Earnings call transcript Q4 2022

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Operator

Good morning, and welcome to the Boston Scientific Fourth Quarter 2022 Earnings Call. All participants will be in listen only mode [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.

Lauren Tengler

Thank you, Drew. for today. thanks and everyone, joining us Welcome, With and Brennan, Chief today's call Executive Mahoney, Chairman are Mike Executive Officer. President Chief me and on Vice Financial Officer; and Dan

morning issued announcing 'XX We which of the used reconciliations non-GAAP includes release release. press earlier results, our and full a QX year measures in the this

the We reconciliations to measures under non-GAAP today's call Financials of the our a Relations heading used call of of approximately one release that The this copy posted hour. Filings. the have as as section Investor duration well and morning's be in website of will

Mike and including will comments business, we'll XXXX as well full on QX then Dan performance as year our provide outlook guidance, questions. for your the and and take

Mike our and joined Meredith session, Dr. Ian be will Chief Dr. Officer, Q&A Ken by and Dan today's Stein. Medical During

everyone I'd and sales. than organic the the period net of foreign remind Before currency growth of a excludes we and operational to further excludes and that are begin, comparable less revenue which growth there acquisitions impact on fluctuations, full like call, for revenue divestitures

excluded March, acquisitions of and organic Relevant on closed respectively, and Preventice, XXXX. Medical, February XXXX, Baylis well which August as as September closed which XX, growth Lumenis Surgical, FARAPULSE for in or

in half Divestitures Endosurgery, stake in of close Apollo excludes M.I. Specialty March all of Tech the well first include on Aquatech the purchase Pharmaceuticals are Guidance acquisition majority the and XXXX. BTG X, expected previously to the XXXX. business, closed which a announced as which agreements to as

Relations be our which website. found Investor financial our For and more operating may to information, deck, please on refer highlights

expect, This are may the statements the within securities similar meanings contains by anticipate, and On may, which revenue, this sales forward-looking believe, references estimate call, other unless call words. identified and like laws, otherwise federal words of specified, be all organic. to

earnings opportunities, about product clinical our approvals spend cost savings and new and our growth other tax They market performance, and trials our expected rates, our including well and expenses. statements growth use, share, acquisitions, margins as launches, include, R&D financial among as and cash other things, flow and anticipated and sales,

assumptions be to risks actual by or materially expectations our incorrect, from and If our or or out expressed projections the uncertainties vary could forward-looking implied underlying certain results statements. materialize, turn

may we that differences in to These cause the filed with Factors and update of described XX-Qs most such of disclaim Risk recent or Factors intention our statements those include any obligation as date, them. speak subsequent and SEC. today's the only section XX-K

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

Mike Mahoney

today. thank base for stronger represented innovative growth you a us and which serve, more portfolio. and our durable for return everyone markets to XXXX joining within a to Lauren, provided procedural Thanks, the we consistent

and spirit macroeconomic despite EPS very supply challenges. of ongoing winning of sales I'm chain proud the the team, our goals our and on delivering resiliency global and

strong performance regions or we throughout that business geographic share our Importantly, across all the units gained and maintained delivered believe year. of most all market

X% low quarter In 'XX, grew the sales was fourth the operational fourth sales total versus X% of range. guidance grew and 'XX, end quarter organic company which

Italian results for for points XXX provision these reserve quarter. unplanned that include established However, of the note it's very an $XX approximately basis government in important resulted million, an of headwind to sales a which payback

would sales; fourth organic of the of operating and share. was end high sales our achieved impact The on range Italian guidance to of X% quarter strong underlying per have And the both sales performance we without margin earnings the X%. increases reserve,

with X%, 'XX in while organic sales of line sales grew versus grew Full year XX% approximately guidance our X%. 'XX, operational

high sales $X.XX the full 'XX, impact reserve, without quarter adjusted Once and the of the EPS and year both of the of again, $X.XX quarter end grew versus Fourth guidance the declined fourth year to of in minus achieved $X.XX. range range. achieve for the of of both adjusted $X.XX full end Italian versus 'XX, low X% guidance we EPS would X%

cash flow expectations. and cash full million $X.X year We of adjusted generated $XXX billion, free line in free flow with our of

for outlook Now XXXX. for

guiding for first the growth Tech both X% and of to 'XX investments and which in 'XX, majority XXXX. Apollo full to to of year quarter of in expected close organic acquisition are which of the stake first X% excludes all and Endosurgery M.I. We the are half

$X.XX we margin quarter Our the double-digit macroeconomic And despite $X.XX, to and points goal growth basis our and of supply EPS estimate plus to to first remain adjusted year headwinds, chain expect is and EPS ongoing XXXX. in operating of expansion $X.XX our pressures XX be 'XX adjusted to full we committed EPS $X.XX. adjusted

our Dan additional provide and more the Italian along reserve on some with now on I'll outlook. 'XX our sales performance, provide details 'XX will on highlights comments 'XX outlook. 'XX results our

with and quarter Regionally, on operational 'XX U.S. tailwind acquisitions, XX% year the Full 'XX. an grew particular our Endo versus in point units. urology strength inclusive basis, of WATCHMAN, from a fourth XXX basis XX%, business grew

