Edwards Lifesciences Aktie

Good morning, everyone, and thanks for joining us today. Very, very pleased to host Edwards Lifesciences. So it's -- this should be a fun event. I guess, to start off with before we start asking questions, do you want to have any sort of opening statements or shall I just get right into this?

So let's get into it. Good morning, everyone. It's great to be here. I'm glad you have interest in the company. We are pleased about all what we do. We take care of patients in the best way possible. And so we are very proud of the impact we are having.

So Edwards is evolving from basically predominantly a TAVR story for the last decades into TMTT, which is increasing the part of the growth algorithm. I guess from a bigger picture, how should investors think about for the vision of the company and changing composition sort of in terms of TAVR, TMTT, PASCAL, also U.S., OUS for your long-term growth rate in the next sort of 3 to 5 years?

Thanks, Pito. So let me start with a couple of comments. One is Doretta, our new CFO, has been with us 2 months now. She's an amazing partner. She gets the strategy of the company, and she's fully on board to enable this strategy and to accelerate this strategy. So let me talk about strategy very quickly. When a lot about this company is like we have strategic clarity. It is all about structural heart disease. It is a very large space. There is a lot of unmet patient need, and it is growing. As a company, we spent a lot of time on execution, the entire leadership team. It is a rather smaller leadership team. Everybody is deep into structural heart disease, and we deliver flawless execution, and you have seen that.

And finally, a culture of the company. We've 17,000 employees, they know that it is mission driven. They know it is about the patient. And every day, they wake up and they are motivated to make a big impact. And these 3 things together basically has resulted in what you have seen, top-tier performance, top line, bottom line, and us being predictable, adding durable performance. So now to address specifically your question here, Pito, is you're right. The way we are thinking about the company today is mainly in 5 therapy areas, all of them in a leadership position, all of them with many catalysts. So you have TAVR AS, you have PASCAL, you have EVOQUE, you have M3 and you have surgical. And so this gives us in this rich scale to be confident, short term, to be confident long term and to be able to be confident about durable top-tier performance as a company.

Since the second quarter results, the NCD has come out because now I've been very excited about the NCD for quite some time. And it's been sort of a pretty good debate within the investment community over the last year in say, 3 months as we've been talking about it. Some doctors at large volume centers had different views impact versus doctors at sort of lower small community centers that we've talked to in the last few weeks. I was wondering if you could help guide investors how we should think about the NCD that we have in hand in terms of new centers, utilization within those centers, high volume, low volume or any other areas of benefits that we should be thinking about?

Thank you. No, the news last week was a very positive news for patients for the field and for the company. And so CMS after 15 years of a ton of evidence, physician experience, great patient outcome and this technology being like one of the most proven, one of the most studied, declared that basically, it's now reasonable and necessary, which is a big step if you think about it. We look at the NCD along 4 key elements. The first one is about providing flexibility, flexibility at 2 levels. One is around patient access. So in the past, the former NCD, the patients for an evaluation had to go twice to the hospital and see a surgeon and a cardiologist. And today, there is only 1 on-site face-to-face physician visits. The other one could be done through a remote kind of visit.

So that's providing the patient who are very sick, all patients, an easier access to being evaluated for TAVR, but also an additional flexibility at the point of treatment. In the past, it was mandatory to have a surgeon and a cardiologist in the room during a TAVR procedure. It is not anymore the case. One is mandatory, 1 operator, it could be a surgeon. It could be a cardiologist. But what CMS has done very well in our mind is it provided the opportunity to the heart team to decide. If they want to be 2 in the room, they can, and both physicians will be covered. So in my mind, this is extremely well done in a sense that it will protect high quality of care. It is empowering the heart team to decide what's best for the patient. But also it is streamlining the processes where it is necessary. So that's about flexibility.

The second element is about volume requirement for a hospital to have a TAVR unit. In the past, for hospitals to have a TAVR unit they had to have a certain number of procedures per year, it is not anymore the case. Though operating requirements remain the same, which is very good, again, to maintain our excellence in care. So this will provide an opportunity for some cardiac surgery centers who don't have a TAVR unit to open a TAVR unit, and it will happen in cardiac surgery center only. It is mandatory in this entity.

So here, an opportunity here to increase patient access across the U.S. The third one, also very important, is now asymptomatic is covered with CED under this NCD. So it is an additional patient population will be able to receive this very proven therapy. And the fourth one, also very important. It is providing a pathway for upcoming FDA approvals, new indications. So what we need do to step back and think about is NCD is more of an exception and MAC coverage is more of a norm. There are only a few hundreds of NCDs, 400-or-so and thousands of technologies are covering for MAC. So what CMS has done here is clearly providing guidelines that for upcoming FDA approval, the MAC will be very well positioned to cover these new indications.

So if you think about altogether, it is empowering the heart team, it is maintaining excellence of care. At the same time, providing flexibility in terms of access to care, in terms of the treatment at the point of treatment. So all of this very positive, very well done, all thinking about, at the end of the day, the patients that leaves you the best care.

So I mean, just a follow-up there. On your second point, change the point of treatment. How should we think about how many new centers exist out there today that have these sort of cardiac surgery centers? Like how many do you guys think will be opening because of change of NCD. And how do we think about the smaller volume centers today that exist that have had issues of staffing that only having 1 on doc in the room helps scale them up. So if you can just help us quantify new centers and also increase capacity in the smaller centers as we think about how this can [ stem ] the drain from the urban guys that are already slammed with lot of things helping basically spread out some of the demand.

So let me start with potential revenue centers. There are about 1,100 cardiac surgery center in the U.S. and about 850 TAVR centers in the U.S. So the difference between these 2 numbers is the potential of this cardiac center opening a new TAVR unit. I don't believe all of them will do. My guess is some of them will do that. It will be a decision between a physician, administration at these centers also looking at the patient access gap or needs leading in this region, in this town, in this city. So it could be 100, it could be 200, it will take time. This hospital will have to make their decisions, get an approval. Our team will be ready to train them and do TAVR, for sure.

But our guess is it is going to take time. It will happen over time. And this is also positive if you think about it because at the end of the day, what do we want we have worked very hard in the last 15 years to build something very special with TAVR. And we want to make sure we maintain that. So excellence of care is very important and we are ready to train all of the sensors. That's the first part of your question.

The second part of the question is about how much this flexibility is going to help low-volume centers. It's a good question. I say it's going to be independent, hospital dependent but it has the potential to help when now you have the flexibility, so let's take it a few examples. If it is a very easy TAVR case, 1 single operator is most likely going to be sufficient and the heart team will decide. If it is a complex case and the heart team decided to have a surgeon and a cardiologist, they can do that. If it is not necessarily a well-experienced operator, and they want to be 2, they can't do that also. So it is full flexibility to do what's best for patient care. So I believe it is going to help.

Yes. And I think the beauty of everything that Bernard just talked about is these are all multiyear opportunities, right? Some will be more -- you may see some impact more shorter term when we talk about flexibility, some centers may adopt that flexibility right away. Others may take a little bit longer. Opening centers may take a little bit longer. So you're not necessarily going to see a huge peak and then a valley. But what you really have is the pathway and the confidence in having a durable long-term TAVR growth rate that we've been talking about of that mid- to high single digits.

It is interesting. We talk to doctors, say, in Kansas City that were in the trials and their volumes basically peak 10 years ago, haven't changed since we said 10 years ago, I was the only one there, and now there are 6. And so this kind of will keep opening up more capacity where for those guys, we talk to other centers down in Dallas, they have that issue use staffing. And they have 3 TAVR centers and they have -- they've always a focus of issues staffing. So I just think about capacity issues, this could be 20%, 30%, 40% increase of capacity of the simple cases because the complex cases you'll keep sending in, but this has over the multiyear time period, especially as these doctors get more and more demand from mitral and TMTT, like there's just demand and you want to ship it out because these doctors take a long time to train.

No, you're right. right. So it is why this NCD very well thought out. And the CMS has done an amazing job listening to all stakeholders, cardiologists, surgeons, industry, societies, patient group. In my mind, it is really very well done because this is going to be like the backbone of this TAVR therapy for the next 10 years. Basically -- and I am assuming that all of the heart team are going to look at this one. And use it to their advantage, whatever the opportunity and challenges are, they are going to use it to challenge themselves and make it better. And that's -- they are in power to do that.

Yes. And the last point goes into the innovation you've done over decades, SAPIEN initially was incredibly hard. And now today, it is simple, and that's what it's known for. And so there's -- this is going to expand capacity significantly as demand keeps on increasing.

And think about it, I love what you said. Think about what it is today for most of the cases. You have a patient getting to the hospital the night before, getting a TAVR in the morning, leaving the hospital at night, being able to have a normal dinner that night with family kids, grandkids. And the complication rate with the SAPIEN platform is very low. The performance is best in class and the durability, best-in-class in the most durable one at 7 years, we know that now. So think about the impact to these patients.

We'll get into the durability in a second. But the second biggest question I'm getting in the last few weeks, and we've done a lot of doc calls and we're hosting an event next week to check this out obviously the PROGRESS trial, which is one of the most exciting catalysts, I think, in MedTechs or in '26 -- in '27 and probably beyond. I guess one of the questions that I'm getting a lot is, how do we think about the impact of in the [indiscernible] versus the TAVR UNLOAD in terms of the trial designs. And how can we think about a positive outcome with that aspect of the trial? What's a home run for you guys on this trial? What is a good trial results? And how do you think about this sort of the TAM implications within both home run, good results sort of with this aspect to sort of trial design?

So I get this question a lot, as you can imagine, almost multiple times today. So let me give you a few points that are very important. One is the study you mentioned is different study. It is a heart failure study with some moderate patients, so very different and moderate and progress. When we started the trial, 5, 6 years ago now. We're starting the trial because we know well aortic stenosis. We know it is a deadly disease. We know it's a progressive disease. So we had a belief then, and it is still the case today, that treating this patient earlier before the progression happen makes sense. So this was the belief why we -- this is how we design the trial.

We were pleased to see how fast the trial enrolled which is always a good indicator when physicians see that it is in their own patients. Again, it is a small sample size that. Yes, now it's working not too bad. Having said that, I don't want to speculate. We are very close. We are at 6 weeks from an important trial results at TCT. I don't want to speculate on what it could be, what are the risks, how big it is. We know at it is a big patient population, the moderate patient population, at least, at least as big as the severe patient population. So yes, so this was our belief. It is still our belief. Let's -- I encourage all of us to be patient for 6 more weeks. It's going to happen fast.

The good news is all of that is also part now of the new NCD. And I don't want necessarily to be back to the new NCD, but I think it is important. So the new NCD is going to help with severe symptomatic patients with all of the flexibility we talk about and all of this. The new NCD is also now covering asymptomatic, which is a patient population also large and uncovered enter last week. And there is a pathway for moderate if we get an FDA approval.

If I can ask it differently, how should I think about the sort of TAM between the symptomatic and asymptomatic moderate AS and ask because some of the calls we've been doing in the last month, I've been talking some clinicians have actively treating moderate symptomatic patients because there's some fuzziness within the guidelines is very good results. And I'm curious if I think about from -- depending on how the trials go, that will be a very easy population to turn on. So I mean there's a thing about moderate size, what percent of the population is symptomatic versus asymptomatic you've seen?

It is very difficult to know. I know everybody wants detail. I tell very difficult to know because I use this example all the time. When we're starting to a TAVR journey 20 years ago. We thought -- so everybody was telling us at the time, we are treating all patients, all AS patients. And this TAVR opportunity is going to be at best, very small. And then we said maybe it could be a $1 billion opportunity. And to date, it is a $7 billion opportunity. So when you don't see the patient, when you don't treat the patients, it is tough to assess and understand.

I know everybody have some prediction, some beliefs they are usually wrong. And the study is going to help us. Again, what you need to think about, it is why we presented the patient characteristic is that this study is telling only the more severe moderate patients with one at risk factor. And this is what we will know out of the study.

The other thing I would add is it's been so many years, right? And still penetration within our existing population is still only in the low teens. And so even the market opportunity asymptomatic, moderate could be additive, but there's still so much opportunity within the market itself.

Switching to the international markets for a bit, both developed countries like Europe and then like emerging countries, what's the view of the balance between deep clinical research that you guys have had for decades at a premium price point versus sort of lower-cost products that would be coming out kind of with less clinical data what do you see in terms of market share, market growth within both the developed and underdeveloped as you think about those sort of different ways of selling these devices?

Yes, that's a good way to think about it. I would say the opportunity is probably even bigger outside of the U.S. to Doretta's point, if the adoption in the U.S. is in the low teens outside of the U.S., it is even lower. So we have an even greater opportunity outside of the U.S. Like you have seen lately in our results, we are doing equally well in the U.S. and outside of the U.S., despite having way more competition outside of the U.S. and some of the technologies, I'm not for sure -- not at the same level than our SAPIEN platform. I like our position having a valve like SAPIENS, proven, best-in-class performance. very, very low complication rates, pacemaker, stroke and now benchmark durability.

I like our chances. It will be very tough. We are not talking about a commodity technology. We are talking about a valve in someone's heart which needs to bid for a long time. And if I am a patient, I know which one I want. And I trust the clinical community in them making the best choices. It is why we are doing well, and it is why we believe that we are in front of the durable top-tier performance.

We talk about the durability for a second. Obviously, the [indiscernible] that was pretty favorable for SAPIEN versus one of your largest competitors. Doctors are often stubborn sometimes in terms of changing behaviors with sort of these type of studies. I guess, what have you seen from -- what are you hearing as sales reps? What have you seen in the positions in terms of speed of change, willingness to change because of sort of this study and frankly some of the studies have come out beforehand to kind of does it move the needle, they're just going to stick to what they know. Are they open hearing it? Does it take time? Kind of what's the speed at which this evolves, if at all?

I will make 3 points. The first one is, it is not going to go fast because nothing goes fast in medicine. The second one is we were pleased with our results, and it is not a surprise. We have been doing valve for 70 years. So I think it is important to remind everybody the first mechanical valve 70 years ago. The first tissue valve 10 year later, the first TAVR 20 years ago. The first tricuspid valve, EVOQUE, 3 years ago and the first mitral transcatheter valve this year. So this is our domain knowledge. We do that for a living. So no surprise here. It is not easy. It's very complex. And the third one is they -- we have seen in the last 7 years, many valve technologies coming and going. Companies who were super excited by it at the time we launched it, and didn't last too long.

So just to give you a full framework, I think physicians are I trust the clinical community. They are smart people, they go deep. Some of them are embracing the change faster than others, but they always do the right for patients.

Okay. I trust them. So back to your sort of TAVR penetration comment a few minutes ago, it was $1 billion not that long and it's now it's $7 billion. What are the biggest constraints just for patient identification and treatment that we're seeing today? How do we help evolve this? How does the NCD help within an aspect? And I also ask because interesting call the other day that this large system is now using CAT scans, if the echo is -- doesn't give a complete answer, they're using CAT scans to scan, and that's increased the volumes of the center by 20%. So just...

There is still a lot to do. Given where we are today in a low teens penetration in the U.S. for TAVR. So there's still a lot to do and we are doing a lot. So we -- they are things that we do at the society level in terms of education, in terms of quality metrics, but also technology can help. So I give you an example, just to illustrate, it is not a TAVR example, but you can easily translate this example to TAVR.

For each of the mitral and tricuspid patients, the heart team submit echo and CT scan of a patient to our team will look at it. We analyze it. And we tell them what technology is best. PASCAL or EVOQUE or PASCAL or M3, depending if it is a mitral or tricuspid patients. We used to do that very manually. More and more, we are embracing technology and AI. The turnaround is amazing, and we might have even better results. So we can imagine a world where this could be part of the processes here to analyze the imaging and to provide the best care options to treat these patients. So that's another example.

Also sometimes people in the hospital have an echo for a different surgery. And during a full echo they detected having severe AS but it could be lost because they didn't come for this, all of that can help look across the hospital to detect better these patients. So I do believe that in the next 5 years, even faster than that. We are going to see technology and AI helping with awareness, helping with diagnostic, helping with treatment.

Okay. Switching to TMTT for a little bit. Your target is about $2 billion of revenues by 2030. Can you just sort of bridge how we should think about sort of that $2 billion in revenue between PASCAL, EVOQUE, SAPIEN M3. And kind of what are the catalysts that we should be looking for within those product lines in the next 18 months to help give us confidence in terms of achieving those targets?

It's good. So I will -- more and more internally at least, we are thinking at TMTT having 3 therapy focus, PASCAL, EVOQUE and M3. And 4 growth drivers. PASCAL MR, PASCAL TR, because, as you know, we are on track to get an approval for the tricuspid PASCAL in this position before the end of the year and then M3 and EVOQUE. All of them today are contributing to the excellent performance we are having, where we are on track to achieve about $0.75 billion, growing about 40% for -- in 2026.

When we gave $2 billion in 2030. We did this number a long time ago. I remember I did it. I was running TMTT. And you know why? Because I was at a time, getting a lot of question TMT is a tiny business, $100 million, I believe it was. How big are you going to be? So we gave this number in our mind near term, $2 billion by 2030 just to give you a sense. But the vision is not $2 billion by 2030. Our vision is clearly to unlock the potential of mitral and tricuspid. And There are millions of patients in need with no solutions, which is why we build a full portfolio to help physicians treat their patients in the best way possible. So even though everybody remember, $2 billion, believe me, internally, it is not the number I have because it's a way bigger number to be able to impact way more patients across these mitral and tricuspid segments.

It's a way bigger.

Over time. It's way bigger over time.

I'm not going to speculate on the number.

Okay. So I guess, any color on the $2 billion split between the product categories. When you initially gave it versus where you are today. So obviously, when you're planning things happen, things evolve, PASCAL has obviously is that a fairly phenomenal rise versus the first few years? I mean kind of as you think about the $2 billion number you had before, what's the split between those 3 products for 2030? And how has that evolved the last couple of years?

And second question is, as I think about the $2 billion between U.S., OUS, Is it still kind of how should we think about it through that evolution as well?

I would say all of them the 4 platforms that we discuss are the 4 growth drivers and U.S. to U.S. are performing very well. There is no one lagging, no one leading. It's performing very well. We -- I can give you a little bit of flavor on each one of them and see Doretta, if you want to add anything. On PASCAL, for instance, this one is the most established one, where we started earlier. And it is seen as very differentiated, and it is impacting the space itself where there is more and more patients now treated here. So we are growing the market, and it is what we care the most about.

For EVOQUE, it is a new therapy. And so we are operating a new space, a new category, and this is going very well. We are opening new centers, and we are also increasing the utilization in existing centers and both are contributing to the performance of EVOQUE. M3 is the very beginning, but it is following the same trend, very high demand in the U.S. There is an item outside of the U.S. And so we look at all of this. This gives us confidence. But the way we are -- why are we confident and why are we pleased? It is not about selling a technology. It is not -- we are not going to a physician and say, you know what, with this technology, trust us, you can treat everybody. We are saying, no, we are here to help you and we have all of the solutions you need to treat your patients. And that's a different kind of a way of thinking.

It is a different kind of partnership with physicians. So this is what gives us confidence. And it is not necessarily -- we are not looking at them in isolation here. But Doretta, do you want to add anything?

I think you said it very well. PASCAL, OUS tends to be more established than here in the U.S. But I think the important thing is each of these drivers provide incremental layers of growth to our overall TMT franchise that are just different stages of launches, different stages of development.

And now to be more specific about a question between $0.75 billion now to $2 billion in 2030. So think about what's happening. You have PASCAL tricuspid approval before the end of the year. So this is going to add incremental opportunity here. Then you have M3 being at the absolute beginning. The approval was earlier this year. So it's like -- so these 2 by itself are things that we didn't benefit so far.

So thinking about TR, there's obvious question around mortality, quality life is obviously phenomenal. That's why this got approvals faster than anyone was expecting. How much like interest you see from physicians in terms of solving for quality of life. So much of what we solve for is mortality and all of a sudden now we're solving for quality of life. So how -- how much interest do you see sort of around that aspect? And within the TR, not a debate on repair versus replace. If you can point on that. And then finally, as you think about hospital economics for EVOQUE, what's your sort of views on hospital economics? And is that maybe a constraint for future adoption within that class.

Yes. No, there is a lot to unpack, that's a good question. I would say, first, Sure. Many of you have looked at the PREVUE study last year. So clearly, the opportunity between tricuspid, mitral and AS are equally important and probably equally in size. So a big opportunity.

Now tricuspid up to 2 years ago, physicians didn't have any options. So it is yet a disease to be better understood and a category to be developed. I compare tricuspid like TAVR, AS 15 years ago, where we were discovering with the first partner study. So it is probably the same in terms of cycle and maturity, very early, one. So big opportunity, very early in the cycle. We have now 2 promising technologies, EVOQUE and PASCAL, and we have a competitive technology also. So you have full technologies as an offering to physicians, the beginning of some studies.

What we see also is an evolution in the understanding of the disease. So for instance, in Europe, the centers have started earlier. So you have larger centers who have done a lot of tricuspid cases, way more than in the U.S. as of now. And we have seen the latest study from Europe, presented at ESC, TRIC-HF, mostly German centers, not all German centers. They were able to show a mortality benefit. So you see that the first experience, it was only quality of life for EVOQUE removing crossover, we were able to show some mortality benefit, hard end point benefit also. But the TRIC-HF was able to show a mortality benefit, in addition of quality of life. So there is a progression of understanding happening in the field. There is still a lot to do. There is still a lot to do very in term of technology innovation, more understanding of the disease, more evidence and we are clearly going to be behind it, investing and being very close to the physician ability.

Sort of guiding on that, when we talk to docs that were in the EVOQUE trials, you talked about how late they're getting into replacing the valves and many of the patients and the speculation that they've got there early in the disease progression that the mortality benefit would have been very clear. And we are focusing on is basically by the time you're placing these valves, the heart was already sort of in final stages and therefore, it's hard to change mortality or get it early into a much easier time period or to show the mortality done.

The field is learning a lot as we go. And I am pretty sure that a few years from now, it is the same comment. I mean if you made it earlier in this conversation, remember TAVR where it was a few years ago. And here, it is the same. And we started from a better base with EVOQUE and with PASCAL tricuspid, all of these. So for sure, we apply the learning from TAVR and from the past. But if you see Gen-1, this is still the beginning. So yes, it is going to evolve. This patient, when you look at them, and I need a lot of them, they are in a terrible condition, their quality of life is terrible. And I have met so many of them who received or PASCAL or EVOQUE, and they have a different life today. So no, there is promise here.

Doretta, I'm going to drag you in here now and talk about some exciting balance sheet capabilities. How do you rank internal R&D, tuck-in M&A, large transactions, share repo what therapeutic gaps do you guys think that you're missing to take those investments externally? And almost most importantly, as you guys sort of mature into this company with substantial cash flows. What's the rate of leverage ratio that Edwards to be running at as larger and larger transactions become frankly harder to do, should you guys be bringing leverage up and increase share repo to investors?

Yes. We're in a very fortunate position to have a flexible balance sheet. That being said, we want to continue to be disciplined with how we think about capital allocation. And our first priority, very consistent with what it's been historically is to continue to invest in our own internal capabilities, including our manufacturing network and how do we bolster our internal business.

Secondly, it's about how do we find additional opportunities, but we want to be thoughtful about it. We've said we have a clear strategic focus, which is in structural heart. And what makes us successful is being able to get involved early and really shape the development, be leaders in the space and have growth opportunity, and that's the lens by which we look at external opportunities.

But because we get in early, it's important to have these bets to be able to place. And then third, it's being opportunistic with our share repurchases. And so we've bought back over $500 million year-to-date, and we're going to continue to opportunistically buy back shares and return capital to shareholders.

And then probably last question here. Bernard, as the CEO, it's obviously been a great opportunity. Kind of what's changed the most in terms of how you allocate your time and focus today versus your previous role? What organizational cultural changes do you think or need to make in order to operate many different growth platforms and keep this company, which has been so dominant in a single category expand into multiple categories.

So we announced -- I was going to become CEO about 4 years ago. It was December 2022. And it has been an amazing journey, leading this great company. So I say one is a decision about selling a noncore business was very important. This gave us clarity on strategy. This gave us agility in our execution. Also, I pay a lot of attention at the leadership team. What I like about this company, I have very experienced, dedicated group of leaders and all of us are deep in structural heart. So when you think about what we meet on a regular basis, everybody understands valves, everybody understand aortic stenosis, everybody understand mitral tricuspid heart failure.

It is not the leadership conversation where you have to discuss about the world and be deep, which is impossible. And I believe these things together is something that I pay very much attention, I'm building upon and also the culture of a company where it is very mission driven. So that's -- and all of this, in my mind, is what has resulted in the performance so far here in MedTech but even more important, all of the catalysts across over 5 therapy areas, so to give us confidence that we are going to maintain this kind of top performance with durability, EPS leverage, despite the company growing, almost $7 billion in revenue this year. And what we said in the long term is the target is to be like to grow the top line about 10%.

So I would say, inspiring goal, inspiring way to bring things together impacting patient care and delivering top-tier performance. Okay?

With that, we are actually out of time.

Thank you so much everyone.

Thank you.

Greetings, and welcome to the Edwards Lifesciences Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

It is now my pleasure to introduce Gerianne Sarte, Head of Investor Relations. Thank you. You may begin.

Good afternoon, and thank you for joining us. With me on today's call is our CEO, Bernard Zovighian; and our CFO, Doretta Mistras. Also joining us for the Q&A portion of the call will be Dan Lippis, our Global Leader of TAVR; and Daveen Chopra, who has global responsibility for TMTT, Surgical and IHFM.

After the close of regular trading, Edwards Lifesciences released second quarter 2026 financial results. During today's call, management will discuss the results included in the press release and accompanying financial schedules and then use the remaining time for Q&A.

Please note that management will be making forward-looking statements that are based on estimates, assumptions and projections. These statements speak only as of the date on which they are made, and Edwards does not undertake any obligation to update them after today. Additionally, the statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements.

Factors that could cause these differences can be found in today's press release and Edwards' other SEC filings, all of which are available on the company's website at edwards.com. Unless otherwise noted, our commentary on sales growth refers to underlying sales growth, which is defined in the financial results press release issued earlier today. Reconciliations between GAAP and non-GAAP numbers mentioned during this call are also included in today's press release. Quarterly and full year growth rates refer to continuing operations.

With that, I'll turn it over to Bernard for his comments. Bernard?

Thank you, Gerianne, and welcome, everyone. Before we begin, I'd like to welcome Doretta to our first Edwards Life Sciences earnings call. Since joining in June, Doretta has quickly demonstrated her impact and valuable contribution as a member of the team, and we are pleased to have her leadership as we deliver on our patient-centered innovation strategy and our commitments to sustainable, distinguished performance.

Let me begin with a high-level comment on our quarterly performance. We delivered stronger-than-expected second quarter sales growth of 12.5%. As Edwards continues to invest in new structural heart therapies and expand adoption globally, our results increasingly reflect the strength of our comprehensive portfolio with growth supported by multiple therapies across TAVR, mitral, tricuspid and surgical as well as meaningful contribution from each of our regions.

Today, our company profile has evolved to include multiple strategic platforms across multiple regions that will support durable growth, giving us confidence in our target of 10% total company sales growth on average over the long term. For those most familiar with Edwards, you know that the long-term differentiation of our performance begins with our singular focus on transforming care in structural heart disease. This, combined with our commitment to early innovation and agile execution, enable us to create new categories and expand access for patients.

Equally important is our culture. Our 16,000 employees around the world are aligned with our vision, inspired by their work and dedicated to delivering exceptional innovation for patients in need. This dedication to developing safe and effective therapies requires unwavering focus, deep expertise and a commitment to generating world-class evidence, both on our therapies and the diseases they address, capabilities that distinguish Edwards as a trusted partner.

Our history of innovation has transformed care for patients around the world, and we know from this experience that establishing new therapeutic categories and changing the practice of medicine requires deep and sustained commitment. We believe this foundation positions Edwards to lead the future of these therapies for many years to come. As a result of this strategy and focus, Edwards is able to make a differentiated impact and develop best-in-class technologies in TAVR, TMTT and Surgical.

Speaking more specifically, in TAVR, years of technology advancement, development of world-class evidence and partnership with clinicians have positioned SAPIEN as the standard of care for TAVR treatment, setting the benchmark for valve performance and durability. We are committed to continuing to raise the bar for both technology and clinical data while transforming the lives of aortic stenosis patients around the world.

In TMTT, our years of pioneering development and strategic investment have resulted in multiple unique therapies that enable physicians to offer options to the clinically diverse patients suffering from mitral and tricuspid diseases. As we continue to build and expand, each of our therapies is advancing along its adoption curve, enabling us to extend these technologies to a broader population of patients.

In Surgical, building on 70 years of innovation and leadership, we are continuing to partner with surgeons around the needs of the complex patients by expanding our leadership in valves as well as other therapies to address the many patients best treated surgically. At the same time, we are executing our proven innovation strategy to extend our leadership into structural heart failure and aortic regurgitation, which also represent large unmet patient needs and longer-term growth opportunities.

Generating world-class evidence is a key element of our strategy. We continue to demonstrate the company leadership in advancing high-quality science and innovating for patients through several important clinical presentations at the recent New York Valves Conference. These new data spanning aortic, mitral and tricuspid therapies provide further understanding of the complexity of structural heart disease and the need for innovative treatment options. Across Edwards, the result of our unique strategy and strong execution is reflected in the significant advancements that are building the foundation for continued long-term growth.

In TAVR, this includes long-term SAPIEN valve performance and the asymptomatic indication, both supported by differentiated evidence. In TMTT, PASCAL, EVOQUE and SAPIEN M3 continue to scale globally. And in Surgical, this include continued expansion of our portfolio. Ahead of us, in the remainder of the year, we anticipate the finalization of updated U.S. TAVR NCD and the presentation of PROGRESS trial results. A new TR indication for PASCAL in the U.S., the launch of next-generation PASCAL technology in the U.S. and Europe and the introduction of surgical left atrial appendage with ECLIPTIS in the U.S.

Altogether, we believe these important advancements represent multiyear opportunities that will materialize gradually over time. This underpins our annual sales growth targeting 10% on average alongside operating margin expansion for the company with TAVR growing mid- to high single digits. As we create and shape new therapeutic categories and achieve important clinical, regulatory and commercial milestones, there may be some minor variability in growth rate within therapeutic areas. But the more meaningful takeaway is the long-term durability of our growth and distinguished performance. Combined with our financial strength, this gives us confidence, confidence in both the short term and confidence in the long term.

Let me now turn to our financial expectation for the rest of the year. Given our second quarter performance, we are increasing our full year 2026 sales growth guidance for TAVR, TMTT and total company and reaffirming our earnings guidance. Our updated 2026 sales guidance is 10% to 11% for the company with strong earnings leverage and operating margin expansion. As a reminder, our second half performance in 2025 set a higher bar for the second half of 2026. In summary, let me put our durable performance in perspective. After delivering a strong 2025, we are on track to deliver on our increased company guidance of 10% to 11% this year and remain confident in our longer-term outlook.

Now I will provide more detail about the performance of our product groups. TAVR second quarter global sales of $1.3 billion were stronger than expected and increased 10.5% over the prior year. Globally, procedural growth benefited from sustained clinical momentum and data supporting proactive disease management of severe AS. At the same time, treatment decisions continue to be shaped by the long-term differentiation of our SAPIEN platform. Edwards growth rates were similar in the U.S. and outside of the U.S. Growth also benefited from the exit of a competitor in Q2 2025 and compelling long-term SAPIEN durability data.

Average selling prices were stable globally. At the recent New York Valves Conference, a new PARTNER 3 sub-analysis of the SAPIEN platform at 7 years will reinforce the best-in-class valve performance and long-term durability of Edwards TAVR. Further, a 5-year analysis from the early TAVR trial adds to the growing evidence supporting a shift toward treating aortic stenosis patients earlier in the disease pathway. Also, at New York Valves, the PROGRESS trial presentation on baseline characteristics provided a new insight into the heterogeneous nature of moderate AS patients. Research has shown that approximately half of these patients present with at least one at-risk feature.

The PROGRESS trial is designed to evaluate whether this patient may benefit from TAVR earlier than current guidelines of surveillance suggest. We will learn more about the clinical relevance of treating this patient with TAVR when the PROGRESS trial results are presented at TCT later this year. We were also pleased to share an update on our next-generation SAPIEN platform. Through our unwavering focus on innovation, we continue to elevate our best-in-class TAVR technology, and the first patients have now been treated with the updated SAPIEN X4S. We are excited about this innovative platform and look forward to sharing more when the ALLIANCE trial is complete.

Let me now turn to some commentary on U.S. TAVR. In Q2, procedure growth continued to benefit from a heightened focus on the therapy as the clinical community further incorporates into practice the meaningful evidence supporting proactive disease management. Edwards' competitive position in the U.S. increased modestly year-over-year, enabled by continued adoption of SAPIEN 3 Ultra RESILIA. We are also pleased that CMS continues to prioritize and progress the reconsideration of the NCD for TAVR, and we look forward to the final policy in September. Based on the draft coverage policy, we are encouraged that this update has the potential to advance TAVR therapy for Medicare beneficiaries with aortic stenosis.

Outside of the U.S., we continue to see strong adoption of SAPIEN. In Europe, updated ESC and EACTS guidelines are helping shape clinical discussion around earlier intervention and proactive disease management, further reinforcing the role of TAVR across a broader patient population. Edwards' competitive position increased modestly year-over-year in Europe, which included what we believe to be the final quarter of benefit from a competitor exiting the market. In Japan, we are encouraged by the growth and continued adoption of SAPIEN 3 Ultra RESILIA. We also received the asymptomatic indication approval in Japan.

In summary, we are pleased with our TAVR performance. And given our Q2 results, we are increasing our full year sales growth guidance to 8% to 9% from 7% to 9%. Edwards' leadership in TAVR, built on differentiated innovation, world-class clinical evidence and continued indication expansion is increasing patient access and supporting sustained adoption of the SAPIEN platform, creating a durable mid- to high single-digit long-term growth opportunity.

With that, let me turn to 2 of our important growth drivers in mitral and tricuspid. Our differentiated TMTT repair and replacement therapies drove second quarter sales of $195.9 million, an increase of 44.8% year-over-year. Globally, mitral and tricuspid procedural growth remained in the double digits. Growth from our differentiated TMTT platforms, PASCAL, EVOQUE and SAPIEN M3 exceeded our expectation in the quarter. Individually, each therapy delivers meaningful benefit for patients and health care systems. Collectively, they provide physicians with a comprehensive set of options to tailor treatment to a broader range of patients with the goal of eliminating regurgitation, which indicates better outcome for patients.

Adoption of PASCAL continues to increase, reflecting strong physician interest for its differentiated design and clinical outcomes as well as the significant unmet needs of mitral and tricuspid patients. At last month's New York Valves Conference, real-world outcome demonstrated sustained safety and effectiveness of the PASCAL PRECISION system for 1 year in a broad population of more than 4,600 U.S. DMR patients. We continue to expect that our next-generation PASCAL with Capture Clarity technology for both mitral and tricuspid patients in the U.S. and Europe will be approved in the fourth quarter. Also, in the fourth quarter, we continue to expect CLASP IITR results to be presented at TCT and the launch of PASCAL in the U.S. for tricuspid patients. This launch expands the population of patients that can benefit from this impactful therapy and adds another layer of growth for TMTT.

