Edwards Lifesciences (EW) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales reached $1.6 billion, up 8% year-over-year on a constant currency basis, with TAVR growth below expectations but strong TMTT performance and new product launches.

• Net sales for the first six months of 2024 reached $2.7 billion, up 7.9% year-over-year, driven by TAVR product sales.

• Adjusted EPS was $0.70; GAAP EPS was $0.61, impacted by one-time separation expenses from the Critical Care sale.

• Announced acquisitions of JenaValve (aortic regurgitation) and Endotronix (heart failure management), expanding into new structural heart therapeutic areas.

• Entered a definitive agreement to sell the Critical Care product group for $4.2 billion, with closing expected by Q3 2024.

Financial highlights

• TAVR global sales were $1.04 billion in Q2, up 6% year-over-year, but below plan; U.S. TAVR growth lagged global rates.

• TMTT sales reached $83 million in Q2, up 75% year-over-year, led by PASCAL and early EVOQUE adoption.

• Surgical Structural Heart sales were $264 million in Q2, up 5% year-over-year; Critical Care sales were $246 million, up 7%.

• Adjusted gross profit margin was 77.1% in Q2, down from 77.7% last year due to FX headwinds.

• Adjusted SG&A expenses were $509 million (31.2% of sales); R&D expenses rose 12% to $303 million (18.6% of sales).

• Adjusted free cash flow for Q2 was $333 million; first half was $539 million.

Outlook and guidance

• Full-year TAVR sales growth now expected at 5%-7% (was 8%-10%), equating to $4.0-$4.2 billion.

• TMTT full-year sales guidance raised to the high end of $320-$340 million.

• Q3 sales guidance: $1.56-$1.64 billion; Q3 EPS: $0.67-$0.71, assuming full quarter of Critical Care ownership.

• Minimal revenue from JenaValve and Endotronix expected before late 2025.

• 2025 guidance and updated long-term targets to be provided at December investor conference.