our second largest business behind EP and growing at a very high growth rate now really being led by the whole strategy is see, prep and treat. So our see piece of this is our IVUS imaging. So you've seen imaging, which is very strong in Japan and Asia, really becoming dominant modality and or up in the U.S. now and continuing to grow. So we're the market leader in IVUS. We continue to roll out new capabilities with IVUS leveraging AI capabilities to improve the efficiency of the lab and the precision and the physician.

And then the treat components, we have multiple products in that area. And then we're excited about the recent FRACTURE news and the launch of our seismic platform for IVL in 2027. And then the treat piece of it, we have obviously a number of stents and various products, but our agent drug-coated balloon is performing extremely well. We're the market share leader there, and we have what's called the STANCE Trial. The STANCE Trial to widen the indication for the balloon capabilities.

Then we have so many, many products further out in that pipeline, as we mentioned before, with hypertension. The Penumbra post-closing will fall under that business. Our Silk Road acquisition has done extremely well within our vascular business. We've got a number of pipeline products in that area. So I really think beyond the ongoing EP, which is a great market, and we tend to continue to be the market share leader with cadence. We'll work through the workflow issues with WATCHMAN and expand that market indication, get the labeling done and get back that to growth. But that whole combination of IC VT, not a great name. Really will be, I think, a unique growth driver for the company across that comprehensive portfolio for many years to come.

Great. Great. Let's just touch on CRM for [indiscernible].

And the Siegel valve will also fall under that over time, of course.

Got you. CRM growth was negative in Q1. How do you get back to growth in CRM?

Yes. CRM has been a tough one for us. Our challenge has been we've been -- we've got a strong core DFib pacemaker portfolio. We've got an important launch called Denali, which is a whole new platform for core defib, CRT-D pacing that would be coming out in kind of '27, '28 time period along with S-ICD. So that should revitalize that group better than it has performed better than it has been historically. Our gap continues to be in leadless, which is the higher growth area. And so we do have our payer leadless program with S-ICD, which have launched in 2027. So that should improve it.

So we're not going to likely grow faster than our peer group in the short term. But as that Denali platform gets launched in our emblem with S-ICD leadless pacemaker, that will help our growth in our CRM business.

Okay. Great. Ken, anything else in that area.

No.

Got it. Great. Let's touch on Penumbra. So what do you like about neurovascular and peripheral vascular spaces and how are Penumbra's platforms differentiated versus key competitors?

Little vascular space, we're the #1 -- likely the #1 player in that business now. We just don't have a mechanical thrombectomy solution. And years ago, we got rid of our neurovascular business, which is crazy. And so we've always liked neurovascular. So those are the 2 areas that were really big growth markets that are WAMGR that are accretive, at least on the thrombectomy side, to Boston Scientific, which is hard to do at that at least 8% growth. And Penumbra is a gem of a company.

They're really very high strong share position in thrombectomy, high strong share position in neurovascular, very exciting pipeline of products that you're aware of that are coming through, hopefully, by the end of this year in -- and so really fills 2 gaps in our portfolio in peripheral vascular that we didn't have. We have still grow a nice acquisition for vascular surgeons. But it's 2 big categories that have great wagers that we did not have a presence.

So it fills that strategic niche very, very well. And it's an excellent company, a very strong scaled commercial force. We'll run it as a stand-alone business within Boston under Lance Bates who runs that ICBT area. And so our aim is to retain that commercial team, we retain that R&D team and let them continue to run but drive appropriate commercial capabilities across that wide portfolio of products.

Great. How are you feeling about the regulatory process and kind of just confidence in closing of everything on track?

We just had the shareholder vote that went well, and we said second half 2026, and we're kind of proceeding that as planned.

Great. Okay. So at $15 billion was obviously a larger deal than the tuck-ins that we're used to seeing from Boston side, skeptics have keyed in on the timing as EP and WATCHMAN are decelerating, what do you say to investors who worry that the deal was maybe defensive or too big? How do you think about.

We've liked Penumbra for years. And the timing worked out with Adam and the team when we announced this year. So that would have been an acquisition we would have done 3 years ago where we would do 2 years from now if we could do it. So it made a lot of sense for the reasons I said earlier. On the strategic side on the portfolio. It's an increased growth rate for the company. We'll be able to drive capabilities around the globe that they lack in Europe and Asia Pac.

And we'll be able to drive some better operational synergies in the supply chain and manufacturing. So that deal just made a lot of sense for us. The financial returns are healthy, and the timing worked out when it did.

Great. Okay. Before we zoom out a little bit, just a question from the audience, just a clarification. I think you mentioned earlier expectations for WATCHMAN around Q2, Q3 just clarify a little bit what you meant there flat dollar?

Yes. But we -- what I mentioned is we expect -- we've seen the declining stand-alone WATCHMAN, and we're being as forthcoming as we can, sharing what we're seeing. We're learning a little bit from what happened in January in EP. So we've seen a declining stand-alone growth rate, increasing concomitant. And so what I mentioned is we expect to see second quarter dollars in WATCHMAN similar to first quarter dollars. We had very, very strong sequential growth in 2025 in 2Q and third quarter. So we expect to essentially see a flat dollar growth in 2Q and 3Q with WATCHMAN.

With that guide, with that information, we're comfortable within our second quarter guidance range and our full year guide range.

Yes. Got it. Okay.

So if it gets better than that, there's more upside. But what we want to do is say, based on the downward trend we're seeing in stand-alone, and we have all these initiatives with label changing, all the med-ed events, all the educational events to improve stand-alone. But assuming stand-alone doesn't get better and the sequential growth, dollar growth stays the same. That's what we're mentioning here in second quarter and third quarter.

With that framework, we're comfortable within the guidelines of our second quarter or full year guide.

I mean global WATCHMAN revenue in Q2, Q3 kind of flat to where it was in Q1.

Correct. On a dollar basis.

U.S.

U.S. is 90% of it.

U.S. flat Q1, Q2 Okay, got Q1 to Q2, Q3. Okay. Zooming out, you announced a $2 billion ASR last week. You've got $3 billion left on authorization? How are you thinking about additional buyback opportunities? What's the max leverage you'd be willing to take on?

Yes, we're happy we're doing the $2 billion ASR given where our share price is trading based on the strength of the growth profile of the company as you look to the future for Boston Scientific as we outlined before, with our portfolio. So we think at this valuation, the -- which we haven't done a share repo in a while, we think it makes a lot of sense. And so we think $2 billion is the right number.

When we close Penumbra, we'll stretch to a little -- our goal is to stay at that A- level. We'll stretch to a little bit above 3x on our debt ratio. And then we'll continue to delever from there and kind of get back to that 2.5, 2.25 to 2.5 range -- 2.25 to 2.5 range.

Got it. Okay. So as we all turn our attention to Q2 and the organic growth range of 5% to 7%, can you talk just a little bit about the key swing factors that could take you to the high end or the low end of that Q2 range?

Well, it's 40%, not too far away. So as I said, we're comfortable within the guidance range there. And so we've assumed in that range, as I mentioned, the sequential dollar dollar growth -- same dollars from first quarter, second quarter in WATCHMAN, which is a change, but it was contemplated in our guide just to be appropriately safe.

And so as you look at that full year guide, -- it's the same big levers we see for is continuing with our EP momentum primarily on the pipeline initiatives we have and the mapping. I give you the WATCHMAN comments. And as we expect, we continue to see strength in Interventional Cardiology and Vascular. And so as we -- those are really the upsides, downsides of it, but in essence, we're comfortable within those ranges.

Got it. Okay. Can you talk a little bit about M&A. You did Penumbra was a little bit bigger deal. Axonics was a bigger deal -- should we expect that to be more of the trend going forward? Do we -- should we expect you to get back to sort of...

No, I don't think that will be the trend going forward. I think there's very few Penumbras out there with companies that have that strong market share position, high growth rate, high WAMGRs and they had that really beautiful strategic fit with Boston Scientific. There's very few assets out there. And so we like Penumbra a lot. We made a big bet with MiRus because we -- it's transformational, and we think it could be the FARAPULSE of TAVR in terms of its potential capabilities.

But you won't see bets as big as Penumbra in the near future, one, because of the ratings that we want to have and so forth, but also a scarcity of assets. So I would say traditional more traditional Boston Scientific tuck-in M&A.

Yes. Great. And as you think about focus areas for those types of deals, focus areas for venture investments...

Well, there's a lot of them. We have about almost 50 companies in our venture portfolio. We've been very active off of those. And they're across maybe weighted about 80% to cardiovascular broadly and 20% in MedSurg. So we have a number of assets in that area that we like a lot.

Okay. There was a question from the crowd on mitral and tricuspid, maybe related to MiRus. Can you just talk a little bit about what you've got in the hopper there?

Yes. We are excited about our bets in that area. We think it's important that you have to have a foundational potentially meaningfully disruptive TAVR valve as the anchor product. And we think we have that with MiRus. Have to prove it through the clinical, but we're incredibly bullish on the potential with that. So with that as the likely foundation, it wouldn't make sense to add mitral and tricuspid.

We have a number of venture bets in that area. And also the team at MiRus is also creating the tricuspid and mitral platforms, leveraging that same outlay.

Great. Okay. Maybe thinking longer term, you've repositioned that 10% plus organic growth as kind of an upside case over the '26 to '28 time frame, but you're sticking to those op margin expansion goals. What's the right way to think about Boston Scientific over the next few years?

Well, I would say short term, kind of that 6.5% to 8% is our full year guide. We've improved margins every year for 14 years in a row. I think we've delivered double-digit EPS almost every single year. And so that will be our continued goal this year to hit that double-digit EPS growth, improve margins with that full year guide. And as you look at the future of the company, it's all on this innovation pipeline, improving share in EP, addressing this WATCHMAN, call it, workflow issues as we widen the patient indication for that and continue to have clear market leadership in WATCHMAN and really building off that ICBT portfolio we talked about and then strengthening our businesses in MedSurg.

Neuromod is doing very well this year. We continue to expect them to grow nicely above market. Endoscopy will have a solid year this year and improve our urology business. So I think strengthening of the overall MedSurg business, but very unique growth drivers across cardiology that position the company for unique growth in the long run. And we always continue to improve margins and drive double-digit EPS based on our track record.

Great. Okay. Maybe wrapping up, Med tech stocks have pulled back. Boston is trading at a significant discount to historical multiples. What final thought do you want to leave investors with here?

Well, that's why we did the share repo. I just -- I think if you look at med tech, you ask about procedure volume. It's basic stuff. It's an aging population. These are less invasive procedures that have a massive impact on sustaining lives or improving lives, whether across our businesses. And so the volume is there. And the innovation cycle that we have for the future is very, very robust.

And we have a very disciplined company when it comes to improving margins and driving EPS growth. And so like any cycles, med tech as a sector is below the S&P quite a bit this year, where it hasn't been for many years prior. So our job at Boston is to continue to drive performance this year and to invest for the future to deliver long term. And over time, the sector performance should improve.

Great. All right. We're out of time. Thank you, [indiscernible] for being here.

Good morning, and welcome to the Boston Scientific First Quarter 2026 Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Lauren Tengler, Vice President, Investor Relations. Please go ahead.

Thank you, Bailey, and thanks to everyone for joining us. With me today are Mike Mahoney, Chairman and Chief Executive Officer; Jon Monson, Executive Vice President and Chief Financial Officer. During the Q&A session, Mike and John will be joined by our Chief Medical Officer, Dr. Ken Stein.

We issued a press release earlier this morning announcing our Q1 2026 results, which included reconciliations of the non-GAAP measures used in this release. The release as well as reconciliations of non-GAAP measures used in today's call can be found on the Investor Relations section of the website.

Please note that on the call, operational revenue excludes the impact of foreign currency fluctuations, and organic revenue further excludes certain acquisitions and divestitures for which there is less than a full period of comparable net sales.

Guidance excludes the previously announced agreement to acquire Penumbra, which is expected to close in 2026, subject to customary closing conditions. For more information, please refer to the Q1 financial and operating highlights deck, which may be found in the Investor Relations section of our website.

On this call, all references to sales and revenue are organic and relative growth is compared to the same quarter in prior year, unless otherwise specified. This call contains forward-looking statements regarding, among other things, our financial performance, business plans and product performance and development.

These statements are based on our current beliefs using information available to us as of today's date. and are not intended to be guarantees of future events or performance. If our underlying assumptions turn out to be incorrect or certain risks or uncertainties materialize, actual results could vary materially from those projected by the forward-looking statements.

Factors that may cause such differences are discussed in our periodic reports and other filings with the SEC, including the Risk Factors section of our most recent annual report on Form 10-K. Boston Scientific disclaims any intention or obligation to update these forward-looking statements, except as required by law.

In addition, this call does not constitute an offer to sell or the solicitation of any offer to buy any securities or solicitation of any vote or approval in connection with the proposed transaction with Penumbra. Boston Scientific has filed with the SEC a registration statement on Form S-4 containing a proxy statement of Penumbra and a prospectus of Boston Scientific that contains important information about Penumbra, Boston Scientific, the proposed transaction and related matters. At this point, I'll turn it over to Mike.

Thanks, Lauren, and thank you to everyone for joining us today. The first quarter represented a solid quarter for Boston Scientific with total company organic sales growth of 9.4% versus our guidance range of 8.5% to 10%. First quarter adjusted EPS of $0.80 grew 6%, achieving the high end of our guidance range of $0.78 to $0.80 and Q1 adjusted operating margin was 28%. Turning to our outlook. 2026 has proven to be a more challenging year than we initially expected. And to that end, we are guiding to organic growth of 5% to 7% for the second quarter and reducing our full year guidance to 6.5% to 8%, reflecting unanticipated headwinds and changing business patterns that I'll cover in more detail on this call.

Our second quarter '26 adjusted EPS guide is $0.82 to $0.84, and we now expect our full year adjusted EPS to be $3.34 to $3.41, representing growth of 9% to 11%. I and our company does not take this change lightly. As in Boston Scientific take great pride in ourselves and consistently executing against the guidance and goals we provide.

Importantly, we remain convicted in the future of Boston Scientific. We have a strong global team committed to high performance, and we continue to invest in key new and existing markets which we believe will enable us to deliver on our fundamental goal of driving differentiated performance over the LRP.

I'll now provide some additional highlights of our first quarter, along with some comments on our outlook. Regionally and on an operational basis, the U.S. grew 11% with double-digit growth in five out of our eight business units. Europe, Middle East, Africa grew 1% operationally. Growth in the quarter was driven by FARAPULSE, coronary and vascular therapies in Neuromod, offset by the discontinuation of ACURATE and POLARx, largely impacting the EMEA region.

Last year, we did announce our intent to discontinue POLARx Cryo catheter but have accelerated that timing given some recent safety events and the availability of nonthermal ablation technologies. As we look forward, we expect that growth in demand will continue to improve with the annualization of the ACURATE discontinuation in 2Q and ongoing momentum from FARAPULSE, WATCHMAN and other key products.

Asia Pac delivered a strong quarter and grew 12% operationally, led by double-digit growth in a number of countries, including Japan and China. First quarter growth in Japan was led by our differentiated PFA ecosystem with OPAL, FARAVIEW and FARAPULSE as well as strong reception of WATCHMAN FLX Pro. But within the quarter, we're pleased to have received PMDA approval for the de novo indication of our coronary drug-coated balled agent DCB can expanding the patient population eligible for this differentiated technology. China also delivered strong growth, inclusive of the impact of the VBP led by our Interventional Cardiology portfolio, particularly our imaging technologies.

We are making consistent progress against our FARAPULSE goals in a competitive market in China and received NMPA approval within the quarter for OPAL HDx Mapping system with FARAVIEW, further building out the PFA platform.

Now some commentary on our business units. I'll start with urology. Urology did have a difficult quarter in Q1 as sales grew 1% organically, falling short of our expectations, driven primarily by the stone management and single neuromodulation businesses. Within Stone, underperformance was driven by China VBP as well as some key product gaps in the core Stone portfolio. We expect the recent FDA approval for insurers to unlock value within our StoneSmart ecosystem alongside LithoVue Elite and we also anticipate launching additional new products in 2026 and including insulin [ urethoscope ] later this year.

Our sacral neuromodulation business continue to see impact on commercial model disruption. And importantly, within first quarter, we have hired and trained a significant number of new sales and clinical reps we do anticipate improvement in the Pelvic Health franchise throughout the year as S&M commercial organization capability stabilized, along with the addition of Ecoin Tibial Nerve stem with the closure of Valencia Technologies in April. We expect our Urology performance to improve throughout the year. However, we now expect our full year uro growth to be low to mid-single digits in 2026.

Endoscopy sales grew 7% organically, with strong results across the business and better-than-anticipated performance from AXIOS as we're able to ramp supply and available product sizes. As we look to the second quarter, we will continue to see some impact from AXIOS while also navigating other transient supply chain disruptions in endoscopy. Importantly, we expect improvement in the second half of 2026 as the underlying business is very strong, and we anticipate resolution of the supply chain issues.

Neuromodulation had a strong quarter with organic sales growing 15% with our comprehensive portfolio growing low double digits, excluding the impact of the outlook. Our paint business grew mid-teens, inclusive of a strong quarter of outlook, as I mentioned, which closed at the end of January. Intercept continues to perform well, supported by compelling 5-year data demonstrating the long-term efficacy and cost effectiveness of this treatment for clinic low back pain.

In DBS, we saw continued adoption of the Cartesia X leads an accelerating uptake of the Illumina 3D programming algorithm in the U.S. Cardiovascular delivered organic sales growth of 11%. Within those businesses, we'll start with ICVT, Interventional Cardiology Vascular Therapies grew organic sales of 8%. This business grew 9% organically, driven by double-digit growth in our ordinary therapies franchise, with strength in agent and ongoing momentum with our Imaging portfolio. And earlier this year, we completed enrollment in our fracture trial, studying the size of the IVL device in coronary arteries with data to be presented at EuroPCR on May 19 and we continue to expect launch in the U.S. in the first half of '27.

Our Vascular Therapies business had a nice quarter, growing 7% organically driven by double-digit growth in TCAR and [ Bartina ] and this is offset by a large VBP impact on their arterial business in China, which is expected to annualize in second quarter. We expanded our launch with our seismic peripheral IVL for above the knee with positive physician feedback on performance. We expect to ramp our manufacturing supply chain over the course of the year and continue to anticipate launching our below-the-knee indication in the second half.

In first quarter, positive data from [ Hipyto ] was presented at [ ACC ] evaluating eco clot anticoagulation versus anticoagulation alone, providing new clinical evidence that can help physicians make more informed decor patients with acute pulmonary embolism. We remain excited about the opportunity to ask the number team and highly differentiated portfolio of Boston Scientific. We anticipate that the deal will close in the second half of '26, subject to the Penumbra shareholder vote on May 6 and the receipt of the remaining regulatory clearances.

Our Interventional Oncology business had a nice quarter with organic sales growing 15% driven by our broad offering of cancer therapy technologies. Within the quarter, we received FDA clearance of any day dosing and niche limited market release. Any day dosing is enabled by the TheraSphere 360 management platform line positions to schedule treatments on more days of the week and offering more streamlined ordering and operational efficiencies.

Cardiac Rhythm Management sales declined 3% in the quarter. Our low-voltage business saw some impact in the quarter as we navigated our physician advisory and came up against a tough comp within our first quarter of 2025 change-outs. On the high-voltage side, we saw some impact from the Middle East complex impacting this particular business. In first quarter, our diagnostics franchise grew low double digits with continued strength across our broad diagnostic portfolio. And overall, we anticipate that our CRM business to return to growth in the second quarter and expect low single-digit growth in the year, supported by our full launch of the [ Lutroin ] second quarter within the U.S.

Turning to WATCHMAN. WATCH grew 19% organically in the first quarter, which was below our expectations, with pressure on volumes in the U.S. as the quarter progressed, we believe this reflects the annualization of the initial concomitant adoption tailwind and a softening in stand-alone WATCHMAN cases driven by hospital capacity related procedure prioritization and evolving reimbursement dynamics. Importantly, we remain focused on expanding physician and patient education within the approximately 5 million patient indicated population today. And we expect data from CHAMPION to support a return to 20% market growth over the LRP. In late March, CHAMPION data was presented as a late breaker ACC with the trial achieving all primary and secondary endpoints, reinforcing the safety and efficacy of WATCHMAN and highlighting the high burden of clinically relevant bleeding on oral anticoagulation. As the next step, in addition to submitting for a label update, we are working with medical societies to support consideration of changes to LAAC guidelines using the totality of WATCHMAN clinical evidence ahead of any update to the National Coverage Determination.

We also have additional data being presented at [ HRS ] this weekend, a champion post-ablation analysis which will provide further insights on this patient population. Across the globe, the results from CHAMPION provide important evidence to support the expansion of the patient population eligible for WATCHMAN over time in large markets including the U.S., Japan, China and Europe.

For full year '26, we now expect global WATCHMAN growth to be mid-teens, with low to mid-teens in the U.S. In the U.S., while concomitant demand continues to strengthen, we anticipate overall WATCHMAN growth to decelerate with tougher comps and expect stand-alone WATCHMAN procedures to improve over the course of the year as it takes time for the totality of this clinical evidence to translate into [indiscernible] practice. We remain very confident in the long-term outlook of the business, supported by great clinical evidence, market development and new product innovation.

Turning to EP. Organic sales grew 22%, 18% in the U.S. and 30% internationally. International growth was driven by our innovative portfolio, including our expanded OPAL Mapping footprint in catheter utilization with strong double-digit PFA growth in Europe in a highly competitive environment supported by the launch of FARAPOINT. U.S. growth was driven by continued expansion of the OPAL, strong catheter utilization in FARAPOINT, our PFA focal point catheter, which is performing ahead of our expectations and has moved into full launch.

Looking ahead, we now expect our global EP business to grow approximately 10% in 2026. And within the U.S., we are updating our full year expected growth to be in the mid-single-digit range. with continued strength internationally at plus 20%, inclusive of full year impact of approximately $35 million from the discontinuation of POLARx. This outlook is the change from previous commentary but we feel is prudent and reflects ongoing competitive dynamics, offset by strength in our evolving FARAPULSE PFA catheter and mapping portfolio. We are highly confident in our ability to maintain our leadership position in PFA both in the U.S. and internationally through investment in commercial capabilities, ongoing clinical evidence, our expanding mapping footprint, in an impressive next-generation catheter watches included our FARAWAVE Ultra in the first half of '27.

And this weekend, AVANT GUARD cited FARAPULSE new patient population of drug-naive persistent a patients will be presented as a late breaker at HRS. Additionally, we will see data from our first-in-human ELEVATE PFA study setting FANAFLEX, which is our large global map in a blade catheter for more complex arrhythmias. We anticipate initiating in our IDE later this year and continue to expect launching FANAFLEX in the U.S. in 2028.

We've in closing, I'd like to share again my confidence in our team and the future of Boston Scientific. While this year has proven to be more challenging than we anticipated, we believe Boston Scientific is competing in the right markets, with a WAMGR growth of approximately 8%, we continue to be uniquely positioned to drive differentiated top line growth. We will continue to do this through strategic internal innovation, clinical evidence, external DC and M&A investments, along with our disciplined approach to expanding operating margins. All of which have resulted in our track record of delivering double-digit adjusted EPS growth.

I'm very grateful to our talented team of global employees who work every day to advance financial life and I'm confident in the sustainability of our top-tier financial performance. With that, I'll hand it over to Jon.

Thanks, Mike. First quarter consolidated revenue of $5.203 billion represents 11.6% reported growth versus first quarter 2025 and includes a 220 basis point tailwind from foreign exchange, which was in line with our expectations. Excluding this $104 million foreign exchange tailwind, operational revenue growth was 9.4% in the quarter. Organic revenue growth was also 9.4%, in line with our first quarter guidance range of 8.5% to 10%.

Q1 2026 adjusted earnings per share of $0.80 grew 6% versus 2025, achieving the high end of our guidance range of $0.78 to $0.80. And results include an approximate $0.01 headwind from FX. Adjusted gross margin for the first quarter was 70.5%, which represents a 100 basis point decline versus the first quarter of 2025 and primarily driven by tariffs as well as inventory charges related to the discontinuation of our POLARx Cryoablation system. 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.

First quarter adjusted operating margin was [ 28.8% ]. We continue to expect full year 2026 adjusted operating margin expansion of 50 to 75 basis points, driven by OpEx leverage as we drive strong spend controls and continue to implement efficiency initiatives and optimize our organizational structure. On a GAAP basis, first quarter operating margin was 21.2%.

Moving to below the line. First quarter adjusted interest and other expenses totaled $112 million, in line with expectations. And our adjusted tax rate for the first quarter was 11.7% and which was in line with expectations and includes a benefit from stock compensation accounting.

Fully diluted weighted average shares outstanding ended at 1.495 billion shares in the first quarter. And free cash flow for the first quarter was $170 million with $348 million from operating activities, less $177 million in net capital expenditures. We now expect full year 2026 free cash flow to be approximately $4 billion.

As of March 31, 2026, we had cash on hand of $1.453 billion and our gross debt leverage ratio was 1.8x. Our top capital allocation priority remains strategic tuck-in M&A, followed by share repurchase. In alignment with this strategy, we recently closed the acquisition of [ Valencia ] Technologies, which complements our Urology business, and we expect our announced acquisition of Penumbra to close in the second half of 2026.

In addition, as previously disclosed, our Board of Directors recently approved an additional $4 billion under our existing share repurchase program bringing our total authorization to $5 billion. While we have been restricted from being in the market, we intend to repurchase approximately $2 billion of our shares during the second quarter subject to market conditions and applicable securities loss.

I'll now walk through guidance for Q2 and full year 2026. We now expect full year 2026 reported revenue growth to be in a range of 7.0% and to 8.5% versus 2025, excluding an approximate 50 basis point tailwind from foreign exchange based on current rates, we expect full year 2026 operational and organic growth to be in the range of 6.5% to 8.0%. We expect second quarter 2026 reported revenue growth to be in a range of 5.5% to 7.5% versus second quarter 2025 excluding an approximate 50 basis point tailwind from foreign exchange based on current rates, we expect second quarter 2026 operational and organic growth to be in a range of 5.0% to 7.0%.

We continue to expect full year 2026 adjusted be line expense to be approximately $440 million and under current legislation, including enacted laws and issued guidance we now expect a full year 2026 adjusted tax rate of approximately 12.0%.

We now expect full year 2026 adjusted earnings per share to be in a range of $3.34 and to $3.41, representing growth of 9% to 11% versus 2025, including an approximate $0.04 headwind from foreign exchange. We expect second quarter adjusted earnings per share to be in the range of $0.82 to $0.84.

In closing, we recognize that revising our guidance is a significant decision and not one that we made lightly. We believe our updated guidance appropriately reflects the unanticipated headwinds, and we remain highly focused on executing our full year 2026 guidance of 6.5% to 8% organic revenue growth 50 to 75 basis points of adjusted operating margin expansion and 9% to 11% adjusted earnings per share growth.

For more information, please check our Investor Relations website for Q1 2026 and financial and operational highlights, which outlines more details on first quarter results and 2026 guidance. And with that, I'll turn it back to Lauren, who will moderate the Q&A.

Thanks, Jon. Bailey, let's open it up for questions for the next 35 minutes or so. In order for us to take as many questions as possible, please let yourselves to one question. Bailey, please go ahead.

[Operator Instructions] Our first question comes from Robbie Marcus with JPMorgan.

Great I wanted to ask whether Mike or Jon, came 3 months ago on the fourth quarter call and provided the guidance. And I think a lot of people were expecting a lowering today based on some of the third-party data we've seen, so it's not that surprising. But I guess the question is really what happened during first quarter that really prompted it? When did you realize it? And what gives you the confidence given there's going to be some deceleration throughout the year that the LRP is still valid and that growth can improve in 2027 here.

Yes. Thanks, Robbie. I would say first quarter, we're overall, we're pleased with that result. The 9.4% growth and on track for our margin and EPS. Essentially, what we saw, there's really three main contributors to the takedown of the guy, which is not in my happiest moment and very disappointed in that. as we're a company that consistently delivers on our commitments. So this is a guide down that we quite think are not proud of, but we think it's the right thing to do. And that reflects the current environment and the loss of the proper prudent guided deal.

But we can talk about the future of the company, but speak and then at the time the takedown particularly, it's really focused on the three areas: primarily EP, WATCHMAN and Urology. And if we start with WATCHMAN, we saw a very, very excellent growth engine on 2025, we grew almost 30%. We saw a really strong consistent volume trends in January. So there is no signal to any WATCHMAN weakness until we leased out the early days of kind of early to mid-February, we started to see declining WATCHMAN volume for the first time. And as we did the analysis on that, we can talk more about it. Essentially, it is a strong increase in concomitant growth in a deceleration of stand-alone WATCHMAN. And we go through all those details now. That's the first primary one.

So we see a declining WATCHMAN trend growth throughout fourth quarter, the first quarter and therefore, in our guide, we think it's prudent to assume that in that guidance range. We can talk more about the rationale and reasons for that.

The second primary reason is EP, our EP business had a very nice first quarter. we are absolutely confident that we will remain the PFA market leaders in the U.S. and globally in '26. And we have a very rich cadence, just an R&D review last week with the team. The launch of the next 2.5 years, that's very impressive. But that being the case, even though the market is strong, we didn't lose a bit more share than we anticipated.

So again, what we did in this guide anticipated greater share erosion than we're particularly seeing and still allows us to be the market share leader in PFA, but we're guiding globally to approximate 10% [ NEP ].

And the last reason making up is urology, which I mentioned that difficult first quarter, [ Neuro Mine ] had a real tough year a couple of years ago, and that business is growing double digit. I'm not saying euro is going to return to double digit right away. But right now, we're suffering in our core stone business and in the [indiscernible] neuromodulation area. We have very active execution plans in place to fix sickle neuromodulation, which we believe will be better as the years that the quarters go on. And then, of course, now we have some key product launches that will impact that business and help it quite in 2027. But it's essentially going to be a below market year in urology. So those are the three contributors overall to the guide down. Never all done very objectively. We think it's prudent. And we think it's the best guide to provide, to give shareholders confidence and to set up the business the right way.

As you look forward in the LRP, we're not going to make a comment on the LRP top line growth at this point. We feel that will be under some slight pressure clearly given the 2026 guide. We will update that more in the future when we go through our strat plan process. We are comfortable with the 150 basis points of margin improvement in LRP, and we're comfortable with delivering double-digit EPS growth of the LRP.

And I guess, lastly, that the long answer I'm giving you is we compete in a 8% WAMGR market. We almost always grow at or above this WAMGR. And this setup for '26 would show us at market at the high end of our guide or below that WAMGR. This is not Boston Scientific, it's not what we do. And in '27, we have a number of key product launches, we'll have far easier comps than we do this year. And we're very bullish about '27 and '28, we can detail that more. But start from long response, hopefully, that helped a little bit.

Our next question will come from Joanne Wuensch with Citi.

Mike, I think you just summarized what everybody needed to hear in that answer. Can you sort of walk us through a little bit how you're thinking about the quarters over the next couple of quarters, particularly for EP, WATCHMAN and Uro I'm sort of trying to think about the gist of Robbie's question. How do we get from first quarter to fourth quarter and then the jumping off point into 2027. And I just want to make sure those are somewhat set up appropriately.

