Boston Scientific Corporation

Q2 performance beat; EPS strength driven by tax items - Total company organic sales +7% YoY, ahead of the 5%–7% guide. - Adjusted EPS $0.86 (+15% YoY), beating the high end of guidance ($0.82–$0.84), mainly from favorable discrete tax results. - Adjusted operating margin: 28.4%; adjusted gross margin 70.3% (up 80 bps YoY). - Notable GAAP items: product liability charge (~$75M) and tariff refunds recognized (~$80M).

Major forecast reset: 2026 outlook downgraded (pressure in 2 key franchises) - Updated full-year 2026 organic revenue: +5% to +6% (previously guided higher), adjusted EPS: $3.28 to $3.32 (+7% to +8%). - Q3 2026 guide: organic revenue +3% to +5%; adjusted EPS $0.80–$0.82. - Management says second half is more pressured than expected; the guidance reduction is concentrated in: - WATCHMAN: U.S. market slowed sharply due to compounding clinical evidence impacting referral patterns. - Electrophysiology (EP): greater competitive share movement in the U.S. than anticipated.

WATCHMAN: mid/high-single-digit declines expected in 2H26; no near-term improvement assumed for 2027 - Q2 WATCHMAN: +4%, with international +18% and U.S. +3%. - Concomitant adoption accelerating: ~1/3 of U.S. procedures concomitant; concomitant procedures +60% YoY and +11% sequential vs Q1. - For the rest of 2026: - Global WATCHMAN growth flat to low-single digits (full year). - 2H26 global decline mid- to high-single digits YoY. - U.S. Q3 expected to decline mid-single digits sequentially; full-year U.S. flat growth. - 2027 guidance posture: management explicitly assumes market dynamics do not improve in 2027 (even while expecting actions to help over time).