BOSTON SCIENTIFIC CORP

Boston Scientific Corporation is a global developer, manufacturer and marketer of medical devices used in a broad range of interventional medical specialties, operating in the highly competitive medical device industry. The company faces significant competition from large manufacturers with multiple lines of business and competing products, as well as from a wide range of medical device companies that sell a single or limited number of competitive products, and from low-cost manufacturers and domestic medical device companies in certain countries like China. Management believes the company's products and solutions compete primarily on their ability to deliver differentiated clinical and economic outcomes, ease of use, comparative effectiveness, reliability, and physician familiarity, and competitive success depends on continuing to offer products that provide such outcomes, developing or acquiring innovative technologies, protecting intellectual property, obtaining regulatory and reimbursement approvals, maintaining quality systems, and successfully marketing products.

The company generates revenue through the sale of medical devices to hospitals, clinics, outpatient facilities, and medical offices in 127 countries worldwide, with the majority of net sales derived from countries where it has direct sales organizations. Revenue is recognized when control transfers to the customer, typically upon passage of title and risk of loss, and the company also recognizes revenue from consignment arrangements based on product usage or implant. The business model includes a mix of transactional device sales and recurring revenue from service obligations such as the LATITUDE Patient Management System, where revenue is deferred and recognized over the related service period. Primary customer segments include hospitals, physicians, and other health care providers that bill various third-party payers, including government programs and private insurance.

The company's product portfolio is organized into two reportable segments: MedSurg and Cardiovascular. The MedSurg segment includes the Endoscopy, Urology, and Neuromodulation business units. Endoscopy develops minimally invasive devices for gastrointestinal and pancreaticobiliary conditions and weight loss, including hemostatic clips, stent systems, single-use scopes, and endoluminal surgery products. Urology develops devices for kidney stones, benign prostatic hyperplasia, prostate cancer, erectile dysfunction, incontinence, and pelvic floor disorders, including stone management products, laser systems, prosthetic urology products, and the Axonics Sacral Neuromodulation System. Neuromodulation develops devices for neurological movement disorders and chronic pain, including the WaveWriter Alpha Spinal Cord Stimulator System, the Intracept Intraosseous Nerve Ablation System, and the Vercise Genus Deep Brain Stimulation System. The Cardiovascular segment includes Interventional Cardiology and Vascular Therapies, Watchman, Electrophysiology, Cardiac Rhythm Management, and Interventional Oncology and Embolization business units. Interventional Cardiology and Vascular Therapies develops technologies for coronary, peripheral, and venous diseases, including intravascular imaging systems, atherectomy systems, drug-eluting stents, and thrombectomy systems. Watchman develops Left Atrial Appendage Closure Devices for patients with non-valvular atrial fibrillation. Electrophysiology develops technologies for diagnosing and treating heart rate and rhythm disorders, including the FARAPULSE Pulsed Field Ablation System. Cardiac Rhythm Management develops implantable devices including defibrillators, pacemakers, and remote patient management systems. Interventional Oncology and Embolization develops products for treating various forms of cancer, including radioactive glass microsphere therapy and embolization devices.

In 2025, the company completed several acquisitions: on April 1, 2025, it acquired the remaining shares of Bolt Medical, Inc., developer of an intravascular lithotripsy platform, for an upfront cash payment of $475 million ¹, net of cash acquired, with a future payment of up to $200 million ² upon achievement of a regulatory milestone; on May 7, 2025, it acquired the remaining shares of SoniVie Ltd., developer of the TIVUS Intravascular Ultrasound System, for an upfront cash payment of $362 million ³, net of cash acquired, with an additional future payment of up to $200 million ⁴ upon achievement of a regulatory milestone; on May 6, 2025, it acquired 100 percent of Intera Oncology, Inc. for an upfront cash payment of approximately $172 million ⁵, net of cash acquired; on July 11, 2025, it acquired 100 percent of Anrei Medical (HZ) Co., Ltd. for an upfront cash payment of approximately $182 million ⁶, net of cash acquired; and on January 24, 2025, it acquired 100 percent of Cortex, Inc. for an upfront cash payment of $239 million ⁷, net of cash acquired, with up to an additional $50 million ⁸ in future payments upon achievement of milestones. On January 15, 2026, the company announced a definitive agreement to acquire 100 percent of Penumbra, Inc. for a purchase price valued at $374 per share ⁹, or approximately $14.500 billion ¹⁰, expected to close during 2026. On January 27, 2026, the company completed its acquisition of 100 percent of Nalu Medical, Inc. for an upfront cash payment of approximately $517 million ¹¹, net of cash acquired. In February 2023, the company committed to a global restructuring program (the 2023 Restructuring Plan), which was expanded on July 29, 2025 by up to $250 million ¹² in aggregate additional pre-tax charges, and is estimated to result in total pre-tax charges of approximately $700 million to $800 million ¹³. The company also announced the discontinuation of worldwide sales of the ACURATE neo2 and ACURATE Prime Aortic Valve Systems in the second quarter of 2025, resulting in total pre-tax restructuring and restructuring-related net charges of approximately $87 million ¹⁴.