This emerging and Europe, basis on ongoing launches across product discipline full quarter was grew and on and markets, versus 'XX execution. Africa new year Middle East growth a commercial supported fourth above-market pricing basis. XX% ongoing by an and XX% operational the strong investments portfolio, in

momentum and franchise. ongoing We're in the portfolio excited year innovative opportunity about the the Baylis our further ahead region, across EP with with Solutions Access with particularly

operationally in XX% basis, quarter double innovation grew has ongoing year. XX% region. was products, full XX% supported digits, driven and of growth accounts. Japan by grew Full business 'XX out the Pacific POLARx, six versus units across the share for open which full by Asia approximately new a eight year On fourth including year

about with vessels. a recent in received AGENT DCB, excited both to new for are from ongoing look coronary which XXXX approval momentum our for and balloon is reimbursement restenosis and products We drug-coated forward small

XX%, the year ongoing launches, and execution. resiliency by On more diversification a full China and new fueled XX basis, than portfolio grew team's product

stake in of Acotec. in majority China We expand a recently continue to the our the announced with presence market acquisition

in strategies. to commercial and R&D, can both value believe this strategic for We investment with manufacturing create companies opportunities collaborate

to in COVID. double-digit continue be to a and to despite 'XX expect ongoing from also pressure China VBP QX grower in procedure potential impact We volumes

sales the of continued growth digits momentum operational with fourth and versus quarter 'XX with America, year versus XX% double XX%, growing Latin 'XX. In units all growth business full of

the XX%, organically sales versus both urology. operationally business Urology 'XX organically On starting fourth grew basis. on XX% grew and units, year They quarter versus and with full XX% and 'XX. a operationally

ongoing new Within fueled grew expansion. the and digits, global quarter, all continued launches and double franchises by product

year Moser was on organically grew laser key basis quarter, full sales X% the as 'XX. Rezum organically the further full growth in global Lumenis technology, a such as acquisition Endoscopy portfolio. a versus SpaceOAR driven products and of On as urology X% complementing the and by LithoVue, basis, year well the grew

and In our acquire innovative strong Endosurgery, Single-Use both 'XX, which XX% we intent we and complementary such supporting endoluminal will Apollo as surgery the imaging, and products with across had AXIOS growing over add innovative to quarter, the a announced globe. growth global success fourth In portfolio.

stake Neuromodulation a grew acquisition versus our half innovative 'XX. organically includes organically in look announced as Tech, to sales majority and full as fourth well M.I. in forward the which grew of versus X% on year We this 'XX first basis previously 'XX. X% quarter closing stent the

physician Alpha stimulation cord continued spinal enthusiasm Globally, FAST. WaveWriter in with for and fourth business grew the quarter our X%

from to year. this at our NANS nonsurgical three-month invest to study, clinical expand earlier We back continue indications evidence in SOLIS, and data present

primary met nonsurgical medical FDA of the approval The study back endpoints, by we its and 'XX. comparing indication to SCS end conventional anticipate management for

recent momentum by digits Our Brain continued of strong launch basis. year grew low is as and aided X-in-X the on double franchise performance quarter Vercise digits launches double 'XX product lead in from This the in full as the a well extension. new

I'm sales of we pleased double our grew X% year digits drug-eluting position Intervention within SFA the performance the one the one sorry, position number year versus global achieving both 'XX fourth the full the Peripheral portfolio growing and Within organically for with full 'XX. Arterial, in U.S. number and are quarter strong --

year a prior varicose Varithena, year offering, market-leading our growing was over On versus our venous in full with XX% vein XXXX. basis, franchise flat

innovative digits, of therapies our franchise in growing embolization cancer Oncology Interventional suite double and tools. well Our low by portfolio performed led of 'XX,

continue We TheraSphere the of image-guided glioblastoma. in frontier GBM of potential of reoccurring our -- image feasibility TheraSphere expanding first the patient applications enrolled in with the to intra-arterial delivery of safety our in patients invest early and study,

sales Cardiology organic excellent XX% sales operational year full and a XX% sales On quarter, 'XX. quarter delivered XX% with and basis, operationally growing fourth growing another XX% grew versus organically.

for growth in patients. and Our to its newly aligned four that cardiac differentiated growth customers group address for segments across our businesses, delivered need cardiology of the greatest continue strong offerings the we as higher areas invest

stents drug-eluting our Cardiology Therapies' driven complex basis, Interventional and fourth basis Therapy X% a by 'XX. franchise, international and On grew quarter X% regions versus imaging performance year organically in a in year Coronary organically grew PCI the on franchise. includes our strong Cardiology, which grew both full Within full X%, sales and

franchise in neoX valve. fourth digits and Our both our grew the quarter in in structural Ongoing double ACURATE Valves fourth the year evidence throughout outpacing 'XX the with clinical full support basis, aortic Europe market growth to quarter. Heart and

implantation study the rates with best-in-class a safety London low rates. outcomes and as at presented from PVL XX-day Data pacemaker PMCF ACURATE was breaker PCR and Valves, neoX positive late demonstrating

valve restenosis Nested a Valve severe Additionally, patients we the the ACURATE enrolled size and XL in our TAVR Registry, treat efficacy patient the to assessing aortic Prime XL Aortic procedure. ACURATE first the for need Prime safety of larger with who

