Edwards Lifesciences (EW) Q2 2025: TMTT Sales Surge 57% as Portfolio Expansion Outpaces Market
Edwards Lifesciences delivered double-digit top-line growth, propelled by standout 57% gains in its TMTT segment, as structural heart innovation and global execution drove upside across the portfolio. The company’s sharpened focus on next-generation transcatheter therapies is translating to real-world demand, while robust clinical evidence and new approvals are setting up multi-year tailwinds. With management raising both sales and EPS guidance and highlighting a deepening pipeline, Edwards is positioning for durable growth despite margin pressures and evolving competitive dynamics.
Summary
- TMTT Acceleration: Transcatheter mitral and tricuspid therapies outpaced all segments, validating portfolio investment.
- Global TAVR Momentum: Renewed clinical focus and new indications are expanding patient access worldwide.
- Guidance Raised: Upgraded sales and EPS outlook signals management confidence in multi-year catalysts.
Performance Analysis
Edwards Lifesciences posted 10.6% constant currency sales growth in Q2, with total revenue reaching $1.53 billion, exceeding expectations and demonstrating broad-based portfolio strength. The TAVR, transcatheter aortic valve replacement, business delivered $1.1 billion in global sales, up 7.8% year-over-year, with balanced growth across the U.S. and international markets. Notably, the TMTT, transcatheter mitral and tricuspid therapies, segment delivered $133 million in sales, surging 57% year-over-year and contributing meaningfully to overall company performance. Surgical structural heart sales also grew 6.8%, reflecting ongoing demand for Resilia, next-generation surgical valve, technologies.
Gross margin contracted to 77.6% from 80% a year ago, pressured by manufacturing ramp for new therapies and FX headwinds. Operating margin benefited from deferred spending but is expected to decline in the second half as investments in Genovalve, a pending acquisition, and other initiatives ramp up. Cash remains strong at $3 billion, supporting continued R&D and potential future buybacks. The company’s geographic diversification was on display, with rest-of-world outpacing legacy markets and Europe seeing share gains from a competitor exit.
- Portfolio-Driven Growth: TMTT and TAVR both contributed to the double-digit top-line advance.
- Margin Compression: New product launches and FX reduced gross margin, with further pressure expected near term.
- Capital Allocation Discipline: Balance sheet flexibility underpins ongoing investment and share repurchases.
Management cited broad-based demand and robust execution as the primary drivers, while cautioning that operating leverage will be muted until 2026 as investments accelerate.
Executive Commentary
"Our focus on structural heart has positioned the company for agile execution of our strategy and provides the foundation for sustainable growth. It is supported by our conviction in mid to high single digit TAVR growth over the long term given the under-treatment globally."
Bernard Zavigian, Chief Executive Officer
"Our double-digit sales growth drove adjusted earnings per share of 67 cents. Our guidance continues to assume some pressure from the weakening dollar and the impact of announced tariffs, albeit less than initially expected, as well as the acquisition of Genovalve, which is not closed yet."
Scott Ullum, Chief Financial Officer
Strategic Positioning
1. TMTT: Category Leadership and Pipeline Depth
Edwards’ TMTT franchise is emerging as a core growth engine, with Pascal and Evoque platforms showing rapid adoption in both repair and replacement therapies for mitral and tricuspid disease. The addition of Sapien M3, a transcatheter mitral valve replacement, with CE Mark approval, further expands the addressable market. Management highlighted ongoing clinical evidence generation, including pivotal studies and real-world registry data, as critical to driving adoption and reimbursement access globally.
2. TAVR: Renewed Focus and Expanding Indications
Global TAVR growth remains robust, underpinned by new asymptomatic approvals in the U.S. and Europe and a renewed clinical focus on early intervention for aortic stenosis. The exit of a competitor in Europe provided a modest share tailwind, while Japan saw mid-single-digit growth. Management is closely watching U.S. CMS, Centers for Medicare & Medicaid Services, policy changes that could further expand access and streamline procedures, potentially unlocking new patient pools and procedural capacity.
