Boston Scientific (BSX) Q3 2026 Earnings Call: Q&A Summary

Q: Robbie Marcus with JPMorgan asked about the actual financial impact of the cyber incident in the third quarter and the reasoning behind the no-growth guidance for 2027.

A: Jon Monson, CFO, estimated the cyber incident caused a $150 million revenue headwind and a $0.07 EPS impact in the third quarter. He noted a further 200 to 300 basis point headwind is expected in the fourth quarter as inventory levels normalize. Mike Mahoney, CEO, explained the 2027 outlook assumes current WATCHMAN market dynamics persist and accounts for competitive entry, alongside expected share erosion in the EP business until new product launches arrive in 2028.

Q: Larry Biegelsen with Wells Fargo asked about the confidence in returning to growth in 2028 and the specific drivers, given concerns about PFA competition.

A: Mike Mahoney stated that 2028 growth will be driven by the Interventional Cardiology, Vascular, and Penumbra segment, which is expected to grow above the weighted average market growth rate. He added that CRM will return to growth with the mCRM launch, and the Rhythm Solutions business will improve through the cadence of new product launches, including ICE, FARAWAVE Ultra, and FARAFLEX.

Q: Joanne Wuensch with Citi asked about internal actions to bridge performance to 2028 and the status of the Penumbra acquisition.

A: Mike Mahoney highlighted a restructuring program focused on delayering the organization and reducing discretionary spend. Jon Monson added that the company expects to achieve over $500 million in savings over three years, with more than half realized by the end of 2027. Regarding Penumbra, Mike Mahoney noted that regulatory discussions are ongoing, and they now expect to close the transaction in early 2027.

Q: Rick Wise with Stifel asked for an update on the MedSurg outlook and what is required to return to historical growth rates of 7% to 8%.

A: Mike Mahoney explained that Neuromodulation is performing well, while Endoscopy remains strong despite facing China pricing headwinds in 2027. He noted that Urology is improving with new stone management product approvals and commercial team stabilization, and the company aims to return the segment to its historical 7% to 8% growth range over time.

Q: Travis Steed with Bank of America asked about the pipeline delays and improvements in forecasting capabilities.

A: Jon Monson stated that the company has enhanced its forecasting process by implementing more sensitivity analysis and incorporating third-party data. Mike Mahoney acknowledged that while the pipeline is rich, the company has experienced approximately 6-month delays in some large platforms as they prioritize high-quality, high-scale launches.

Q: Josh Jennings with TD Cowen asked if the 7% weighted average market growth rate is sustainable and for an update on the LAAC market.

A: Mike Mahoney affirmed that the 7% growth rate is sustainable, potentially reaching 7% to 8% over the next three years as the company enters new markets like IVL and hypertension. He noted that the WATCHMAN business is currently a headwind but remains a key focus for long-term growth.

Q: Marie Thibault with U.S. Bank BTIG asked why adjusted EPS growth is not expected in 2027 despite restructuring efforts.

A: Jon Monson cited product mix pressure from the WATCHMAN and EP businesses, escalating China pricing headwinds, and continued investment in supply chain and quality systems as the primary factors creating gross margin pressure in 2027.

Q: Pito Chickering with Deutsche Bank asked about the delays in the THRIVE data and the strategy shift for VITALYST.

A: Dr. Ken Stein, Chief Medical Officer, explained that VITALYST is pivoting to focus on cardiogenic shock due to the high unmet need and mortality rates in that patient population. Regarding THRIVE, he noted that enrollment has been slower than expected following the integration of the SoniVie team, but the company remains confident in the technology.

Q: Matthew O'Brien with Piper Sandler asked for more detail on the causes of delays for the Ultra and FARAFLEX programs.

A: Joseph Fitzgerald, EVP of Cardiology, clarified that Ultra delays are due to design verification and validation requirements, as it is a PMA supplement. He attributed FARAFLEX delays to IDE approval negotiations, CMS approval timing, and operational challenges in expanding the number of clinical sites.

Q: Matt Taylor with Jefferies asked for an update on the expected dilution from the Penumbra acquisition.

A: Jon Monson stated that the original estimate of $0.06 to $0.08 of dilution will likely increase due to higher interest rates since the deal was announced, though he noted the company will provide more detail once the transaction closes.