Boston Scientific banks on breadth as EP boom normalises

A year that outran its own benchmark

Boston Scientific entered 2026 sounding more like a growth-stage disruptor than a $20 billion incumbent. For the second consecutive year the group delivered mid‑teens organic sales growth and more than 20% adjusted earnings expansion, a performance that still stands out in a medtech sector wrestling with normalising procedure volumes and stubborn cost inflation.

Revenue in 2025 rose to $20.74 billion, up almost 20% on a reported basis and 15.8% organically, modestly above the company’s own 15.5% target. Adjusted EPS climbed 22% to $3.06, marking a third year running of 20%-plus profit growth and helped by a lower-than-expected tax rate and disciplined spending. The adjusted operating margin reached 28%, 100 basis points higher than 2024, even as management continued to pour capital into its highest‑growth franchises.

The fourth quarter preserved that momentum. Sales were $5.29 billion, up 15.9% reported and 12.7% organically, landing at the top of guidance. Adjusted EPS of $0.80 grew 15% and beat the $0.77–$0.79 range the company had signalled. Free cash flow, at $3.66 billion for the year, grew 38% with roughly 80% conversion of earnings, giving Boston Scientific ample firepower to prosecute its preferred playbook of aggressive tuck‑in acquisitions.

Yet the subtext of the results was more nuanced than the headline numbers suggest. Two core engines – electrophysiology (EP) and the WATCHMAN left‑atrial appendage closure device – continued to power ahead, but management used the call to reset expectations around EP market growth and to redirect investor attention to a broader cast of franchises now coming into their own.

Growth recalibrated, not relinquished

For 2026, Boston Scientific is guiding to 10–11% organic revenue growth and 12–14% EPS growth, implying a deceleration from the mid‑teens pace of the last two years but still comfortably ahead of what management calls its weighted average market growth rate. The first quarter is expected to be softer, at 8.5–10% organic, reflecting tough comparisons and some temporary product issues.

Gross margin, at 70.6% in 2025, is guided to remain broadly flat this year. A richer mix – driven by high‑margin offerings in EP, structural heart and interventional oncology – should be largely offset by investment in the global supply chain and the full‑year impact of tariffs. Operating margin, by contrast, is slated to expand by a further 50–75 basis points in 2026, stepping towards a longer‑range goal of 150 basis points of cumulative expansion through 2028.

From a balance sheet perspective, the company ended the year with $2 billion of cash and a 1.9x gross debt leverage ratio. Rating agencies reaffirmed its A‑ equivalent rating after the proposed Penumbra acquisition was unveiled, with Fitch nudging its outlook up to positive. Management continues to put strategic M&A at the top of its capital‑allocation hierarchy, followed by share repurchases; it closed the Nalu Medical deal in neuromodulation during the year, and has signed agreements to buy Valencia Technologies in pelvic health and Penumbra in neurovascular and thrombectomy, both expected to close in 2026.

EP: still leading, but a more mature market

The EP business, and in particular Boston Scientific’s FARAPULSE pulsed‑field ablation (PFA) platform, has been the poster child of the company’s growth story. In 2025, EP revenue surged 73%; in the fourth quarter alone it grew 35% organically, dramatically outpacing large rivals whose reported growth rates were in the high single to low‑double digits.

Even so, management moved on this call to cool the notion that the atrial fibrillation ablation market is expanding at 25% or more. Chief executive Mike Mahoney argued the global EP market grew a more modest 18–20% in the quarter, and forecast roughly 15% growth in 2026 – still a robust number, but one consistent with a technology that has already penetrated much of its initial target segment in the US.

By Boston Scientific’s own estimates, about 70% of AF ablations in US labs in 2025 were performed with PFA technology, and roughly half globally. That implies a sizeable yet diminishing tailwind from conversion of radiofrequency and cryoablation to PFA, especially in the more mature American market. Mahoney acknowledged that as more PFA competitors launch and gain share, Boston Scientific’s own share will naturally moderate from what has been an exceptionally dominant position, but he insisted the company will remain the clear market leader through 2026 and beyond.

To sustain outperformance over the 15% market growth the company now assumes, management is leaning on three pillars. First is geographic expansion: Japan and China both delivered mid‑teens growth in the Asia‑Pacific region in 2025, with Japan benefiting from OPAL mapping system placements and increased FARAPULSE use, and China from the recent NMPA approval of the FARAWAVE NAV device and expanded indications into persistent AF.