I'll take a shot and Jon you can clean up the part of the math here. So we think second quarter is our toughest quarter of the year. We had a nice first quarter. Second quarter, we had very challenging dollar sequential quarterly growth comps on a dollar basis, in particular with EP and WATCHMAN. So that's our toughest quarter there. And so we also think with some of the impacts of some transient trends and [ EP and endo ] and some other areas that will be fixed for the second half of the year. So we think second quarter is our toughest quarter, that's the guide, [ 5% to 7% ] and the full year guide, as you know, is 6.5% to 8%. Jon, do you want to touch on any sequence and more.

Yes. Thanks, Joanne. So maybe stepping through WATCHMAN and EP. So you heard Mike mentioned in his prepared remarks, we expect global EP to grow mid-teens for the year. So that would imply Joanne low double-digit growth for the rest of the year for our global WATCHMAN business. So that's how you should think of WATCHMAN for the rest of the year.

Global EP at 10% for the year implies mid- to high single-digit growth for the rest of the year. So if you then think of the rest of the business, as mid-single-digit growth. That's about where we landed in the first quarter. Expect to see some acceleration there within urology, CRM to pick up. So that's how you should expect the phasing as we go through the year, say, relatively consistent, slight uptick in the second half. They call it roughly 7%. And as we see Uro and CRM drive better growth as we move through the year.

Our next question comes from Larry Biegelsen with Wells Fargo.

I guess on EP, just maybe a little bit more color on the market and share assumptions, how they've changed. Where is the share pressure coming from Mike? And on U.S. EP, sales have been flattish for the past 3 or 4 quarters. Should we expect relatively flat U.S. EP sales for the rest of the year? And what does that mean for 2027, I think people are trying to understand when you can get back to market growth in EP?

Yes, I think John gave some of those numbers for the year, we expect Global to be approximately 10%. In the U.S. particularly, we expect mid-single-digit growth for the U.S. business, which implies a flat 2Q to 4Q. That's a low single digit -- in international about 20%. So call it flat to low single-digit U.S. mid-single digit for the year. .

And then -- so that's the story there. What's different about it from our previous commentary where we've said we were a growth at market. We're disciplined and we're disappointed to bring that guide level down, but we think it's appropriate. The aim to be and we have high comments that will maintain PFA leadership in the U.S. internationally, globally in '26 and throughout the LRP. And we are very excited about the product launches that we have, in particular, the three big ones coming up, '27 are third generation FARAPULSE, differentiate [indiscernible] platform, and we think a very disruptive FANAFLEX platform all in the next 2.5 years.

But today, we are seeing increased competition. There's three other large players in the marketplace. We've made commentary before Medtronic continues to be a solid competitor, J&J is enhancing their footprint in PFA and Abbott is early stages of launch in the U.S. In Europe, we really proud of our European performance for all three of those companies are performing, and we continue to grow that a 20%-plus clip where we quite frankly have a quite advanced mapping capability and platform and doing very well there.

So we do expect a little bit more share [ erosion ] than we've anticipated in the past in previous guidance, but we think this is the appropriate guide to do and allows us to continue that PFA market leadership while we're bringing that platform forward. And importantly, our makers, which we've made a massive investment over the past 2.5 years continue to get stronger and stronger every quarter. We continue to install more and more OPAL mapping platforms. Our maps get more sophisticated, and we continue to add new catheters to the mix along with FARAPOINT, which we recently launched. So we'll continue to grow the Matthew platform, continue to invest in that commercial capabilities, you'll see more direct investments in WATCHMAN in particular. So we'll invest both commercially and marketing, and they're both our WATCHMAN and our EP businesses. But we're confident we'll maintain PFA leadership, but we are going to see a bit more share than we anticipated earlier in the year.

Our next question comes from Rick Wise with Stifel.

I was hoping you would might talk a little bit more about the WATCHMAN outlook in more detail. I mean, CHAMPION data, obviously, was excellent. But perhaps there was more controversy about the data, the reaction to the data than I expect didn't perhaps than you expected. How are you addressing some of the concerns that you were left how are you changing the narrative about the risk of WATCHMAN? And maybe how specifically are you going to tackle the growth rate factors that impacted this quarter?

Yes, I'll ask Ken to add comments here. First on some of the factors. And first of all, we're very proud that we essentially created this category, leading clinical science created a concomitant category. And this category grew 30% last year, and we expected mid-teens growth this year. And we're seeing the evolving practice patterns as this product continues to evolve with great clinical data and changing practice patterns. So with that extraordinary growth in [ AF ] ablations and WATCHMAN, we are seeing some practice pattern changes that I highlighted that we saw really become more acute in February. We're seeing terrific concomitant demand.

Bottom line, we are seeing pressure in kind of the stand-alone WATCHMAN implant business, which historically has not been a challenge for us. Those challenges with a stand-alone WATCHMAN area a bit multifactorial. You've seen a bit more switch to the EP from the interventional cardiologist as the venture cardiologist is less exposed to the concomitant procedure. They've got more structural art procedures to do and there's been the reimbursement cut in that area. But you're seeing strengthening amongst the EP physician group.

So those are some of the trends that have really moved it just recently more towards -- a bit more towards EP, a bit more towards concomitant and less than stand-alone. And that's also -- our customers are also adapting to operational workflow. They're adding new labs. They're moving to ASCs because they've experienced multiyear growth of, call it, 25% in WATCHMAN, multiyear growth of 20%, 25% in ablation. So there's significant demand and pull plus the approval of new structure of our procedures. So the hospitals themselves are investing in labs, particularly concomitant AFib are money winners for hospitals. So they're making the investments, but they're also moving through their own workflow challenges. You've seen a consistent backlog for WATCHMAN, which I guess which is good and high demand for super AFib.

So on what are we doing to make it better? We're doing a lot right now to make it better. The most impactful thing quickly is commercial investments. We are putting more focused commercial investments directly at the WATCHMAN business. Today, we have a lot of strength because the same territory rep in many cases, is serving both the EP customer EP and WATCHMAN, where we're going to augment them with additional focus on WATCHMAN specifically, and put a little more emphasis and focus directly at that interventional cardiology call point. And we'll be making quite a bit of marketing investments to really highlight the outstanding data that we believe the first study of its kind that met its primary endpoints and champion that can get detail.

So commercial investments, Medicare investments, marketing investments, position activation investments to all to leverage CHAMPION. It's also important to note that Ken can talk and sorry, too much coffee. Today, 25% of all watchword procedures are oncoming. We do expect that to grow to 50% over the LRP. So that view hasn't changed. What we've seen is an offset a bit in standalone watchman procedures. Ken, do you want to talk more about that?

Yes. I don't know too much to add,. Again, I think the first thing I'd say it, in terms of question, it just takes time to disseminate data and to educate physicians on the results of things like CHAMPION. And of course, we were not able to get out and pre-promote ahead of the data release and ahead of the publication in the New [ Northera ] Journal of Medicine.

Having said that, the trial at all of its primary safety and efficacy and end points and all of the important secondary endpoints, we do still anticipate that we will get a big labeling, updated guidelines and eventually an updated national coverage determination. It just takes time for that to play through.

I think the other thing just to reiterate what Mike said, in parallel with that, we see the opportunity to continue to improve some of the operational efficiencies that are required just to unlock more operational capacity for handling these procedures. We see hospitals building out more dedicated to these procedures, the move of simple relations to ASCs will further unlock capacity. And again, just a high level [ like stay ], not only see a very large opportunity for continued growth in concomitant procedures.

And maybe the one statistic I'd add to what Mike said, just to remind everyone, roughly 50% of ablation for AFib in the U.S. today are done in patients who are at high risk for stroke, [ Chagas ] score of 3 or higher and who are potentially candidates for the common procedure.

Our next question comes from David Roman with Goldman Sachs.

I wanted maybe just to toggle over to the other 70-plus percent of the business that's non-EP in WATCHMAN. And I appreciate some of the dynamics that you walked through on the call. But maybe you could unpack a little bit for us in more detail kind of where you see that cohort of the business going, some of the specific product launches that you expect to see in '26 and '27 in that we should be watching? And the extent to which that piece of the business can get back towards kind of an 8% growth level where it was, call it, before the accurate discontinuation.

Sure. Thank you for the question, David. The area that's not getting the spotlight on it is ICVT, [indiscernible] Cardiology Vascular Therapies Group, which again has a one-timer accurate, which will anniversary thankfully in May, which will help that business. But that business is extra very high level, driving the double-digit growth in China despite VBP, a very global business. Agent is continuing in our imaging businesses, in particular, continue to exceed our internal expectations, which is terrific. And we're excited about the seismic launch that it's really been in the small scale thus far within our [ Copal ] Vascular business has been very well received by physicians and that fracture trial will read out at PCR in a month or so. And we expect to have that coronary approval as we enter 2027. And we're focused right now on building up the manufacturing supply chain to enable a meaningful launch for seismic for both coronary and below the knee and above the knee applications in '27.

So they also have a number of kind of singles than doubles key product launches in vascular to continue to widen that portfolio out. The Interventional Oncology business grew mid-teens and I talked about a key workflow launch that they additionally had along with some second M&A that they're executing on. And hopefully, the shareholder vote goes positive for us with Penumbra on May 7. And we're really excited about that team, which is extremely talented and brings a really differentiated portfolio and gaps that we have across Boston Scientific in that category. So particularly in combination, stand-alone, but [indiscernible] that business did extremely well in the future, ideally with Penumbra, that's a very unique, powerful growth driver for the company over this LRP period. And I think a lot of the discussion will still be on WATCHMAN EP, but much more will pivot to that area given the launches and momentum in that area.

Lastly, I would just try to summarize the MedSurg overall. Some EP, we've had some challenges right now in Urology. We're not happy with the 1% growth in the quarter. We have clear line of sight to how we're going to adjust and to fix that as that business will improve in 2026, but not the level that we expect our business to perform at. And we'd be highly disappointed if we were closer to market growth for that business in 2027.

Endoscopes doing well. They've got a nice set of product launches coming over the next 9 months. And our erode business is growing double digit. So overall, MedSurg is a tick lighter in '26 that we anticipate. And we see that business will improve as the kind of quarters move on and '26 we'll have a stronger '27.

Our next question comes from Travis Steed with Bank of America.

On the WAMGR, I think there was a slight change to the WAMGR from 9% to 8%. I wanted to touch on that. And on the LRP, was the message more were not achieving at 10%? Or was it more we'll kind of wait and see how it all plays out because I'm thinking about '27, you sound pretty bullish on '27, no headwinds, you have product launches. So just kind of curious...

On the WAMGR drivers, I think we're pretty clear at the Investor Day that we were 8% moving to 9% over the LRP. So that's -- I believe that was the message in the WAMGR. So we call it 8% moving towards 9% because we're in the right high-growth markets. So I think that's consistent.

LRP, I mentioned it in the previous commentary. So what we are confident in giving you now is we're confident in our ability to continue to have the discipline to improve margins up about 150 basis points. We're confident in our ability to execute double-digit EPS over this LRP period. And on the sales side, obviously, with the guide at 6.5% to 8%, that puts pressure on the 10% plus guide we gave in LRP. So that -- I would say that's likely an upside scenario at this point. But it's premature for us to give you an LRP organic revenue growth number at this point and let us work through our strategic plan. and launch cadence, and we'll update that over the course of this year.

Our next question comes from Josh Jennings with TD COWEN.

I just wanted to touch on the EPS guidance revision. I think some may be concerned that with the deceleration in high-margin products, U.S. EP franchise and WATCHMAN franchise, there may be incremental pressure there. But any more details you can share just on any offsets or the impact on profitability with the revised outlook for U.S. EP and WATCHMAN?

Yes. Thanks, Josh. So we will see less mix benefit than what we expected at the start of the year. So that's why we expect our gross margins now will be slightly lower than 2025. But what we're doing is really driving leverage across OpEx. So most immediately, we put in much more restrictive spend controls across the company. So what we're doing is we're reducing spend that isn't correlated to revenue generation or that isn't pointed at our key product pipeline programs that we have in place.

We also had more broadly a number of or structure optimization initiatives in place that includes scaling our centralized shared services. We've got a number of AI automation, other initiatives already in place, Josh, that drive cost efficiency and productivity. And so we're looking at those for what we can accelerate. And then as it relates to the R&D portfolio, we're looking across each of the businesses there, ensuring that we're appropriately fueling and appropriately focusing on the most impactful programs. But then those that are less impactful, we're looking at how we can trim those. So we've got a number of initiatives, Josh, focused on how do we drive our OpEx toward the most impactful areas of the business and revenue generation and then everything else we're squeezing.

Our next question comes from Marie Thibault with BTIG.

I wanted to double back to urology. I think you mentioned you have some active execution plans in place for improving the sacral neuromodulation business.

Can you just dive a little deeper into that? I know that, that's something you've been focused on for a couple of quarters. Maybe it's going a little bit slower than hoped. So if you can just give us an update on how that is going.

Yes, it's definitely gone slower than we anticipated. We had we just had too much commercial turnover is the bottom line over the course -- take it over the course of the last 6 to 9 months. And we certainly learned from that. We made adjustments to it. But at this point in time, we feel we have the right leadership structure in place from region managers on out that are so key to driving a business like this. We have quite a bit of turnover at the manager level, clinical rep level and territory level. And so a lot of learnings from that as we look forward to Penumbra.

But I would say on the management side, that's all been filled up on the region of managers, which is important. And we've had nearly 100 people that have been hired in our various stages of training, both clinical reps and territory reps to really strengthen that commercial team, which is really needed not only for case coverage, but also to drive the appropriate patient activation events and pull-through to appropriate procedures, which is really part of the business and an area that [ Axonics ] did really well. So we're also leveraging a lot of the internal capabilities from WATCHMAN and others. But it's primarily been a commercial disruption issue that has lingered farther than we wanted it to. But at this point in time, we have made the appropriate hires, the appropriate training, the appropriate investment, and we are confident that we'll see an improvement in that business as the quarters progress.

Our next question comes from Vijay Kumar with Evercore.

Mike, I just -- I had one question on this buyback. Generally, when we see companies announced large deals like Penumbra, $15 billion deal, we generally see buybacks being suspended. So my question is, is the $2 billion buyback in 2Q, is that signaling anything on the deal in -- Jon, I think you mentioned you had $1.5 billion of cash on hand. How you're funding this $2 billion buyback? Are you going to raise any debt? Why now?

Thanks, Vijay. So we intend to -- the $2 billion, we've got $1.5 billion on the balance sheet now, and we project our cash over the second quarter. We'll fund that through cash on hand. We've been restricted from trading. We will be restricted at least through the Penumbra shareholder vote on May 6. But as soon as we're not restricted, we intend to repurchase are $2 billion worth of shares, as I've mentioned.

And why now is we look at the stock price. We look forward at the outlook for the company that we have, our confidence in the company, the pipeline. We think that's a great use of our capital.

Our next question comes from Matthew O'Brien with Piper Sandler.

I was hoping to talk a little bit about the Penumbra. I know the vote is coming up here in just a few weeks. Just curious about Boston's comfort level in adding additional cash to that transaction, if required, just given the pullback in your stock and the degradation in the value of the overall transaction. If that were to be the case, would you still be committed to the deal at the current -- or the previous valuation if a higher cash component is required?

Yes, I would just comment on the numbers in general. We've gotten to know their leadership team extremely well. We really focused on the way spirit of the momentum of the ICT team we have and the potential addition to Penumbra, we think is a very, very powerful business in combination over time. We've said many, many times that we essentially plan to run a number of as a business unit consistent how we do Boston Scientific, global presidents, keeping their strong commercial team intact, keep an R&D pipeline. So we have a very solid way to maintain and enhance the Penumbra momentum post closing. We had the shareholder vote on May 7. We're hopeful and confident that, that will be approved as planned.

Our last question will come from Matt Taylor with Jefferies.

I just wanted to follow up on some of the comments that you made about the outlook for WATCHMAN and PFA. Was wondering for more clarity on WATCHMAN in terms of how stand-alone was growing. You mentioned it was decelerating. Was it actually declining in Q1? And what's the outlook for stand-alone this year and next?

Yes. I'm not going to call out the specific number for outlook on concomitant specific and what stand-alone a little bit. I think we gave a pretty good guide as to what we see as the appropriate guidance for the full year on WATCHMAN, which is global mid-teens U.S. low to mid-single digits in cash.

Low to mid teens, sorry. Low to mid-teens for U.S. WATCHMAN and international plus 20%, mid-teens growth globally. So that's our outlook, which is obviously a slower outlook than what we saw in first quarter, but it reflects what I mentioned earlier on a overcoming some very, very strong comps, overcoming some efficiency issues that we see that I highlighted before. and more of a trend towards stronger and stronger concomitant and a less strong weakening trend in stand-alone. Now over time, we aim to try to improve that based on the CHAMPION results, investments we're making. But as I mentioned, you have concomitant strengthening stand-alone currently less strong.

Thank you for joining us today. We appreciate your interest in Boston Scientific. If we were unable to get to your question or you have any follow-ups, please don't hesitate to reach out to the Investor Relations team. Before you disconnect, Bailey will give you all the pertinent details for the replay. Thank you, everyone.

Please note, a recording will be available in 1 hour by dialing either 1 (877) 344-7529 or 1 (412) 317-0088 using the replay code 45-39-327 until April 29, 2026 at 11:59 p.m. Eastern Time. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good evening, and welcome to the Boston Scientific American College of Cardiology Conference Call.

[Operator Instructions]

Please note, this event is being recorded.

I would now like to turn the conference over to Lauren Tengler, Vice President, Investor Relations. Please go ahead.

Thanks, Drew. Thanks to everyone for joining us. With me to discuss our CHAMPION-AF and HI-PEITHO trials are Dr. Ken Stein, our Chief Medical Officer; Dr. Michael Jaff, Chief Medical Officer, Vascular Therapies; and Dr. Brad Sutton, Chief Medical Officer, AF Solutions.

During the Q&A session, Dr. Stein, Dr. Jaff and Dr. Sutton will be joined by Dr. Marty Leon, Study Co-Chair, Mallah Professor of Cardiology, Chief Innovation Officer and Director, Cardiovascular Data Science Center, Columbia University Medical Center.

We issued 2 press releases earlier today of the data presentation of each HI-PEITHO and CHAMPION-AF clinical trials. The releases can be found on the Investor Relations section of our website.

This call contains forward-looking statements regarding, among other things, our financial performance, business plans, clinical trials and product performance and development. These statements are based on our current beliefs using information available to us as today's date and are not intended to be guarantees of future events or performance. In our underlying -- if our underlying assumptions turn out to be incorrect or certain risks or uncertainties materialize, actual results could vary materially from those projected by the forward-looking statements. Factors that may cause such differences are discussed in our periodic reports and other filings with the SEC, including Risk Factors section of our most recent annual report on Form 10-K.

Boston Scientific disclaims any intention or obligation to update these forward-looking statements, except as required by law. In addition, this call does not constitute an offer to sell or the solicitation of any offer to buy any securities or solicitation of any vote or approval in connection with the proposed transaction with Penumbra. Boston Scientific has filed the SEC a registration statement on Form S-4 containing a proxy statement of Penumbra and a prospectus of Boston Scientific that contains important information about Penumbra, Boston Scientific, the proposed transaction and related matters.

At this point, I'll turn it over to Ken.

Thank you, Lauren. Yes, welcome. Good evening. This is obviously a very exciting time for us, presented 2 very high-quality randomized trials, both of which have the potential to be practice transforming. Before we get into those, I want to begin just a high-level overview of where we stand right now with our cardiovascular group. The group as a whole delivers today therapies that treat millions of patients every year. And if you look at what's in development, we're working on therapies that have the potential to address disease states that affect over 1 billion people globally.

I also want to remind you, we recently did change our reporting lines. I hope it's not confusing to everyone. Right now, our Cardiovascular group as a whole, which is led by Joe Fitzgerald, includes our Interventional Cardiology and Vascular Therapies group, which now term ICVT. So that includes vascular therapies and Interventional Cardiology. Separately, our Interventional Oncology and Embolization group and then Cardiac Rhythm Management Diagnostics and our Electrophysiology and WATCHMAN divisions, which now fall under our AF Solutions group led by Nick.

Before we get to the 2 trials that you all want to hear us talk about today, I just want to reiterate the overall strength of our clinical trial portfolio. I do believe it's one of the factors that differentiates Boston Scientific from the competition. I was talking to folks earlier today. Someone told me 10 years ago, we'd have 2 papers in the same issue in New England Journal of Medicine. I'd have said you're crazy. But that's not all that's going on. And so just a quick look at what's to come in terms of more important clinical trials.

I'll begin our FRACTURE trial. That's the IDE trial to get SEISMIQ approved within coronary use. We will be presenting that at the EuroPCR meeting in few weeks, AVANT GUARD, our randomized clinical trial of FARAPULSE as first-line therapy for patients with persistent atrial fibrillation will be presented as a late-breaking clinical trial at the Heart Rhythm Society. And then down the road, but I think very important to make sure we all focus on THRIVE trial to get TIVUS through its IDE approval for treatment of hypertension, AGENT DCB stance, a very important indication expansion trial for the AGENT Drug-Coated Balloon and further out our expected VITALYST high-risk PCI trial, which we still do hope to begin at some point this year. But that's not what you all are here to talk about tonight.

So with no other ado, I'm going to turn things over to Dr. Michael Jaff.

Thank you, Ken. What a great day for patients with PE, incredibly exciting day. This one doesn't work. Thank you. As of yesterday, patients who came into an emergency room or faced in a hospital with sick symptoms of a pulmonary embolus were largely managed by a watchful waiting on monitored bed and anticoagulation. And if things went well, they went well. And if things went poorly, they dealt with it. And oftentimes, they dealt with it was a very complex series of events.

As of today, that's no longer the case. HI-PEITHO was a large prospective multicenter international randomized clinical trial with meaningful clinical endpoints and independent adjudication of all those endpoints. 544 patients with intermediate risk pulmonary embolus, 59 sites, U.S. and 8 countries in Europe. Half were randomized to EKOS plus anticoagulation that is ultrasound-assisted catheter-directed thrombolysis and half randomized to anticoagulation alone. The primary outcome was the 7-day composite of meaningful clinical endpoints, death from a pulmonary embolus, recurrence of a pulmonary embolus, which in every study has shown a bad prognosis or the risk for cardiovascular decompensation or collapse. All of those endpoints were independently adjudicated.

This was the primary outcome statistically P of 0.005 in favor of EKOS plus anticoagulation over anticoagulation alone. This is a dramatic difference. One of the big knocks on thrombolytic therapy and EKOS in the past has been that sure it may work, but you do it at the expense of major bleeding and catastrophic intracranial hemorrhage. And in the HI-PEITHO trial, there was no difference in major bleeding at 7 days and 30 days regardless of the definition, ISTH or GUSTO. In addition, there was not a single intracranial hemorrhage in this trial. So we are incredibly proud of this. The feedback we've heard so far has been incredible.

And with that, I will turn it over to Brad to talk about CHAMPION.

Thanks, Dr. Jaff. Good evening, everybody. It's a full house. It's a long day for everybody, I think. We're going to talk about CHAMPION-AF. And so I'm going to put on my sort of clinician hat a little bit and talk about -- think back to the days when I treated a lot of atrial fibrillation, albeit in the stone age before pulse field ablation. But nonetheless, this is an incredible undertaking. The disease state is well known to you all. More than 60 million patients have this disease globally. It comes with a fivefold risk -- increased risk of stroke.

And we know that the mainstay of therapy here has been long-term oral anticoagulation. That comes with a couple of problems. Number one, something like 40% or more patients don't tolerate the medication or take the medication as prescribed long term, which comes along with an increased risk of stroke. And of course, oral anticoagulants come with the risk of bleeding. So the CHAMPION-AF clinical trial is the largest prospective randomized trial in this space. It's the second large randomized trial we've run in this space relative to novel oral anticoagulants, 141 sites globally and 300 operators. So a really broad experience of operators enrolling in this trial.

CHA2DS2-VASc 2 or greater in men, 3 or greater in women and randomized to WATCHMAN FLX, and they could be on either DAPT or NOAC plus/minus aspirin therapy for 3 months. What we're going to talk today about, as you saw from Dr. Kar's excellent presentation is the 3-year data. So here, you can see that we met our prespecified primary efficacy endpoint, the noninferiority endpoint, which was a composite of cardiovascular death, stroke, systemic embolism.

I would point out a couple of things. Number one, if you look at the curves, they diverge, converge and diverge and converge a number of times. I think this is a function of the overall low event rates. And I would point out here that the absolute sort of difference on an annualized basis between these 2 therapies with regards to ischemic stroke was 0.33%, right? So significant for noninferiority and incredibly low event rates in both arms, suggesting that both therapies are reasonable for patients looking to reduce the risk of stroke in the setting of non-valvular atrial fibrillation.

The primary safety endpoint here was the composite of nonprocedural bleeding, both major bleeds and clinically relevant nonmajor bleeds. So let's talk for a minute about what is a clinically relevant nonmajor bleed. These are not nuisance bleeds. This is not bruising. This is not an annoyance. These are significant bleeds that impact patients' lives. They require an escalation of medical care. They require an emergency room visit or a change in medication. So these are meaningful to patients, and we showed superiority with the appendage closure group over the oral anticoagulation group.

Now procedural bleeding was not included in the primary safety endpoint, but we did look at it in a secondary analysis. And this is an important slide for you to sort of take in. The benefit remains true when you include procedural bleeding with a 34% relative risk reduction in bleeding over 3 years relative to oral anticoagulation therapy. And it's a [indiscernible] slide. A number of secondary endpoints, prespecified secondary endpoints underscore the safety and net clinical benefit of WATCHMAN FLX. First, on the left is the noninferiority endpoint around major bleeds. So this is both procedural and nonprocedural bleeds, so no difference there.

The net clinical benefit, I think, is an important story. So if you're a patient or a provider, you're weighing risks and benefits of 2 therapeutic strategies. And so what you see here is the composite of cardiovascular death, stroke, systemic embolism and nonprocedural bleeding and statistical superiority in terms of the net clinical benefit for appendage closure over anticoagulation. So to put this into context, I think there's a couple of really important points to make. Again, the annualized rate of stroke here and for stroke and systemic embolism in the WATCHMAN arm was 1.1%. So how does that compare to the pivotal DOAC trials? If you look at the ARISTOTLE trial, which studied apixaban and led to apixaban approval, it's the most prescribed DOAC in the world, annualized risk of stroke of 1.3%. And in fact, this rate in the WATCHMAN arm in CHAMPION is as low as any of the pivotal DOAC trials. And I think that's an important thing to keep in mind.

And that's still with an incredibly high compliance rate in the drug arm here, right? So a difference, again, of 0.33% per year between the 2 treatment strategies with an almost 90% compliance rate in the medication arm here. And we know that's not real world. So we're very proud of this data. Again, the bleeding benefit preserved both when you include procedural bleeding and with the prespecified safety endpoint.

Finally, I want to just talk about the market opportunity here. Today, there are 5 million patients indicated for the therapy. We believe the CHAMPION-AF data paves the way to quadruple that number by 2030 and beyond. So 20 million indicated patients around the world. The bulk of those are in the U.S. If you take the 5 million today, it's probably 3.5 million in the U.S., 1.5 million outside of the U.S. We will be pursuing a label expansion. The goal here is to position this therapy in eligible patients as a first-line alternative to oral anticoagulation. Of course, we're seeking and working actively now with professional societies to get meaningful interim guidelines updates and ultimately expanded coverage both with regards to CMS and the commercial payers, which we believe supports our previously stated market growth of 20% over the LRP.

And we're not stopping there. So this is a picture of our fourth-generation device. We're really committed to innovation in this space. This device really is uniquely architectured to close any appendage regardless of the complexity of the anatomy. I would point out that, that IDE trial kicks off later this year. We expect to commercialize that sometime in 2028. And then maybe 1 or 2 other things that I'd love to highlight here, the SIMPLIFY trial, which we hope to present the back half of this year, a reminder that, that is a 3-arm randomized study comparing on-label DAPT versus single antiplatelet therapy or half-dose DOAC. So really excited to bring that data to you all.

And then we do have 3 late breakers that I'd be remiss if I don't mention at HRS coming up, actually, one around the ASAP-TOO trial, which if you've been involved in this space for a long time, you may remember. So excited to give you a little bit of data on ASAP-TOO in contraindicated patients. On the EP side, AVANT GUARD, as was mentioned by Ken, is our first-line persistent AF ablation story randomized versus antiarrhythmic medication. And there's one more, Ken, help me remember. Study of CHAMPION. Thank you. So the prior ablation segment of CHAMPION-AF versus no prior ablation will be presented as a late breaker.

With that, I'll turn it back over to Lauren.

Thank you, Brad. And you did want to make the point that you couldn't have said it better yourself than Dr. Kar. So that's what you left this slide with.

That's right.

Yes.

Said it better than I did.

All right. Yes. Awesome. So I know everyone is going to ask the slides will be posted on our website at the conclusion of the event, so you'll be able to see that. We are going to open it up to Q&A for the next 20 or 25 minutes. In order for us to take as many questions as possible please limit yourself to 1 question. I will let my esteemed panel come up and sit down and just raise your hand and someone will give you -- maybe we'll start with, yes, go ahead.

Shagun Singh, RBC. I was just wondering with respect to next steps, how should we think about guideline changes, label changes? And then what impact do you expect from the study in 2026 prior to these label changes in NCD?

Maybe I'll -- just on sort of the broad picture, we think this data supports our previously provided guidance of the 20% market growth. And maybe I'll let Brad or Ken speak to the guidelines and NCD.

Yes. I mean I'll just reiterate what Brad said. Again, we do firmly believe that this data should support a label expansion. So we will be submitting to FDA for that. We are working with the societies now in terms of getting a focused update to consensus documents, which would come before any guideline update. And then once we get through the FDA process, then the next step would be to work with CMS in terms of getting expanded reimbursement through the CMS national coverage decision.

You can -- maybe in the front row over here.

Matt Miksic from Barclays. Maybe just maybe help us understand how you think about the near-term effects before we get to the point of guidelines, NCD, et cetera. What challenges, if there are challenges in the clinical referral community, do you think that this solves or helps kind of move along?

Dr. Leon, do you mind answering that?

Sure. Glad to. Well, first, guidelines tend to lag behind clinical practice. I think people are going to look at this data, hopefully, as we do, that this is a very strong endorsement for the expansion of left atrial appendage closure with the WATCHMAN FLX in a much broader population than we've previously been confined to. You know the current guidelines are pretty restricted. Right now, even in contraindicated patients, it's only a Class IIa indication. In the Class IIb indication in patients that are at moderate or high bleeding risk, which is well behind what we currently are doing clinically.

And it's my feeling that these data with a 0.33% annualized increase in either ischemic strokes or systemic embolization versus about a 2.6% reduction in bleeding that -- that's going to be a balancing act that's going to allow us to be able to have meaningful conversations with patients. And given the nonadherence even to DOACs, at least in my mind, it's likely that a significant number of patients are going to prefer this single treatment option to what is currently available. Kind of interesting just to digress, and this wasn't brought up this morning, but in the NOAC group, there are about 200 patients that crossed over.

And of the patients that crossed over, more than 50% were because either patients or referring doctors decided that they really wanted to have a left atrial appendage closure device and they felt necessary to indicate that, that's even before there was any data. So it gives you a sense as to what physicians and what patients feel about lifelong NOAC therapy as an option, particularly in older patients. So I think that, that's going to resonate with the community of people who have atrial fibrillation.

