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    EW
    Earnings call· Jun 2026(Q2 FY26)

    Edwards Lifesciences Corp EW

    Jul 23, 2026 Source

    Executive summary

    Edwards Lifesciences Q2 FY26 — Strong Sales Growth Across Portfolio, Raised Full-Year Outlook

    Edwards Lifesciences delivered a stronger-than-expected second quarter, driven by robust performance across its TAVR, TMTT, and Surgical segments, leading to an increased full-year sales outlook. The company's diversified structural heart portfolio and global execution are underpinning durable growth, with confidence in achieving long-term average sales growth of 10%. Management is focused on advancing new therapies and expanding patient access, while navigating foreign exchange and tax rate pressures.

    Highlights

    5

    • Total sales grew 12.5% year-over-year to $1.74 billion, exceeding expectations.

    • TAVR global sales increased 10.5% to $1.3 billion, driven by clinical momentum and SAPIEN durability data.

    • TMTT sales surged 44.8% year-over-year to $195.9 million, with strong adoption of PASCAL and EVOQUE.

    • Full-year sales guidance for the total company raised to 10-11% growth, from 9-11%.

    • Adjusted operating profit margin reached 30% in Q2, with full-year expected at the high end of 28-29% guidance.

    Concerns

    4

    • Gross profit margin expected at the lower end of 78-79% full-year guidance due to foreign exchange headwinds through hedging.

    • Full-year effective tax rate expected at the high end of 16-19% range due to Pillar Two impact and California R&D credit changes.

    • Second half 2026 performance faces a higher comparable base from 2025, particularly in Q3.

    • Foreign exchange is estimated to be a $35 million headwind in the second half of 2026.

    Guidance & targets

    21
    CategoryTargetConfidence
    Full-year 2026 Total Company Sales Growth
    10% to 11%
    high materiality
    High
    Full-year 2026 Total Company Sales
    $6.6 billion to $6.9 billion
    high materiality
    High
    Full-year 2026 TAVR Sales Growth
    8% to 9%
    high materiality
    High
    Full-year 2026 TAVR Sales
    $4.75 billion to $5 billion
    high materiality
    High
    Full-year 2026 TMTT Sales
    $760 million to $780 million
    high materiality
    High
    Full-year 2026 Adjusted EPS
    $2.95 to $3.05
    high materiality
    High
    Full-year 2026 Gross Profit Margin
    Lower end of 78% to 79%
    medium materiality
    Medium
    Full-year 2026 R&D Expense as % of Sales
    Approximately 17%
    medium materiality
    High
    Full-year 2026 Operating Margin
    High end of 28% to 29%
    high materiality
    High
    Full-year 2026 Constant Currency Operating Margin Expansion
    Approximately 150 basis points
    high materiality
    High
    Long-term Underlying Operating Margin Expansion
    50 to 100 basis points
    high materiality
    High
    Full-year 2026 Effective Tax Rate (excluding special items)
    High end of 16% to 19%
    medium materiality
    Medium
    Full-year 2026 Average Diluted Shares Outstanding
    575 million and 580 million
    low materiality
    High
    Q3 2026 Sales
    $1.63 billion to $1.71 billion
    high materiality
    High
    Q3 2026 Adjusted EPS
    $0.71 to $0.77
    high materiality
    High
    Long-term Total Company Sales Growth
    10% on average
    high materiality
    High
    Long-term TAVR Sales Growth
    Mid- to high single digits
    high materiality
    High
    TMTT Revenue Target
    $2 billion
    high materiality
    High
    PASCAL Next-Generation with Capture Clarity Approval
    Q4
    medium materiality
    High
    PASCAL U.S. Launch for Tricuspid Patients
    Q4
    medium materiality
    High
    Surgical Sales Growth
    Mid-single-digit
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    TAVR
    Stronger than expected, benefiting from sustained clinical momentum, data supporting proactive disease management, and long-term SAPIEN durability. Growth also benefited from a competitor exit in Q2 2025.
    U.S. growth: similar to OUSOUS growth: similar to U.S.Average selling prices: stable globallyCompetitive position in U.S.: increased modestly year-over-yearCompetitive position in Europe: increased modestly year-over-year
    		$1.3 billion10.5%——
    TMTT
    Differentiated repair and replacement therapies exceeded expectations, driven by strong adoption of PASCAL, EVOQUE, and SAPIEN M3 across all regions. EVOQUE momentum driven by new centers, deeper utilization, and streamlined patient screening.
    Mitral procedural growth: double digitsTricuspid procedural growth: double digitsPASCAL adoption: increasingEVOQUE scaling: increasingSAPIEN M3 launch: measured, steadily opening new centers
    		$195.9 million44.8%——
    Surgical
    Driven by continued adoption of RESILIA therapies, which provide extended durability. U.S. approval for ECLIPTIS, with major rollout planned later this year.
    RESILIA therapies adoption: continued (INSPIRIS, MITRIS, KONECT)
    		$284 million5%——