Second is product breadth. The company has begun a limited market release in the US and Europe of FARAPOINT, a NAV‑enabled PFA catheter for focal lesions, initially for atrial flutter but with ongoing trials to extend its reach into more complex procedures. It has also initiated the OPTIMIZE study, pairing its Cortex OptiMap mapping technology with FARAPULSE to improve identification of AF drivers, and is advancing FARAFLEX, a new catheter now in first‑in‑human studies. While most of these will not materially change 2026 numbers, they underpin the firm’s argument that it can keep extending its lead in PFA as the therapy moves beyond de novo AF into ventricular tachycardia and other arrhythmias.

Third is ecosystem integration. Boston Scientific is investing in mapping systems, imaging – including a collaboration with Siemens Healthineers on a next‑generation 4D ICE catheter – and concomitant procedures that link AF ablation with structural heart interventions, all of which can increase lab throughput and revenue per case.

WATCHMAN: poised for a pivotal data moment

If EP is the company’s fastest‑growing franchise, WATCHMAN remains its most strategically resonant. The device, used to occlude the left atrial appendage in patients with atrial fibrillation to reduce stroke risk, posted 29% growth in the fourth quarter and strong double‑digit growth across all major markets for the full year. The business is effectively the global category, with Boston Scientific facing little in the way of scale rivals.

The next inflection point is likely to be clinical rather than commercial. The CHAMPION trial, a large randomised study comparing WATCHMAN FLX to novel oral anticoagulants (NOACs), will be presented as a late‑breaking clinical trial at the American College of Cardiology meeting in March. The study’s dual primary endpoints are noninferiority on stroke, systemic embolism and cardiovascular death, and superiority on major bleeding.

Chief medical officer Ken Stein made clear that Boston Scientific is banking on a familiar narrative: WATCHMAN matches the efficacy of NOACs on preventing stroke while delivering fewer serious bleeds, much as the company demonstrated in the OPTION trial in the concomitant ablation setting. If CHAMPION delivers, the company expects not just an expanded label – which could notionally quadruple the indicated population from 5 million to 20 million globally – but a reinforcement of the current indication among cardiologists still wary of referring patients off anticoagulants.

Concomitant procedures, in which WATCHMAN is implanted alongside AF ablation in the same session, are already a significant growth driver. Boston Scientific has now treated more than 25,000 patients concomitantly and secured reimbursement that has underpinned adoption, particularly in the US. The firm has also completed enrolment in the SIMPLIFY trial, which is testing simplified post‑procedural antithrombotic regimens; positive data there could further smooth workflow and lower barriers to use.

Stein said that, despite several recent trials examining alternative strategies for stroke prevention in AF, Boston Scientific has seen no discernible impact on WATCHMAN demand. The franchise, he argued, remains on a trajectory of above‑market growth, with CHAMPION offering the prospect not of a one‑off spike, but of sustained higher‑level growth through the company’s long‑range plan.

MedSurg: patchy in places, but mending

Away from the marquee cardiovascular franchises, Boston Scientific’s MedSurg segment told a more uneven story in 2025, though management believes most of the underperformance is now behind it.

Urology grew 23% operationally but only 5% organically for the year and 3% organically in the fourth quarter. Mahoney conceded the business “was below our expectations,” citing supply‑chain challenges and a more disruptive than planned integration of the Axonics acquisition, which created commercial friction. The company expects the franchise to at least track underlying market growth in 2026, helped by new product launches, improved supply and the planned acquisition of Valencia Technologies to bolster its pelvic health portfolio.

Endoscopy delivered a steadier performance, with 8% organic growth in both the quarter and the full year, powered by endoluminal surgery, imaging and endobariatrics, the latter aided by improved reimbursement for endoscopic sleeve gastroplasty. However, a manufacturing variation forced a product removal of certain sizes of the AXIOS stent and delivery system in December. Boston Scientific expects to have the full AXIOS range back on the market by mid‑2026, but signalled that Endoscopy growth will be weaker in the first half as a result.

Neuromodulation, by contrast, turned in an “excellent” year, with 10% growth in the fourth quarter and 8% for 2025 overall. The brain stimulation business grew low double digits, driven by Cartesia X and Illumina 3D offerings, while pain management grew high single digits, aided by a deliberate broadening of the portfolio and the addition of Nalu Medical’s peripheral nerve stimulation technology. Expanded reimbursement for the Intracept procedure and the launch of the Intracept EDGE J Stylet also buoyed the pain franchise.