David Roman from Goldman Sachs. I've done a bunch of web scraping today using AI to get -- to gather all the social media feedback from different types of physicians. So I was hoping I could just read it to you and get your feedback on it. It says, EPs scientifically interested but clinically cautious. Interventionalists most bullish see near-term adoption upside and general cardiologists pragmatic gatekeepers slower to change behavior. So I guess I'd just love to get your perspective on, does any of that surprise you? And then what is the strategy to -- and what's now the go-to-market strategy that you have the data in hand here in terms of driving adoption?

Ken, do you want to start and then...

Maybe I'll start and then Marty. Well, first of all, you didn't need to go to AI to get that descriptions, just the varying personalities in the specialties. That's sort of something we've all been dealing with for 30 years. No, I know, David. I know where you're coming from. I just would say that, that's a pretty darn good description of all of us. And I think that's right. The implanted community as the people I've been talking to here, irrespective of specialty, I think, have been uniformly, I'd almost say giddy, with these results. I think these results were as good as anyone could have possibly expected in the implanted community.

I think general cardiologists rightly are a little more conservative, but that's why trials like this are so important. And having the strength of a 3,000-patient randomized clinical trial that hit all of its endpoints, having it in the New England Journal of Medicine is important. I think the biggest thing that people are going to learn from this, I expect, and Marty, I'm interested in -- very interested in whether you agree or disagree with me. This trial, we felt was a very big risk when we started it because this trial enrolled a very low bleeding risk group of patients. And I think the real question was a group of patients that turned out to have an average HAS-BLED score of 1.6, could you really show superiority in bleeding? I think the biggest lesson that people are going to get here is that there is just a lot of clinically important bleeding even in people who are considered to be good candidates for the NOAC drugs.

Yes, I completely agree. I mean I think that -- I mean, there are obviously differences between how electrophysiologists and structuralists and interventionalists and general physicians view things. I think at the beginning that to a certain extent and perhaps even rightly so, the left atrial replenish closure was tainted with some early procedural complications and people were much more conservative about applying it to broader groups of patients. And I think that was not unreasonable. But that's changed. And if anything, look at the safety data in this study with over 100 sites, a global trial, a 1% overall procedural significant complication rate that is striking, and that should allay a lot of the concerns about broader application.

So whenever you talk about changing indications, I think you always have to weigh some of the primary efficacy effects versus what the safety is. And the general practitioners are always going to elevate or embellish, not in a negative way, but they're going to focus on safety. I think one of the messages that we should really convey is that over a broad population of proceduralists all over the world, there's a very, very low complication rate with this current device. That is the current state of practice. And I think that's also going to drive therapy. It also builds confidence within the operators in terms of being able to expand this beyond the current indications of patients who are higher risk or being nonsuitable for anticoagulant. So...

Chris Pasquale, Nephron. Very encouraging trial overall. I was hoping you could just comment on the ischemic stroke rate. Hazard ratio was 1.61. The lower bound was right at 1. And there is a 5-year endpoint that isolates ischemic stroke and systemic embolization. Should we be thinking -- how should we think about the relative risk over time in these 2 arms? Does the device risk become ameliorated because of endothelialization of the device itself? Just anything we can take that we might be seeing in 2 years from what we saw today?

Yes. Again, maybe I'll start and then turn things over to Marty. So first, most important, point is, right, the reason that, that endpoint is a 5-year endpoint is because it's not adequately powered at 3 years. And I caution against really putting too much into it. I think second, from a patient-centric standpoint, what's more important than specific types of stroke is all stroke or all stroke and systemic embolism. And again, we, a, we very convincingly meet noninferiority for the combined endpoint of cardiovascular death, all-cause stroke, systemic embolism.

But even if you do believe that there is a small difference in the ischemic stroke rate, and let's see what the 5-year data play out, the rates in both arms are incredibly low. And the difference on an annualized basis is very small relative to the potential benefit in terms of reduction of clinically meaningful bleeding. And so I think the real important message out of this then is patients ought to be able to make that decision.

Yes, 2 points that I'll make. First, we didn't show the Kaplan-Meier curves of the ischemic stroke rates, just didn't have time. I think that the way they organize the late-breaking trials was a little bit funny this year. The contextual discussion, I think, really cut away from being able to show more data and having a meaningful discussion. In any event, if you look at those Kaplan-Meier curves at the end of 3 years, the difference in ischemic strokes is 3.2% versus 2%.

That begins to separate at 6 months and is pretty flat between 1 and 3 years. In fact, between 1 and 3 years, there are 27 versus 23 events. And with the difference in denominators, that's almost identical. So there isn't very much change over time as you go forward. So I think that I would keep that in mind, and I don't expect that these curves are going to continue to diverge and then we'll lose the potential of achieving noninferiority. So that's one point.

Second point is we're talking about all strokes, all ischemic strokes. When you break them down into disabling versus nondisabling, about 60% of these strokes are nondisabling. Now what is a nondisabling stroke? It's a modified ranking score of 2 or more, which means that you have difficulty riding a bicycle or playing the piano. It's not a very significant stroke. It's a low bar of stroke. So what I'm saying is that the real significant strokes is even that much less. And when you weigh that against the difference in bleeding, that's a discussion I'd really like to have with patients who have difficulty adhering to anticoagulant therapy, even NOAC.

Josh Jennings from TD Cowen. You reiterated the TAM expansion opportunity. I was hoping to just review now that we know the CHAMPION data, we saw the CLOSURE-AF publication in New England Journal of Medicine last over the weekend. The discussion referenced OCEAN and ALONE and CLOSURE. I was hoping to just get a review of why you think the TAM expansion opportunity is still fully in play. I think you've talked about this in the past. So now with everything on the table, maybe it would be great to just review the impact of CLOSURE, OCEAN and ALONE.

Yes, I'll take a stab at that. I think it very much is still in play. And the way I see it, it really becomes a question of patient segmentation and directing the appropriate therapeutic strategy to the appropriate patient. OCEAN and ALONE were sort of highly selected low-risk patients who had undergone a successful ablation as proven by the fact that they were atrial fibrillation free for a year of close monitoring, right? So that is a very selected group of patients with very low CHA2DS2-VASc risk. That is not the appendage closure patient, not in this trial, not in commercial experience, not anywhere in the world.

So I think there is room for both strategies depending on the risk profile of the patient. I think CLOSURE is an interesting trial. So contemporaneously, it's worth kind of point-by-point conversation. But in fact, it's a much smaller trial with a composite endpoint, less rigorous study design with old generations of devices. They screened something like 10 patients, every patient enrolled. It took years and years to get that trial complete and really failed its endpoint because of the bleeding complications very procedurally, bleeding complications that we don't see, as Dr. Leon mentioned, with the WATCHMAN FLX device. It's our belief, frankly, that if that had been run exclusively with WATCHMAN FLX, it very likely would have been a positive trial.

Yes. I have to tell you, I was really surprised that CLOSURE got published in the New England Journal of Medicine. There was a lot of buzz about it after its presentation at the AHA. When you think about it, this was meant to be a real-world pragmatic investigator-initiated study that took over 6 years to enroll a fraction of the initial patients that they really intended to enroll based upon the initial study design and with a screen failure rate of 92%. So only 8% of the patients who are actually screened and consented were actually enrolled in that trial.

The procedural complications were -- the major bleeding was 5% -- was 5x what it was in CHAMPION-AF. Any potential benefit of having to stop anticoagulation was completely negated by the totally inappropriate complication rate in the first month. But with all of these caveats about CLOSURE, what was nice about CLOSURE was that the stroke rates were about the same. So in fact, we're going to do a meta-analysis, looking at ischemic stroke, we're going to include CLOSURE and we're going to include CHAMPION, we're going to include PRAGUE-17 and OPTION. And I think you'll get a much better feeling for what the actual results are. So that's a funny trial, and I'm just struck that people have really latched on to it.

A very different patient population enrolled in a very different way. 46% of the patients enrolled were enrolled at 3 centers. It's a very different study. So it's a little bit hard to interpret and really put it in the context of this 3,000-patient clinical trial that was done in a much more rigorous fashion that will have 5-year follow-up with a third primary endpoint to come.

Joanne.

Joanne Wuensch. I'm curious how you think physicians are going to turn the switch on in thinking about accelerating enrolling patients. We talked earlier about that they're going to maybe wait for guideline changes and that they're a cautious group to begin with. But I'm trying to think about if I'm a doctor that usually does, I'm making this number up, 20 LAACs a month, do I think in 2027, that's going to 30? I mean I'm trying to think about how that changes the vision of not '26, but in '27 plus that.

And Lauren, this then becomes a question for you. You reiterated the WATCHMAN growth rate of 20% in the LRP, but that was before we knew the results of CHAMPION. What does it take for you to say it's higher than that?

Do you want me to start?

Lauren, you go first?

All right. Yes. So as we've discussed, we've always assumed that data from CHAMPION will be positive as it was necessary to continue to expand the patient population for which we'll treat to support that 20% growth rate. So the data was positive, and we see it as supporting that overall market growth of 20%.

I'll hand it back to the CMOs to answer the hard stuff.

Yes. Well, again, I guess you can do the math on the 20% and then answer your average one is doing -- and thank you for doing the 20 months, by the way. We appreciate it. But well, 20 would be going to 20 x 1.2, right? So I think maybe the deeper part behind the question, right, is again, we see this as helping sustain that 20% this year because I think as we've said before, it does reinforce the current indication. Nearly half of the patients in this trial had an ablation within the prior year. So I think it also helps reinforce the concomitant indication and referrals for that.

I think, again, Marty was very eloquent talking about the safety profile, which is really very gratifying to me given just how many centers there were and how many operators were involved in this trial. I think that also helps reinforce current referral pathway. But then it will take better representation in guidelines consensus statements. It will take a redo of the NCD in the U.S. to unlock the larger opportunity for growth. And likewise, outside of the United States, where, again, physicians, I think, are a lot more conditioned to adhere a little more closely to guidelines and where reimbursement challenges are greater than they are in the U.S., it will take the time for those things to play through in the international markets.

Great. Next question, go to Pito.

Pito Chickering, Deutsche Bank. Looking at the primary endpoints in the subgroup analysis, it looks like the U.S. is better for NOAC. Japan was a lot better for WATCHMAN and Europe is right in the middle. I know there's only about like 120 people enrolled in Japan, but should we read anything into the geographic differences between that subgroup analysis?

Yes, I can jump into that. That -- and I don't recall that, that actually reached statistical significance. It was near. It didn't. It was close. Yes. But there are plausible physiologic reasons to think that Japanese patients and East Asian patients in general are more prone to bleeding risk on anticoagulants, including the NOACs than is a Western population. And so it makes sense from first principles to think that the Japanese patients would have the greatest benefit in terms of reduction in bleeding events and being able to avoid NOACs.

All right. Next question, Larry.

Right. So maybe a 2-parter. The label and the NCD, how confident are you that FDA and CMS isn't going to want the 5-year data? And you always expected CHAMPION to help with international. Ken, you just mentioned it. Does CLOSURE-AF make that a little tougher given it's a German study?

Yes. I mean we wouldn't be submitting this to FDA if we didn't believe that the data support getting the label update. And again, once we get the label update, it is our belief that the data would support reopening the NCD and broadening the indication. And our hope would be that whatever they do come out with in -- the NCD would cover the full label. Yes, I mean, CLOSURE, is it going to have more of an impact in Germany? We're very glad that it's finally published. I think on the one hand, there's certainly more awareness about it now that it's been published than there was after it had initially just been presented at AHA.

I want to come back again to what Marty said. I mean I say I'm not here to bury CLOSURE. I think there's a lot to praise in CLOSURE. And the 2 points, and I think it's on us and on the implanters of WATCHMAN in the community to get this message across are, right, number one, exactly identical stroke rates in a very high-risk population so that there are now 4 high-quality trials randomizing left atrial appendage closure against the NOACs, all showing noninferiority for stroke, and that's PRAGUE-17, OPTION, CLOSURE and now CHAMPION. And second, that, that trial failed because they had procedural complication rates and early bleeding rates that are not characteristics of what we see today with contemporary devices.

All right. We have time for one more question.

Anthony, Mizuho. Maybe can you review, you had 85% adherence to NOAC, what is the real-world adherence to NOAC? And I think the average cost is $500 out of pocket for a Medicare population. I think when you present WATCHMAN, it's going to be 0. So when you consider the low adherence plus the cost benefit of WATCHMAN, how is that going to be presented by Boston now that this data is out there?

Yes, I can take a crack at that. I mean I think it's an incredibly high rate of medication adherence in this trial. I mean kudos to the investigators and their interactions with their patients. The real-world data is not that, right? The real-world data is something more like 60% compliance. And so I think what you've got in the trial in the control arm here is really a best case scenario for clinical outcomes with DOACs. I forget the second part of your question, sorry.

Cost.

Yes, the cost-effectiveness analyses in this space have always really fallen in favor of a onetime procedure versus a lifelong anticoagulant. I think you've got an evolving landscape with DOACs becoming generic, but also the introduction potentially of Factor XI inhibitors. So I think it's a little bit of a nuanced answer moving forward. But to be sure, cost is one of the reasons patients have difficulty with long-term adherence to the DOACs.

All right. Well, thank you for joining us today. We appreciate your interest in Boston Scientific. If we were unable to get to your question or if you have any follow-ups, please don't hesitate to reach out to the IR team. And Andrew will provide the details of the replay on the webcast. Thank you so much.

Please note, a recording will be available in 1 hour by dialing 1 (877) 344-7529 or 1 (412) 317-0088 using replay code 8626162 until April 4, 2026, at 11:59 p.m. Eastern Time. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

We've got Chairman, President and CEO, Mike Mahoney; and Chief Medical Officer, Dr. Ken Stein here in Boston with the TD Cowen team. Thank you, guys.

Good morning. Can you hear us?

Think you, guys. That's coming through nicely.

I wanted to kick it off and just ask about just -- you've walked through this on the fourth quarter call, at the Investor Day last year just this 10%-plus growth guidance. You issued 10% to 11% on the fourth quarter earnings call. It looks very similar to the starting point of 2025, where you guys were at 10% to 12%. Maybe just discuss what's different this year compared to last year as you see it, and speak about your confidence about maintaining this -- these high double-digit rates of growth despite the challenging 2-year stack, 3-year stack comps that you're facing?

Yes. Sure. Good morning, everybody. Maybe a few things that remain the same for -- especially for the long-term investors. We continue to invest for the long term for Boston Scientific. And we've had good success over many years and plan to continue to do to a number of core tenants because I know we're going to talk about EP and WATCHMAN and lots of things here. But as the group knows, as we talked about at Investor Day, we want to continue to improve our WAMGR growth as much as we can. And we continue to do that, and you've seen the signed announcement of Penumbra and also a number of other venture investments that we've moved to continue to that.

The other goal we continue to deliver on is exceeding the WAMGR in terms of our growth rate and also delivering higher end than pure performance in terms of our sales performance, consistent OI margin performance and double-digit EPS. And that's consistent with what the guide is for 2026, where we guided full year 10% to 11%, 50 to 75 bps, I believe, of margin improvement and double-digit EPS. So again, those figures would all put us above our WAMGR, high end of peer group, which is what our aim for.

In terms of comparing to last year, one thing that is a bit different is, I would say, on our guide, the ability to dramatically exceed that guide is not what it was the last 2 years because there we had the transformation of PFA, and it was typically to the upside performance and also the WATCHMAN concomitant. So we're not going to give inter-quarter guidance for first quarter or for full year, but we're comfortable with the guide of 10% to 11% that we gave. Across our businesses, we see EP, we'll talk about, that's about 72% of our revenue, an important part of our business. But we have 83% of our business that's also doing extremely well.

So other big differences, we have the CHAMPION readout coming up in March. We tucked in a few nice acquisitions with Nalu in Spinal Cord Stim, with Velencia. We announced the Penumbra acquisition, and we have a number of our businesses that are doing very, very well. Our ICTx business, our Interventional Oncology business, our Endoscopy business, our Neuromodulation business, our PI business. So we continue to have a consistent, really, playbook of investing in our business, driving growth above our WAMGR, and we expect to have a good year.

Thanks for that. And just in recent past or multiyear past, I mean, almost every one of your business units has outpaced it's -- the market that it's levered to. And I think that precedent is giving you guys confidence that, on average, the majority of your business units will outpace the market growth and you guys can exceed that WAMGR. I mean is that the formula you already just put on the table, just to confirm?

I think we've actually executed that. Not every business every quarter, but in totality, we grow faster than our WAMGR. And we really invest for the long term. We have such an exciting pipeline that goes out across ICTx, EP, all of our businesses and a very impressive VC portfolio. So I think especially for the long-term investor, this formula of continuing to deliver high performance, continuing to improve operating margin, continuing to double EPS, we see strong visibility of that in this 3-year LRP.

Maybe just to touch on the operating margin guidance, targeting 50 to 70 bps for the year, that would keep you on track to potentially exceed your 3-year LRP target, but maybe a similar type question, just what gives you -- your team the confidence and the drivers of the margin progress this year? Anything different -- that's different this year particularly relating to macro factors?

A lot of macro factors, but we feel comfortable with that guide. We still benefit from the strength of the mix enhancement with ICTx continuing to get larger and larger, with divisions like Interventional Oncology getting larger and larger, the contribution of WATCHMAN with concomitant, the contribution of EP, it's overall good mix. But we're also investing heavily in our supply chain, our manufacturing, place a lot of capital across Boston Scientific. So we see kind of gross margins in the similar range as 2025, but we expect to deliver that primarily through OpEx and SG&A.

Great. And maybe just to circle back on the top line guidance and also margin guidance, but there a major conflict arose over the weekend in the Middle East. There's a lot of unknowns. It's very, very early, but anything to call out or investors should consider for Boston's business as we move forward despite there being so many unknowns?

Yes, a lot of unknowns there. Obviously, we want the safety of all our employees and patients and hospitals and physicians. That business for us, kind of the area that you're talking about this impact, it's about 1% of our revenue. And so there could be some disruption depending on how long this plays out, but it's not a significant dollar amount for Boston Scientific.

Understood. Yes, we hope for the safety of all your team members and everyone over there. Maybe as you prompted this next question with your comments, we're definitely going to get into the EP business, but...

We want you to. We actually love it.

I know. Absolutely. Absolutely. You gave some more detail -- your team, some more detailed guidance on the EP franchise and PFA this year. And then maybe just to start specifically on the expectation that you'll maintain your global leadership position in PFA ablation catheters here despite increasing competition. Can you just help build out some of the assumptions that underpin those expectations?

Yes. First, very proud of our global team. We have really delivered terrific execution. We weren't a player in this market 4 years ago. And the team globally is doing a great job of executing actually ahead of our plans for last year and really right in line where we thought the market would be as we articulated that at the Investor Day. So as I mentioned in the first quarter earnings call, we see the overall market -- no one knows exactly, but we see the overall market in 2026, call it, 15-ish percent, and our goal for 2026, as it will be for [ years ] beyond that, is to grow in line or above market like we do with other businesses. And we see that as achievable in 2026. We're aided by -- if you have a 15% -- no one knows exactly if it's -- but we think 15%. So we're aided by the continued adoption of PFA, which we think that utilization will continue to tick up. We're also aided by the sweet spot where FARAPULSE plays in about 70% of the procedures. That market is growing faster. So we see that market as a high teens, potentially 20% segment where FARAPULSE plays. And the rest of the market growing maybe high single digits to get you about a 15% market growth overall. So that's how we see the market.

In terms of the split kind of U.S., OUS, we do have more competitors in the U.S. We absolutely expect to maintain PFA leadership. But we see that U.S. market growing kind of 10% plus in 2026 and faster growth OUS to get us to that kind of at or above market growth overall for the year. We're really proud and Ken can talk more about it, but the key for us is widening the portfolio. And so we're really excited about this FARAPOINT product that's just been approved and had great feedback that Ken can talk about more.

We're kind of leading the league in clinical studies, clinical science. We're really the pacesetter in that area. And the portfolio investments we're making and more importantly the execution of the team, everything from our Cortex partnership to our next-generation FARAPULSE, which is called Ultra, which will launch in the first half of next year, we think will be significant upgrade to the existing for FARAPULSE in terms of its capabilities, its delivery, it's tracking that Ken can articulate. So that will be a really big launch for us next year. And then we have FARAFLEX and other -- ICE and other programs.

So our focus is to continue to innovate where we're good now with Ultra, replacing that in 2027 and widening the portfolio. And the team is doing a great job of really enhancing the footprint of our mappers. And those mappers are being used more now because when you launch FARAPOINT, you widen the indications of the patients you can serve. And so really the global scaling of our mapper team, and the ongoing improvement of our OPAL Mapping System, combined with the portfolio, combined with a growth market, gives us a lot of confidence in the business.

Excellent. Dr. Stein, anything to add on top?

Yes. I mean I think just to maybe repeat what Mike said with little additional color, right? I think the key is the FARAWAVE platform right now is still, by far and away, the most user friendly, the safest and the best approach that there is for the more straightforward AF ablations. And I think, frankly, where we have seen some competition, it's mostly been in the more complicated procedures. For us, that's we're moving ahead with additional catheters like FARAPOINT allows us to better compete. It's we're getting into the business of AF mapping, so that was our Cortex acquisition, again, allows us to give a completely different way to solve these problems in the more complex procedures.

And then also, I think very important to realize, while the catheters themselves are a very big part of the market, there's a lot of other ancillary things that get used. So our transseptal access systems, the market leaders for transseptal access, that will grow at or greater than market. More use of the OPAL Mapping System. And also just a commitment to continue to bring out new better improvements to our catheter platform. So as Mike said, I mean we're already on a third-generation PFA catheter with FARAWAVE while the competitors are still just trying to bring out there first. We will have FARAWAVE Ultra. We've got FARAFLEX that's in its first human use, hope to begin the IDE trial of that imminently. And so it's just this continued cadence of improvements to the catheters, to the mapping system and to the ancillary products that get used during ablation procedures.

Excellent. And just to circle back, just on the U.S. market growth assumption closer to maybe in the lower double digits, closer to 10%. Is that -- there have been some capacity constraints, just a lot of large numbers. Some of the -- I mean our understanding is patient queues are very long and there is work being done by many high-volume centers to build out EP labs that we just hear from a couple yesterday on a physician panel. But any -- just help digging into the U.S. market assumption for 10%-plus growth.

Yes. So in the market, we think the AF is growing faster. We think, as I said, it's closer to upper teens, 20% where FARAPULSE plays.

In the U.S as well?

Yes.

Yes.

And we started that. Because you see increased adoption still in terms of the PFA utilization. You still see, believe it or not, new centers opening with PFA. You have ASCs that will continue to impact more materially as time goes on, and you're getting really kind of the price normalization, I would say. So you're kind of lapping that. But we still feel comfortable with the segment that we're playing in primarily with AF growing, call it, upper teens, close to 20%.

Thank you for clarifying. And just -- and I know our team, we focus on our checks with clinicians trying to hear their forecast or what they're using currently, what they expect to use throughout this year. We tap into these high-volume academic center electrophysiologists and my understanding is that majority of atrial fibrillation cases are done outside of those centers and then maybe community hospitals or soon to be ASCs or in some states ASCs. But any help just thinking about where Boston's or just the FARAPULSE platform share is in that nonacademic center bucket? And is that an area where you guys are having outsized success?

Yes. I mean I'm not going to give an exact share breakdown, but the point that you made, I think, is one that bears repeating. It's a really important one. And that is, the best data is that about 2/3 of AF ablations take place in relatively low-volume centers. And then even if you look at the 1/3 that are in high-volume center, right, that's then a mix between the academic centers and I'm an ex academic, right? And when you're an academic center, you sort of have to use a variety of different tools because you've got to train your fellows in how to use all the available tools. When you get outside of the academic setting, right, then it is very unusual for folks to adopt more than 1 or 2 workhorse platforms.

And our experience here is, if you're only going to have 1 or 2 platforms, it is really hard for FARAPULSE not to be 1 of those 1 or 2. So again, not going to give an exact number, but I think you can expect, right, that we've got outsized share when you're looking at low-volume centers and even high-volume centers when you're looking at nonacademic centers. And as you move out to the ASC, again, I think that's an environment where we're going to particularly shine based on safety, based on efficiency and based on just total cost of doing the procedure.

Thank you for that. And just any help thinking about the nonablation catheter piece of the FARAPULSE overall revenue pie, and where you sit at entering 2026 from a market share standpoint? And just, is that where you could see some outsized growth because of you're underrepresented in nonablation catheter technologies?

Yes. I mean, I break it down, I think, by some of the specific technologies. If you look at transseptal access, right, I mean we are, by far, the market leader there. I think our growth there is going to track market, which is a very healthy growth. But since we pretty much are in the market there that you're not going to grow faster. And we certainly have an opportunity to get increased share for the use of mapping with OPAL, with the enhancements that we brought to OPAL. And then as you look further down the line, there's also the opportunity to get into more advanced imaging ancillaries, whether it's things like ICE catheter into cardiac echo or whether it's things like the partnership we announced with Siemens in terms of a 4D ICE product. That's a little bit, again, farther out than '26. But again, come back to your point, it's not just the EP catheter. And I think we do have an opportunity, again, to grow at market or faster than market as you look at a lot of these ancillary products.

Great. One last question on the EP business, well WATCHMAN is right there, too. But just on concomitant and just in that dynamic of the non-high-volume academic centers having 1 or 2 systems, I mean how big of a deal is it to have WATCHMAN and -- in terms of helping you secure that #1 or 2 kind of spot in these nonacademic centers that are performing AFib ablation cases and WATCHMAN procedure, seems pretty big?

Yes. I mean I think FARAPULSE is good enough to stand on its own. I think even if you didn't have WATCHMAN, you'd be really hard pressed not to have that as 1 of your 1 or 2 systems. But absolutely, right? The opportunity to do concomitant, the fact that WATCHMAN is, again, by far, the market leader for left atrial appendage closure and the opportunities that we have, right, to, again, build a moat around concomitant with things like developing a specific sheath to support concomitant workflow with some of the imaging things that we're doing to help support a concomitant workflow, that absolutely strengthens our position.

Great. Well, we've a big milestone for WATCHMAN is coming up this month, at the end of the month at ACC with the CHAMPION trial results being presented. Is there any way -- or hoping you could just -- you guys could paint the kind of best case scenario and the next base case scenario with results? I know you can't share the results, but just in terms of fully -- with opening that, the quadrupling of that patient opportunity or TAM, what do clinicians need to see?

Yes, so have the meeting a month from now.

That's right. I mean, I think just for everyone to recognize, right, there are 2 primary endpoints to the trial. One is an efficacy endpoint, right? And the goal here is to show that WATCHMAN is noninferior or in other words, it provides comparable protection against stroke to latest generation of blood thinners. And the other would be a bleeding end point where the goal would really be to prove that WATCHMAN is superior in terms of safety over -- preventing clinically important bleeding over the long run. And both are important endpoints.

I don't know that one is more important than the other. But I would say if we do happen to hit both endpoints, right, that then changes WATCHMAN from really being something that's restricted to patients who really can't take blood thinners over the long term and opens it up as a first-line choice and really, I think, gets to much more of what [indiscernible] sort of shared decision-making. It becomes a patient-physician discussion, do you want do pills, do you want to have an invasive procedure?

And I think the other thing to -- important to be aware of is there is this play between OPTION and CHAMPION. And when you think about that kind of decision-making that I was talking about, again, what's -- if we hit both endpoints, right, and it becomes sort of a patient's decision which way do you want to go, I think it's a lot easier to make that decision of which way you want to go if you're going to have an ablation at the same time. It changes it from the why to the why not. And so we knock wood, hopefully, we will hit those end points, and I think everyone's going to know in a couple of weeks.

Excellent. Looking forward to that presentation. There have been some concerns around data sets that have been presented in 2025, the OCEAN-AF and CLOSURE-AF that maybe on the margins, that TAM expansion, going over 5 million patients to 20 million patients indicated if WATCHMAN can move to first line contracts a little bit. I mean, maybe we can start with if you have any thoughts? I know you've reviewed this for us before, I think publicly, but lower risk patients in OCEAN, it seems like, and maybe [ non-motoring ] candidates in CLOSURE potentially from a high level, but maybe you could provide some more details around your thoughts...

It's exactly what you said, right? So there's a bunch of data that came out. Let me deal with CLOSURE first. right? CLOSURE was a German trial of very high-risk patients that used a very large variety of different devices for left atrial appendage closure, including early generation WATCHMAN, including early generations of some of the competitive products that were out there. I think the headline on that was it was a negative trial, that the blood thinners did better. I think when you peek under the hood on that, this actually -- we found it relatively encouraging because it didn't fail because it didn't provide adequate stroke protection. CLOSURE is actually the first very high-risk patient population where you could prove that even with these legacy devices, left atrial appendage closure provided comparable stroke protection to best available blood thinners. It lost on operative complications. And our view on that is that if that trial had been done with WATCHMAN FLX, they would not have had the degree of complications that they saw in the trial.

So again, even the OCEAN -- I'm sorry, even though CLOSURE headline negative for the field, when you peek under the hood, we actually see a lot of positives in that trial. The other one that you mentioned is this trial called OCEAN. And there were 2 trials. There was OCEAN, there was trial also out of Korea called ALONE-AF, both of which showed, again, very convincingly for the very first time that AF ablation, in and of itself, reduces the risk of stroke. But these were trials of relatively low-risk patients to begin with.

So again, just for the noncardiologists here, right, not everyone with AFib is at risk of stroke, not everyone with Afib needs any kind of treatment to prevent stroke. We look at a scoring system. It's called CHADS VASc, right? And typically, you think of people, CHADS VASc score of 0 or 1 is very low risk, 2 is kind of moderate risk, 3 or higher is high risk. And 3 and higher are really the patients who are candidates for WATCHMAN today, right?

The vast bulk of patients in those 2 trials had scores of 1 or 2. And so I think we really haven't seen any material impact since those trials were published in terms of referrals in for concomitant the WATCHMAN plus ablation. And I think it's just really good news for ablation in general because it does provide a reason now for patients to have ablation that goes beyond just relief of symptoms.

I appreciate that breakdown. Your team has been -- shared -- helped investors think through just the timing of a benefit from positive CHAMPION results and guideline changes, reimbursement decisions, coverage. But it's hard to imagine that positive data won't at least push some patients into the queue within the current indication. How are you guys thinking about that? Or how should investors and analysts think about that dynamic coming out of the ACC in the scenario where WATCHMAN does hit both primary endpoints?

Yes. So should the trial be positive. Again, I think there's an immediate impact in just reinforcing the current indication, but it will take time for the label to change, will take time for consensus statements or guidelines to reflect the new data and will certainly take time in the U.S. for CMS to revise the national coverage decision. And that's why I think we've been pretty consistent in all of our conversations around this to say, this is why, assuming a positive CHAMPION, we see that as sustaining the 20% market growth in left atrial appendage closure this year and over our long-range plan.

Thank you. I wanted to touch on the Penumbra acquisition. I think it was a little bit of a bigger swing than in years past, but not huge for -- and obviously, you guys had the capacity, but may have surprised some. Penumbra has been having success as a stand-alone. Maybe just review how Penumbra can get even better under Boston's roof and really the rationale for that acquisition?