'XX quarter a fourth supported expansion. and organically grew in full versus strong finished U.S. year the on the versus XX% utilization with organically XX% grew sales sales, record DAPT 'XX. label WATCHMAN basis QX by

way novel triple the indicated has in of our anticoagulation ahead versus we the head-to-head patients Importantly, oral for schedule. more and trial completed of FLEX XXXX beyond. potential This CHAMPION-AF the trial number to enrollment of WATCHMAN than

growth sales quarter this and and and and basis organically. by year operationally We execution. organically strong versus X%, grew fueled X% expect commercial 'XX clinical on business grew a evidence outlook in X% fourth and this excited full about CRM double-digit remain XXXX, innovation, both ongoing for operationally

growing digits, all and expect business mid-single franchise markets were or double and our on Diagnostics that year, the market. a core slightly grew high-voltage grew single low digits our the low line basis, Our CRM, year major in voltage strong versus 'XX. full had In digits, we above business

and Electrophysiology quarter XX% XX% operationally organically sales 'XX. XX% grew XX% year grew basis and operationally a full versus fourth and 'XX organically versus on

fourth over 'XX. Importantly, business continues market, organically our international to versus outpace EP growing quarter the XX%

look AFib with and Japan in now imminently. over treat ADVENT planning to trial and Europe of and continue half ADVANTAGE trial randomized are forward both Europe. in since the 'XX the continues FARAPULSE second has these evidence well quarter perform therapods of been And to patients in another patients strong readout to treated launch. to invest in with clinical in continues Momentum we persistent AF the POLARx of to U.S. our initiate IDE growth

innovative the We and We've which times VersaCross very acquisition market improving platform, been with our the Connect in performance of the launched procedure. 'XX. our than grew efficiencies pleased in our 'XX, X Baylis faster WATCHMAN in

we years shared our with Earlier this past. consistent year, strategy

the sales We in R&D position announced meaningful advance growth balancing commitments. to we our ourselves fund to of four win XX% acquisitions, our in markets innovation patient And invested play by continue in we sustainable care. and 'XX, financial internal to through

extremely to and on motivated operating adjusted is We're delivering performance markets, and growth our free remain excited adjusted our margins that achieve strong people focused and and sustaining generation. expand cash EPS the than year to grow goals, sales and about drive continuing ahead faster to flow differentiated long-term double-digit a continuing culture

Dr. retirement WATCHMAN I fell to CRM, Dan, including investor engagement, of it over of the under Stein with roles. company turn will responsibilities Ian, Ken to I and assume that a EP global share Meredith, previously to before So, Dr. some total addition Ian want the in that

for financials. provide many Please join congratulating his I'll Ian on Dan to to pass With that, details it me in the and contributions. off thank Ken, more

Dan Brennan

quarter consolidated a reported reflects Mike. a as slightly U.S. revenue favorable foreign to $XXX million billion fourth versus dollar exchange, XXXX Thanks, headwind the Fourth of the quarter. expectations from quarter represents $X.XXX weakened throughout our revenue growth and X.X% the

of Italian point versus impact associated in XXXX, resulting with in growth to operational acquisition XXXX. foreign guidance which to X.X% payback the X% the contributed of Sales organic XXX this basis at range Baylis XXX an headwind X% including basis provision, from quarter an was growth of exchange, an growth recorded from unplanned was our revenue approximate Excluding sales government basis the X.X% XXX quarter. end revenue related fourth the in low of points point reserve

provision payback the have medical of of a amounts. above the requires With this hospitals recovering to devices government's in to budgets, goal public Italy spending pay supplied that companies back these device medical overrun portion

through the to continue in enforceability we the of will and system. court our have Italian While appealed and challenge others industry, law the

have to guidance We the amounts best could quarter, required established fourth the $XX we would high pay a sales million the in we of reserve, back. of range. be Without reserve our the organic growth of estimates end representing revenue achieved

QX Italian quarter. XXXX. Flow-through at would Without our share sales per X% versus have representing the range, on the reserve low $X.XX, the range of end adjusted the of achieved of resulted the a high we end reserve, for in of earnings our decline

consolidated year a versus revenue $XXX full XXXX of X.X% and exchange. reported growth year revenue Full from reflects billion $XX.XXX million XXXX headwind foreign represents

this XX.X% basis for revenue headwind point operational Excluding XXX foreign was exchange, the from year. growth

basis $X.XX acquisitions sales basis organic a of and low Italian of to inclusive we have Full X.X% end in XXXX would of of in revenue achieving share with XXXX, guidance versus XXX contributed been Italian growth reserve. at range. impact line resulting range reserve, guidance sales earnings the Sales our year Without with our points, from X.X% represents closed XX year $X.XX the unplanned high full growth, $X.XX. per expectations adjusted the point associated the of end

XXX macroeconomic Adjusted margin for fourth partially with gross Full related in tailwind headwinds. gross driven contracts, XXXX, our an adjusted continued versus quarter margin margin of points improved in our year XXXX by approximately gross was adjusted by expectations. full also XX.X%, to line XX.X%, offset FX of the hedging year resulting basis

These were freight direct approximately XXXX million and costs related cost variances material unfavorable and manufacturing versus primarily predominantly from headwinds increased and to availability. $XXX are

years, chain first XXXX. XXXX the supply half, half of similar second assumes be higher prior exchange we margin gross movements from XXXX. to that occurred Different to expect largely timing guidance XXXX be Our than the will due and macroeconomic to foreign headwinds during

was XX.X% margin unplanned negative in XXXX operating the Fourth points point inclusive basis a XX.X%, of XXXX, improving reserve. XX adjusted resulting operating year from quarter Italian margin versus full impact adjusted sales XX basis of

basis continued to year on goal despite our achieve our And approximately XXXX, continue is operating to goal expectation for to macroeconomic we we full without Italian the margin XX versus XXXX points As the of margin operating basis margin annual focus reserve. of representing look of adjusted compared expansion. margin importantly, improvement and the expansion full our XXXX, operating adjusted XX the XX.X% impact XX.X% headwinds, points year operating of adjusted of sales the XXXX to of

million I'll quarter operating GAAP was on margin including in which in litigation-related detail basis, a expenses, fourth XX.X%, moment. $XXX On the provide a

the below to Moving line.