Cardiovascular: broadening the base

Beyond WATCHMAN and EP, Boston Scientific’s wider cardiovascular portfolio provided an important ballast of double‑digit growth and a reminder of how diversified the company’s revenue engine has become.

The Cardiovascular segment grew 21% organically for the year and 16% in the fourth quarter. Interventional Cardiology Therapies posted 10% growth in Q4 and 8% for the year, led by a coronary therapies franchise that achieved double‑digit gains on the back of its AGENT drug‑coated balloon and a shift towards high‑growth complex PCI and imaging segments. AGENT’s clinical and reimbursement profile drove drug‑eluting technology growth above 20% for the year.

The company is also leaning into intravascular lithotripsy. It has completed enrolment in the FRACture trial, evaluating its Seismic IVL system in coronary applications, with data expected later this year and a potential launch in the first half of 2027. In the peripheral space, the Seismic IVL system has already been used in first US cases, with indications expected to extend below the knee in the second half of 2026.

A reorganisation within Peripheral Interventions will see the peripheral vascular business combined with interventional cardiology under a single Interventional Cardiology and Vascular Therapies unit, intended to capitalise on R&D and commercial synergies, while Interventional Oncology & Embolization (IO&E) remains a standalone division. The peripheral vascular franchise grew 6% organically in Q4 off a 15% operational gain, with TCAR for carotid artery disease and venous products such as Varithena and EKOS contributing low double‑digit growth in their respective niches.

IO&E, for its part, delivered 12% organic growth in the fourth quarter and nearly $1 billion of 2025 sales, with strong performance in embolisation and cryoablation. The TheraSphere 360 Y‑90 Management Platform, a web‑based system designed to streamline radioembolisation workflows, is the latest addition intended to keep that business growing ahead of its markets.

Cardiac Rhythm Management remained more pedestrian, with just 1% organic growth in both Q4 and the full year. Diagnostics grew high single digits and now account for nearly a fifth of CRM revenue, while high‑voltage devices managed low‑single‑digit growth and low voltage was flat. Boston Scientific has started enrolment in the SYNCHRONICITY trial, comparing bundle branch pacing to conventional CRT, and expects CRM growth to trend closer to overall market rates in 2026, helped by the addition of the BioEnvelope and continued diagnostics momentum.

Regional dynamics and transient drags

Geographically, the US was the standout performer in 2025, growing 17% on an operational basis in the fourth quarter and 26% for the year, propelled by EP, WATCHMAN and interventional cardiology. Asia‑Pacific also shone, with 15% operational growth in Q4 and 14% for the full year, again led by Japan and China.

Europe, the Middle East and Africa looked more subdued, at 5% operational growth in the quarter and 3% for the year. Adjusting for the discontinuation of the ACURATE neo2 transcatheter valve, however, management said EMEA would have been growing in the high single digits. That ACURATE gap, combined with the temporary AXIOS issue, is expected to shave about 150 basis points off first‑quarter 2026 organic growth and to depress Endoscopy performance in the first half. Both effects should largely annualise by mid‑year, easing the comparative drag in the second half.

Mahoney was at pains to emphasise that such headwinds are transient and circumscribed. Six of Boston Scientific’s eight business units grew faster than their markets in 2025, he noted, and the company still expects all its segments – including the more troubled urology franchise and modest CRM operation – to have better years in 2026 than they did in 2025.

Looking beyond the headline franchises

For investors who have come to see Boston Scientific primarily through the twin lenses of EP and WATCHMAN, this call was an invitation to widen the aperture. The company’s long‑range plan, reaffirmed within weeks of its November investor day, still calls for 10%‑plus organic growth from 2026 to 2028, 150 basis points of cumulative operating margin expansion, and continued double‑digit EPS growth. Those targets, Mahoney insisted, would stand unchanged even if they were being set afresh today.

The rationale rests on two claims. First, that Boston Scientific is disproportionately weighted to fast‑growing medtech markets – from AF ablation and structural heart to thrombectomy, neurovascular and IO – in a way that raises its weighted average market growth above that of most diversified peers. Second, that it now has enough scaled growth engines, from neuromodulation and IO&E to complex coronary and diagnostics, that the company is no longer hostage to the near‑term fortunes of any single franchise, no matter how spectacular.

In 2025, the PFA boom and WATCHMAN’s expansion provided the most dramatic storyline. In 2026, if management delivers on its plan, it will be the quieter but broad‑based acceleration across MedSurg, peripheral vascular and CRM – coupled with the integration of the latest crop of tuck‑in deals – that determines whether Boston Scientific can continue to outgrow its sector from a higher base.