Yes. I mentioned when we announced it, with our performance and our ongoing commitment to the high performance and their results, you saw the fourth quarter results. You have 2 very strong companies combining together. Culturally, we spend a lot of time with them. They're an excellent company. And so I think we can help each other. And the key will be to retain their commercial team, run them as a stand-alone business under our Cardiovascular Group, just like we do our WATCHMAN business, our ICTx business, our CRM and EP business. So it will be under Joe Fitzgerald. Actually Penumbra eventually post closing will go under our ICTx PI vascular business. But we'll really retain like we do all of our companies, Global Business Unit President, retain their commercial team.

And where we can benefit each other is Penumbra is clearly less scaled outside the U.S. than we are. We have a very large business in Europe, Middle East, Africa, all over Asia Pac. They are underscaled there, just given the market size and their focus has been more -- not totally, but more on the U.S.

So we have significant capabilities outside the U.S. Also, their business has a variety of stakeholders with the vascular surgeon, interventional radiologists, interventional cardiologists. We have excellent relationships across those groups, across our businesses. So there'll be some accounts where they may not be in, maybe their competitor is in, but we have strong relationships there. So I think we'll be able to help Penumbra out in that way also in the supply chain area as we continue to globalize them. We're a big footprint in Costa Rica. They're building the plant in Costa Rica. So I think on the whole supply chain side. So the benefits to Penumbra will be the supply chain side outside the U.S. and helping them with accounts where they may be less strong given the relationships Boston has.

For Boston, it helps us in many ways. I just saw a couple of cases last week. One case didn't require -- both [ knee ] cases. One case did not need anything other than the Penumbra case, other case required balloon stent and guidewire. And they actually pulled a competitive product. So in that case, in the future, hopefully, that balloon stent guidewire will be Boston Scientific that will complement the Penumbra case. So the -- really the -- we have different portfolio. We -- there are spaces that we didn't play in, neurovascular and VT. And so the combination of the category leadership portfolio we have across interventional cardiology and vascular, combined with Penumbra is just a beautiful solution for customers and for our category leadership strategy. So we think there's a lot of synergies in the portfolio given the uniqueness of what they have in neurovascular, which we don't play in, and also in thrombectomy.

Great. And then any updates just in terms of expectations for getting through the regulators and closing?

We'll see. We're in the heat of that now.

Okay. And I think the filings came out, and it seems like the time to kind of interaction to close was -- or not close, but acquisition offer was relatively condensed. But my understanding is you've been following many companies over the years, and you had some fairly detailed knowledge of Penumbra's portfolio and capabilities. But any comments just on that filing and some of the timing that was shared publicly?

I just think both sides see the strategic fit, which is your first question. So if you're Penumbra, you want to have a great company, you want to grow and thrive in a company that has a similar culture and that's Boston Scientific. For Boston Scientific, we also wanted to add that capability. It's long been an area that we want to get into in neurovascular and thrombectomy with the market leader. And so I think, obviously, you may have read the proxy or not, we knew the company well, they knew us well. We gave them a compelling offer. And we know how to integrate this right to make sure that both companies remain stronger post acquisition.

All right. Well, we're running down to the end of the half hour here. Thank you guys so much for taking all the questions and giving the answers. Great to see you in person and have a good rest of the day with your meetings.

Thank you for having us.

Good morning, and welcome to the Boston Scientific Fourth Quarter 2025 Earnings Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Lauren Tengler, Vice President, Investor Relations. Please go ahead.

Thank you, Drew, and thanks to everyone for joining us. With me today are Mike Mahoney, Chairman and Chief Executive Officer; and Jon Monson, Executive Vice President and Chief Financial Officer. During the Q&A session, Mike and Jon will be joined by our Chief Medical Officer, Dr. Ken Stein.

We issued a press release earlier this morning announcing our Q4 and full year 2025 results, which included reconciliations of the non-GAAP measures used in this release. The release as well as reconciliations of the non-GAAP measures used in today's call can be found on the Investor Relations section of our website. Please note that on the call, operational revenue excludes the impact of foreign currency fluctuations, and organic revenue further excludes certain acquisitions and divestitures for which there are less than a full period of comparable net sales. Guidance excludes the previously announced agreement to acquire Valencia Technologies Corporation, which is expected to close in the first half of 2026 and Penumbra, which is expected to close in 2026, each subject to customary closing conditions.

For more information, please refer to the Q4 financial and operating highlights deck, which may be found in the Investor Relations section of our website. On this call, all references to sales and revenue are organic and relative growth is compared to the same quarter of the prior year, unless otherwise specified. This call contains forward-looking statements regarding, among other things, our financial performance, business plans and product performance and development. These statements are based on our current beliefs using information available to us at today's date and are not intended to be guarantees of future events or performance.

If our underlying assumptions turn out to be incorrect or certain risks or uncertainties materialize, actual results could vary materially from those projected by the forward-looking statements. Factors that may cause such differences are discussed in our periodic reports and other filings with the SEC, including the Risk Factors section of our most recent annual report on Form 10-K.

Boston Scientific disclaims any intention or obligation to update these forward-looking statements, except as required by law. In addition, this call does not constitute an offer to sell or the solicitation of any offer to buy any securities or solicitation of any vote or approval in connection with the proposed transaction with Penumbra. Boston Scientific will file with the SEC a registration statement on Form S-4 containing a proxy statement of Penumbra and a prospectus of Boston Scientific that will contain important information about Penumbra, Boston Scientific, the proposed transaction and related matters.

At this point, I'll turn it over to Mike.

Impressive, Lauren. Thank you. Good morning, and thanks, everyone, for joining us today. In 2025, we achieved over $20 billion in sales and for the second year in a row, delivered mid-teens growth, surpassing our financial goals that we set at the beginning of the year. This outstanding and highly differentiated performance was fueled by innovation and execution across our business units and the winning spirit of our global team. In fourth quarter '25, total company operational sales grew 14%, organic sales grew 13%, achieving the high end of our guidance range of 11% to 13%, with continued strength across many of our businesses, including EP, WATCHMAN, IO, endo and ICTx.

Full year '25 operational sales grew 19%, while organic sales grew 16%, exceeding our guidance of approximately 15.5%. Q4 adjusted EPS of $0.80 grew 15%, exceeding the high end of our guidance range of $0.77 to $0.79. Full year adjusted EPS of $3.06 grew 22%, also exceeding the high end of our guidance range of $3.02 to $3.04. On a full year basis, we expanded adjusted operating margins by 100 basis points to 28%, balancing drop-through on the strong revenue performance throughout the year with reinvestment back into the business to drive long-term growth.

Now for our 2026 outlook. We expect our differentiated financial performance to continue and are guiding to organic growth of 8.5% to 10% for Q1 and 10% to 11% for the full year. Our Q1 adjusted EPS guidance is $0.78 to $0.80 and our full year adjusted EPS guidance is $3.43 to $3.49, representing leveraged double-digit EPS growth of 12% to 14%, and Jon will provide more details.

I'll now provide some highlights in Q4 and the '25 results along with comments on '26 outlook. So regionally, on an operational basis, the U.S. grew 17% in the fourth quarter and 26% on a full year basis with exceptional performance across the business units, particularly EP, WATCHMAN and ICTx. Operationally, Europe, Middle East, Africa grew 5% in Q4 and 3% for the full year. Excluding the impact of the ACURATE discontinuation, full year EMEA growth would have been high single digits. EP also grew strong double digits in Q4 as we continue to lead with our ecosystem approach, offering differentiated technologies and comprehensive commercial support. As we look ahead to 2026, we anticipate momentum in EP and WATCHMAN to continue in Europe and growth to be higher in the second half of the year once the impact of the ACURATE discontinuation is annualized.

Now the Asia Pac region. It grew 15% operationally in Q4 and 14% for the full year, led by mid-teens growth across Japan and China. Japan's growth in the quarter was driven by WATCHMAN and EP, fueled by OPAL Mapping System placements and increased FARAPULSE catheter utilization, where we continue to gain share. China had another quarter of double-digit growth driven by EP, WATCHMAN and ICTx, and we expect EP momentum to continue into 2026, supported by a recent NMPA approval of our FARAWAVE NAV device as well as indication expansion into the persistent AF population.

Now some commentary on our business units. Fourth quarter urology sales grew 13% operationally and 3% organic on a full year basis. On a full year basis grew 23% operationally and 5% organically. Our performance in uro this year was below our expectations, and we expect that our overall business will return to market growth in '26 with supply chain issues behind us, new product launches and the strengthening of our sacral neuromodulation franchise. We look forward to expanding our pelvic health portfolio with the recently announced acquisition of Valencia, which is expected to close in the first half of '26. Endoscopy delivered organic growth of 8% in both Q4 and for the full year and delivered a very strong year.

Q4 growth was driven by our endoluminal surgery, imaging systems and endobariatric franchises with the later receiving positive reimbursement support for ESG procedures. In December, we initiated a product removal for certain sizes of our AXIOS device due to a manufacturing variation. We do understand the issue and are working to bring these unique devices back to market in full by midyear and anticipate lower endo growth in the first half of the year as a result.

Neuromodulation had an excellent quarter, growing 10% in Q4 and delivering 8% organic growth for the full year. Our brain franchise grew low double digits on a full year basis, led by the Cartesia X and Illumina 3D offerings, providing the full benefit of directional stimulation, also improving efficiency and programming time. The pain franchise continues to strengthen and grew high single digits on a full year basis. This strong growth is a result of a deliberate strategy to expand our pain portfolio, to bring options to the physicians, patients and hospitals we serve. This is further strengthened by the close of the Nalu acquisition, adding peripheral nerve stimulation, PNS, to our portfolio. And within the quarter, we received expanded reimbursement coverage for the Intracept procedure, initiated a full market launch of the Intracept EDGE Stylet designed to improve the treatment experience.

Our Cardiovascular segment delivered 16% growth operationally in organic in the fourth quarter and 22% operationally and 21% organic on a full year basis. In January, we announced an agreement to acquire Penumbra, which is expected to close in '26. Penumbra offers a highly differentiated portfolio that operates in high-growth segments where Boston Scientific lacks offerings, including mechanical thrombectomy and neurovascular. The deal is both strategically and financially attractive to Boston Scientific and delivers significant value to patients and customers globally.

Within Cardiovascular, Interventional Cardiology Therapies sales grew 10% in Q4 and 8% on a full year basis. We're very proud of the coronary therapies franchise, delivering double-digit growth in both the quarter and full year as we have shifted our underlying business to high-growth markets. AGENT DCB has been a standout performer all year with its differentiated clinical benefit and reimbursement support, lifting our drug-eluting technology growth to over 20% on a full year basis. We continue to make progress in other areas of the portfolio, and we're pleased to have completed enrollment in the FRACTURE trial, studying our SEISMIQ IVL System. We anticipate presenting data from this trial later this year and continue to expect this differentiated technology in the first half of '27.

In Q4, we did reorganize the reporting structure of our Peripheral Interventions divisions, and we've aligned the peripheral vascular business led by Cat Jennings with Interventional Cardiology Therapies to amplify both commercial and R&D opportunities across similar technologies while retaining customer call point focus. This new business unit will now be called Interventional Cardiology & Vascular Therapies. Interventional Oncology & Embolization will continue to be led by Peter Pattison as a stand-alone business, and this structure will enable focus on this broad and unique portfolio.

The peripheral vascular business grew 6% organically in Q4 with operational growth of 15%. Arterial growth in Q4 was driven by double-digit performance in TCAR, supported by the recent launch of ENROUTE in China. And within the quarter, we completed our first cases in the U.S. with our SEISMIQ IVL System. We're excited to add this differentiated and complementary technology to our portfolio and expect to expand our indication to include below-the-knee in the second half of the year. And venous low double-digit fourth quarter growth was driven by continued strength in Varithena and EKOS, and we're pleased to have the HI-PEITHO, our clinical study in EKOS versus standard of care anticoagulants accepted as a late breaker at ACC to be presented on Saturday, March 28.

Our Interventional Oncology & Embolization business grew 17% operationally and 12% organically in Q4 and achieved nearly $1 billion of full year '25 sales, operational growth of 16% and organic of 12%. Q4 organic growth was driven by our category-leading embolization and cancer therapies portfolio with ongoing strength in cryoablation, which treats a broad number of cancer types.

Now as we look ahead, we expect to continue to outpace the underlying market growth supported by new product offerings such as TheraSphere 360 Y-90 Management Platform, which is a web-based platform to simplify the entire process for patients and physicians. Cardiac Rhythm Management sales grew 1% organically in both the Q4 and for the full year '25. On a full year basis, our diagnostics franchise grew high single digits and now represents nearly 20% of our overall CRM business. In core CRM, our high-voltage business grew low single digits and our low-voltage business was flat in the quarter. We continue to see demand for our conduction system pacing offerings. And in Q4, we began enrollment in the SYNCHRONICITY trial, evaluating left bundle branch pacing compared to conventional cardiac resynchronization therapy.

So as we look to 2026, we anticipate that our growth will be closer to market in CRM over the course of the year, driven by the addition of our complementary bioenvelope and ongoing momentum within our diagnostics business. Our WATCHMAN business delivered an outstanding 29% growth in Q4 and on a full year basis, exiting the year with strong double-digit growth across all major global markets. We are extremely pleased with the performance of this franchise with above-market growth driven by the strong adoption of concomitant procedures, and we have now treated more than 25,000 patients concomitantly with WATCHMAN.

As we look ahead, we continue to invest in our portfolio, clinical evidence and driving efficiencies for physicians. In the quarter, we announced a strategic partnership with Siemens Healthineers to develop and commercialize their next-generation 4D ICE catheter called AcuNav, intended to offer physicians an innovative imaging option for stand-alone WATCHMAN or FARAWATCH procedures. And last month, we completed enrollment in the SIMPLAAFY clinical trial, evaluating 2 single-drug regimens as post-procedural alternatives to dual antiplatelet therapy with data expected in the second half of '26.

Importantly, our CHAMPION trial, a large randomized trial studying WATCHMAN FLX versus novel oral anticoagulation was accepted and will be presented as a late breaker at ACC on Saturday, March 28. If positive, this data would support WATCHMAN as a first-line therapy for stroke prevention as an alternative to OAC and would expand the number of indicated patients from approximately 5 million today to 20 million globally. We're extremely proud of our global EP performance in the quarter with organic growth of 35% in the fourth quarter, resulting in 73% growth on a full year basis.

As we enter our third year in the U.S. with our market-leading PFA technology, we believe that approximately 70% of AF ablations in the U.S. in '25 were done with PFA, with that number closer to 50% globally. Within the quarter, global growth was driven by PFA catheter utilization supported by OPAL placements in a scaled, high-performing commercial organization. We continue to invest in our ecosystem approach to innovation and recently received approval and limited market release in both Europe and U.S. for our FARAPOINT PFA Catheter, nav-enabled that can create focal lesions, initially indicated for atrial flutter.

We're also studying FARAPOINT in the REMATCH-AF trial for use in redo procedures with data expected in 2027. We're pleased to have initiated the OPTIMIZE trial studying the Cortex OPTIMAP Mapping Technology with the FARAPULSE PFA system, which is intended to address our unmet needs in identifying sources of AFib as an alternative to traditional anatomic approaches, a capability that may be particularly important in more complex patients.

As we look to 2026, we anticipate that the EP market will grow approximately 15%, and we expect to outpace that market growth, led by our differentiated PFA portfolio, ongoing expansion utilization of mapping systems and continued adoption of PFA across the globe. Importantly, Boston Scientific is uniquely positioned with its leading AF solutions portfolio and commercial team and the value to physicians and patients with our concomitant FARAWATCH procedure, supporting operational efficiency and capacity.

So in closing, I'm extremely proud of our team and our performance in 2025. And we believe that our '26 guidance, along with our '26 to '28 goals of sales growing 10% plus, adjusted operating margin expansion of 150 basis points and leveraged double-digit EPS growth continue to be highly differentiated. We have an incredibly strong global team that's focused on advancing science for patients globally while delivering differentiated results today, setting us up for a strong 2026 and beyond.

With that, I'll turn it over to Jon.

Thanks, Mike. Fourth quarter consolidated revenue of $5.286 billion represents 15.9% reported growth versus fourth quarter 2024 and includes a 160 basis point tailwind from foreign exchange, which was in line with our expectations. Excluding this $74 million foreign exchange tailwind, operational revenue growth was 14.3% in the quarter. Closed acquisitions contributed 160 basis points to sales, resulting in 12.7% organic revenue growth at the high end of our fourth quarter guidance range of 11% to 13%.

Q4 2025 adjusted earnings per share of $0.80 grew 15% versus 2024, exceeding the high end of our guidance range of $0.77 to $0.79. Outperformance was driven primarily by our favorable adjusted tax rate in the quarter. Full year 2025 consolidated revenue of $20.074 billion represents 19.9% reported growth versus full year 2024 and includes a 70 basis point tailwind from foreign exchange. Excluding this $114 million tailwind from foreign exchange, operational revenue growth for the year was 19.2%.

Closed acquisitions contributed 340 basis points to sales, resulting in 15.8% organic revenue growth, exceeding our full year guidance of approximately 15.5%. Full year 2025 adjusted earnings per share of $3.06 grew 22% versus 2024, exceeding the high end of our guidance range of $3.02 to $3.04 and marking our third consecutive year of 20% plus adjusted earnings per share growth. Adjusted gross margin for the fourth quarter was 70.7%, resulting in full year 2025 adjusted gross margin of 70.6%, representing a 30 basis point expansion versus full year 2024.

In 2026, we anticipate full year adjusted gross margin to be roughly in line with full year 2025 as we expect favorable product mix to be largely offset by investments in our global supply chain and the annualization of tariffs. Fourth quarter adjusted operating margin was 27.3%, resulting in a full year 2025 adjusted operating margin of 28.0%, improving 100 basis points versus full year 2024. In 2026, we expect to expand adjusted operating margin by 50 to 75 basis points, progressing toward our goal of 150 basis points of operating margin expansion over our long-range plan. On a GAAP basis, fourth quarter operating margin was 15.6%, resulting in a full year reported operating margin of 18.0%. These results include a $194 million litigation charge relating to the full resolution of a legacy IP-related matter.

Moving to below the line. Fourth quarter adjusted interest and other expenses totaled $99 million, resulting in full year adjusted interest and other expenses of $430 million, slightly favorable to our expectations, primarily driven by higher interest income. On an adjusted basis, our tax rate for the fourth quarter was 10.7% and 11.7% for the full year, which was favorable to expectations and inclusive of favorable discrete tax items. Our operational tax rate was 14.9% for the fourth quarter and 14.2% for the full year, in line with our expectations.

Fully diluted weighted average shares outstanding ended at 1.496 billion shares in the fourth quarter and 1.494 billion shares for full year 2025. Free cash flow for the fourth quarter was $1.013 billion with $1.364 billion from operating activities, less $351 million in net capital expenditures. Full year 2025 free cash flow of $3.659 billion exceeded our expectations, reflecting 38% growth versus 2024 and 80% free cash flow conversion. For 2026, we expect full year free cash flow to be approximately $4.2 billion, and we continue to target free cash flow conversion in the range of 70% to 80% over the long-range plan.

As of December 31, 2025, we had cash on hand of $1.965 billion, and our gross debt leverage ratio was 1.9x. Following the announcement of our agreement to acquire Penumbra, all 3 major rating agencies affirmed our A- equivalent credit rating. Additionally, Fitch Ratings upgraded our outlook from stable to positive. Our capital allocation priority remains strategic tuck-in M&A, followed by share repurchases. In alignment with this strategy, we recently closed the acquisition of Nalu Medical, which is complementary to our neuromodulation pain franchise. Additionally, we announced agreements to acquire Valencia Technologies and Penumbra, which, upon close, will enable Boston Scientific to enter strategic adjacencies within our urology and cardiovascular businesses, respectively. Our legal reserve was $242 million as of December 31, with $46 million already funded through our qualified settlement funds.

I'll now walk through guidance for Q1 and full year 2026. We expect first quarter 2026 reported revenue growth to be in a range of 10.5% to 12% versus first quarter 2025. Excluding an approximate 200 basis point tailwind from foreign exchange based on current rates, we expect first quarter 2026 operational and organic revenue growth to be in the range of 8.5% to 10%, which includes an approximate 150 basis point impact from the discontinuation of ACURATE and a transient impact associated with the product removal of certain sizes of our AXIOS device.

We expect full year 2026 reported revenue growth to be in the range of 10.5% to 11.5% versus 2025. Excluding an approximate 50 basis point tailwind from foreign exchange based on current rates, we expect full year 2026 operational and organic growth to be in the range of 10% to 11%. We expect full year 2026 adjusted below-the-line expense to be approximately $440 million. Under current legislation, including enacted laws and issued guidance, we forecast a full year 2026 adjusted tax rate of approximately 12.5%. In Q1, we anticipate our adjusted tax rate will be approximately 12%.

We expect full year 2026 adjusted earnings per share to be in a range of $3.43 to $3.49, representing growth of 12% to 14% versus 2025, including an approximate $0.03 headwind from foreign exchange. We expect first quarter adjusted earnings per share to be in a range of $0.78 to $0.80. In closing, I'm pleased with the strong financial performance our global team delivered in 2025, and we look forward to executing on our full year 2026 guidance of 10% to 11% organic revenue growth, 50 to 75 basis points of adjusted operating margin expansion and 12% to 14% adjusted earnings per share growth.

For more information, please check our Investor Relations website for fourth quarter 2025 financial and operational highlights, which outlines more details on fourth quarter results and our 2026 guidance.

And with that, Lauren, I'll turn it back to you to moderate the Q&A.

Thanks, Jon. Drew, let's open it up for questions for the next 35 minutes or so. In order for us to take as many questions as possible, please limit yourself to one question. Drew, please go ahead.

[Operator Instructions] The first question comes from Robbie Marcus with JPMorgan.

I'll ask the question that's on everybody's mind today. Mike, there were fears that U.S. EP and U.S. WATCHMAN could come in soft, and U.S. EP was flat with third quarter. U.S. WATCHMAN missed by a hair. What exactly happened in the quarter versus your expectations versus the market? And the reason people are concerned is these are 2 of the key growth drivers. So you talked about confidence in [ about 15% ] EP growth next year of the market. The Street is sitting at around 25%. It feels like that needs to come down. Hopefully, you could help us level set expectations for those 2 key products, what happened in the quarter and how to think about them in '26?

Well, thank you, Robbie. Happy to. And I'll touch on your question. Overall, we're super pleased with the quarter and the full year growing 16%, EPS growing 22% for the full year and 6 of our 8 business divisions growing faster than the market -- growing faster than the WAMGR and setting us up for strong guide and investments for the overall company. The 2 businesses that you called out, I think you nailed it. If you look at EP, we're quite pleased. Actually, our results in Q4 exceeded our internal target. And WATCHMAN grew 29%, pretty much similar to the third quarter, as we lap the anniversary of the concomitant reimbursement a year ago.

Specific to EP, really pleased with the results of 35%. Two of our larger competitors resulted -- had results of 6.5% growth, the market leader. Third place player 12.5%. We grew 35%. So we continue to gain share overall. And to your point, we think the market in Q4 was closer to 18% to 20% growth rather than what some other companies have claimed at 25%. So we think the market was kind of in an 18% to 20% range, similar to what we developed internally in our plan. And we've called the market for 2026 about 15% growth. So we think it's an excellent market. We don't think it grew 25% in the fourth quarter. We grew faster than our peer group based on this percentage that I saw or that we laid out. We actually grew even faster outside the U.S. than the U.S.

The U.S. is more highly penetrated with PFA. There's actually more competitors present outside the U.S., and we've accelerated growth outside the U.S. So our PFA performance is quite strong. The market is still healthy. We think it's 18% to 20% in the fourth quarter. And we exceeded our internal plan, and we got new products approved. Our mapping footprint continues to grow, and we have a lot of clinical data that -- various clinical studies that are in flight. So we're very confident with our PFA business and our performance.

With WATCHMAN, we grew 29%, excellent job. We pretty much are the market with WATCHMAN. Concomitant continues to grow, and we did annualize the concomitant reimbursement, which happened in fourth quarter last year. So we're quite proud of the 29%. When you come to these consensus numbers, we exceeded our guidance. We actually exceeded analyst consensus. The mix of that is slightly different, but it shows the power of all of Boston Scientific being able to deliver, to beat our guidance, to beat consensus in the quarter and the full year. And we're quite proud of the EP performance based on the commentary I just provided.

The next question comes from Larry Biegelsen with Wells Fargo.

Look, I'm sure there'll be a lot of questions on the U.S. EP business, but I wanted to ask about WATCHMAN. So basically, my question is, can you confirm you're not seeing an impact from the 3 recent trials we saw in 2025. And I want to ask about CHAMPION since it's such an important trial. Maybe for Dr. Stein, what endpoints do you think physicians will be most focused on? And how important do you think it is to physicians to see similar rates of both ischemic and hemorrhagic stroke like we did in OPTION? And I'll leave it at that.

Yes. Well, again, look forward to presenting the results of CHAMPION at ACC. We will be hosting an event for investors on that Saturday night at 5:30 p.m. Central Time, and we can get deep into the data at that point. Again, I think the -- there are 2 co-primary endpoints, one non-inferiority for combined endpoint stroke, systemic embolism and death, one for bleeding. And just as we saw with OPTION, I think both of those are going to be important for the field.

In terms of the first half of your question, it can absolute -- again, you just saw the numbers we reported out, it can vary without any equivocation, say that we have not seen any impact from those trials, CLOSURE, ALONE-AF and OCEAN. And again, we continue to see very robust uptake of WATCHMAN in general and of concomitant procedures specifically.

The next question comes from Travis Steed with Bank of America.

I guess I want to push a little more on U.S. EP just because it was flat sequentially and your RF competitors grew $18 million and $26 million sequentially in the U.S. So it does look like share change versus last quarter at least on a sequential basis. And I don't know if there was something that changed late in the quarter because you were pretty bullish at some December meetings with investors. And so I don't know if there's anything kind of changed at the end of the quarter and especially considering the Q1 guide of 8.5% to 10% and kind of what that means for EP in the early part of '26.

I think we've been pretty consistent with our messaging on EP. We do think the market is 18% to 20%, like we said, I think some maybe have overshot the market growth in Q4. When you're the highest market share leader in PFA and competitors are coming out, we planned and we do expect to lose some share given the competitive launches that are coming out and given our really dominant market share position going into 2025. So we did anticipate that. And we are also very comfortable to say that as we looked at the end of '26, that we'll be the clear PFA market leader with growing -- and we also think our EP business grow faster than 15%.

So with new entrants coming, it's not surprising that we lost some share. But the overall EP growth of 35%, I think, is quite impressive given the size of that business now and grew faster overall than our competitors. On the first quarter guide, we guided full year to 10% to 11%, which we think is strong guidance for the -- given where we are early in the year here. And 8.5% to 10%, it's simply 2 factors really, one is our toughest comp of the year. And secondly, we do have the -- about 150 bps of impact from the ACURATE discontinuation along with the AXIOS withdrawal, well, not full withdrawal, but partial metrics withdrawal, which will impact the first half of the year.

So we see both those products -- both those issues will be addressed as you get into, call it, June for the second half of the year with the impact of ACURATE being gone, AXIOS being gone, our product launches and slightly easier comps, although it's still tough, but slightly easier in the first quarter.

The next question comes from Rick Wise with Stifel.

I hate to stick with EP, but looking at the EP discussion from another angle, maybe talk us through your expectations for how the '25 (sic) [ '26 ] year is going to unfold, maybe the cadence of the year, specifically relating to better understanding the growth acceleration that seems likely to occur as the quarters progress, helped by your innovation pipeline. And so maybe you can drill down further into what are the implications of FARAPOINT and talk to us again about the ancillary products like ICE catheter, et cetera? And maybe any updates on the FARAFLEX timing. So we better understand how -- again, the cadence of '25 and the setup as we head into -- I'm sorry, for '26 and the setup for '27.

Sure. I guess as we exit '25, we're kind of in a, what 65-ish percent PFA market share position. We have a market that we think is going to grow 15%. We have high utilization in the U.S., call it, 80% -- 70%, 80% and outside the U.S., quite a bit lower. So with a healthy market, we expect to continue to grow above market. Our PFA share will reduce somewhat, but we're very confident by year-end, likely if you add all the other competitors together, our share will be equal to them in that area. We're not going to break out share by quarter, but we're very confident that we'll maintain clear market leadership in PFA over the course of 2026 and beyond.

And I think if you look at the drivers that continue the strong pace of growth overall, one, it's geographic scope. We continue to gain share in Japan. We just got a persistent indication. We continue to drive more account openings, utilization in Japan. China is a very, very big market, a small part of our number. We made significant investments in the past 18 months in China, and you'll see China have a more significant impact on our overall global growth.

Europe is the most competitive market, but our growth is quite impressive there, and we just got approval for the FARAPOINT catheter. In the U.S., same thing, now more significant mapping -- scaled mapping commercial team continues to gain experience, continues to add more mappers, more OPAL systems. The FARAPOINT product will allow us more time in the lab to expand our reach in different clinical indications. And we have a host of products in the pipeline. You mentioned a few of them. They won't impact 2026 in a meaningful way. But we will continue to widen out the portfolio with our Cortex clinical trial work being done, the recent FARAPOINT approval. And then we have a whole cadence of new catheters coming over the coming 1 to 3 years. So we have significant investments in the portfolio, and we continue to expect to be the clear market leader and have a very strong '26 growing faster than market.

The next question comes from Joanne Wuensch with Citibank.

I suspect many of us will be picking through WATCHMAN and FARAPULSE or EP for quite some time. But to drive the back half of the year, I suspect other products are accelerating, and it's not just easing comps from AXIOS and ACURATE. What would you like to highlight to us that you see for a second half accelerant and then into 2027, so maybe we can expand our focus just a little bit?

Yes. Great. I think, again, we expect to have a great year in EP and WATCHMAN. We've got CHAMPION trial coming out. Those results are -- will be coming through. Concomitant is doing terrific. We're training more EP docs on concomitant every day. As you said, broadly, the comps do get a little bit easier. But we expect to have stronger performance in a number of our business units in '26 versus what we had in '25. We do expect our PI business, our uro business, our neuromod business and our CRM businesses to have stronger years in '26 than they did in '25.

Not many questions on neuromod, but that business we expect to be high performer in '26, along with improvement in PI, uro and CRM. And then you have our other businesses, which are performing quite well. As we get through this AXIOS issue, our endo business is strong. Our IO business is now scaled to over $1 billion, growing nicely in the double digits. Our coronary business grew 20% in the quarter, and now we're launching our SEISMIQ IVL in PI, and we just finished enrollment in our IVL platform for coronary.

And importantly, we've also initiated our first clinical work with VITALYST in hypertension. So we have a number of investments that we're making for the long term. And it's really the whole of Boston Scientific. And of our 8 divisions, 6 of them grew faster than market, which is pretty consistent. We grow faster than WAMGR. So we love our EP business. We love our WATCHMAN business, but it's the entire company that gives us confidence in the 10% to 11% guide for the full year.

The next question comes from David Roman with Goldman Sachs.

I wanted to ask, Mike, if you could just expand a little bit more as you think about the diversification of growth drivers here on a go-forward basis. As you kind of reflect on 2025, you had some challenges in urology, you're raising some challenges here in endoscopy in the first half of the year. So what investments and processes are you putting in place to make sure that you're seeing consistency and performance in the non-EP and WATCHMAN businesses, given those will represent a much more significant percentage of growth here on a go-forward basis?