    Operational metrics

    11
    Adjusted EPS
    $0.78
    Q2 FY26

    Benefited from better-than-expected top line performance and planned phasing of strategic investments.

    GAAP EPS
    $0.42
    Q2 FY26

    Primarily driven by California R&D tax credit impact.

    Adjusted Gross Profit Margin
    77.6%flat YoY
    Q2 FY26

    Foreign exchange reduced gross profit margin by 70 basis points compared to prior year.

    SG&A Expense
    $561 millionvs $502 million prior year
    Q2 FY26

    In line with expectations, reflecting continued investment and higher translation of OUS expense from weakening dollar.

    R&D Expense
    $279 millionvs $276 million prior year
    Q2 FY26

    Decrease as a percentage of sales reflects growing revenue and strategic prioritization of investments.

    Adjusted Operating Profit Margin
    30%
    Q2 FY26

    First half operating margin benefited from planned phasing of strategic investments.

    Foreign Exchange Impact on Reported Sales
    $15 millionincreased by 110 bps
    Q2 FY26

    Increased reported sales by approximately $15 million or 110 basis points versus the prior year, which was $6 million higher than expectation.

    Foreign Exchange Estimated Headwind
    $35 million
    H2 FY26

    Estimated headwind compared to the prior year if foreign exchange rates hold at current levels.

    Cash and Cash Equivalents
    $2.9 billion
    As of June 30, 2026

    Strong and flexible balance sheet.

    Share Repurchase Authorization Remaining
    $1.5 billion
    Current

    Part of capital allocation strategy to return capital to shareholders.

    Average Diluted Shares Outstanding
    578 million
    Q2 FY26

    Average diluted shares outstanding during the quarter.

    Industry KPIs

    8
    MetricValueDetails
    Pricing realized pricestable
    New product launch rampMultiple launches/approvals
    Procedure volume growthdouble digits%
    FCF conversion leverage guidance—
    Installed base system placementsfirst patients treated
    Segment franchise organic growth12.5%%
    Indicated addressable patient populationat least as big as severe AS
    Pivotal trial clinical evidence milestonesMultiple data presentations

    Product announcements

    3
    ProductTypeDetails
    SAPIEN X4Smilestone
    ECLIPTISlaunch
    SAPIEN M3 RESILIAexpansion

    Risks & headwinds

    4
    Foreign Exchange HeadwindsQ2 FY26 and H2 FY26

    Reduced Q2 gross profit margin by 70 basis points; estimated $35 million headwind for H2 FY26

    Mitigation: Hedging program (partially offsetting gross margin impact)

    Increased Effective Tax RateFY26

    Expected at the high end of 16% to 19% range for FY26

    Mitigation: None explicitly stated, but noted potential benefit if Pillar Two legislation passes before year-end

    High Prior-Year ComparablesH2 FY26, particularly Q3 FY26

    Q3 underlying sales growth will be 'artificially lower' compared to strong Q3 2025 performance

    Mitigation: Incorporated into full-year guidance

    Regulatory Uncertainty (Pillar Two and California R&D credits)FY26

    Impacts effective tax rate, driving it to the high end of the guidance range

    Mitigation: None stated, but noted potential benefit if Pillar Two legislation is passed before year-end

    What to watch in Q3 FY26

    5

    U.S. TAVR NCD Final Policy

    Q3 FY26
    CurrentDraft policy released, second comment period closed
    TargetFinal policy in September

    Why it matters

    The final policy has the potential to advance TAVR therapy for Medicare beneficiaries, including asymptomatic indications, and streamline patient access.