Reported net sales for 2025 were $20.074 billion ¹⁵, compared to $16.747 billion ¹⁶ in 2024, representing reported growth of 19.9% ¹⁷. Reported net income attributable to Boston Scientific common stockholders was $2.898 billion ¹⁸ in 2025, compared to $1.853 billion ¹⁹ in 2024, an increase of 56.4% ²⁰. Diluted net income per common share was $1.94 ²¹ in 2025, compared to $1.25 ²² in 2024. Adjusted net income attributable to Boston Scientific common stockholders (non-GAAP) was $4.574 billion ²³ in 2025, compared to $3.725 billion ²⁴ in 2024. Adjusted diluted net income per common share (non-GAAP) was $3.06 ²⁵ in 2025, compared to $2.51 ²⁶ in 2024. Gross profit was $13.854 billion ²⁷ in 2025, compared to $11.490 billion ²⁸ in 2024. Operating income was $3.613 billion ²⁹ in 2025, compared to $2.603 billion ³⁰ in 2024. Cash provided by operating activities was $4.534 billion ³¹ in 2025, compared to $3.435 billion ³² in 2024.

The filing does not provide specific management guidance for revenue, margin, or EPS for the upcoming period in the form of a formal quantitative outlook. However, management discusses expectations for the 2023 Restructuring Plan, which is estimated to result in total pre-tax charges of approximately $700 million to $800 million ³³ and reduce gross annual pre-tax expenses by approximately $350 million to $400 million ³⁴ as program benefits are realized, with a substantial portion of the savings expected to be reinvested in strategic growth initiatives. Additionally, the company expects to incur total EU MDR implementation costs of approximately $475 million to $525 million ³⁵ over the transition period, with cumulative expenses of $464 million ³⁶ incurred through December 31, 2025.

A key growth vector is the expansion of the Electrophysiology business unit, led by the FARAPULSE Pulsed Field Ablation (PFA) System, which launched in the U.S. in early 2024 and has seen rapid conversion from legacy treatment modalities to PFA, now the predominant component of the Electrophysiology business unit and revenue. The company received FDA approval in the United States and PMDA approval in Japan in the second and third quarters of 2025, respectively, to expand instructions for use labeling to include the treatment of drug refractory, symptomatic persistent AF with the FARAPULSE PFA System. Another growth vector is the continued market penetration of Left Atrial Appendage Closure (LAAC) procedures with the WATCHMAN LAAC Devices, and the company received CE mark in the second quarter of 2025 for the WATCHMAN FLX Pro Left Atrial Appendage Closure Device, which is optimized for healing and designed to improve visualization and treat a broader range of patient anatomies. The company also expects to drive growth through its strategic imperative to drive global expansion, including in Emerging Markets, where reported net sales growth was 11.4% ³⁷ in 2025, primarily driven by growth in China.

The company's margin trajectory is influenced by several factors. Gross profit margin was 69.0% ³⁸ in 2025, compared to 68.6% ³⁹ in 2024, with the increase primarily driven by increased sales of higher margin products, partially offset by inventory charges resulting from the global discontinuation of the ACURATE platform, increased levels of tariffs, and other period expenses. The company's restructuring and optimization initiatives, including the 2023 Restructuring Plan, are expected to reduce gross annual pre-tax expenses by approximately $350 million to $400 million ⁴⁰ as program benefits are realized, though a substantial portion of the savings is expected to be reinvested in strategic growth initiatives. The company also expects to incur total EU MDR implementation costs of approximately $475 million to $525 million ⁴¹ over the transition period.