resulting FX Fourth $XXX expectations, and in slightly expense other by driven interest in and adjusted from expense interest $XX year full million, quarter other totaled adjusted an certain unhedged million, of loss currencies. our higher than part

and an our benefit accounting. compensation including for and was On tax full the the items basis, quarter XXXX adjusted XX.X% tax and XX.X% for fourth the stock discrete year from rate

for Our year, operational favorable fourth XX.X% expectations tax was full slightly XX% the rate to quarter for and our approximately of XX%. the

$XXX X.XXX million flow quarter billion and was less million, outstanding shares free operating average $XXX capital the expenditures. QX weighted of full Adjusted cash and flow million from XXXX. was year million in activities cash $XXX diluted X.XXX Fully $XXX for net with ended for at billion the free

free Full year free was cash and cash with flow billion line million activities was from with $X.X less billion, $XXX of operating $XXX XXXX adjusted million in net flow capital expenditures. $X.X expectations,

we expect XXXX, in billion. excess of free flow For cash $X.X adjusted

million. had cash of XXXX, we December on $XXX hand As of XX,

with Endosurgery Apollo and the in the available investments We of and of continue on in half lines acquisition or to the expect credit cash close first XXXX. stake M.I. Tech to Acotec hand majority

opportunities we'll our Our with continue allocation goals. high-quality financial for capital conjunction M&A, assess top remains and priority in tuck-in to

and stable our at to outlook to BBB+ the we was Standard X.XX As and quarter. both in within be pleased & Poor's were a of line leverage December with with Fitch expectations, upgraded times, XX, our

reserve XX, mesh $XXX legal of prior our million Our was from December million increase quarter, the as primarily an of to $XXX litigation. related

time the resolve year now estimates well our XXXX. claims and global as remained I'll While of QX and remaining same three has case years, for latest walk increased claims. for full these through the to materially probable the to and we've as reserve guidance our count account estimable past our cost U.S. over the

reminder, And guidance as any a closed. acquisitions have yet that not excludes

to year X% of revenue expect growth XXXX a versus We in XXXX. be full reported X% range to

point from and XX basis point full X% a XXX year in an exchange, current versus we XXXX closed Excluding from basis rates, based approximate organic to of be foreign revenue headwind on expect range acquisitions, contribution to X% growth a XXXX.

a first range versus of to X% quarter expect We XXXX. be QX in growth reported revenue to XXXX X%

XXX contribution from acquisitions, be range X%. headwind revenue we of approximate to XXXX organic to in point based rates point expect and basis an foreign on closed growth X% XX Excluding first a exchange from basis a quarter current

full year to our adjusted forecasted XXXX Under be approximately full and expect sales, adjusted tax forecast of approximately mix expenses in tax we year an approximately XXXX current for benefit a of rate line QX we with will rate below operational largely of quarter, adjusted the million. resulting XXXX which of including legislation We XX%. compensation, the the geographic $XXX a tax XX% of first recognized the approximately XX%, in accounting be expect stock rate

We expect for which X.XXX X.XXX includes weighted convertible a count year June X issue the offering. year on this approximately diluted preferred XXXX stock XXXX mandatory for fully and shares shares shares of QX our XXXX, to billion related expect we to billion full share average May

the We dividend to stock to share be at conversion. expect time preferred ending the the per neutral impact adjusted with of earnings

XXXX range and growth representing share we At share. earnings adjusted contracts, $X.XX adjusted earnings FX anticipate neutral in rates year XXXX. XX% $X.XX, X% year per a current impact full to hedging of expect on a existing versus to We be full to per from

quarter to $X.XX. share first a $X.XX be per of earnings in to We expect adjusted range

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

In top-tier of continued very challenging environment, closing, our that the macroeconomic with and team to I'm during margin operating despite expansion in revenue XXXX performance global momentum results a proud forward differentiated and looking achieved I'm XXXX.

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

Lauren Tengler

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

Operator

Stifel. The Instructions] from Wise question go comes [Operator with ahead. Rick first Please

Rick Wise

I'll excellent one right Great Good long-term start guidance. XXXX everybody. to your to focus X% your is Scientific. X% year I see guide to another question, with in line with from morning philosophy. guess Boston Obviously, the on

in in But you started the same place 'XX.

You Why of obviously, issue, to And macro the headwinds above conservatism, respect Italy for organically. maybe just or pressures part excluding X% that, model why to finished Is the as X%? stick similar again both? with lingering this macro 'XX?

to not but Scientific, Thank the way, you or companies large-cap they're Boston The in and from or improving much. less 'XX? reporting all date, pressures as highlighting very form shape they some macro the finish start year they're

Mike Mahoney

Rick. Good It's for morning, Mike. the compliments. Thanks

We're Just points, happy summarize fourth guess. I your to with really quarter.

