Edwards Lifesciences — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 total sales grew 10.5% year-over-year to $1.72 billion; constant currency sales grew 11.2%.
• Q3 TAVR sales grew 8.0% to $1.24 billion; constant currency sales grew 8.8%.
• Q3 TMTT sales grew 44.0% to $207 million; constant currency sales grew 45.6%.
• Q3 Surgical sales grew 2.5% to $264 million; constant currency sales grew 2.8%.
• Q3 reported EPS was $0.53; adjusted EPS was $0.80, representing a 19% increase versus the prior year.
• Q3 gross profit margin was 78.5% (78.7% adjusted), compared to 77.9% in the same period last year.
• Q3 operating profit margin was 17.4% (30.3% adjusted).
• Q3 SG&A expenses were $561 million (32.7% of sales), down from 33.1% of sales in the prior year.
• Q3 R&D expenses were $281 million (16.4% of sales), down from 18.1% of sales in the prior year.
• Cash and cash equivalents were approximately $3.1 billion as of September 30, 2026.
• Total debt was approximately $600 million as of September 30, 2026.
• Share repurchases totaled approximately $700 million through the third quarter, with $1.3 billion remaining under authorization.

Guidance and Future Outlook:

• Increased full-year 2026 total company sales growth guidance to approximately 11.5% (from 10% to 11%).
• Increased full-year 2026 TAVR sales growth guidance to 9.0% to 9.5% (from 8% to 9%).
• Increased full-year 2026 TMTT sales guidance to $780 to $790 million (from $760 to $780 million).
• Increased full-year 2026 adjusted EPS guidance to $2.97 to $3.05 (from $2.95 to $3.05), reflecting 18% growth at the midpoint versus the prior year.
• Reaffirmed mid-single-digit growth guidance for the Surgical segment.
• Projected Q4 2026 total sales between $1.67 and $1.75 billion.
• Projected Q4 2026 adjusted EPS between $0.61 and $0.69.
• Expects full-year 2026 adjusted gross profit margin to be at the lower end of the 78% to 79% range.
• Expects full-year 2026 operating profit margin to be at the high end of the 28% to 29% range.
• Expects full-year 2026 effective tax rate to be at the high end of the 16% to 19% range.
• Expects R&D expense as a percentage of sales to be approximately 16.5% in 2026.

Business Segments and Product Lines:

• TAVR: Global procedural growth benefited from a focus on proactive disease management of severe aortic stenosis. Competitive position remained stable sequentially and increased modestly year-over-year, driven by adoption of the SAPIEN 3 Ultra RESILIA platform. Average selling prices were stable globally.
• TMTT: Mitral and tricuspid procedure volumes continued to grow in the double digits.
  • PASCAL Precision received U.S. approval for tricuspid repair.
  • PASCAL Ace with Capture Clarity received U.S. approval for degenerative mitral TEER procedures; it is the first FDA-approved TEER device with indicators for leaflet grasping confirmation.
  • EVOQUE system received U.S. and European approval for transjugular access.
  • SAPIEN M3 system with RESILIA tissue was introduced in Europe.
• Surgical: Continued adoption of the RESILIA tissue portfolio.
  • AUTUS became the first FDA-approved surgical pulmonary valve designed specifically for pediatric anatomy.
  • ECLIPTIS surgical left atrial appendage system is in a measured rollout in the U.S.

Market and Competitive Landscape:

• U.S. CMS released the final updated national coverage determination (NCD) for TAVR, reinforcing the value of the multidisciplinary heart team.
• Updated ESC and EACTS guidelines in Europe are shaping clinical discussions around earlier intervention.
• Japan secured new and dedicated reimbursement for the SAPIEN 3 Ultra RESILIA platform.
• The PROGRESS trial results were published in The New England Journal of Medicine, marking a turning point in the management of moderate aortic stenosis.
• The CLASP IITR pivotal trial demonstrated superiority of the PASCAL system plus optimal medical therapy compared with OMT alone for severe or greater tricuspid regurgitation.
• The ENCIRCLE trial supported transseptal TMVR as a therapeutic option for selected patients with mitral regurgitation.

Risks and Challenges:

• Currency fluctuations are expected to impact the full-year adjusted gross profit margin, though manufacturing efficiencies are offsetting the scaling of newer therapies.
• The effective tax rate is impacted by changes to California law restricting the usage of R&D credits.
• The company expects the side-by-side safe-harbor taxation legislation related to Pillar Two not to come into effect before the end of 2026.
• A $220.2 million impairment charge was recorded in Q3 2026 related to in-process research and development assets and fixed assets acquired as part of an acquisition.
• A $174.4 million valuation allowance was recorded in 2026 due to California budget legislation limiting business tax credits.

Management Commentary and Tone:

• CEO Bernard Zovighian stated the company delivered strong third-quarter growth of 11.2% which exceeded expectations, citing broad-based performance across businesses and regions.
• Management expressed confidence to raise the full-year outlook, attributing success to a focused structural heart strategy, disciplined execution, and long-term investments in innovation.
• Management noted encouraging signs of procedure growth exiting the quarter and a stable competitive position in the U.S.
• The tone emphasized strong, sustainable long-term growth driven by clinical evidence, regulatory milestones, and commercial priorities.

Other Key Points:

• Edwards Lifesciences is the leading global structural heart innovation company.
• The company hosted a conference call on November 4, 2026, to discuss results.
• The PROGRESS trial data reinforces the value of proactive disease management for aortic stenosis.
• Real-world clinical outcomes for EVOQUE TTVR patients in the TVT Registry with CMS linkage replicated those observed in the TRISCEND II clinical trial.
• Early clinician feedback on the PASCAL tricuspid system and PASCAL Ace with Capture Clarity is very positive.
• The company continues to expect constant currency operating margin expansion of approximately 150 basis points for the full year 2026.