    We are also pleased that CMS continues to prioritize and progress the reconsideration of the NCD for TAVR, and we look forward to the final policy in September.

    Q&A highlights

    6

    Inquired about the drivers of strong TAVR performance, specifically market expansion from asymptomatic indications and competitive share gains, and asked for a breakdown of TMTT product strength.

    Bernard Zovighian attributed TAVR strength to years of technology, evidence, and SAPIEN's benchmark status, noting similar growth rates in U.S. and OUS. For TMTT, he highlighted strong performance across PASCAL, EVOQUE, and SAPIEN M3, emphasizing the value of the diversified portfolio.

    “Our strategy in structural heart is working very well. I want also to recognize our team who is having a flawless execution globally.”

    asked by Robbie Marcus · answered by Bernard Zovighian

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Focus and Durable Growth

    Edwards Lifesciences emphasizes its patient-centered innovation strategy, focusing on transforming care in structural heart disease. The company's comprehensive portfolio across TAVR, TMTT, and Surgical, combined with global execution, supports its long-term target of 10% average total company sales growth and operating margin expansion. This strategy is built on deep expertise, world-class evidence generation, and a commitment to creating new therapeutic categories.

    02

    TAVR Leadership and Market Expansion

    The TAVR segment continues to benefit from years of technology advancement and clinical evidence, positioning SAPIEN as the standard of care. Recent data from PARTNER 3 sub-analysis reinforced 7-year durability, while the EARLY TAVR trial supported earlier intervention. The company is also advancing its next-generation SAPIEN X4S platform, with first patients already treated, and anticipates the finalization of updated U.S. TAVR NCD in September, which could streamline patient access.

    03

    TMTT Portfolio Driving Significant Growth

    The differentiated TMTT repair and replacement therapies, including PASCAL, EVOQUE, and SAPIEN M3, drove a 44.8% year-over-year sales increase. PASCAL continues to see increased adoption due to its differentiated design and clinical outcomes, with next-generation technology expected for Q4 approval in the U.S. and Europe. EVOQUE is rapidly scaling, expanding into new centers and deepening utilization, while SAPIEN M3 is in a measured launch phase, showing promising early clinical outcomes and recently receiving CE Mark for its RESILIA version.

    04

    Surgical Innovation and RESILIA Durability

    The Surgical segment achieved 5% sales growth, driven by the adoption of RESILIA-based therapies like INSPIRIS, MITRIS, and KONECT, which offer extended durability. Recent 10-year data from the COMMENCE trial further supported the long-term performance of RESILIA tissue. The U.S. approval of ECLIPTIS, a surgical left atrial appendage technology, is expected to contribute to growth with a major rollout planned for later this year.

    05

    Financial Performance and Outlook

    The company delivered strong Q2 financial results with 12.5% sales growth and $0.78 adjusted EPS. Despite foreign exchange headwinds🌐 impacting gross margin and higher tax rates due to Pillar Two and California R&D credit changes, Edwards reaffirmed its full-year adjusted EPS guidance. The company maintains a strong balance sheet with $2.9 billion in cash and a disciplined capital allocation strategy prioritizing organic growth and opportunistic share repurchases.

    06

    Clinical Trial Milestones

    Key clinical milestones include the upcoming presentation of PROGRESS trial results at TCT later this year, which will evaluate TAVR in moderate AS patients with at-risk features. Additionally, CLASP IITR results are expected at TCT, and the company plans to launch PASCAL for tricuspid patients in the U.S. in Q4, further expanding treatment options.

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