Yes, we do that every day at the company. I highlighted on neuromod, a smaller business, but I think you'll see strong performance in 2026. We just added additional product in that category via acquisition. Urology was a tougher year this year. We had some supply chain issues. Axonics integration didn't go as well as we wanted to initially with some commercial disruption, but we feel comfortable with that. So also with new product launches coming in urology, we expect urology to be at minimum back to market growth with our uro business. Neuromod quite a bit above growth. And endo is really a solid, high-performing company with second half launches that will be important for us once we get through that AXIOS issue.

So a lot of confidence that MedSurg in general should have. Ideally, we plan on a better year than '26 -- in '26 versus '25. And the other businesses, ICTx is a very large business for us now. Our complex coronary business grew 23% -- I'm sorry, complex coronary grew 31% in the quarter, 23% for the year. And our ICTx business, despite the discontinuation of ACURATE grew 10% in the quarter. So that business is doing extremely well with AGENT, with our imaging portfolio, and we have the most product launches and biggest clinical studies in that business.

So we continue to diversify and strengthen that ICTx business that's doing quite well. Our interventional oncology business, we have new product launches there. We've done a tuck-in M&A. So we continue to fuel all of our businesses. We don't invest at the same rate for all of them given the WATCHMAN and EP growth profile. But we -- it's classic Boston Scientific doing organic R&D, tuck-in M&A to continue to grow above our weighted average market growth rate.

The next question comes from Patrick Wood with Morgan Stanley.

I'd love to hop off essentially from that topic. And if I zoom out, there's been a ton of money spent building out people's vascular sales forces. Obviously, the proposed transaction on your side, but some of your peers too in the last kind of 18 months. And I guess as I was reflecting on that, like how much is that going to help things like SEISMIQ in the IVL side and TCAR building out that force in a larger way? And then equally, are there things coming down the pipe over and above AGENT that we can't see on the vascular side that's causing a lot of money to be deployed in acquiring and building out sales forces there?

I'm not sure I quite get the question. I would say on the commercial side, we have tremendous scale in our PI business commercially and within our interventional cardiology business. We're combining the reporting structure of those business units together. So we're very much market leaders in that area. The announcement of Penumbra, as we talked about, is really exciting for us. It gets us into new high-growth markets in PE and neurovascular, just to name a few with a highly scaled sales force.

So in terms of commercial clinical capability, I think we're pretty unmatched in that area. And traditionally, with the company, you've seen a lot of organic R&D like AGENT was and a lot of clinical work with new products being introduced starting with IVL this year, and we'll continue to look at more tuck-in M&A there. So I think that whole -- we call that ICTV -- ICVT area now, we're very bullish on and some of the biggest investments in the company are in that area.

The next question comes from Danielle Antalffy with UBS.

And Mike, sorry, this is another EP, WATCHMAN question. And maybe it's actually for Dr. Stein though. I mean, I guess I'm curious, as you see competitors launch, I know you guys talked about like pretty significant efficiency gains with FARAPULSE and PFA devices overall. Those are probably slowing. We have WATCHMAN coming. I mean I asked this at the Analyst Day, but I'm just curious what's playing out in the real world as far as capacity at the EP lab because a lot of the docs we talk to sound like they have growing waitlist for their EP procedures, and this could only just get exacerbated once CHAMPION comes, assuming CHAMPION is positive. So I'm just curious what you could say to that and how much that is currently impacting overall market growth.

Yes, Danielle. I mean I think you nailed it, right? I mean we've now anniversaried, I mean we're 3 years into the launch of FARAPULSE in the U.S. I think the efficiency gains that people saw are largely now built into the system. And I think as Mike said, that's why what we're looking for, again, is 15% growth in the EP market next year. Again, we are growing and believe we will continue to grow faster than that market. But the keys -- again, feel a little sort of almost silly, but I'm apologizing for 15% growth in what's one of the largest markets in med tech.

But the keys to driving that forward will be, a, starting the build-out of ASCs in the United States to unlock some more capacity and reduce those waiting lists, continued just development and repurposing cath labs for the use for EP procedures in the hospital, continuing what we can do as a company to help further drive greater efficiency in procedures. So things that we can do with concomitant procedures, just growth of concomitant overall helps with that efficiency. We've talked about some of the other investments that we've made, the partnership with Siemens on 4D ICE. But really, until all of those things play out, that's why we really don't see growth exceeding 20% in the market and why that 15% seems to us to be a much more realistic way to view it. But again, to close, but it is our intent to continue to grow faster than that market.

The next question comes from Michael Polark with Wolfe Research.

I have a question on ICE. So the partnership with Siemens Healthineers for the 4D catheter versus your plans to launch a 2D product. Can you just help us understand, do these things work together? Does the partnership with Siemens, is that a reflection of a fresh view on how you plan to go to market with the 2D product? Help us understand how these are catalysts, how they coexist. I would appreciate any color.

Yes. We'll give you just a little bit. It's a bit too early for that. We're excited about the Siemens collaboration. That's a product that's in development. It's not commercially available yet. So we -- in partnership with them, it's really going to be different segments. That will be very much a premium product and markets that can pay for a premium product, and we think it will be differentiated and further differentiate our WATCHMAN and FARAFLEX capability. 2D ICE would be a different price point. It's been an established market for a while. So our 2D ICE programs will really be just a nice portfolio addition to our overall portfolio within our EP portfolio bag.

The next question comes from Matt Taylor with Jefferies.

I wanted to follow up on CHAMPION. You sound excited about that and should be. It's a big study. I was wondering if you could comment on the range of outcomes for that, obviously, non-inferiority trial. Do you think there's any chance of showing superiority on any of the endpoints or the secondary endpoints? And I also wanted to ask if you think a positive CHAMPION result could boost concomitant in the option indication.

Yes, Matt. I think first of all, just to clarify, the bleeding endpoint is powered as a superiority endpoint. We'll see what it shows when we report it out, but the goal there would be to show superiority on bleeding complications. I think it'd be you would have needed to power for superiority on stroke would have needed a trial that would probably have been in order of magnitude larger. And so that's part of -- and well, let me just backtrack on that a little bit. And I don't think we need to show superiority on stroke. Again, the goal here would be to show that WATCHMAN would be non-inferior, so as effective as the drugs, but to be able to show superiority on bleeding. And again, that was what we demonstrated with OPTION. And I think everyone's seen the impact that, that's had for the OPTION population.

In terms of the second part of the question, I think it's a perceptive question because there are a couple of things that would happen if CHAMPION does turn out to be positive, right? And one is developing the new indication, but the other is strengthening the current indication. And so I do believe that a positive CHAMPION would give increased impetus for referrers to referring for the current indication, which includes the option indication. It will take time to build out the new indication, get better representation and guidelines and get a revision of the CMS national coverage decision. And again, that's part of when we look at the CHAMPION story, right, if it's positive, it's not just a step change in growth in WATCHMAN, but it's something that sustains the growth in WATCHMAN over our long-range plan.

The next question comes from Josh Jennings with TD Cowen.

Mike, it's only been a couple of months since the Investor Day. And I think I just wanted to hear about your confidence level in hitting your LRP targets through '28, specifically the 10% plus organic revenue growth goal. Throughout this call, I think your confidence level is clear that, that 2026 guidance is achievable. But any updates just on your confidence level through the LRP and the double-digit organic revenue growth target?

Yes, it hasn't changed. If we're doing our Investor Day today, we'd get the same numbers, 10% plus, '26 to '28, 150 bps of margin improvement, strong double-digit EPS growth even within that. And then we think Penumbra further enhances our WAMGR and further strengthens the company beyond that. So really no change in position here. Our whole key to our business is being in fast-growth markets, which we've demonstrated. We anticipate in that time horizon the WAMGR gets closer to 9%. Penumbra actually could slightly even improve that once that closes by a small margin but slightly improve it. And excluding Penumbra, we're very comfortable with those LRP goals as we stated.

And I understand there's time for one last question. I have that from Chris Pasquale with Nephron Research.

I think I heard you say that you think U.S. PFA penetration is already at 70% for AF cases, which is a little higher than we were thinking and suggests that we're already in the latter innings of that mix shift. I'd love to hear your thoughts on what's left to penetrate with PFA, particularly as we think about other procedure categories like SVT or VT? And what's going to be necessary from either a product or a data perspective in order to really move into those segments?

Yes. Thanks, Chris. Again, I think, first of all, right, that 70% penetrated in AFib, there's still 30% left to penetrate. And there's always just a tailwind of adoption of new technologies. I think as you look at arrhythmias other than atrial fibrillation, there is probably the 2 prime use cases where we would see a real advantage to moving to PFA would be for atrial tachycardias, the atypical atrial flutter type thing. Although, frankly, we think that's going to be a diminishing part of the market going forward because usually where that's seen, that's a redo AF ablation. And we just see redo numbers shrinking with the efficacy of FARAPULSE for de novo ablation.

I think the other thing you hit on is ventricular tachycardia. We are already engaged in a couple of studies of using FARAPULSE technology for ablation in the ventricles, and it's one of the areas where both FARAPOINT catheter and FARAFLEX catheter, which is in development now, and we're very pleased with the progress of that in its first human use studies. But that is one of the areas where, again, I think those catheters and those form factors are going to shine.

Thank you for joining us today. We appreciate your interest in Boston Scientific. If we were unable to get to your question or if you have any follow-ups, please don't hesitate to reach out to the Investor Relations team. Before you disconnect, Drew will give you all of the pertinent details for the replay. Thank you, everyone.

Please note, a recording will be available in 1 hour by dialing either 1 (877) 344-7529 or 1 (412) 317-0088 using replay code 9663601 until February 11, 2026, at 11:59 p.m. Eastern Time.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, and welcome to the Boston Scientific Investor Update. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Lauren Tengler, Vice President, Investor Relations. Please go ahead.

Thank you, Drew, and thank you, everyone, for joining us today. With me are Mike Mahoney, Chairman and Chief Executive Officer; Jon Monson, Executive Vice President and Chief Financial Officer; and Adam Elsesser, Chairman and Chief Executive Officer of Penumbra. During the Q&A session, Mike, Jon and Adam will be joined by Joe Fitzgerald, Executive Vice President and Group President, Cardiovascular; and Dr. Michael R. Jaff, [ Vice President, Peripheral ] Interventions, Chief Medical Officer. We issued a press release earlier this morning announcing that we have entered into an agreement to acquire Penumbra. The release, along with a presentation describing the acquisition can be found on the Investor Relations section of our website.

This call contains forward-looking statements regarding, among other things, the anticipated financial and business impact and benefits of the transaction, the closing of the transaction and timing thereof, our business plans and strategy, product performance and development. These statements are based on our current beliefs using information available to us as of today's date and are not intended to be guarantees of future events or performance. If our underlying assumptions turn out to be incorrect or certain risks or uncertainties materialize, actual results could vary materially from those projected by the forward-looking statements. Factors that may cause such differences are discussed in the press release we issued this morning, in our periodic reports and other filings with the SEC, including the Risk Factors section of our most recent annual report on Form 10-K.

Boston Scientific disclaims any intention or obligation to update these forward-looking statements, except as required by law. In addition, this call does not constitute an offer to sell or the solicitation of any offer to buy any securities or solicitation of any vote or approval. In connection with the proposed transaction, Boston Scientific will file with the SEC a registration statement on Form S-4 containing a proxy statement of Penumbra and a prospectus of Boston Scientific that will contain important information about Penumbra, Boston Scientific, the proposed transaction and related matters. At this point, I'll turn it over to Mike.

Thanks, Lauren. Good morning, and welcome, everyone. Today, we're excited to announce our entry into an agreement to acquire Penumbra for $374 Penumbra common share in cash and stock for a total consideration of $15 billion. We're highly confident this deal is both strategically and financially attractive to Boston Scientific and delivers significant value to patients, customers and our shareholders. We are excited about the combination of Penumbra and Boston Scientific, bringing to market highly differentiated technologies, which improve patient lives through minimally invasive solutions to meet many of today's greatest clinical challenges. Penumbra is a great company. A highly differentiated portfolio of novel technologies that operate in high-growth segments were Boston Scientific lacks offerings, including mechanical thrombectomy and neurovascular.

Boston Scientific brings broad capabilities, including supply chain experience, expertise and a significant global commercial footprint that upon close would enable access to Penumbra technologies around the world. Importantly, there's a very strong cultural alignment between the 2 teams, the deep focus on innovation and clinical evidence aiming to provide physicians with solutions to transform patient care. Finally, this deal is financially compelling. Penumbra operates in segments that are growth accretive to Boston Scientific, and we expect this transaction to support our goals over the long-range plan. Penumbra has a tremendous track record of innovation, execution and growth. To ensure this growth continues, we plan to continue to operate Penumbra essentially as a stand-alone organization within the Cardiovascular group while leveraging our broad Boston Scientific capabilities and global footprint.

The acquisition has the potential to close in the first half of 2026, but more likely second half, subject to customary closing conditions. Before I pass it over to Adam, I'd like to recognize the hard work of more than 4,500 Penumbra employees, creating a high-performing best-in-class company with a strong culture and values that we plan to build upon for the benefit of patients and customers around the world. I'm also thrilled that upon close, Adam will be joining our Board of Directors at Boston Scientific. Adam is a highly respected leader with exceptional knowledge and deep industry experience. He joining our Board of Directors underscores his commitment to the success of the combined companies. With that, I'll turn it over to Adam.

Thanks, Mike. Our decades-long development of therapies for challenging medical conditions has focused on deep innovation for complex diseases so that we can offer physicians novel solutions to transform patient care with products available in over 100 global markets. I am proud of our team and the tremendous success of the company over the past 20-plus years, and I'm pleased to share that we expect our Q4 '25 revenue growth to be in the range of 21.4% to 22% resulting in full year preliminary revenue of $1.4 billion, representing growth in the range of approximately 17.3% to 17.5%. I've gotten to know Mike and the team, and I'm excited about the opportunity ahead. As Mike said, we share similar cultures within our company and feel strongly that combining these strengths will further accelerate growth. As part of this transaction, I plan to elect to receive Boston Scientific stock for all of my Penumbra shares, and I'm excited to join the Boston Scientific Board of Directors at close. With that, I'll turn it over to Jon to walk through the financials.

Thanks, Adam. I'll now go through the financials of this deal, which is both strategically and financially compelling. The transaction consideration reflects a total equity value of $15 billion to be funded in approximately $11 billion in cash and $4 billion in Boston Scientific stock, resulting in a 73% cash, 27% stock mix. Based on Boston Scientific's 10-day VWAP ending this past Tuesday, January 13, this will result in an equity issuance of approximately 41 million shares, which was fixed at the time of signing. Boston Scientific expects to finance the $11 billion cash portion of the transaction with a combination of cash on hand and new debt. We expect that this acquisition will close in 2026, subject to customary closing conditions. Penumbra participates in segments that are accretive to Boston Scientific, which will help fuel top line growth and long-term margin expansion.

We anticipate that this transaction will be slightly dilutive to Boston Scientific's adjusted operating margin in the first full year post close, neutral to slightly accretive in year 2 and increasingly accretive after the full realization of over $200 million of OI impact from revenue synergies and cost efficiencies in year 3. For adjusted EPS, we expect this transaction will be dilutive in the first full year post close by $0.06 to $0.08, slightly accretive in year 2 and more accretive thereafter. This is a highly strategic acquisition and the deal structure enables us to maintain flexibility for additional potential tuck-in M&A or share repurchase while maintaining a firm commitment to our credit ratings.

Finally, we're committed to achieving the financial goals we laid out at our Investor Day last year. We believe that this transaction further supports our ability to achieve those goals. Penumbra's sales growth profile is accretive to Boston Scientific, supporting our goal of 10% plus compounded annual growth over the '26 through '28 period. For adjusted operating margin, importantly, we remain committed to achieving 150 basis points of expansion over the long-range plan as revenue acceleration and cost efficiencies are realized. And finally, we expect to achieve leveraged double-digit EPS over the period 2026 through 2028. With that, Mike, I'll turn it back to you.

Thanks, Jon. In closing, we're absolutely thrilled about this announcement and look forward to the opportunities ahead. We expect that the combination of the 2 companies will provide the ability to treat more patients with Penumbra's innovative technologies, not only in the U.S. but around the world, that will provide Boston Scientific to enter -- have that opportunity to enter the high-growth segments of mechanical thrombectomy and neurovascular. With that, I'll turn it over to Lauren to moderate Q&A.

Thanks, Mike. Drew, let's open it up for questions for the next 30 minutes or so. [Operator Instructions] Thanks. Drew, please, go ahead.

[Operator Instructions] The first question comes from Larry Biegelsen with Wells Fargo.

Congratulations to Mike and Adam. I guess just -- I'd like to just start off maybe Mike, why is this the right time to acquire Penumbra? I think this is a larger deal than we've seen Boston Scientific do in the past. And Adam, why is this the right time to sell Penumbra? You just put up really strong results here. And just secondly, any product overlap here, Mike, in peripheral and any divestitures assumed like EKOS or coils?

Larry, thanks for the question. Yes, first of all, we mentioned at a different conference earlier this week, Boston Scientific as a company we highlighted that we're comfortable with our '25 fourth quarter guide and comfortable with our '25 full year guide. And important to reiterate, as I mentioned in my prepared remarks, that we're very comfortable with the Investor Day commitments that we made about 3 months ago that outlined our LRP goals. In terms of timing, when you look at both of these companies, you have a very strong high-performing Boston Scientific and a very strong high-performing Penumbra. So you have basically 2 companies that are strong independently and given the combination, have the potential to even become much stronger. So you have both companies dealing with a position of strength and getting stronger together. That's really the underlying theme of the combination.

In terms of some other bullets as to why now, as I mentioned in the segments, given the strength of each company, together, we have the ability to enter new high-growth segments, neurovascular, mechanical thrombectomy. Jon laid out the financial benefits of this one. There's very few companies that could enhance the weighted average market growth rate of Boston Scientific, Penumbra can. There's very few companies who can additionally accelerate our growth, EPS and OI margins and Penumbra can. And maybe most important with these combinations, the cultural alignment of the teams on the ground and management. And getting to know Adam and the team, the cultural fit between Penumbra's team and our team is excellent. We focus on innovation, clinical science, we care about our employees, and we're going to grow faster together. So that cultural alignment is really, really important. In terms of your last question on essentially closing timing, we are very comfortable that this transaction will close at some point in 2026. And we won't comment further on any details of the regulatory process at this point.

Okay. And Adam, I'd love to hear your perspective on -- you founded and led Penumbra for a long time, why do you feel this was the right time to sell? And maybe, Jon, just any color on the $200 million in year 3 on synergies, revenue versus cost?

Yes. It's sort of in the same vein of what Mike just said. We have been working extraordinarily hard, obviously, for 20 years. We are entering a very clear next phase of this company where the product innovation has progressed to the point where we really just have the most extraordinary best-in-class products across the whole portfolio. And we're really entering a wonderful phase and the ability to combine with Boston and their expertise and their ability just, I think, will accelerate that opportunity and be extraordinarily beneficial to, again, our customers and most importantly, our patients. It's really -- I agree with Mike, the cultural fit has been wonderful to see and to feel. It's just going to be one of those situations where together, we can do so much more and I'm excited. I think our team is going to be excited. They're going to be fired up and I think Mike had an expression that he said the winning spirit and attitude, which is exactly how we feel and the next few years are going to be pretty extraordinary.

And thanks, Larry. I think we're giving you a three-fer here with your question. But yes, on the year 3 synergies, it's -- from a revenue perspective, we see potential for revenue acceleration, particularly outside of the U.S., where Boston has a larger footprint. And then from a cost efficiency perspective, we see opportunity there, particularly in G&A and operations. As Mike had mentioned upfront, effectively, Penumbra will operate stand-alone immediately post integration. But we do see opportunity for efficiency between the 2 companies in G&A and operations.

The next question comes from Robbie Marcus with JPMorgan.

Great. I would say if either of you don't want to be executives anymore, you can be actors because you did an excellent job making sure nobody knew about the deal, including with a Penumbra dinner last night. So congratulations on that. I wanted to talk about just M&A at Boston Scientific moving after. Obviously, deals over the past have generated good returns, your return on invested capital has trended up over the past. How are you thinking about returns and time lines for those returns on this business? And then part 2, I'll just ask it all upfront, how are you thinking about future M&A at Boston Scientific? And does this put a pin in it for a while as you integrate and digest the Penumbra acquisition? Congratulations.

Thank you very much, Robbie. In terms of the financial aspects of the deal, Jon outlined quite a bit of it. As you know, we always look at the high strategic fit and financial returns. And this obviously is a home run strategic-wise for all the reasons I mentioned before and also financially compelling. As I highlighted, we're stand alone with our 3-year LRP commitments, and this is additive. And Jon highlighted the commitments to double-digit EPS growth and the margin improvement. On ROIC, we are comfortable that this hits our screen on high single digits at year 5 in terms of returns.

On M&A, we believe we're very, very prudent with our acquisitions. I think we've got overall a very, very strong record of doing effective integrations and beating -- or at least meeting or beating on our deal models and with the cultural alignment that we have, and we're confident we will deliver upon that. On future M&A, obviously, we'll be quite smart. This is a larger deal than we've done in the past. Our company is larger. Our balance sheet is very strong. We're comfortable that we'll close, but we'll certainly be mindful of future M&A. We will have the capacity to do that given the ratings and ratios that we see. So we don't have to close down our venture portfolio and things along those lines, but we'll certainly be mindful of future M&A.

The next question comes from David Roman with Goldman Sachs.

I wanted just to start going into a little bit more detail on the revenue synergies. Jon, I know you mentioned outside the U.S. as one of the key potentials. But I think in the presentation, you also talked about a pipeline that has the potential to further accelerate growth. So maybe you could talk about a breakdown between sort of underlying acceleration opportunities at Penumbra and then how BSX layers on top of that the potential to accelerate that performance from a sales synergy perspective.

I'll just give you a couple of examples. We're not going to -- Adam highlighted his fourth quarter results, the full year results and the confidence in his company's technologies and growth going forward. I reiterate our results essentially, and we've given our 3-year LRPs. If you look at revenue, there's so many opportunities. Jon highlighted a big one in outside the U.S. activities. It's clear that Penumbra has a nice presence there. We have a very significant presence outside the U.S. across Europe, Middle East, Africa, all of the Asia Pac countries with a scaled commercial sales force in those regions. And today, we don't offer mechanical thrombectomy or the neurovascular portfolio. So really, the scale of our OUS capabilities will help. And then you just look at practical examples within the U.S. We did an excellent job Cat Jennings and the team with our Silk Road acquisition and that integration, which is doing very, very well.

And that call point, as an example, is the vascular surgeon call point. And the vascular surgeon call point is an important one for us, and it's one where we're a bit underpenetrated really with our best product being Silk Road. Penumbra is very, very close to the vascular surgeon call point in their competitive mechanical thrombectomy products. So in examples like that, could further help accelerate our collaboration relationship with Silk Road. We also have a lot of nonoverlapping products with our drug-eluting stents and our DCB balloons, all of which vascular surgeons use. It may be Boston Scientific, not as quite -- we don't have the same level of relationships and collaboration with that call point as Penumbra does. So I think there's many different opportunities given the distinct portfolios of the 2 companies and the contacts and relationships that exist in there to potentially look at opportunities to enhance growth for both companies.

The next question comes from Travis Steed with Bank of America.

Congrats to everybody on the acquisition. Curious how you thought about the growth outlook in the venous business versus the stroke business that still puts you back into the stroke market again after being out of it for a long time. And also curious how you kind of thought through the Penumbra, the pipeline in terms of giving you confidence in the growth outlook here?

I'll answer the first part of that, and then I'll ask Adam to step in. We've really liked the neurovascular market for quite a while. As you know, we used to be in it many, many years ago and sold that business. So we certainly like the market profile, the growth profile of that business. And to enter that business, we always felt that we needed a leading portfolio with a scaled commercial company with a very, very strong pipeline. There was no sense in going into neurovascular as a niche player and build from there. So we've really been looking for a long time on how to become a scaled market-leading neurovascular company, not one that's coming from a distance behind the pack and trying to roll up a bunch of companies that way. So Penumbra offers just that. They've got an excellent portfolio, a meaningful commercial presence and a great pipeline. Adam, if you want to touch a bit more on your outlook for neuro, that would be great.

Sure. I think you know how confident we are in how we think neuro will evolve, not just in the traditional ischemic stroke market, where we obviously feel very confident in our current position. And obviously, with new products coming, more and more confident that, that will continue to do quite well. As it relates to the newest area, which is embolizing the middle managerial artery, early days, but I think there's been a lot of discussion about what that opportunity is and the value that, that can provide to patients and obviously, could be a significant growth opportunity over the next 2, 3 years. And we're just really in the earliest stages. So neuro is really set up for some significant growth, and it's exciting. And I think all you know, I was involved with our first company many years ago. I admired Boston back then for being in the neuro space, and it's going to be delightful to have -- I think, for physicians to have Boston back.

The next question comes from Rick Wise with Stifel.

Truly, congratulations on an exciting deal here. Mike, maybe starting with you, and then a follow-up for Jon. You talked through some of the aspects of your global footprint and the potential positive constructive implications for the merger or the acquisition. Talk about -- the other point you mentioned was supply chain expertise. Maybe just unpack that a little bit. Help us understand what you think Boston can bring and how that might impact the outlook for the combined company.

Happy to. I think our global supply chain capability and reputation is very, very strong. As an example, we have a very large presence in Costa Rica with many of our products. You've seen how we've been able to scale FARAPULSE very, very quickly in Costa Rica as well as the consoles around the world. So we have a very much global manufacturing footprint. Adam and the team have -- absolutely have the right vision, and they've stated publicly their expansion into Costa Rica, which is something that we know extremely well. So I think in terms of their current program, I think we will just add additional fuel and capabilities to that. We have a long history of improving our cost productivity in our manufacturing plants year-over-year, and we'll learn from each other on the things that they're doing, and we'll bring best practice from Boston Scientific. So I think from an overall manufacturing operations, distribution, given the scale of the company, I think it will be additive and we'll learn from each other. We definitely feel like there'll be some synergies in that regard.

Great. And I lied, I'm not going to ask that question, Jon. Another question for you, Mike, maybe just thinking about the rest of the portfolio, I appreciate the growth and the innovation that Penumbra brings the implications for margins. Does this say anything -- does this transaction, yes, the biggest, the largest you've ever done, say anything about the rest of the portfolio? Any aspect of the growth outlook for the rest of the portfolio that I'm sure somebody is going to ask us are there any growth implications that maybe are more concerning now that this is going to fill a gap of some kind, a growth gap and enable you to hit your LRP targets?

Absolutely. Companies have a choice. Do you get stronger when you're strong? Or do you try to get strong when you're weaker? This is about us getting stronger when we're very strong. And that's the first comment I made, we're not going to give all of our results for fourth quarter and full year. But as I mentioned at the very beginning, we're very comfortable with our fourth quarter guide and our full year guide as highlighted at a different conference early in the week. And we absolutely stand behind, independent of Penumbra, 3-year outlook that we gave at Investor Day, which highlighted our WAMGRs growing to 8% in '25 and 9% over this LRP, our consistent ability to deliver above-market growth. And we highlighted in detail our 3-year road map in clinical, and we didn't share with you a lot of the venture stuff that we have going on. So independent of Penumbra, our LRP goals that we laid out remain the same. And we're adding Penumbra together from a position of strength to make ourselves even stronger.

The next question comes from Michael Polark with Wolfe Research.

I'll stay on that thread and sorry to be myopic. But just as it relates to the LRP and the strong double-digit EPS growth messaged for 2026 through 2028, is it fair to still assume that, that double-digit message is a target each year, '26 through '28, even with, say, $0.07 of Penumbra-related dilution? The question asked a different way is, as this deal closes, could earnings growth be at risk of being below target and then being well above target as you digest Penumbra? Any color or clarification on that would be appreciated.

Yes. Thanks, Mike. I mean, always the goal each year. We are, as we've said, committed to double-digit leveraged EPS growth over the '26 through '28 period. As I had mentioned in my remarks, again, see $0.06 to $0.08 of dilution year 1. So we'll have to see depending on the timing of the close. We expect that to happen this year. So there may be a little lighter immediately post the close, but continue to target double digit each year and very confident double-digit leverage EPS growth over the period.

I think we've proven as a company that we're -- our ability to make trade-offs within the company while still really growing above our peer group and delivering margins each year and double-digit EPS each year over many, many years. This deal will not close in 90 days. We're comfortable that we will close in 2026. It allows us to enable the proper planning to continue to innovate, to continue to invest like we do in our organic pipeline, and continue our tuck-in M&A, being mindful of the size of this one. And we're very confident in our ability to deliver that double-digit EPS growth over the 3 years, and it'd be very disappointing. So that's what we're going to do.

The next question comes from Danielle Antalffy with UBS.

Congrats on the deal. I guess, Mike, my question for you is around how you see this elevating the rest of the Boston Scientific franchise. So you mentioned sort of what you guys could do for Penumbra internationally, for example. But just curious about whether you see sales synergies on the other side of the business, i.e., the legacy Boston Scientific side of the business and how you see that playing out and how quickly that could play out?

Yes. Danielle, I'll give a couple of examples there. There's many examples I can think of. I pointed towards, there's strong relationships across both companies, interventional radiologists, with interventional cardiologists with vascular surgeons. We have excellent relationships with interventional cardiologists. Given the clinical data that Penumbra has delivered, their pipeline, I think you'll see globally more interventional cardiologists involved with these procedures. The vascular surgeon call point is really, really important.

It's one that Boston Scientific has been, call it, underscaled in over the years. We've had a more limited product portfolio that really meets the demand, especially mechanical thrombectomy. There are many products across Boston Scientific that the vascular surgeon uses that are very different. And so that enables potentially more contracting, greater access, leveraging the combined -- the 2 sales forces together. And same thing with interventional radiology. We have a differentiated portfolio than Penumbra, the same call point, but that will help bring a more -- a broader portfolio to all 3 of those call points that exist independently, albeit very different technologies.

The next question comes from Patrick Wood with Morgan Stanley.

Beautiful. All the comments around culture fitting and operating as an independent entity within Boston in its way. Like is that -- how are you thinking about retention of key staff, right? The reps are super important here. You mentioned the engineering team, which has always been a key part for Penumbra. So how are you thinking about retention and keeping the people that are critical within this business?

Well, thank you for asking, Patrick. That is critical. We know that, and we know how to do that. We've done a lot of acquisitions, and we've learned from those. I commented on Silk Road and the -- really the excellent momentum we have in that area. So we absolutely know that Penumbra's global commercial team is essential, and we're going to welcome into Boston Scientific. As you mentioned, they'll essentially operate as a business within Boston Scientific, but also maximizing the synergistic call points that I mentioned in the previous question from Danielle. But we very much understand the innovation ecosystem that Penumbra has. And our goal is to clearly maintain that and accelerate that. We also know their commercial capabilities. So that is the #1 goal for us.

