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    BSX
    Earnings call· Dec 2024(Q4 FY24)

    BOSTON SCIENTIFIC CORP BSX

    Feb 5, 2025 Source

    Executive summary

    Boston Scientific Q4 FY24 — Strong Organic Growth and FARAPULSE Momentum

    Boston Scientific delivered an exceptional Q4 and full-year FY24, driven by strong organic growth across its diversified portfolio and significant uptake of FARAPULSE. The company exceeded its financial goals, demonstrating robust execution and innovation. Management anticipates continued differentiated performance in FY25, balancing operating margin expansion with strategic investments to fuel long-term growth and maintain market leadership.

    Highlights

    5

    • Q4 FY24 organic sales grew 19.5%, exceeding guidance of 14%-16%.

    • Full-year FY24 organic sales grew 16.4%, exceeding guidance of approximately 15%.

    • Q4 FY24 adjusted EPS of $0.70 grew 26%, exceeding guidance of $0.64-$0.66.

    • Full-year FY24 adjusted EPS of $2.51 grew 22%, exceeding guidance of $2.45-$2.47.

    • FARAPULSE sales surpassed $1 billion globally in 2024, with over 200,000 patients treated.

    Concerns

    3

    • Foreign exchange created a $26 million headwind in Q4 FY24 and a $127 million headwind for full-year FY24.

    • China faces ongoing VBP pricing pressures, making growth more difficult despite mid-teens expectations.

    • Increasing competition from lower-cost competitors in some MedSurg businesses in Asia and Europe.

    Guidance & targets

    20
    CategoryTargetConfidence
    Full-year 2025 Reported Revenue Growth
    12.5% to 14.5%
    high materiality
    High
    Full-year 2025 Operational Revenue Growth
    13.5% to 15.5%
    high materiality
    High
    Full-year 2025 Organic Revenue Growth
    10% to 12%
    high materiality
    High
    Q1 2025 Reported Revenue Growth
    17% to 19%
    medium materiality
    High
    Q1 2025 Operational Revenue Growth
    18% to 20%
    medium materiality
    High
    Q1 2025 Organic Revenue Growth
    14% to 16%
    high materiality
    High
    Full-year 2025 Adjusted Below-the-Line Expense
    approximately $425 million
    medium materiality
    High
    Full-year 2025 Operational Tax Rate
    approximately 13.5%
    medium materiality
    High
    Full-year 2025 Adjusted Tax Rate
    approximately 12.5%
    medium materiality
    High
    Q1 2025 Adjusted Tax Rate
    approximately 11.5%
    low materiality
    High
    Full-year 2025 Adjusted EPS
    $2.80 to $2.87
    high materiality
    High
    Q1 2025 Adjusted EPS
    $0.66 to $0.68
    high materiality
    High
    Full-year 2025 Free Cash Flow
    in excess of $3 billion
    medium materiality
    High
    Full-year 2025 Adjusted Operating Margin Expansion
    50 to 75 basis points
    high materiality
    High
    China Revenue Growth
    mid-teens
    medium materiality
    Medium
    WATCHMAN Market Growth
    approximately 20%
    high materiality
    High
    AF Market Conversion to PFA
    rapidly convert
    high materiality
    High
    Persistent AF Label for FARAPULSE
    updated label
    high materiality
    High
    FARAPOINT U.S. FDA Approval
    U.S. FDA approval
    high materiality
    High
    EMPOWER Leadless Pacemaker Launch
    to market in '25
    medium materiality
    High

