Boston Scientific NYSE: BSX reported first-quarter 2026 results that landed near the top end of management’s prior guidance, while executives reduced their outlook for the remainder of the year citing “unanticipated headwinds” and changing business patterns in several key franchises.
First-quarter results beat expectations as growth reached 9.4% organically
Chairman and CEO Mike Mahoney said the company delivered “a solid quarter,” with total company organic sales growth of 9.4% versus a guidance range of 8.5% to 10%. Boston Scientific posted adjusted EPS of $0.80, up 6% year over year and at the high end of its $0.78 to $0.80 range. Adjusted operating margin was 28%.
CFO Jon Monson said first-quarter revenue totaled $5.203 billion, representing 11.6% reported growth versus the prior year and including a 220 basis point foreign exchange tailwind ($104 million). Excluding FX, operational and organic revenue growth both came in at 9.4%.
On profitability, Monson said adjusted gross margin was 70.5%, down 100 basis points year over year, “primarily driven by tariffs as well as inventory charges related to the discontinuation of our PolarX cryoablation system.”
Guidance reduced as management points to EP, WATCHMAN, and Urology
Despite the first-quarter performance, Mahoney said the year “has proven to be a more challenging year than we initially expected,” prompting the company to guide for organic growth of 5% to 7% in the second quarter and reduce full-year organic growth guidance to 6.5% to 8%.
Boston Scientific guided to second-quarter adjusted EPS of $0.82 to $0.84 and updated its full-year adjusted EPS outlook to $3.34 to $3.41, which management said implies 9% to 11% growth. Monson added that the EPS outlook includes an approximate $0.04 FX headwind for the year.
During Q&A, Mahoney said the guidance reduction was “primarily EP, WATCHMAN, and Urology,” adding that the company “started to see declining WATCHMAN volume for the first time” beginning in mid-February, that EP share trends were weaker than anticipated, and that Urology underperformed expectations.
- WATCHMAN: Mahoney said the company saw “a strong increase in concomitant growth and a deceleration of standalone WATCHMAN,” and that growth came in below internal expectations.
- Electrophysiology (EP): Mahoney said the EP business delivered a strong quarter but that the company “did lose a bit more share than we anticipated,” leading Boston Scientific to “anticipate greater share erosion” in guidance.
- Urology: Mahoney said Urology faced challenges in stone management and sacral neuromodulation, with “commercial model disruption” affecting the pelvic health franchise.
Business trends: regional performance and product dynamics
Mahoney said U.S. sales grew 11%, with double-digit growth in five of eight business units. EMEA grew 1% operationally, with growth driven by FARAPULSE, Coronary and Vascular therapies, and Neuromodulation, offset by the discontinuation of ACURATE and PolarX, which “largely” impacted EMEA. Asia-Pac grew 12% operationally, led by Japan and China.
Mahoney also said the company accelerated the timing of the PolarX cryocatheter discontinuation “given some recent safety events and the availability of non-thermal ablation technologies.”
By business, he cited:
- Urology: Organic sales growth of 1%, with headwinds from China’s VBP, product gaps in the core stone portfolio, and continued sacral neuromodulation disruption. Mahoney pointed to FDA approval for Asurys and additional planned 2026 launches, including a slim ureteroscope later in the year. He also said the Valencia Technologies acquisition, which closed in April, adds eCoin tibial nerve stimulation and should support improvement as commercial capabilities stabilize.
- Endoscopy: Organic sales growth of 7%, including better-than-anticipated performance from AXIOS as supply and product size availability improved. Mahoney cautioned that second-quarter results will still reflect AXIOS impacts and other “transient supply chain disruptions,” with improvement expected in the second half.
- Neuromodulation: Organic sales growth of 15%, with Mahoney highlighting Intracept performance and adoption in DBS of Cartesia X leads and the Illumina 3D programming algorithm.
