• Total Sales Q4 2024: $1.39 billion, 9% year-over-year growth.
• Full-Year 2024 Sales: $5.4 billion, 9% growth.
• TAVR Full-Year 2024 Sales: $4.1 billion, 6% year-over-year growth.
• TAVR Q4 2024 Sales: $1.04 billion, 5.3% year-over-year growth.
• TMTT Full-Year 2024 Sales: $352 million, 77% year-over-year growth.
• TMTT Q4 2024 Sales: $105 million.
• Surgical Full-Year 2024 Sales: $981 million, 6% year-over-year growth.
• Surgical Q4 2024 Sales: $244 million, 5% year-over-year growth.
• Adjusted Earnings Per Share Q4 2024: $0.59.
• GAAP Earnings Per Share Q4 2024: $0.58.
• Adjusted Gross Profit Margin Q4 2024: 79%.
• SG&A Expenses Q4 2024: $492 million, 35.5% of sales.
• R&D Expenses Q4 2024: $271 million, 19.6% of sales.
• Adjusted Operating Profit Margin Q4 2024: 25.6%.
• Cash and Cash Equivalents as of Dec 31, 2024: $3 billion.
• 2025 Sales Guidance: $5.6 billion to $6 billion.
• 2025 TAVR Sales Guidance: $4.1 billion to $4.4 billion.
• 2025 TMTT Sales Guidance: $500 million to $530 million.
• 2025 Surgical Sales Guidance: $970 million to $1.05 billion.
• Q1 2025 Sales Guidance: $1.35 billion to $1.43 billion.
• Q1 2025 Adjusted EPS Guidance: $0.58 to $0.64.

• Warning! GuruFocus has detected 4 Warning Signs with EW.

Release Date: February 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Edwards Lifesciences Corp (NYSE:EW) reported a strong 9% sales growth for the full year 2024, reaching $5.4 billion, in line with their original guidance.
• The Transcatheter Mitral and Tricuspid Therapies (TMTT) segment exceeded expectations, contributing significantly to the company's growth.
• Strategic acquisitions, including JC Medical, Innovalve, and Endotronix, expanded Edwards' opportunities in new therapeutic areas.
• The company completed the sale of its Critical Care segment, allowing a focused strategy on structural heart technologies.
• Edwards Lifesciences Corp (NYSE:EW) maintained a strong balance sheet with approximately $3 billion in cash and cash equivalents as of December 31, 2024.

Negative Points

• Transcatheter Aortic Valve Replacement (TAVR) growth was lower than expected, impacting overall sales performance.
• Sales growth in Japan was slower compared to other regions, indicating regional pressure and challenges.
• The company experienced a decrease in adjusted gross profit margin from 80% to 79% year-over-year.
• Selling, general, and administrative expenses increased significantly, reflecting growth in TMTT field-based teams and transition expenses.
• Foreign exchange rates are expected to negatively impact 2025 sales by approximately $130 million.

Q & A Highlights

Q: Can you discuss the dynamics that drove TMTT's performance in 2024 and what needs to happen operationally to reach the 2025 guidance? A: Bernard Zovighian, CEO, explained that TMTT's growth was driven by the PASCAL and EVOQUE systems, with Europe and the US being significant contributors. Daveen Chopra, Corporate VP, added that EVOQUE is still in launch mode and growing, while PASCAL continues to expand in both the US and Europe. Both systems are expected to be key growth drivers in 2025.

Q: How should we think about SG&A and R&D expenses for 2025, given the rebased business excluding Critical Care? A: Scott Ullem, CFO, indicated that operating profit improvement will be driven by a 100 basis point reduction in both R&D and SG&A as a percentage of sales. The company plans to keep spending levels flat in 2025, with a lower growth rate in spending compared to revenue growth, leading to improved margins.

Q: Can you elaborate on the regional pressures mentioned and areas of strength for TAVR? A: Bernard Zovighian noted that Japan presented some growth challenges but remains a significant opportunity due to its aging population. The company is committed to enhancing capabilities in the region to drive future growth.

Q: What impact do you expect from the NTAP and the upcoming NCD for EVOQUE? A: Daveen Chopra highlighted strong demand for EVOQUE, driven by positive patient outcomes. The NTAP and anticipated positive NCD will support continued access and growth. The company expects the NCD to be finalized by the end of Q1 2025, which is built into their guidance.

Q: How do you see the early TAVR data impacting procedures, and what are the key factors for its success? A: Larry Wood, Corporate VP, stated that the early TAVR data is compelling and will lead to more patients entering the system. Success will depend on education, indication updates, guideline changes, and hospitals addressing capacity challenges. The data is expected to be a multi-year catalyst for growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.