    Segment performance

    18
    SegmentRevenueYoYQoQMargin
    U.S.
    Operational growth in Q4 FY24. Full year 2024 operational growth was 21%, with double-digit growth in 6 of 8 business units.
    		—31%——
    Europe, Middle East and Africa (EMEA)
    Operational growth in Q4 FY24. Full year 2024 operational growth was 14%. Expected to outpace market in 2025 with momentum in EP and growth in emerging markets.
    		—12%——
    Asia Pacific
    Operational growth in Q4 FY24. Full year 2024 operational growth was 16%, led by Japan, China, Australia, and New Zealand.
    		—12%——
    Japan
    Double-digit growth for the second year in a row, driven by AGENT DCB, Rezum, WATCHMAN FLX Pro, and early FARAPULSE contribution.
    		—double digits——
    China
    Crossed $1 billion in revenue for full year 2024. Expected to grow mid-teens in 2025 despite VBP pricing pressures.
    		$1 billionstrong double digits——
    Urology
    Organic growth in Q4 FY24. Full year organic growth was 9%. Operational growth was 20% in Q4 and 13% for full year (post-Axonics acquisition). Fueled by Prosthetic Urology and Stone Management.
    		—8%——
    Endoscopy
    Organic growth in Q4 FY24. Full year organic growth was 8%. Operational growth was 8% in Q4 and 9% for full year. Led by endoluminal surgery and single-use imaging.
    		—7%——
    Neuromodulation
    Organic growth in Q4 FY24. Full year organic growth was 3%. Operational growth was 12% in Q4 and 14% for full year. Brain franchise grew mid-single digits, Pain franchise grew mid-single digits in Q4 and low single digits for the year. Expected higher growth in 2025.
    		—5%——
    Cardiology
    Sales growth in Q4 FY24. Full year sales growth was 25%.
    		—32%——
    Interventional Cardiology Therapies (ICTx)
    Sales growth in Q4 FY24. Full year sales growth was 11%. Driven by imaging, complex PCI, and AGENT DCB launch.
    		—10%——
    Structural Heart Valves
    Sales growth in Q4 FY24. Full year sales grew double digits. Launched ACURATE Prime valve in Europe.
    		—low single digits——
    WATCHMAN
    Sales growth in Q4 FY24. Full year sales growth was 19%. U.S. Q4 growth was 20%, bolstered by concomitant procedures and OPTION trial data.
    		—20%——
    Cardiac Rhythm Management (CRM)
    Sales growth in Q4 FY24 and for the full year. Diagnostics franchise grew double digits for full year. Core CRM (high-end and low-voltage) grew low single digits in Q4 and full year.
    		—3%——
    Electrophysiology (EP)
    Sales growth in Q4 FY24. Full year sales growth was 139%. FARAPULSE surpassed $1 billion in global revenue in 2024. Strong uptake in U.S. and Europe, launches in Japan and China.
    		$1 billion172%——
    Peripheral Interventions
    Organic growth in Q4 FY24. Full year organic growth was 11%. Operational growth was 22% in Q4 and 15% for full year.
    		—12%——
    Interventional Oncology & Embolization
    Sales growth across entire product portfolio in Q4 FY24. Grew mid-teens for the full year.
    		—double digits——
    Vascular
    Full year performance. Arterial led by double-digit growth in drug-eluting portfolio. Mid-single-digit Venous growth led by Varithena and clot management.
    		—high single-digit Arterial——
    Silk Road
    Stand-alone business grew double digits for the full year.
    		—double digits——

    Operational metrics

    22
    Organic Revenue Growth
    19.5%exceeded guidance of 14%-16%
    Q4 FY24

    Organic revenue growth for the fourth quarter, exceeding guidance.

    Organic Revenue Growth
    16.4%exceeded guidance of approximately 15%
    FY24

    Organic revenue growth for the full year, exceeding guidance.

    Adjusted EPS
    $0.7026% growth YoY, exceeded guidance of $0.64-$0.66
    Q4 FY24

    Adjusted earnings per share for the fourth quarter.

    Adjusted EPS
    $2.5122% growth YoY, exceeded guidance of $2.45-$2.47
    FY24

    Adjusted earnings per share for the full year, including a $0.05 FX headwind.

    Adjusted Gross Margin
    70.6%20-basis-point sequential improvement vs Q3
    Q4 FY24

    Adjusted gross margin for the fourth quarter.

    Adjusted Gross Margin
    70.3%
    FY24

    Adjusted gross margin for the full year.

    Adjusted Operating Margin
    27.4%
    Q4 FY24

    Adjusted operating margin for the fourth quarter.

    Adjusted Operating Margin
    27.0%70 basis points improvement vs FY23
    FY24

    Adjusted operating margin for the full year.

    Adjusted Interest and Other Expenses
    $87 million
    Q4 FY24

    Adjusted interest and other expenses for the fourth quarter.

    Adjusted Interest and Other Expenses
    $301 millionin line with expectations
    FY24

    Adjusted interest and other expenses for the full year.

    Adjusted Tax Rate
    10.5%
    Q4 FY24

    Adjusted tax rate for the fourth quarter, including favorable discrete tax items and stock compensation benefit.

