01—Abstract
Summary
Summary of the 8-K filed February 10, 2026. Cited figures are marked; the original filing is the authoritative source.
Edwards Lifesciences (EW) reported fourth-quarter 2025 results that beat the top line and were in line with its prior margin guidance.
Q4 sales rose 13.3% to $1.57 billiona (11.6% constant currency), led by TAVR at $1.16 billion (up 12.0%, 10.6% constant currency) and TMTT at $156 million (up more than 40%). Surgical sales were $254 million, up 4%. GAAP diluted EPS was just $0.11, but that figure was depressed by a $208.6 million intellectual property and litigation charge and a $99.8 million impairment on its JenaValve investment.
Adjusted EPS was $0.58b, which management said also reflected a higher-than-expected tax rate. Q4 GAAP operating margin was 9.6% versus 23.7% adjusted, with SG&A rising to 38.4% of sales from 35.5% as strategic patient-access spending was partly pulled forward from earlier quarters. Management raised its confidence in 2026 guidance, now calling for constant currency sales growth of 8% to 10% and adjusted EPS of $2.90 to $3.05.
TMTT is expected to grow 35% to 45% to $740 million to $780 millionc, and full-year operating margin is expected at the high end of the 28% to 29% range. First-quarter 2026 guidance calls for sales of $1.55 to $1.63 billion and adjusted EPS of $0.70 to $0.76. Management pointed to several catalysts: long-term PARTNER 3 and PARTNER 2 data, the EARLY TAVR trial, new European guidelines, FDA approval of SAPIEN M3, and a possible updated TAVR national coverage determination (NCD) that CMS has opened for reconsideration.
The company ended 2025 with about $3.0 billiond in cash and roughly $600 million in total debt. The filing is a routine Item 2.02 earnings disclosure furnished under Exhibit 99.1 and is not deemed filed under the Exchange Act. For investors, the key questions are whether the growth in TAVR and TMTT holds through 2026, whether SG&A investment converts into higher patient access, and how large and recurring the IP litigation charges and tax rate changes are.
02—Key points
Key Highlights
- Q4 2025 sales of $1.57 billion grew 13.3% reported (11.6% constant currency); FY 2025 sales were $6.07 billion, up 11.5%.
- TAVR sales reached $1.16 billion in Q4 (up 12.0%), with stable pricing and competitive position globally and modest European share gains after a competitor's exit.
- TMTT sales grew more than 40% to $156 million in Q4, driven by PASCAL and EVOQUE, with the first transcatheter mitral replacement (SAPIEN M3) approved in the U.S.
- GAAP diluted EPS was $0.11 versus adjusted EPS of $0.58, reflecting a $208.6 million IP and litigation charge and a $99.8 million JenaValve investment impairment; the adjusted figure also absorbed a higher-than-expected tax rate.
- Q4 SG&A rose to 38.4% of sales (from 35.5%) as strategic patient-access spending, partly delayed from earlier quarters, was incurred; R&D fell to 17.1% of sales.
- 2026 guidance was reaffirmed with increased confidence: 8–10% constant currency sales growth, adjusted EPS of $2.90–$3.05, adjusted gross margin of 78–79%, and R&D near 17% of sales.
- Balance sheet remains strong, with about $3.0 billion in cash against roughly $600 million of total debt at December 31, 2025.
03—Questions
Frequently Asked Questions
Why was GAAP EPS so much lower than adjusted EPS in Q4 2025?
GAAP diluted EPS was $0.11 versus $0.58 adjusted. The gap is mainly a $208.6 million charge for intellectual property agreements and certain litigation, which adds about $0.32 per share after tax, plus a $99.8 million ($76.5 million after tax) impairment of the company's JenaValve investment, worth about $0.14 per share. Smaller items, including restructuring and acquisition contract termination costs, make up the rest.
What does the 2026 guidance imply for growth and profitability?
Management expects constant currency sales growth of 8% to 10% and adjusted EPS of $2.90 to $3.05. TMTT is forecast to grow 35% to 45% to $740 million to $780 million. Operating margin is expected at the high end of the 28% to 29% range, and adjusted gross margin at 78% to 79%. For Q1 2026, the company guides to sales of $1.55 to $1.63 billion and adjusted EPS of $0.70 to $0.76.
What are the main growth drivers Edwards highlighted?
The company pointed to TAVR, supported by long-term PARTNER 3 (7-year) and PARTNER 2 (10-year) data and the EARLY TAVR trial. It also cited new European guidelines and a possible updated U.S. TAVR national coverage determination that CMS has opened for reconsideration. In TMTT, growth comes from PASCAL, EVOQUE, and the newly approved SAPIEN M3. Later-2026 catalysts include next-generation TEER, PASCAL for U.S. tricuspid patients, and a surgical left atrial appendage closure device.
Why did SG&A jump, and is it expected to persist?
Q4 SG&A rose to $603 million, or 38.4% of sales, compared with 35.5% a year earlier. Management said the increase funded strategic investments to expand patient access to therapy, and that some spending had been delayed from earlier 2025 quarters. The filing does not give a precise 2026 SG&A target, but the FY 2026 operating margin outlook at the high end of 28% to 29% suggests the company expects to manage these costs within its margin plan.
Does the filing indicate any risks or changes investors should monitor?
Yes. Q4 Effective tax rate was 29.0% on a GAAP basis, and management said the adjusted rate was higher than expected, which weighed on EPS. Litigation charges have been rising, reaching $325.4 million for the full year 2025 versus $40.4 million in 2024. The JenaValve impairment and the other non-operating loss on impairment also show that some strategic investments are being written down. Investors should track whether the IP litigation expense recurs and whether the national coverage determination review ends favorably for TAVR.
04—Continue