Italy Excluding and that as revenue 'XX. really And high margins reserve plus of the EPS. top-tier sales, delivered one growth pleased X%, of I of that Dan grew actually in as improved think end well basically end onetime companies high said, that few

don't So, of and here. in the in have bullish excited, 'XX future guidance, February we very here. you momentum we're on a lot the day win On

we guidance the to So is for X% think year appropriate. full X%

comp XXXX. For in X% off we're a coming growth the full year,

a of We we couple We're are we as fast include last believe that's EP guess, that grew And couple side. WATCHMAN as digits diagnostics. to on minus. market There or company. you X% do bullish There's with CRM plan I things a are be the X% momentum in continue and grow possibly in our year, -- very the a We business, will about low pluses to in invest on single when we can the obviously of there headwinds. with X%,

potentially excellent us bit as we 'XX. So, growth of and in to little we but double-digit comps on for based headwind quite deliver, did expect not there a as fast they a performed expect 'XX, terrific again, them China in

the Also, about markets we underlying X%. compete at

to time push This think give, full smart X% we a year, to year we're beat estimate. to off to it. X% is X% of going coming the So, and prudent comp, guidance

Dan Brennan

as to macroeconomic then kind in of a And saw the Rick, similar the relative that headwind -- in we environment, we that reiterated being XXXX XXX XXXX.

have organization of saw you been which a at updates of giving global high-performing reason on we specs pretty have. all chain that and XXXX, the As has through top level the the we've supply is through specificity that we this that been it,

annual imagine, guidance operating at that There and So, XXXX try could as and you bring. preparation plan work some to better, in they better. a understand Freight process, as are would what we right? detailed through our process look level dug really elements went does

prices coming see prices down. oil You fuel and

we're So, be freight costs less. will optimistic

materials had of that The piece is XXXX, direct supply got materials of labor you've bit and and the XXXX. a that that annualize cost and still that to in uncertain choppy in we

prudent that in guidance So, surprised help. that February we in to I in a help lot get that be assume the case as what year saw the last for the as a think we we prudent think of right macroeconomic we sit headwind course here, prudent to here get similar XXXX, we don't to to year. I'd assume is I go But February, love through

Rick Wise

much. Thank so you

Operator

Marcus with question ahead. Please next go from JPMorgan. comes The Robbie

Robbie Marcus

Mike, POLARx to on you quarter, going you question. bullish have outside have last were Congrats FARAPULSE, my Thanks particularly our FARAPULSE we saw and for now. a EP and the start, in nice U.S., nice beat month, really on Maybe where quarter. a at taking conference the

data Maybe assuming about looks for you expectations get the saw in and XXXX, you it back half the what year, for the expectations FARAPULSE in could good? after later specifically especially talk quarter the your it in of your we

Mike Mahoney

and grew quarter the or it XX EP XX, XX% Sure. think... Yes, our I grew business in

Lauren Tengler

internationally. XX%

Mike Mahoney

and in these we products don't approved U.S. the U.S. have internationally the because poorly XX% in

down XX. the look growth U.S. the as growth really really But outside -- drove the that to at I So key us. barometer the for

product platform against with in decade. a a pickup platform that hasn't both FARAPULSE. Cryo is our to we're that is see And a great cryo changed continuing competing and

have use Japan like features the of that the and in Europe. the of we so, platform in And cryo and ease physicians

to for that half well, that's in So hopeful approval second doing the U.S. quite we're here. 'XX and have of

FARAPULSE is is extremely Stein he extremely we both bullish users and FARAPULSE RF adopted comments. point XXXX well then and very look on doing for phone, and make in the especially some point users, who to as Dr. we're is And can so and But the cryo at terms utilization our high, enthusiasm Europe for EP of performance in Japan. FARAPULSE outlook, have

And -- big U.S. if the of approval in 'XX. the then perform FARAPULSE can will some platform cryo we from we get expect a in quite to the well. the second And half, impact as well see

So, the a field. future our competitive know is EP of business bright. We very it's

cryo we have and unique the team showing bring ready that to an they're commercial clinically have that differentiated We FARAPULSE launched to in and platforms and these excellent U.S. are where believe we both

have So, growth if we for us Dr. you XX Stein, it's comments? but EP, specific don't other give well guidance that. beyond driver clearly any and a critical for

Ken Stein

Mike. differentiated Thanks, we to Again, just PFA that there. technologies Thanks, is absolutely. other Yes, believe relative FARAPULSE Robbie. do out

the it's way to that I PFA field that the the to all with dependent because important think reiterate of a the and PSA effect, highly that created equal technologies not and to are the results is FARAPULSE any only see is design the that's you're it's going evaluation deliver delivered on designed waveform and now system dependent strategy. dosing was catheter up actual dependent on from right in ground the

randomized said, to of in trial of half well as we trial, this presenting forward are advantage AF persistent looking second the really our the ADVENT you as FARAPULSE results our year And initiate imminently. to as

we've what Transseptal and versus access that consider access, about our with really to extraordinary really bales other and The it's structural from continue and also solutions only growth continue solutions, I'd also the in and to Mike ablation access above-market is increased said use both procedures I and across energy to in WATCHMAN think think thing of you the procedures. needle see Transseptal to heart add the think with that important momentum I got Baylis as see

Robbie Marcus

with maybe has a Boston And important follow-up. operating China Great. growth Thanks. year the an XX% the just driver quick environment. Scientific, been even difficult in grew for

about here expectation how So the Thanks. thinking of quarter? for coming out going what's the be forward? And your we reopening should first China into year

