BSX Q3 Deep Dive: WATCHMAN and Electrophysiology Drive Outperformance, Guidance Raised

Medical device company Boston Scientific (NYSE:BSX) announced better-than-expected revenue in Q3 CY2025, with sales up 20.3% year on year to $5.07 billion. Guidance for next quarter’s revenue was better than expected at $5.27 billion at the midpoint, 1.7% above analysts’ estimates. Its non-GAAP profit of $0.75 per share was 5.1% above analysts’ consensus estimates.

Is now the time to buy BSX? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Boston Scientific’s third quarter saw a positive market reaction, reflecting operational execution across multiple business units. Management attributed the strong results to broad-based growth, especially in electrophysiology and the WATCHMAN left atrial appendage closure device, which CEO Michael Mahoney called “a gem for Boston Scientific.” The company also noted resilient demand in the U.S. and Asia Pacific, with double-digit growth in Japan and China. Mahoney emphasized that growth was driven by elevated procedure volumes and continued adoption of new technologies, while margin performance benefited from favorable product mix, particularly in high-growth areas like electrophysiology and WATCHMAN.

Looking forward, Boston Scientific’s updated outlook is underpinned by sustained momentum in its core therapeutic areas and ongoing product innovation. Management highlighted the anticipated launch of new devices, such as the next-generation WATCHMAN Elite and expanded electrophysiology offerings, as key growth drivers. CFO Jon Monson stated, “We expect to expand operating margin each year,” while acknowledging that tariffs and product mix will continue to shape profitability. The company also expects continued robust demand in emerging markets, despite ongoing challenges in Europe and pricing pressures in China.

Key Insights from Management’s Remarks

Management identified diversified product innovation, operational strength in core regions, and successful execution in electrophysiology and structural heart as primary factors behind the strong quarter.

• Electrophysiology leadership: Electrophysiology sales grew 63%, driven by the adoption of FARAPULSE pulsed field ablation technology and the OPAL HDx mapping system. Management underscored that these offerings are positioning Boston Scientific to compete for market leadership, with global PFA penetration expected to reach 50% by year-end 2025.
• WATCHMAN adoption expands: The WATCHMAN device saw 35% growth, supported by increased use in concomitant procedures (where both AF ablation and left atrial appendage closure are performed together). Mahoney pointed to a large, underpenetrated patient population and upcoming CHAMPION trial data as catalysts for ongoing expansion.
• Margin gains from product mix: CFO Jon Monson highlighted that gross margin improvements were driven by strong sales in higher-margin products like electrophysiology and WATCHMAN, partially offsetting the impact of tariffs. Management expects continued mix benefits, but also acknowledged headwinds from tariffs and product withdrawal in Europe.
• Regional divergence: The U.S. and Asia Pacific delivered strong double-digit growth, while Europe, Middle East, and Africa were impacted by the discontinuation of the ACURATE valve and an ERP system rollout, which caused temporary backorders.
• Strategic M&A and pipeline progress: The company closed the acquisition of Elutia BioEnvelope and signed an agreement to acquire Nalu Medical, expanding its pain management and neuromodulation portfolio. Management emphasized tuck-in M&A as a continued capital allocation priority.

Drivers of Future Performance

Boston Scientific expects growth to be driven by continued product launches, margin expansion through mix, and steady demand in key therapeutic areas, while navigating external pressures.

• Pipeline-driven expansion: Management is investing in pipeline development, with upcoming launches like FARAPOINT for complex arrhythmia ablation and the next-generation WATCHMAN Elite device. They anticipate these new products will sustain double-digit growth in core markets and broaden the addressable patient base.
• Margin management amid headwinds: The company expects operating margin to expand by roughly 50 basis points annually, supported by favorable product mix and operational leverage. However, tariffs and cost pressures—especially from annualizing tariff impacts and product withdrawals—remain persistent risks to profitability.
• Geographic and segment diversification: Boston Scientific sees robust demand in the U.S. and Asia Pacific, with China’s growth offsetting pricing headwinds from volume-based procurement. Management believes a broad product portfolio and focused commercial execution can help mitigate regional volatility and competitive pressures.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will be watching (1) the pace of new product launches—including the rollouts of FARAPOINT and WATCHMAN Elite, (2) the resolution of European supply chain disruptions and any recovery in EMEA growth, and (3) the impact of ongoing tariff headwinds on margins. Execution on tuck-in acquisitions and continued penetration in China will also be important signposts.

Boston Scientific currently trades at $103.57, up from $99.87 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

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