BSX Q1 Earnings Call: Outperformance Driven by Cardiology and Electrophysiology, Guidance Raised Amid Tariff Headwinds

Medical device company Boston Scientific (NYSE:BSX) announced better-than-expected revenue in Q1 CY2025, with sales up 20.9% year on year to $4.66 billion. The company expects next quarter’s revenue to be around $4.88 billion, close to analysts’ estimates. Its non-GAAP profit of $0.75 per share was 11.5% above analysts’ consensus estimates. 

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StockStory’s Take

Boston Scientific’s first quarter results were shaped by broad-based momentum in its cardiology and electrophysiology businesses. Management highlighted that double-digit growth in five of eight business units and strong adoption of key platforms like FARAPULSE and WATCHMAN contributed to the company’s outperformance. CEO Mike Mahoney emphasized, “Our strong growth continues to reflect the durability of our category leadership strategy, which is powered through meaningful innovation and clinical evidence generation.”

Looking forward, management’s raised full-year guidance incorporates both continued portfolio strength and the anticipated impact of new tariffs. CFO Daniel Brennan noted that while tariffs present a $200 million headwind, the company expects to offset these through increased sales and discretionary spending reductions. Mahoney added, “We remain excited about our near and long-term growth catalysts, which we believe will enable us to deliver consistent differentiated performance this year and well beyond.”

Key Insights from Management’s Remarks

Management attributed the quarter’s outperformance to execution across core businesses, successful integration of recent acquisitions, and ongoing investment in clinical and manufacturing capabilities.

• Cardiology and Electrophysiology Surge: Cardiology sales grew substantially, with management pointing to strong demand for FARAPULSE (a pulsed field ablation system used in cardiac arrhythmia treatment) and the WATCHMAN left atrial appendage closure device. These platforms benefited from increased adoption, new account openings, and supporting clinical data.
• Geographic Expansion: The U.S. market experienced over 30% operational growth, while Japan and China also contributed meaningfully. Management noted that China, despite pricing pressures from volume-based procurement (VBP), is expected to maintain double-digit growth due to local partnerships and product launches.
• Integration of Acquisitions: The company completed the acquisitions of Bolt Medical and made progress integrating Axonics and other recently acquired businesses. These moves expand Boston Scientific’s footprint in interventional cardiology, peripheral interventions, and urology.
• Pipeline Progress and Regulatory Milestones: Management highlighted ongoing clinical trials and anticipated regulatory approvals for next-generation products—including the Empower leadless pacemaker, expanded indications for WATCHMAN, and new mapping solutions for electrophysiology.
• Tariff and Supply Chain Management: The team acknowledged that new tariffs will impact costs in the second half of the year but stated they will not shift manufacturing locations, instead focusing on managing discretionary spending to protect margins.

Drivers of Future Performance

Management’s outlook for the next quarter and the full year is underpinned by continued demand in core therapeutic categories, the expected contributions from recent product launches, and disciplined cost management in the face of new tariffs.

• Core Portfolio Momentum: Management expects sustained demand for FARAPULSE, WATCHMAN, and emerging electrophysiology products to drive above-market growth in key geographies.
• Mitigating Tariff Headwinds: The company plans to counteract a $200 million tariff impact primarily through higher sales, selective cost controls, and minor foreign exchange benefits, rather than changes to the manufacturing footprint.
• Ongoing Pipeline and Integration: New clinical data readouts, regulatory milestones, and the integration of new acquisitions such as SoniVie and Entera Oncology are expected to contribute to both revenue growth and portfolio diversification.

Top Analyst Questions

• Robert Marcus (JPMorgan): Asked about the ability to offset $200 million in tariffs and whether manufacturing would shift. Management replied that increased sales and spending reductions would cover the headwind, with no plans to change manufacturing locations.
• Larry Biegelsen (Wells Fargo): Questioned Boston Scientific’s goal to become the #1 player in electrophysiology. CEO Mike Mahoney said this is the company’s aim, driven by clinical leadership and geographic expansion, especially in China and Japan.
• Joanne Wuensch (Citi): Requested details on WATCHMAN’s growth and uptake of combined procedures. Management cited faster-than-expected adoption and highlighted benefits for patients, physicians, and hospitals.
• Frederick Wise (Stifel): Asked about the broader impact of trade tensions and supply chain risks in China. Mahoney stated that double-digit growth is expected in China despite VBP pressures, supported by local manufacturing and partnerships.
• David Roman (Goldman Sachs): Inquired about drivers for moving MedSurg growth from mid-single to high-single digits. Management pointed to integration of acquisitions, improvements in neuromodulation, and some ongoing supply chain challenges in urology.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will focus on (1) the uptake and broader clinical adoption of FARAPULSE and next-generation electrophysiology platforms, (2) progress on regulatory approvals and expanded indications for products like WATCHMAN and Empower, and (3) evidence of successful integration and revenue contributions from recent acquisitions such as SoniVie and Bolt Medical. We will also monitor the company’s ability to offset tariff headwinds while sustaining margin expansion.

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