EVOQUE is a significant growth platform for TMTT and continues to scale in the U.S. and Europe. We are increasing patient access to EVOQUE and driving further adoption by expanding into new centers, deepening utilization in existing centers and streamlining patient screening processes. We believe the value of our growing body of clinical evidence will further increase with time as demonstrated by recent reduction in all-cause mortality and heart failure hospitalization and will support continued physician adoption and expansion of access for patients with TR.

Turning to SAPIEN M3. Our early experience validates the significant need for mitral replacement solution for patients who are not well suited for mitral TEER or surgery and demonstrate excellent clinical outcomes for patients. We continue to execute a measured launch of SAPIEN M3 in the U.S. and in Europe, steadily opening new centers and supporting sites as they build procedural experience. During the quarter, results from the ENCIRCLE mitral annular classification or MAC Registry were presented at New York Valves, demonstrating low 30-day mortality, virtual elimination of regurgitation and impactful quality of life improvements. In Q2, we also received CE Mark for SAPIEN M3 RESILIA and broaden our indication for SAPIEN M3 and SAPIEN M3 RESILIA to include patients with MAC, increasing access to therapy for a patient population with a significant unmet need.

In summary, we enter the second half of 2026 with both a strong foundation and multiple opportunities to further strengthen our position in TMTT. As a result of our continued sustainable performance, we are increasing TMTT sales guidance to $760 million to $780 million from $740 million to $780 million. Together, PASCAL for mitral, EVOQUE, SAPIEN M3 and PASCAL for tricuspid represent layers of durable growth that support our path to $2 billion in TMTT revenue in 2030 and position us for additional growth beyond.

In Surgical, second quarter global sales of $284 million increased 5% over the prior year, driven by continued adoption of our portfolio of RESILIA therapies, including INSPIRIS, MITRIS and KONECT, which provided extended durability for patients. At the recent AATS conference, 10-year data from our COMMENCE trial studying the long-term durability of our best-in-class RESILIA tissue were presented. The results showed favorable 10-year freedom from structural valve deterioration or SVD, and a very low rate of SVD-related reoperation regardless of age, even in a relatively young cohort. This defining 10-year clinical milestones add to the growing body of clinical evidence supporting the long-term performance of RESILIA as a differentiated tissue technology.

We also received U.S. approval for ECLIPTIS, our surgical left atrial appendage technology and are planning for a major rollout later this year, supported by a continued focus on procedural excellence and patient outcomes. In summary, our progress in the quarter reflects our long-term commitment to meaningful innovation, lifetime care and expanded option for underserved surgical patients, and we continue to expect mid-single-digit sales growth in Surgical in 2026.

With that, I'll pass it over to Doretta to cover the details of our financial results.

Thank you, Bernard. I'm pleased to join you all today to cover our second quarter results. Before I begin, I want to say how excited I am to be part of Edwards and supporting the important work we are doing to meaningfully impact patient lives. Over the past several weeks, I've had the opportunity to spend time across the organization, meeting many of our employees and getting to know many of our analysts and investors. I look forward to continuing to build upon these relationships going forward.

Now turning to our financial results. We are pleased with our financial performance in the quarter, including strong top line growth and earnings leverage. Total sales of $1.74 billion grew 12.5% year-over-year, reflecting strength across all product groups and regions. Adjusted EPS in the quarter was $0.78. Based on our second quarter performance, we are increasing our full year sales guidance for total company to 10% to 11% from 9% to 11%, TAVR sales guidance to 8% to 9% from 7% to 9% and TMTT guidance to $760 million to $780 million from $740 million to $780 million. Edwards now expects total company sales of $6.6 billion to $6.9 billion and TAVR sales of $4.75 billion to $5 billion at current exchange rates. As a reminder, our second half performance in 2025 set a higher bar for the second half of 2026, particularly in the third quarter when we experienced unusually low impact from seasonality last year.

Moving to EPS. We have confidence in delivering our previously increased full year adjusted EPS guidance of $2.95 to $3.05 despite now assuming our effective tax rate will be at the high end of our original 16% to 19% range, driven by Pillar Two impact and changes to California law restricting the usage of R&D credits. I'll now cover additional details of our Q2 results, starting with EPS. Adjusted EPS of $0.78 in the quarter benefited from our better-than-expected top line performance as well as our planned phasing of strategic investments in R&D and SG&A throughout the year. Our GAAP EPS for the quarter was $0.42, primarily driven by the California R&D tax credit impact. A full reconciliation between our GAAP and non-GAAP measures, including adjusted EPS and other items is included with today's release.

Moving on to other elements of the P&L. For the second quarter, our adjusted gross profit margin was 77.6%, flat compared to the same period last year, driven by foreign exchange headwinds, offset by lower manufacturing expenses. Foreign exchange reduced our second quarter gross profit margin by 70 basis points compared to the prior year. We now expect gross profit margin to be at the lower end of our full year 78% to 79% gross margin guidance, driven by the impacts of foreign exchange through our hedging program. SG&A expense in the quarter was $561 million or 32% of sales compared to $502 million in the prior year. This was in line with our expectations and reflects continued investment in resources to support patient care as well as a higher translation of our OUS expense base from the weakening dollar.

R&D expense was $279 million in the second quarter or 16% of sales compared to $276 million or 18% of sales in the same period last year. This decrease in R&D as a percentage of sales and increase in total expense reflects our growing revenue and strategic prioritization of investments in our expanding structural heart portfolio. We continue to expect R&D expense as a percentage of sales to be approximately 17% in 2026.

Second quarter adjusted operating profit margin was 30%. Our first half operating margin benefited from the planned phasing of strategic investments in SG&A and R&D during the course of the year. We continue to expect full year operating margin to be at the high end of the original 28% to 29% guidance, resulting in approximately 150 basis points of constant currency operating margin expansion for the full year. Going forward, we continue to plan for 50 to 100 basis points of underlying operating margin expansion while continuing to invest in the business.

Turning to our tax rate. We now expect our 2026 effective tax rate, excluding special items, to be at the high end of our previous range of 16% to 19%. This reflects an expectation that side-by-side safe harbor taxation legislation alongside Pillar Two does not come into effect before the end of the year. Our tax rate is also impacted by changes to California law permanently limiting the usage of R&D credits. Despite these incremental tax headwinds, we remain on track to deliver operating margin expansion and leveraged EPS growth. If legislation is passed before year-end related to Pillar Two, we would expect to see a benefit to this rate.

Foreign exchange rate changes in the second quarter increased reported sales by approximately $15 million or 110 basis points versus the prior year, which was $6 million higher than our expectation. On a constant currency basis, sales in the second quarter were near the top end of our guidance range. If foreign exchange rates were to hold at current levels, we estimate foreign exchange to be a second half headwind of approximately $35 million compared to the prior year.

Turning to the balance sheet. We continue to maintain a strong and flexible balance sheet with approximately $2.9 billion in cash and cash equivalents as of June 30, 2026. Edwards' disciplined approach to capital allocation remains unchanged as we continue to support growth and create long-term value for patients and shareholders. Our highest priority remains investing in organic growth opportunities and strengthening our manufacturing network.

Next, we look for external opportunities within structural heart, where we can create value by applying our unique innovation strategy to address large unmet patient needs. Finally, we will continue to be active in returning capital to shareholders through opportunistic share repurchases. Edwards has approximately $1.5 billion remaining under our share repurchase authorization. Average diluted shares outstanding during the quarter were 578 million. We continue to expect average diluted shares outstanding for 2026 to be between 575 million and 580 million.

Now let's turn to our Q3 guidance. For the third quarter, we're projecting sales of $1.63 billion to $1.71 billion. From a modeling standpoint, as expected, Q3 underlying sales growth will be artificially lower than our first half performance, given the high bar that our 2025 performance set for the second half. On a sequential basis, we expect normalized seasonality in Q3 this year. We are expecting adjusted EPS in Q3 of $0.71 to $0.77. The strength of our first half performance and the strong fundamentals across TAVR, mitral, tricuspid, surgical and our regions gives us confidence in delivering on our increased outlook for the rest of the year and targeting 10% sales growth on average longer term.

And with that, I'll hand it back to Bernard.

Thanks, Doretta. So in summary, our second quarter performance underscores the strength of our focused strategy and reinforces our confidence that the investments we are making today will drive sustainable growth and meaningful value creation over the long term.

Before we move to Q&A, I'd also like to highlight 2 upcoming opportunities to engage with our team. We will host an event at the TCT Conference in San Diego this fall, and we will also host an annual investor conference on December 4 at the New York Stock Exchange. Additional details for both events will be provided, and we hope you can join us.

With that, I will turn it back over to Gerianne to facilitate Q&A.

Thank you, Bernard. We're ready to take your questions. [Operator Instructions]

Diego?

[Operator Instructions] And your first question comes from Robbie Marcus with JPMorgan.

Congrats on a great quarter. Bernard, 2 for me. I'll just ask them both upfront, both revenue-driven, TAVR and TMTT focus. First on TAVR, clearly, a very strong quarter. It appears you're getting the benefits of market expansion from asymptomatic and some competitive wins from your main competitor. The share seems to be shifting over. I'd love if you could dive into those 2 and talk to the trends you're seeing on competitive share shift, market expansion? And if you want to throw in how different U.S. and outside U.S. growth was considering the focus there. And then on TMTT, my guess is it's all the products, PASCAL and EVOQUE that's driving the upside. But if there is any one that contributed more aggressively to the 7% sales beat versus consensus. I appreciate any color.

Thanks, Robbie, and great to be with all of you. So allow me to start with a very brief comment about the company performance. We are very excited about it, very pleased, better than expected. And this is reflecting in our strategy. Our strategy in structural heart is working very well. I want also to recognize our team who is having a flawless execution globally. We have seen in Q2 and even in Q1 of this year, great performance by therapy and in each of our regions. So again, all of this give us confidence.

So back to your question about TAVR. I would say on TAVR, a little bit of the same, better than expected. And these results are not happening by chance. They are the result of years of technology advancements, about 20 years, building world-class evidence. All of this together has positioned SAPIEN as the benchmark TAVR platform globally with regards to valve performance and valve durability. So it is why it is important for us to always step back and look at why the results. And we believe that because of this, our results are durable. Now if you want to compare U.S., OUS, our growth rate in TAVR were very similar between U.S. and OUS. And the way the result of this renewed focus on TAVR given all of the clinical data we have produced in the last 12 months and many years. So that's probably what I want to say about TAVR. I'm sure Dan later will be able to provide more details.

On TMTT, yes, I think the value of the portfolio is now clearly in action. We have seen PASCAL doing very well with an increased adoption also in U.S. and in Europe because of its differentiated feature. EVOQUE also have seen an acceleration and is doing very well. And M3 is also having some -- even though it is early, it is going very well. We got very good feedback from European physicians and U.S. physicians. So the beauty of this quarter is it is altogether. And again, here, I'm sure Daveen, later today, will provide more detail about TMTT. So thanks very much for the question, Robbie.

And your next question comes from Larry Biegelsen with Wells Fargo.

I'll echo my congratulations on the really strong quarter here. Bernard, just one on PROGRESS and one high-level question for me. So Bernard, on PROGRESS, can you talk about why you highlighted the heterogeneity of the PROGRESS population in the press release and in your prepared remarks? And if PROGRESS is positive, how would you frame the impact to your TAVR business relative to earlier new indications like asymptomatic?

Thank you, Larry. And let me start about first why we decided this time to split the PROGRESS presentation in 2, the baseline characteristic at New York Valves and the full presentation of the results at TCT. We did that because a little bit of a learning from EARLY TAVR. When you study a disease in 8 minutes of a presentation, it is very difficult for a physician to provide everything, what the study design is, why we did it, the baseline characteristic and then the results.

And so here, given the importance and given the learning from EARLY TAVR, we said it was probably important to split it in 2. So we went a little bit deeper into, hey, one is potentially the size and what we have presented at New York Valves is that moderate is at least as big as severe. Some analysis is showing even bigger. This population is very diverse, very complex. And so we thought it was important in advance. So people understood this disease. We also talk about the fact that there is no difference in age between the severe and moderate AS. So that's a little bit about what we wanted to achieve here.

Maybe, Dan, you want to add a couple of things on that?

Yes. I think you covered it largely. I mean, it's the first randomized trial looking at the treatment of moderate AS patients. And the heterogeneous nature of this population is not well understood. And I think understanding the baseline characteristics a little bit better give us a greater insight into that and just help us understand when we get to digest the results at TCT later this year, just help us focus on what those results really mean.

And so as you well know, Larry, this is a trial studying moderate AS patients with at least one at-risk feature. And I think it was important to describe what they are. And that population is at least in the literature anyway, suggests that it's representative of about 50% of the total moderate population. So it's still a large population here. And so this is -- we shouldn't be surprised by it, but maybe some people were -- maybe some people don't understand that the severe AS patient population and the moderate AS population are very similar in terms of their age.

In fact, there's -- again, the literature on prevalence suggests that there's only 1-year gap between severe and moderate. And so all those sort of details come out in the baseline characteristics. And then again, it allows us to sort of answer those questions and then focus on the results when they drop at TCT.

Yes. And with regards to impact, Larry, think about -- you know that the practice of medicine is moving slowly. So we expect minimal impact in 2026. And our long-term guidance for TAVR, mid- to high single digit is here to accommodate all of these kind of scenarios. What we will do at investor conference is provide a more detailed guidance, obviously, for 2027.

Thanks for that comprehensive answer. But I wanted to ask about your comments about 10% total company growth on average because you didn't highlight that on the Q1 call and the implied second half underlying growth is about 9%, which is slightly below 10%. So I know it's really early, but is there -- do you believe you can grow 10% underlying next year? And if so, what are the drivers?

Just to be clear, Larry, my comments on 10% is about the company. And it is a guidance comment long term about the company with TAVR growing between mid- to high single digit. I think this was our comment that we did at the investor conference, and it was the same comment that we did at the end of the Q1 and the same I did today.

No, I got it. I meant the total company, Bernard. Sorry if there's any confusion. I was asking about total company, not TAVR, but I'll leave it there.

And your next question comes from Travis Steed with Bank of America.

Congrats on a good quarter. Just maybe as a follow-up somewhat to Larry's question. Given the tough comps in the second half, you mentioned you still expect normalized seasonality in Q3 this year. Just want to make sure I understand what normal Q3 seasonality means. Looking back at the model and worldwide TAVR kind of down between $15 million to $30 million sequentially from Q2 to Q3, which to me, my math puts at a kind of 5% to 6% worldwide TAVR growth. Curious if that's kind of the math that we should be doing or if you'd say anything on the seasonality?

So maybe let me try to put in perspective how we think about the guidance for 2026. First, we had a better-than-expected first half, Q1 and Q2. So we took this sustained performance into consideration in raising our full year guidance. In addition, what we talked about in Q1 and today is the fact that we expect the second half growth rate to be artificially low because of the high comps from last year. I don't know if you remember, but last year, the summer was very high from a growth rate. So we have a very high comp 2H of 2026. And we took all of that in consideration to give you the guidance, 10% to 11% for the total company. So is it good enough here? Or do you want more detail on this guidance and 1H and 2H dynamic?

Yes. Just there was a comment in the prepared remarks about normalized seasonality in Q3. I just want to make sure we had that down.

Yes. So this year, we don't expect like last year to have a very strong summer basically. And what you are going to see is basically Q2 to Q3, you are going to have some incremental dollars, Q2 to Q3.

Okay. And then the kind of the second question is more on the NCD. I don't know how big of a deal you think NCD is on kind of TAVR growth next year or how to quantify how many centers this opens up? Or does it open up capacity for TMTT as well as TAVR, just any more on the NCD now that it's kind of more finalized?

Maybe I'm going to ask Dan to comment on the NCD itself, and then we can discuss about TMTT.

Yes. Thanks for the question, and it's an important one. First of all, we're really pleased, right, that CMS is running this process. And the good news is we're getting nearer to the end of it. We've just seen a draft policy position and the second comment period, the second public comment period is now closed. And so final policy memo is expected in September. And so this is where we are in the process.

When you look at that draft, there are a couple of opportunities there. We're encouraged by it, number one. I think that's really important to say. And I look at it in 3 different ways, right? The big reasons to sort of like open this up and revisit it. first one is we're encouraged at least in the draft, it says that there's a pathway for asymptomatic indications to be covered. That's really important. That's one opportunity. The second is that the -- that there's a recognition that after all these years that symptomatic severe aortic stenosis is a reasonable and necessary procedure for Medicare beneficiaries and that it can be covered without evidence development. And that's super important. And then the third is modernization of the policy around empowering heart teams to give timely access to care for patients in need. And so these are the big ones that present what we would say tailwind or potential catalysts as far as future opportunity in 2027 and beyond.

Your comment specifically about new centers, if you think about it, the current draft policy states that cardiac surgery programs still need to be in play and exist for a TAVR program to be covered or TAVR procedure to be covered. And so if you think about that, where we are about 850-odd plus centers and how many surgical centers, there is room for some expansion, but that's not the big add. The big add will be how efficiently patients can be processed referred, diagnosed, referred and treated and what that means from a program efficiency perspective, and that will be very, very important as demand we anticipate to continue to increase based on indications and evidence.

Do you have a follow-up question?

No, that was it for me.

And your next question comes from Joanne Wuensch with Citibank.

Thank you so much for taking my question and for delivering the quarter. So we're getting a lot more questions on PROGRESS. And I was curious if you could sort of level set, assuming that the clinical data looks good, how you think the adoption rate might be? And how do you think the steps would be towards having that contribute to revenue?

Yes. I'm going to let Dan take this one.

First, we can make a whole bunch of assumptions. I think like the first thing is we have to see the results, and those results will be, as you know, presented, published at TCT this year. But if I -- taking a step back, I think we need to think about this patient population in a very similar way as the asymptomatic patient population. These are new indications that don't have a predicate, right? We spent 15 years doing a lot of evidence generation on TAVR as an alternative to surgery. And whether it be an asymptomatic patient population or a moderate disease patient population, the guidelines are not -- surveillance is the recommendation for these particular indications, not surgical intervention.

And so there's an element of change management and human behavior change and education, et cetera, that has to go along with any of these new indications or new data sets. And so I think that we can look at that very similarly. I think it's going to be important data. There's going to be a lot of learning. But we can think about those 2 things in a similar way relative to, say, high risk, intermediate risk, low risk where it's just against an existing predicate.

Does that make sense, Joanne?

It does.

And your next question comes from Pito Chickering with Deutsche Bank.

Great quarter. I'll put my 2 questions upfront. Looking at PASCAL tricuspid with the approval expected in the fourth quarter, and we're seeing the data at TCT in the fall. Is it safe to say that the trial is successful and has already been submitted to the FDA? Any color there? And then the follow-up is with market share gains you've seen in mitral with PASCAL, can you talk about how you think you're positioned to enter the tricuspid market with PASCAL?

So I can tell you, we are very pleased about the PASCAL performance. But I'm going to let Daveen provide more detail. He's very close to it.

Yes. Thanks, Bernard. Thanks for the question, Pito. Yes, as you said, exactly right now, we're expecting both the data to be released at TCT this year. I think we'll all look at the data together, and our expectation is for a Q4 approval in the U.S. is our current planning right now.

If you look at PASCAL tricuspid, however, so far, we've obviously had this technology now in Europe for a few years. And we see that some of those differentiated features with the PASCAL device on the mitral side come off even more so in the tricuspid side. So physicians can see that some of those cool features about independent grasping, et cetera, they really make a difference in treating their tricuspid patient. And as a result, we see that physicians want to use PASCAL more and more often in the tricuspid situation in Europe.

So I think it's on the back of that as we think about the U.S. tricuspid approval and launch as that next layer of growth, as that next wave of potential growth for the TMTT business where we think that those differentiated features should be able to come over to the U.S. We've got a large number of physicians who were in the trial, were in the continued access for the trial as well. And I think there is that kind of looking forward to this technology coming and helping their patients here in the U.S.

What we like with this PASCAL tricuspid upcoming approval in the U.S., this is adding a layer of growth for TMTT. So we have today PASCAL mitral. We have EVOQUE still scaling. We have M3 at the beginning, and we are going to add this fourth layer of growth for TMTT. So this give us confidence. One is that physicians will have all of the tools they need, best-in-class tools they need to treat their patients, but also confidence in TMTT achieving $2 billion in 2030.

Your next question comes from Vijay Kumar with Evercore ISI.

Congrats on a nice sprint here. Bernard, it looks like in the press release, you called out EVOQUE. So I'm curious on the TMTT performance. Is -- have you seen an inflection in EVOQUE? And is that what's driving the strength? Or is this more broad-based when you look at the TMTT portfolio?

Let me make a brief comment about it, and then I will ask Daveen to add additional color here. I will say we have seen an inflection in EVOQUE since the beginning. The demand is very high. And if you -- so it's like it's growing very well. And what we have seen in the quarter is great adoption. But I'm going to let Daveen who is very close to this action.

No, I think I'll speak first a little bit more broadly. As Bernard mentioned upfront in the call to Rob's question, we've seen a growth coming across all of the platforms in TMTT, and to be honest, all the regions for TMTT. It's been great to see that all the technologies are adopted. As you can imagine, right, PASCAL was our first technology. So it's actually our largest technology by revenue. And EVOQUE though, is second in size, but growing very quickly. There's a lot of excitement for the technology. We see the continued new data coming out, people adding to the overall clinics portfolio that makes people want to use EVOQUE. And then we've got the new kid on the block, obviously, with SAPIEN M3, which is the newest high growth rate, but the smallest because it's just the newest in terms of its timing.

And what we're seeing overall is that specifically if you dive a little bit into EVOQUE, we see a couple of different factors. We see us kind of deepening overall adoption coming from -- we have new centers opening up every week, every month across the world. So new centers are getting exposed to EVOQUE. We see that in existing centers. Over time, we're continuing to work closely with them to streamline the whole process of an EVOQUE patient from the pre-case plan to getting ready for that patient to actually executing the case. And that then enables those centers to actually do more cases and actually increase the kind of amount of usage in each case. So I think those together are helping keep the momentum going in EVOQUE, but I don't want to underscore the momentum we see today, both in PASCAL and the initial momentum we're seeing with M3.

That's helpful, Daveen. And maybe, Bernard, one on PROGRESS. I know there was a lot of -- it's a heterogeneous population, and you guys did a good job trying to balance out the different factors. Most of these patients had heart failure symptoms. What were the baseline drugs in this trial? Was it a consideration when randomizing? I don't know if you can answer that, but if you could talk about how drug arms in both arms -- how the drugs in both arms were -- whether they were randomized or was that a criteria?

Thanks, Vijay. I'm going to ask Dan to reply to this way. It is a technical question, Vijay. So Dan is in the best position here.

I think -- and I think this is one of the reasons why we presented the baseline characteristics and perhaps it's important for everyone to understand, this is not a heart failure trial, right? This is a trial on moderate AS patients with at-risk features. UNLOAD was a heart failure trial where the patients happen to have moderate AS. And so these are 2 very, very different patient populations. And you could see from the baseline characteristics, what's interesting about them is perhaps clinically not benign. We'll see like that these patients did have symptoms. They did have at-risk features as the trial design was intended. But they also had very healthy left ventricular function.

And so this is the type of patient that we're dealing with. They're not a heart failure patient. They're a moderate AS patient with certain characteristics that may predispose them to greater risk clinically than what current guidelines suggest, which is active surveillance. And so again, a lot of learning here, understanding the patients. So drug regimens don't play into a big factor here because these patients don't have heart failure symptoms. Although the primary endpoint is going to include hospitalization and heart failure events, obviously, when you're doing a surveillance trial like this and a comparator against surveillance like this. So a lot to learn, and we'll learn more when the results are presented at TCT. Thanks for the question.

Your next question comes from Josh Jennings with TD Cowen.

First, I just wanted to talk about TAVR market growth drivers. I mean, the CMS, NCD update and the moderate indication are 2 clear ones. TAVR-in-TAVR is kind of going to pump in on the back burner, but low-risk indication was approved in 2019. So next year will be the eighth year post-approval. Edwards hasn't been very vocal about TAVR-in-TAVR as a potential driver with SAPIEN is well positioned for that procedure. Maybe could you help provide some insights on Edwards' internal expectations for the TAVR-in-TAVR opportunity and when these procedures could potentially contribute at a meaningful level to volume growth?

Yes. Maybe I -- Josh, maybe I answer that question. You're absolutely right when you talk about some of the more obvious sort of milestones ahead of us with NCD, PROGRESS, et cetera. And lifetime management, I think we've talked a lot about this. This is something that is becoming absolutely more important and more critical, particularly as the evidence suggests that you get benefit by treating earlier in the disease pathway, not just younger. I mean, earlier in the disease pathway, as we learn, can mean different things to different patients at different age groups.

But the reality is, is that we anticipate as more -- as the therapy penetrates is that there are going to be patients who outlive the durability of their valve, and we're seeing that in various trials, et cetera, in various patient populations. And so lifetime management becomes a thing and the planning of when to treat with what option and how to treat the second option. And there's a lot of complexity in there. So we have modeled that into our market model. We look at that. Right now, it represents a relatively small part of the market relatively. We anticipate that to grow, and that's all factored into the TAVR market.

If you put all of this in perspective, we are, in my mind, sitting in front of an amazing opportunity. If you look at TAVR, you have -- it is still underpenetrated. It is still under adopted. We have the asymptomatic indication to unlock with the NCD. The NCD has the potential, if the drug remain like it is to streamline timely access for patients. You have -- if a study is positive, a PROGRESS study is positive, another indication for this patient population. So we look at TAVR as a very durable growth engine for the company.

You add all of the catalysts we are having on TMTT, PASCAL, M3, EVOQUE and you look at Surgical also, we didn't discuss about Surgical today, but we have also many opportunities in Surgical. So altogether for TAVR and altogether for the company, we feel very confident. You look at what we did last year, what we are doing this year, the kind of execution we are having also, all of this together in my mind, it is what give us confidence about achieving long term about 10% EPS leverage and operating margin improvement, 50 to 100 points. So again, excited, confident. I like what the team is doing, and it's great to be able to report this kind of quarter.

Thank you. And ladies and gentlemen, that's all the time we have for questions today. I'll now hand the floor back to Bernard Zovighian for closing remarks.

Yes. So thank you all for your interest in the company. You know that we are available for any call, Doretta, Gerianne and [indiscernible] and myself are available. And I know that you are going to have a phone call with the team. Thank you so much, and have a great day.

Thank you. And with that, we conclude today's call. All parties may disconnect. Have a good day.

Next up, we have Edwards Life Sciences. Welcome, Bernard.

Thank you.

Thanks for coming.

How are you doing?

Good.

Excellent. Good to be here. Hi, everyone.

Maybe I'll let you open. I know you want to make some opening remarks to get started. Let's just go and that?

Yes. No, thanks. So look, it is -- we feel good about where we are at as a company. And when I step back and reflect the reason why, I think we have a great deal of strategy. We have a strategic clarity. This is all about structural heart. Everybody in the company is focusing on that. We have a great culture. We -- the employees, about 16,000 are fully engaged, inspired by our patient-focused culture. Execution is amazing across the other company. And sale of Critical Care a couple of years ago help us even further to be very agile, fast execution, and you have seen that. And all of this is resulting in my mind, a very differentiated performance, but also sustainable performance. We had a great year last year. Q1 was the same growing double digit. But also it is less about double digit, more about broad-based across surgical TAVR, mitral and tricuspid. Also broad across regions. So this is what gives us confidence. It is sustainable. People are behind us. Strategic clarity and great execution. So feeling good about the year ahead of us.

Okay. Great. And then coming off Q1 results, obviously, a strong TAVR quarter and beating 2 points and really strong across the board. I don't know if there's anything you'd like to kind of say kind of post Q1?

Yes, no, very pleased about Q1, obviously, better than expected, mainly driven by procedural growth. So basically the market growth. And all of that, I'm sure you heard me saying about it is this renewed focus on TAVR. In the last year or so, we have produced so much evidence on TAVR, early TAVR, long-term durability data, partner 47 years, partner 10 years. So all of this together gave a renewed focus on the community. I'm a clinical community about focusing on these patients. And so basically, mainly market in Q1, but a little bit of share also mainly in Europe from the exit of 1 competitor almost a year ago now, a little bit in the U.S., too. But you know us well. What we care the most about is unlocking the opportunity that we have in TAVR, and we are very pleased with what we see.

Great. We'll dig into a lot of that in a bit. But maybe first, this announced new CFO since last week, I guess. So maybe why did the Board go with that decision? And how should we think about the new CFO announcement?

Yes. So I was looking for a very experienced CFO with comprehensive experience and I'm very pleased that Doretta accepted the job. We have been talking a lot together. She was 2 decades in the banking industry, leading banks, also as CFO of a large pharmaceutical company. And she studied a lot AOL. She knows the kind of strategy we are having differentiated, unique in medtech, where we go early. We have multiple bets. We take risk to create categories and to lead categories. So having on board and CFO is going to help us and help me take this kind of decision to create what we are creating differentiated performance in medtech. So very pleased to have her. She's going to start with us on June 1.

Okay. All right. Good. I'll save most of my margin questions for her. But maybe high level, since you are here. How do you think about margin strategy? Does it kind of stay the same, the 50 to 100 basis points a year? And how do you think about -- like this year is kind of above normal or at the higher end of that range, how should we think about kind of the longer-term margin outlook for Edwards?

Yes. No, we are committed. We are committed, first and foremost, to have a differentiated top line performance. And what we said is, for the year, we increased the guidance to 9% to 11%. So basically, the midpoint at 10%, we said '27 and beyond, growing double digit, about 10% with EPS leverage and 50 to 100 basis points improvement on margin '27 and beyond. So we are still committed to that. This year is more about 150. And this is what you can expect from us, great top line performance, EPS leverage, improving margin. We are very fortunate to be focusing on a space where there is a lot of opportunities. We are the leader. And so yes, pleased about it. When I step back again I don't believe there are many medtech assets with this kind of durable outcome in front of them.

Makes sense. On TAVR, you saw an acceleration over the last year or so. And obviously have a product coming from a competitor. But just even in the U.S., like what do you think is kind of driven that acceleration? And how do you think we should think about TAVR growth against some of the tougher comps in the second half of the year?

Yes, that's a good question. First and foremost, where what gives us confidence is the durability of the SAPIEN platform, now proven at 7 years and 10 years, and we know it is very important for valve. The early TAVR is giving this confidence that yes, treating patients early without symptom makes sense also. So for the year, we have increased the guidance. So think about the new range, and you can model at the midpoint. This is what the way we are thinking about guidance for the year, we are trying always to give you a realistic guidance based on what we know. And longer term, what we said was basically expecting mid- to high single digit. And this is a wider range to be able to accommodate any scenarios. And all of that together for TAVR will give us the opportunity as a company to double grow digit.

When you think about your competitor had 6-year low-risk data, when you -- what are you seeing in the field when you're talking to doctors you're seeing, physicians think differently about TAVR and the valve that you use in low-risk patients?

Look, I'm not going to talk about competitive technologies. We are very pleased, obviously, with our valve performance at 30 days at 6 months and 1 year and at 10 years, and it is the benchmark by far, so we are focusing on that. We are focusing on patient care, and we are focusing on physician having access to the best technology, to the best TAVR technology there.

You've been taking share, I guess, in the TAVR market already, though, right? And so I kind of expect that to continue.

We have said in Q1, we have taken a little bit of share in the U.S. We are not focusing too much on that. You know us well, the big opportunities about the market. I know that many people are talking about share. You know me, I've been saying that all the time, share is a lagging indicator. I'm not looking back. I'm looking about the many patients that today, unfortunately, are undiagnosed, don't have access to care and making sure that they can have access to care. And if we do so, we are going to have a great -- and the next 10 years is going to be an amazing for TAVR, for SAPIEN TAVR.

On the TAVR NCD proposal expected June 15, I believe. I mean the comments supported indication expansion, but there was some debate around the heart team requirements. So any sense for how you expect the TAVR NCD to play out and how it could impact the marketplace?

The TAVR NCD is going to be very important. It has been in place for a long time. Since then, the TAVR procedure has evolved a lot. It is now the standard of care in the U.S. and in many locations around the world. We believe it is time to refresh that. The heart team is very important in evaluating other patients. We are looking forward to a more flexible NCD where the heart team can decide what operator can be in the room, but it is obviously up to CMS to decide. The first draft mid-June, will give us an indication about the new NCD and the new NCD will be in place by the end of the year.

And then an increasing number of centers, how does that help? Is it -- help open up capacity even for TMTT or is it just more about TAVR?

I believe it is going to be about a number of things. Right now, there are a number of patients in the U.S. who don't have access to care of the way we should have access to care. So this is going to help us having greater and easier access to care, and everybody will benefit. The patients, the physicians and the health care systems because TAVR is a very effective procedures.

Okay. Makes sense. On early TAVR, the data presented in 2024, curious how much of that's already helping drive momentum in '25. Is this a new indication expansion for asymptomatic that's going to come through and help the TAVR market or kind of what you're seeing on asymptomatic?

So what we have seen in Europe first is indication has been approved, but also of the guidelines has been updated. Indeed, a dogma of waiting for symptom is -- has been eliminated in Europe with the new guidelines. In the U.S., we don't have the new guidelines. And so we have -- and obviously, it is not yet covered by the NCD. So we have not seen any asymptomatic patient in the U.S. What we have seen though, CMS data is an increased number of echo alerts, an increased number of stress tests. So this is a clear indication that the heart teams across the nation are aware of the latest data and are paying close attention to these patients.

Moderate data. I don't know if you've seen the data or not, if you'd say or not, but when the data comes assuming it's successful, how do you think that impacts the market?

So the moderate patient population is a large patient population. We started a study 4, 5 years ago because we had a belief that treating this patient will be beneficial for them. We know that AS is a progressive disease. So potentially that thing this special is also a good idea here. But we don't know the data. I don't have the data. We are doing high-quality data, high-quality evidence, so with FDA-approved studies, all of that. I'm not going to see the data until over the last few days. It is going to be presented in a high-quality fashion at TCT. And right after that, we are going to do an event with -- for investors to go deep into the data and understand the implication of the data. But as of now, I have no more to add that. Yes, we were having a belief that it is an important disease to steady first and potentially to treat.

Yes. And once the data is out, you had to kind of do what you do with the asymptomatic change guidelines and the same process?

Potentially, it will depend on how the new NCD is written, so we will have to wait for that. But -- so let's wait, the guidelines and NCD. They know that all of the people in charge and leading societies, they know that this is a study coming. So let's see what's coming out from NCD.

Okay. Fair. And then TMTT, you're still talking about $2 billion in revenue by 2030, which is about $300 million a year of revenue growth. The midpoint this year, I think, around $210 million. How are you thinking about the acceleration in the TMTT line to get to that $2 billion in 2030 and the drivers there?