    Adjusted Tax Rate
    11.9%
    FY24

    Adjusted tax rate for the full year, including favorable discrete tax items and stock compensation benefit.

    Operational Tax Rate
    12.3%
    Q4 FY24

    Operational tax rate for the fourth quarter.

    Operational Tax Rate
    13.2%in line with expectations
    FY24

    Operational tax rate for the full year.

    Fully Diluted Weighted Average Shares Outstanding
    1.490 billion
    Q4 FY24

    Fully diluted weighted average shares outstanding at the end of Q4 FY24.

    Fully Diluted Weighted Average Shares Outstanding
    1.486 billion
    FY24

    Fully diluted weighted average shares outstanding for the full year FY24.

    Free Cash Flow Conversion
    71%
    FY24

    Free cash flow conversion for the full year.

    Cash on Hand
    $414 million
    as of 2024-12-31

    Cash balance at the end of the fourth quarter.

    Gross Debt Leverage Ratio
    2.2x
    as of 2024-12-31

    Gross debt leverage ratio at the end of the fourth quarter, after Axonics and Silk Road acquisitions.

    Legal Reserve
    $326 million$76 million increase vs Q3 2024
    as of 2024-12-31

    Legal reserve balance at the end of the fourth quarter.

    Business Day Impact
    200 basis points
    Q4 FY24

    Impact of one additional business day in Q4 2024 on revenue growth.

    Business Day Impact
    -200 basis points
    Q1 FY25

    Expected impact of one less business day in Q1 2025 on revenue growth.

    Industry KPIs

    12
    MetricValueDetails
    Tariff impact—
    System utilization—
    Pricing realized price—
    New product launch rampFARAPULSE
    Procedure volume growth—
    FCF conversion leverage guidance71%%
    Installed base system placements—
    Segment franchise organic growth19.5%%
    Consumables recurring revenue mix—
    Sales force commercial capacity build—
    Indicated addressable patient population—
    Pivotal trial clinical evidence milestonesADVANTAGE AF Phase I

    Product announcements

    6
    ProductTypeDetails
    TENACIO pump for AMS 700launch
    AXIOS for gallbladder drainageexpansion
    Cartesia X and HX leadslaunch
    ACURATE Prime valvelaunch
    LUX-Dx IIlaunch
    FARAWAVE NAV on OPAL mapping systemlaunch

    Deals & partnerships

    4
    AxonicsHighly complementary technologies in Urology

    Acquisition closed in November, integrating highly complementary technologies into the Urology portfolio.

    Bolt MedicalIntravascular lithotripsy platform for coronary and peripheral artery disease

    Agreement to acquire Bolt Medical, which offers an intravascular lithotripsy platform. Expected to close in H1 2025.

    Intera OncologyBroadens interventional oncology offerings for liver cancer patients

    Acquisition expected to close in H1 2025, expanding interventional oncology offerings with a pump portfolio.

    CortexAdvanced AF mapping solution

    Recently closed acquisition of Cortex, an advanced AF mapping solution, to enhance capabilities in the EP segment.

    Risks & headwinds

    6
    Foreign exchange fluctuationsQ4 FY24, FY24, FY25

    $26 million headwind in Q4 FY24; $127 million headwind in FY24; $0.05-$0.06 EPS headwind for FY25

    China VBP pricing pressuresFY25

    more extensive this year in '25 than in the past

    Mitigation: Increasing contribution from FARAPULSE and diverse portfolio, greater access to customers; still expect mid-teens growth.

    Competition from lower-cost competitors

    strengthening

    Mitigation: Focus on driving a lower-cost portfolio to serve global customers more efficiently; innovation.

    PFA competitive landscapeFY25

    unclear as to the competitive landscape in 2025

    Mitigation: Focused on driving forward relentlessly, investing in commercial execution and R&D to maintain leadership.

    Business day impactQ1 FY25

    1 less business day in Q1 2025, worth approximately 200 basis points

    Mitigation: Adjusted for in guidance; high end of Q1 2025 guidance is in line with Q4 2024 organic revenue growth when adjusted for business days.

    Tariffs (Mexico, Canada, China)FY25

    minor headwind

    Mitigation: Viewed as manageable and contemplated in guidance ranges; not significant levels of manufacturing/sourcing from these countries.

