10-QPeriod: Q3 FY2023

BOSTON SCIENTIFIC CORP Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 1, 2023For Securities:BSX

Summary

Boston Scientific Corporation (BSX) reported strong financial results for the third quarter and first nine months of 2023. Net sales increased by 11.2% to $3.527 billion in Q3 2023 and by 11.4% to $10.515 billion for the nine-month period, driven by robust operational growth across its diverse product portfolio and strategic acquisitions. The company demonstrated significant profitability, with net income attributable to common stockholders rising to $505 million ($0.34 per diluted share) in Q3 2023 and $1.065 billion ($0.73 per diluted share) for the nine-month period. Key operational improvements and strategic acquisitions, including Apollo Endosurgery and Acotec Scientific Holdings, contributed positively to revenue growth. The company also managed its expenses effectively, with R&D expenses increasing to support innovation and SG&A expenses growing proportionally with sales. While facing some supply chain pressures and inflationary impacts, Boston Scientific maintained a healthy gross profit margin and continued to invest in its pipeline. The company also resolved significant patent litigation, resulting in a substantial credit. Overall, BSX presented a solid financial performance with strong top-line growth and profitability.

Financial Highlights

50 data points
Beta

Revenue

$3.53B

68.8% Gross Margin

Net Income

$504.00M

14.3% Net Margin

EPS (Diluted)

$0.34

Total Assets

$34.04B

Cash & Equivalents

$952.00M

Free Cash Flow

$508.00M

Financial Statements
Beta
Revenue$3.53B
Cost of Revenue$1.10B
Gross Profit$2.43B
SG&A Expenses$1.24B
Operating Expenses$1.73B
Operating Income$693.00M
Interest Expense$66.00M
Net Income$504.00M
EPS (Basic)$0.34
EPS (Diluted)$0.34
Shares Outstanding (Basic)1.46B
Shares Outstanding (Diluted)1.48B

Key Highlights

  • 1Net sales for Q3 2023 grew 11.2% to $3.527 billion, and 11.4% for the nine months to $10.515 billion, indicating strong market demand and effective sales execution.
  • 2Net income attributable to common stockholders was $505 million ($0.34 per diluted share) for Q3 and $1.065 billion ($0.73 per diluted share) for the first nine months, demonstrating significant profitability.
  • 3Operational net sales growth was 11.1% in Q3 and 11.9% organically for the nine months, reflecting broad-based growth across segments and acquisitions.
  • 4Acquisitions, including Apollo Endosurgery and a majority stake in Acotec, are contributing to revenue growth and strategic positioning.
  • 5The company resolved significant patent litigation with Cook Group, resulting in a $158 million award and a subsequent settlement.
  • 6Gross profit margin remained strong at 68.8% for Q3 and improved to 69.6% for the nine months, despite some currency headwinds.
  • 7Boston Scientific continues to invest in R&D, with expenses increasing by 5% in Q3 and 6% for the nine months, supporting its innovation pipeline.

Frequently Asked Questions

Revenue growth was primarily driven by strong operational net sales growth across its diverse product portfolio, including the Endoscopy, Urology, Cardiology, and Peripheral Interventions businesses. Strategic acquisitions, such as Apollo Endosurgery and the majority stake in Acotec Scientific Holdings, also contributed significantly to the top-line performance.

Boston Scientific reported solid net income attributable to common stockholders of $505 million ($0.34 per diluted share) for the third quarter and $1.065 billion ($0.73 per diluted share) for the first nine months. The company also provided adjusted figures, which exclude items like amortization, acquisition-related costs, and litigation credits. For Q3, adjusted net income was $732 million ($0.50 per diluted share), highlighting strong underlying operational profitability.

The company continues to invest in R&D, with expenses increasing to maintain a pipeline of new products. They also announced an agreement to acquire Relievant Medsystems, Inc., expected to close in the first half of 2024, demonstrating a commitment to strategic growth through acquisitions. The company expects its full-year 2023 gross profit margin to slightly improve compared to 2022.

The company reported a significant litigation-related net credit of $111 million in Q3 2023 related to the settlement of offensive patent litigation. They also reached an agreement in principle to settle a class action lawsuit related to the LOTUS Edge™ Aortic Valve System. While these matters are being managed, the company continues to accrue for potential future losses related to ongoing litigation, including product liability cases.