Yes. We feel good about it. Let me first bring some context here about -- we started TMTT about 8, 9 years ago with the vision of having a portfolio to be able to realize this large market potentially, mitral and tricuspid. And today, 8 years later, we have this unique portfolio that nobody has, which is helping physicians select the right technology for their patients. This year, we are on track to achieve $0.75 billion in revenue, growing 40% at the midpoint. So doing well at the right pace. And we have a number of catalysts coming in TMTT. We have a next-gen Pascal coming end of the year. We have a new indication, Pascal tricuspid speed in the U.S. coming end of the year. You have a new geography for Pascal also that we are expanding, new centers. For EVOQUE, we have now a growing body of evidence with mortality [ beliefing ] eliminating a crossover patient. We presented that at ACC. So all of that together, together with me, is going to be additional catalysts to move from $0.75 billion this year to $2 billion in 2030. The true vision though is not 2030. We believe that mitral and tricuspid are going to be probably as big as aortic stenosis 10 years from now. So that's the opportunity there. And adding this kind of portfolio is going to be very important to grow TMTT to this kind of big numbers.

On SAPIEN M3 CE mark in April '25, FDA approval December 2025. How do you see the rollout of that going kind of feedback from physicians and any differences between U.S. and Europe launches?

It's going very well. It's still early granted. Very well, patient love the technology. Again, it is not impacting Pascal or any kind of tier devices. It's fully about non-eligible tier patients. So it is expanding the patient population can be treated. And this is why our patients like it. It's effective. It is safe and it is expanding in the patient that can impact. So it is doing very well, still early, but we got great feedback.

And on Pascal, you've been taking share there. Even your competitor was expecting share to stabilize and now they're saying it's going to continue to be sure loss for them, sure gain for you. What -- how much opportunity do you see on the Pascal side to continue that growth?

Yes. I will make the same comment on share, a lagging indicator, let's don't talk about that. Let's talk about the potential, many patients, mitral intricacy patient need a treatment. We believe that Pascal is a great technology, highly differentiated, and physicians love it. They achieved a great outcome for their patients. So important. We have seen that the mitral tier procedure now is increasing double digits quarter-over-quarter, which is great to see, and it is the same playbook. When you bring best technology, great evidence, you support physicians. Automatically, you are growing the category. That's an important playbook for us to remember. What I love about this playbook, it is a sustainable playbook. It is not like in a few quarters, it is very sustainable long term.

How do you think about replacement versus repair in the mitral and tricuspid market?

We see different patient population. So they complement each other, and it help us grow the pie and grow over potential.

Okay. And then kind of catalysts and TMTT, some of the new products like next-gen EVOQUE plan introduced second half '27. How meaningful is that? Kind of what are the big changes there?

Yes. All of the next gen are important. You will see the next gen Pascal this year, end of the year, the next gen EVOQUE by the second half of next year. We have also in the plan of the next gen M3 that we didn't talk too much about it. All of them are going to be meaningful improvement for obvious competitive reasons. I don't want to get into the detail before we launch it. But yes, I'm very pleased. So that's like not only we are the only 1 with this kind of comprehensive portfolio, but also we are bringing in the next gen. So this portfolio is evolving too to better technology.

And then Class 2 tricuspid regurgitation data later this year as well, right?

At TCT, yes. Yes. Yes, we'll be present at TCT, and we expect an approval in the U.S. thereafter.

That probably expand -- I mean that expands the market quite a bit for Pascal, right? And I don't -- I assume there's not been a lot of like off-label use there in those regard.

No, I don't think so, because there is an approved device in the U.S. So it is all incremental. It is an upside to the kind of revenue you see from TMTT today.

Okay. That's helpful. And then next gen Pascal, anything you'd call out on that product?

No, the same competitive reason. Now all of this, this is already contemplated into the current guidance that we are for TAVR, for TMTT and for the company. And with regards to 2027, we will provide a guidance at investor conference in December.

Okay. Helpful. And then the pipeline, maybe Innovalve, do you have anything and say on Innovalve or the aortic regurgitation opportunity?

Yes. Innovalve, mitral -- transcatheter mitral valve is a very complex to do. You have seen the space for 20 years. Companies, including ourselves, have tried to bring but transcatheter mitral valve, many have failed. Finally, we had a great 1 with M3. And we are already thinking about the next gen. And not just the next gen M3, but the next gen mitral replacement, and it is why we have Innovalve here. The thinking is, can we further expand the patient population that physicians can treat with a mitral replacement. So it is all about incremental. It is not about impacting each other. So that's on Innovalve. On AR, our technology, [ SOJON ], that's the name of it, is doing well. We are doing a pivotal study, and we are enrolling a study well. And we will talk more when we know more about when we are going to finish enrollment, when we are going to present the data. Our vision for AR is very simple, the same that what we discussed in the past. We believe that there are many patients who need a treatment, solutions. The only solution available today is surgical. There is 1 just approved transcatheter AR technology. And our vision is to bring the best technology, innovate with the best valve for these patients.

And then lateral appendage where you've talked about a product there. What can you update us on the timing and process there? And what's the unmet need in that space?

Yes. We still believe this is a big unmet need. There are transcatheter solutions. There is some surgical solutions. We are looking at this 1 as a nice opportunity in surgical, and this is why the team has developed a very competitive technology. We believe we are going to bring it by the end of the year. As soon as we will bring it, you will see a little more in the feature of this technology.

And then I do want to touch on international, just a bit and improved a lot this past quarter. It grew 12%, if I remember correctly. And you've always been taking share internationally from your competitor that left the market, but just underlying the outlook in the international market?

Yes. We -- as a mater of fact, international in Q1 grew faster in the U.S. So even faster. The U.S. did very well and Europe did even better than the U.S. In Japan, we did very well also. Now to temper a little bit of the Japanese results, Q1 2025 was a very low Q1, so the comp was favorable. But nevertheless, we see Japan as an important market for us. We know that AS is the disease of the aging. And there is 1 country where the aging is very prevalent in Japan. So we are spending a lot in terms of awareness, training the team, hiring the best people to make sure that Japan is going to be very successful. So pleased about Q1, double digit. I don't believe you should expect Japan being double digit in the next few quarters, but nevertheless, good performance expecting from Japan.

Okay. And then on heart failure, like you've been making a big push into heart failure, just -- how do you see that space kind of developing over the next few years?

Yes. So before I answer directly your question, Travis, let me offer a little bit about how do I see our core businesses, TAVR, surgical mitral and tricuspid. Over the next 4 to 5 years, we are in a leading position with best technology, world-class evidence, many catalysts like we discussed. And I feel very good about having sustained performance. What I mean by that is growing the top line around 10% with EPS leverage. We are also thinking about long term, beyond that, beyond 4, 5 years and expanding into field close to us, which is a natural progression. And heart failure is a good one, where many of these patients, we see them already. Many of them have mitral disease, tricuspid disease. So which is why we are investing in many of the different modalities to treat heart failure patients. They are more for long term than short term. But yes, we are bullish also here. The same way we did it in TAVR. The same way we did it in TMTT 10 years ago.

Okay. That's helpful. And I don't know if there's anything else you wanted to touch on, those are kind of list of questions. And I think you have some closing remarks you wanted to make too, so I left some room for that.

Thanks. So look, you have seen -- again, back to my introduction, strategic clarity, great execution, we have an amazing culture in the company. Everybody is dedicated. Everybody wants to win, and you have seen that in 2025. You have seen that in Q1. We increased our guidance for the year, and we have a great outlook for the years to come. So thank you so much for your interest in the Edwards.

Thank you. Thanks for [ coming ] with us.

Thank you.

Greetings, and welcome to the Edwards Lifesciences First Quarter 2026 Results. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Gerianne Sarte, Senior Vice President, Investor Relations. Thank you. You may begin.

Good afternoon, and thank you for joining us. With me on today's call is our CEO, Bernard Zovighian; and our CFO, Scott Ullem. Also joining us for the Q&A portion of the call will be Dan Lippis, our global leader of TAVR; and Daveen Chopra, who has global responsibility for TMTT, Surgical and IHFM.

After the close of regular trading, Edwards Lifesciences released first quarter 2026 financial results. During today's call, management will discuss the results included in the press release and accompanying financial schedules and then use the remaining time for Q&A.

Please note that management will be making forward-looking statements that are based on estimates, assumptions and projections. These statements speak only as of the date on which they are made, and Edwards does not undertake any obligation to update them after today. Additionally, the statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements. Factors that could cause these differences can be found in today's press release and Edwards' other SEC filings, all of which are available on the company's website at edwards.com. Unless otherwise noted, our commentary on sales growth refers to underlying sales growth, which is defined in the financial results press release issued earlier today. Reconciliations between GAAP and non-GAAP numbers mentioned during this call are also included in today's press release. Quarterly and full year growth rates refer to continuing operations.

With that, I'll turn the call over to Bernard for his comments.

Thank you, Gerianne, and welcome, everyone. Building on a year in 2025 marked by solid financial performance and strategic progress, we delivered another strong quarter in Q1, achieving 12.7% sales growth, which reflects the impact and durability of our differentiated strategy. Our focus on structural heart disease solves large, urgent and complex patient needs. It allows us to pursue unique opportunities to innovate and lead. None of this will be possible without the exceptional talent of our employees who bring our culture to life each day through their dedication to patients. We've built a workplace where our 16,000 employees around the world can stay and grow with us. I want to thank each of them for being aligned to our vision, inspired in their work and committed for the long term, which is essential to our continued impact for patients.

Our strategy is underpinned by speed, agility and disciplined execution, which enables our differentiated sustainable growth. Developing safe and effective valve therapies requires unwavering focus, deep expertise and the generation of world-class evidence capabilities that distinguish Edwards as a trusted partner. While it takes time to pioneer new therapeutic areas and change the practice of medicine, our innovative therapies have transformed care for many patients and positioned Edwards to continue to lead for many years to come.

Looking forward, we are reinforcing our foundation with multiple strategic investments focused on clinical evidence generation, technology advancements, indication expansions and resources to support patient care. We continue to pursue additional meaningful growth opportunities in each therapeutic category that will have a positive impact on our performance in 2027 and beyond.

In TAVR, there is a renewed focus on the therapy across the health care ecosystem. This has been reinforced by definitive 7-year PARTNER III and 10-year PARTNER II data, which validate the durability and consistent performance of SAPIEN. Our platform is distinguished by high-quality, long-term evidence grounded in decades of scientific rigor. In addition, the practice-changing early TAVR trial results are resonating with the clinical community, validating the movement away from the outdated practice of watchful waiting and further highlighting the importance of intentional referral and treatment earlier in the disease pathway for severe aortic stenosis. Together, our SAPIEN innovation and evidence have once again elevated the standard for current and future TAVR valve performance, durability and lifetime management of patient with aortic stenosis.

In TMTT, our many years of patient-focused commitment, pioneering development and strategic investments have resulted in a unique comprehensive portfolio of therapies that enables physicians to offer options to the clinically diverse population of patients suffering from mitral and tricuspid diseases. With a complementary portfolio of repair and replacement technologies across both valves, we have expanded the population of patients who can benefit from these technologies. We remain deeply committed to ongoing innovation and the generation of high-quality clinical evidence to reach even more people affected by these diseases.

In Surgical, we continue to expand our portfolio to address the needs of the many structural heart patients best treated surgically. Our portfolio of resilient tissue technologies including INSPIRIS, KONECT and MITRIS is backed by years of durability data and continue to support enhanced patient care globally.

The success of our structural heart strategy is evidenced by the significant opportunities across surgical, TAVR, mitral and tricuspid, and we are in a unique position to advance new technologies, next generation of existing technologies and to expand indication to benefit even more patients. In addition, we are executing our proven innovation strategy to expand into structural heart failure and aortic regurgitation, which represents significant longer-term growth opportunities. We remain steadfast in our commitment to address patients in need by advancing novel therapies to extend lives, improve quality of life and provide greater impact and efficiency for health systems.

Turning to our financial performance. Edwards continues to be well positioned to invest in innovation while also generating attractive financial results. In 2027 and beyond, we believe our strategy will enable average annual sales growth of approximately 10% as well as operating margin expansion. We expect variability in sales growth rates over time based on the timing of catalysts. Our financial strength and strategic clarity give us confidence in the future.

In the first quarter, we generated 12.7% sales growth and strong earnings performance for Edwards, both ahead of expectations, driven by broad-based growth across our product groups. Based on our first quarter outperformance, we are raising our full year 2026 sales growth guidance to 9% to 11% and adjusted EPS guidance to $2.95 to $3.05, which demonstrates solid earnings leverage.

Now I will provide more detail about product group performance. TAVR first quarter global sales of $1.2 billion increased 11% over the prior year. Globally, procedural growth benefited from a heightened clinical focus on proactive disease management of severe AS, along with long-term evidence, demonstrated the proven durability and valve performance of a SAPIEN platform. SAPIEN growth in the U.S. was healthy, and it was even faster outside of the U.S. Edwards global competitive position in the first quarter increased slightly year-over-year, mainly due to the exit of a competitor in Europe. Average selling prices were stable globally. Recent clinical trial results on long-term TAVR performance continue to support patient treatment with SAPIEN TAVR. We are encouraged by the broader momentum that the EARLY TAVR study data has generated across the clinical community for both symptomatic and asymptomatic patients.

There has been a shift towards proactive disease management with an increased focus on evaluation and intentional referral of patients with severe aortic stenosis earlier in the disease pathway. This evolution in patient management, combined with a large and growing body of long-term SAPIEN outcomes data, reinforces our confidence in the durable multiyear growth opportunity ahead. Over our 70-year history of continuous valve innovation, we have devoted our deep knowledge, experience and learning to the complex research and development, clinical studies and manufacturing of surgical and transcatheter heart valves. Each innovation represent a unique challenge. We know the impact of these advanced technologies. And over time, we have seen multiple examples of other valve platforms showing variable performance, which is the reason why long-term clinical evidence from rigorous FDA trials must continue to guide therapy choice for patients.

We are confident in our SAPIEN TAVR therapy with distinguished valve performance, proven long-term clinical evidence, including the 7-year Partner III data and 10-year PARTNER II data and an asymptomatic indication, all of which are meaningful differentiators. Later this year, we will also learn more about patients with moderate AS when the PROGRESS trial results are presented at the TCT conference.

Let me now turn to some commentary on U.S. TAVR. In Q1, procedure growth continued to benefit from the heightened clinical focus on proactive management of severe as the clinical community continues to digest and incorporate new evidence into patient care. We believe Edwards' competitive position also benefited slightly year-over-year. We are also pleased that CMS is conducting the process to reconsider NCD for TAVR. This decision has the potential to improve timely access to life-saving TAVR therapy. The initial 30-day public comment period closed on January 14 of this year, and we look forward to the next steps in the process, including the release of a draft decision memo by June 15 of this year.

In Europe, first quarter results demonstrated continued strong commercial execution and sustained physician demand for the SAPIEN platform. The Q1 growth rate also benefited from the exit of a competitor in the prior year. Updated guidelines from the European Society of Cardiology and the European Association for Cardiothoracic Surgery are reshaping clinical discussion around proactive business management, reinforcing the role of TAVR for a broader patient population. Outside of Europe, our sales growth was strong across multiple geographies, including Japan, driven by procedural growth and adoption of our SAPIEN 3 ultra resilient platform.

In summary for TAVR, based on our Q1 results, we are raising our full year TAVR sales growth guidance to 7% to 9%. As we look ahead to '27 and beyond, we see compelling mid- to high single-digit growth opportunities in TAVR, supported by our patient access strategy, expanding clinical evidence and a differentiated innovation pipeline designed to meet the needs of millions of patients around the world that suffer from aortic stenosis. Together, this will have lasting impact on the continued expansion and success of a SAPIEN platform globally and support a durable, multiyear growth opportunity.

Now let's turn to TMTT. Our unique portfolio of repair and replacement therapies to treat mitral and tricuspid diseases drove third quarter sales of $173 million, an increase of approximately 42% year-over-year. We believe that mitral and tricuspid procedural growth globally was in the double digits. In tricuspid, we have seen strong adoption of repair and replacement technologies globally. At the recent ACC scientific session, 2-year TRISCEND II data we have presented demonstrated significantly lower all-cause mortality with EVOQUE versus medical treatment when accounting for patient crossover. This new data demonstrated that the EVOQUE replacement system provides significant and sustained elimination of [ TR, ] improvements in health status and quality of life and no added device-related risk. We are also increasing patient access to transcatheter tricuspid valve replacement and driving further adoption of EVOQUE by expanding into new centers. We believe the growing body of clinical evidence, including reductions in all-cause mortality and heart failure hospitalization will support physicians' continued treatment of patients with tricuspid regurgitation.

Moving to PASCAL. Adoption continues to increase, driven by physician enthusiasm for its unique design and differentiated outcomes and underscored by the significant needs of these patients. Our progress on the PASCAL pipeline remains on track with the next-generation technology expected in Q4 for both mitral and tricuspid in the U.S. and Europe. We also continue to expect the launch of PASCAL in the U.S. for tricuspid patients in Q4 of this year, which will expand the population of patients that can benefit from this impactful technology. The recent FDA approval of SAPIEN M3 expands our mitral portfolio in the U.S. Our commercial experience, while early, validates the need for this mitral replacement solution for patients who are not well suited for mitral TEER. Physician feedback on patient outcomes and procedural experience with SAPIEN M3 has been positive.

In summary, for TMTT, strong and increasing utilization of our differentiated therapies, EVOQUE, PASCAL and SAPIEN M3, combined with double-digit mitral and tricuspid procedure volumes globally, positions Edwards for continued growth. Our portfolio of repair and replacement therapies is allowing physicians to select the best possible technical solution for their patients to get the optimal clinical outcome. This, combined with an expanding body of high-quality clinical evidence, expansion into new indications and the advancement of next-generation technologies, support our path towards $2 billion of revenue in 2030 and additional growth beyond.

In 2026, we remain on track to achieve $740 million to $780 million in sales in TMTT, representing 35% to 45% growth. In Surgical, first quarter global sales of $276 million increased 6% over the prior year, driven by continued adoption of our RESILIA therapies that offer extended durability. INSPIRIS adoption continues to increase globally, KONECT, which facilitates Bentall procedures for patients in need, recently launched in Europe with strong adoption. With the launch of MITRIS in additional markets around the world, we have seen strong uptake of this technology in surgical mitral valve replacement procedures.

The 10-year data from our COMMENCE trial studied long-term durability of our best-in-class RESILIA tissue will be presented at the upcoming AATS conference. We continue to expect that our surgical tricuspid valve TRIFORMIS will launch in the second half of the year. Our surgical left atrial appendage closure program is on track for preliminary introduction later this year. In summary, we continue to expect mid-single-digit sales growth in Surgical in 2026.

And now Scott will cover the details of the company's financial performance.

Thanks, Bernard. Our better-than-expected Q1 sales performance reflected strength across all product groups and regions. Total sales of $1.65 billion grew 12.7% year-over-year. We are raising our full year total company sales guidance to 9% to 11%, up from 8% to 10%, and our TAVR sales guidance to 7% to 9%, up from 6% to 8%, driven by strong Q1 results. Edwards now expects total company sales of $6.5 billion to $6.9 billion and TAVR sales of $4.7 billion to $5.0 billion at current exchange rates. As a reminder, the first quarter of 2025 was a lower growth rate quarter, and our results in 2025 set a higher bar for 2026, especially in the second half. We continue to expect $740 million to $780 million in TMTT sales and mid-single-digit sales growth in Surgical in 2026. We are also updating our full year earnings per share guidance to be between $2.95 and $3.05 per share as a result of our first quarter results.

And now I'll cover additional details of our Q1 results, starting with earnings per share. Adjusted EPS of $0.78 in the quarter benefited from solid operational performance and planned phasing of strategic investments during the course of this year. Our GAAP EPS for the quarter was $0.66. A full reconciliation between our GAAP and non-GAAP measures, including adjusted EPS and other items, is included with today's release. For the first quarter, our adjusted gross profit margin was 78.2% compared to 78.7% in the same period last year. This year-over-year change was driven by a weakening dollar as well as additional manufacturing expenses related to the expansion of new therapies. We are maintaining our full year 78% to 79% gross margin guidance.

Selling, general and administrative expense in the quarter was $522 million or 31.7% of sales compared to $466 million in the prior year. This was in line with our expectations and reflects continued funding of resources we provide to support patient care as well as a higher translation of our OUS expense base from the weakening dollar. Research and development expense was $263 million in the first quarter or 16% of sales compared to $255 million or 18% of sales in the same period last year. This decrease in research and development as a percentage of sales and the increase in total expense reflects our strong top line growth as well as strategic prioritization of investments in our expanding structural heart portfolio. We continue to expect 2026 R&D as a percentage of sales to be approximately 17%.

First quarter adjusted operating profit margin was 31.4%. Our margin benefited from the better-than-expected top line performance as well as planned phasing of strategic investments during the course of the year. We expect full year operating margin to be at the high end of the original 28% to 29% guidance, resulting in approximately 150 basis points constant currency operating margin expansion for the full year. In 2027 and beyond, we continue to plan for 50 to 100 basis points of underlying operating margin expansion. We continue to expect our 2026 tax rate, excluding special items, to be between 16% and 19%. The midpoint of this guidance assumes adoption of a side-by-side safe harbor taxation model alongside Pillar Two while the higher end accommodates the event that this legislation does not come into effect before the end of this year.

Foreign exchange rate changes in the first quarter increased reported sales by approximately $15 million versus guidance we provided originally for Q1. On a constant currency basis, sales in the first quarter were near the top end of our guidance range. Year-over-year reported sales growth benefited $49 million or 400 basis points from foreign exchange. FX reduced our first quarter gross profit margin by 30 basis points compared to the prior year. At current rates, we now expect foreign exchange to have an approximately $55 million upside to full year 2026 sales compared to the prior year, and the majority of this benefit already occurred in the first quarter.

Turning to the balance sheet. We continue to maintain a strong and flexible balance sheet with approximately $2.4 billion in cash and cash equivalents as of the end of the first quarter. During the first quarter, the company entered into an accelerated share repurchase agreement to buy back $500 million in shares. Edwards has approximately $1.5 billion remaining under our share repurchase authorization. Average diluted shares outstanding during the quarter were 581 million. We now expect average diluted shares outstanding for 2026 to be between 575 million and 580 million. For the second quarter, we're projecting sales of $1.66 billion to $1.74 billion, and we are expecting adjusted earnings per share in Q2 of $0.70 to $0.76. And with that, I'll pass it back to Bernard.

Thank you, Scott. In summary, our Q1 performance demonstrated the strength of our focused structural heart strategy as well as the impact of our ongoing investments in large opportunities that will continue to support long-term sustainable growth and distinguished value creation.

Before we move to Q&A, I'd like to share that we will be hosting our annual investor conference on Friday, December 4 at the New York Stock Exchange. Additional details will follow as the event gets closer, but we hope you will mark your calendars to join us in New York City as we discuss our patient-focused innovation strategy and the opportunities ahead.

With that, I will turn it back over to Gerianne to facilitate Q&A.

Thank you, Bernard. We're ready to take your questions. [Operator Instructions]

Thank you. [Operator Instructions] And our first question comes from David Roman with Goldman Sachs.

Maybe I could just start with TAVR. There was a lot going on during the quarter with respect to industry data around longer-term performance of one of your competitor products. You talked about the increased focus on lifetime management on the last call and at last year's analyst meeting. Can you maybe just help us think through some of the drivers here from some of these data? Are you seeing a class effect on TAVR? Is this questioning device selection for lifetime management? Is this a balloon versus self-expandable valve dynamic? Just help us think through some of the different moving parts here, and what operational considerations are reflected in your guidance.

Thank you, David. This is a very comprehensive question here. So let me try with first some big picture comments here. I believe we should look at the TAVR category way beyond what happened in the quarter. If you look at what happened in the last, let's say, months, years, what we have done as a company, we produced a ton of data, high-quality data, all of them being highly positive. So think about EARLY TAVR for asymptomatic patients. Think about the 7-year data with Partner III. You have a 10-year data PARTNER II. So all of this together and obviously, additional data from a competitor -- but it is not just 1 thing. I believe as a company, what we have produced is pretty amazing. This gave you confidence that SAPIEN has distinguished valve performance, benchmark durability. And your physician, we are confident already, but this gave extra confidence. And everybody knew that you have a time frame for valve vulnerability when the valves are failing. It is usually around 4 or 5 or 6 years. So everybody also was obviously clearly looking at Partner III 7 years and 10 years. And to see this kind of data, this gave you the confidence for this renewed focus in TAVR as a category and also is explaining the fact that last year, because of the second part of the year, we had a great result in TAVR. And in Q1, we continue to get a great result in TAVR. But maybe I'm going to ask Daniel to add a few comments about this. Dan?

Yes, David. Like again, great quarter. Pleased with the results. Encouraged to see the momentum that was built in the back half of 2025 continue into '26, and that contributes a lot, right? Independent of what's going on with our competitors, we expected a good quarter. All the things that Bernard said. It's always nice when it's a little better than expected, and that's the case here in Q1. And that certainly gives us a little extra confidence, and that's reflected in our new guidance. But I think it's also important just to like -- the competitive data that was dropped, it happened like mid-late February, and so it's really difficult to parse out exactly what is contributing to what at this time. And it was partial data as well. And so we still have to -- and the clinical community still have to understand the full data set, including all the echo follow-up on patients, et cetera. So I think it's a little early to sort of like get into the details and trying to understand exactly how much of that is contributing. But for sure, the totality of data that has been in play and being presented the clinical community over the last 12 months is contributing. All leading towards patients benefit when treated earlier in the disease pathway with TAVR. Hopefully, that answers your question a little bit.

That's helpful. I'll be quick on my follow-up here. Just on TMTT, I think if you look at the sequential dollar growth here, Q4 to Q1, one of the more significant step-ups that you've seen just on a dollar basis. Are you -- is this -- what are you seeing just sort of a share gain perspective and then also any early perspective on how M3 might be impacting the business?

Sure, David, this is Daveen. Thanks so much for the question. I think overall, in TMTT, obviously, we continue to be excited about TMTT. We're seeing that this comprehensive portfolio of repair and replacement is really enabling personalized therapy which helps get the best clinical results for patients. So I think overall, as we look across the portfolio across the different platforms, as you said, maybe in PASCAL, we continue to see its products being differentiated, physicians are seeing that differentiating -- differentiation, and that's probably why they're choosing it. EVOQUE continues to scale up well. People are seeing, as we talked about, new data coming out, more all-cause mortality improvements of this therapy, which continue to drive its growth. And SAPIEN M3 is the newest kid on the block, where we just launched this in the U.S. at the end of the year, and we're starting to see a lot of physician excitement for this product because it's a product for patients where they didn't really have a great solution before. And I think for many of their patients, SAPIEN M3 is getting great clinical results and allowing them to have a great solution for their patient

Your next question comes from Larry Biegelsen with Wells Fargo.

Congrats on a really strong start to the year here. I guess I have to ask one follow-up question, Bernard, on the -- on David's question on the 6- and 7-year data. It was obviously the big news in the quarter. So what are you -- he asked about the guidance. What are you assuming in the guidance from a share standpoint, from an impact from the low-risk data? If you took share because of that, would that be upside to the guidance you're providing today? And I had one follow-up.

Thank you, Larry. And thanks, yes, we had a great quarter. It is always great to start the year strong, especially after having finished last year strong also. So to have this kind of a momentum in the business gives us a lot of confidence. So if you step back, first, globally, for TAVR, the majority of our performance is coming from market growth. So this renewed focus, all of the data, we talk about Dan and I. So the majority is about your market growth globally and also with some share mainly from the exit of a competitor in Europe. So yes, we have seen a slight benefit also in the U.S. from a share standpoint. But we try -- you know us very well. We try not to focus too much on share because share is a lagging indicator. Share is never driving a business. We, as a company, we bring data, we bring evidence, we bring best innovation to bring to physicians best tools, best solutions so they can take care of their patients. And therefore, everybody is benefiting. So that's the way we are thinking about it.

Now everything that you have seen in the -- everything that we talk about is in the guidance today. And what we try to do with our guidance is to give you a realistic guidance based on what we know today. So what you talk about happened in mid-February, and we gave you the best of what we know today. providing a realistic guidance is very important to us, Larry.

All right. Bernard, just for my follow-up. It's been a while since it's been since December since we heard about SAPIEN X4. Could you give us a little bit of an update? You talked about confirmatory clinical work. Where does that stand?

Thank you, Larry. So I'm going to ask Daniel. He is very close to this one to give you an update on this platform.

Yes, Larry, thanks for the question. Clearly, we're pretty excited about our TAVR pipeline in general, which includes X4. X4 is a potential game changer for us, especially on the concept of personalized valve sizing. You know that we've set a very, very high bar with S3UR. That continues to differentiate, and we see that in the data that we're just talking about, not only our own data, but also relative to competitive data. We talked about in December that when we put X4 in a clinic, we immediately started to see things that we would think like, hey, if we had the opportunity to enhance that product, we should take it, and we are. And that has to go into a confirmatory trial. And so we're going to be collecting that evidence through 2026. And when we've completed that, we'll have more to say about the X4 product and the time lines and all those sorts of things. So that's exactly where we're at.

Your next question comes from Travis Steed with Bank of America.

Congrats on a good quarter. Maybe ask about capacity. You've had more left atrial appendage closure procedures shifting towards EP. What are you seeing from a capacity standpoint for structural heart doctors when you're in the field? And are you seeing any kind of benefit on the numbers in the market?

Travis, thanks for the question. Capacity has not been an acute matter in the last few quarters. What we have seen is health systems in the U.S. have done a great job managing capacity. They look at their processes, they look at their staffing, they look about how to turn faster the room in between patients. So we have been quite impressed by all what we have been doing. And obviously, we are there also to support them. But maybe I can add David and Dan to add some color here, if you have seen anything.

Yes. This is Daveen. I'll just make one comment. I think the agility that you; talked about, Bernard, is especially true as you start a new therapy like TMTT, right? When you start something like M3 or EVOQUE, you start taking up lab space. But what we've seen is, at least from our standpoint, is that as they put in new lab time, they've worked across the system to ensure that they're not taking away from a place like TAVR or something else from what we've seen. They've continued to be agile and figuring out, hey, how do we get an extra shift in? How do we get an extra lab running? How do we do other things like that. So that's been pretty consistent in what we've seen as centers get going in TMTT.

And if I just add from my side, I think it's the right point. It's different from hospital to hospital. But from a TAVR perspective, I think what really helps is that it's clearly a priority procedure. And that's based on the evidence. And so there is that ability to navigate some of the acuteness of various hospital challenges. We're on the ground every day with the hospitals trying to understand what their specific issues are, if they have them and how, if anything, we can help, but it's something that we pay close attention to all the time.

Helpful. And then maybe a follow-up on the NCD. There's a lot of stuff in the proposed NCD centers heart team. Just curious if you think it will all go through as proposed and how important are each of those things in the NCD proposal. And I had a lot of questions on is -- did U.S. TAVR, was it high single digits or double digits, if you'd answer that, too?

So it is very tough to predict what the final NCD will be. You know that we are very pleased. CMS opened over process. The first phase is over. So basically, now we are waiting for, I think, in mid-June to get what the draft NCD will be are positioned, I believe, is fact-based in the interest of a patient to make sure they have a fast access to care. And -- but again, the decision we rely on CMS. That's on the NCD. What's the second part of your question, Travis?

The U.S. TAVR, was it high single digits or double digits this quarter under the [ tight rate ] between the two?

Yes. We don't like to give this kind of specifics. So globally, TAVR grew 11%. What we said is that TAVR in the U.S. was healthy and that the OUS TAVR grew even faster. So I'm sure you can do some math here.

Your next question comes from Robbie Marcus with JPMorgan.

Great. Congrats on a nice quarter. Maybe one on guidance. Really strong quarter here, beat on TAVR, TMTT across-the-board margins. Just wanted to ask sort of the philosophy and the rationale. You took TAVR up 1% for the year, had a big beat in TMTT and left that unchanged. I realize there's a pretty wide guide to start with. And then EPS beat by $0.05, and raised the low end by $0.05. Maybe just give us the rationale, and I realize it's still first quarter, so I imagine conservatism is a big chunk of it.

Thanks, Robbie. So I would say, let me maybe start with the philosophy here on the guidance. I want to be always transparency with you guys and with everyone here to provide a very realistic guidance based on what we do at the time we are providing the guidance. And this is what we are doing here by providing this range. Now if you look at Q1, yes, indeed, Q1 came on strong -- stronger than expected. And it is why we raised the guidance for the year for TAVR and for the company. Now there are a couple of things that you need to be aware of is the comp. So if you look at Q1 in 2025, so last year, it was a little bit lower growth rate for us as a company and for TAVR. And so that's one. Two is we had a great year last year in 2025, especially in the second part of the year. So Q3 and Q4. So this is setting a higher bar for us in 2026 in Q3 and Q4. So we took all of that into consideration. Q1 2025 being low, at 2025, H2 being high, a strong beat in Q1. And based on what we know today, that we give you the best guidance we can, being a realistic guidance. We feel confident about us delivering on this new guidance for TAVR and for the company. I hope it is helping you, Robbie.

Great. Maybe just one follow-up. And I realize this is a follow-on to a follow-on. But we did see your main TMTT competitor talk about healthy market growth, but then losing share to you in both mitral and tricuspid. And we did hear yesterday, I guess, from another one of your competitors talk about their left atrial appendage closure was being utilized a bit less stand-alone by interventional cardiologists as they're shifting focus over to mitral and tricuspid. You're clearly benefiting from all of those trends in commentary. So I was wondering if you agree with those comments that you're seeing in the market and how you're helping to drive that.

That's a very interesting question, Robbie. And I -- what I tried to do here is maybe again, look at the big picture here. So for some of our competitors, it is about share. We look at this one as we are creating a category. When 10 years ago, we had the vision and I should say, of a bold vision to go deep into the 2 disease states, mitral and tricuspid, and decided to invest in a big way in building a portfolio of therapy to be able to solve these unmet patient needs. At the time, 10 years ago, 5 years ago and even today, it was not about share. It was about the patient. It was about the opportunity.

Now fast forward in 2026, guess what? We have a portfolio. We committed. We have made the investment. And now we are benefiting from it. So now you ask position what do we have? We have multiple solutions, and they can choose which one is best for what patient. And that's the difference. This is what's happening. So that's still our view of what's happening here. But I'm going to add, Daveen, you are here, you are close to the action here. So what do you think?

Yes. No. I'll just add a little bit on to what you said, Bernard. Clearly, we think that the patient treatment for mitral and tricuspid disease, 2 diseases that are massively under diagnosed, under awareness, under referral, lots of opportunity for so many more people to get these treatments to help their lives, right? They're still growing. The procedure growth is still growing at double digits across both mitral and tricuspid. And so for us, clearly, if you look across the board at our therapies, whether you're talking about PASCAL with TEER or EVOQUE or SAPIEN M3, which is brand, brand new, we're growing at a higher rate than we think the market, and that there's tons of opportunity to create massive new categories to treat people, whether you think about it from a mitral side or a tricuspid side or from a repair side or a replacement side. And we think that all this when you add this together, and as Bernard talked about, having the portfolio to best treat patients, to give them the best possible solution, really will help us drive to that $2 billion in 2030 that we've talked about and continued growth beyond that. So we are continuing to be very excited about how our portfolios come together to help treat more patients overall.

Your next question comes from Vijay Kumar with Evercore ISI.