Mike Mahoney

That a despite pricing you. the different challenges and 'XX all COVID had there. Thank team that the with all tenders occur terrific over

China likely China, in for do given bullish the the There'll out in team quarter they've for be we COVID. the that are in 'XX, full China we So, challenges some year. pressure double-digit first very with -- expect growth of again had

XX% we we growth challenges strong not potentially likely level in same in digits the full some digit expect we So, the do but double at as double but expect sales year, for QX, nonetheless. the that delivered 'XX, strong

Operator

ahead. The Larry comes from with go Biegelsen Wells question next Fargo. Please

Larry Biegelsen

the Good question. here. end Congratulations to morning. Thanks FARAPULSE. strong on to two-part I for taking my a year wanted ask a question on also

this did the that later Stein, context? you excitement for the trial put data win year. How ADVENT FARAPULSE? what would Can to RF you prior for and your you in compare And help ADVENT Dr. studies? talked maybe a for be about So cryo into for

at see Boston Pulse ACC, is this to at the the data weekend. AF, INSPIRE we're data -- going we're second And going select Medtronic guess, to see J&J I the part

we talked would differentiated. looking You is What those be about for Thank how my support studies FARAPULSE for in question. that taking your earlier? should comments

Ken Stein

here. And just by begin me to reiterating Robbie what I sort Yes. Larry. Thanks, said of let

at look PFA own. needs technology be everyone to evaluated really data, in As we its on that mind just every the needs to bear

the size the the you same patch and tip and RF ablation, much very putting you've got get power doing lesion. ablation. same unlike you're you've same the got through, When if same back It's catheter RF that you're

catheter that related and that put very Again, the much many how is put from is tells impact just what it's happens the them do an you field intimately then waveform, very of have effect, going you where of what different. your of energy strategy, you because dosing shape PFA you applications generating; to in. kind and you're field you're that the in do actually design tells electric which to the field

this. on decade and Again, validating then with deliver in confident a isolation. catheter dosing preclinical that based and industry ground high-quality very up PFA, ReMAP waveform to that the leader based the We're on validating designed of strategy FARAPULSE was from clinical data, a is durable creates a that having the studies really

the to right? And of randomized looking and you confidence we're where degree high seeing eating, a excited is say, gives MANIFEST, in and pudding going, that of our proof forward trial. I'm I in again, the ADVENT we're mentioned results of the the us glad really

the earliest MANIFEST Europe. a commercial following approval of So, in registry is study cases Mark CE our

the experience people's learning about X,XXX X,XXX So, initially on this then and first patients. reported in curve out some follow-up of those and is published climbing first cases limited the is

And really system stenosis, the FARAPULSE injury, of vein advantages promise complications cases data esophageal cases a no being of was able feared so of realized. using AF no the nerve safety show Certainly, of phrenic cases really persistent X,XXX injury, what those of of certainly avoid to most FARAPULSE. ablation. patients, proves No like pulmonary

and in with procedure results what's efficiency. AFib ablation conventional trials efficacy Seeing remarkable least that as for thermal good seeing as reported are at paroxysmal high-quality

sort -- in XX the order of these routinely use, Now now on of cases seeing commercial clinical being minutes. done

who are do cetera, patients, good patients it's is dealing good. be that though, et right? whole, can throughput issues, Anything too. And good efficiency with a system treated the of need of is, cetera. It's There to as procedural a staffing for increased kind for we et an lot

can that less undergoing of The you're things go procedure, wrong, a honestly. less the number time

we MANIFEST a worst differentiated as the basically, complications. validates safer right, FARAPULSE, procedure of the so advantages what the avoiding all see And some, to data

and and A least a is which procedure benefits you as what see procedure, that with thermal efficient hospitals effective as ablation physicians, patients. at really

Larry Biegelsen

you. Thank

Operator

ahead. Citibank. The from go with Please Joanne comes Wuensch question next

Joanne Wuensch

Thank grower taking I up Urology the forward? solid want Prolapse What XX% that And mean, or is question. minute two just organically and look as much XX.X% to very a of you double-digit was a good this that? And morning. more on spend should quarter, quarter. Pelvic this as I driving think last we business. for the another we

from? Thank question, you. year, going least operating there it that points is expansion of follow-up now, basis points at this basis my out I'm coming just put where margin And XX XX or to

Mike Mahoney

endo, Great, asking Mike for Thanks here. uro. the

and continue You because to about there didn't accretive margins it asked rate. and throw quite our within but sizable both to and portfolio just outperform growth getting they nicely endo, I'll are really in

world. say, I through a highly strengthening combination our differentiated service made, the And of really U.S. and grows acquisitions the But urology category with is results, global the have with I around the The business now performance performance urology been accretive underpenetrated. the U.S. would the U.S.-oriented and all through portfolio. to business This talked and and prepared a about We has urology with line, commercial predominantly in and within the outside endoscopy. global Outside that leadership that that in been a we've it's very has R&D extensively. that we investments in strong faster words, mentioned U.S. Scientific. business a Boston

So they have set to a who with very differentiated customers contracting us. want comprehensive portfolio versus with work competitive that's our very capabilities and

here. the we And few so next well, continues urology results over to quite years similar do expect and

well. done has Lumenis of integration the And

the So that's same of the words a as say, I along business. lines, terrific endoscopy well. would with most same And

margin In one? you Dan, to terms hit do of that want improvement,

Dan Brennan

that. XX do commentary reserve. was excluding XXXX I on points the basis again top sales the so Italian Yes, of results, can the

