Boston Scientific's Margins Strengthen in Q3: What's Driving It?

Boston Scientific BSX posted an adjusted gross margin of 71% in the third quarter of 2025, representing a 60-basis-point (bps) improvement compared to the prior-year period. The increase was mainly driven by a favorable product mix, supported by strong growth in electrophysiology (EP) and WATCHMAN units. However, tariffs restricted the full extent of that growth. The adjusted operating margin climbed 80 bps year over year to 28%, driven by solid drop-through on the company’s top-line performance.

Breaking down the components, WATCHMAN’s third-quarter sales rose 35%, with total patients treated now exceeding 600,000. The momentum was driven by the accelerated concomitant adoption in the United States and ongoing penetration within the 5 million patients, supported by strong clinical evidence and awareness among patients and physicians. Boston Scientific continues to project approximately 25% of the U.S. WATCHMAN procedures to be done concomitantly by the end of 2025. 

Meanwhile, Boston Scientific’s continued share gains in the overall EP market are impressive. EP sales surged 63% year over year, aided by the continued growth of the Farapulse Pulsed Field Ablation (“PFA”) System. In the United States, double-digit growth in FARAPULSE was due to the accelerated adoption of the OPAL HDx mapping system, with one in three FARAPULSE accounts now using the integrated FARAWAVE NAV and OPAL device. Boston Scientific expects global PFA penetration to keep expanding and reach about 50% by the end of 2025.

Based on third-quarter performance, Boston Scientific expects the full-year adjusted gross margin to come in slightly above the 2024 levels, accounting for an estimated $100 million tariff headwind. Management also continues to project adjusted operating margin expansion of approximately 100 bps at the high end of the prior 75-100 bps range.

Latest Updates From BSX’s Peers

Abbott ABT has entered into a definitive agreement to acquire Exact Sciences, the developer of the Cologuard non-invasive colorectal cancer screening test. The acquisition adds a new growth vertical to Abbott's already high single-digit growth profile, gaining leadership in the fast-growing $60 billion U.S. cancer screening and precision oncology diagnostics segments.

GE Healthcare GEHC has entered into an agreement to acquire Intelerad, a medical imaging software provider for the healthcare industry, for a purchase price of $2.3 billion paid in cash. This acquisition reflects the company’s continued commitment to cloud-enabled and AI-powered solutions across care settings and advances its goal to triple its offerings of cloud-enabled products by 2028.

BSX Price Performance, Valuation and Estimates

Year to date, Boston Scientific shares have risen 9.8% compared with the industry’s 3.4% growth. 

In terms of valuation, Boston Scientific shares trade at a forward 12-month Price-to-Sales (P/S) ratio of 6.59, lower than their median but above their industry average.

Earnings estimates for Boston Scientific are showing an upward trend, as you can see.

BSX stock currently carries a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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