Congrats on a nice [indiscernible]. I guess one on maybe a guidance kind of question, Scott. You did the ASR. Can you just talk about how you think about share count here for second quarter? And whether there was any weather impact here in Q1? How Q1 played out?

Sure. So we completed the accelerated share repurchase. We also did a little bit more repurchase. So something like $520 million total in the quarter. So that brings down the share count a bit. You see the weighted average for the full year is coming down 5 million shares from our original guidance. The accretion dilution is kind of a push. It doesn't have a big impact on the bottom line short term. But obviously, we're buying back shares because we think longer term, it's the right investment.

Weather impact in Q1, really nominal. I know there was a question back in February when there was some weather that hit the Northeast. And we said back then, a lot of times, it's -- you just don't know whether procedures are going to get rescheduled during the quarter or after the quarter, into the next quarter or whether they go away. In this case, we didn't really see a big impact by the time we got to March 31st.

Great. And then maybe, Bernard, one for you on the PROGRESS trial. I think last call, there was some concerns on -- maybe you're less bullish on PROGRESS. So can you just maybe talk about -- express your bullishness and progress? And how are you handling crossovers? Are crossovers allowed in this trial? If so, when are crossovers being allowed in PROGRESS?

Thanks, Vijay. We tend -- in general, and you know us well. We tend not to talk about trial before we can talk about trial results. So most of our trials are FDA-approved trial, third-party adjudicated. And we treat them very seriously because it does matter to our long-term strategy. They are not marketing trial or so on. So right now, the only thing I can tell you about moderate is what I said in the past, which is we are looking for the presentation at TCT this year. And as a matter of fact, we are going to have other trial TCT this year. But this one is going to be a TCT this year. We were very pleased at the time of enrollment a couple of years ago where this trial enrolled very fast. And usually, it is a good deal of proxy when physicians, treating physicians, they are enrolling the trial. So we see the benefit. But again, I don't know anything about the results, and we usually keep it like it is in [ TV end. ] So every one of us are going to discover the trial at TCT. And believe me, we are going to go deep with the PI, with the investigators, with all of you at TCT. So you will have a full analysis. We will understand all of the learning and all of this. But as of now, yes, we started the trial for a reason, but I don't know more than that. I hope it is helping, Vijay.

That's helpful, Bernard.

Your next question comes from Joanne Wuensch with Citibank.

And I also say a very nice quarter. Two questions. I'll just ask them upfront. The expense management, particularly as I looked at research and development, a little less. So SG&A was really strong in the quarter. How should we think about your maybe new view towards expense management or continued view?

And then forgive me, Scott, for asking this, but where are you in the progress towards finding a new CFO?

Thank you. So let me start with R&D. We are very much committed into our R&D investment, organic innovations. And we are -- the guidance for the year is around 17%. So clearly, we are committed. A couple of things is happening. One is we want to have the right priorities. So you have seen the ratio going down from what it was a few years ago, around 19% to 16% in Q1, but 17% for the full year 2026. And we are going to continue looking at making sure we have big investment because structural heart disease have many opportunities, at the same time, managing the priorities and having a ratio continuing to go down. We are also helped by the top line increasing. So the top line increasing as managing priority. So this is what we are doing in a very intentional manner and strategic manner.

With regards to the CFO, the process is going. And I should say it's going well. But as soon as I have news to report, I will say it in the press release, obviously, because it is an important hire. But good news is Scott is very committed to make sure it is a very successful transition. He has been a very successful CFO for the company over the last 12, 13 years, and he has been a great partner to me and to many of the executive team. So I feel good about the process here. And as soon as I know more, you will hear from me.

Your next question comes from Matt Taylor with Jefferies.

So I just wanted to follow up on the thread before and get some clarity from you on the guidance. When you're increasing the TAVR guidance this year, are you assuming any increase in your competitive position or share gains? Could you characterize that? Or is that mostly market growth and your stability with it?

Thanks, Matt. So the main reason for having increased the guidance was based on our Q1 outperformance based on our earlier expectation. That's the main reason. Now if you look at our Q1 performance, this was led by market globally, given our renewed focus on TAVR, led by all of the clinical evidence that we have produced in TAVR with SAPIEN 3, and you know all of them, and also a little bit of share. Share in Europe from the exit of a competitor and also some slight share gain in the U.S. So this is the way we build the guidance based on what we know today, Matt. And obviously, as we know more for the Q2 earnings call, we will provide more analytics if we have to.

And maybe as a follow-up, could you comment on just the health care environment in general. There's been some chatter about concerns with changes in the macro environment and coverage. I think that would impact U.S. because you're levered to Medicare, and these are very necessary procedures, but I'd love any thoughts that you have on the overall environment.

Yes. We -- I would say we don't see an intense environment. And again, what you need to realize, as a company, all of our technologies are technologies helping to extend life of patients or improvement of the quality of life of patients. So there are -- most of them are life-saving technologies. And there are technologies that patient needs urgently. So we don't feel maybe what you are talking about.

And we got some good news also this morning from the new administration. I don't know if you did follow, but together with CMS and FDA, basically a partner to bring a new policy for breakthrough therapies. And it is exactly what we are doing as a company. And the goal here for this new policy, the name of it is rapid, is basically to make sure that patients have an early and timely access to care in the U.S.

So we look at it. The environment for breakthrough therapy is positive. And the news from this morning, we look at it as even more positive. We have been working with FDA and CMS for decades. And it is great to see that they want to enhance a process which was already working. And I'm sure this process is going to be even better. So we are fully behind it. So very positive about it.

And our final question comes from Matt Miksic with Barclays.

So one follow-up on mitral and one quick follow-up on tricuspid kind of a review forward. So I think you know one of the competitors in mitral talked a little bit about the share activity share pressure, which, of course, it in mitral for some time, you can share repair with PASCAL total great some step-up of that activity. And maybe you could talk a little bit about like what the rollout of M3 looks like in terms of training, in terms of adoption and how, if at all, that is either expanding the accounts that you're in or enhancing engagement with those accounts? Any kind of color like that would help. And then as just one quick follow-up on tricuspid.

Sure, Matt. This is Daveen. So some quick background. I think we see in the treatment of mitral patients that, as I mentioned before, PASCAL really offers differentiated technology, which the physicians are seeing, and that's why they want to use PASCAL for their patients. As you look about SAPIEN M3, this product is one for where you may get suboptimal results for either TEER or surgery. So this is offering a potentially solution for patients who don't necessarily have a great surgical or transcatheter solution today. And as you can imagine with any new technology, again, only a quarter into the launch, you start off by really working closely with the centers that were a part of your clinical trial. And those are usually our first wave that we start working on and then eventually you start building on to other kind of large mitral centers. But we're so early in the rollout because we're only a quarter in that you're just kind of starting that process and with a limited number of centers overall.

Matt, do you have a follow up? Thank you. We'll move on. And since that was our last question, I'll hand the floor back to management for closing remarks. Thank you.

Thank you, everyone, for your continued interest in Edwards. Scott, Gerianne, Dan, Daveen and I obviously welcome any additional questions by telephone. And I wish you a great rest of your day. Thank you, everyone.

Thank you. This concludes today's call. All parties may disconnect. Have a good evening.

So we can get started. But thank you all for joining. I'm Michael Kratky. I'm our senior med tech analyst, and really thrilled to be joined by Edwards and CFO, Scott Ullem. So Scott, thanks so much for joining us.

Our pleasure. Great to be here. Thanks for having us, Mike.

Great. Well, I'd love to kick things off from your perspective. A lot's happened. But -- how would you say the business has evolved over the last year? And as you look out over the next 12 months or so, what gets you most excited?

Yes. It's actually changed a lot over the last year. I mean, in 2025, maybe I'll start with TAVR. We had this really watershed event, which was the presentation in late 2024 of our early TAVR clinical trial data. And it really addressed the last unknown question at the time about durability of the SAPIEN family of valves and demonstrated -- well, the durability was more taken on with the 7-year trial data. But in 2024, we got the results of the early TAVR data studying asymptomatic patients. And the data really helps spur a lot of momentum in the business in 2025.

So over the last year, we've seen the impact of that information along with the 7-year data that I mentioned before, studying the durability of SAPIEN in patients in our PARTNER 3 low-risk study. So TAVR has had a lot of important clinical information that has added to an already large body of clinical evidence. And I think has reinforced physician confidence in this is a therapy for patients who are suffering from severe aortic stenosis. We've got more coming for that. We can talk about in a minute for SAPIEN, but those are some of the key impacts to the business and to our innovation efforts in 2025.

In TMTT, our transcatheter mitral and tricuspid therapies business, we saw, for the first time in 2025, the portfolio of therapies for patients suffering from mitral and tricuspid regurgitation. And for the first time, we saw this a long-time vision of ours become a reality, which is to have both a repair and a replacement solution for patients with MR or TR and it's been a game changer. It's been really important for physicians who are treating these patients suffering from these diseases. And it's given Edwards a very different position with physicians as partners in assessing the best therapeutic alternatives for these patients. So instead of just pushing a particular device, we are involved in discussing the right treatment options for these patients.

Surgical also as a really important set of influences and catalysts that are driving that business, and we're proud of our surgical portfolio led by our flagship surgical aortic replacement valve called INSPIRIS which is connected to our lifetime management strategy for treating patients with valvular diseases. And we can talk more about that if you'd like. I'll pause there, and we can also talk about some of the other things we're working on in structural heart failure and aortic regurgitation whenever you're ready.

Yes. Certainly, a lot to dig in on. Why don't we take things off with TAVR. So you mentioned some of the different growth drivers and things that have evolved over the last year, but I would love to specifically drill down on the second half of 2025. You saw a nice acceleration in your U.S. TAVR growth. So curious if you can help parse out what were some of the drivers there between asymptomatic alleviating capacity constraints, any shift in share that investors should keep an eye on and how you kind of explain some of the strength there?

Yes. So second half strength, I think, was, we believe, fueled a lot by that early TAVR data that I mentioned before. So the information that severe aortic stenosis is a disease that needs to be treated urgently regardless of whether a patient has symptoms. And so even though we're not seeing asymptomatic patients being treated yet, the data around the disease has really inspired a lot more focus on this disease, and I think inspired physicians and referring physicians to get patients to the point of treatment as quickly as possible. And that's a lot of what's been driving our increases in year-over-year growth rate in the second half of '25.

Keep in mind, it was also off of a relatively low baseline comparison in 2024. And so the 10.6% growth that you saw in Q3 and Q4 was off of a lower base in same period in 2024. And just carrying that forward. It's one of the reasons why we're projecting higher first half growth in 2026 than second half growth in 2026 because it's compared to those higher growth rates in the second half of last year.

Yes. Understood. And maybe just to drill down there. In terms of your 2026 TAVR growth guidance, 6% to 8%. What's kind of embedded there in terms of U.S. versus OUS and maybe key points of sensitivity within that?

Now we haven't broken down the 6% to 8% growth forecast by geography. But suffice it to say, we're now in a position with the SAPIEN family of valves, where we have about 2,000 sites performing SAPIEN procedures globally, a little less than half of those are in the U.S. We've got over 60 countries where TAVR is available to patients. And so the -- while it's difficult to predict where the contribution from growth will come in advance, one of the benefits of having this global footprint is strength in one region can sometimes offset weaknesses in another region and vice versa.

So overall, we feel good about the business. We feel we've got increased confidence in that 6% to 8% guidance than we had when we first offered it at the investor conference in December. And we'll talk more about it, of course, when we present Q1 earnings on April 23.

Excellent. Well, another big point of focus for investors in our discussions is certainly around the TAVR NCD. Curious how you think about what that can mean from a potential commercial impact for the business and what we still need to find out there?

Yes. So there are actually 2 things upcoming that are important for the analysis of TAVR. One is the NCD, which is, as you know, first round submissions have already been received and CMS is planning to make public a first draft in the June, July time frame as we understand. So that's one important focus area for us in 2026.

The other one is guidelines in the U.S. So the guidelines in Europe evolved last year to reflect the early TAVR data, and just the overall growth and impact that we're seeing and the benefits that we're seeing from TAVR, the U.S. guidelines have not been adjusted yet. And we're expecting those will also evolve. We're not sure when, but that's another important factor to evaluate as we're looking at the future performance of TAVR.

Excellent. We'll be sure to stay tuned on that side. You talked a little bit about how some of the readouts that we've seen over the last couple of years have shifted some of the commercial dynamics. You've had some competitor data come out recently. I'm curious if that's kind of changed your perception of how market share could evolve in 2026 for your TAVR business?

Well, time will tell you. You're probably talking about CRT this weekend and the JACC article from a few weeks ago. Obviously, we're very close to the data and are talking with physicians every day. And the physicians are the ones who really matter here. The physicians will interpret this data and determine how it's going to change their practice. And obviously, we've got our own views about what the data means. We're really pleased with the overall body of clinical evidence that we've produced for SAPIEN and it's confirmed the durability of our platform, and we're really proud of that. But it's probably premature to predict what practice changes may come from this most recent data. .

Understood. And I think another big catalyst that certainly investors are keeping an eye on for you this year is the moderate data, the progress readout, I think later at TCT. So in terms of both the clinical expectations for that study and the potential commercial impact, I would love to hear kind of how you're framing it these days?

Yes, we're not framing it really because we don't have the information, and we're really looking forward to getting it. It's a common question we've been getting. What I can say is when we first designed this trial, we did it with a belief that patients suffering from moderate aortic stenosis would benefit by having access to TAVR therapy, and that's the reason why we started this clinical trial.

It enrolled about 2 years faster than we thought it would. And that's sometimes an early indicator of how much physician interest there is in studying a question like this. But at this point, we don't have any information yet and we're looking forward to seeing it when everybody else does at TCT later this year.

Understood. I guess just on the potential impact or sizing the commercial opportunity or what that could look like, a, just curious in terms of how large that opportunity might be? And then in terms of how quickly you'd be able to access it or have the pieces in place to drive adoption there? What's the right way to think about the cadence on the back of that data?

Yes. We're still learning a lot -- to your first question, we're still learning a lot about the disease. The estimates are that the population of patients with moderate aortic stenosis is significantly bigger than the patients with severe aortic stenosis. In terms of what the treatment protocols could look like based upon this data, well, time will tell. We'll have to see the data and physicians will evaluate it, and we'll see things unfold afterwards. .

Understood. Maybe just going back to some of the different factors in play in the TAVR market recently. But certainly, hospital capacity constraints was one of the things that had kind of come into the equation more so in '24 and '25. So where do you think those stand today? Is that still part of the bottleneck here? And how could that shift moving forward?

We think the capacity constraints that we saw a couple of years ago have abated and capacity is always a factor for hospitals to manage. It always has been and probably always will be just getting the right balance of physical infrastructure and the resources required to support patient treatment, is something that is being adjusted center by center.

But we don't see it as a factor right now. We feel like that congestion, we saw at the cath lab in 2024, resulting partly from new therapies that Edwards is bringing to market is behind us and hospitals have adapted to the requirements to support patient care, especially in these areas where there is new technology like EVOQUE, like PASCAL, like SAPIEN 3 Ultra RESILIA. I think that -- we'll stop there.

Yes. And it's a great segue. So I would love to shift the focus to the TMTT side of the business. Some of the puts and takes embedded within your 2026 growth guidance there. What gives you the confidence that you can deliver on that?

Yes. So I mentioned before, just in the introductory comments that we're in a position with TMTT now where for the first time, we actually have a toolbox of different therapies that physicians can use to treat patients who are suffering from regurgitation in the mitral valve and regurgitation in the tricuspid valve. And just starting with PASCAL, this transcatheter edge-to-edge repair is an important alternative for treating patients with MR and TR.

The design of this therapy actually originated from an old surgical procedure called the Alfieri stitch, where you connect the leaflets of the valve together to try to reduce the size of the orifice through which the blood is flowing. And so replicating that same therapeutic approach in the form of a catheter solution has been really valuable for physicians who are treating these diseases.

I think that repair is a safe and effective alternative for a lot of patients, but not for all patients. There are patients who have MR or TR who are not eligible or really not -- are not really positioned for that treatment as well as they are for a replacement solution, which is where EVOQUE and SAPIEN M3 come in. So both the PASCAL TEER treatment for mitral and tricuspid, EVOQUE for tricuspid replacement and SAPIEN M3 for mitral replacement is the whole package, and we're really excited about being able to offer that for physicians to treat their patients.

Understood. And I think PASCAL has had a great amount of momentum over the last couple of years. And I think for us, it's always a little bit of a challenge trying to decipher how much of that is overall market growth and adoption versus also some benefit from share gains that you've seen. I'm curious how you think about where your share stands today? How much room is there still for share capture from here?

Yes. Well, our competitor in the TEER space is the share leader. Yes, we've been growing faster than the market, but the market still has been growing double digit and we're pleased about that. I think we're less focused on share at this point and more focused on improving treatment rates for patients because the rate of treatment for patients suffering from mitral regurgitation is significantly lower than treatment rates for patients suffering from aortic stenosis. And the rate of treatment for patients suffering from tricuspid regurgitation is even lower. .

So it's not about can we pick up an extra point or 2 of share, it's about how do we bring more patients into the system and make these therapies available to them, whether it's a repair therapy or a replacement therapy.

Got it. And just in terms of kind of parsing out some of the different drivers of the TMTT business, certainly having a holistic portfolio is a huge advantage for you. How should we think about the different contribution of revenue coming from PASCAL versus EVOQUE versus some of the other products you have?

Sure. Well, right now, the biggest revenue contributor, of course, in TMTT is PASCAL because that's where we started. EVOQUE and -- EVOQUE right now is growing at a faster rate than PASCAL because it's entered the system later than PASCAL did, but both are growing really nicely, and we're pleased with having multiple different growth drivers. SAPIEN M3 is very early, but we have a lot of optimism and expectations that SAPIEN M3 is going to be an important contributor to TMTT's growth. But at this point, we haven't broken out the relative contributions between the different therapies. .

Got it. Understood. I think the other part here is you have some clinical readouts that are going to probably shift some of the outlook or the opportunity within the TMTT side of the world. So I guess within those, I think maybe Class II TR is one of them, maybe a couple of others. But curious if there's any that you're most focused on in terms of what they can mean for your TMTT business?

Yes. you're right, Class II TR will be an important view into clinical performance of PASCAL. And that shows up at TCT this year. We're expecting the readout to happen there. The other one that's coming up even sooner at the end of this month is the TRISCEND II clinical trial data for our EVOQUE tricuspid replacement valve. And so we'll see that in New Orleans on March 30. .

And just in terms of framing what that could mean for the business, what within that TRISCEND II study at ACC do you think is going to be most in focus for the medical community or what we might hope to learn there?

Yes. We think everything is in focus. I mean with these clinical trial data, as we look at the primary endpoints, the secondary endpoints and see how they compare to both the 1-year data and the registry experience that we've seen as well, which has been favorable. The registry performance for EVOQUE has been really impressive. And we always like to compare how these different technologies perform in a clinical setting -- in the clinical trial setting to the real-world setting, where if you've got multiple physicians who are using these devices on their patients, and we're just seeing very strong results in terms of safety and efficacy, we're also seeing really strong feedback from physicians.

And EVOQUE as a therapy has proven to be this really unique experience where, not only do the data demonstrate the performance of the valve, but the actual -- just the anecdotal evidence of patients coming back after being treated with this device and having shed 20, 30 pounds plus of fluids after the tricuspid regurgitation has been eliminated, getting their lives back as just has been a life changer for them and for their physicians.

And you see patients go from being in and out of the hospital all the time being in pain, not being mobile to have their life back and be able to walk, talk and go dance on Saturday night.

Yes. I mean it's fantastic. And I guess sticking with EVOQUE, I'd be curious in terms of the clinical utility there, how you've seen that? Maybe drive some of the early wins and what patients you kind of see is the most suitable fit for EVOQUE?

I think this is something where physicians are learning a lot. I mean, every day is a school day when treating these patients, especially just early on in the journey, and we've got our first-generation devices and limited time periods of clinical data so far. But we're looking at all the different elements, and we'll see more, as I mentioned, with the TRISCEND II report out. We also have a new generation of EVOQUE that we're planning to introduce in the second half of next year, and that will be another step forward in the treatment of tricuspid regurgitation. .

I guess in terms of the next-generation device, was there anything that you were specifically looking to improve on it? Or what could that device mean for the profile of this business?

Yes. Well, we'll talk about more when the time comes. We're not really going to offer reviews to the device. But suffice it to say, this is really Edwards' strategy and our whole focus in terms of innovating is we're competing against a disease. And the better technology we can develop, the better we'll be able to help patients battle these diseases. And so we've always got a Gen 2 in the works and a generation after that as well for all of our major platforms, including EVOQUE and including PASCAL, where we're planning to introduce Gen 2 of PASCAL later this year in 2026.

Got it. And is that similar details on what the next generation PASCAL could look like or have to wait for those as well?

Similar lack of details. Yes, we'll hold off [indiscernible] those when the time comes.

Understood. It was worth asking. But I guess the other part of this business, I recognize it's early days, but SAPIEN M3 launched in the first quarter of this year. So curious what the early feedback has been, the demand and what the commercial strategy for that business might look like?

Yes. So feedback has been positive, but you're right, it's early feedback, and we're just in the process of introducing this therapy, which comes with a big focus on training and just getting sites ready to take on more patients who are coming in who need the therapy. But so far, the feedback has been favorable, both from a safety perspective, efficacy perspective. And what we're really watching is to make sure that the referring physicians are aware of the severity of this disease and that there's a new alternative to TEER, which is a replacement using the SAPIEN family valve platform which has been around for a long time and very known and respected.

So the combination of this new technology and starting to build a presence in different sites, I think, has given us confidence that we're on the right track, and we'll continue to build it from there.

Understood. You mentioned the site adoption. I'm curious kind of 2 questions here. One is, should we think about the sites for SAPIEN M3 and the cadence of that looking similar to what it's been like for EVOQUE. And the second question is just where we stand today on the number of sites that have adopted EVOQUE?

So we haven't talked about the number of sites for EVOQUE or PASCAL or M3. We're not going to go there at this point. But it will be a similar playbook. It's a similar playbook to what we've used for the development and expansion of SAPIEN around the world and EVOQUE and now SAPIEN M3. And as I mentioned, it starts with making sure that physicians are well trained, have access to all the resources of Edwards Life Sciences and have confidence that they're going to get predictable, consistent results using this therapy. That's the most important thing.

Having strong procedural success rates of success is really the key, especially in early days. We're also training our own people. We've got experts at Edwards Life Sciences who spend full time in the field working shoulder to shoulder with physicians. And we want to make sure that our people have a chance to go through that journey as well and that we've got Edwards personnel that can support the expansion to new sites of this therapy as we roll it out.

Got it. Well, certainly, a lot to be excited about on TAVR and the TMTT business. But I would love to ask you about Surgical. During the 4Q press release, highlighted you're pursuing multiple new innovative surgical solutions including left atrial appendage closure. So curious if you can offer any additional details on this? Maybe we go from there?

Yes. We did acknowledge in the fourth quarter earnings call that we are preparing to introduce an LAA solution for surgeons who are using Edwards surgical solutions to treat valvular disease in their patients. Beyond that, we haven't really talked about any of the details and we're planning to hold off until we really are ready to unveil that solution.

But we're excited about it. It's a complement to our existing portfolio of surgical therapies. And I think it's a reflection of the fact that we're still investing in surgical. I mean we've got multiple new valves. We've got our new tricuspid replacement valve TRIFORMIS. We have our MITRIS surgical replacement valve and of course, INSPIRIS, which is our aortic replacement valve. And this is just another new innovation that you're seeing from Edwards Life Sciences with more to come in the future as well.

Yes. And realize that detail is probably limited just based on your comments. But I would like to ask you, we've seen Intuitive has been also making a point to maybe offer their own instrumentation. So curious if you see potential synergies there? Is this something that, that could potentially go hand-in-hand with what you're doing?

Yes. Too soon for us to say. We're obviously watching them carefully. And generally, we really encourage more focus in cardiac care. And it's beneficial to have more technology, more participation by multiple different parties in treating these patients who need care. And so whether it's robotic surgery or wearables for diagnostics, these are all things that we think can be helpful and getting patients identified and getting them into the system and to points of care where they can really have their disease is treated. .

Got it. Well, I'd love to spend a little time in the 5 minutes or so that we have just on the P&L and kind of walking through some of the different drivers of your gross margin guidance, opportunities for upside beyond that as well moving forward?

So we're -- I mean you know our guidance for the year, 78% to 79% gross profit margin and our operating profit margin growing about 150 basis points over 2025. And it reflects the fact that our priority #1 is investing for sustainable organic sales growth, but we're also very focused on continuing to improve margins. And we've got plans in place and programs in place that give us confidence that we'll be able to do that, not just in 2026, but in 2027 and beyond, expanding operating margins by 50 to 100 basis points. So it's an important part of our strategy, an important part of what we think is the value creation opportunity for Edwards.

Got it. And maybe just on that point, talking about operating leverage moving forward. Certainly, R&D has been a huge point of focus for Edwards. Is that something you see as potentially offering a source of upside to that operating leverage moving forward or how R&D as a percent of sales could shift over time?

Yes. Well, it's a contributor to value creation in 2 ways. One, first and foremost, just generating the innovations that drives the top line. But two, we can continue to grow our investments in research and development, but we'll do it at a lower growth rate than the top line growth. And so we're going to see ratio improvement and R&D as a percentage of sales probably drifting down over time.

In the fourth quarter of 2024, our R&D as a percentage of sales was 19.4%; in 2025, low 17%; 2026, we're expecting around 17% R&D as a percentage of sales. And so it's still high and it's at an appropriate level for us to be able to continue to drive that top line growth.

The last thing I'll say about R&D is we're really focused carefully on prioritizing our investments. So we're exclusively focused on structural heart, as you know. And we're being very selective about where we apply those resources in R&D to make sure that we're chasing after the biggest opportunities to treat patients that are also opportunities to help support sales growth longer term.

Certainly, R&D, a heavy focus on the organic side, but I am curious about capital allocation for the year. And as you explore potential external opportunities, how would you characterize your appetite and what could be a target profile for a deal?

Yes. I mean we do have an appetite for external investments, and it's really the same as it's always been, which is we look actively at technologies that can supplement and augment the internal work that we're already doing to advance innovation in structural heart. So we're really laser-focused in that area. And as a result, most of our focus ends up being on companies that are earlier stage, so start-up stage or pre-commercial stage for sure.

We've been active in making investments in providing seed funding, supporting joint ventures, investing in intellectual property, buying options to purchase companies if they meet certain milestones in the future, and we're going to keep doing those same things. We are -- obviously, we're not forecasting what M&A we may do in 2026, but expect that it's going to be more like what we've done over the last several years.

Got it. Well, just with the minute or so we have, obviously, Edwards, a leader in the space, has been a titan of category leadership. Is there anything at this point that you think still might be flying under the radar for Edwards for investors?

No, I think the most important thing for us and for investors is just to continue to recognize the importance of innovation. And it's really the lifeblood of our company's culture. It's the lifeblood of the therapies that we've been able to develop and commercialize over the years, and it remains our focus. And just staying the leader in structural heart, we think, is a really important way to create value for shareholders and to continue to drive solutions for patients.

Got it. Well, Scott, thanks so much for joining us. Really appreciate you having me here, and thanks, everyone, for joining.

Yes. Our pleasure. Well done.

Thank you.

All right. Thanks, everybody, for joining us this morning. Very pleased to have with us at our conference, Scott Ullem from Edwards Life Sciences CFO, long-time CFO, not to make a big deal out of it, but sort of coming around the final lap in the role. So exciting times ahead, but -- so appreciate having worked with you around the name for all these years.

Yes. Likewise, thanks, Matt. And I'm also here with 2 colleagues of mine. Gerianne Sarte, who is taking over as Head of Investor Relations at Edwards Lifesciences next month; and Sydney Bailey, who is an experienced member of our Investor Relations team, and has recently returned from leave. So we'll both be here all day. Thanks, everyone, for your interest in Edwards.

Yes, you bet. So maybe to start off, we were just chatting a minute ago about some of the takeaways from CRT. I don't think in the 23.5 minutes that we have, we'll have a chance to get into those in detail. But at a higher level, one of the questions that we get around Edwards is sustainable is the ability to deliver on this sort of double digits sustainable growth and the components of that. So maybe how -- at a high level, when you get that question, if you get that question, how do you piece together sort of the established, if you will, TAVR business and the opportunities there, plus the faster-growing emerging businesses under TMTT and elsewhere?

Yes. So it's not just a question that we respond to, it's actually our strategy, right? We've designed our company strategy to generate distinguished organic sales growth. And we do it through principally investing in these technologies and platforms that are differentiated and that offer therapies to populations of patients that are large in size. And of course, they fall into a couple of categories.

TAVR has been really the cornerstone of our growth for decades now at Edwards Life Sciences and continues to be a big driver of innovation and growth for the company. And I know we want to talk about this more during the session. Transcatheter mitral and tricuspid therapies is a similar strategy of TAVR in that we're bringing a minimally invasive solution for patients suffering from a structural heart disease and doing it in a way that is distinguished because it's supported by scientific evidence of the safety and efficacy of these therapies.

And then surgical is our long-term flagship business at Edwards Life Sciences where we continue to innovate both for mitral and aortic valves and now soon tricuspid surgical valve replacement as well. And so the combination of those 3 businesses plus new initiatives in structural heart like structural heart failure therapies is really what gives us confidence in our ability to generate double-digit top line growth constant currency on average annually.

Okay. So maybe one follow-up on that is the contribution from TMTT started obviously to growing a lot faster. EVOQUE is kind of entering the early to middle innings of growth maybe. But when does that become the bigger dollar contributor to growth? Because I think that's for some time has been kind of, I don't want to call it the dream, but the long-term strategy knowing that TAVR wouldn't always grow in the teens or wherever it was going several years ago as that kind of matured that mitral and tricuspid would start taking the helm. So when on a dollar basis, is that 2 years away? Is that 3 years away? What could you tell us?

Yes. Well, we haven't really laid out the year-by-year dollar contribution to growth, but our long-term guidance is for TMTT to grow to $2 billion in revenues in 2030 and to continue to grow thereafter. And for TAVR to grow mid-single digits, mid- to high single digits over time on average annually off of its current base. So you can run different scenarios what that looks like. But I think more importantly, suffice it to say, TMTT is representing an increasing component of Edwards' consolidated growth rate.

So the business was over $500 million in 2025. We expect it to be $740 million to $780 million in size in 2026. And then continuing to grow beyond that, obviously, to that $2 billion number in 2030. And so it's a combination of TAVR growing mid- to high single digits, TMTT continuing at this growth rate, 35% to 45% in 2026. And then surgical continuing to perform as well that contribute to this expectation of double-digit 10%-ish growth over time.

Okay. And so we might look at TMTT and say, well, okay, it's growing faster and then it's growing a little less fast and a little less fast. But the reality is under TMTT you're actually rolling on sort of growth drivers. So we're in the early innings with tricuspid and with mitral repair, you could say or in mitral repair in the market for a couple of years now and taking share from the market leader in the U.S. But then we have mitral this year, replacement and then tricuspid replacement. So maybe just getting started with mitral replacement, maybe talk a little bit about how that might be similar, how that might be different from what you've seen over the past couple of years in tricuspid replacement?

Sure. But just to acknowledge the important point you made, Matt, this is the first time when this vision that we had long ago has really presented itself where we've got repair and replacement therapies for patients with both mitral or tricuspid regurgitation. So we -- this is -- you've followed us for so long. You know this is a longtime dream of ours, and we started with this transcatheter edge-to-edge repair technology in the form of our PASCAL therapy.

And now we've got PASCAL for mitral and tricuspid, EVOQUE for tricuspid and SAPIEN M3 for mitral valve replacement. And that combination of therapies is a really powerful element of our strategy because it gives physicians options when they're trying to treat patients who historically have had only one option, which is surgery. And a lot of patients are not eligible for surgery or not recommended for surgery by their physicians for these diseases.

So to your question about mitral, SAPIEN M3 is the first transcatheter transfemoral replacement device for patients suffering from mitral regurgitation. We've learned a lot about the disease over the years from our PASCAL experience. But SAPIEN M3 offers this unique combination of addressing the complex anatomy of the mitral valve with a coil, but also using a proven multigeneration SAPIEN valve to actually perform the work of the native mitral valve that's being replaced. And so it's -- it's a very sophisticated, safe and effective procedure that we're excited. Now we have approval to offer in multiple different geographies, okay?

So training ramp, I mean there's a couple of differences, right? So one is, as you got into early EVOQUE, there was -- you obviously want to be engaged in these cases completely engaged because it's a new platform. And so I guess, similar in that way, maybe a little bit different in the sense that there are some other therapies that are treating those patients in mitral now.

There's repair, which everyone is -- whether it's your system or Abbott system, folks are comfortable with the safety profile. And then there's surgical repair, which is also pretty entrenched. So fair to say just a little bit different in those regards, maybe like in the beginning, a tighter lane for finding the patients with M3 versus more of an open field in tricuspid. Is that a fair way to characterize it?

Well, maybe, I guess what I'd add to your description, though, Matt, is patients are eligible for different types of therapeutic interventions. And a patient who may be eligible and recommended for a PASCAL procedure may not be recommended or eligible for a SAPIEN M3 procedure and vice versa. And it's the reason why this toolkit approach that we've taken is so important.

It's not okay just to have one device that you try to make for all patients because patients anatomies, especially for patients with mitral regurgitation are complex and different. Patients may have a challenge with the chordae, with the leaflets of the mitral valve, the left ventricle may be diseased. And all these different elements of the way these diseases manifest themselves inform the right treatment alternative. That's the reason why we have both the repair and replacement solution.

Okay. No, that's fair. So maybe some of the new growth opportunities. These are a little bit. I mean, and we throw in there also like in a valve for mitral, which is a couple of cycles away of joining M3 in that space. But maybe talk a little bit about the heart failure, structural heart opportunity when we can start to see that ramp when investors will notice some of those programs and then given the opportunity in AR, how that starts to play out with J-Valve?

Sure. So first on heart failure therapies. We decided -- as we learned more about these different diseases, especially mitral and tricuspid regurgitation that there was overlap between the structural heart patients we have been treating and patients suffering from structural heart failure in a way that we think we've got real expertise that we can provide and technology that we can introduce to treat those patients with heart failure.

And so it's the reason why we're now starting to build a foundation for implantable heart failure management with our Cordella device. And this is patients who historically have not had real treatment options that give the patient visibility to their condition and give the patient and the physician visibility to lifestyle changes and pharmaceutical regimen adjustments that can help them battle this disease more effectively. So we're excited about Cordella.

We're also excited about Vectorious which is a technology that was created by a business that's based in Israel that Edwards invested in long ago and we recently bought the portion of it that we had not already owned and we think the combination of Cordella and Vectorious is an important cornerstone for starting this effort that we're undertaking in heart failure. So these are the first 2 investments in in structural heart failure, again, because we think it's a significant population of patients who need better therapies.

Okay. And sort of zooming out, if you think about surgical as providing part of the foundation for what has enabled your structural transcatheter businesses to lift off over time and be more successful that surgical legacy valve and valve leaflet design and it seems like, and this was coming out of CRT this past weekend, there's a realization that many of the sort of disease states are heading towards heart failure that are up until now being treated separately and I'd put mitral and maybe tricuspid and maybe even TAVR into that category.