So there that and then point was XX more like actual, XX.X% be impact. basis was the would a

XX.X the come short points from? math get So to lines is And it we does all The answer where then add basis there. that where is, the to P&L. give XX believe of you the just you

said the to XXXX. neutral line, hedged the margin But to headwind year. line, gross we're year. year gross have the a adjusted margin FX neutral largely So for will from we for EPS EPS the this slight Again, at

with think slight from But gross reducing our margin. north of team in go rates gross in through terms cost we margin a supply good activities have we'll can other today, headwind have we lot see are FX and still where itself And improvement from think with we we chain the that what programs. of global volume a

strategic then the guidance And starts whole as focused each ensure healthy P&L. plan. about, think to throughout and opportunity versus top opportunities gives healthy is talked a that solid, contribute comp line. And us discretionary we've last always with the X% top SG&A tightly And achieve that on within towards has line XXXX. It leverage. our the P&L think and to managing us we year efficiencies leverage all in the a of to it's good, line, X% goal that R&D just We really our spend X% helping

Operator

The next question go Evercore ahead. comes Please ISI. from Vijay with Kumar

Vijay Kumar

my taking for Thanks question.

things incremental Just some cleanup -- questions X% is, what to through bit remind it drivers? becomes of a X% Some 'XX? in you tailwinds China maybe here the on versus little can headwinds but incremental just you a can of some any here us the guidance is has I assumptions. positive FARAPULSE go tailwinds those Mike, are and just organic, organic, headwind, but it think can the of what 'XX

up million, progress count seen seems behind -- the share count we've the the Curious count throughout what's on share again, given assumption are And for why just share year. that how XX year?

Dan Brennan

Yes, sure.

converts to have and your simple It's the quickly revenue share Mike take the that of take count, clean question. in a year. we On during that just then just the up can math --

when increase count lose is that the convert preferred then mandatory we the preferreds. share increase dividend. So the will we Recall, the from

neutral to share Vijay? preferred holders but it's That makes as count increases get sense, So the those common shares. EPS, will

Vijay Kumar

That's Yes. helpful.

Dan Brennan

Yes.

mandatory mean related neutral impact to preferred EPS So year. this should be share count I from conversion the the takeaway

Mike Mahoney

the but And headwinds: normal. just tailwinds, headwinds Sure. than the and we 'XX, did like of comp fact of bit in tougher tighter growth a a we maybe X% some the that's

that's one. So

line double-digit same growth exceedingly CRM expect a And to likely grow more with also really China in off 'XX. growth, 'XX. of be in the market the but I in would market had likely coming a growth 'XX, as mentioned then not quite bit

headwinds, of of couple a the there's a clearly, So tailwinds. bunch

Europe, the to -- U.S. performed company well globe, The extremely across LatAm, and continues Asia-Pac perform

growth grouping You XX% grow the across the Cardiology WATCHMAN year, company. as Euro really whole X%, growing a grew saw for XX%. Endo X%, impressive PI XX%,

just momentum strong have a commercially. across the a momentum tailwind bit we So which we is the of given obviously very businesses, have

that we EP. questions the And today incrementally on of have some to

year in EP in approved would very gets have in be Europe outside in the to a expect strong on We U.S. and tailwind when in cryo depending Potential Japan.

much depends the of sure U.S. the I'm date approval impact So an will there. in that have on how

to continue over quarter with fourth WATCHMAN XX% share year gained like do and We actually well. really WATCHMAN we We're in just market extremely proud. ended share. products think Other the

continues do to well. business So really that

discussion very trial finish by in shortly. momentum analysts, the and Europe, well is lots neoX. to And but we're That physicians large anxious each gets building business And ACURATE one size. that doing that a internally by U.S. little quarter. is actually We now have extremely

Vijay Kumar

Thanks That’s helpful. guys.

Operator

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

Travis Steed

Hi, I'll good taking question And my guess a thanks morning, impact. everybody. for on I question. ask Italy the

it's And if it we're a wouldn't country, of big a curious XXXX? Just a taking like be why in want conservative a it know about year -- Italy just this hearing don't maybe only approach a sales. impact I no And to reserve. I you're number. I from taking Boston. so more seems know big seems of than maybe calculated just that like more on on confirm

And then well, is now I'll op my on as which follow-up ask margins.

first takes side And second sure on in half? you. half first currency. there's versus second lower half I margin half higher, think I consider want puts the margin to mentioned to Thank op and the make on you gross any just

Dan Brennan

what can the first. been behalf the for situation, to over XXXX excess passed some Sure, few other speak Italy. I spending have last the an allocated I Travis. mentioned I'll Italy hospitals back budgets within public Boston over with I evolving here, provision back a It's the take government you can't particularly claw to on in what Italian weeks companies. the for to is speak Scientific. one in of because trying regard

dormant. over really into literally monies. years, few little collect last weeks, there's But that some activity more been with that. limited for -- the There's around again, it's a their no implementation the been desire to guidance, X-plus events really put been teeth last there's been That those changed,

booked the we that owe part We're We reserve booked be we books, the what a it our a that as reasonable a be it. obviously reserve cover amounts on reserve reserve to that. incremental so will industry given court the uncertain, timeframe. And will we we disagree we with participants, had outcome but the as vehemently system reserve. that we is that But picked incremental think challenging an we'll of believe other through Italian