    What to watch in Q1 FY25

    5

    Q1 FY25 Organic Revenue Growth

    next quarter
    Current19.5% (Q4 FY24)
    Target14% to 16%

    Why it matters

    This will indicate if the strong momentum from FY24 continues into the new fiscal year, especially considering the impact of one less business day.

    We expect first quarter 2025 organic revenue growth to be in a range of 14% to 16% versus 2024.

    Q&A highlights

    6

    What were the drivers for the strong Q4 performance in PFA and WATCHMAN, especially with concomitant reimbursement and OPTION trial data, and how do you see these products performing in 2025?

    Management noted a benefit from concomitant reimbursement and OPTION trial data for WATCHMAN, reinforcing the 20% market CAGR for 2025. For FARAPULSE, the tremendous growth (over $1 billion globally in 2024) is driven by strong execution and supply chain investments. They are focused on maintaining leadership in PFA despite potential competitive entries.

    “With FARAPULSE, I think the numbers are pretty standout. Tremendous growth is the biggest transformation I've seen in medtech, over $1 billion globally in 1 year.”

    asked by Robert Marcus · answered by Michael Mahoney

    3 min read6 chapters

    Detailed Narrative

    01

    Strong Financial Performance and Exceeding Guidance

    Boston Scientific reported an excellent Q4 and full-year 2024, surpassing financial goals. Q4 operational sales grew 23% and organic sales grew 19.5%, exceeding the high end of guidance. Full-year organic sales grew 16.4%, also above guidance. Adjusted EPS for Q4 was $0.70 (up 26%) and for the full year was $2.51 (up 22%), both exceeding guidance ranges. The company also expanded adjusted operating margin by 70 basis points to 27% for the full year.

    02

    Regional Growth Highlights

    Operationally, the U.S. grew 31% in Q4 and 21% for the full year, with double-digit growth in six of eight business units. Europe, Middle East, and Africa (EMEA) grew 12% in Q4 and 14% for the full year, driven by strong commercial execution and key franchises. Asia Pacific grew 12% in Q4 and 16% for the full year, led by Japan, China, Australia, and New Zealand. China crossed $1 billion in revenue for the full year, growing strong double digits despite VBP pressures.

    03

    Electrophysiology (EP) and WATCHMAN Momentum

    EP sales surged 172% in Q4 and 139% for the full year, with FARAPULSE surpassing $1 billion in global revenue in 2024 and treating over 200,000 patients. WATCHMAN sales grew 20% in Q4 and 19% for the full year, bolstered by increased concomitant procedures due to new DRG reimbursement and positive OPTION trial data. The company expects the AF market to rapidly convert to PFA and the WATCHMAN market to grow approximately 20% in 2025.

    04

    Pipeline and Regulatory Progress

    Boston Scientific continues to advance its pipeline with significant clinical and regulatory milestones. Phase I of the ADVANTAGE AF trial for FARAPULSE in persistent AF patients met primary endpoints for efficacy and safety, with an updated label expected in H2 2025. Enrollment for AVANT GUARD (FARAPULSE as first-line therapy) is nearing completion. Data from Phase II of ADVANTAGE AF (FARAPOINT) is expected in H1 2025, supporting U.S. FDA approval by year-end 2025. The company also launched ACURATE Prime valve in Europe and received FDA/CE Mark for Cartesia X and HX leads in Neuromodulation.

    05

    Strategic M&A and Capital Allocation

    The company's capital allocation priority remains strategic tuck-in M&A, followed by annual share repurchases. Acquisitions like Bolt Medical (intravascular lithotripsy) and Intera Oncology (interventional oncology) are expected to close in H1 2025, broadening existing portfolios. The company ended the year with a gross debt leverage ratio of 2.2x, providing flexibility for continued strategic investments. Free cash flow for FY24 was $2.648 billion, with a 71% conversion rate, and is expected to exceed $3 billion in FY25.

    06

    Business Unit Performance and Outlook

    Urology grew 8% in Q4 and 9% for the full year organically, fueled by Prosthetic Urology and Stone Management. Endoscopy grew 7% organically in Q4 and 8% for the full year, led by endoluminal surgery and single-use imaging. Neuromodulation grew 5% organically in Q4 and 3% for the full year, with expected improvement in 2025 driven by new DBS leads and Intracept momentum. Peripheral Interventions grew 12% organically in Q4 and 11% for the full year, with Interventional Oncology excelling with double-digit growth.

    AI-generated summary of the company’s earnings call. Not investment advice.