Boston Scientific NYSE: BSX reported second-quarter 2026 revenue growth at the high end of its guidance range and adjusted earnings per share above expectations, but lowered its full-year outlook as it faces slowing demand in its WATCHMAN left atrial appendage closure business and increased competitive pressure in U.S. electrophysiology.
Chief Executive Officer Mike Mahoney said organic sales rose 7% in the second quarter, while adjusted earnings per share increased 15% to $0.86. The company had guided for 5% to 7% organic revenue growth and adjusted EPS of $0.82 to $0.84. Mahoney said the EPS outperformance was primarily driven by favorable tax results.
Boston Scientific now expects full-year organic revenue growth of 5% to 6%, compared with its prior outlook, and adjusted EPS of $3.28 to $3.32, representing growth of 7% to 8%. For the third quarter, the company projected organic revenue growth of 3% to 5% and adjusted EPS of $0.80 to $0.82.
WATCHMAN and EP Drive Outlook Reduction
Mahoney said the revised outlook was concentrated in two businesses that had previously been major growth drivers: WATCHMAN and electrophysiology, or EP.
WATCHMAN sales grew 4% in the second quarter, including 18% international growth and 3% growth in the U.S. The company estimated that roughly one-third of U.S. WATCHMAN procedures are now performed concomitantly with other procedures. Concomitant procedures rose more than 60% year over year and 11% sequentially from the first quarter, while standalone procedures, which comprise the remaining two-thirds of procedures, declined by the low teens from the prior year.
Mahoney attributed the slowdown in the left atrial appendage closure, or LAAC, market to recently published clinical evidence related to stroke risk in atrial fibrillation patients, which has affected referrals and patient identification. He also cited operational inefficiencies as hospitals and physicians adopt concomitant procedures.
The company now expects global WATCHMAN growth to be flat to low single digits for the full year, with a mid- to high-single-digit year-over-year decline in the second half. In the U.S., Boston Scientific expects third-quarter WATCHMAN sales to decline by the mid-single digits sequentially from the second quarter, leading to flat full-year growth.
Chief Medical Officer Dr. Ken Stein said the company has seen a decline in referrals for patients with what he described as “soft indications,” including patients who prefer not to take anticoagulants without a clearly defined medical reason for an alternative. Boston Scientific plans to expand physician education, invest in commercial coverage and direct-to-patient outreach, and continue developing clinical evidence and product enhancements.
Stein also pointed to the SIMPLAAFY trial, expected to read out in the second half of 2026, which could help simplify post-implant drug regimens if it meets its endpoints. The company continues to believe data from its CHAMPION trial support a potential FDA labeling update and reconsideration of the Centers for Medicare & Medicaid Services national coverage decision.
EP sales increased 9% in the quarter, including 3% growth in the U.S. and 23% growth internationally. Mahoney said the company has seen faster-than-expected adoption of pulsed field ablation, or PFA, with PFA accounting for an estimated 80% to 85% of the U.S. atrial fibrillation market. The rapid transition has limited Boston Scientific’s ability to offset competitive share pressure in the U.S.
Boston Scientific expects global EP growth to be flat in the second half of 2026. U.S. EP sales are projected to decline by the mid-single digits sequentially in the third quarter, resulting in full-year U.S. EP growth ranging from flat to low single digits. International EP growth is expected to be approximately 20% for the full year.
Growth in Interventional Cardiology, Neuromodulation
Despite the pressure in WATCHMAN and EP, Mahoney said approximately 75% of Boston Scientific’s revenue base is expected to grow about 6% in the second half, consistent with historical performance.
Cardiovascular sales rose 8% in the second quarter, while interventional cardiology and vascular therapies grew 12%. Interventional cardiology grew 15%, supported by coronary therapies, drug-coated balloons, imaging and complex percutaneous coronary intervention procedures. Vascular therapies grew 8%, aided by Varithena adoption and the company’s drug-eluting portfolio.
Neuromodulation revenue rose 12%, with double-digit growth in both pain and brain therapies. Mahoney said Nalu, acquired by Boston Scientific, contributed for a full quarter and was performing well as integration continued.
Endoscopy sales increased 7%, with continued strength from the AXIOS platform. The company also received FDA clearance for RIVOS, a device intended to consolidate procedural exchanges during endoscopic ultrasound biliary drainage.
Interventional oncology and embolization grew 12%, supported by global demand for its technology portfolio. Boston Scientific cited published results from the PROACTIF study of TheraSphere for liver malignancies and said it received FDA clearance for the TRUSELECT microcatheter.
Other businesses were more mixed. Urology grew 1%, affected by slower-than-expected recovery in sacral neuromodulation and pressure in stone management. Cardiac rhythm management sales declined 2%, as the company cited competitive pressure and portfolio gaps. Boston Scientific expects CRM to be flat for the full year, with some second-half contribution from EluPro.
Restructuring and 2027-28 Product Catalysts
Chief Financial Officer Jon Monson said second-quarter revenue totaled $5.44 billion, up 7.5% on a reported basis. Foreign exchange added about 50 basis points of growth. Adjusted operating margin was 28.4%, up 70 basis points from the prior year, while adjusted gross margin rose 80 basis points to 70.3%.
On a GAAP basis, operating margin was 21.6%, including an approximately $75 million charge related to certain product liability cases and about $80 million in refunds on previously paid IEEPA tariffs. Free cash flow was $1.29 billion in the quarter, and the company expects approximately $3.8 billion for the full year.
Boston Scientific also announced a companywide restructuring program targeting approximately $500 million in run-rate savings exiting 2029. Monson said more than half of the savings are expected to be realized exiting 2027, with savings initially appearing in selling, general and administrative expenses and later in cost of goods sold.
The company expects limited EPS growth and challenging operating-margin expansion in 2027, reflecting continued WATCHMAN and EP softness, as well as the initial impact of its planned Penumbra acquisition. The transaction is expected to close in the second half of 2026, subject to remaining regulatory clearances.
Management said it expects its growth profile to improve in the second half of 2027 and more meaningfully in 2028 as products and platforms including FARAWAVE Ultra, intracardiac echocardiography, FARAFLEX, renal denervation, intravascular lithotripsy and potentially the MiRus TAVR platform advance. Mahoney said Boston Scientific estimates its weighted average market growth rate at approximately 7% to 8%.
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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