So over the long term, I guess, is that something that -- it's multi valve strategies or other things, and this is a longer-term comment, but the comprehensive care for the patients who is without intervention or highly likely to end up in heart failure, putting together more comprehensive multi-device, multitherapy solutions for that patient? Is that kind of part of the long game?

It sure is. And you're right, we have so much to learn and we're really better understanding now the interplay between these different structural heart conditions and diseases that patients face. But there's no singular journey. Different patients progress at different rates and the cause and effect can vary as well. It's one of the reasons why we're so excited about getting into structural heart failure because there has been a dearth of therapeutic alternatives historically for these patients.

Heart failure is the #1 most expensive and highest mortality condition that patients face. And so there's a real opportunity for a company like Edwards to introduce new technologies, but we also want to do it in a way that is strategic and thoughtful and really helps us focus in areas where we have a core competency to bring to bear and we feel like we're getting started in that journey now in a meaningful way with Cordella and Vectorious.

You also mentioned in your previous question, aortic regurgitation. And you know that we've made this acquisition of aortic regurgitation technology that we're pretty excited about. And we're a ways away from having a commercialized product, but we feel good about the learnings that we've developed. We feel good about the technology challenges and our ability to address those and eventually to commercialize a solution for a catheter-based replacement of a disease aortic valve that's a very different disease than aortic stenosis. So that's on the horizon as well.

Okay. So I'd be remiss not to mention early TAVR and sort of asymptomatic or moderate AS, as other kind of growth drivers, opportunities, expansion opportunities within TAVR. Maybe talk a little bit about what you've seen so far or what we might see over the next couple of years what some of the catalysts like guidelines might be to help sort of realize those opportunities?

Sure. So the early TAVR trial that you're talking about was a breakthrough trial for Edwards Lifesciences, and we presented the results at the TCT conference in the fall of 2024. In 2025, we started to see the momentum resulting from those clinical trial results. And it came in the form of more physician interest and focus or refocus on aortic stenosis.

The trial demonstrated that symptoms don't matter, that patients with severe aoritc stenosis need to get their valve replaced regardless of whether symptoms can be identified or isolated or associated with the disease of aortic stenosis, a diseased valve that level of severity needs to be replaced. And so we're excited about that learning. We're excited about the ability to treat more patients who have this disease.

And as you know, now CMS is going through the process of evaluating the current national coverage determination, and we'll see the first draft of that early this summer. And we hope that, that leads to a more accommodating NCD that helps patients with symptoms and without symptoms navigate more easily the referral pathway to actually getting their valve replaced.

Got it. And I guess there was some split in the community for those folks who felt like they had, I guess, a great deal of control and connection with their patients who come in and are diagnosed with AS might say, well, why would we want to treat this patient early? We'll treat we know the exact right time the day and the hour when we can treat this patient and get the most out of this next valve.

And then the other part of the community, I think, would recognize as well, there are other folks who come in who aren't quite symptomatic, but they're severe, and I never see them again. And we don't know if they actually just expire in the interim. And so there's like 2 mines, I think. But one of the things that has changed is maybe a pivot towards this next valve has to last your lifetime to this next valve is maybe the first of a couple of valves or maybe 3 valves that you may have in your lifetime for lifetime management. How is that sort of -- how are you seeing that reflected in adoption or in hesitancy around performing TAVR, this realization that, sure, it may last 10 years, it may last 12, it may last 9 if you're young? But lifetime management is the strategy that doctors seem to be talking more about.

Yes. And as are we. But you hit on an important point. This ...

That's 2 points. Pardon me. Two important points, I think.

Well, they're probably even more than that.

I make a note of that actually.

Tally them all up. No, I think the most important thing that came out of this early TAVR trial is debunking the myth that watchful waiting was an appropriate way to care for these patients. Aortic stenosis -- treating aortic stenosis is not poetry and Jazz, it's science. A diseased aortic valve that has severe regurgitation needs to be replaced, regardless of what impression you may have of how that patient is acting or the valve needs to be replaced. And early TAVR was designed to test that thesis, and it was definitive and clear that, that is the right protocol.

I think that it does lead to this question about lifetime management, and it's the reason why we've been designing the family of therapies that we make in such a way to support patients who have lifetime needs, including surgical valves. So our current INSPIRIS surgical valve is designed to accommodate a future TAVR in SAVR, future transcatheter valve to replace the surgical valve if and when the surgical valve reaches end of life. Similar story for transcatheter valves where patients can first receive a larger transcatheter valve like a 29-millimeter and later, if necessary, a 26-millimeter or a 23-millimeter inside that original prosthetic replacement. And so this is a lot of the work that we're doing internally to make sure that patients, young or older in between, have therapeutic alternatives to treat their diseases.

Okay. And then maybe in the couple of minutes that we have left here, just pivoting into the middle of the P&L and margins. I have gotten the question and you've gotten it more than me, obviously, at various times, why aren't we getting more leverage? Why can't -- these are high-margin products. Why can't Edwards margins be higher? But you've been, of course, investing in a lot of things, not just R&D, but building out capacity and training and market development and so on.

So maybe talk a little bit about at a double-digit growth rate, which is different margin conversation than a high teens growth rate in terms of leverage. But at that, what's the -- maybe what are some of the considerations that help you strike the balance between how much we're driving to the operating line and how much we're investing in sustainable growth?

Right. So priority #1 at Edwards is investing for sustainable, durable organic sales growth. That's the #1 objective. We can accomplish that objective while also achieving margin expansion. And so this year, we're expecting about 150 basis points of operating margin expansion. Over time, in the years ahead, we are expecting and planning 50 to 100 basis points of operating margin expansion, which gives us both fuel to drive the top line, but also an ability to get leverage in the P&L and grow EPS at a rate higher than sales growth.

Okay. So pretty straightforward. I mean part of those investments, I think many companies when they invest in manufacturing are investing in the cost of goods line essentially in terms of fixed fixed operating costs and then leverage. rolling out new products, you're in a state of suboptimal unit gross margins, I'm sure, for some period of time. And then the labor sensitivity intensity of these high margin but high labor, how does that -- does that at all change the -- where we see these investments or versus where another company that's adding production lines for an FDA-approved product might be adding them?

Yes. You're right. Our fixed and variable expense ratio looks a little bit different than a company with a lot of PP&E involved in the production process. But suffice it to say that the growth strategy requires a lot of different expertise inside of Edwards, all working together. So our production engineers work very closely with our new product development engineers in constructing therapies that are safe, effective and manufacturable at scale.

And of course, it all gets supported by our force out in the field where we're continuing to add resources in the form of field clinical specialists who support physicians performing procedures and all the other folks who are out supporting our hospital sites around the world. So we feel like we've got the right framework in place. We feel like we've got an excellent team that is really working harmoniously together to help grow the business and do it in a way that is financially sustainable as well.

Okay. So outside this room, oil, Middle East are big topics. not to dive into it, we're over time by a few minutes, but last time energy costs were up, didn't seem like they took much out of your performance or your P&L. Maybe just a quick word on exposure to Middle East and exposure to energy.

Yes. So it's too soon to say whether energy is going to be impacted for the longer term for us or anyone else. But I can tell you that our #1 focus right now in the Middle East is making sure that our employees are safe and well protected and able to continue to help the technologies that we produce get to the point of care for patients who need them. That's where we're really focused right now in the Middle East.

Understandable. Okay. Well, thanks so much. With that, we'll call it. Really appreciate you coming.

Thank you all.

We're going to get started here as we're moving down the medical devices company presentation, fireside chat track at the 46th Annual TD Cowen Healthcare Conference. I'm Josh Jennings from the TD Cowen Medical Devices team, and we are honored to have Edwards' CFO, Scott Ullem, joining us making the track out from the West Coast. Scott, thanks so much for being here.

That's our pleasure, and I'm here with my colleague, Gerianne Sarte, who's going to be taking over as Head of Investor Relations in April.

Thank you for introducing her. I'm sorry, I didn't introduce you, myself. I've got mixed emotions here at this -- you've been the regular attendee and your team of the TD Cowen Healthcare Conference. And this may be the last time we get to have a chat up here on stage.

Well, I haven't been here for all 46 of your annual investor conferences, but it's always a pleasure to be here. Thanks, Josh.

Thanks, Scott. And maybe to start, just maybe the succession path and the process, any updates there? I mean it seems like there has been some restructuring in the -- some of the big executives at Edwards over the past couple of years with Mike Mussallem leaving, Larry Wood leaving and now you're departing as well. But I think in each instance, the executive's departure was -- the basis was you're leaving the company in a good position and you have a strong team behind you, but maybe just talk about where the succession plan is and how you feel about leaving Edwards and being well positioned?

Yes, sure. Thanks for asking. So like we mentioned earlier, we're running an external search process and just working through the different stages of evaluating candidates and ultimately, Bernard, our CEO, will select the next CFO. And as soon as that happens, we'll certainly announce it, of course, and then orchestrate a smooth transition. That's always been the plan, still is the plan, and it's my intention.

And I think you're hitting on something important, which is over the last couple of years as we've had natural transitions at different positions on our executive team. One of the encouraging things for me about Edwards is we have a deep bench. We have a lot of people who can step in. For example, our new Head of THV or transcatheter aortic valve replacement, Dan Lippis had been in the THV world, both in the U.S., Europe and Japan, Asia Pacific before succeeding his predecessor and taking over as THV. And so it's an example of we have a deep bench of people, both at the senior level that you'll see and multiple levels below that. So I'm feeling positive about our team. I'm feeling positive about all the good things will come with having a new CFO.

Absolutely. And then Bernard has taken the baton over the last couple of years and is hitting his full stride along with your team as a whole. Maybe to start, we can talk about the TAVR franchise and the market recovery and just review how well positioned Edwards is. You continue to have dominant share in the United States. There have been some controversial debates around low-risk durability data that were -- those debates were answered or questions were answered last year at TCT with a 7-year data.

But maybe to start, just how big of a deal has that been for the Edwards TAVR franchise, the SAPIEN platforms, recent success, market growth and also maybe supporting some asymptomatic adoption. A lot in that question, but I think you can handle anything I throw at you.

No, there are a number of questions there. But let me just try to give a little bit of an overview of what's happening in TAVR in the U.S.

What's certain to us is that there is a renewed focus on TAVR, renewed focus by operators, by referring physicians and by patients. There's a renewed focus on the deadliness and severity of aortic stenosis, and on the treatment alternative, surgical and, of course, transcatheter valve replacement. And we've seen that in the growth in 2025. If you just look at the different data presentations and podium presentations at major medical meetings during the course of 2025, whether it's ACC, New York Valves, TCT, there were important data presentations from Edwards that reinforced the safety and efficacy and importance of getting patients diagnosed with severe aortic stenosis to the point of treatment as quickly as possible.

I think that the clinical trial data, in particular, that has been released, including the 10-year data on durability of SAPIEN 3. It was presented at New York valves last summer. And most recently, the 7-year data on PARTNER III that was presented at TCT in the fall reinforce the fact, the scientific evidence that this therapy, the SAPIEN family of TAVR valves is really valuable for patients. And so we're doubling down. We're continuing to invest heavily in expanding the reach of our SAPIEN platform, and we can talk more about what that looks like.

Excellent. And some of the concerns were on just hemodynamic outcomes translating to clinical outcomes that may have been unfavorable for the SAPIEN platform. Again, that did not play out. But maybe just talk about the evolution of the SAPIEN platform, particularly on the hemodynamic front, SAPIEN 3 Ultra RESILIA or UR is -- has better hemodynamics results to date. And how do you see that -- this debate on hemodynamics playing out going forward?

Yes. One of the things that we've learned during progression of introduction of new valve technologies over the years is that picking one particular element and focusing on it is not as telling and valuable in reaching conclusions as looking at the composite endpoints and the most important elements, which include all-cause mortality, rehospitalization, stroke, pacemaker rates. But looking at in total, we saw from the transition from SAPIEN to SAPIEN XT, SAPIEN XT to SAPIEN 3, SAPIEN 3 to SAPIEN Ultra. And finally, now our flagship current technology, SAPIEN 3 Ultra RESILIA, really phenomenal performance across all of those different measures.

So whether hemodynamics or anything else, I think the really important thing is to look at in totality, the body of clinical evidence supporting these different therapies and what they can mean for patients. We're really pleased with what we've seen. And we're really pleased with the investments that we've made in innovating on our own technologies to make our therapies even better, and we're going to continue to do that.

SAPIEN 3 Ultra RESILIA is still getting rolled out globally. And we think that's going to be -- continue to be a fabulous therapy for patients for the foreseeable future. We do have next-gen products, including SAPIEN X4 and the successor to SAPIEN X4, as we always do. But for now, we're really excited about SAPIEN 3 Ultra RESILIA and the clinical trial results that we're seeing.

And just when you issued guidance for the Edwards TAVR franchise, I believe you expected stable share globally and so to grow relatively at the market pace. That was in front of the Evolut 6-year data being published and being made public. Were there any share shift assumptions just to review in that initial guidance? And some of our recent checks suggest that there could be a share mix or share shift benefit for 2 SAPIEN platform as these Evolut low risk 6-year results are digested by the interventional and cardiac surgery communities.

Well, our most recent guidance of having increased confidence in our TAVR full year growth rate of 6% to 8% was prior to the other data that was presented. It's too soon to say. I mean it's -- we obviously watch carefully what other participants in this field are doing. And I think there's focus on that most recent clinical evidence, of course. But frankly, we're more concerned about how do we get more patients into the system. Market share is important, but we think that the value is even greater if we can increase the number of patients who can get access to and treatment with SAPIEN technology. And that's really where our heads are focused right now. Over time, we'll see what the reaction is among physicians to that 6-year data.

Understood. And just on that point you just raised about getting more patients access to TAVR intervention and benefiting from it, you would say, in the asymptomatic population is now in play. Any just maybe qualitative or quantitative, if you can, just sharing of data points in terms of how the adoption in that asymptomatic indication has played out in 2025, and it should progress favor positively in 2026 is our assumption. But maybe just talk about that. And is Edwards SAPIEN platform seems to be best positioned because the only TAVR data studied SAPIEN and not any competitors' valves. But do you see a big advantage in that segment, which is relatively large as it starts to become a bigger contributor to overall market growth?

Yes. We do, and thanks for the question. Maybe we should just step back and talk about how the asymptomatic effort has unfolded. So we ran this trial, of course, looking at patients who were diagnosed with severe aortic stenosis, but did not have identifiable symptoms. And when those data were presented at the TCT conference in the fall of 2024, it was impressive. And I think it made a real impact on physicians' view of this disease, and we're in the middle of this transition of going from the former precedent of watchful waiting where it didn't matter if a patient had -- the belief was it didn't matter if the patient had severe AS, if they were not yet showing symptoms.

To now understanding that symptoms are irrelevant. And the data presented through this EARLY TAVR trial demonstrated and proved that symptoms are not relevant to the importance of getting diseased valves treated. When in 2025, we got approval for asymptomatic on the label from FDA last summer. And that caused even more focus on this therapy and the importance of -- for all patients with severe aortic stenosis that was also in 2025, we saw guidelines evolve with the European Society of Cardiology and EACTS which are now are promoting earlier treatment of patients to make sure that there's not this watchful waiting approach. And those guidelines, we expect to also be addressed in the U.S. along with the NCD that is currently under evaluation by CMS.

And so it's really an important time and juncture in the journey that we've had with TAVR. And this is one of the last barriers to fall. For a while the barrier was only patients who are so at risk of an adverse outcome from surgery were allowed to get TAVR. And those different blockades have come down with the progression of different partner trial releases. But this asymptomatic one is kind of the last big barrier to fall in the field of severe aortic stenosis. And as soon as we get the new NCD in place in the U.S., the U.S. guidelines adjusted, it will really be beneficial for patients.

I'll offer one other observation about the asymptomatic data. While the label is important, we have not seen any demonstrable signs of asymptomatic patients being treated in the U.S., which is not surprising because there's not an NCD to cover that indication on the label. We are seeing, we think, more focus that's leading to more symptomatic patients coming into the system. And we're also seeing in the CMS data more echocardiograms, more referrals, more stress testing, which is all favorable in terms of treatment rates for patients suffering from this disease.

So maybe baked into some of those metrics you were sharing, those trends could be just asymptomatic patients rolling in as symptomatic. So maybe there's -- I mean, there's some kind of penetration of what historically has been thought to be the asymptomatic population? Or is that not the right way to think about it?

Well, the data that we have is, of course, on a trailing basis, we just haven't seen it. Certainly, as I mentioned before, what we have seen is physicians being more thoughtful about evaluating patients and being aware of symptoms. And because there's not an NCD, there's still a lot of focus on the asymptomatic versus symptomatic, but a lot of times for these elderly patients, who are supposedly asymptomatic. When a physician really explores that, it turns out they may have symptoms, and that can be evaluated by a simple stress test, and we've seen more stress tests being performed. But we're also looking forward to a point where that kind of artificial barricade to treatment falls away and that the treatment practice and paradigm turns to just looking at the disease.

And like other diseases with a high mortality rate symptoms are not relevant. If you have a diseased, severe case of aortic stenosis, if you have a diseased valve and it's severe, then you need to get the valve replaced regardless of symptoms. And that's what we're really trying to advance as a practice in medicine.

Just in terms of all these trends and how just the evaluation of severe aortic stenosis patient is that evolution and workup and evaluation, getting them into the queue. I think the PARTNER III 7-year data, I mean, it's intuitive that that's going to help just penetration of this asymptomatic opportunity once coverage is in place and guidelines evolve. But maybe there's more a statement in the question, but anything to just discuss along those lines. I mean, how big of a deal the PARTNER III update was and then checking of the durability box has been to opening up this asymptomatic channel?

It's a huge deal, and thanks for the question. There are actually two long-term data sets that support SAPIEN durability. One was the PARTNER II 10-year data that was presented at New York Valves last year. The most recent one is the PARTNER III 7-year data that was presented at TCT. Both clinical trial sets demonstrated durability of SAPIEN long term. This is something that Edwards cares deeply about. We're the leader in surgical valves. We're the leader in transcatheter valves and durability is exceptionally important. And it's one of the reasons why we have invested so aggressively in durability innovation.

For example, the RESILIA tissue that is now on our surgical valves and on our transcatheter valves has been tested, and we're going to be presenting the results of the 10-year COMMENCE trial at this year's American Association of Thoracic Surgeons Conference. And we're looking forward to seeing what that looks like. But for all the other data that we've seen, SAPIEN valves are exceptionally durable. And it's something that we think is a really critical consideration for physicians and their patients.

Great. And the national coverage decision finalization will also probably be a tailwind for TAVR volumes, particularly in this asymptomatic indication. I think the assumption our team have are that asymptomatic coverage will be in play, you could potentially see the restrictions on smaller volume centers open or be eliminated. I think our biggest question, maybe you could just talk about those two buckets and then our assumptions. And then the third one, we're not so sure about is whether or not the mandate to have a surgeon and an interventionalist in the procedure room during a TAVR procedure, maybe where that could be reduced down to just one operator. Maybe walk us through those three assumptions. We're not clear on that third one, but any updates in terms of how Edwards is thinking about this national coverage decision and the importance of it for sustaining or driving stronger TAVR volumes?

Yes. It's very important in the U.S. to have a new NCD. And Edwards and many other companies and interested parties submitted letters to CMS during the first comment period. Those letters and input are being considered by CMS, and we'll see what the impact of the new NCD looks like this summer when it's published by CMS. But the position that we proposed and submitted to CMS was that the new NCD, first and foremost, attaches coverage to label so that asymptomatic patients who are already on indication with the FDA also have those procedures covered nationally with this new coverage determination.

And then the second piece that you touched on has a number of elements, which is taking out the friction and the impediments to hospitals and physicians being able to treat more patients, whether it's hospital site requirements or operator requirements or other issues that really provide limitations on growing these practices that we think should be considered by CMS. One of the relevant NCDs that we look to is the NCD that was put out for EVOQUE, which is Edwards tricuspid replacement valve, where there are no site requirements, there are no operating requirements. That it's really left up to the hospital and the heart teams to determine the best way for patients to be cared for. And so we're looking forward to seeing what CMS comes out with this summer.

Great. As you're winding down your tenure as CFO of Edwards, you issued guidance for some nice P&L leverage in 2026 and the profitability of the business is coming into focus. Maybe talk about why now is the right time to maybe deliver on that leverage at a higher clip. And is this a multiyear framework that's in play.

Yes. Well, I'd say we've always had a focus on profitability, like a very acute focus on profitability...

Sure, I didn't mean to discount that...

No, that's okay. That's all right. But it's a fair question because our guidance does include now operating margin expansion. And it's an important part of how we're running the company and how we expect to create shareholder value.

But just looking back, we invested aggressively in building our transcatheter mitral and tricuspid therapies business. I'm sure you want to talk more about that as well. When we did that, which is now over 10 years ago, we made an intentional strategic decision, which is that we were not going to take resources away from growing TAVR, in order to grow TMTT and that we would do both simultaneously. It impacted our margins. And our research and development, for example, as a percentage of sales went up to as high as over 19% back in the fourth quarter of 2024.

Now that TMTT is hitting its stride, generated $545 million of sales in 2025, we expect $740 million to $780 million of sales in 2026. We're seeing leverage on the research and development line, and that ratio as a percentage of sales is drifting down to around 17% we expect in 2026. And that's one of the reasons why we expect that operating margins will continue to expand 50 to 100 basis points on average annually in the years ahead.

Now it's not going to be exactly the same number every year. But even as we continue to grow our investments in research and development and in the field force supporting these different therapies in TAVR, TMTT and surgical, we do expect that expenses and are planning expenses to grow lower than the top line, which will yield that operating margin expansion.

And should we be thinking in days past when TAVR was growing in the double digits and outperformance would lead to a nice flow-through. Is that the same setup for 2026? Or because you have such strong operating margin expansion as outperformance benefit likely to kind of be reinvested as we look at '26 and out into '27?

Well, a little bit of both. We're going to continue to invest in growth of all of our different platforms. And again, as I mentioned, we will grow expenses at a lower rate than sales on average annually, which will lead to that operating margin expansion.

I do want to catch one thing that you mentioned though, the double-digit TAVR. Yes, we had double-digit TAVR growth in Q3 and Q4 of last year. That is not a new normal that we're expecting. So our guidance for this year is 6% to 8%, and long-term TAVR guidance is mid- to high single-digit top line constant currency growth rate.

I wanted to -- as you referenced, touch on TMTT, not leaving enough time for that important business unit. But you guys have reiterated a long-range target of $2 billion for that franchise. Maybe talk about just the assumptions there. Anything you can share just in terms of the contribution from the transcatheter mitral and transcatheter tricuspid portfolios? And will one outpace the other? Is there any mix you can share in that $2 billion assumption? Maybe to start there.

Yes. It's a good question. We speculate about this even internally. And we don't know. And the fact that we don't know what the mix of therapies is going to be in 2030 is a reflection of the importance of the strategy we have in place, which is we believe it's critical for treating physicians to have different tools in their toolkit to treat the different forms of these diseases, mitral regurgitation and tricuspid regurgitation.

For some patients, they'll benefit from our PASCAL transcatheter edge-to-edge repair system. Other patients will benefit from a full valve replacement, whether it's EVOQUE for tricuspid regurgitation or SAPIEN M3 for mitral regurgitation. And of course, we've got parallel surgical valves as well. But in TMTT, really having multiple different therapies to address custom personal patient needs is going to be a really valuable element of this growth to $2 billion in 2030 and growing beyond that as well.

And maybe review the toolbox approach. I mean we think about 2027 in the United States and internationally, Edwards will have replacement and repair solutions for both mitral, which is already in play now and tricuspid. How big a deal is that in terms of helping you guys secure the CAGR that gets you to that $2 billion in 2030.

Yes. It's important. And in fact, even with transcatheter edge-to-edge repair, our PASCAL device does not have a full label indication at this point. So we have enrolled our CLASP IIF trial studying PASCAL in patients with mitral functional regurgitation. And we'll be presenting the results of the CLASP II TR trial at TCT later this year. And so adding those indications and presenting supporting clinical trial data is going to be really valuable in growing that PASCAL franchise. And so will new product introductions and additional clinical trial information from EVOQUE and SAPIEN M3.

So across the board, just continuing to innovate across these different therapeutic alternatives is going to be critical to growing TMTT. And we're confident we're going to be able to do it. We've got Gen 2 of PASCAL and EVOQUE ramped up and getting closer to introducing those. And that will be the first of multiple next steps in bolstering those product lines.

Those are two healthy markets, Edwards is best positioned. Are you surprised that some of the other players, big players in the structural heart sector have not either invested or I guess, maybe they haven't -- just haven't had success building out technologies that can be competitive in mitral and tricuspid, but it seems like a 2-horse race right now, and do you expect more competition to come in. Is that one of the assumptions that baked into your ramp to $2 billion in TMTT sales by 2030?

Yes. So the $2 billion in sales is Edwards sales. Certainly, the total sales will be higher than that. But I think one of the reasons why we've had the privilege of being the leader in these spaces is we are exclusively focused on structural heart care. So other companies have multiple lines of business in health care. We really think structural heart is critical, and that's where we've chosen to focus our attention.

One of the reasons that's given us confidence to do that is because there are so many patients who can benefit from the treatments that we are providing and will provide in future generations. And so yes, there will be competition, and there always has been competition in our space. We're comfortable with that. We'd take competition seriously. But we think about competition more as Edwards competing against these diseases than Edwards competing against other companies.

Maybe we can spend the last couple of minutes on EVOQUE, a big product. A lot of investor focus over the past 18 months, the data and the launch. Two questions. One, has the EVOQUE launch kind of met the internal bar that was set by your team? There was some real-world data presented at TCT last year that was big. And maybe just talk about the ramp and any qualitative and hopefully quantitative metrics you can share?

Yes. So we're really pleased with the EVOQUE introduction and rollout. And we're still in relatively early days of doing that. The rollout has a couple of components, of course. One is training new sites and expanding the availability of the EVOQUE therapy across different hospitals. The other is increasing referrals of patients who have tricuspid regurgitation from their general cardiologist to their interventional cardiologists to the heart team. And so we're supporting hospitals as they do both of those things.

I think we've been really pleased with the procedural success rates for EVOQUE across the board on a number of different elements, the types of which we talked about earlier, EVOQUE has performed very well, and we're still talking about a first-generation therapy with its early on in its development. So we're pleased with the start. We're very enthusiastic about the potential for EVOQUE to play a meaningful role for physicians and patients who are suffering from this tricuspid regurgitation disease.

One of the cool things, I'll just tell a quick story, Josh, is when patients with TR, tricuspid regurgitation, get treated by their physician. The results are very evident very soon. So most TR patients have a lot of swelling in their lower extremities and they're in pain and they're in and out of hospitals all the time. Sometimes they have heart failure. And once their tricuspid valve gets replaced, it's really almost miraculous. Patients come back and see their physicians a couple of weeks later, and they may be 30 pounds lighter with plans to go dancing that coming weekend. And so it's one of the things that gives physicians a lot of confidence and interest in treating even more patients.

And not the best question to wrap up with, but just with the events over the weekend and the conflict that's ongoing in the Middle East, any -- just help thinking about Edwards' exposure to that region. Very, very early days, so maybe hard to comment on, but any thoughts would be appreciated.

Yes. Well, we're obviously watching the situation carefully as it unfolds. We do have people and patients in the region. And so we'll continue to watch carefully and safeguard our employees and also secure to every extent possible, the availability of the therapies we provide to patients in the region.

Well, I'd leave it there. Scott, thanks so much. This is maybe our last fireside chat, but hopefully, not our last interaction in-person going forward. So great to see you and appreciate it.

For sure. Thanks, Josh.

Thank you everybody who's come to the Unplugged Conference, and Scott Ullem, thank you so much for trecking across the country in this lovely weather to join us here today. Appreciate it.

It's our pleasure. And I do want to introduce my colleague, Gerianne Sarte, who is going to be taking over as Head of Investor Relations in April. So we're delighted to have Gerianne in this role. She's a long-time veteran in med tech and health care, and she's really looking forward to getting to know all of you.

Well, I'm excited to spend some time with you. Anyway so -- chair makes noise, sorry about that in advance. One of the things that has come up as I talk to investors is the TAVR market. All right. And we went through this period middle of 2024 where it was slowing and I understood why it was slowing. And now we're in a period where it's accelerating. And I am -- I'd love your view on why did it slow, why did it accelerate to 11% of core revenue for you, market is probably closer to 7% or 8% according to Department of [ Health ]? And how do we think about the sustainability of Edwards' growth and the market growth?

Yes. I think there's -- on the surface, it might look like it's slowing and accelerating more than maybe the underlying factors really would suggest. In 2024, we had this convergence of competing therapies that all hit the cath lab at the same time. Now part of this was due to Edwards introducing things like EVOQUE. Hospitals got a little bit further behind in capacity development than hospitals typically are. There's always going to be a little bit of a gap between capacity and labor and brick-and-mortar space and what the future needs look like, but it became especially pronounced in that period. That's behind us.

Hospitals, I think, are -- it's more back to status quo, continually tweaking and expanding to accommodate these new therapies. In the fourth quarter and the third quarter of 2025, the business performed well, and we saw a pronounced refocus on TAVR, granted, in the fourth quarter, we had an easier year-over-year comparison, we only had 6% growth in TAVR in Q4 of 2024. So it was easier to turn double-digit growth in Q4 2025. But put the math aside, we saw this pronounced focus and actual sequential growth in Q3 last year over Q2, which is highly unusual. And it reflects positive clinical trial results from the early TAVR trial presented at TCT in late 2024. This was studying patients who have severe aortic stenosis, but do not demonstrate symptoms, plus FDA approval of SAPIEN 3 Ultra RESILIA for use in asymptomatic patients. So the combination of those 2 influences, we think, really inspired that higher sequential growth than just renewed enthusiasm and focus on TAVR.

We also have coming up this year, a new NCD guideline evolution in the U.S. We already saw guidelines evolve in Europe in 2025. And just general, a lot more attention on what's coming with TAVR.

So not to get too specific, but is what has happen is doctors have sort of shaken out their schedule? Like when we talk to doctors, spoke with them 5 years ago, it was like TAVR, TAVR, TAVR all day long, 2 years ago, it was like, "Well, I try to do mitral, I try to do tricuspid." Is it more just a matter that they have their days figured out and how they're allocating their times? Or is it they actually opened up more cath laps, and therefore, there're more people doing more surgeries?

It's a really good question. And the answer is both, and it depends on the hospital. In some hospitals, there is a situation where you actually need more physical space. Oftentimes though, it's more driven by standing up heart teams and making sure that the schedules can work between procedures, some of which take longer than others, and operators. So one of the things -- just as an example, one of the things that will be considered when CMS determines the new NCD is the operator requirement. Because right now, getting the schedule of a cardiac surgeon to match up with the schedule of an interventional cardiologist, different departments, different wings of the hospital, it adds kind of unnatural friction in running an efficient cath lab, and it's one of the things that we hope CMS will address in the new NCD.

So -- lots of questions. What has the feedback been as you've gone through the NCD process? And how do you think about that taking place?

Very limited feedback at this point. The NCD was reopened at the end of last year. Edwards and lots of other respondents submitted letters to CMS expressing points of view about what the new NCD should look like. We'll see a first draft of the new NCD this summer. I think June, July time frame is when we hear from CMS. There will be another comment period, and then we expect the final NCD to come sometime late this year, early next year or whenever CMS actually publishes it. It's their process, not ours, obviously.

Is there anything we can learn about the last time the NCD was opened? I think that was in 2019.

It's tough to say. I mean the most recent relevant NCD that we've experienced is with the new EVOQUE NCD, which was the beginning of last year. And it's actually a pretty good reference point because there are no hospital requirements, no site limitations, no operator requirements. And that's for a first-generation device treating a disease that is really untreated. So we'll see. But at this point, there's nothing that we can really take away other than expressing a lot of perspective to CMS that we've developed over the -- over 10 years since we've been performing TAVR procedures in the U.S.

So we did a call recently with a cardiac surgeon, who was like, I think we should still be there. And I understand their sentiment, but how much of the voice do they bring to the table and creating this decision?

Surgeons have an important voice. And the surgeons have been treating aortic stenosis for decades and treating it very successfully. And as Edwards is the leader in surgical valves and in transcatheter valves, we've had a chance to see the role that these technologies and these physicians play in patients' lives. And so I think surgeons will weigh in, they'll have a point of view, interventional cardiologists, obviously, and CMS will take all of those things into consideration when determining the new NCD.

Okay. When we built our TAVR market model recently, Edwards took share in the quarter. And why do you think that is? And do you think it's sustainable?

I think probably the most noteworthy share shift that we experienced in the fourth quarter was in Europe, where one of our competitors exited the region. And their position basically got reallocated across all the different competitors, including Edwards. And so that was a notable share shift in that region. Overall, globally, we've seen pretty level share positions for Edwards.

Okay. And how sustainable are things such as pricing, patient flow, physician training?

Yes. Well, those are all very different elements, but let me try to take them. So...

In any particular...

In any particular, so pricing has been pretty level for quite a long time. It changes by region, but globally, we've seen pretty level average selling prices. We model in our long-range plan ASP compression over time as hospitals reach higher volume levels that then earn rebates and incentives. So we plan and model lower average selling prices, but we haven't seen that recently. It's been pretty level.

In terms of physician behavior and performance, like I say, I think there's a lot of enthusiasm among physicians. There's renewed focus on TAVR. TAVR is on the podium on the -- just on the speakers list at major medical meetings. And with all of the clinical trial data that has come out recently, and the forthcoming NCD, we expect this to continue to be a focus of physicians. There's another piece, too. Do you want me to comment on another element?

All of it. It was -- I can't even remember my own question. It has to do with patient volume.

Yes. So patient volumes, certainly, we've seen an uptick in patient volumes. And we talked about...

Is that with the demographics or what do you think that is?

I think it's across the board. One of the things that we've been trying to do is make sure that we've got a lifetime management approach to helping patients suffering from this disease. And what I mean by that is, whether a patient comes in and presents with the disease as an 80-year old or as someone a decade or 2 younger, we want to make sure that Edwards is supporting those cases with relevant clinical trial data and technology. So we now have our surgical valves meant to accommodate future valve and valve procedures and our transcatheter valve meant to accommodate future TAVR and TAVR procedures. So we have across our size ranges. These devices are designed to support future TAVR and TAVR for younger patients who end up with valves that reach end of life and need to be replaced.

And what percentage of the procedures do you think are now valve and valve?

Small percentage of the procedures today, but we do believe it will increase over time.

Okay. And then we are getting additional data at TCT this year on moderate AS. And people haven't started to talk about it yet, but I expect them to shortly. How should we think about the clinical trial design for that and what to expect from it?