The company is focused on continuously improving supply chain effectiveness, strengthening manufacturing processes, and increasing operational efficiencies. It has an ongoing supplier resiliency program to identify and mitigate risk and has taken measures to mitigate the impact of challenges within the global supply chain. The company monitors inventory levels, manufacturing, sterilization, and distribution capabilities and maintains recovery plans to address potential disruptions. As of December 31, 2025, the company maintained 13 principal manufacturing facilities, including six in the U.S. and Puerto Rico, three in Ireland, two in Costa Rica, one in Malaysia, and one in China, as well as a Global Headquarters in the U.S. and various distribution and technology centers around the world. The company had approximately 59,000 employees ⁴² as of December 31, 2025.

The company's capital allocation strategy includes investment in research and development, which was $2.052 billion ⁴³ in 2025, compared to $1.615 billion ⁴⁴ in 2024. Purchases of property, plant and equipment and internal use software were $876 million ⁴⁵ in 2025, compared to $790 million ⁴⁶ in 2024. The company has a stock repurchase program approved on December 14, 2020, authorizing the repurchase of up to $1.000 billion ⁴⁷ of its common stock, with the full amount remaining available as of December 31, 2025. The company did not pay a cash dividend in 2025, 2024, or 2023 on its common stock and currently does not intend to pay cash dividends. The company plans to fund the Penumbra acquisition through a combination of cash on hand and newly issued debt in an aggregate amount equal to approximately $11.000 billion ⁴⁸, with the remaining portion paid in shares of common stock.

The company faces several headwinds and constraints. It continues to experience pressures from competitive activity, increased market power of customers as the health care industry consolidates, national and regional government tenders, economic pressures experienced by customers, and capacity shortages within health care facilities that have and may continue to negatively impact demand for products. The company also faces uncertainty regarding potential shifts in trade policies, tariffs, and other trade protection measures, which could have a material adverse effect on its operations, including its ability to source and manufacture products in a timely and cost-effective manner. The company anticipates incurring incremental costs under the current schedule of tariffs on U.S. imports and any potential increases in tariffs introduced by China on U.S. manufactured products. Additionally, the company faces risks from global macroeconomic conditions, including inflation, interest rates, monetary policy, exchange rates, and geopolitical developments, which could adversely impact its business.

The company faces intense competition and rapid technological change in the medical device industry, and failure to develop or acquire new products or enhance existing products could have a material adverse effect. The company is subject to extensive and dynamic medical device regulation, and failure to obtain or maintain regulatory approvals, or adverse regulatory actions such as recalls or seizures, could impede product sales. The company has significant debt, with an outstanding balance of $11.436 billion ⁴⁹ as of December 31, 2025, and must maintain a maximum permitted leverage ratio of 4.50 times ⁵⁰ under its credit agreement, with actual leverage at 1.92 times ⁵¹ as of December 31, 2025; failure to comply could require repayment of borrowings. The company is involved in various legal proceedings, including intellectual property litigation, and is substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims, increasing its exposure to unanticipated claims. The company's international operations, which accounted for 36% ⁵² of global net sales in 2025, are subject to risks including geopolitical instability, foreign currency fluctuations, trade protection measures, and varying regulatory requirements, which could adversely impact growth and profitability.

Management's message emphasizes the company's five strategic imperatives: Strengthen Category Leadership, Expand into High Growth Adjacencies, Drive Global Expansion, Fund the Journey to Fuel Growth, and Develop Key Capabilities. Management believes execution of these imperatives will help deliver on the company's mission, drive innovation, and increase value for customers and employees while strengthening its leadership position and delivering profitable revenue growth. Key strategic priorities for the period ahead include continuing to invest in core businesses, pursuing opportunities to diversify and expand into strategic high-growth adjacencies and new global markets including emerging markets, and completing and integrating acquisitions such as the pending Penumbra acquisition. Management also highlights the company's commitment to corporate social responsibility and living its values as a global business and corporate citizen.