3. Surgical Heart: Steady Innovation and Durable Growth
Surgical structural heart therapies delivered solid mid-single-digit growth, with Resilia technology continuing to differentiate on long-term durability data. New approvals, such as Connect in Europe, and 8-year clinical outcomes are reinforcing the value proposition for surgically treated patients, even as the company’s transcatheter portfolio captures more share of structural heart procedures.
4. Capital Deployment and M&A Integration
Edwards maintains significant balance sheet firepower, with $3 billion in cash and a $1 billion remaining buyback authorization. The pending Genovalve acquisition is expected to close in Q3, with near-term margin dilution offset by long-term portfolio synergies. Management is prioritizing R&D and commercial investment in high-growth categories, while guiding for margin expansion to resume in 2026 and beyond.
Key Considerations
The quarter showcased the benefits of Edwards’ focused innovation and global execution, but also surfaced new competitive and operational dynamics that investors should monitor.
Key Considerations:
- Clinical Evidence as a Differentiator: Robust long-term data for TAVR and emerging TMTT therapies are strengthening Edwards’ value proposition and pricing power.
- Policy and Reimbursement Catalysts: Upcoming CMS NCD updates and evolving European reimbursement could drive multi-year volume expansion, but timing is uncertain.
- Margin Headwinds Near-Term: Manufacturing scale-up, FX, and Genovalve integration will pressure margins through 2025, with leverage expected to return in 2026.
- Leadership Transition in TAVR: The departure of the long-serving TAVR leader introduces succession risk, though the successor brings deep global experience.
Risks
Edwards faces several risks, including regulatory and reimbursement uncertainties, particularly around the timing and scope of U.S. NCD and European access for new indications. Margin compression from FX, tariffs, and acquisition integration will persist through the second half, with deferred expenses set to catch up. Competitive dynamics, especially pricing pressure in Europe post-competitor exit, and the need to maintain clinical leadership in TMTT, also present ongoing challenges.
Forward Outlook
For Q3 2025, Edwards guided to:
- Sales of $1.46 billion to $1.54 billion
- Adjusted EPS of $0.54 to $0.60
For full-year 2025, management raised guidance:
- Sales growth of 9% to 10% (to $5.9 to $6.1 billion)
- Adjusted EPS at the high end of $2.40 to $2.50
Management cited strong first-half execution, ongoing clinical catalysts, and portfolio expansion as drivers, but flagged that margin leverage will be muted until 2026 as investments accelerate.
- Genovalve acquisition expected to close in Q3, with integration costs impacting H2 margins
- Guided for 50 to 100 basis points of annual operating margin expansion starting in 2026
Takeaways
Edwards is executing on a multi-pronged innovation strategy, with TMTT outpacing expectations and TAVR gaining new clinical ground globally. Margin headwinds are near-term but offset by long-term portfolio catalysts and disciplined capital deployment.
- Growth Engine Shift: TMTT is evolving into a major driver, supporting the transition from legacy surgical to transcatheter therapies.
- Strategic Flexibility: Balance sheet strength and global presence provide levers to weather margin pressure and invest in future growth.
- Watch for Policy Shifts: CMS and European reimbursement changes will be pivotal for volume, access, and competitive dynamics in the coming quarters.
Conclusion
Edwards Lifesciences delivered a quarter that underscores its structural heart leadership and innovation depth, with TMTT’s 57% growth and upgraded guidance pointing to sustained momentum. Near-term margin headwinds are a reality, but the strategic foundation for multi-year growth remains intact.
Industry Read-Through
Edwards’ results highlight the accelerating shift toward transcatheter therapies in structural heart disease, with robust clinical evidence and regulatory approvals serving as key adoption levers. Competitor exits and policy changes are reshaping the European and U.S. markets, with pricing, access, and procedural capacity all in flux. The company’s ability to scale new categories (e.g., TMTT) and drive global penetration offers a playbook for medtech peers, while the margin pressures from FX and manufacturing ramp serve as a caution for those scaling innovation pipelines. Watch for broader sector moves as CMS and EU reimbursement frameworks evolve and as clinical data continues to drive differentiation in the high-growth structural heart space.