Yes. Well, we're optimistic about seeing this data. And we don't know what the data are going to say, but we're looking forward to seeing the data. When we first started this trial, we did it because we developed a belief largely informed by physicians that patients with moderate aortic stenosis can benefit from TAVRs and alternative. And with that, we launched this trial. Obviously, we had a view that it was important, and if there [ wasn't ] an opportunity here, we would not have started the trial. The trial actually enrolled about 2 years earlier than we expected. And oftentimes, that's a leading indicator of whether or not there's some benefit of this therapy for patients. But since we enrolled it 2 years early, we don't have any more information. We don't know what the patient demographics or profiles look like. We don't have any leading indicators, but what the data may suggest. And so we're looking forward to the trial reading out in December, but there's some speculation on our fourth quarter earnings call about, "Geez, is Edwards talking more or less favorably about [indiscernible]", there's no new information. And we talked about it at our investor conference in December. We don't know anything more, and we will not know anything more by the end of the first -- in our first quarter call either.

So can we at least conclude that because it enrolled 2 years faster that there is a viable population out there, and it's not hard to identify and find these patients?

That is a -- that seems like a realistic observation.

Okay. Because there's some conversation like moderate AS is not either identifiable or isn't worth treating this early. And I'm not -- what you're saying 2 years earlier would not support that dismissal?

This is one where we have to defer to the data, and we just don't have any data yet. So we're looking forward to seeing it at TCT later this year. And a lot of these questions will get addressed, I think, when it gets unveiled.

Okay. I'll stop there then. TMTT, I think, is a good place to go to next. And I can spend, I think, the next 1.5 hours on that. One of the things I try to think about is how much of TMTT these days is mitral versus tricuspid? And Gerianne, maybe this is a project for you, how to think about the different products you have going through? And if you can't divide it up, what can you sort of say what the lead contributor is? Is PASCAL the biggest piece of the revenue at this stage, for example?

Well, obviously, we know exactly what the split is between repair and replacement and geography, all that kind of stuff, but we have not shared that publicly. And what I can say is our first entree into transcatheter mitral and tricuspid therapies was with mitral TEER, so repair -- transcatheter edge to edge repair for patients with mitral regurgitation. And as a result, that's a bigger business, but rapidly our other therapies are catching up. So TEER for tricuspid patients in Europe. We are still waiting for, and we'll have data presented at TCT on TEER for tricuspid patients in the U.S. Right now, we have just a DMR indication for PASCAL -- degenerative mitral regurgitation indication for PASCAL in the U.S., and we've enrolled our FMR trial. So we expect that we'll have FMR results to produce and hopefully lead to approval in the future. We haven't published a time line yet.

So that's not also TCT, or you don't know yet?

We have not published a timetable for that. So back to your question, though, the split between, so we got repair and replacement, but both are evolving and growing. So we've got repair indication expansion and geographic expansion. And in replacement, we're still pretty early on in the introduction of EVOQUE and very early on in the introduction of SAPIEN M3, both in Europe and the U.S. SAPIEN M3, of course is our mitral -- transcatheter mitral valve replacement with the SAPIEN 3 valve inside. So I know I didn't answer your question, Joanne, about what the split is, but that gives you a little bit of a sense of the framework that we're bringing to with TMTT.

Right. But you did share that TEER mitral is a larger piece and the others are catching up rapidly. And that helps at least frame it somewhat. And reminded me of all the bits and pieces and the data rolling out. Do you think that there's a stage where replacement exceeds repair?

We talk about this regularly and physicians talk about it as well. And the short answer is, we don't know. There are debates and speculations, but one of the important learnings that we have developed over the last decade or so that we've been working on developing this TMTT group is having a portfolio is very important. Patients with mitral regurgitation present with different facets and different characteristics of the disease. It can be DMR FMR, it can be chordal problems, leaflet problems, left ventricular disease. And so each patient is different and having different solutions to offer to physicians when determining how to treat their patients is really valuable. If we just came with a TEER device, it would be a different conversation than when we come with a portfolio of alternatives. And so we're excited that the vision we had a decade ago has now become a reality, and we have repair and replacement for both mitral and tricuspid.

Excellent. M3 was just approved earlier in the year. What has been the feedback?

Well, positive so far. I mean I think there's a lot of optimism about having this therapeutic alternative. Remember, for a long time, 10 years ago, everyone was focused just on transcatheter mitral replacement. This was before TEER had really taken off or before we had tricuspid replacement. And so this has been a long time coming and a long time awaiting. And we're enthusiastic now that we can bring it to market and get it into the hands of physicians who have it as an option. I think time will tell what that growth ramp looks like, and we'll talk more about that in the quarters ahead.

Okay. And versus some of the competitor products for TEER -- I'm flipping back and forth the way you guys flipped back and forth on this topic. But going back to thinking about clipping devices, what are you seeing on the competitive landscape?

Well, I mean, obviously, we're not the largest competitor. There's an incumbent. And I think that where we're really focused is not so much on the competitive landscape, but on how do we grow the market? How do we grow the number of patients who are coming into the system to be treated with these technologies? Because the undertreatment rate -- the treatment rate for mitral and tricuspid disease is lower than the treatment rate for aortic stenosis. Aortic stenosis is already treated at a much lower rate than other deadly diseases like different forms of cancer, and mitral and tricuspid are even lower. So for us, it's not about how do we go battle the competition, it's about how do we facilitate more patients getting to the point of treatment so that they can get their disease treated. And Edwards will be a part of that.

And what is the answer to that? And this may actually tie all the way back to the TAVR NCD, where if you have more centers and you have more people who are trained, there're more types of procedures they can do.

Yes. I guess, procedural rates and access to treatment is probably different across the different diseases, but suffice it to say, for mitral and tricuspid, which are both pretty early on in their journey, a lot of this is about awareness, awareness of the diseases and awareness of the therapeutic alternatives. For example, tricuspid regurgitation has been dramatically underreported like hundreds of cases in the U.S. per year, not tens of thousands. And for a long time, the tricuspid valve was referred to as the forgotten valve. And yet, here we are with many, many patients suffering from tricuspid regurgitation with rare intervention by surgery. And so all off a sudden we find out it's a much more common disease than people thought. It's a very debilitating disease. The mortality, but even more notably, the quality of life of this disease is awful for these patients. And so having a minimally invasive replacement alternative or minimally invasive repair alternative has just brought new life and a new pathway for these patients. And we're just trying to make sure that physicians and referring general cardiologists and patients themselves know about the disease and the fact that there are options now.

Yes. And -- but some of it is patient education as well as physician education. And how do you get to those patients? I feel like I've asked you this question 40 times, like is it a direct consumer campaign? Late at night, am I not going to hear like -- see an Edwards program of some type?

Yes. Sometimes, I mean a lot of it -- there are multiple different channels that we use to reach patients. And remember, for a lot of the patients, for example, aortic stenosis patients are older. And so sometimes you're not only talking to the patients, you're talking to the patients' children and you're talking to the patients' caregivers, adult children. And so we have different communications strategies. We have different avenues for getting information and material to caregivers and patients alike so they understand the diseases, the different ways the diseases manifest themselves and how to get to a heart team to get consultation about the best form of treatment, whether that's surgical or transcatheter, whether it's repair or replacement. Our hope and objective and efforts are aimed at getting patients to the point where they can get diagnosed and, if appropriate, referred to a heart team for a decision about where to go from there.

Okay. Surgical remains part of the core portfolio. I mean Critical Care was [indiscernible], you kept surgical. Growing mid-single digits, is that -- should I just sort of put mid-single digits and drag it across in my Excel spreadsheet? What is driving that? And what sustains it?

Yes. Mid-single digits is a good long-term assumption or expectation for both 2026 and beyond. And what's driving it is, we're still innovating in surgical. So transcatheter mitral and tricuspid and aortic and some of the new structural heart failure therapies that we're introducing get a lot of the limelight. Surgical is still a $1 billion-plus business for Edwards and a remarkable and important category for patients who need surgical treatment. I think what's really going to continue to propel surgical is innovation, not just in the device, but also in the tissue treatment. So we're getting ready at the American Association of Thoracic Surgeons Conference in May to present the 10-year results from our COMMENCE trial, which is studying our RESILIA tissue in surgical patients, and we're really enthusiastic about seeing that as well. Keep in mind, RESILIA tissue is the same tissue we use in our aortic valves. So this will be an important lens into durability, which is probably the most important consideration for Edwards and physicians and patients.

Are we still talking about durability for TAVR? Did the 7-year data set put that to rest?

Well, we hope so. It was compelling data. I mean we were pleased with it. I'd say we weren't surprised by it, but we were pleased with the data, and it's yet another element of a large body of clinical evidence supporting the safety and efficacy and durability of the SAPIEN family of valves. And I say the SAPIEN family of all because it's a very different platform than other TAVR and TAVI technologies, and we're really pleased with the results.

Good. Just to swing back to surgical procedures. We're hearing more and more about robotic cardiac surgery. How do you think about that evolving the landscape of cardiac surgery? And where does Edwards get to play in that?

So it's unclear to us where robotic surgery ends up playing the biggest role in cardiac procedures. But whatever role it plays, we're enthusiastic and encouraging. We think it's beneficial to have more focus on it. We think, obviously, Intuitive Surgical is a great company and their added focus on cardiac care can only add to the spotlight that we would love to put on cardiac care more generally. So under any scenario, we welcome the additional focus and the additional attention and tools that could be provided. And we think that benefits patients and obviously, Edwards will be there as well as the provider of the therapy.

Okay. Do you see that taking off?

I think it's early to say. I think that's probably a question better for Intuitive. But like I say, we think that surgical robotics, we think that imaging technologies, whether it's professional imaging or wearables technology, anything that brings more limelight and visibility into these diseases and to the therapies that could be provided is a good thing for patients.

All right. In '24, you made, I think you announced 3, but actually was able to complete 2 acquisitions. I don't think they get a lot of attention, so maybe remind us of what they are and why they are important?

So what you're -- do you want to talk about JC Medical? Maybe that's a good place to start?

I think it's a great place to start.

Okay. So -- and we can talk about Endotronix as well. So JC Medical is a technology that is used to treat patients with aortic regurgitation. Think of it -- aortic regurgitation is a leaky valve in contrast to aortic stenosis, which is a clogged valve. It requires a different valvular solution, totally different platform, different technology. And so we're -- we closed that acquisition. We've been working on it now internally for a while, and we've learned enough to realize a couple of things. One, aortic regurgitation is a serious disease that needs to be treated. Two, it's vastly undertreated right now, partly because the only alternatives are surgical, and there are a lot of patients who are not eligible for surgery or would prefer a transcatheter solution. Three, we really like the technology that we're working on right now. And we believe that, with time, it can be trialed and ultimately commercialized for the benefit of patients. So that's where we are in AR. We still think it's a big opportunity. We're excited about it, but -- and we'll talk more about the time line in the quarters and years ahead.

The other acquisition that we made is of a device trade name is Cordella, and this is an implantable heart failure management technology that provides patients suffering from heart failure and their physicians with visibility into how their heart is performing and how the pharmaceutical regimen they're on is impacting their day-to-day heart failure and how they manage it. So it's been a really impressive addition to the alternatives for patients who are suffering from heart failure, and we're excited about continuing to invest in this technology and to continue to grow the footprint that we have in this technology for patients.

But where can your footprint in heart failure go? I mean, it seems like it's a toe in the water to me.

Seems like it's what?

A toe in the water.

At this point, it is a toe in the water. And at this point, our real objective is we're learning more about the technology and the disease ourselves. And at the same time, we're helping physicians and hospitals and hospital sites introduce a new technology to patients who need it and can benefit from it.

And how do you think about capital allocation and future M&A now?

So our capital allocation priorities are very consistent with where they've been historically. Priority #1 is to make sure that we've got the infrastructure and capacity to support the growth of our therapies across Edwards. So making sure our production facilities are keeping up with demand. Priority #2 is investing in external growth. So making acquisitions generally smaller in size, focus on structural heart. We'll make minority investments. We'd provide seed capital to early-stage companies, and we buy other companies or options to buy other companies based upon how they perform against milestones and benchmarks that we set out. So that hasn't really changed, and it will continue to be an important part of Edwards' strategy, although not a required part of Edwards' strategy. And the acquisitions that we make and the external investments that we make are generally smaller in size relative to our market cap.

The biggest allocation of capital is the final priority, which is buying back shares. And we think it's created real value for the company. We think it represents a good opportunity to give back capital to shareholders and to set up the company for value creation in the years ahead. Last year, we bought back a little less than $900 million of stock. And in both of the prior years, we repurchased over $1 billion in stock. And so it exceeds the amount of dilution that we need to cover each year, and we're going to continue to look for opportunistic times to buy back stock.

And what is the formula for where you hit that lever, pull the lever hit the button?

Yes. Well, we don't announce it in advance, obviously, but we'll talk about it once we've done it. We've got about $2 billion left of share repurchase authorization today.

Okay. When you put together the guidance for the December Analyst Meeting, and then you reiterated it in early January, and then again 2 weeks ago, is there anything that's changed now that we're in mid-February from, call it, December? Or what has changed?

I'd say there's -- nothing has changed since our earnings call a couple of weeks ago. On the earnings call, we said that we had increased confidence in our sales growth guidance, 8% to 10% for the company, 6% to 8% for TAVR. And that was the one update since our investor conference. But overall, we like the setup for the year. We had a very strong 2025. And we've got a number of different influences that we think will benefit the company both in 2026 and in 2027 and beyond. So we're feeling positive about the business both from a TAVR perspective as well as in TMTT and surgical.

Was there ever a year, and I'm sure I can look this up, but where you raised guidance on the fourth quarter call early? Because you did say a couple of times on the call, we increased confidence.

Yes. I don't -- I'm tempted to say yes, back in the 20 teens, but I'm not sure of that. So it's -- I will say, it's not a common precedent. And so obviously, it indicated that we do have increased confidence and a lot of it is because of the way 2025 ended and the focus we're seeing in 2026 on these new technologies and this new clinical trial data.

Is there anything you're seeing in the broader landscape that sort of you think investors may be missing or you might be worried about? Or -- I mean, very frankly, what I'm thinking of is, a couple of months ago, everyone thought med tech was fine. And now we're all worried about med tech, and we're worried about everything from impact of the ACA to snow days, to pricing, to, I don't know. But I'd love because you're closer to all of that, your opinion?

Well, obviously, from a stock market perspective, med tech got off to a rocky start in 2026.

Noticed.

And I know you all know that. But from a company perspective, that doesn't reflect the outlook that we have for this business in 2026 and beyond. So I know that doesn't do you a lot of good if you're getting measured quarterly for your investment prowess. But -- and I think that, at Edwards, we feel optimistic and confident about the growth trajectory that we're on, about the number of patients who are still going untreated today and about the role Edwards can play in bringing scientific evidence and new technology for physicians to be able to use to treat their patients.

So I always end by asking, when we're together this time next year, what will we be talking about, but I know you're going off to do something much more much more better. Much more better isn't grammatically correct. I don't even know what the phrase is, but the person who will be sitting there, what will we be talking about?

It's a good question. I think it will be similar themes actually. I think we'll be talking about what happened with the NCD? How does the NCD look? Right now, we don't know what the new NCD is going to look like for TAVR. And by next year at this point, I hope we will. We'll be talking about how the guidelines in the U.S. evolved? Right now, the guidelines in the U.S. still support -- or still don't reflect the data and FDA approval of asymptomatic. And so we'll see how those guidelines have evolved. I think we'll be talking a lot more about the penetration of PASCAL and EVOQUE and SAPIEN M3 into the patient population suffering from mitral and tricuspid diseases. And -- but there's a lot that's going to happen in the next 12 months. I think it's an exciting -- a lot of times [indiscernible] said, long years and years and years from now, it's going to be exciting. We're at a point now where we're pretty excited about the next 6, 12, 24, 36 months because there are so many different catalysts and influences on our business.

Excellent. Thank you so much, Scott. Gerianne, welcome.

Thank you all.

Greetings, and welcome to Edwards Lifesciences' Fourth Quarter 2025 Results Conference Call.[Operator Instructions]

Please note that this conference is being recorded.

I will now turn the conference over to your host, Gerianne Sarte. Thank you. You may begin.

Thank you. Good afternoon, and thank you for joining us. This is Gerianne Sarte, I'm the incoming Senior Vice President of Investor Relations. With me on today's call is our CEO, Bernard Zovighian; and our CFO, Scott Ullem. Also joining us for the Q&A portion of the call will be Dan Lippis, our global leader of TAVR; and Daveen Chopra, who has global responsibility for TMTT, Surgical and IHFM.

Just after the close of regular trading, Edwards Lifesciences released fourth quarter and full year 2025 financial results.

During today's call, management will discuss the results included in the press release and accompanying financial schedules and then use the remaining time for Q&A. Please note that management will be making forward-looking statements that are based on estimates, assumptions and projections. These statements speak only as of the date on which they are made, and Edwards does not undertake any obligation to update them after today.

Additionally, these statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements. Factors that could cause these differences can be found in today's press release and Edwards' other SEC filings, all of which are available on the company's website at edwards.com. Unless otherwise noted, our commentary on sales growth refers to constant currency sales growth which is defined in the financial results press release issued earlier today.

Reconciliations between GAAP and non-GAAP numbers mentioned during this call are also included in today's press release. Quarterly and full year growth rates refer to continuing operation.

With that, I'll turn the call over to Bernard for his comments.

Thank you, Gerianne, and welcome, everyone. I am pleased to introduce Gerianne Sarte as our new Head of Investor Relations at Edwards. Gerianne has an extensive background in med tech and as a leader in our global finance organization prior to moving to this new position. You'll be seeing and hearing from her going forward and I know she looks forward to getting to know you.

Now let me turn to discussing Q4 and 2025 results. We delivered a strong quarter, growing at 11.6% and a strong full year 2025, growing at 10.7%. This is the result of our differentiated strategy with a clear vision around three key elements: focusing thoroughly on structural heart, solving large, urgent and very complex patient needs and pursuing unique opportunities to innovate and lead. This is only possible due to our deeply experienced teams, their excellent execution and their commitment to patients worldwide.

With our achievement in 2025, we are entering 2026 with strength and momentum globally with many growth catalysts in each area across the company. Starting with TAVR, there is a renewed focus on SAPIEN across the healthcare ecosystem, led by the 7-year PARTNER III and the 10-year PARTNER II data which confirm the long-term durability and proven valve performance of the SAPIEN platform. This data presented last October at TCT reinforced the confidence physicians and patients have in Edwards TAVR and set a new clinical benchmark for safety, efficacy, durability and lifetime management of patients.

In addition, the practice-changing EARLY TAVR trial is resonating with the clinical community, starting with the guideline changes in Europe. Together, all of these will have a lasting impact on the continued expansion of a SAPIEN platform globally.

Continuing with TMTT, growth is fueled by a comprehensive portfolio of repair and replacement therapies and strengthened by new options for patients. These include the launch of SAPIEN M3, the scaling of EVOQUE, the upcoming introduction of next gen PASCAL in Q4 of this year and the introduction of PASCAL for U.S. tricuspid patients also in Q4. Together, these are significant advancements for mitral and tricuspid patients and represent large opportunities to achieve our $2 billion revenue expectation for TMTT in 2030.

Overall for Edwards in 2026, we have increased confidence in meeting our 8% to 10% sales growth guidance as well as in our EPS guidance. We are looking forward to an updated national coverage determination for TAVR, which may present a potential tailwind later this year, recognizing that our impressive results in 2025 have set a higher bar for 2026, especially in the second half.

Long term, we are well positioned to execute our compelling growth strategy. And specifically over the next 3 years, we will be pioneering new therapies, launching next generation of existing technologies as well as expanding indication to impact more patients.

Our talented team of 16,000 employees create, develop and enable treatment of patients globally. With a highly differentiated and complete portfolio of therapy to address aortic, pulmonic, mitral and tricuspid valve diseases. We take very seriously responsibility of investing in the development of safe and effective value therapies with proven long-term durability.

Valve technology requires dedicated focus and generation of world-class clinical evidence that will continue to differentiate Edwards. I am confident that our technology will remain the first choice of clinicians to transform the care of their patients.

Leveraging our experience, we are extending into structural heart failure and aortic regurgitation or AR for the many patients who are not well served today. This will create additional growth opportunities and extend our structural heart leadership. In 2027 and beyond, we continue to expect average annual sales growth of 10% with constant currency operating margin expansion as we continue to address patients in need by advancing novel therapies to extend lives, improve quality of life and provide greater impact and efficiency for health systems.

Now I will provide an overview of Q4 sales performance by product group. TAVR overall procedural growth in the quarter remained in the high single digit. And for Edwards, TAVR's fourth quarter global sales of $1.16 billion increased 10.6% over the prior year and slightly sequentially over a high Q3, which was inconsistent with typical summer seasonality. The Q4 performance reflected clinicians elevated focus on SAPIEN therapy and proactive disease management of patients suffering from severe aortic stenosis.

Edwards TAVR procedural growth was comparable across the U.S. and OUS. And our average price and competitive position were stable on a global basis. While early TAVR studied TAVR AS patients without symptom, we are encouraged by the impact this study has had on increasing the sense of urgency for the treatment of patients who have symptoms. The timely referral evaluation and treatment of patients with severe aortic stenosis is fueled by a large and growing body of evidence on the long-term outcomes of SAPIEN valves.

Our position as the only TAVR therapy with asymptomatic indication will provide additional benefits along with the potential of an updated TAVR NCD and U.S. and Japan guideline evolution. These additive catalysts provide multiple layers of durable growth.

In addition to the long-term data presented at TCT, more than 30 distinguished physician thought leaders published the first ever AS global consensus document. This validates the movement away from the outdated practice of watchful waiting and further supports the importance of guideline management of CV AS patients.

Let me turn to some U.S. commentary. We saw intentional and urgent treatment of severe aortic stenosis patients, fueled by a large and growing body of world-class evidence on the SAPIEN platform and the increased adoption of SAPIEN 3 Ultra RESILIA. We are pleased that CMS formally opened the process to reconsider the NCD for TAVR. This decision has the potential to improve timely and equitable access to life-saving TAVR therapy. The initial 30-day public comment period closed on January 14 and we look forward to the process continuing.

In Q4, we expanded our partnership with the American Heart Association as the founding sponsor of a heart valve initiative. This new initiative is focused on timely diagnosis and treatment to save lives and improve care for millions living with heart valve disease. It is a multiyear program to elevate heart valve disease as a critical focus area for hospital systems through adherence to specific quality metric based care, expanded data collection, enhanced health care professional education and patient engagement.

In Europe, fourth quarter results reflected healthy underlying TAVR procedure growth as well as our consistent execution across the region. Updated guidelines from the European Society of Cardiology and the European Association for Cardiothoracic surgery are reshaping clinical discussions around proactive disease management and reinforcing the role of TAVR for a broader patient population. We also continue to see modest year-over-year share improvement in several key countries, strengthening our leadership position in the wake of a competitor's exit.

In summary for TAVR, we are pleased with our strong Q4 results and full year 2025 performance. SAPIEN growth globally was supported by rising clinical urgency for intentional proactive disease management and long-term evidence demonstrating the proven durability and valve performance of SAPIEN 3.

As we look ahead, we are well positioned to continue the momentum and remain focused on driving our patient access strategy, generating additional clinical evidence and delivering on our innovation pipeline to address the growing patient needs across the world. These strengths reinforce our confidence in Edwards' TAVR as a durable growth engine and a meaningful contributor to long-term value creation.

Now let's turn to our TMTT product group. Our comprehensive portfolio of repair and replacement therapies offers meaningful opportunities to physicians to best treat their mitral and tricuspid patients. This drove another strong quarter with TMTT growing over 40% to $156 million.

We were also pleased that for the full year, TMTT sales exceeded $0.5 billion. Continued global adoption of PASCAL and EVOQUE contributed to overall growth. Physicians continue to provide positive feedback on PASCAL's differentiated benefits for treatment of their patients who need transcatheter edge-to-edge repair. With EVOQUE, we are expanding the number of centers and training more physicians while focusing on excellent patient outcomes.

The recent FDA approval of SAPIEN M3 expands our mitral portfolio in the U.S. and represents the first transcatheter replacement option suffering from mitral disease. Similar to our other therapy launches, the strategic introduction of SAPIEN M3 is leveraging our proven high-value support model and focusing on outstanding clinical outcomes.

We are initially opening sites that were previously in our ENCIRCLE pivotal clinical trials and physician interest in this technology is growing. With PASCAL and EVOQUE globally and now with the introduction of SAPIEN M3 in the U.S. and Europe, Edwards continues to deliver on our vision of offering a portfolio of therapies to treat more mitral and tricuspid patients.

Overall, PASCAL adoption globally is delivering differentiated outcome for patients. The introduction of next gen PASCAL in Q4 will further distinguish this important therapy for patients who need edge-to-edge repair. The upcoming U.S. approval of PASCAL for tricuspid patients will provide an enhanced therapy alternative. And the scaling of EVOQUE and launch of SAPIEN M3 will further advance treatment for tricuspid and mitral patients. This represents multiyear growth opportunities starting in 2026 and contributing to achieving $2 billion of revenue in 2030 and additional growth beyond.

Finally, this year, we continue to expect sales in the range of $740 million to $780 million. In our Surgical product group, fourth quarter global sales of $254 million increased 2% over the prior year. The underlying fundamentals of our Surgical product group remains strong while growth in Q4 was impacted by end of year distributor inventory adjustments in one country. Full year surgical sales grew 4.3% and for the first time, exceeded $1 billion.

We continue to expect mid-single-digit sales growth rate in Surgical in 2026, driven by continued adoption of our RESILIA therapies that offer extended durability of our surgical therapies, including INSPIRIS, KONECT and MITRIS. We were encouraged by new data presented at the recent STS meeting, including strong 1-year data from the MOMENTIS study. MOMENTIS is studying long-term durability for the Edwards' MITRIS systems for surgical mitral valve replacement and 1-year result from the study demonstrated 100% freedom from SVD, impressive stable hemodynamic performance and excellent safety. This specifically designed surgical valve customized for mitral patients will advance and improve care.

We are also pursuing multiple new innovation to advance surgical solutions for patients, including left atrial appendage closure or LAAC. This is a new therapeutic area that is a complementary solution to specific valvular procedures and we are planning on a preliminary introduction of our new surgical LAAC technology later this year.

In summary, we still expect to deliver our mid-single-digit sales growth rate guidance in 2026. And finally, we are looking forward to seeing 10-year data from our COMMENCE trial at the ATS conference in May, studying long-term durability of our best-in-class RESILIA tissue.

And now Scott will cover the details of the company's financial performance.

Thanks, Bernard. Today, I will provide a wrap-up of 2025, including detailed results of our fourth quarter and guidance for the first quarter and full year 2026. We were pleased with our better-than-expected Q4 sales performance with strength across all product groups. Total sales of $1.57 billion grew 11.6% year-over-year. Our adjusted earnings per share was $0.58, this lower-than-expected EPS was driven by higher spending on patient access initiatives and a higher-than-expected tax rate.

It is important to note that we have increased confidence in our 2026 earnings per share guidance of $2.90 to $3.05. Our GAAP EPS for the quarter was $0.11, which included onetime charges related to the JenaValve acquisition that did not close as well as litigation expenses. A full reconciliation between our GAAP and adjusted EPS for this and other items is included with today's release.

And now I'll cover additional details of our P&L. For the fourth quarter, our adjusted gross profit margin was 78.3%, in line with our expectations compared to 79.0% in the same period last year. This expected year-over-year change was driven by additional manufacturing expenses related to the fast expansion of new therapies.

We continue to expect our full year 2026 adjusted gross profit margin to be within our original guidance range of 78% to 79%. Selling, general and administrative expense in the quarter was $603 million or 38% of sales compared to 35% of sales in the prior year. We increased SG&A spending in the fourth quarter to fund strategic investments in order to amplify patient access to therapy, such as early TAVR education, investment in field resources and the AHA heart valve initiative. Some of the strategic spending was delayed from previous quarters in the year.

Research and development expense was $268 million in the fourth quarter or 17.1% of sales compared to $271 million or 19.6% of sales in the same period last year. This decrease in R&D as a percentage of sales reflects our strategic prioritization of investments in our expanding structural heart portfolio. We continue to expect 2026 R&D as a percentage of sales to be approximately 17%.

Fourth quarter adjusted operating profit margin of 23.7% was aligned with our previous guidance of mid-20%. Our full year 2025 adjusted operating profit margin of 27% was within our original expectations for the year. For 2026, we expect approximately 150 basis points constant currency operating margin expansion, which includes less spending related to removing JenaValve from our operating plans for the year. We continue to plan for 50 to 100 basis points of operating margin expansion annually on average in 2027 and beyond. We continue to plan to deliver leveraged earnings per share.

Turning to taxes. Our reported tax rate this quarter was 29% or 17.9%, excluding the impact of special items, which was above our expectation for the quarter, driven by Pillar Two impact and country income mix. We continue to expect our 2026 tax rate, excluding special items, to be between 16% and 19%.

Turning to the balance sheet. We continue to maintain a strong and flexible balance sheet with approximately $3 billion in cash and cash equivalents as of December 31. Edwards currently has approximately $2 billion remaining under its share repurchase authorization. Average diluted shares outstanding during the quarter were 582 million. We continue to expect average diluted shares outstanding for 2026 to be between 580 million to 585 million.

Foreign exchange rates increased fourth quarter reported sales growth by 170 basis points or $20 million compared to the prior year. FX rates had minimal impact on our fourth quarter gross profit margin compared to the prior year. Relative to our October guidance, FX rates had a nominal impact on fourth quarter earnings per share. At current rates, we now expect FX to have an approximately $40 million upside to full year 2026 sales compared to the prior year.

I'll finish with comments related to our outlook. We have increased confidence in meeting our 2026 full year sales growth rate guidance of 8% to 10% and earnings per share guidance of $2.90 to $3.05. The product group sales guidance we provided at Investor conference remains unchanged.

For the first quarter, we're projecting sales of $1.55 billion to $1.63 billion. We expect slightly higher growth rates in the first half of 2026, following unusual summer seasonality that benefited 2025. We are expecting adjusted EPS in Q1 of $0.70 to $0.76, representing mid-teens growth at the midpoint of that range.

And with that, I'll pass it back to Bernard.

Thank you, Scott. In closing, we finished 2025 strong and achieved many lasting catalysts. We have increased confidence in our top line and bottom line guidance for 2026. Our strategy of focusing on structural heart is demonstrating impactful results for the company and the patients we serve and is positioning us for long-term sustainable growth and value creation.

With that, I will turn it back over to Gerianne.

Thank you, Bernard. We're ready to take your questions.

[Operator Instructions]

[Operator Instructions]

Our first question comes from Robbie Marcus with JPMorgan.

Great. Congrats on a good quarter. Two for me. First, maybe just on TAVR, 10.6%, another very strong quarter. I would have to imagine you're taking some share even excluding the Boston Scientific exit. So maybe just speak to the strength you're seeing, the confidence in it and any regional differences? And just one thing, if you can talk to volumes versus sales. I imagine the delta's price, but I had some questions on that.

Thanks, Robbie. Good afternoon, everyone. Yes, one is we are very pleased about the quarter overall in the year for Edwards. With regards to TAVR, very pleased about the quarter. Like you said, we're growing 10.6% year-over-year. And what we see is truly the results of our strategy here, where last year, we brought a very compelling evidence, EARLY TAVR, PARTNER III, 7 years, PARTNER II, 10 years. And all of this gave confidence. All of this also enabled a renewed focus on TAVR as a category and specifically the SAPIEN platform.

So this is creating the physicians to talk more about TAVR, to talk more about SAPIEN. This is enabling a physician to treat their patients a little bit early. This is also enabling providers to prioritize TAVR. So it is all of that together, but I'm going to ask you, Dan, to give you more specific details about the quarter.

Yes. Thanks, Bernard. And Robbie, you're spot on, right? Like the overall procedural growth rate in the quarter was in the high single digit. And so there is a gap. And you're absolutely on the money as far as share gain and pricing contributing to that gap. Largely on the share perspective, I mean, the share gain that we had from the Boston Scientific exit, contributed a big chunk of that. We are pleased to see the stickiness of that share gain from quarter 3 to quarter 4. We took our piece of that. But most of the competitors in Europe also benefited from Boston's exit. I would say that we benefited about in line with our competitive position in the market.

But if you look at globally, like overall, our competitive position remains relatively stable, I would say. I mean, for sure, we're not weaker in Q4 than we were in Q3. But another piece of this is S3UR penetration, right? And we continue to see very strong adoption of this outstanding platform, a lot of positive feedback from physicians. And so this is also contributing like you mentioned a little bit on the price side.

Great. Maybe, Scott, just if you could talk to the increased spend on market access, you highlighted in fourth quarter, step up in SG&A was roughly $100 million, which is pretty substantial. So maybe just dig into that, where did the spending go? And how should we think about that rolling in? Do we think of that as onetime cost?

Yes. Thanks, Robbie. I appreciate the question. We had planned a step-up in the fourth quarter spending, and we decided to be aggressive in light of the reception we were getting to the things Bernard mentioned earlier, the asymptomatic trial, the 7-year results, the 10-year results. And so we intentionally upped their spending in the fourth quarter, $112 million year-over-year. We were still in operating margin terms in the area that we had expected for the fourth quarter. So we had said mid-20% and that was sort of in the range of where we came in.

We invested more aggressively in patient access. So asymptomatic amplification. Bernard mentioned the American Heart Association partnership. We've also been reinforcing our field force in THV and also in TMTT. Some of the spending was delayed from earlier quarters in 2025. So following this elevated level of spending in Q4, we are planning a more moderated operating expense growth and SG&A expense growth in 2026, which is how we get to the operating margin guidance of the high end of our original 28% to 29%. The other benefit in that margin increase or margin expansion is the exclusion of the original spending that we had planned for JenaValve.

Maybe, Dan, do you want to talk a little bit more about some of these initiatives?

Yes. I think like a couple of big ones here, right? So with the change in the European guidelines. This is the biggest shift that we've seen in over 10 years. And it's a real important shift from watchful waiting to intentional and urgent treatment of severe aortic stenosis earlier in the disease pathway. This is a big shift. It involves change management and change of behavior, particularly at the referral level. And so we see an opportunity here to bend the curve of adoption of these guideline changes. And so we have a number of significant amplification programs that we have started and started to implement in Europe. This is a big one.

Second one, as Scott and Bernard mentioned, our partnership with the AHA. This is an important one, and this is a multiyear partnership, and it's designed to do the same thing, democratize and educate on the importance of treating earlier in the disease pathway for aortic stenosis. And so this is all designed to improve diagnosis and treatment of severe AS through guideline-based care, through extended data collection, but also heavy on education. And so these are two big ones.

We also invested further in some of the sort of short-range pilot stage marketing programs to improve treatment rates and patient and referral education in the United States and like Scott said, there are some field -- we're very much a high-touch field clinical field force and with volumes increasing, we need to get ahead of those resources in the field. They take time. They take time to train and get people certified. So we got ahead a little bit of that, but also a big chunk we got behind early in the year and a lot of that caught up with us in Q4. So they are the big items.

And your next question comes from Travis Steed with Bank of America.

Congrats. Just wanted to maybe focus on for TAVR and total company growth. Anything to kind of call out for cadence over the year? And I wasn't clear on an organic basis, what Q1 was to me since I didn't have the FX impact in Q1? And any comments on kind of like the January trends that you've seen so far to give you confidence in the guide? Then I have a follow-up.