And that's why we can talk about strategy and financials all the time. But it's really how do employees feel about the combination. How do they feel in 2 years? Is this a place where they can grow together? Can they become developed? Do they like the values, not just the values that are shown on the board that people talk about, but do they see that every day. And I think you see with Boston Scientific, we have a very highly engaged global workforce. We develop our employees. We have a culture that lets them speak their mind. We care about our employees, and that very much matches with Penumbra. And so I'm very confident that 2 years post integration, we will have retained and grown that commercial force. We'll have retained and added additional fuel as necessary to their innovation capabilities and that you'll see the same employee engagement and ability to attract talent that Boston Scientific enjoys today enhance.

The next question comes from Matt Taylor with Jefferies.

I wanted to circle back on 2 things you touched on before. One is the close in '26, I know you're not going to comment a lot on the regulatory process. It's a little bit longer than typical and you do have some overlap with EKOS. Maybe you could just help us with the size of the EKOS business. I would just like to understand that better.

I don't know, Lauren, do we break that stuff out to any...

We don't.

Yes. We -- as you know, we have not given out like sizes of specific products in this -- as you know, EKOS is a very different technology, completely different technology than mechanical thrombectomy and what is a very underserved market with many different competitors in that area. So we're very comfortable with these subsegments. We're very comfortable that this transaction will close in 2026. Appreciate your question.

Next question, excuse me, comes from Shagun Singh with RBC.

Congratulations on the deal. I was just curious if this was a competitive bidding process and within the context of the high interest in this space, was the 19% premium, the right premium? And then just curious if you can talk a little bit about how you allocated the deal valuation between vascular, neuro as well as the pipeline? And anything, how did you factor in Thunderbolt within this?

Yes. We're probably not going to get into all of that. At the end of the day, we're very mindful of -- we know Penumbra very, very well. As I mentioned, we're coming from a position of strength. They're coming from a position of strength, and it's the -- it's an excellent combination for both of us. I won't comment on their process. It's clear from their process that Boston Scientific offers to Penumbra employees and shareholders excellent shareholder value, the best cultural fit, the best strategic fit in a transaction that will close in 2026. So that's likely from their perspective, but I can't speak from their perspective, but you wouldn't do this deal if you're Penumbra without checking those boxes. And they checked the same boxes for Boston Scientific.

And I understand there's time for one last question. That will come from Pito Chickering with Deutsche Bank.

I'm going to ask Patrick's question a little bit differently. Mechanical thrombectomy has a lot of competition, but only a few winners. And I believe a big part of Penumbra's success has been the speed of innovation, something that the large companies have struggled with. So as you think about the sales force feedback to the R&D team, the quick area of innovation on the operations side to get new products to market quickly, how do you protect that culture as so many large companies have tried to replicate and have failed due to such a cultural difference?

Great question. I think there are a lot of pockets of that within Boston Scientific, believe it or not. So you can be -- and I agree with your meta comment. We do have pockets of very quick agile innovation across Boston Scientific, and we do have overall a very good organic R&D capability. And there's no doubt that one of the gems of many gems of Penumbra is their innovation cadence, their speed, their ability to see in the future what's needed based on the physician feedback. We obviously know that. And that's why essentially -- as I mentioned before, essentially will be run as a stand-alone capability that will also benefit from Boston Scientific's global reach and some of the capabilities that we have. We know that gem needs to be protected and fueled and that's exactly what we'll do.

Thank you for joining us today. We appreciate your interest in Boston Scientific. If we're unable to get to your question or if you have any follow-ups, please don't hesitate to reach out to the Investor Relations team. Before you disconnect, we will give you all of the pertinent details for the replay. Thanks again, everyone.

Please note, a recording will be available in 1 hour by dialing either 1 (877) 344-7529 or 1 (412) 317-0088 using replay code 1390686 until January 22, 2026, at 11:59 p.m. Eastern Time. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Hello, everyone. Welcome. I'm Robbie Marcus, the med tech analyst at JPMorgan. Really happy to host Boston Scientific. We have Mike Mahoney, CEO; Jon Monson, CFO; and Dr. Stein, Chief Medical Officer. We're going to do a fireside chat here.

Lots to talk about. Maybe we can just start. We're coming into -- we'll get fourth quarter earnings in a couple of weeks here. Coming into 2026, you have a lot of new products launching this year. You have a lot of great products growing very healthy, great margin expansion. How are you thinking about the business? How do you feel coming into 2026?

Good morning, Robbie. Good morning, everyone. I feel great about where we are as a company. We had our Investor Day a few months ago, and really not -- there's some good news since then, but not much has changed. We committed to 10% growth -- 10% plus growth over the 3-year period, 150 bps of margin improvement. We consistently increased our weighted average market growth rate over many, many years to where 2025 was about 8%. We anticipate that number going to 9% over the next 3 years. And really pleased with the performance of the company and our setup for '26 and well beyond. Lots of growth drivers we can talk about. You want me talk about them now or wait?

No. Well, let's go one by one. I mean, obviously, you have WATCHMAN and you have Pulsed Field Ablation. Those are the 2 highlights there, and let's spend some time on those first. But there's obviously a lot more. There's a lot of investments you have and a lot in the rest of the portfolio that's grown very nicely. So maybe just top of mind for everyone is Pulsed Field Ablation here. And this is a market that just blew wide open. 2024, you came here, you said you were real excited. And I think it's -- I don't know the statistics, probably the best medical device product launch in the history of the market.

So here we are now 2 years on the market almost coming up in a month. How do you feel about, a, market growth, and that's a nebulous question given there's a lot of expanding indications and areas you're moving into and geographies still. And b, Boston Scientific's position within that?

Yes. I think we're in a great position. We -- so I think just the continued progress and momentum and establishment and credibility of our team that continues to grow. And so '25, we'll give the results in a few weeks here, but our EP business did extremely well. Clearly, the PFA market share leader. The market is undoubtedly the fastest-growing market in med tech. In '25, the market was well in this 20% growth range, and we predict a very, very healthy, a minimum of 15% plus over the next 3 years. So the market itself is growing quite quickly, much of it due to Pulsed Field Ablation and our leadership in that area.

But what's most important for us is the execution of our team, starting with our global capabilities, which we were -- really had very little of a few years ago in Japan and China, those teams are getting stronger and stronger. The PFA adoption of those markets is much smaller. In Europe and in the U.S., we had a very small mapping footprint 2.5 years ago. It's a very sizable mapping footprint that we have in place now. The mappers get stronger and better every quarter. And then on the portfolio side, we're pleased to announce we just got -- you may have seen the FARAPOINT PFA product, which Ken can detail a bit more, was just approved yesterday, I believe.

And so we have a strong cadence of products in addition to FARAPULSE to round out the portfolio to serve our physicians better. And to put -- what it also does is it puts our mappers more in the front line to closely work with the physician groups beyond using the FARAPULSE catheter today. So we have a tremendous confidence in the market growth, our leadership position and most importantly, as it will be a competitive market for many years to come, the internal execution on our product pipeline and our people development.

Yes. Maybe just -- again, first, just to reiterate the point, this is a market that will continue growing double digits, right, certainly over our long-range plan and beyond. AF, an incredibly common arrhythmia, the 10.5 million Americans have AFib, probably about 60 million people across the globe. AF ablation is still incredibly underpenetrated, sort of high teens probably at this point in the U.S. for paroxysmal AFib, high single digits for persistent. So there's just a lot of runway for continued growth and PFA and FARAPULSE in particular, is part of what's driven that.

But I do want to emphasize, it's not only the FARAWAVE story, all right? We've got a complete tool set approach. So FARAPOINT catheter, as Mike mentioned, just approved in the U.S. today, approved -- and in limited market release already in Europe. We see that being used for arrhythmias like atrial flutter. We're also evaluating its use for redo ablations, evaluating its use for ventricular tachycardia.

We've got the FARAFLEX catheter in clinical trials already. And beyond ablation catheters, I think really important to realize the strength of the portfolio outside of that. Our Access Solutions with the Baylis acquisition continues to do very well. We will be entering the ICE market, intracardiac echo. We've got an ICE catheter in development. Remind everyone, that's a $1 billion market that we haven't participated in at all. And so I think what I want to do is just highlight not just FARAPULSE and FARAWAVE as beautifully as that product has done, but highlight the overall strength of our EP portfolio.

I think it's a great point because we, on the outside, we just take all the EP numbers and add them up and that's the market. And there's obviously a lot more in there. So you're looking at AF ablation, you're moving into other non-AF ablations, FARAPOINT, which hopefully, we see soon, feel free to comment on timing there. But ICE is adding on. So it's not just underlying volumes. It's also revenues per procedure. So maybe talk about that where volumes are going and where you think you stand there? And then how much more is there to go on the revenue per procedure?

Sure. So to a quick on -- so a FARAPOINT, we got FDA approval in the U.S. yesterday. We'll be going into limited market release in the U.S. imminently, already are in a limited market release in Europe. And you can anticipate then we'll see that scale up pretty quickly over the course of this year. And in terms of the other things that you use in a case, again, it's not just the ablation catheter. It's transseptal access system, it's the ICE catheter, it's other diagnostic catheters. And again, the market is just so large and so underpenetrated that there is, in our view, still room, again, for just continued double-digit growth in the market over the foreseeable future.

One area that could be really interesting is moving into the ASC. I believe January 1, there are 5 or 6 states where you can move in. Sort of how are you thinking about that? Is that going to help improve patient volumes? Does that open up EP lab capacity, maybe do more WATCHMAN? How are you thinking about that and Boston Scientific's positioning in the ASC?

Yes. I'm thinking about the same way you are. Again, the market is so large that unlocking capacity is really part of what's critical to that continued double-digit growth. And so getting the simpler, more straightforward cases into the ASC, keeping the more complicated cases, which include persistent AF ablation, also include the concomitant procedures, and we're seeing really tremendous growth in the concomitant procedures.

So FARAPULSE ablation plus WATCHMAN, right? And you open up lab space for that. And based just on the predictability, the simplicity, the fantastic safety of the FARAPULSE procedure, we really see ourselves as having a large, differentiated advantage when you start moving into the ASCs. And you're right. There are a number of states that already have ASCs that are doing ablation. There are about 20 states in the United States where there's sort of limited regulations that prevent you from getting into them. The rest of the U.S., it will take a little more time just for regulations to catch up. So the build-out into the ASCs isn't going to happen overnight. It's something that is just going to happen with a consistent cadence really across our long-range plan.

Do you think in the U.S. where mapping is almost 100% of cases in the hospital, do you think mapping will translate into the ASC? And does the economics provide for it?

So we -- I don't know that you need to map, and I think we'll see a divergence of approaches among physicians when you get to the ASC. Really nice thing for us, though, is we've got a very economically advantageous procedure if you want to map with our FARAWAVE NAV catheter, you don't need to pull a second mapping catheter. And we also have the advantage that there's no installed base of competitive mapping systems in the ASC. So really it gets us sort of a blank page to start with and compete on our own purely on the basis of the differentiated advantages that we have with FARAPULSE and OPAL.

Maybe one more here. FARAPOINT approval yesterday, does that open up the non-AF ablations for you? Do you see that complementing FARAPULSE, FARAWAVE and if it does open up the non-AF ablations, how quickly and how fast can that move?

Yes. We see that opening up over the long run. So the initial labeled indication will be as an adjunct for ablation of atrial flutter during AF ablation procedures. But there's a lot of interest in use in it beyond those -- beyond that one particular approach. So we are currently running an ongoing clinical trial looking at FARAPOINT for multiple uses for redo AF ablation procedures. We also are running clinical trial looking at its use in ventricular tachycardia ablation.

And you can sort of imagine it being used really where people today are using RF ablation catheters to sort of what we call spot welding, right, hit a small focal point. The other thing I just want to emphasize, though, is between FARAWAVE and FARAPOINT, we also do see room for a different catheter form factor, which is our FARAFLEX catheter, which really, in terms of what we've done in clinical trials right now, gives us really the only company with the full tool set for all of the different PFA approaches you might need to take for any cardiac arrhythmia that you may encounter in practice.

I'll add one more. It seems like everybody forgot about AVANT GUARD. There's a readout for first half of this year, I believe. Maybe talk to your confidence in that trial and the opportunity you could open up for Boston Scientific specifically.

Sure. So just to explain, so AVANT GUARD is a trial of first-line therapy of catheter ablation in patients with persistent atrial fibrillation. Again, the goal is to prove that the earlier you intervene on patients like this, the better are the results that you get. And really to just sort of firmly say that there's not any real role except in isolated patients for a trial of drug therapy before moving to ablation.

And in terms of degree of confidence, I mean, to begin with, they don't let me start a trial unless I'm relatively confident in what it might show. On the other hand, the reason you do trials is because you never know what you're going to get until you actually get them. But there's a lot of predicate data that suggests that, again, the earlier that you intervene and the earlier that you ablate, the better patients do.

Great. Mike, overwhelming demand, I'm going to ask this question. Hopefully, you can answer. Third-party data sets are...

We're still on EP.

We're moving -- a little on EP, a little on the overall. So third-party data sets are showing not the best sales growth for Boston Scientific and EP in fourth quarter. And I'd say overall, in December for med tech and hospital procedures in general, a big softening. And I think that's what's hitting med tech yesterday and today to an extent. Any comments on EP or just fourth quarter as you think about Boston Scientific?

Well, Jon, you may comment. We are comfortable where we finished the year. We're not going to give our final results here, but we're comfortable with the finish of the year, and we'll give all the results about 3 weeks or so.

Yes, 3 or 4 weeks...

So for us, we give our Investor Day targets, which we've hit for the last 4 Investor Days. We're pretty consistent about hitting -- we're really consistent about hitting our guidance numbers and our company executes at a pretty high level. So there's lots of data that seems to run around that people get all antsy about. But I think we're pretty good at delivering on our commitments.

Great. Maybe we could pivot a bit to WATCHMAN. And this dovetails nicely after the OPTION trial we saw over a year ago. This goes hand-in-hand with concomitant procedures. And I mean, wow, was 2025 a good year off the back of that. As we think about WATCHMAN, we'll get to CHAMPION in a second, but just on the underlying data and what you have today, how do you feel about where you are in the opportunity and penetration? And how much more room is there to go in keeping CHAMPION [indiscernible]?

I'll give you the highlights and Dr. Stein can fill in all my gaps. I think we're blessed to have, I think, the 2 most differentiated products in med tech with WATCHMAN that has a 91% share and FARAPULSE, we talked about the last 25 minutes. So we -- and then maybe the fastest-growing procedure, if you look at the fast-growing markets, EP, the WATCHMAN market actually grows faster, but not quite the size of it and then concomitant. And we're blessed to have 2 really unique products there that our doctors are so comfortable with.

And the OPTION data, the reimbursement has put a big tailwind behind that concomitant procedure that really only Boston Scientific can deliver uniquely and safely. And we estimate, I think, at Investor Day, about 25% of the WATCHMAN patients are being used in a concomitant procedure. We think that number can grow at least to 50, if not north of 50. And Ken can talk about OPTION and CHAMPION, really important readout in a couple of months here.

So the concomitant procedure is so efficient. It's very safe. It's economical. Hospitals enjoy the reimbursement benefit. We have an excellent clinical team that's very, very difficult to match to do both of those procedures. And referring physicians are very, very comfortable with it. So we continue to see that as a big tailwind for Boston Scientific.

And you have over 90% share in LAAC. So are you seeing all the vast majority of the benefits accrue to Boston Scientific, given it was also your trial.

Yes, we have 90%. So occasionally, you will see a concomitant done with a competitor's product, but that's a small minority of the concomitant procedures you see.

As you think about back to competition and PFA, how much of a competitive advantage is it to have the leading LAAC? And is bundling between the 2 a major differentiator for you?

It's a huge, Ken can speak to it clinically, but just from our business, you have the leading market share product with PFA with all the ecosystem we're building around it that Dr. Stein complemented. You have WATCHMAN and the clinical data and the moat that we believe we have with WATCHMAN, CHAMPION coming out and next-gen. And if a physician can use a company with the same clinical team and the same predictive safety outcomes, it's a difficult thing to compete with, especially if you don't have an LAAC offering.

At the AHA conference in November, there were some negative trials that came out on LAAC. I mean I've published on these. I think they're very explainable, each one of them. How are you thinking about the applicability or non-applicability of, say, a closure AF and as people are obviously very excited for and anticipating the WATCHMAN trial, we should get in the first half?

Yes. And I think closure was the only one that I felt, again, was -- could particularly be interpreted as negative. I don't think it's as negative as you all believe it was, and I'll explain that. So right, closure is a trial of very high-risk patients, treated in Germany, head-to-head left atrial appendage closure against medical therapy. So first off, there's note I said -- I didn't say WATCHMAN, all right? And actually, the majority of devices in that trial were not the latest generation WATCHMAN.

There was a lot of use of a couple of our competitors' devices, both of which are known to have a higher risk of operative complications than is WATCHMAN FLX. And the trial did not fail based on efficacy, right? It failed based on procedural safety and procedural complications and postoperative bleeding. And the rates of those complications that were observed in that trial are nothing at all like what we see with WATCHMAN FLX, like what we've published with WATCHMAN FLX.

And so one thing I would say is it's our view that if that trial had been done completely with WATCHMAN FLX, there's a really high likelihood that it actually would have passed. And the nugget of positivity, and it's pretty big nugget is on efficacy, right, the stroke rate in these very high-risk patients in this randomized trial even with suboptimal left atrial appendage closure devices was identical to the stroke risk on best medical therapy. That's the first time that's ever been shown in such a high-risk population, right?

And I think actually, in the long run, supports the idea that as long as you don't have these horribly high complication rates that they had with these devices in Germany, right, that left atrial appendage closure ought to be thought of as a very good first-line option for patients who are high risk of stroke and AFib.

Are you aware if we're going to see a subgroup analysis broken out of Boston Scientific, and it's roughly 50% non-Boston Scientific devices used in the trial at any point?

Yes. I'm not aware whether that's actually going to be presented. They did not present that when they presented the data at AHA.

Have you zoomed in on whether it will be ACC or HRS where we're going to see the CHAMPION trial?

Not yet.

Not yet. Okay. Maybe moving off of WATCHMAN here and obviously, such a great growth driver. But there is the whole rest of the business and growing probably high single digits when you add it all up. And in and of itself, that's a great business to have for many med tech companies, and this is playing second fiddle. So maybe we could start. The one that gets a lot of attention outside of those 2 is peripheral vascular, and you're the leader there, arterial, venous, interventional oncology.

How are you thinking -- you've added a lot of assets here over the years. How are you thinking about the need for further innovation here? And how are you prioritizing investments? Because it feels like arterial and venous is one business. Interventional oncology, no one else really has in the medical device world. And we all ignore the drug side, but it's growing strong double digits for years and years now, and there's still a lot in the pipeline here. So how are you thinking about sort of the classical arterial and venous and then investment on the interventional oncology side?

Sure. Hopefully, we have -- we can talk about our Interventional Cardiology division, which is actually our second biggest division that's growing really impressively if we have time for that. So we love our Interventional Oncology business. As you said, it's not the traditional competitors in that marketplace. Like many of the strategies that we employ at Boston Scientific, we really drive for category leadership, so we can provide a wide range of tools for interventional radiologists and the oncology committees.

The anchor products there are really TheraSphere, which continues to do extremely well. We're broadening out with trials in Japan and China, where we're very under-indexed. So we're going to make a lot of progress in those 2 markets, particularly China in 2026 with our MANDARIN trial. We're also looking at expanding indications. We've been working on glioblastoma for a number of years now, and we continue to work with the FDA and expanding what could be a potentially remarkable indication expansion with TheraSphere in that area.

And then we round out that portfolio like we do in so many of our businesses with many other products within our interventional oncology alliance. So when they're working with Boston Scientific, they like TheraSphere as the core hub. But our coil portfolio, we did an acquisition last year. We continue to round that business out to be the supplier of choice to treat liver cancer and other cancers.

And maybe just on the vascular side of it, maybe I just want to point out, we have now initiated a limited market release for above the knee with our SEISMIQ. That's our intravascular lithotripsy device. We also have finished enrollment in our FRACTURE trial, which is the use of IVL SEISMIQ in the coronary tree. We would expect to see those results reported out second half of this year. Excited about that, excited about the possibilities with TCAR, particularly based on the latest data with respect to coronary stenting versus carotid endarterectomy. So again, a lot of opportunities across what's a very broad portfolio in our vascular therapies division.

Maybe talk to the IVL product. Docs we spoke with, I think it's very good in the periphery, but very excited for it in the coronary, and we'll get that data with FRACTURE in the second half of this year. Obviously, a very large, fast-growing market. How do you feel you compete against the market incumbent? And what's the strategy here to launch?

We are very excited about it. As Ken just said, we just finished the trial. So I think it's a 30-day endpoint. So hopefully, you'll get quite a bit more news on that in 2026. It's the faster-growing market of the 2, although we think our presence in peripheral is stronger than our competitor. So I think with our IVL product in the peripheral, it will have some advantage to us in '26 and more in 2027 as we continue to scale manufacturing.

But we know that call point better than the competition does in terms of relationships and the portfolio that you just kind of highlighted. On the coronary side, the same thing. These are our physicians that we're working with every day on our IVUS imaging platform, on our AGENT and all our coronary products. So it's a call point that we know very well. It's a product that we've worked very hard in the last 2 years on scaling manufacturing and ensuring we have the supply that we need when we launch it.

And there's a lot of differentiators that Ken can detail a bit more in terms of the number of emitters, you can turn the emitters on and off. It's very highly deliverable. And in the patients that we've seen thus far, we think this will be very disruptive to the IVL market, particularly in 2027 when coronary is approved.

I don't think very many on the street have this explicitly factored into models. Do you think this can be a material contributor in 2026? Or is this more '27 and beyond?

In 2026, it will be nice for our peripheral business. We won't have the coronary yet. And it will be gated somewhat by ramping up the manufacturing, which we've been building upon. And so by the time we get to the coronary launch, we're confident we'll have the scale of manufacturing that we need to do a significant launch, not a soft launch in '27. So there'll be some benefit in '26 and much more so in '27.

You mentioned interventional cardiology, second largest business, hard to pass it up. I just wanted to touch on peripheral first. You do have a number of drivers here. AGENT has obviously been a huge success here, and you have a renal denervation asset in development here. Let's touch on those 2 and if anything else you want to highlight. But AGENT has just been a rocket ship straight up. You are having more competition coming out across the market with a different drug coating. How do you feel about AGENT's ability to continue to grow in the face of new competition?

Well, Ken, you can detail more of the paclitaxel topic. But I think when you look at -- I'm really proud of this division, it's like many of our divisions, they continue to transform year-over-year their portfolio mix into faster-growing markets. DES is such a small piece of our -- I think it's like 2% of overall Boston Scientific now. The team created our IVUS imaging platform, which is growing strong double digits. AGENT, they did a remarkable job on the design of the product, the clinical work and establishing reimbursement, which -- there's some additional reimbursement recently in good news where physicians -- I'm sorry, in the ASCs and the outpatient settings get paid even more for AGENT.

So they did an excellent job of execution, what's really all about, and they have the richest pipeline, and Ken will talk more about your direct question. If you look at SEISMIQ, which we just talked about, IVL in 2027. If you look at the hypertension, which we're in clinical trial now, which we're excited about that market. I think there's still a lot to prove out in that market, but I think our timing is ideal. And we're also excited by Vitalyst, our circ support platform, which is our largest organic R&D investment in the company, which we're starting clinical trial in the first quarter here as well.

It'd be interesting to just compare your first JPMorgan stents as a percentage of Boston Scientific sales versus 2% now, probably 25%, 30%...

[indiscernible]

And just maybe to tie the bow around AGENT, I want to cover 2 things. So first off, there are competitive products, they're limus based. AGENT is paclitaxel. And there are a lot of really good fundamental reasons just in terms of the biophysics and the pharmacokinetics of drug delivery and duration of drug delivery that makes us think that paclitaxel is the better option for this use case.

And then also just some numbers to throw out, right? So current indication for AGENT is in-stent restenosis. It's about 10% of PCIs today in the United States. if we look elsewhere where DCBs have been used for a longer period of time, right, use can go well beyond in-stent restenosis to a variety of different de novo lesions, small vessel bifurcation, maybe even acute coronary syndrome.

We are studying the use in de novo in our AGENT STANCE trial. And if that's positive when we get the indication expansion, right, that takes you up from 10% of PCIs today to 30% of PCIs that are done in the United States. So to get back to your question, right, there's a huge potential runway for DCBs in general and for AGENT in particular, if the STANCE trial is positive.

I don't want to leave Jon quiet all at the end. But before I get to you, Jon, one for you, Mike, on just capital allocation strategy. And I feel like this is a real differentiating factor for Boston Scientific. Not only do you invest a lot in internal innovation, you spend a lot on external innovation. You do early venture investing.

We spend appropriately.

Yes, appropriately. By my math, if I think about internal and external and I try and amortize what's off the balance sheet, I'm coming out to low double-digit percentage of sales, which is well above what most other peers are spending, and it helps drive an above peer top line. So here we are over 10 years since you stepped into the CEO role and transformed from 25%, 30% stents probably up to 2% diversified the business and massively improved the top and bottom line growth. How are you thinking about Boston Scientific's ability to continue that strategy, strong internal investment, but also supplementing with a lot of external investment.

That's the DNA of the company. And it's across our global leadership team, the teams underneath them. We have an excellent innovation ecosystem. It can always get better. We can always be more effective in R&D. We can globalize R&D more. So we're always looking at ways to improve and working with many third parties as well. So we never have our last good idea. But I think that's really what's great about the company. We have a very aligned leadership team that knows these businesses so well. I believe we have the most exciting pipeline in med tech.

And I say confidently that we have the strongest venture portfolio in med tech that we've been working on for many, many years. And you've seen the history, we traditionally buy 25% of our M&A or so that's come from our venture portfolio. So it's really a combination of all those 3 is our organic R&D, the clinical science that Ken and the team push for to keep advancing us further and then the combination of M&A and venture. And you know our aim is to continue to nudge up our WAMGR and continue to highly differentiate our financial results versus our peer group and grow faster than the market.

At the same time, we have a history for the last 13 years of improving margins at least 50 bps per year every year. So it's not as if we're doing this recklessly, we have the discipline to improve margins. We're a pretty agile company given our size and our balance sheet has never been stronger.

Well, I think that's a really important point because when med tech investors see a company doing a lot of M&A, they think, oh, they're just buying growth. Yet, Boston Scientific's return on invested capital throughout this period has continued to go up. We don't see the returns on any one given deal, but you're doing so many deals, the overwhelming amount must be positive and contributing and generating above your cost of capital. So is that a fair statement to say that you are seeing a lot more wins on your acquisitions? And just maybe something on how you think about returns on your investments?

Yes. No, thanks, Robbie. We take a portfolio approach, and I think that is fair to say. We don't win them all, but I think if you look at the basket of deals that they've done, it's helped to increase our WAMGR, as Mike said, and drive differentiated growth. We look at a number of financial metrics as we're analyzing M&A. Obviously, we start with fit. But then from an ROIC perspective, it's -- we target high single digit by year 5 or sooner if we can.

50 basis points plus of operating margin expansion, I believe, is the commitment in the long-range plan. How should we think about new product contribution versus internal operational improvements?

Well, it's a little of both, Robbie. I think with new products, we've done a great job broadly on pricing as an industry within Boston Scientific, that used to be a 3%, 4% headwind each year. We target flat each year, maybe it's flat to down 1%. And then the margin profile, you look at FARAPULSE and WATCHMAN gross margin accretive and our 2 fastest-growing segments.

So that helps to drive the 150 basis points of operating margin expansion that we're looking to drive over the LRP. But then we have a number of programs in place focused on operational efficiency. SG&A in particular, we like the R&D investment between 9% and 10% of sales. It's approximately where we are today. So I wouldn't expect to see that change much over the LRP. But within SG&A, we continue to scale our centralized shared services. We're implementing a new ERP system that will drive enhanced efficiency and automation.

I'm working across the leadership team on a number of AI initiatives that we have to drive efficiency and productivity. And I think the company has done a great job of being very disciplined with discretionary SG&A spend as well. So if you go back 10 years ago, our SG&A was 37% of sales. It's around 33% today. We've got line of sight to continue to drive improvement there, Robbie. So I think it's the combination of new product launches and operational efficiency give us confidence in the 150 basis points over the LRP.

One of the other things throughout all this M&A is free cash flow has gotten materially better. What have been the key improvements over the last several years? And what are the key improvements as we look forward?

Yes, it's strong working capital discipline. So we've done a nice job of improving working capital. The focus on operating margin as we have higher OI, that helps to drive free cash flow conversion and efficiency. So it's largely that same formula going forward, Robbie. So we're targeting 70% to 80% free cash flow conversion, which is right in line with the peer set and an area where we've made very strong improvement.

What about pricing? We got a big bump in the industry following the inflationary spike in 2022. Do you think it can -- it's been flattish, I'd say, some areas above, some areas modestly below. But overall, I'd say medtech pricing has been flat. How do you feel about the ability for Boston Scientific and the market as a whole to keep pricing where it is?

It's a big focus of ours. Our goal is flat each year, Robbie. I think as you look at some of our more mature segments, China with VBP can be an area of price headwind. So if you put that all together, I like where we sit. Again, target of flat, but flat to down 1%, I would say, is what we -- what you should expect on a go-forward basis.

One of the areas that stood out versus other companies in medical devices is your performance in China and the ability to grow sustainably throughout the past half decade there, where it's been a tough market for many. What differentiates Boston Scientific as you've really just continued to grow with innovative products there?

Yes. We could talk forever about our pipeline and our venture investments, but the real credit gets to the quality of the team and the execution. And so we feel like we do a pretty good job of executing in the near term and putting a lot of energy into the long term of the company. And our China team has done just that. We have an excellent team there. We have a very diversified portfolio there. We've been able to manage VBP. So it's not going to grow the 20% it used to, but we're confident it's going to grow in the teens going forward despite the challenging market, now it's quite scaled.

So we have an excellent team there. And we are using China much more as an innovation ecosystem to assist us in certain parts of the world than we used to. So we think it's quite a strategic market. It's very competitive, very challenging, which makes it fun. But we have an excellent team there and our outlook for China, although it's a very difficult market remains quite bullish.

One quick thing I want to say about neuromod, but my ADD is kicking in. I think it's just important maybe just for a feeling of Boston. So you would look at neuromod and say not a huge business for us. A couple of years ago, you'd say this thing is kind of lagging. But it shows the execution focus beyond the long-term planning that we do is that business really continues to grow momentum. We expect to have a strong 2026, our spinal cord stimulation platform, will be a new platform coming in about 12 months.

But the combination of, again, the category leadership of Relievant, which has more than exceeded expectations and acquisition we've done, our radio frequency portfolio and this new peripheral nerve stim company that we just announced, really, again, it's similar to our strategy in interventional oncology, urology, it's having the widest portfolio. So pain physicians can count on Boston Scientific to meet any point in the customer journey and allows us to do contracts that are unique.

And so I think it's just a good example, similar to interventional cardiology. It doesn't get all the spotlight, but we have the ability to improve and strengthen businesses through our innovation and through our focus on commercial channels. So we expect that division to do well in '26.

I have a big question for a little amount of time. Let me squeeze it in here. You have a great pipeline. I think we've seen something like 3 years of pipeline at the Analyst Day. How do you feel about Boston Scientific in the 3- to 7-, 10-year time frame?

