Boston Scientific Corporation

Second-quarter 2026 consolidated revenue was $5.442 billion, up 7.5% reported and 7.0% operationally/organically versus Q2 2025, including a 50 basis point FX tailwind. Adjusted EPS was $0.86, up 15% year over year and above the $0.82 to $0.84 guidance range, helped by favorable discrete tax items. Adjusted gross margin was 70.3%, up 80 basis points year over year, and adjusted operating margin was 28.4%, up 70 basis points; GAAP operating margin was 21.6%. For 2026, the company now expects reported revenue growth of 5.5% to 6.5% and operational/organic growth of 5% to 6%, Q3 revenue growth of 3% to 5%, adjusted EPS of $3.28 to $3.32, full-year adjusted operating margin expansion of 0 to 25 basis points, a tax rate of about 11.5%, and free cash flow of about $3.8 billion. The company also said Q2 free cash flow was $1.290 billion and cash on hand was $539 million, with gross debt leverage at 2.0x.

Mike Mahoney described Q2 as solid, but said the company now sees the second half of 2026 as more pressured than expected. He pointed to unexpectedly sharp U.S. WATCHMAN slowdown tied to clinical evidence affecting referrals, and stronger-than-anticipated competitive share loss in U.S. EP. He emphasized that Boston Scientific remains confident in the long term, citing a pipeline of catalysts in 2027 and 2028, including new product launches, Penumbra, MiRus/TAVR optionality, and a restructuring program to support a return to stronger growth.

Jon Monson detailed the quarter and updated outlook with specific figures: $5.442 billion of revenue, 7.0% operational growth, $0.86 adjusted EPS, 70.3% adjusted gross margin, and 28.4% adjusted operating margin. He said the quarter included about a $75 million product liability charge and roughly $80 million of tariff refunds, and that adjusted tax rate was 10.4%. He also said full-year 2026 free cash flow should be about $3.8 billion, adjusted below-the-line expense about $485 million, adjusted tax rate about 11.5%, and weighted average shares about 1.475 billion, while the restructuring should deliver about $500 million in run-rate savings exiting 2029.

Analysts focused on whether the new guidance reflected conservatism or worsening trends, and management said the reset was based on actual second-half dynamics already visible in WATCHMAN and EP, not just prudence. On WATCHMAN, management said the slowdown stems from changed referral patterns after recent clinical data, higher comp pressure on concomitant procedures, and weak stand-alone growth; they added that they are not assuming improvement in 2027 until the market actually changes, though they will continue physician education, commercial investment, and direct-to-patient efforts. On EP, management said U.S. share has come down as PFA adoption accelerated faster than expected, and that improvement should come in late 2027 and 2028 with FARAWAVE Ultra, ICE, and later FARAFLEX.