Thanks, Travis. Yes. So I mentioned that we expect about $40 million of tailwind from FX to sales. This has changed since our investor conference. A lot of that falls in the first quarter. And so we're expecting Q1 sales growth on a reported basis to be about 300 basis points higher than the underlying growth that we are expecting in Q1.

Now remember, the first half growth rates in 2026 should be higher than the second half growth rates. And maybe Dan I will ask you to talk a little bit more about that.

Yes. Thanks, Scott. Travis, yes, it's true. The growth rate in our guidance moves down a little bit over the course of this year. As previously, we guided that the front half will be stronger than the back half in '26, and this is because we have much tougher, much higher year-over-year comps in the second half. We also applied classical seasonality and other assumptions to the year that weren't the case in 2025. That makes it a little bit more of a challenge. But the Q4 results that we had in 2025 give us increased confidence in our 6% to 8% guidance, and this is really important. On top of that, we have these meaningful tailwinds and catalysts later in the year that give us confidence in the mid- to-high single digit beyond 2026.

Got it. And then I have a follow-up on the TAVR NCD. You called it a potential tailwind later this year. Just wanted to kind of think about how you're seeing that help growth more centers, faster patient pathways and if you read the public comments, they're all mostly positive on expanding the indication, but there's a bit more debate on the care team. So curious if you think how that shapes up in the final and how that might impact the different scenarios you're thinking about?

Yes. So I'll take this one. I think, obviously, it's very, very important. The first phase -- first of all, it's important that the process was formally reopened. That was really important that happened right before the end of the year. And the first phase is now over, as Bernard mentioned. So we expect the initial draft around the June time frame. There will be a second round of public commentary at that point. And then assuming that the normal CMS process follows, the final determination could be in the Q4 time frame.

So if you think about impact for 2026, negligible, but probably important and more relevant in 2027 and beyond. Now the key priority areas for us is to ensure timely and equitable access to care for patients, right? And the big win for patients would be coverage to label and any changes that may reduce procedural complexity or help improve equitable access to care. So that's what we're focused on. But we need to see what the draft looks like, and we look forward to the process continuing. And like you mentioned, we're also pleased that most of the commentary was positive and largely in line with our thinking.

Your next question comes from Larry Biegelsen with Wells Fargo.

Yes. Two for me. I wanted to just ask about the LAA opportunity. How big is that market today? There's a competitor that has a device which sales of, I think, over $200 million. How is yours differentiated? And how do you want us to think about your LAA sales ramp over the next few years? And I had a follow-up.

Thanks, Larry. We apply always the same filter. When we decide to get into a new space, it is all about is there a big unmet patient needs? Can we have an impact? Can we bring differentiated technologies? And so we look at this one and we say, yes, yes and yes. So how big it is? We don't know where very well in this segment yet, but we believe there is some technology out there. We believe there is still an unmet patient needs. And long term, we believe we can have an impact here. But I'm going to ask Daveen, which is very close to this one, to add some comments.

Thanks, Bernard. Thanks, Larry, for the question. Yes. Obviously, as we mentioned, we're looking to enter the market later this year. And if you look at existing technologies out there, we think there's still unmet patient needs. And that's where we believe, obviously, that we can come out with the technology in this new therapeutic area for Edwards Surgical, we can come out with a solution that can really help patient care. And we see this as a complementary solution to our specific valvular procedures that we're already in. So as a result of that, we kind of see kind of a measured commercial rollout and opportunity to be a growth driver in the future for Edwards Surgical.

That's super helpful. Bernard, we saw a long list of catalysts in '26 in your press release today. And I think people will notice that you didn't mention moderate AS. So can you talk about why you left that out? And how you're thinking about the moderate opportunity today?

Thanks, Larry. I'm glad you saw a long list and indeed, it is a very long list. And let me first talk a little bit about why all of these catalysts that we get to your question about moderate. The risk is very long because of our very unique strategy, where we invest early, we are very committed. We have a flawless execution. I'm sure you have seen that the kind of results we have had in 2025 is pretty spectacular.

Financially, having all these catalysts, new technologies, new evidence, lasting evidence, lasting impact. All of them are basically in play for this year. With moderate, for sure, moderate is a big category. We know that the moderate prevalence is bigger than the severe one. We know it is big, but at the same time, we don't know what the study result will be. So we are waiting to know more about PROGRESS, the PROGRESS trial, which will be presented at TCT to talk more about it. But at least what you have seen is where we know for sure when it is coming and the type of impact we are going to have. Progress and moderate, big opportunity, we don't know yet we have the study results.

Your next question comes from David Roman with Goldman Sachs.

I was hoping you could go into a little bit more detail on the comments regarding lifetime management for TAVR. And maybe more specifically talk about what you think the implications will be to valve and vendor selection, balloon expandable versus self-expandable? How that might end up being a contributor to incremental market share gains as you think about the TAVR business here in 2026 and beyond.

I know that. Dan has a lot of passion about this one. So I'm going to let Dan talk about this.

You're on the right point, David. I mean, look, the evidence -- and when I say evidence, I'm talking the EARLY TAVR evidence, the sub-analyses from EARLY TAVR, the evidence that the likes of Philippe Genereux has published now on acute bowel syndrome. And then you've got PARTNER III and PARTNER II long-term data on top of this, all pointing to the fact that you're going to get a better clinical and economic benefit if you treat earlier in the disease pathway. This is a huge shift, and it changes the conversation between doctor and patient.

So if you can imagine a year ago or a little bit more, you might have -- it might have been something along the lines of, let's see if we can eat this out another 6 months or 12 months or maybe a patient would want to thinking that they're trying to time their treatment and trying to figure out how to make their valve last as long as possible to avoid secondary or tertiary procedures. And this conversation has completely shifted because the evidence says that the benefit of doing that is not -- there's no upside to that, right? There's no upside to waiting anymore.

And so this brings into the very important conversation and the concept of lifetime management. This is very, very important because you got to get the first procedure right to make sure you've got options and the right options for patients for their second procedure, whether that be another valve and valve or whether that be coronary artery access, PCI or what have you. And so we think our platform is uniquely positioned both acutely and with lifetime management options, whether that be secondary or tertiary procedures. And I think that's going to be one of the key value propositions that we have not only immediately but in the years to come.

And maybe just a clarification there. So in that scenario, is it reasonable to expect that just a significant percentage of patients receiving TAVR either in the asymptomatic or call it the sub-75 population that creates a unique opportunity for SAPIEN? And maybe just my follow-up, I'd ask you on capital allocation. You've obviously pulled the JenaValve deal did not end up coming to fruition. You bought back a good amount of stock last year, but you've also made some key hires to the business development team. Maybe just talk to us about your latest thinking here on capital allocation.

Yes. So as far as the -- look, whether it be younger patients or whether it be elderly patients, there's a good chance now with modern medicine and the way that this is going, that patients will outlive their first valve. I mean it's -- I think lifetime management considerations is not just now for youthful patients. And in fact, more and more, we see -- we find ourselves in scenarios where certain valve platforms were chosen with the idea that the patient would not outlive that valve and then finding the options for that patient limited at that time point, which is really disappointing.

So this lifetime management thing, getting the first procedure right upfront is a big thing. It is a conversation that everybody is focused on in the clinical community. Now as far as strategic allocation, look, we think valve and valve and whether you throw in leaflet modification or other types of things associated with secondary procedures, we think this is going to be very real. It's small now, but it will be growing. It's all about the denominator, right, and the numerator. And so we're looking at ways, as we always do to lead in this space. And that's something that we're looking at very, very closely.

The other thing that, obviously, we do is we look at how we apply our field force here and how we invest in our field force and what kind of value that we bring with our service model as these conversations and these types of procedures evolve in terms of how to get the best outcome for a patient at any given time.

And on capital allocation, David, our priorities have not changed. Our first priority is investing in the business to support our growth. And that comes in the form of making sure we've got sufficient production capacity. And as we mentioned at the investor conference, we are increasing our production capacity to keep up with the growth in TAVR, and TMTT and Surgical. It also involves making external investments. And so we've got a number of different activities underway. We've always been active in M&A. As you know, most of the things that we invest in or purchase tend to be smaller in size because we're focused on structural heart. But that's going to be a continual direction for allocation of capital.

And then share repurchase is one of our best ways to return capital to shareholders. And we continued our share repurchase activities in the fourth quarter. We bought back about $40 million, bringing the total repurchase in 2025 to just under $900 million. We still have about $2 billion of authorization remaining. And you should expect that we're going to continue to look for opportunistic times to repurchase more shares.

And your next question comes from Joanne Wuensch with Citibank.

Could you give us a little bit of the state of the union on how M3 is being taken up in the United States and any -- or what impacts are going outside the United States? And then if you could just sort of flesh out and give a little bit more color on the guideline changes that are happening in Europe and how to think about those impacts for the remainder of the year?

Thanks, Joanne, It's Daveen. I appreciate the question. Talk a little bit about the SAPIEN M3 launch. We're just starting in the U.S., right? We got approval, obviously, right before the end of the year. And it's kind of scaling in line with our expectations here in the U.S. and we are just starting to open up centers, really focusing on centers who are, in our who are in our ENCIRCLE pivotal clinical study first.

In Europe, we're scaling in line with expectations as well, but it's still pretty early in the process. I think what we like that we're seeing is that we're getting really high procedural success, and we're getting really great patient outcomes. Remember I was with a patient just the other week who had previously had mitral valve surgery and then needed an M3 because the surgery had failed. And for him, hearing about the difference his life made when he had no other tear or surgical alternatives with mitral regurgitation really hurting his life and how it just got so much better, just it worn my heart so much to kind of hear that.

So because of that, we're seeing this physician excitement because there's a group of patients who didn't -- who don't really have tear or have great surgical options for which M3 really becomes a good opportunity. So for us, we're continuing to appropriately kind of scale up, open up new centers and bring this therapy to new patients. So that's kind of SAPIEN M3.

And maybe moving on to kind of European guidelines, you want to start with TAVR guidelines? The European guidelines, I can talk about the FMR guidelines a little bit. Yes. So on the European guidelines with FMR, they're now Class I for functional mitral regurgitation for reduction of heart failure hospitalizations. So we're seeing, I think, increased awareness, specifically in mitral and tricuspid, increased awareness for these 2 diseases and increased kind of referrals happening with this guideline shift. So we see it as a helping continue that double-digit tier market growth that we've been seeing. And maybe passing on to TAVR for a comment on the guidelines, Dan.

Joanne, as you may recall, the guidelines on the TAVR side changed in a meaningful way on two fronts. One is they reduce the age recommendation for TAVR going from 75% to 70%, right? That's one big element of the change. And then the other element was this whole concept of recommending proactive disease management regardless of symptom or heart function. So this is basically taking -- changing the dogma of watchful waiting in Europe. And so this is a huge shift.

Now that is a -- that requires a lot of education. You can imagine, we're seeing -- definitely, we did see healthy procedural growth in Q4 in Europe and some of the large countries contributed to that in a meaningful way. But the way that we look at this is the guidelines won't be a light switch, whether it be in Europe or the U.S. or Japan, but give us an opportunity as those get disseminated as those get democratized and then put into practice, it's just layers and layers of durable growth for us. And so that's kind of how it's playing out, not a light switch, but definitely momentum.

Your next question comes from Matt Taylor with Jefferies.

I wanted to dig into the better performance we've seen in TAVR, especially in the U.S. the last couple of quarters and just ask you what you thought was causing that you're not benefiting from Boston. There really are you gaining share? Can you estimate how much EARLY TAVR has been contributing? Or are there other factors? What's really caused the increase in growth in the U.S. in the last couple of quarters?

So yes, thanks for the question. And I think without trying to be on repeat here, but this data, this very, very compelling data, not just on the early TAVR and the asymptomatic side and not just clinical but also economic data. I mean, I can't stress how important the economic data -- benefit of economic -- of the economics -- treatment of patients and the hospital economics earlier in the disease pathway is having an effect as much as the clinical data.

So these two things tied with definitive durability data is creating a wave of confidence in the community to have a different conversation. It is also forcing, if you like, the aortic stenosis patient, the TAVR patient to be prioritized differently and to be treated with urgency. Typically, you might see a little bit more rearranging of the patient list to bring more sick patients to the front of the list and the more healthier patients towards the back of the list rather than just getting through the list. And this conversation is completely different now, and people are focusing on this intentional and urgent treatment of symptomatic AS.

So this is regardless of whether the patient is asymptomatic or not. This is the impact that it is having on symptomatic aortic stenosis is what we see largely driving our growth. When we look at the claims data, we don't see asymptomatic patients coming in, in waves through the claims data. And that shouldn't be a surprise because the NCD doesn't cover asymptomatic indications at the moment. So right now, that's not a huge surprise.

What we do see, though, since the indication in the United States, we do see increase in the number of echoes. We do see increase in the number of referrals. We do see a decrease in time from referral to CT, which is the heart team evaluation. And interestingly enough, we do see a relatively sharp increase in stress tests for patients and nobody typically likes to do stress tests. And so that's also an interesting finding that we see in the data.

And so definitively, this is all positive momentum, and it's driving a lot of growth. But as I mentioned before, the other thing that is supporting and contributing to the performance in Q3 and Q4 is the success of SAPIEN 3 Ultra RESILIA. That's making a meaningful contribution to our performance, and we're pretty happy with that.

And big picture here, if you process all of this that Dan talked about, this is what gives us confidence in our guidance for the year for TAVR, 6 to 8 and our guidance beyond 2026 for TAVR from mid- to high single digits. All what we are doing right now, all the things we have been doing, all of these catalysts are impacting severe symptomatic patients. And so the asymptomatic patients are still in front of us. This is why we are so confident as to have TAVR as the durable growth opportunity for Edwards.

Your next question comes from Vijay Kumar with Evercore ISI.

My first one was a quick housekeeping. Scott, I think you called out SAVR was impacted by some distributor adjustments. Could you quantify what that is? And is the Q1 guidance implying a 10% TAVR growth?

Sorry, Vijay, could you say the first part of your question one more time, please?

Sorry. On SAVR, you called out a distributor impact in that Q4. Could you quantify what the impact is? Are those sales coming back in Q1? And just curious on what gets us to Q1 sales guidance? Is it SAVR? Are we modeling TAVR of 10% growth?

Yes, sure. Thanks for the question. Yes, the surgical inventory adjustment was in one country, it was the end of the year, and it was really adjusting inventories in the distribution channel. In China, we go through distributors, and we work very carefully on managing inventory levels. And so this is just something that we did at the end of the year. We still expect mid-single-digit growth from Surgical in 2026 and beyond. So think of this as a onetime event.

Sorry, Q1?

Yes. So Q1, the guidance implies -- I mentioned before, on a reported basis, about 300 basis points higher than the underlying growth guidance. We haven't broken out specific underlying growth guidance, but know that the growth in the first half of the year is higher than the growth in the second half of the year. And overall, we're increasingly confident about the 6% to 8% full year growth guidance for TAVR.

That's helpful. And then maybe one on the moderate AS. What is, I guess, the right way to think about moderate AS. When these patients are untreated, right, do they look like low-risk TAVR patients? Is this asymptomatic TAVR patients? What's the right way to think about moderate AS? And what's the underlying mortality rate in untreated moderate AS patients?

Maybe let me start with Vijay. And first, when we when we decide to start a big pivotal study, randomized study, multiyear randomized studies like this one, it is because we believe we can show the benefit to patients. It is because we believe it is a big opportunity. It is because we believe in that case, SAPIEN 3 will have a big positive impact on these patients. So that's just to make sure that you feel our confidence and our belief behind progress and the moderate AS patient population.

Having said that, we know the importance of highly scientific clinical studies. And as a company relying a lot on world-class evidence, we are trying not to talk a lot about before having seen the results. We know the importance of it. But -- so it is why some studies are more like post-market studies, marketing studies. So people have a freedom to talk about it. And here, we want to have a very high bar in terms of clinical evidence. So we have confidence, belief. It's a large patient population, and we are going to wait TCT to share more about it.

Now Dan, do you have anything that you want to share in addition to what I said here?

Yes. The only additional color that I would say is as we learned a ton from now asymptomatic EARLY TAVR trial about how unpredictable the nature of the diseases and any -- and this whole idea of that it's a progressive, predictable disease has been thrown out the window even on EARLY TAVR. And we -- this is not an asymptomatic trial, right? PROGRESS is not a symptomatic moderate, right? So we're talking about a symptomatic patient population. And we don't know the results of the trial. We don't know what it looks like. What we do know is it enrolled very fast, right? And that's usually a bit of an indicator of things. And so we're excited to sort of just learn more about how this can inform this patient population and how transcatheter therapies may fit into this. But until we see the data, until we get past TCT, there's not a lot more to add.

Thank you. And ladies and gentlemen, we have reached the end of the question-and-answer session. So I will now hand the floor back over to Bernard Zovighian for closing remarks. Thank you.

Yes. Thank you so much. Thanks for your continued interest in Edwards. Scott, Gerianne and myself, welcome any additional questions by telephone. Thank you so much, and have a great rest of your day.

Thank you. And this concludes today's conference. All parties may disconnect. Thank you.

Welcome, everyone. I'm Robbie Marcus, the Med Tech Analyst at JPMorgan. Very happy to introduce our next speaker, Bernard Zovighian at Edwards. Bernard is going to do a presentation followed by some Q&A. Bernard?

Thank you, Robbie, for hosting. Good morning, everyone. Great to see all of you. I'm very excited to share with you the vision we have for the company in 2026 and beyond. We'll be making some forward-looking statements, which involve risk. They are all listed on our website and filed with the SEC. We will be also using non-GAAP financial measures, the reconciliation are available on our website.

In the last 3 years, our focus on solely on Structural Hearts give us an opportunity to deploy our strategy with speed and agility and speed and agility across our core platforms. So TAVR, TMTT, so Mitral and Tricuspid and Surgical, where we will continue to invest and bring next-gen innovation because we believe there is still a big opportunity. There are many patients in need in this category. But we will also expand the Structural Heart portfolio for patients who today have no other option.

So how do we do this? So in a very simple manner, simple manner to say not necessarily simple to execute we will continue to bring novel innovation, differentiated innovation and world-class evidence to transform care. In addition, what I believe is very exciting. For all of you that know us very well, we will continue to pioneer therapies for the many patient group currently unaddressed. What I mean by unaddressed, patient group who have no other solutions today. So let me give you some example.

Patients with asymptomatic AS, patients with mitral disease, tricuspid disease or aortic regurgitation. Each one of this unaddressed patient group represent a very large opportunity. First and foremost, the large opportunity for patients, but also a very large opportunity for growth. And we are one of the only company committed to invest early, to be first and to deliver first-of-its-kind innovation for all of these patients. And we know what it takes. This is the DNA of a company. When it is complex, when there is no solution, when most of the company are not focusing, we are trying to go there and change patient care.

I like to always quantify us as a very special med tech company. And what makes us special is the combination of our success, our differentiated performance. The very unique strategy we have and our patient-focused culture, where we have more than 16,000 employees across more than 100 countries every day, caring about patients. And we know that there are many patients in need, more than 20 million. We are very diverse in their needs, with no option today. We are also very committed to strengthening the communities where our employees are living and working, something that I'm very proud of.

The result of our unique innovation strategy is when we lead everyone benefits. Physicians have access to best innovation, and we bring this best innovation with cadence on a regular basis. We impact patient care and patient lives who can live longer and better. The employees of a company, they are part of something special, something meaningful, something mission-driven. And overall, we impacted a practice of medicine and create value, cost benefit value to the entire health care ecosystem. So let me now go through our product growth.

In TAVR, Edwards is leading with best-in-class technologies. The SAPIEN platform is by far the best platform globally. In 2025, we brought 2 large important practice-changing evidence, EARLY TAVR and the 7-years PARTNER III trial both randomized studies. And by the end of this year, we are going to present the moderate trial at TCT. All of this together is basically enabling us entering a new era. What I mean as is the entire ecosystem, an era of proactive disease management for this patient.

In TMTT, we now have fully realized the impact of a fully comprehensive portfolio. With PASCAL, EVOQUE and the more recently SAPIEN M3, enabling personalized care for this patient. At the same time, we are committed to remain fully focused on supporting the heart team globally to ensure excellent patient outcome. We feel confident about the acceleration of this business and us achieving $2 billion in revenue in 2030 with continued long-term momentum beyond 2030.

In Surgical, we will continue to drive adoption of our RESILIA tissue portfolio, and we know that RESILIA today is the standard of care for tissue durability. And the technology that we have are INSPIRIS, MITRIS, KONECT and more in this great Surgical platform. At the same time, we are committed to emerging opportunities in Structural Heart in order to reach more patients, this will complement our core, again, the core being TAVR, TMTT and Surgical. And it is a very natural progression for the company.

So TAVR AR, for instance, we are developing a new therapy for patients with very limited options today. IHFN, what we want -- the goal here is to establish a new standard of care with patients at the center of care management. And we are not going to stop here in this expansion within Structural Heart disease because many other art failure patients are in need. So let's now look at the growth outlook.

What I want to do is briefly looking back. And I'm very proud of the team and our accomplishment in 2025. We delivered significant goals with lasting impact. So let me give you some example. Two practice-changing evidence, EARLY TAVR, which is changing right now, the path for all aortic stenosis patients. 7-year PARTNER III setting new benchmarks for TAVR durability. We launched not just 1 but 2 world first catheter-based replacement valve for mitral and tricuspid. And we are continuing to be a top investor in our strategy, more than $1 billion in R&D while delivering profitable growth. Financially, we are on track to deliver a high end of our original guidance of 8% to 10% sales guidance and to exceed our original EPS guidance that we gave you in December 2024. So we are exiting the year strong, which gives us confidence for 2026 and beyond.

And starting in 2026, our strategy will result in many catalysts across our core businesses. And so what you can see on the slide here is, one, in my mind, many, many catalysts. I'm so proud about what we have in front of us. What you can see is basically 2 categories of catalysts, the next-gen, where you see next-gen SAPIEN, next-gen EVOQUE, next-gen PASCAL, next-gen M3. So plenty of exciting new technology coming in the next few years. But also the one with a star are basically the catalyst where we are first. We are pioneering a new category for the many patients I already talked about, the one that have no solutions today. Or simply said, we are creating new market, new market, new opportunity for growth, new opportunity for patients. So let me give you some example here. You have TAVR for asymptomatic AS patients, TAVR for moderate AS patients, TAVR for AR patients, transcatheter tricuspid valves, surgical tricuspid valve, transcatheter mitral valve, transcatheter therapies for heart failure. So clearly, a broad-based set of catalysts, short term and near term.

So since we saw you at the last Investor Day in December, we have had a couple of exciting updates.

CMS reopened the U.S. NCD for TAVR and we are supportive of this action. This will ensure that patients with AS will gain improved access of its life-saving technology. The process between an opening and a close usually takes up to 12 months. So it has been opened in December 2025. In December also, we received U.S. approval of SAPIEN M3, which is already approved in Europe, which is the first of its kind therapy, a game changer for the many patients suffering from mitral disease and now complementing our full comprehensive TMTT portfolio. The timing of this event was largely consistent with expectation, so no impact to our 2026 guidance.

You have seen the news on Friday that the acquisition of the JenaValve was blocked. Obviously, the buyer, ourself and the seller we are disappointed with this result, especially for the many patient in needs. But you know what, this is the past, we get it. So I can tell you that as a true pioneer in the space, we are very confident in our continued AR strategy. This is -- there is no change to our commitment to deliver breakthrough innovation to these many AR patients. We are committed to lead AR strategy for patients, and we are very active with our pivotal study with the [ GI ] Medical Technology.

Let me transition to our financial outlook for 2026. 2026 is set to be another very successful year. 2025 was a great year, '26 is set to be another great year, led by diversified source of growth, which is very important. In the past 10 years, most of our performance was driven by TAVR and now we have 3 large sources of growth, making this company more diversified within Structural Heart disease. We expect sales growth, 8% to 10%. We are continuing to have a high level of investment in innovation while improving R&D and SG&A ratio.

So let me talk briefly about the implication of JenaValve transaction not happening basically in 2026. We have a short-term EPS gain about $0.10. So the EPS now at the midpoint of our range is going to grow around 15%. So very pleased about the kind of top line trajectory 8% to 10%, EPS growing about 15% and about 150 bps margin improvement in 2026. So clearly, very well set to have another distinguished year.

And all of this multiyear catalyst that you have seen a couple of slides earlier will result beyond 2026. TAVR will continue to grow mid- to high single digit. TMTT increasing to $2 billion by 2030. Surgical mid-single digit. And then you have Structural Heart failure, TAVR AR will have increased contribution to growth. So confident about all of this as a company overall, achieving about 10% average annual total company growth with leverage EPS. So I feel like we are well positioned. We will create a long-term, sustainable, differentiated and profitable growth. And this is my last slide before getting into Q&A.

In summary, we are confident in our strategy. We are exiting 2025 with distinguished performance and enhanced leadership. Near term, for the next 2 to 3 years, our catalyst in TAVR, TMTT and Surgical will provide very novel solutions for the large and growing needs of millions of patients. Therefore, we are confident in maintaining this distinguished performance. And longer term, beyond this near term between our core innovation and the emerging opportunities, we expected a sustainable growth and value creation. Thanks.

So with that, Robbie, and maybe Scott, let's start with our Q&A session.

Great. Bernard, if you allow me to say, I feel like Edwards, since you've taken over as CEO, is probably in the best position. It's been the TAVR market has stabilized and even accelerated a little. You've had a number of new product launches, both in the mitral and tricuspid side of TMTT, some long-term data.

So maybe a 2-part question. One, how do you feel about where the business is today? And number two, what are you as CEO most focused on for the coming, let's call it, 3 to 5 years to keep this double-digit growth alive?

Thanks. Yes, you know what, I feel very good, to be fair. Like you said, we never had so many catalysts. And these are the result of our strategy. They didn't happen by chance. Our unique innovation strategy, our investment, our amazing team execution. Like you said, in TAVR, we have so many opportunities. SAPIEN is the most durable valve at 7 years, proven. It was one of an important question. With EARLY TAVR we have proven that waiting for this patient is not a good idea. In TMTT having this full portfolio, which is the result of the vision we had 10 years ago.

And so yes, I feel very good about all of that. I think when I think about where I'm spending my time right now and where I will spend my time, I would say twofold. Short term, it is about the execution of a catalyst to make sure they are happening. Long term, what I mean long term is the next 3 to 4 year, you saw it with this catalyst, we are going to be pleased about our performance. But I will be spending time about how to maintain that beyond 2028, 2029 and '30 to make sure that we remain this innovator, this pioneer, this -- we are now a large cap company growing double digit and I want to sustain that for the foreseeable future.

You had the -- your Analyst Day in early December. You laid out 2026 guidance, as you had on the slide, 8% to 10% organic growth on the top line, 6% to 8% TAVR growth within that. If we start with TAVR here, this is a market coming out of COVID has now returned to its, let's call it, premium growth versus some other med tech markets. It went from a 4 competitor to a 3-competitor market last year, and we saw you actually take some dollar share versus your largest competitor.

So maybe speak to underlying patient trends you're seeing, how asymptomatic is or isn't benefiting the market now? And any benefit you're seeing from SAPIEN 3 Ultra RESILIA and pricing within that?

I do believe that what happened last year was fundamental of our outlook for TAVR. Two questions where unanswered last year. Is TAVR lasting? Is TAVR durable technology? And we know that most of the valve when they fail, they are failing in the 5 to 6 years kind of time frame. So what we have proven that SAPIEN is not and is the most durable valve. So this was a big question.

The second one was about with EARLY TAVR, the mindset about waiting for symptom. And we have proven that this is a progressive disease and for many asymptomatic patients for many, not all of them, but for many, waiting is not a good idea. So this created basically the beginning of a change in mindset. It's the beginning. And so that's, in my mind, we will remember 2025 and these 2 studies. This is going to shape how AS patients are going to be treated in the next 10 years.

And do you think we're seeing a tangible benefit from asymptomatic patients today in the TAVR numbers? Or do you think that's all still yet to come?

I believe it is still yet to come. What you have seen our momentum and the TAVR momentum in H2 compared to H1 in 2025 is more coming by the amplification of this new evidence and the beginning of a change of mindset. So -- and the beauty of that is what is we have a multiyear of growth ahead of us. We had also -- I didn't talk about that, a new guidelines in Europe in the summer. So all of that creating this new environment, positive environment around treating these patients. But I don't believe that if any asymptomatic patients were treated in the U.S., very minimal. The heart team will wait for the new NCD to be an effect.

What about on market share? It's been very stable for several years. And then it's hard for us to discern volumes share. But we do see on a dollar basis share that Medtronic is growing a little slower than Edwards in TAVR. Do you think that's a -- do you see that on the volume side? And do you think that's something that's more regional? Or do you see that trend sustaining globally as well?

Yes. We get a lot of question on share. To be fair, let me start there. We are very pleased about our share position. We are the global leader everywhere on this planet with SAPIEN. But it is not where we are focused on. We are -- what we are focusing on in unlocking the market potential, making sure that the patients that deserve a treatment have access to a treatment. And so share is always the same that you think it is a short-term kind of things. Don't get me wrong, we love our position. But I'm not spending my time on share. That's a lagging indicator, I'm spending my time and the team is spending the time on bringing evidence, developing best technology, partnering with physicians and treating more patients. And I think this is what is inspiring about our strategy.

Maybe to that point, before we went into the asymptomatic trial, we did have a number of Surgical trials that showed treating asymptomatic patients work. So there was a reason to believe the trial would be positive. You're breaking new ground here with your moderate patient trial. What would be deemed a success in your view? And what do you think physicians will need to actually treat these less sick patients with the TAVR valve versus best medical care?

Yes, that's a good question. And I would say, first, we have been in valve for now almost 70 years. So we know well this disease. When we start the trial, we -- it's because we believe we can show that it makes sense to treat this patient population. And by the way, the moderate patient population is a very large patient population. Having said that, we need to wait the results of the trial. Having said that also, we know that AS is a progressive disease. So we are confident, cautiously confident until you see the result of the trial at TCT this year, later this year.

Now obviously, the better outcome we have, the more impact we will have to the clinical community. And we will always lead with science, lead with evidence to make sure physicians can make the right decision for their patients.

Let's talk about the NCD. You talked about your supportive of this. It was reopened in January or late December and should close in June based on time lines. What do you expect this can really do to the TAVR market and volumes? And is it just a TAVR volume beneficiary? Or is this -- can this help the entire cath lab?

I would say first is, it can have multiple impact. It could have an impact on efficiencies, on making sure that patients have an equitable access to care across the nation. So that's truly the hope.

When I look at -- when we look at what CMS did in some of the past NCDs for very novel technologies, way less studied than, say, than TAVR, the NCD were very progressive. So we expect that they will follow the same methodology. We will have to wait. But I believe it is going to help with efficiency, with less requirement and accelerate patient access.

And maybe enable some additional centers to be activated as well the self-certify under the new NCD. But as Bernard said, that's probably not the biggest impact. It's more efficiency and taking out some of these outmoded original requirements that were put in place when TAVR was first approved.

Do you think it's a potential if you do see volume shift to some of these newer centers that it might just allow for more volumes of TMTT as some of these centers as TAVR becomes more prevalent, sort of like stents. Stents was an incredibly difficult procedure at first, and now it's bread and butter of these doctors.

You know what, in cath Lab, we are going to see a number of dynamics in the next couple of years. You have some less risky procedures are going to move from the cath lab to the ASCs in the next couple of years, starting this year. We saw some of the CMS announcement late last year. The NCD has the potential to streamline TAVR to basically enable more capacity for TAVR, but also for TMTT. So all of that together, we believe about capacity will benefit, access -- patient access to care will also be beneficial.

Maybe jumping over to TMTT, tricuspid the launch has been going well with EVOQUE, but I'd say people were hoping it could go a little faster. You have some excellent real-world data you showed at TCT last year. I know you're booked, I think you said all through 2026 with the new surgeon training. Can we see an acceleration in EVOQUE in the U.S. in 2026 now that you have a lot more data out there and you know the good results you can get in the real world?

So it is an interesting question because if you think about -- let me go there. TMTT last year, Scott, grew altogether, what, 50%?

Over 50%.

So 50%. EVOQUE grew faster than that. So I say I like the EVOQUE trajectory growing more than 50%. We always can do better. This is what I said to the team all the time. At the same time, we want to create a category that all of us can be very proud of where patients are very well taken care of, and it is based upon solid foundations.

Indeed, we presented the real-world outcome which, in my mind, is showing 2 things that physicians are embracing the technology, that physician with less experienced, have similar outcome or even a better outcome now than the one who did the study more than 2 years ago. So clearly, it's working. There is an adoption happening. It's very fast. And to be fair, it is very much according to plan. Last year, we increased the TMTT guidance once, and we are on track to deliver on this increased guidance.

Yes. We always want more from you. As you think about PASCAL TR coming in the U.S. in the not-too-distant future, how do you see having the repair and replace portfolio? And do you think physicians have in their head who the right patient is yet? Or do you think that's still an evolving discussion?

It is still evolving. You got it, Robbie. One is the -- what's beautiful about our portfolio is it is a true partnership with the heart team. We are not telling them, "Look, this is all what we get so you need to use this technology for all of your patients." We are telling them, "Look, we are here to help you, look at the patient anatomy, the patient issue, and whatever you need, PASCAL, EVOQUE and M3, we have it. We are here to support you." We are going to learn a lot from a patient segmentation in the years to come.

Right now, I don't believe we know exactly -- for some patients, there is a clear segmentation between repair and replacement. But for many patients, it is not yet clear, and we are going to learn a lot. And we are going to learn together with the physicians. And this is what I like about again, back to this concept about being first and being the pioneer. We are the one basically bringing the learning with the physician community. And that's important. I think it is inspiring, meaningful and lasting.

Maybe jump around a little bit. Scott, last year was on a constant currency basis, the first time I can remember Edwards giving margin expansion in a long time. You did it last year very nicely and it's, I think, 150 basis points. Is that right, baked into guidance for 2026. Is this 150 basis points a year is a lot. What do you think is the new normal as you've committed to bring R&D down as a percentage of sales of some of these big trials have lapsed and you continue to get better leverage out of the sales force?

So yes, this is a commitment that is baked into our strategic plan that we're going to continue to expand operating margins for the foreseeable future. Some years, we'll have more expansion than others. For example, this year, the 150 basis points will benefit from the JenaValve acquisition not happening. Other years, we may be on the lower end of the range of expansion, but we are going to continue to see leverage in the P&L.

Part of that is because of research and development, part of it is just due to scale. As the company gets bigger, then it's easier to grow the top line faster than the expense lines. But make no mistake, we are continuing to invest aggressively in research and development. Clinical trials are an important part of building a fact pattern, building a base of evidence that supports top line growth in the therapy. So we're going to continue to be investing in R&D, continue to invest in clinical trials and at the same time, showing margin expansion.

Maybe within capital allocation, you had a slide with several different investments you have externally and you continue to put up some of the best free cash flow conversion in the med tech sector. So you have a lot to put back to use. Is M&A moving up the list in terms of usage for Edwards? Historically, we've really seen share repurchase.