Mike Mahoney

He reserves? mentioned see you 'XX do issue with more also in an

Dan Brennan

The 'XX are guidance. included amounts in

is periods, of and to the anything reserve relates in beyond amount So included to XXXX guidance. the that's XXXX XXXX, prior

that I'm juxtaposition respect you of With because to asked glad it's bit op margin, question actually, margin. a gross a with

which will margin first out a have, got bit second there. and which I higher the in sure is in trend gross make half, we a wanted point that be mentioned half normally the to lower buck the of I that I So

Relative throughout see where year. the you'll similar to think trend operating margin, though, a I builds it

of see I the in first the P&L second down and higher higher very So netting margin in a gross but half, the half, the second you amounts in margin, lower starting as first go to through you'd building to rest half, half. QX and trend would the expect operating similar

that's Travis. hopefully, So clear,

Travis Steed

Yes. Thank you.

Operator

ahead. The Please comes Morgan Furlong go with Cecilia Stanley. question next from

Cecilia Furlong

contributions? for the outlook taking called growth you're as underlying that about WATCHMAN, what's market for you thank double-digit How question. 'XX? out the XL And morning. Good the growth well to ACURATE follow-up as time quick are neoX on then registry. lines How you approval this specifically the in about Japan I wanted thinking ask China point thinking on Prime And U.S.? and a at just you with

Mike Mahoney

had in WATCHMAN, On we a year terrific 'XX. Sure.

As for very that, the It's growth companies maintaining, year. XX% today. potentially I call so expect it, said, slightly above XX% in full we XX% share, a in call 'XX, market, it, the marketplace healthy two grew

are market very from comfortable and Similar is the the proven with that procedure really The and helping to safety, clinical WATCHMAN the everyday they in consistency LAs trial WATCHMAN, using Boston through physician in device. from drive effectiveness benefits is in comfortable growth. seeing lab the support strong team physicians that They're manyfold. referring previous them such the comments, have extremely of the to at practice success is with community

excellent hospitals. market. product procedure So procedure that's the for which important an And profitable hospitals. really for -- to It's a a improve, that's time it's is today continues also

is very So good. the overall market context

WATCHMAN next-gen and platform, the product, from sheath leading about platform coming a year now. this steerable a coming We have new the we have year new and

So a differentiated pipeline well. as we have

of NeoX inaccurate one. of a think, the the on the is down doing having some implementation XL launched XL We reporting U.S. That's trial. expect was, for approval Europe. extremely slow I We well that to of -- part -- that just bit or our There process U.S. just in not valves. do some

that have size that approval. U.S. impact in of Europe. one-third is not a XL are valve about using on important So it's an procedures valve does because the And that

we'll and we're So Europe faster without eventually, than in that, market growing approval. adding be doing well, to quite that

So we're be in it expect in U.S. ACURATE to excited XXXX approved we neoX, the about that.

Cecilia Furlong

taking for Thank question. you Great. the

Operator

question, Josh go I have Cowen. the with is ahead. Jennings Please currently, next And

JoshJennings

driver with good I Thanks for but hear could the that to a portfolio intervention your diabetes, the just about to for just and Apollo get your long-term in from opportunities the obesity taking endoscopy portfolio become higher And not also wanted this question. the obesity you was outlook whether for segment. start off and -- growth hoping device-based Hi, I morning. sorry, a acquisition into diabetes level franchise? just

evidence big the in of on a space going for I a follow-up is And indication But now three evidence. levels Thanks the forward? lot. have generate SOLIS could neuropathy review diabetic trial of neuromodulation clinical your results. with I different plan hoping peripheral competitors was think Congratulations then you the that business. Boston's just indication And just on to

Mike Mahoney

Yes.

overall advance really which the it's overall, Endosurgery driving with of leader. category above-market Apollo is growth and we to can leadership, consistent strategy new on So where continuing our therapies be

endoluminal we think less particularly in Europe U.S., endoluminal in really at terrific business. in I the look U.S. the uptake more endo you see of say, and we so a bit so When for outside And is surgery, our Japan, a surgery, that would frontier next

to the and procedures with U.S. a momentum think we surgery over pick years a these endoluminal build platform will OverStitch used by product Apollo is And continue coming outside to so the perform most and called that's next xTAC. really physicians

to So Apollo current endoluminal obviously procedures Duncan we help one platform. us do outcomes, that position, as put to the be training great because these but also get addition the able we'll that to the are surgery a number Apollo would say, into our the portfolio, will train think with us platform of require make and physician in Dr. field strongest significant

Unidentified Company Speaker

Neuromod, SOLIS. And then about on asked I

Mike Mahoney

quarter. did that the with On that improvement pleased quarter, SCS SOLIS we're SOLIS, we in the again, overall X% in growing business with in fourth three-month some we see SCS, expected. the results

approval We the by back XXXX. and nonsurgical expect indication year-end for of

Unidentified Company Speaker

any we're in timelines, now haven't And early look in announced clinical work right to invest and we'll but PDN for space. that

concludes that And our for call today.

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

disconnect, you details pertinent of Drew? you Drew the all will the give for Before replay.

Operator

by XXXX Please be X-XXX-XXX-XXXX conference recording available Time. The you XX:XX p.m. will dialing for until February note concluded. in hour presentation. attending a at now Eastern has either replay XXXXXXX X, today's one X-XXX-XXX-XXXX or using Thank code

disconnect. now may You

Boston Scientific (BSX) 1 Feb 232022 Q4 Earnings call transcript