- Cardiovascular: Organic sales growth of 11%. Interventional Cardiology/Vascular Therapies grew 8% organically, driven by double-digit coronary therapies growth and imaging momentum. Vascular Therapies grew 7% organically, driven by TCAR and Varithena, offset by the China VBP impact on arterial business that management expects to annualize in the second quarter. Interventional oncology grew 15% organically, and Mahoney said the company received FDA clearance for “Any Day Dosing” enabled by the TheraSphere 360 Y-90 management platform.
- Cardiac rhythm management (CRM): Sales declined 3%, with impacts Mahoney attributed to a “physician advisory,” tough comparisons in low-voltage device change-outs, and Middle East conflict-related disruption on the high-voltage side. He said the company expects CRM to return to growth in the second quarter and to post low single-digit growth for the full year, supported by the U.S. launch of EluPro.
WATCHMAN and EP outlook: strong clinical evidence, but near-term pressures
Mahoney said WATCHMAN grew 19% organically in the first quarter but “was below our expectations,” with U.S. volumes pressured as the quarter progressed. He attributed the trend to annualizing an initial concomitant adoption tailwind, as well as a softening in standalone cases tied to “hospital capacity, related procedure prioritization, and evolving reimbursement dynamics.”
Mahoney discussed CHAMPION-AF data presented at ACC, calling it supportive of the long-term opportunity. Chief Medical Officer Ken Stein said the study “hit all of its primary safety and efficacy endpoints and all of the important secondary endpoints,” and added that updates to labeling, guidelines, and national coverage determination “just takes time to play through.”
For 2026, Mahoney said Boston Scientific now expects global WATCHMAN growth in the mid-teens, with low- to mid-teens growth in the U.S. and more than 20% internationally. He said concomitant procedures represented roughly 25% of WATCHMAN cases today and that the company still expects that mix to rise over the long-range period, even as standalone procedures face near-term pressure.
In EP, Mahoney said organic sales rose 22% in the quarter, including 18% in the U.S. and 30% internationally. However, management reduced its 2026 EP outlook, with Mahoney saying Boston Scientific now expects the global EP business to grow approximately 10%, including mid-single digit growth in the U.S. and about 20% internationally. He cited competitive dynamics in PFA, mentioning Medtronic, Johnson & Johnson, and Abbott.
Margins, cash flow, capital allocation, and Penumbra
Monson said the company expects full-year 2026 adjusted gross margin to be “slightly below” 2025, citing lower-than-expected product mix benefit and incremental investments in supply chain and quality systems. Still, he reiterated an expectation for 50 to 75 basis points of adjusted operating margin expansion in 2026 driven by OpEx leverage, spend controls, and efficiency initiatives.
Boston Scientific posted $170 million in free cash flow in Q1 and now expects about $4 billion of free cash flow for full-year 2026. As of March 31, the company had $1.453 billion in cash and a gross debt leverage ratio of 1.8x.
Monson said the company’s top capital allocation priority remains “strategic tuck-in M&A, followed by share repurchase.” He noted the board approved an additional $4 billion for the share repurchase program, bringing total authorization to $5 billion. While the company has been restricted from repurchasing shares, Monson said it intends to buy back approximately $2 billion in the second quarter, subject to conditions and securities laws, funded through cash on hand and projected cash generation during the quarter.
On the previously announced agreement to acquire Penumbra, management reiterated that guidance excludes the deal. Mahoney said Boston Scientific anticipates closing the transaction in the second half of 2026, subject to the Penumbra shareholder vote on May 6 (referenced elsewhere on the call as May 7) and remaining regulatory clearances.
About Boston Scientific NYSE: BSX
Boston Scientific Corporation NYSE: BSX is a global medical device company that develops, manufactures and markets a broad portfolio of products used in less-invasive medical procedures. Founded in 1979 by John Abele and Peter Nicholas, the company is headquartered in Marlborough, Massachusetts, and focuses on technologies that enable physicians to treat a wide range of cardiovascular, digestive, urologic, pulmonary and chronic pain conditions without open surgery.
Boston Scientific's activities span product development, clinical research, regulatory affairs and commercial sales.
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