Well, I don't know if anybody else cares. We spent a lot of time on it. Our goal is to make the company everyone loves who they work for. Maybe I love too much. But we think about how to make Boston Scientific differentiated and to be the employer of choice. The employer of choice typically has a great culture component, but you also want to have financial success to reinvest. So we think about the company in that time period you talk about. That's why we have venture portfolios. That's why -- we can improve margins 50 bps per year. We're spending a significant amount of money on products that aren't going to launch until '29, '30 and '31. And so we really do think about making each quarter, but how do we continue to invest to the same formula that we just talked about. So we spend a lot of time in those areas.

Well, that's a great place to end. Thanks for a great discussion. Thanks, everybody, for joining.

Thanks, Robbie.

And here we are today to talk about Boston Scientific. Wow, you've had a big year, big 2 years, big 3 years. And I think one of the things I really would like to kick off with is sort of a view of where do we go from here? Because frequently, when I talk to investors, they know the story, thank you. They know the story, they love the story, but then there's this next phase. And you did a great analyst meeting very recently. But if you had to summarize next steps, what would you say?

What a question, Joanne, wow. Thank you so much for hosting us. Maybe I'll start and just say. Thank you for acknowledging our great Investor Day. We thought it was a great day as well. And I think our goal of that day was to leave you with not only the excitement around what we have in hand at Boston Scientific today with growth drivers like FARAPULSE, WATCHMAN and others, but really a view on the future. So that's why we have Janar here today to talk a little bit more about some of those big adjacent markets that we want to enter into. And that's all with underlying strong market growth in the procedures we treat and the relentless focus on innovation to continue to bring more value to our products, our procedures and our patients.

Excellent. Well, that just leads us straight into electrophysiology. And you have a few things going on in that area. Would you like to give us a state of the union?

Sure. The EP business, which has really had a tremendous run since our first introduction of FARAPULSE into the EU market back in '21. And as you know, we entered the U.S. market in '24 and then Japan and China subsequently. So we're growing, as you've seen in our numbers to date, probably 2x the market, driven by the ecosystem that is everything around FARAPULSE. So that is the FARAWAVE catheter, the approvals we've gotten for both PVI and PVI posterior wall said another way, both paroxysmal and persistent indications, as well as the integration of FARAWAVE into our OPAL Mapping System, which we commonly refer to FARANAV. There's a bigger ecosystem that I'm sure we'll get into.

But as an example, if you look at PFA cases around the globe, it's not uncommon for other catheters to be pulled to do other complex ablations, touchups, et cetera. And just recently, I think we posted yesterday, we got approval in the EU for our FARAPOINT catheter. So as we've said, we have pending FDA approval for that catheter, and it's great to bring the CE Mark in. And that just -- that's one small example of how our ecosystem around the FARAPULSE system will continue to increase over the next few years.

So I think most investors have it down FARAPULSE OPAL, but now we're throwing in other FARA names. So simplistically, if you were going to describe the difference between FARAPOINT, FARAFLEX, and FARAPULSE. What makes one different than the other?

So if you think of our Workhorse product that we've been marketing now for 4 or 5 years, it's the FARAWAVE catheter. It's an over-the-wire. It can have multiple configurations, a wide basket, a wide flower shape, a basket shape. It can be manipulated into what people -- some call the olive shape. That has been our Workhorse catheter that has really, in my opinion, revolutionized the way that Afib is treated around the world. I'm sure we'll go on and on about this, but extremely high usability, replicatability, whether you're doing PVI plus posterior wall with Fluoro, with mapping system, with ICE, the utility and the replicatability of that workhorse product has really driven a lot of our success.

So then to the part of your question, FARAPOINT looks like a traditional RF catheter. It is a single point catheter with multiple electrodes and think of that as your pinpointing lesions that you want to deliver, whereas with FARAWAVE, you're getting a very wide area of circumferential ablation to ablate a pulmonary vein. And then FARAFLEX, which I'm sure we'll get into, it kind of sits between FARAPOINT and FARAWAVE as a unique super high-density mapping catheter that gives you a much bigger footprint of ablation than a FARAPOINT catheter would get. So FARAWAVE, very wide area, very usable, highly applicable to PVI and broad posterior wall. FARAPOINT is like a touch-up tool. Think of that as a roller in painting versus a little art type to do touch up. And then FARAFLEX kind of sits right in the middle.

And so when you go to speak with a physician, are you selling all 3? Are they using all 3? I mean, I like the painting analogy here, but how do you think about that?

Well, today, up until whatever it was yesterday, most of our conversations with physicians around the world were FARAWAVE on the OPAL Mapping System. That's the ecosystem that has driven our success really in every market around the globe. Now we will add to that starting immediately in Europe. And hopefully, in the next -- in the short term, we'll get FARAPOINT approved in the United States. And that expands our ecosystem, which, again, the ecosystem to date has been largely use FARAWAVE to do your index PVI, PVI plus something else. And this will add the ability not to pull an RF catheter as an example, you'll be able to go to PFA for point. And all of that is optimized in the OPAL mapping ecosystem.

So at the analyst meeting, I think you spoke about 80% worldwide transition to PFA at the end of your LRP. But with this type of portfolio, why 80%? And why is it going to take to 2028?

I think it has to do with when did markets start. Really, if I had to pinpoint one answer, it's -- in Europe, it's hard to talk about Europe as a single market. It's 15 different markets that matter. But if you -- let me focus on the U.S. The U.S., as we said at Investor Day, very quickly went to greater than 50% penetration. And that's largely due to this broad applicability, replicatability of the FARAWAVE workload. So if I look at Japan or I look at China, right, it's when did they get approved and where are they on that journey. Now we're almost 2 years into the U.S. journey. We're 4 years into the European journey. So I think the rate and pace of penetration is closely tied to what technologies you have approved and what indications you have approved. So now with the approval of persistent AF in the United States and other markets, that will juice further penetration as will other products getting approved in the ecosystem that we call FARAPULSE.

So right now, most of the -- all -- it's not just most of the applications are on atrial fibrillation. And there was a little teaser at the analyst meeting about diabetes. And having been a student of med tech for a very long time, you never take technology into just one area of the human body. I've never seen like radio frequency in a narrow space. How do you think about ultimately taking post-field ablation into other applications?

Well, I'll say, first of all, we're maniacally focused on expanding it in the $13 billion EP market.

Capital market?

Yes. And that's $9 billion of AF and $4 billion of other things. So we spend the vast majority of our time on that and achieving category leadership in that space. I think we talked a little bit about some venture capital investments that we've made, for instance, in the diabetes type 2 indication. We don't really give a lot of details about those. But suffice it to say, we're looking at PFA applications in other places. But what dominates our thinking right now is how do we extend our leadership with our FARAPULSE ecosystem in EP.

And from in EP, we'll stick with that for now. How do you think about the changing competitive landscape? There will be a new market participant in the United States next year?

Yes. I mean, surprise, surprise, everything in cardiology has multiple competitors, and it's highly competitive. That's -- it's been that same way for the 35 years I've been in cardio. So that's kind of par for the course, right? So we have -- the good news in a PMA-driven market is you tend not to get surprised. So you can see what's happening in the CE Mark trials. You can see what's happening in IDE approval studies in the U.S. So suffice it to say, I think we have a very good understanding of what competition we will face and in what time frame. And so I can't do much about that other than make sure that our ecosystem, the 3 catheters that you talked about, the OPAL Mapping System, the OPAL Mapping Capacity, those are the things directly in our control that we remain super focused on.

Is there anything about what happened in Europe with competitive introduction that you can say, this is what we learned from there, and then this is how we anticipated in the U.S.

I think what we've learned, I spoke about earlier, and that is the uniqueness of the FARAWAVE flower and basket combination and its applicability to PVI, ablating pulmonary veins and doing other work like posterior wall is, I think, completely unique to FARAWAVE as a workhorse tool. And what we learned is other entrants aren't quite that extendable, replicatable in all of those use indications.

Okay. And when we think about the next wave of technology, in my investor conversations, we're spending more time on WATCHMAN. Not that this is new, but that there is some data coming out next year that people might be focused on. How do you think about the WATCHMAN franchise growing over the years, accelerating with option and then what Champion may or may not help out with?

Yes. I think we've been very consistent in saying our long-term view of WATCHMAN as a 20-plus percent growth engine for BSC depends on both OPTION and CHAMPION being positive. And obviously, OPTION this time last year was presented and published in the New England Journal. We've said that CHAMPION, which I should probably describe CHAMPION for a second because it is different than OPTION. So OPTION was a trial where we said, let's randomize all patients get an ablation. Half of them stay on anticoagulants, half of them get a WATCHMAN place. And let's see what the clinical outcomes are there.

CHAMPION does not require ablation. It takes frontline randomization, NOAC-eligible patients. Half of them stay on NOACs, half of them are implanted with WATCHMAN. And that trial, which is 3,000 patients, 3 years of follow-up, the first big, large statistically powered head-to-head trial for first-line indication. That's the CHAMPION study, and it will be presented. We haven't been super specific, first half of '26 that should read out.

And then once it is read out, assuming it is positive, what are the steps to it being implemented?

Yes. So the first thing is we have to get our label updated because today, you could say whether you look -- and I won't go through all the gory details, we are not labeled for first-line therapy in most markets. And then there's the difference between what does our approved label say and then what does reimbursement look like. And that's different all around the world. So the first thing we'll do is we'll go to update the label. So if you look at OPTION, as soon as we got that data, we began updating the label. It took us 8-ish months to get the label to include concomitant ablation.

So we'll first work on label, then we will also work on the guidelines. So the societal cardiology guidelines around the world will work with those groups to get the guidelines changed. And then we will go after reimbursement in all the major markets around the world. So for instance, in the United States, there's a national coverage decision that indicates and dictates how and when WATCHMAN is reimbursed. So we'll take a label update, guideline update, and then we'll -- again, with positive CHAMPION data, we'll negotiate with CMS to open the NCD to expand the indicated patient population. And I'll shorten this answer. So what we said multiple times is we believe that the CHAMPION indication expands the population eligible for WATCHMAN to approximately 20 million patients around the globe.

I think that's 3 or 4x bigger than our current. So that drives the reimbursement, the label, et cetera, drives nearly a tripling of the WATCHMAN TAM to $6 billion by 2030.

And what we've seen in other data presentations is once it's out there, doctors start to change their practice even before you go through the label and the reimbursement and everything else. Can we expect the same thing here?

I think so. I think people do pay attention to late breakers and it begins to change practice long before some of that happens. But I think we've been pretty clear that label guidelines, reimbursement, that doesn't happen overnight. So that's why we've been pretty focused on what does the WATCHMAN, the LAAC market opportunity look like at 2030 because I don't think I'm surprising anybody, this guidelines don't happen overnight.

I heard that. Very good. Janar, thank you so much for joining us. I don't feel like you have had as much sunshine on the Boston Scientific platform.

Okay. No problem.

That's okay. But I think maybe if you could share with us the products which are fall under your umbrella because I think those are some of the ones that are really the drivers that came out of the analyst meeting.

Yes. So I mean, I think if you look at how we view interventional cardiology at Boston Scientific, we basically try and cover every product that an interventional cardiologist may have some involvement with, and we share some of that leadership with the WATCHMAN franchise as well. But the things that we obviously cover that have been core to us for several decades is coronary therapies. Within that, we're very excited about intravascular lithotripsy that is currently enrolling in a trial at the moment with our seismic device. Of course, everyone is aware that we recently acquired an RDN device, renal denervation that also falls under our purview as well.

And we're also in the process of getting soon to start a trial next year using an LV support device, which is an in-house developed product called VITALYST, which is a pump. But we essentially cover the broad spectrum of what an interventional cardiologist does, which, as you know, if you give us a wire and a balloon, we'll take it anywhere.

I like that approach. But let's start first with the seismic device for IVL. Can you remind us of how you think about that clinical trial, the market opportunity and being a disruptor in that space?

Yes. So maybe I'll start with the market opportunity first because that's how we've approached the device and the product and where we see IVL fitting in. When we met at Investor Day, we talked about where we view IVL. We have been very, very maniacal and Joe talked about surrounding the EP with an ecosystem. It's no different for us in interventional cardiology. In coronary therapies, interventionalists want a toolbox. They want a lot of different tools, right, imaging, different options to treat and prep of the lesion is very key to that.

So we structure our portfolio and our investments and how we educate with a moniker of C, PrEP and treat. And within the PrEP box, we focus IVL as being one of the 3 tools that we will have, hopefully, for calcium, which is cutting balloon, rotational atherectomy and IVL. So seismic is a tool that we're very familiar with. It's a product that was developed internally at Boston Scientific, and it's a reflection of our investment and innovation in that space. But the catheter has some unique features in that it's got 2 sets of emitters at either side of a balloon. There's 4 emitters at each of those points. And so it allows circumferential delivery of energy. The energy is delivered using laser and think of it a little bit like an earthquake. So it creates a little explosion in the balloon and the waves are what go out and crack that calcium.

And the reason that's so important is that if you look at our practice and therapy in the cath lab that's changed is our patients are getting more and more complex. And what is the enemy of the interventionalist in the cath lab is calcium, which at least roughly about 1/3 of patients that come to the cath lab have calcified coronary artery disease. And that number is only going to increase as our patients are getting older with more comorbidities, more renal failure. So we see that as being a very important toolbox to have. The product also has some other differentiating factors in that it's got very visible emitters. And so you can see it very easily. Deliverability so far has been very promising. And we also have seen some early promising signs about efficacy of the product, which, of course, is important to physicians.

And what is the time line to bring it to market and for us to see the clinical data?

Yes. So we're currently enrolling in the Fracture IDE study that's well into enrollment. We anticipate completion of that in Q1 of 2026, and we're looking at a commercial launch in the coronary use of the product in the first half of 2027.

When will we see the data?

It will be next year.

Next year. First half of '26, first, second half.

We haven't made a decision yet as to which meeting it will be, but you will see the data in 2026, the 30-day endpoint.

Very good. And that brings us to some of the products that you're working on also in renal denervation, and that came through an acquisition. And what made that the right acquisition at this time? And also, I'm going to add to that, I have a memory of Boston Scientific having a renal denervation program way, way long ago. Why is this the right technology at this time?

Yes. So if you look at the history of renal denervation, as you know, it's not been a straightforward road. It's been an incredibly bumpy road for anyone involved in the space. And we similarly evaluate different spaces all the time and our viewpoint changes with regards to it. And the clinical data has evolved over time and become much more promising. This particular asset has been part of our VC portfolio. It's -- we like to take investments in bets and innovation. And the reason we keep came back to this is that hypertension is incredibly common in our community. 1 in 4 adult Americans have hypertension.

And for anyone that's tried to lose weight with lifestyle medications, and I mean, put your hand up if you've ever completed a course of antibiotics, I certainly haven't. But medical therapy is challenging for a lot of patients in terms of compliance. And so having a device-based therapy provides another option. And it's an opportunity to treat quite a lot of patients, which is why we went back to it. This particular technology is ultrasound-based in terms of its energy, and we feel pretty compelled that, that is a pretty efficacious way in order to denervate the arteries compared to radio frequency. And one of the reasons we like the product as well is the ease of use. It's an incredibly simple device to use.

I mean we chatted about it at Investor Day. It's probably one of the few products in interventional cardiology is one moving part. There's nothing to really do with it. It's a single device can be used for all patients. You don't have to size the vessel. And so ease of use is also another thing that really attracted us about this particular asset.

So why is ultrasound better than RF at this stage?

Yes. So I think for a couple of things in that with this particular technology, ultrasound has the potential to have a greater depth of penetration. And if you look at radio frequency ablation, I mean, you made the comment, we take these technologies in different spaces. Radiofrequency ablation needs to have some particular planning and application of where you deliver the energy. You have to be very precise about it, no matter whether it's in the renal artery or somewhere else in the body. The benefit of this is that there's less operator-specific use for it. You just place it and this -- the ultrasound is circumferential. And so it's less operator specific in terms of technique, and that helps you in terms of ease of use as well.

So anything in the reimbursement -- CMS reimbursement guidelines, which came out recently that you were like, yes, that works for us or anything that caused you pause as we relate to renal genervation?

I think the recent NCD recommendations were similar to what they had kind of proposed earlier on. So there wasn't necessarily a big surprise to what they had shared earlier. Just to look at what they've shown was patients with uncontrolled hypertension, they need to have a single physician that sees them over 3 different visits over a 6-month period. You have to fail very similar to other therapies, which is you have to fail lifestyle intervention, medical therapy and then you become eligible. So it's a fairly standard process for routine care. I think what we'll have to see is how this impacts access in terms of the center availability.

But in terms of the patient journey, it's very similar. And we were very reassured that there were also virtual options for visits put in there because trying to see a physician sometimes in person can be tough for patients.

One of the things which comes up, and this is going to impact both of our conversations is having enough access, enough access to a cath lab and enough access to mappers. How do you think about these as hurdles for both of your franchises in terms of utilization and moving things forward?

Well, I think they're radically different. I'll let Janar comment on the hypertension capacity question, EP. If you look around the world, every market is dominated by very large teams of mappers in electrophysiology and a very large footprint of mapping systems. So we get asked the question a lot, like, well, what is BSC doing? Because I think it would be fair to say a few years ago, we didn't have a whole bunch of mapping capacity, and we didn't have a bunch of install. Well, the good news for us, as soon as we kind of knew that the U.S. approval was imminent, we began with a very strategic and tactical program to significantly expand our mapping capability and capacity.

What does that mean? Think of that as hiring multitudes of hundreds of mappers beginning in late '23. So if you look today where we are 24 months later, we don't give specific numbers, but we have dramatically increased that capacity, both people and systems to have the OPAL, FARAPULSE ecosystem available to accounts all over the world. So -- and I'm sure we'll get asked, I don't know if we said it before, but compared to where we were, which wasn't that great, 2 years later, we have significantly expanded both the capacity and capability of our FARAPULSE OPAL ecosystem.

Yes. I think when you think about hypertension, coming back to that about the long journey of RDN. I think the way that we view that particular market is before we start thinking about access, which, of course, will become an issue to address. But I think before that is also just making physicians and patients aware of the therapy. So there's going to be a significant amount of therapy development that will be needed for that space, very similar to the journey that we went on as a company with WATCHMAN, right, educating patients about the options.

And we view that space as being a very similar kind of thing that we will need to do and contribute to the space, which is educating both the referrers, but also the patients themselves about the therapy. The capacity side of things, this is, again, another reason we like this particular asset. It's not a complicated procedure to do. The infrastructure and ecosystem of the device itself is very small in terms of footprint. The equipment and workflow needed is very similar to any cath lab. So any interventional can learn this and do this in a standard cath lab setup. There's not a lot of accessory equipment needed. So it fits into the regular workflow very easily as a procedure.

Both of your procedure buckets, and I'm speaking big picture here, are mostly hospital-based, but we keep seeing more and more moving into the ASC, including the opportunity for PFA being moved into the ASC. How do you think about that trend or flow over the next few years?

So it's very clear, and I think CMS reiterated this in the latest outpatient that their goal is to take all of the inpatient-only procedures and move them to outpatient. Stated goal of CMS, we applaud that, and we have to prepare for that. With that, you have big markets, big procedural base like all PCI and all ablations have now been approved to move to the ambulatory surgery center site of service. So we have to think about the ecosystem that we sell into that environment versus an inpatient only.

And I really applaud our teams because that's probably going to look a little bit different when you think about ablation procedures than what the physician, what the site gets to use in an inpatient only. So deeply embedded in our strategy is if that different -- if that ecosystem of products and what's wrapped around the procedure is different, we have to be prepared for that. And I for one in the EP space, feel very confident that we've got a very broad spectrum of things that we can sell into each of those inpatient, outpatient and ASC environments and contend for leadership.

And maybe just to add a little bit on the logistics of moving to ASC for ablations. There's roughly 5 states today that have the cardiovascular ASC and are unencumbered by a certificate of need. And therefore, you're likely to see some movement sooner there. But broadly speaking, this will take time and won't be necessarily an overnight. But as Joe said, we see Boston Scientific's portfolio of products as being uniquely suited to do really well in that ASC space, and we've been preparing for that.

Excellent. Cardiac Rhythm Management is a space that I felt like I stopped talking about for years and suddenly, I'm talking about it again. At Boston Scientific, how do you think about the newer products which are being introduced and some of the market share shifting and growth dynamics of the subsector or the subdivision?

Yes. So if I think about the CRM global market, it's admittedly the lowest growth market that we compete in -- in cardiovascular. However, I think it's also fair to say that we have fallen behind that market growth. And that's largely due to our product portfolio. If you look at the big categories that have driven the CRM market growth, 2 of them are conduction system pacing and leads, right? So conduction system pacing, the good news for us is we got most of our conduction system pacing portfolio now is approved in the United States and most recently got approved in Europe.

So that's a gap that we are in the process of filling. If you look at leadless, which is our both Empower and modular systems, those are in at review at FDA. We don't have approval today, but that will allow us to create an offense in leadless. The other thing that we talked about on the call, I think, the Q3 call is -- and I'll try to make a very complex project, very simple and short. For us, about once every 20 years, we have to do a complete revamp of our CRM portfolio. The last time we did that was in 2006, '07, '08, where we launched COGNIS and TELIGEN. That was a complete reboot of our CRM portfolio.

So we started that program about 5 or 6 years ago. I think Mike referenced it as Denali. That's just the internal name, that's not the product name. So we are now in the very late innings of finishing that next-gen CRM total reboot. So think about every active implantable cardiac rhythm management device that we sell, everything from pacers to CRT-D is in a complete refresh. While you're doing that, you probably starve the business a little bit for some of those things that you'd like to deliver to the market, deliver to your sales team.

But the good news is we're in the very late innings of finishing that program. So when I think -- when you look at the long-range plan that we talked about in September, right, you saw us committing to at or above market growth. And a big part of that is the fact that we will have that once every 20 years CRM platform delivered in the long-range plan. We just filled, as I said earlier, the conduction system pacing gaps. And then we're on the cusp of getting our leadless EMPOWER platform approved.

Excellent. I was surprised might be the right word at analysts say back into structural heart, back into not the WATCHMAN side of structural heart, but the TAVR mitral tricuspid side of structural heart. I guess it goes into the topic of there's more to come maybe. I'm not sure how to interpret that.

Yes. So that was a VC investment and TAVR, mitral and tricuspid. So nothing specific. But I would say, in general, we've said if we have some history with TAVR to say the least. And if we were to get back into TAVR, it would have to be a highly differentiated product that would allow us an opportunity to be more of a leader than a follower. We have a lot of different opportunities across the portfolio to invest in, and that might be an area of interest for the company.

The analogy I draw is there's no way our interventional cardiology broad coronary therapy, structural heart. There's no time on earth where we're going to ignore an $8 billion to $10 billion segment like structural heart. At the other end of that spectrum, I'll give you an example. So if you look at our electrophysiology business, there's a segment within the $13 billion market that is imaging, basically 2D and 4D ICE. That's probably a one point -- plus $1 billion segment that we have not been in, but we've recently introduced 3 or 4 ways that we're going to get into that market. So that's a good example of where we relentlessly pursue category leadership.

So there's no way our EP business gets a pass and says, "Oh, imaging, $1 billion -- whatever, $1.3 billion, we're really not interested in that." If it's a big component of the procedure and the ecosystem that the physician uses, we are focused on that. So you'll see the CHORUS introduction in second half, that's our 2D ICE. You just saw our 4D ICE partnership with Siemens, and we've been public about our AI partnership with Anumana to take to another level the ability of things like 2D ICE or TEE to help support both structural and EP procedures. So that's a really here and now example where we've been very public about those 3 or 4 things that we have planned to enter and disrupt the $1 billion-plus imaging market in the EP structural space.

There you go. I think we have time for 1 or 2 more questions, but I'm going to actually pivot slightly to artificial intelligence and how you think about applying it into the organization, product development? And is it something that becomes a revenue stream, a product or just something that makes it easier to get through approvals?

I think because we already have approval for it, Janar, why don't you talk about imaging and how we're using AI there, and then I'll talk about EP.

Yes. I mean within our franchise for interventional cardiology, when you look at our portfolio, we launched our next-generation IVA system AVVIGO+, and that has artificial intelligence integrated through it. So think of it a little bit like your iPhone. You get a software update every couple of years. That's our intent with this device in this product is that the artificial intelligence component of the imaging system makes image interpretation easier for the physician. So each time, every few years, they'll get a new update where the assessment of the lesion, vessel sizing, stent placement all becomes quicker, easier and more efficient for them in the lab.

Artificial intelligence is something we're highly focused on as a company and the other way is internally in terms of improving efficiency within our teams. It's a tremendous opportunity for any industry. So we're looking at it not just within our product portfolio, which is key, but also just within how we run teams and trials and even just efficiencies across our workforce.

And on the EP side, you'll see in 2026 AI applied to transesophageal echo to support the WATCHMAN procedure. And then later on, after we get CHORUS approved, which is our 2D ICE, '27 and beyond, you'll see AI doing image interpolation, image creation to facilitate ablations. Those will be our first 2 moves using AI.

Excellent. And then my favorite question, as I always close out, when we're together here next year, what do you think we're going to be talking about?

What I hope we continue to talk about far, far into the future is how well the category leadership strategy at Boston Scientific plays. And it doesn't matter if it's neuromod, neuro, EP, interventional, endo, right, our game plan of committing to category leadership. And that goes beyond -- oh, we just want to be a leader in endoscopy. No, we want to be a leader in any major category that defines the endoscopy space. So what the heck am I do when talking about endoscopy? Well, it's the example because under Mike's leadership, our category leadership, which drives our tactical go-to-market commercial strategy, it drives our internal R&D innovation machine, and it also drives our extensive investment in innovation through VC bets early ownership interest in technology. So we think that's really driven our success over the last 10-plus years, and there's no intention to change that when you look at the next 10 years because why it works. We think it works.

Janar?

So I think we gave a little teaser of this at Investor Day. And obviously, being a clinician, I'm biased, but I think we chatted about this earlier. I think next year, we'll be talking a lot about clinical trials. You're seeing that major trials like CHAMPION or anything that's a late breaker really has a tremendous opportunity to change practice, change markets, change how patients are treated. And we, as a company, whether you look at any aspect of our divisions, we're investing a lot in science, right, in interventional cardiology or EP, whatever you look at it. So we have a number of trials coming up next year, the few years after that. And I think we'll be spending a lot of time talking about that next year.

Wonderful. Joe, Janar, Lauren, thank you so much. Thank you for joining us here, and I hope you have a great day.

Thank you. Thanks, Joanne.

Good morning. Welcome, everybody. Day 2 of the Wolfe Research Healthcare Conference. I'm pleased to start the day in this session with Boston Scientific. From the company, we have Chief Medical Officer, Dr. Ken Stein, and Head of Investor Relations, Lauren Tengler. Ken and Lauren, thank you for being here. Welcome.

Thanks, Mike.

Thank you.

I look forward to the discussion. We have a lot to get through. For those that don't know, Dr. Stein is an electrophysiologist. And so we're going to start our discussion focused on growth drivers, WATCHMAN in the ablation portfolio. But if we have time, we're also going to get to the broader Boston story on innovation.

So with that set up, Dr. Stein weekend before last, I was a little worked up -- AHA, some data. Specifically, I want to start with this closure trial. And it was a negative trial for LAAC. The device arm did not meet non-inferiority to best medical therapy. I want to get your top perspective. What are the major caveats of this study? And why don't you think this is going to influence real-world practice?

Yes. Thanks, Mike. So AHA, lot of good data, some data that's good. Let's talk about closure. And I want to talk about, as you say, the caveats in interpreting it. I also don't want to lose sight the fact that there was one piece of really good news in closure sort of buried in it. So I want to excavate that at the end. But failed to meet not inferiority in a very high-risk patient population that was treated over a very long time in Germany with some very old devices. Closure failed not because the device didn't prevent stroke, and I'll come back to that, right? It failed because there was an extraordinarily high rate of procedural-related complications and early bleeding with left atrial appendage closure.

Now really important to note that I just said with left atrial appendage closure, I didn't say with WATCHMAN FLX. Only half of the devices in this trial were WATCHMAN devices, right? The other half, some of our competitors' devices, including first generation as well as second-generation Amulet, including LAmbre, these are devices that are known to have a higher risk of postoperative bleeding specifically then WATCHMAN FLX.

And even with the WATCHMAN devices, many, if not most of them, were early generation WATCHMAN and not WATCHMAN FLX. We're just going on the presentation. It hasn't been published yet, but my take from the presentation is that if they had used WATCHMAN FLX and if they had the rate of post-operative complications that we see in the real world with WATCHMAN FLX that, that actually would very easily have met noninferiority.

Second thing to pay attention to, because the time over which this trial was done, a huge amount of the patients in the trial were treated postoperatively with a medical regimen that's called dual antiplatelet therapy. And more recently, again, very clear evidence that postoperative regimen is also associated with worse outcomes with more bleeding than when patients get covered with one of the novel oral anticoagulants for that short postoperative period. So again, if not for that, and postoperative complications, we feel very comfortable that this device would have -- this trial would have hit its endpoint.

And then I want to come back to where I started, right? So what's the good news to excavate from this? Well, really one of the first times in a randomized trial in an extraordinary narrowly high-risk population, right? Even using some of these legacy devices, there was an equivalent rate of ischemic stroke comparing left atrial appendage closure to best available medical therapy. And that's something that the critics of WATCHMAN have never ever acknowledged. And we've seen that now in multiple other data sources, real-world data, things like PRAGUE-17, things like the OPTION trial to show it in this high-risk population, actually, I think it's actually a really extraordinary positive.

Good color. I'm going to follow up on PRAGUE-17. So also a mixed device trial. Also, we believe, used a lot of DAPT post-procedurally. But this produced outcomes for lack that were much more flattering, almost opposite to what you see in closure, now slightly lower risk profile in PRAGUE. But how do you bridge that to closure? What operator inexperience and closure or can't tell yet because the manuscript isn't published?

The answer is -- I don't want to pin it on the operators. The higher-risk population you're treating, the higher the likelihood that you're going to have these postoperative complications, bleeding, et cetera. And I think that's probably the most likely explanation for the difference between that and some of the other trials.

Okay. We're going to move to the -- it was OCEAN at AHA and then I'm going to drag in along, I think they're thematically similar. And my worries aren't as high on this, it seems to be a lower risk population for sure. But just remind the audience kind of why no drug or drug light post a successful ablation is not a strategy that meaningfully impairs the WATCHMAN growth vision?

Yes. I -- not only do I not worry about this trial, I love these trials. I think they're fantastic news for patients. I've had atrial fibrillation. I've had ablations, so they are pertinent to me. I think they're also really good news for us as a company because I think they're helpful for our Diagnostics division and certainly for our EP Ablation division, and I have no concern at all that it's going to -- that they're going to impair our ability to get that consistent double-digit growth for WATCHMAN.

So why? So what both of these trials showed, I think pretty conclusively that if you have a low-risk patient population, and they undergo catheter ablation for atrial fibrillation and they go at least a year after the ablation and don't have a recurrence that they are at very low risk of stroke and probably don't need any long-term anti stroke strategy.

But, right, the 2 big caveats there are these are very low-risk patient population. 1/3 of the patients in OCEAN had a CHA2DS2-VASc score. That's the risk score we use in evaluating whether the patients need therapy of one. Those patients have never ever had an indication for lifelong anticoagulation, post AF ablation. In fact, the OCEAN strategy for those patients, 1/3 of the patients in the trial is more conservative than what docs were doing pre OCEAN, right?

