EW Stock Gains on Q3 Earnings and Revenue Beat, Margins Crash

Edwards Lifesciences Corporation EW reported third-quarter 2025 adjusted earnings per share (EPS) of 67 cents, which surpassed the Zacks Consensus Estimate by 13.6%. The figure increased 8.1% from the year-ago quarter’s level.

One-time adjustments primarily include certain litigation expenses and amortization of intangible assets.

GAAP EPS from continuing operations was 50 cents, which remained flat on a year-over-year basis. 

Edwards’ Q3 Sales Details

Sales totaled $1.55 billion, up 14.8% year over year. The metric surpassed the Zacks Consensus Estimate by 3.3%.

Following the earnings announcement, EW stock rose 1.9% in aftermarket trading yesterday.

EW Q3 Sales by Segments

Transcatheter Aortic Valve Replacement (“TAVR”)

Global sales in the product group amounted to $1.15 billion, up 12.4% year over year or 10.6% at constant currency (CER). This compares with our model’s projection of $1.11 billion for the quarter.

In Europe, the exit of a competitor resulted in a rebalancing of the market and a modest contribution to Edwards’ sales. In Japan, TAVR sales growth continues to improve, reflecting a gradual recovery in market growth.

Transcatheter Mitral and Tricuspid Therapies (“TMTT”)

Sales totaled $145.2 million, up 59.3% from the prior-year figure on a reported basis. This compares with our model’s projection of $134.1 million.

This performance was driven by increased adoption and balanced contribution from PASCAL and EVOQUE in the United States, Europe and globally.

Surgical Structural Heart

The segment delivered sales of $258 million, up 7.5% from the year-ago level on a reported basis and 5.6% at CER. This compares with our model’s projection of $256.7 million.

This growth was driven by the strong global adoption of Edwards Lifesciences’ premium RESILIA tissue portfolio, specifically the INSPIRIS, MITRIS and KONECT devices.

Edwards’ Q3 Margin Performance

The gross profit was $1.21 billion, up 10.7% year over year. The gross margin contracted 282 basis points (bps) to 77.8% due to a 31.3% increase in cost of sales.

SG&A expenses rose 22.1% year over year to $514.6 million. R&D expenditures amounted to $280.7 million, up 10.8% year over year.

The operating income decreased 1% year over year to $412.6 million. The operating margin contracted 420 bps to 26.6%.

EW’s Cash Position

The company exited the third quarter with cash and cash equivalents of $3.00 billion compared with $3.00 billion at the end of the second quarter of 2025. Total debt remained sequentially consistent at approximately $600 million.

Edwards Lifesciences Corporation Price, Consensus and EPS Surprise

Edwards Lifesciences Corporation price-consensus-eps-surprise-chart | Edwards Lifesciences Corporation Quote

Edwards’ 2025 & Q4 Guidance

Edwards is increasing its full-year total company sales growth guidance to the high end of 9% to 10%. The Zacks Consensus Estimate for sales is pegged at $5.99 billion, suggesting a 0.3% increase from the 2024 level.

The company now expects 2025 adjusted EPS to be between $2.56 and $2.62. The Zacks Consensus Estimate for the same is pegged at $2.51.

For the fourth quarter of 2025, EW projects total sales to be in the band of $1.51 and $1.59 billion and adjusted EPS in the 58-64 cents range. The Zacks Consensus Estimate for fourth-quarter sales and EPS is pinned at $1.54 billion and 60 cents, respectively.

Our Take

Edwards Lifesciences beat on both earnings and revenues in the third quarter of 2025.  TAVR growth in the quarter was better than expected as clinicians demonstrated a renewed focus on prioritizing treatment for patients suffering from aortic stenosis. Within TMTT, PASCAL’s distinct features are driving distinguished clinical outcomes, along with higher adoption at both new and existing sites around the world.

Additionally, SAPIEN M3 mitral valve replacement system’s CE Mark approval uniquely positions Edwards with a comprehensive TMTT portfolio. In Surgical, Edwards made progress, advancing important innovations globally, such as the KONECT aortic valved conduit that received CE Mark approval in Europe.

On the flip side, contraction of both margins in the quarter is highly discouraging.

The company’s commitment to driving breakthrough innovations in pioneering and leading categories bodes well. Given the strong third-quarter performance, Edwards is confident about its 2025 outlook.

EW’s Zacks Rank and Key Picks

Edwards Lifesciences currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Veracyte VCYT, Phibro Animal Health PAHC and Insulet PODD.

Veracyte reported second-quarter 2025 adjusted EPS of 44 cents, which beat the Zacks Consensus Estimate by 41.9%. Revenues of $130.2 million topped the Zacks Consensus Estimate by 7.1%. VCYT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

VCYT has an estimated earnings growth rate of 19.3% for 2025 compared with the industry’s 12.9%. The company beat on earnings in each of the trailing four quarters, the average surprise being 242.77%.

Phibro Animal Health, currently carrying a Zacks Rank #1, reported a fourth-quarter fiscal 2025 EPS of 57 cents, which beat the Zacks Consensus Estimate by 9.62%. Net sales of $378.7 million topped the consensus estimate by 4.86%. 

Phibro has an estimated earnings growth rate of 21.1% for fiscal 2026 compared with the industry’s 12.8%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 27.88%.

Insulet, currently sporting a Zacks Rank #2 (Buy), reported a second-quarter 2025 adjusted EPS of $1.17, which outperformed the Zacks Consensus Estimate by 25.81%. Revenues of $649.1 million exceeded the Zacks Consensus Estimate by 5.46%.

PODD has an estimated earnings growth rate of 42.3% for 2025 compared with the industry’s 12.7%. The company beat on earnings in each of the trailing four quarters, the average surprise being 19.54%.

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This article originally published on Zacks Investment Research (zacks.com).

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