Because you would just stop anticoagulation after -- 2 months after the ablation in those patients. Another 1/3 of those patients CHA2DS2-VASc score of 2. So these are not the patients who are getting WATCHMAN today. So with the OPTION trial, the average CHA2DS2-VASc score in OPTION 3.5. If you look at our real-world data, with WATCHMAN, you see average CHA2DS2-VASc of 4.5. These are not the 1s and the 2s. So we really saw no impact on WATCHMAN growth after the publication of a lone AF. Remind everyone that came out in August of this year, don't expect to see any impact.

But what it does do is it gives patients another reason to come in and get AF ablation in the first place. When I was in practice, which is pretty much a stone's throw from here, half of the patients who would come into my office asking about ablation, wanted the ablation solely because they wanted to be able to come off their anticoagulants. And I just always had to say to them, well, I understand that you hate these medicines, they're awful to take over the long term. But I can't tell you that just having the ablation would enable you to do that.

Now if you're at low risk, I can say that. So we see this as sustaining the high-growth in EP that we laid out at our Investor Day a couple of months ago. We see this sustaining the growth of our Diagnostics franchise as you look now at a real reason to have to monitor these patients, make sure they're not having recurrences of AF but really don't see any reason to worry about an impact on the growth of WATCHMAN, whether it's concomitant procedures or standalone.

That's good. I'm going to -- that was a complete response. I'm going to avoid the follow-up here in the interest of time. There's a lot to get to. Let's go to CHAMPION. Easy first one, do we have a date yet?

First half of 2026, aiming to present it at one of the major scientific conferences in that time frame.

And this would be AF Symposium in February, ACC March, HRS in April would be my 3 candidates?

Those are the 3.

Okay. All right. We all stay tuned. I think the recent message on CHAMPION, I feel like is emphasized, like we're really encouraged by the contemporary real-world data we're seeing in WATCHMAN. So every reason to believe this is a successful trial. But the shift to -- the focus has turned towards kind of commercial real-world uptake. And I feel like the company has emphasized a little bit more, while we'll also need some reimbursement frameworks adjusted guidelines changed.

And as I watch med tech, I feel like doctors move ahead of formalities all of the time or -- maybe not all of the time, often. And this feels like one of those situations. So why -- maybe what needs to happen here on the reimbursement and guidelines front that is important for the next wave of WATCHMAN? And do you really think that this is something where data turns over, practice doesn't adjust until those formalities do?

Yes. There are a couple of things that will come into play should CHAMPION be positive. And obviously, we don't know. We're still blinded to the results. And so let me maybe break out 3 different effects that a positive champion could have that, again, enable that sustained market growth that we've talked about. One is just reinforcing confidence in the current indication. There are devices still underpenetrated into the current use case as second-line therapy. And there are plenty of people who are enthusiastic about it. There are still some of these boobirds on the sidelines. And I think a positive CHAMPION helps bring that in.

In the U.S., perhaps as important internationally, where use is much more restricted today than it is in the United States. And that's the sort of effect that you can see, again, relatively quickly ahead of anything else. The getting into the first-line use case, which is really what CHAMPION is studying, right, is this a first-line alternative, the best available medical therapy. That would require a change in the label for us to be able to promote it, would require a change in the United States to reimbursement. And this is governed by a national coverage determination under Medicare. And so you really can't do that in the U.S. today and get reimbursed for Medicare. And docs will do a lot of things off label, but not things you don't get paid for.

And maybe I can give a little bit more on just the logistics of that. So we like the approach because it does give us a sustained 20% grower in that WATCHMAN business. So just for logistics and for our proxy, took us about 7 or 8 months to update the label on WATCHMAN with the OPTION data. And then once we have that label update, we can go to CMS and ask for the NCD to be opened up, and they have up to 12 months to rule on that. So that's sort of the time line that we're talking about.

Only clinical data so far. So let's go to numbers. So WATCHMAN is accelerating. After all that, sorry, but just market likes to look ahead. WATCHMAN is clearly accelerating in the U.S. The message has been this is concomitant on the heels of OPTION primarily. So my question, what do you think is really going on? Kind of is it simply the high risk for stroke ablation patients are now being offered WATCHMAN 2 for 1, and you think that is kind of really what's revitalizing the rate of growth? Or is it something else?

Yes. I prefer vitalizing to revitalizing. I don't know that it needed to be revitalized.

Okay. Okay. Fair enough.

Yes. I mean certainly huge growth in the concomitant procedures since the publication of OPTION and concurrently with that publication but getting good CMS coverage for those procedures in the hospital, Lauren remind me, what proportion of our WATCHMAN implants today are concomitant?

Exiting 2025, it will be 25%?

And I think it is pulling in patients who otherwise would not have been referred for WATCHMAN very clearly. Again, when we look at our data pre OPTION, about 10% of WATCHMAN patients had an ablation in -- within a year of the WATCHMAN procedure. And so I think it's really clear that these are patients who are not immediately plan to have a WATCHMAN. There is also an interesting other phenomenon, which is as much as it's helping to continue to vitalize WATCHMAN growth, it's also part of the story of the ablation growth.

Because we're also seeing patients who are getting referred in for WATCHMAN, where the EP is saying, well, as long as we're under the procedure, now with something that's as safe and effective and predictable as FARAPULSE, let's also give a try at ablation where I think in previous years, you would have just gone ahead and done the WATCHMAN and not had the attempted ablation.

And just for numbers, Mike, maybe -- so there were 4 million patients indicated under the original NCD for WATCHMAN globally. Roughly 50% of those are in the U.S. With OPTION, you've got another 1 million to 2 million more patients now indicated for WATCHMAN. And again, roughly half of those are in the U.S. And one other step that I find really helpful because we get asked a lot around what can concomitant get to, just recall in the U.S. 60%, 65% of procedures are done by the EP who also do ablations. The rest are done by ICs who just do WATCHMAN and don't do ablations.

It sounds bidirectional if you were to hazard a guess, is WATCHMAN better enabling ablation or is ablation -- the ablation flow opening up WATCHMAN or difficult to tease out?

Yes. I don't -- again, I think it's bidirectional. It's FARAPULSE, right, enables you to do more of these concomitant, what we're calling FARAWAVE procedures, I won't do that.

Not yet.

Not yet.

[indiscernible].

The -- it's a very diminutive term when you think about it. So it goes both ways. Again, it's FLX, FLX Pro, the predictability and safety profile of that device, the unique data that we've got with FLX from OPTION but also FARAPULSE. I think in an earlier world, if this was an RF ablation taking a couple of hours with a variety of risks. And if this was earlier generation devices that are a little more complicated to use, you would not see the kind of growth that we see today.

All right. Let's go to PFA. The company has described PFA penetration globally, 50%. My team and I were trying to figure out the U.S., where are we? Our best guess is it's going to be above that, maybe 60%. But I think it's important for folks to understand. When you -- your denominator here excludes redos. I think that's an interesting confirmation just for market penetration? Is that right, Lauren?

We don't have indication for redos.

So this 400,000 U.S. AF ablation number that has been recently cited, that's a de-novo estimate?

Yes.

Okay. So I think Dr. Stein the question for you is, one, do you agree that the U.S. is maybe in '25, a little bit higher than this kind of global 50%?

Absolutely.

And tour us around the different use cases, kind of de novo paroxysmal, de novo persistent, some of the off-label stuff, what are you seeing in terms of use rates across all the different types of patients in for FARAPULSE today?

Yes. So again, we're seeing a high degree of use for FARAPULSE both de novo paroxysmal, which was our initial label indication and de novo persistent AF. And part of that is the catheter is just really beautifully designed both for doing pulmonary vein isolation, which is the standard of care today for paroxysmal AFib and posterior wall isolation, in addition to PVI, which has become the standard of care now for persistent AFib. And actually, we're seeing a striking amount of posterior wall isolation, even in the paroxysmal population today.

Historically, right, the market is broken down, call it, roughly 2/3 of cases being de novo ablation, roughly 1/3 being redo. And we are studying the combination of FARAWAVE catheter and FARAPOINT catheter -- FARAPOINT, we pay people to name these things. But FARAPOINT, in redo patients in a trial called REMATCH, I think the redo population is important. It's also part of the reason that we acquired an AF mapping company called Cortex that actually uses an AI-based technique to identify AF sources that we think may be particularly useful in a tough redo patient.

And we recently began enrollment in our -- that device is FDA cleared already, but the data are pretty scanty at this point. So we did recently begin enrollment in a large-scale randomized trial to, again, convince every one of the utility of that technique.

What I do want to emphasize, though, because I don't know that the community recognizes it, is that 2/3, 1/3 breakdown is historic at this point. When we look at our data with FARAPULSE, our published clinical trials and our real-world evidence, we are down to single-digit level redo rates when people get their de novo ablation. And so I also do think that it's predictable that the market is going to switch from this 2/3, 1/3 to a mix that's much more heavily weighted by de novo.

Some way it's very similar to what happened with coronary intervention a couple of decades ago with the introduction stents and then drug-eluting stents, where you went from these very high redo rates with planal balloon angioplasty now to very low red rates with coronary intervention. And I'd expect we're going to see something similar with AF ablation.

Is that single-digit rate, something measured out one year in your internal data?

That's measured one year.

Okay. Helpful. How about mapping OPAL is one of the growth drivers here. Historically, Boston hasn't had much share, if any, in mapping to large incumbents that holding on and navigating the shift to PF on the ablation catheter side for now. Why will OPAL win now?

I think OPAL is becoming an incredibly competitive system, and it does offer some unique advantages versus either the incumbent mapping systems. First off, it is the first system that really was purpose built around PFA and purpose built around FARAWAVE. So it does give much better catheter visualization than either of the competitors that are on the market, it does give the ability to actually understand where the PFA energy is going to intersect tissue. And so we have what we call field tags. So docs before they give the energy delivery really know that they're going to be ablating in the area exactly where they want. Our latest software release adds contact sensing to that.

And I think one of the things that people are going to find particularly as ablation start to move into an ASC environment, ambulatory surgical center environment, is that being able to provide safe procedures predictable procedures, but also cost-effective procedures is going to become really important. And the ability to do a FARAWAVE procedure map it on OPAL without having to pull out any additional hardware, any specialized mapping catheter, makes it an incredibly attractive economic offering to physicians and hospitals.

We have 5 minutes. There's so much that we could get to. I want to ask on PFA competition. Your peers reported this morning, this discussions is competing with their call classic. I don't make the calendar. How do you see their best product coexisting with your portfolio in the market? I mean is it the lines are well drawn and defined, and this is a major rising tide and there was room for more than just one player to participate? Or do you find that -- it is incremental tension for FARAPULSE's ability to continue gaining share?

Yes. I think -- first off, rising tide does lift all boats, and the AF epidemic is so huge and ablation today is so underpenetrated. The market growth itself is a really important driver for us. And in some ways, maybe more important than share. I'd also say their use case right now is very different than FARAWAVE. It's still a point by point ablation paradigm, which is, frankly, it's tedious, more expensive procedure. Where they're seeing a niche today is in the redo cases. We think we've got a very compelling competitive offering when it comes to redos. But if I got to win somewhere, I'd much rather win in the much bigger market, which is de novo ablations.

Okay. Lauren reminded me that you're the Chief Medical Officer for all Boston Scientific. So we're going to get out of the EP lab. I am going to stay in cardiology, one, renal innovation, potentially a big growth area for the industry. You won't be the first mover, but you might be a fast follower. Ultrasound could be a better mousetrap. What gives you confidence the safety box will be checked for your device, no cooling system, just using natural blood flow. I'm interested in what can I go dig up on the interwebs that is going to make me feel good that this will work on the safety side of things?

Yes. So right, the ultrasound catheter, the company that we bought is unique. I think first of all, as you said, I think it is a better mousetrap. There's a lot of reason to think that ultrasound is a better technology for doing denervation as opposed to sort of getting back to the bad old days of RF. We've got a huge amount of experience in other vessels that says that high blood flow can cool sufficiently to avoid endothelial damage. And the thing that is unique about the TIVUS approach. That's the company that we bought, right, is it has these fins that stabilize the catheter within the vessel so that you can deliver the ultrasound energy without occluding blood flow.

The ultrasound catheter is on the market has to use a balloon to stabilize itself in the artery to deliver the ultrasound. And as a result, occludes flow, so heating is a real issue. But flow in the vessel, right, is so fast. And again, you're bringing blood that's heated at 98.6 degrees, right, that's constantly cooling. And I just say we've got a very large experience with other energy sources like RF that heat and in other areas, including intracardiac ablation that say that, that kind of cooling is absolutely sufficient.

Two minutes, a final word to you, Dr. Stein, 3 things elsewhere in the portfolio, Street sleeps on -- okay, 4, you are really excited about?

AGENT Drug-Coated Balloon, that's also a phenomenal product for us, has had a phenomenally successful launch, shouldn't get lost in all the appropriate excitement about FARAPULSE WATCHMAN. Looking forward, both getting into intravascular lithotripsy for calcified coronary lesions, having a fantastic competitor, shockwave. And then I think, outside of cardiology, the 2 things -- it's like naming like your favorite children, I'm going to stop with 2 other things because I'm looking at the clock.

Our endoluminal bariatric surgery within our Endoscopy division. I think having the only devices right now that are FDA cleared for doing endoscopic bariatrics is extraordinarily important. I think the GLP-1s are our best friend in really bringing the forefront the importance of treating obesity and the downstream effects that has on health overall.

And then I'd also say our Interventional Oncology and Embolization division and the opportunities that we've got, particularly with our Y-90 beads for treating a variety of solid tumors. I think really exciting in terms of where we're going to be not just over the next year or 2, but really over our long-range plan and beyond.

That was excellent. We packed in a lot, five seconds to spare. Dr. Stein and Lauren, thank you for being here.

Thanks so much.

Thanks, Mike.

Good morning, and welcome to the Boston Scientific Third Quarter 2025 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Lauren Tengler, Vice President, Investor Relations. Please go ahead.

Thank you, Drew, and thanks to everyone for joining us. With me today are Mike Mahoney, Chairman and Chief Executive Officer; Jon Monson, Executive Vice President and Chief Financial Officer. During the Q&A session, Mike and Jon will be joined by our Chief Medical Officer, Dr. Ken Stein.

We issued a press release earlier this morning announcing our Q3 results, which included reconciliations of the non-GAAP measures. The release as well as reconciliations of the non-GAAP measures used in today's call can be found on the Investor Relations section of our website. Please note that on the call, operational revenue excludes the impact of foreign currency fluctuations, and organic revenue further excludes certain acquisitions and divestitures for which there are less than a full period of comparable net sales.

Guidance excludes the previously announced agreement to acquire [ Nalu ] Medical, which is expected to close in the first half of 2026, subject to customary closing conditions. For more information, please refer to the Q3 financial and operating highlights deck which may be found on the Investor Relations section of our website.

On this call, all references to sales and revenue are organic, and relative growth is compared to the same quarter of the prior year, unless otherwise specified. This call contains forward-looking statements regarding, among other things, our financial performance, business plans and product performance and development. These statements are based on our current beliefs using information available to us as of today's date, and are not intended to be guarantees of future events or performance. If our underlying assumptions turn out to be incorrect or certain risks or uncertainties materialize, actual results could vary materially from those projected by the forward-looking statements. Factors that may cause such differences are discussed in our periodic reports and other filings with the SEC, including the Risk Factors section of our most recent annual report on Form 10-K. Boston Scientific disclaims any intention or obligation to update these forward-looking statements, except as required by law. At this point, I'll turn it over to Mike.

Thanks, Lauren. Thank you, everyone, for joining us today. Our quarterly results again exceeded our expectations led by our innovative portfolio, strong execution and a winning spirit of our global team. In third quarter '25, total company operational sales grew 19% and organic sales grew 15%, exceeding the high end of our guidance range of 12% to 14%, with sustained high performance in both our Cardiovascular and [ MediServ ] segments.

Q3 adjusted EPS of $0.75 grew 19% and exceeding the high end of guidance range of $0.70 to $0.72. Q3 adjusted operating margin was 28%.

Turning to our fourth quarter and full year '25 outlook, we are guiding to organic growth of 11% to 13% and for fourth quarter '25, which implies an increase to our full year '25 guidance to approximately 15.5%, reflecting our confidence to sustain above-market growth. Our fourth quarter adjusted EPS guidance is now $0.77 to $0.79 and we are thus raising our full year adjusted EPS guidance to $3.02 to $3.04. And representing growth of 20% to 21%. Jon will provide more details in the financial section.

I'll now provide some additional highlights on our third quarter results and outlook. Regionally, on an operational basis, the U.S. grew 27% with impressive growth. The excellent growth is broad-based across our cardiovascular businesses, endoscopy and neuromodulation. Europe and Middle East and Africa did decline 2% on an operational basis as a result of two impactful yet transient headwinds in the quarter.

First, the discontinuation of our accurate valve in May 25 and which had prior year third quarter sales of approximately $50 million. And secondly, we implemented our upgraded ERP system mid-quarter at our [ Kerkrade ] distribution center. This did result in a back order of approximately $30 million impacting a number of our businesses in Europe. We do anticipate this backorder will improve throughout the fourth quarter.

Excluding these two headwinds, EMEA growth would have been high single digits driven by strong double-digit growth in and continued high utilization of FARAPULSE and double-digit growth in complex PCI.

Asia Pac grew 17% operationally led by strong double-digit growth across Japan and China. Japan growth was driven by WATCHMAN and EP, we saw excellent performance in the quarter led by FARAPULSE, which recently received expanded labeling for persistent indication and was supported by our OPAL HDx mapping system. China grew an impressive mid-teens despite the substantial VBP in our peripheral business. China growth was broad-based and driven again by growth in ICTX and EP. Within the quarter, we received NMPA approval for the WATCHMAN FLX PRO device, and [ Rise ] began commercial launch, which coupled with FARAPULSE and investment in clinical evidence such as Option A, drives our confidence in sustained mid-teens growth over the LRP in China.

I'll now provide some additional commentary on our business units, starting with urology. Urology sales grew 27% operationally and 5% organically Growth in the quarter was driven by an international business and a global phone management franchise. Axonics performance continues to be below expectations as we are focused on improving our commercial execution post the unplanned emergent However, we remain enthusiastic about the S&M market opportunity in our future to focus on brain activation and globalization opportunities.

We're pleased to have recently received approval for Axonics F-15 in Europe. Our outlook for the Axonics business, coupled with our broad innovation cadence across the business, drives confidence in our expectation that urology growth will improve throughout 2026.

Endoscopy delivered an excellent quarter, growing 9%, driven by double-digit growth in key products, including AXIOS, MANTIS and OverStitch combined with our differentiated broad portfolio. Notably, the U.S. grew 11% led by the recent launch of [ Waflx plus ] and above-market growth across the pancreaticobiliary franchise.

Neuromodulation had a strong quarter as sales grew 9%. Our brand franchise grew low double digits, supported by the 5-year results from the INTREPID study, which demonstrated sustainable benefits of DBS in patients with moderate to advanced parts disease. The pain franchise continues to strengthen and grew high single digits, led by strong double-digit growth in the U.S. with INTERCEPT. The team is in the early stage of launching INTERCEPT in Europe. We also just announced our agreement to acquire Nalu Medical which we anticipate will expand our portfolio into a new paint adjacency in peripheral nerve pain. This is an excellent new growth opportunity and complements our commercial strength with the interventional pain position. We expect this transaction to close in the first half of 2026.

Peripheral Interventions sales grew 16% operationally and 6% organically with excellent low double-digit growth in the U.S. that was offset by the China VBP. Within our peripheral vascular business, we saw a low single-digit decline in arterial, again, driven by the China VBP. During September, Silk Road turned organic and delivered improved high single-digit pro forma growth within the quarter, supported by the recent launch of [ Enroute ] in China. Looking forward, we continue to expect a very limited launch of seismic IVL for peripheral above-the-knee procedures by year-end 2025, an increase in launch cadence -- I'm sorry, in '26 and an increase in launch cadence in '27. In venous, we saw excellent double-digit growth led by continued strength in [ Varithena and ECOs ].

Within the quarter, [ High Petro ], our clinical study with ECOs versus standard of care antiquate completed enrollment, and we expect data to be presented in 2026. Our individual Oncology and embolization business grew double digits, driven by our category-leading embolization and cancer therapies portfolio. With notable strength in cryoablation, which treats a broad number of cancer types. Clinical evidence remains a key enabler for future growth. And within the quarter, we completed enrollment in two important trials. Rowan, who studied TheraSphere in combination with AstraZeneca stride regimen for patients with HCC and [ Aclude ] a large real-world registry for [ Obsidio ] conformable embolic. Cardiology delivered another outstanding quarter, with sales growing 23%. Within cardiology, interventional cardiology therapy sales grew 3%, which does include the impact of the ACURATE withdrawal. With double-digit growth in coronary therapies, driven by aged drug-coated balloon in the U.S. and our imaging catheters globally. The U.S. grew 21%, led by Agent DCB, where we continue to expect strong growth supported by the new technology add-on payment that was recently approved and went into effect October 1.

In the long term, we're investing to expand the indicated patient population with evidence from our [ StanC ] trial evaluating agent versus standard of care in de novo lesions, which began enrollment in August. We continue to be excited about the addition of seismic IVL to our leading coronary therapies portfolio. and expect completion of the fracture trial in first quarter '26. We expect to launch this differentiated technology in the U.S. in early '27 further expanding our C prep treat approach across our portfolio.

Cardiac Rhythm Management sales grew 2%. Our diagnostic franchise grew low double digits, led by continued above-market performance with our Lux ICM device. In core CRM, our low-voltage business grew low single digits with the momentum from the launch of our conduction system patient tools in the U.S. and Europe, and our high-voltage business declined low single digits. We recently closed the acquisition of the Lucia Bio envelope assets, which are designed to prevent postoperative complications for devices such as pacemakers and defibrillators. We look forward to expanding the reach of this technology to more global markets as a complement to our core CRM portfolio.

WATCHMAN grew an outstanding 35% this quarter and surpassed 600,000 patients targeted to date. The excellent growth in the quarter reflects accelerated concomitant uptake in the U.S. and continued penetration into the 5 million patients indicated today through excellent clinical results and strong patient and physician awareness. We continue to expect approximately 25% of the U.S. WATCHMAN procedures to be done concomitantly exiting '25 and with the potential for that to double by 2028, enabled by the trusted [ fairewatch ] approach. We are confident that we can continue to grow the WATCHMAN market by approximately 20% for the years to come driven by continued concomitant uptake, the upcoming data presentation of Champion in the first half of '26 and the launch of our next-generation device, WATCHMAN ELITE expected in late '27 or early '28.

Turning to EP. We're incredibly proud of our EP performance, with third quarter sales growing 63% as we drive continued share gains in the overall EP market. FARAPULSE remains the leading PFA technology having treated over 500,000 patients to date with consistent and reproducible real-world results, further demonstrated in the recently published 1-year results from the [ FERADISE ] trial, which showed favorable procedural and safety outcomes and clinical effectiveness across ablation strategies and AF types.

In the U.S., we saw continued strong double-digit growth in FARAPULSE supported by ramping adoption of our OPAL HDx mapping system, with 1 in 3 FARAPULSE accounts now utilizing our integrated [ Fair wave ] NAV and OPAL device. The team is executing our pipeline strategy, and we recently launched our contact sensing feature and are moving to full release this month.

Looking forward, our aim is to grow -- continue to grow our share in the overall EP market and we expect to retain a strong leadership position in PFA, enabled by our innovative portfolio, expanding mapping and commercial resources and consistent data publications. We expect global PFA penetration to continue to expand and to exit 2025 at 50% penetration and grow to approximately 80% by 2028. At our recent Investor Day, we shared that we aim to be the market share leaders, not just in PFA but the overall EP market over time. We are investing today to outpace the approximately 15% market growth expected through '28 and by advancing our ecosystem of innovative solutions across both the AF and non-AF segments of the market. We are simplifying ablations and the workflows associated with them. and expanding patient access through clinical evidence generation across the globe.

By year-end '25, we expect to make meaningful progress towards expanding access to new technologies and more complex and redo patients. with the launch of our FARAPOINT PFA catheter as well as initiate enrollment in the OPTIMIZE trial, which will study the integration of OPAL in the Cortex AI algorithm. Cortex is a differentiated mapping software designed to precisely visualize and target sources of arrhythmias, addressing an unmet need in the treatment of persistent a patients with unexplained reoccurrence. In closing, I look forward to finishing out an outstanding 2025 and delivering on our guidance, which will result in another year of delivering highly differentiated financial results versus our peer group.

And as we highlighted at our recent Investor Day, we have an incredibly strong global team that is relentlessly pursuing and investing in meaningful innovation to deliver differentiated growth and leverage EPS growth this year and for years to come. And with that, I'll hand over to Jon to provide more details on our financials.

All right. Thanks, Mike. Third quarter consolidated revenue of $5.065 billion represents 20.3% reported growth versus the third quarter of 2024 and includes a 90 basis point tailwind from foreign exchange, which was favorable versus our expectations. Excluding this $38 million foreign exchange benefit, operational revenue growth was 19.4% in the quarter. Those acquisitions contributed 420 basis points to sales, resulting in 15.3% organic revenue growth which was above our third quarter guidance range of 12% to 14%. Q3 2025 adjusted earnings per share of $0.75 grew 19% versus 2024 and exceeding the high end of our guidance range of $0.70 to $0.72, primarily driven by strong drop-through on above-expectation revenue and margin performance in the quarter.

Adjusted gross margin was 71% for the third quarter representing a 60 basis point improvement versus the third quarter of 2024, primarily due to favorable product mix, driven by strong growth in electrophysiology and WATCHMAN and partially offset by tariffs.

As a result of our Q3 performance, we now anticipate full year adjusted gross margin to slightly improve versus 2024, inclusive of an approximate $100 million tariff headwind for the full year unchanged versus previous expectations. Third quarter adjusted operating margin was 28%, expanding 80 basis points versus the prior year period, driven by strong drop-through on our top line performance.

On a GAAP basis, third quarter operating margin was 20.7%. Moving to below the line. Third quarter adjusted interest and other expenses totaled $116 million, which was in line with our expectations.

On an adjusted basis, our tax rate for the third quarter was 13.6%, and our operational tax rate was 13.9%. Fully diluted weighted average shares outstanding ended at 1.495 billion shares in the third quarter, and free cash flow for the third quarter was $1.16 billion with $1.343 billion from operating activities less $181 million in net capital expenditures. We continue to expect full year 2025 free cash flow to be approximately $3.5 billion, reflecting strong cash conversion driven by earnings growth and disciplined working capital management.

As of September 30, 2025, we had cash on hand of $1.275 billion, and our gross debt leverage ratio was 2.0x. Our top capital allocation priority remains strategic tuck-in M&A in high-growth adjacencies, followed by share repurchase. In alignment with this strategy, we recently closed our acquisition of the [ Alusa ] bio envelope assets and announced our agreement to acquire Nalu Medical.

Our legal reserve was $306 million as of September 30, with $46 million already funded through our qualified settlement funds.

I'll now walk through guidance for Q4 and full year 2025. We expect full year 2025 reported revenue growth of approximately 20%, excluding an approximate 100 basis point tailwind from foreign exchange. We expect full year 2025 operational revenue growth of approximately 19%. Excluding an approximate 350 basis point contribution from closed acquisitions, we expect full year 2025 organic revenue growth of approximately 15.5% versus 2024.

We expect fourth quarter 2025 reported revenue growth to be in the range of 14.5% to 16.5% and excluding an approximate 200 basis point tailwind from foreign exchange, we expect operational growth to be in a range of 12.5% to 14.5% and excluding an approximate 150 basis point contribution from closed acquisitions, we expect fourth quarter 2025 organic revenue growth to be in a range of 11% to 13% versus 2024.

As a result of our year-to-date margin performance, we now expect to expand full year adjusted operating margin by approximately 100 basis points at the high end of our prior range of 75 to 100 basis points and we continue to expect full year 2025 adjusted below-the-line expense to be approximately $440 million. We also maintain our forecast for a full year adjusted tax rate of approximately 12.5% and an operational tax rate of approximately 14%. We expect full year adjusted earnings per share to be in the range of $3.02 to $3.04 and representing growth of 20% to 21% versus 2024. We continue to expect an approximate $0.04 foreign exchange headwind on full year adjusted earnings per share. And for Q4, we expect adjusted earnings per share to be in a range of $0.77 to $0.79.

In closing, I'm pleased with our strong third quarter financial performance, and look forward to executing on our full year 2025 guidance and our long-range financial goals, which we shared at our recent Investor Day. From 2026 to 2028, we're targeting 10% plus average organic revenue growth, approximately 50 basis points of annual adjusted operating margin expansion, leverage double-digit adjusted earnings per share growth and 70% to 80% annual free cash flow conversion. We feel that these goals represent differentiated performance in med tech, and we look forward to executing on them.

Thank you all for joining us today. For more information, please check our Investor Relations website for the third quarter 2025 financial and operational highlights, which provides more details on our results and updated guidance. And with that, I'll turn it back over to Lauren, who will moderate the Q&A.

Thanks, Jon. Drew, let's open it up for questions for the next 35 minutes or so. In order for us to take as many questions as possible, please limit yourself to one question. Drew, please go ahead.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Robbie Marcus with JPMorgan.

Congrats on a really good quarter here. One for me. And Mike, this comes on the tail of what was a really bullish Analyst Day. And I think what's really coming through in the discussion this morning with investors is EP has been a phenomenal growth driver but WATCHMAN is really what's the most exciting, at least from the print today and the incremental upside that you're continuing to see an acceleration here off the back of and the option data in the fall of last year.

So the question is really do you think of WATCHMAN as a key growth driver? And how do you think people should really expect growth and dollar contribution to progress, assuming the CHAMPION data is positive, just given how much this market has exploded and still how low penetration is potentially versus the addressable population?

Well, thank you very much, Robbie. We're super pleased with the overall performance for the global company. and you pointed out two excellent performers in EP and WATCHMAN. And WATCHMAN clearly is a gem for Boston Scientific. We essentially created the market through great clinical evidence, and you saw at Investor Day a really strong portfolio going to the future, along with expanding evidence in the big CHAMPION trial to be read out first half 2026. And [ concomitant ] really continues to exceed expectations. It's been adopted very quickly. Now we expect 25% of the WATCHMAN procedures to be done concomitant. So that's certainly a tailwind for us. and the whole combination of FARAPULSE and WATCHMAN together in that procedure is really becoming standard of care for hospitals and physicians given the safety profile and trust they have in that solution along with our excellent commercial teams.

So in framing the market, kind of similar to what we said at Investor Day, we're comfortable with a 20% market CAGR over the LRP, given the strong momentum of WATCHMAN the underserved patient population that we continue to focus on. Also the globalization of WATCHMAN, we saw some good news in China in the quarter with the approval of [ Flx Pro ], which will help China really strengthen their performance in 2026.

So there's just a lot of great things going on with WATCHMAN in terms of the concomitant procedure itself, the trust that the community and refers have in the concomitant procedure the tremendous pipeline of patients that are still very underserved and the resources and investment that we're placing in additional portfolio enhancements and clinical to broaden it out. We have a very unique strong market share in WATCHMAN, and we plan to continue that market share strength that we have while this market continues to grow very quickly.

The next question comes from Joanne Wuensch and Citibank.