Yes. Our capital allocation priorities have not changed at all. Priority #1, of course, is funding innovation internally. And as an extension to that, funding production capacity that we need to support growth. So those are the top priorities. Of course, also funding investments that we're making externally is important, and we make a lot of investments in early-stage companies, whether it's minority investments or seed capital or purchasing options to purchase companies based upon milestone targets that they may have, and we'll continue to do that. I don't think M&A has increased in priority. It has always been a priority. We've been an active acquirer. We've been an active investor, not just internally but externally as well. And so expect that that's going to continue to be the case.

And then you're right, it leaves a lot of capacity for continued share repurchase, which has been an important part of the value creation story for Edwards. We bought back a lot of shares over the years, and we're going to continue to buy back shares opportunistically at a minimum to offset the impact of dilution from performance-based awards. And then also just taking advantage of times when we think the stock is an extra good opportunity to bring down the net share count.

How do you think about external investment into Structural Heart versus other areas that maybe are near adjacencies, but outside of Structural Heart?

No, we are solely focusing on Structural Heart. Structural Heart is a very large opportunity. We believe there are more than 20 million patients between the U.S., Europe and Japan. Many of these patients have today not great solutions. So we see many opportunities. We have a clear path. What we want to -- the way we are thinking about it is where is the need, the patient need? Can we be first? If we can be first, can we become the leader in a short time period? And we have been externally also a heavy investor in early-stage technologies because we like to go early, to take more risk and to create categories. So every year, we have -- we are heavy investors and we will continue to do so, but within Structural Heart disease only.

Is there a preference -- you obviously have 2 divisions at Edwards, Surgical and Transcatheter. Is there a preference one over the other? How do you balance investment?

It is not necessarily balancing across these businesses. It is more about where is a large patient need. Complex patient need, large, where can we make a difference? Is there a big opportunity, growth opportunity in front of us? How can we leverage our core capabilities as a company? So it's more along these lines that where it is going necessarily within the company.

Well, good. I don't think we have enough time for another question. That was a fantastic discussion. Thank you. Thank you, everyone, for joining.

Thank you. Thank you, Robbie.

Well, good morning, everyone. We really appreciate you all joining us today. Thank you for making the trip out here. For those of you who are in person. I'm Mark Wilterding, SVP of Global Finance and the Head of Investor Relations and along with the team had a role in putting today together and really excited for you to be here for the 2025 Edwards Life Sciences investor conference. We've got a great session planned for you today.

In addition to the executive leadership team that we have in person who will be presenting, we've got a number of physician cameos and we'll also talk more about our product portfolio in detail and the progress we're making on a number of clinical trials.

For those of you who are online, please note the presentation slides have been uploaded and so they are currently available on our Investor Relations website.

Just 2 quick items. Please take a minute to get familiar with this slide here behind me. During the event, we will be making some forward-looking statements. It is possible that actual results can differ from our expectations. For more information, you can find detail on our website on the latest SEC filings as well.

The other thing I'd highlight here are the non-GAAP financial measures regarding our performance our SEC filings, along with the reconciliations of any non-GAAP financial measures utilized to the most comparable GAAP measures are available also on our website at ir.edwards.com.

With that, I want to introduce a really special video. One of the best parts of my job, I think, is highlighting just what makes this company so special. The physician partnerships we have, the people at the organization and the patients that we help and I think the team that helped put this video together did a really nice job of capturing that.

[Presentation]

Good morning, everyone. We are -- I'm very excited about having all of you we value your interest in the company. We have very exciting topics to discuss today. One is about how we are going to talk about how special we are as a company. We have a great performance, we are on track to have in 2025 and our vision for 2026 and beyond. We have a very unique strategy in med tech with a clear vision around 3 key elements. We are now solely focusing on structural heart. And we are able to leverage the expertise and commitment of our 16,000 employees globally to impact patient care, solely focusing on structural heart disease. We are solving large and very complex needs with many patients having no other solutions today. And what we like to do, what we aim to do always is to go first. When we go first, we create the path and when we do so, patient benefits and innovation accelerates. And we have seen that across surgical, across TAVR, and across so many other fields when we enter first.

So this strategy is working. Today, we are the global leader in structural heart. We are one of the fastest large-cap med tech company in the world. But that's today, in my mind, what's more important is where we are going. And I believe we are well positioned to deliver sustained and differentiated growth in the foreseeable future.

I have only one slide looking back. And I can tell you, I'm very proud of the team and all the accomplishments we have achieved in 2025. We have delivered very significant goals. Many of them will have lasting impacts. So for instance, 2 practice-changing evidence, EARLY TAVR. EARLY TAVR is not just a study. EARLY TAVR is going to change the path for all aortic stenosis patients in the next decade. The 7-year PARTNER III, for instance, which is setting a new benchmark including TAVR durability. We launched not just 1, but 2 of the world first catheter-based replacement valve for mitral and tracker speed.

SAPIEN M3 and EVOQUE. And we are continuing to be a top investors on our strategy. We are investing more than $1 billion a year in R&D while delivering profitable growth. So financially, I'm very pleased about where we are for 2025. We are on track to deliver on a high end of the original guidance of 8% to 10% that we gave you in December 2024. And we are on track to exceed our original EPS guidance from December 2024. So clearly, we are exiting the year strong, and this gives us confidence for 2026 and beyond.

Our focus on structural heart give us the opportunity to deploy our strategy with speed and agility. And I love this strategy. I the fact that all what we have done in the past years to be solely focusing on structural heart disease. And we are going to apply this speed and agility across our core platforms, TAVR, Surgical and TMTT. Where we still see large opportunities with large unmet patient needs. So we are going to continue to invest and bring next-gen innovations, next-gen evidence. But we are also expanding our portfolio across structural heart with novel therapies for patients who have currently no other options. And the result of this very unique strategy is as Edwards leads in our mind, everybody benefits.

So let me explain. Physicians have access to best innovation on a regular basis. Patient care and patient lives are transformed with our therapy. Our employees are part of something special, something meaningful, something mission-driven. And overall, we impact the practice of medicine, create value and saving at the same time for the health care systems and taxpayers.

So how do we do this? We know there is plenty of patients in need, more than 20 million with very diverse needs. So we will continue to bring novel and differentiated innovation and world-class evidence to transform care for TAVR TMTT Surgical, TAVR and heart failure. But in addition, a concept which is very exciting. We are leveraging our 65 years of valve leadership to pioneer therapies for the many patient group, currently unaddressed. What I mean by unaddressed, we have no options today. And I want to give you some example, patients with asymptomatic AS, for instance, patients with mitral, patients with tricuspid or AR in need of a transcatheter replacement. Each one of these unaddressed patient groups. They represent a very large opportunity. It is an opportunity for sure for the patient. It is also an opportunity for us as a company.

And we are the only company to committed to deliver first-of-its-kind innovation for all of these patients. We know it is not easy, but this is what we like to do. We're tackling big issues, solving them. And this is clearly the result of our 65 years of leadership and our long-term commitment. Later today, you are going to hear from our business leaders.

In TAVR, we have best-in-class technologies. We have practice-changing evidence. And all of that together. It is enabling a new era of proactive disease management, and Dan is going to talk about that. In TMTT, we are now -- have a full portfolio, and this is enabling personalized care for this mitral and tricuspid patient. Daveen is going to talk about that. And in Surgical, our leading resilient innovation are transforming patient lives globally and YJ is going to talk about that later.

In my mind, our core businesses are incredible. They are the heart of the company. They are set for long-term success, and we have so many catalysts and you are going to see some later today. At the same time, we are very committed to emerging opportunities in structural heart, reaching more patients, complementing our core and all of that is clearly a natural progression for the company. TAVR AR, we are developing new therapy for this patients who have limited option or almost no options today. IHFM, we are establishing here a new standard of care with the patient at the center of a care management. And we are not going to stop here, because there are many other structural heart patients in need today. So we are going to continue to invest and bring therapies for these heart failure patients.

Now let me transition to financial outlook. I already talked about 2025 and how strong of a year it is. And 2026 is set to be another very successful year. What I like about the company today, it is also not depending about 1 business. It's led by 3 core businesses, diversified sources of growth across TAVR, mitral, tracker speed and surgical. So in 2026, we expect sales growth 8% to 10% or $6.4 billion to $6.6 billion. We are going to continue investing a high level of investment in innovation, while at the same time, improving our R&D and SG&A ratio, about 100 basis points of margin expansion, very much aligned with the commitment we made during last year at the investor conference with leverage EPS growth of 11% at the midpoint of $2.80 to $2.95, including the Innovalve plant acquisition in 2026 (sic) [ 2024 ].

So clearly, all of these metrics together are setting the stage for having another year of distinguished performance. And starting in 2026, our strategy will result in this many catalysts across our different businesses. I'm sure when you look at this slide, you are very excited like we are. Within the next 3 years, we are going to launch many next gen, next-gen SAPIEN, next gen EVOQUE, next gen PASCAL, next-gen M3 and more. But in addition, I'm very confident in our ability to pioneer new therapies to the many patient group I introduced earlier, the one that have no other options today, the one who are unaddressed or simply said, we are creating new markets.

So let me elaborate, TAVR for asymptomatic patients, TAVR for moderate patients, TAVR for AR patients. So 3 big catalysts in TAVR, transcatheter tricuspid valves, surgical tricuspid valve, transcatheter mitral valve, transcatheter therapies for heart failure and we are going to briefly talk about that today later in the morning. So clearly, many, many near-term catalysts across the company, creating new options for patients. And all of this catalyst basically will result beyond 2026 in TAVR growing between mid- to high single digit, TMTT having an increased contribution to the company growth, reaching $2 billion by 2030 and having growth potential beyond 2030.

Surgical mid-single-digit and structural heart failure, a number of technologies, together with TAVR AR adding an increased contribution to growth beyond 2026, obviously. This gives us confidence that we will be able to target 10% average annual total company growth beyond 2026. Obviously, some variability based on the timing of catalyst from years to years and leverage EPS like in 2026. I feel like we are very well positioned as a large-cap med tech company with plenty of opportunities, creating long-term sustainable differentiated profitable growth.

In summary, we are very confident in our strategy, solely focusing on structural heart disease, the decision we made about 2 years ago. We are exiting 2025 with distinguished performance and hence leadership. Near term, so what I mean by near term is the next 3 to 4 years, our catalyst in TAVR, TMTT, Surgical will provide novel solution for the large and upgrowing needs of millions of patients, and we are confident we will be able to maintain our distinguished performance longer term between our -- so longer term, between our core innovation TAVR, Surgical and TMTT and our expanded opportunity, we expect sustainable growth and value creation.

All of this is possible with the amazing employees across the company, 16,000 employees and the leadership of our executive team. We recently added a few leaders on the leadership team, adding in mind a couple of things, speed of innovation, but also focusing on therapy platforms. We want to accelerate and advance patient access globally. We truly work as a team, and we have one mission, patient care with speed and agility. So this is the agenda for today. You are going to have a very comprehensive overview of the company and all of the opportunities ahead of us.

With that, I'm going to pass over the mic to Dan, who is leading our TAVR business beautifully. Dan.

Thanks, Bernard.

Back to you.

[Presentation]

Well, it's certainly an exciting time for TAVR. And as we enter this new era of proactive disease management, we're really well positioned for growth. The shift is underpinned by unparalleled evidence, which now importantly includes proven long-term durability. We're expanding access to patients with important new indications, for example, like asymptomatic patients. And we have the opportunity to learn how TAVR can change the lives and improve the lives further upstream in its application in moderate disease. All of it made possible and only made possible by Edwards differentiated valve platforms. And we will continue to differentiate and continue to expand with our really exciting innovation pipeline.

I'll take a moment also just to reflect on the last 12 months. And there's been a few important moments in our strategy. We've had a symptomatic indications approved in both the United States and in Europe. Those indications along with really important and meaningful evidence have caused a shift, a real shift and an important movement in TAVR guidelines. And also there's an evolution in policy that is happening. We had really, really important data presented at TCT with a PARTNER III 7-year long-term follow-up, and that data was presented and simultaneously published and our flagship platform SAPIEN 3 Ultra RESILIA continues to roll out globally and help extend our leadership position, all leading to a positive financial results for 2025.

And we're on track to deliver 7% to 8% year-over-year growth. And there has been definitively a renewed focus in TAVR globally, and that is causing a renewed focus in growth in the market globally. I've been at this -- this is my 16th year working with the TAVR therapy, and I don't recall a 12-month period where TAVR has been so consistently in the news for all the right reasons. Every podium around the world, new evidence, subanalyses, both clinical and economic, we've seen updates and guidelines. We've seen expert consensus documents presented and published, all leading to very extraordinary amplification from podiums, publications around the world.

And perhaps none more important data presented than at TCT this year in October, late-breaking clinical trial session sponsored by the New England Journal of Medicine, the long-term data from PARTNER III low-risk trial the 7-year follow-up. And this was highly anticipated for 2 reasons. The first is the 5- to 7-year period is often referred to as a window of vulnerability for bioprosthetic valves. If there is going to be a durability signal, if there's going to be a durability challenge with a bioprosthetic valve it's going to happen in this period.

Second is this is a very, very first trial, whether it be for surgical valve or a transcatheter valve where patients were serially followed with echocardiography and more importantly, independently call lab adjudicated to contemporary definitions of VARC III for valve performance and durability measures, the very, very first time. And the results were so reassuring and positive for patients and physicians, not just because there was equivalents in long-term outcomes between TAVR and Surgery, but a new benchmark has been set for valve performance and durability performance over the longer term.

The results for valve performance in this trial were excellent across every measure, and that sets a new benchmark in transcatheter valve performance. And those results are particularly reassuring because new evidence not only with our EARLY TAVR trial, but including our EARLY TAVR trial is suggesting that there is a significant patient benefit by treating earlier in the disease pathway.

If -- when patients are treated before the onset of symptoms, there is a superior and significant clinical benefit. This is challenging everything that we know about clinical surveillance as a standard of care. One of the most important things that we're learning is this disease is unpredictable. You cannot predict the progression of this disease, highly unpredictable, and there's a high risk, as we all know, of not treating, but there's a high risk of waiting. So time is definitely not the friend of a severe aortic stenosis patient.

And we're learning that it's not just the clinical benefit. We're learning that by waiting, there's an economic tax or to put more positively, there's an economic benefit for treating patients earlier in the disease progression pathway. It is now clearer that patients do better clinically when treated early. But also if we wait while that heart, the left ventricle is working harder and harder to deliver oxygenated blood to vital organs. If we wait, that just gives the opportunity for the patient to progress into acute valve syndrome to have cardiac damage.

And with delayed treatment, you can save a life, but you're also going to have more complications, you're going to spend more days in hospital and you're going to have a higher opportunity to have repeat hospitalizations due to heart failure. And all of that adds up to real dollars and cents at the point of care, both at the health care system and at the hospital level. And this is really important information that is emerging that there is not only a clinical benefit, but an economic benefit for treating earlier in the pathway. It's our strategy. It's been our committed strategy. It's our leadership strategy of being committed to generating very, very high quality levels of evidence.

And that evidence generation, consistent evidence generation has led not only to new indications, differentiated indications but has also led to clinical confidence, and that clinical confidence and indication expansion is leading to guideline evolution. And we talked about it before, but what's happening now is probably the greatest shift in valvular guidelines than has been seen in over 10 years.

Specifically, we saw in 2025 the American Society of Echocardiography, who is typically very passive in reporting the news. They've made a clear shift, particularly for when critical findings like severe aortic stenosis are noted for very clear and urgent communication. This is really different. In their words, communication should be within minutes so that patients can receive timely access to care. Perhaps one of the biggest changes we've seen is, in Europe, where the European Society of Cardiology and the European Association of Cardiothoracic surgeons have made a number of significant advances with their guideline update, not just reducing their Class I recommendation for TAVR to the age of 70.

But most importantly, if severe aortic stenosis is confirmed by echocardiography, refer for treatment evaluation, refer immediately independently of symptoms and independently of heart function. And this is a huge shift. This is a really, really important shift, and this has been confirmed also with the most recent publication at TCT on the global expert consensus, which validates all this. These are the people who do the procedure every day. They're referring cardiologists who are involved in referring these patients every day, surgeons who are involved in the procedure every single day doubling down on these guideline updates and perhaps suggesting an even greater sense of urgency for patients with severe aortic stenosis.

What does it mean for the patient? Well, today, current standard of care of clinical surveillance and watchful waiting is a complicated one. Patients bounce around the system, multiple HCP visits in primary care and in specialty care, going in for heart team evaluations, physicians trying to assess, is now the right time? What is happening with the progression of the disease? What is your symptoms? How bad are your symptoms? Maybe we should do more imaging, CT, echocardiography, maybe let's have another look. All of this is time.

Normally, more than 6 months, often more than a year, and that's just in the United States. Outside the United States, longer, all representing a significant barrier for the patient to get timely access to care. So the new guidelines, they aim to simplify this and reshape the pathway, making it very black and white, very easy if severe aortic stenosis is confirmed by echocardiography refer for treatment immediately. And if there is not a good reason not to treat, treat and treat with urgency, all supported now by guidelines. And importantly, by a quality metric defined by the American Heart Association of time to diagnosis to discharge home in less than 90 days, ambitious but possible. And this is changing the way that we look at the treatment of aortic stenosis.

This is what proactive disease management looks like. Now the education of this, the democratization of this, it takes time, right? This is new. This is challenging dogma for over 50 years that we should be watchfully waiting and waiting for symptom determination. This is all being challenged, but it's new. And what certainly would help accelerate the adoption, particularly in the United States, is if the coverage policy was aligned to the indications and the guidelines.

Today, that's not the case for the TAVR NCD. There is an urgent need to modernize the NCD. And the good news is this is a really high priority for CMS. And now that everyone is back at work and assuming it takes the normal pathway and time line of up to 12 months, assuming that it gets opened imminently, then we can look forward to an updated NCD in the United States before the end of 2026, which kind of lines up when the ACC and the AHA will be updating their valvular guidelines in the fourth quarter of 2026.

So there are so many opportunities within severe aortic stenosis. We have new evidence, important evidence. We have new indications. We have evolving guidelines, all representing independent sources of growth. But at TCT next year, we're anticipating the data from the PROGRESS trial. And this data is going to help us learn more about how TAVR might benefit patients with moderate disease. And guess what, we're going to have the opportunity for more evidence generation, potential for more indication expansion and access to patients. And this creates another cycle and another layer of growth opportunity as we work through that. It's an exciting time.

None of it possible, not the evidence, not the indications, certainly not the clinical confidence and the evolution of guidelines, none of it is possible without standing on the shoulders of outstanding innovation. And we definitively have set the global benchmark there with our SAPIEN platform. And we will continue to evolve and advance our innovation pipeline to meet the needs of patients and clinicians as we go through this new era of proactive disease management, which will amplify needs around lifetime management as we treat earlier and younger.

Today, our flagship platform, SAPIEN 3 Ultra with RESILIA is definitely the global benchmark, not just for early outcomes but now proven long-term outcomes and proven durability and by design, it is the only platform that facilitates and provides a clear path for future interventions like valve-in-valve, like coronary reaccess if patients need as we treat earlier in the pathway and younger in age. It really sets a high bar and that bar gets higher and higher, but we're so excited about our next-generation platform, which is SAPIEN X4.

Now the challenge for SAPIEN X4 is SAPIEN 3 UR. That bar is really, really high. But SAPIEN X4 offers the opportunity to completely change the game we have variable valve sizing. This is entering into the foray of personalized sizing for each patient, personalized valve solutions for each patient, not only, there are many new features associated with this valve platform that brings ease of use dimensions for physicians, for example, really simplified valve orientation or commissural alignment or on-balloon delivery or improve vascular access options with the platform. It's super exciting.

The innovation process never stops. And in fact, it accelerates when you go into clinic, that's when you really start to learn and our engineers and talented team have already identified areas of opportunity to enhance this platform. We're going to take the opportunity to make a couple of those enhancements. We think that, that's going to be meaningful. We're working through the details of that, but it probably require some confirmatory clinical work in addition to the ALLIANCE trial, and we anticipate that we'll get that done in 2026.

So if we look ahead with everything with the evidence, with indication expansion, with guideline evolution, we feel really good about 2026 and the guidance we're setting for 6% to 8%. But it's not just for 2026. The SAPIEN platform is the only platform proven to enable proactive disease management, unmatched clinical evidence, differentiated indications clinical confidence amongst the clinical community that is driving updates at a rapid pace within the guidelines and within coverage policy and the potential to even expand access further as we go further upstream with moderate and the learnings that we're going to have with the PROGRESS trial in 2026.

All of this providing catalysts to support mid- to high single-digit growth, not just in 2026, but beyond that period and across the planned horizon for the mid- to long term. All the ingredients are there for sustained growth in TAVR. And I sure hope that you share my confidence in this therapy and 2026 and beyond as we go into this new era of proactive disease management.

Thank you. And I'll hand over to my friend and colleague, Daveen Chopra.

[Presentation]

Good morning, good morning. I think as we heard in the video, there are millions of patients out there with mitral and tricuspid disease. These are patients that are really underserved by today's medical therapies of surgery or other kinds of medicine. The vast majority of these patients, they're untreated. They're looking for options. And a lot of these patients, they can't live the life that they want. They can't do the things that are important to them. They can't play with their grandkids, take care of themselves. They're looking for options. They're looking for other solutions. And what we see is that many of these patients have a huge diversity in anatomies and clinical presentations.

They require different types of devices different types of therapy option to most optimally treat these patients. And I think this is where the Edwards strategy, our portfolio strategy in TMTT of having a repair and replacement device for each of the mitral and tricuspid valve can really meet their needs and is really critical. It's critical not only to treat the maximum number of patients, but it's really unique to Edwards. It is unique to Edwards to have this portfolio of repair and replacement. And if you think about each product in the product portfolio, especially those new areas of mitral and tricuspid replacement. We're really meeting the needs of these unaddressed patients, right? We talked -- Bernard talked earlier about these groups of unaddressed patients that are looking for new therapies. And that's how we see mitral and tricuspid replacement and really helping reach their needs.

And each of these therapies on their own really brings a lot of value to the health care system, bring values to patients, to physicians, to the health care systems and obviously to Edwards as well. And the way that this value is realized is that ultimately, if you look at the value, we are with having a portfolio of technology, we can now treat more patients. We have products that can treat more anatomies, we can ultimately treat a larger number of patients, number one.

Number two, we now allows us to have personalize therapy selection, leading to better clinical outcomes. If you have the right product for the right patient, we believe you're going to get better clinical outcomes. It's better for patients, better for physicians, et cetera.

And finally, third, when you get better clinical outcomes at a heart team, the referral physicians see it. The patient community sees it. And as a result, you start getting an increasing number of referrals because you're seeing better results, and this grows the overall kind of opportunity for more patients to be treated.

And this kind of strategy, it aligns very much with what we're trying to do in Edwards TMTT to create enduring leadership. And what I mean about leadership, it's more about more than market share. It's about leading into how we work with ourselves, with the governments out there, the leading key opinion leaders, reimbursement agencies, having a leadership spot with the entire community, the entire ecosystem, and that's important to us. An example is we're already seeing this today, for instance, in tricuspid in Europe, right, where we've had our portfolio of repair and replacement now for several years, and we believe that we are very much in the leadership situation in working with the entire community for tricuspid in Europe right now. And so how do we realize this opportunity for each therapy in the portfolio?

How do we ensure that we can really get this access to the maximum number of patients. It really depends on implementing the Edwards therapy development model. This is a model that we've been doing for 15 years in TAVR and how do we create a new therapy and bring it out to tens, hundreds of thousands of patients around the world. And we've been implementing this very well and this comprehensive therapy development activities or what we're trying to implement here in TMTT, whether you're talking about new innovation iterations, new clinical evidence, right? We just heard about that from Dan. Continuous procedural development, improving reimbursement. Those are all things that we are in the process of doing for each of the TMTT therapies to ensure ultimately, right, the goal of all this is to ensure ultimately that we can increase patient access so the most possible patients can be treated with these innovations.

So first, let's dive a little bit into tricuspid and see what's going on there. I think as you all know, tricuspid treatment is relatively new. Just a few years ago, tricuspid treatment had very, very few options, right, and no transcatheter options. And what we're seeing is a transformation in the treatment of patients. We're seeing patients lives drastically improved in an amazing way with tricuspid transcatheter therapies. And for us, as you know, we have 2 different solutions. We have our PASCAL tricuspid solution on the right, which really we believe, offers a differentiated tier results. And on the left, we obviously have our EVOQUE product, which we think can consistently eliminate tricuspid regurgitation in patients. So let's first hear a little bit more about EVOQUE and the current clinical data.

[Presentation]

As you just heard, there's a lot of new compelling evidence on EVOQUE that's really driving broader adoption. Two specific studies were kind of mentioned in that video. The first was a follow-up on our TRISCEND II pivotal randomized study. In a trial that was never designed to show a hard endpoint benefit, this trial showed an 18-month that hard endpoint benefit for EVOQUE, a statistically significant reduction in heart failure hospitalizations in the most severe TR patients. Fantastic to see that progression that over time, we're starting to see the benefits of TR elimination that improve over time.

Second trial was actually a real-world registry, so large-scale real-world post-market registry, the STS TVT Registry in over 1,000 patients and not just centers that did it that use the product in the premarket trial. But now inexperience centers with no exposure to EVOQUE before, now in the post market, people are able to learn the therapy and get the same great efficacy that we saw in the trial. But we also saw an improvement in safety factors. We saw improved safety with lower pacemaker rates and lower bleeding rates than we saw in the premarket pivotal studies, showing that perhaps over time, these procedural improvements how we work together in the Edwards therapy development are starting to show out now in the clinical data. So very exciting for patients.

Additionally, what we're also seeing is that EVOQUE continues to be a really predictable procedure now in the real world. It continues to be a procedure that's under 60 minutes with not a large standard deviation or variation in time. Additionally, while we see the elimination of TR in patients, very consistent elimination, referral physicians love it. Referral physicians love to see a patient grow the heart team, then come back with no TR. That's causing and we're seeing referral physicians to want to send more patients to the heart team to get EVOQUE.

And finally, all of this is supported by the Edwards high-value field model, meaning that Edwards personnel are helping work on the pre-case planning of a case. We're helping work interprocedurally to ensure the best possible outcomes as well as post procedurally. So our relationship, our partnership is ensuring the best possible clinical outcomes. And all this is leading to growing physician confidence in EVOQUE and that momentum that we're kind of seeing quarter-on-quarter.

Like we do with all technologies at Edwards, we continue to want to advance EVOQUE's innovation as well as make sure that we globalize this product to as many countries as possible. First, on the innovation side of things, in 2026, we'll offer and enable a second device access point, so using the same device in a different access point through vessels of the neck to enable about 5% to 10% of patients who have challenging growing access to have an on-label indication to treat with intrajugular access.

Additionally, as we go to the end of 2027 in the second half, we expect to launch a new delivery system and a new valve for EVOQUE, our next-generation valve built off the RESILIA tissue platform. Both of these products, we believe, will continue to have amazing efficacy but also improve the safety to the next level as well as continuing to streamline and optimize the procedure to allow it to be even more scalable than it already is.

Also, as you can imagine, like we do with Edwards, we launched these products initially in the largest markets of the world of Europe and the U.S. but we have to bring these products to around the world. There are over 100 countries in the world that have access to Edwards products. And EVOQUE, we're continuously bringing this technology to patients globally. So outside EVOQUE in the tricuspid space, we also have PASCAL tricuspid, which we believe really complements EVOQUE, having repair and replacement is the way to treat the most patients and with this TR indication of PASCAL, we really are seeing differentiated performance where this product is available in Europe. We're seeing that physicians really love for those tier eligible patients that PASCAL makes a lot of sense with its unique features.

As many of you know, we've been running a large randomized study called the CLASP II TR study. This is for PASCAL's medical treatment. And we've already now -- we're just finishing up the 1-year follow-up of that trial. And so we expect now by the end in Q4 of 2026 to gain U.S. approval and we'll also present the data probably in Q4 or TCT or so next year. So we're very excited to help use this data set to bring this technology that's been available in Europe and doing well in Europe to the U.S. and the largest market of the U.S.

Moving now from tricuspid to mitral, right? We're in an interesting inflection point in mitral, where now we're starting to launch mitral replacement, where we've had Tier for many years with great clinical results, but now replacement is extending a treatment to new patients who are undertreated, unaddressed patient groups from before. And for us, this product that we're launching is a SAPIEN M3 product, which really broadens that patient access. I'll talk about in just a minute.

But I'll actually first start with PASCAL mitral. I mean for us, PASCAL mitral is a fantastic device that has distinct technology that really optimizes procedures and is the workhorse of our mitral portfolio. We believe that this device continues to have really differentiating design and continues to come up with new evidence to support it, right? It's a nitinol-based clips for really atraumatic, allowing for the best possible kind of post procedure, post-implant kind of results.

Secondarily, it's got this cool feature of elongation so that when you're deploying it, especially in the sub-valvular apparatus, you're not getting caught in the cords. You can just make that procedure easier.

And finally, its delivery system, very intuitive, very controllable, so you can get the device exactly where you want for predictable MR reduction. Beyond the device features, the data pool continues to grow. Not only do we continue to follow up our first randomized study, the CLASP IID study, which has now over 3 years of follow-up. We now have -- in the -- MICLASP study, a European post-approval real-world study has 1,000 patients enrolled and hundreds of patients with 2-year follow-up that we present at different conferences. And then we also have the STS Registry, with over 2,000 patients that have been presenting. So we continue to have build the body of evidence to show how fantastic PASCAL is in the mitral space.

And on the right side, very excitingly, I'm pleased to announce that we have completed enrollment in CLASP IIF. This is our randomized study for PASCAL in functional MR patients. It's exciting that we've now finished enrollment that helps us move forward toward trying to get an indication for this product, both in the few markets that don't have an indication like the U.S. and Japan.

And like all of our technologies, you can imagine that we're kind of relentlessly innovate PASCAL. We are already on our fourth iteration of PASCAL now, and we plan by the end of 2026 to launch our next generation. This is a product that we really think can streamline the procedures and advance outcomes with changes to both the implant as well as the delivery system.

We think this will be fantastic for patients, and we'll have more details of this, as we get closer to launching in Q4 of 2026. Now in the mitral space, moving from a repair to replacement. As we talked about, SAPIEN M3 is the first truly transcatheter mitral replacement therapy. This is a space that people have been talking about, man, for 15, 20 years as long as TAVR, it's been hard to do.

And now we finally have a solution that's in the European marketplace and coming to the U.S. And what's unique about this solution is that we created this very novel docking technology, a technology that creates this kind of landing zone in the subvalvular apparatus and then brings in an amazing valve, a valve we know very well, the SAPIEN valve that's been used in thousands of times in the mitral position in calcified mitral, et cetera, and we bring that into the dock to get a great kind of outcome.

And you saw at TCT this year, we released our first -- the big pivotal study results, the ENCIRCLE study. So let's hear about those clinical results from some physicians.

[Presentation]

How amazing to hear those results on that patient, how their lives changed. ENCIRCLE trial, a large pivotal study was obviously released to TCT and showed that we can significantly reduce MR. We can eliminate mitral regurgitation, while getting massive health status improvements in patients. At the same time, we were able to do so in a very safe manner, 0.6% mortality at 30 days. And this is in a group of patients that would buy surgery -- the surgical predictive risk score would have been over 6.5%, so 1/10 of the predicted mortality, fantastic.

And now with these study results, right, we've already been working on trying to get U.S. approval, and we expect U.S. approval in early 2026. So fantastic to pick these results and build upon the early launch that we've had in Europe so far. We've been in Europe since about the summertime, and we're seeing great results, a lot of physician excitement for this technology, and we're taking those learnings to bring it to the U.S. now in 2026.

And like every technology in the Edwards way, we are not stopping with the first generation. You saw on Bernard's slide earlier on, we're already planning to bring our amazing RESILIA tissue to this in 2027 and already working on our next generation for the future where we continue to take and look at the clinical data and how we can make improvements to the device.

So all this overall leads to a sales outlook in 2026 of $740 million to $780 million. Some of this could be moderated by the pace in which we're creating these new care pathways, right? We're creating new care pathways for unaddressed patient groups in mitral and tricuspid replacement. But it also could be buoyed by all this new evidence. You saw several trials and great data coming out that's continuing to work through the referral community and can really help us on the positive side.

And with that, as you saw, there are a lot of these therapy milestones that are coming, whether we're following up now the CLASP IIF study to help us eventually lead to U.S. and Japanese approval, the SAPIEN M3 U.S. launch, TRISCEND II, our pivotal trial. We expect now the 2-year outcomes to be released in Q2 of 2026 at a major conference like ACC or so, exciting.

CLASP II TR and the PASCAL U.S. tricuspid launch as well as launching our next-generation device. There is a lot going on next year that we are excited for in patient care. But finally, in conclusion, right, I think you've seen that our goal with TMTT is to create this portfolio of technology of repair and replacement for each of the mitral and tricuspid to really allow for personalized care, to really help patients the most.

And if you look, for instance, in the U.S., the largest market, we launched start off with PASCAL MR in the lower left. And then we brought EVOQUE. And so if you look at our current revenue base, those are the 2 technologies driving most of our revenue and accordingly, in 2026. But in 2026, we launched the next 2 waves in the U.S. SAPIEN M3 launches in early 2026. PASCAL Tricuspid launches in late 2026. So we go from our first 2 waves to our next 2 waves of growth, fantastic for patient care. And we believe that all this together really provides a clear path to $2 billion of sales in 2030. And each year, if you look at our growth -- our incremental dollar revenue growth, it's an increasing contribution to Edwards growth.

For those of you at TCT, there was an interesting study called the PREVUE study, which talked a little bit about the prevalence of different diseases. And if you looked at mitral and tricuspid disease, look at the number of people who have this disease, man, it's greater than aortic stenosis. So while we feel like we have a great path to $2 billion in 2030, we actually feel like there's a great path beyond 2030, as you can imagine. Our technology to continue to treat more patients throughout the world in a fantastic way, and we're just looking forward to the future.

Thank you so much. I'm very excited to call YJ to talk about the innovations in the surgical business now. Thanks.

[Presentation]

Good morning. I'm YJ Oh. I'm excited to give you an update and an outlook for 2026 on our surgical business. Now we are continuing to see patients' lives around the world being transformed with our leading surgical innovations. More patients around the world are getting structural heart procedures and our differentiated RESILIA innovations are meeting patient needs around the world.

And we're building on our leadership with new clinical evidence and broadening the portfolio. Now let me tell you about some of our patients that are benefiting from our surgical technologies. Let me tell you the story of Connie. She was diagnosed with rheumatic heart disease at age 18. And in discussions with her physicians and mature decision-making, Connie chose to have an Edwards surgical valve because she did not want to have a lifetime of blood thinners.

In addition, she also wanted to have children. So she underwent her first open heart surgery in 2016 and currently has 3 Edwards surgical valves implanted in the aortic, mitral and tricuspid position. So today, Connie is a mother of 2, leading an incredibly active life, and that's in part into her surgical valves from Edwards. So surgery is growing across all types of patients. We are seeing more complex patients being treated surgically with multivalvular procedures.

We are also seeing that there are more complex aortic patients coming forward, which includes Bentall procedures, patients with aortic regurgitation and also those with bicuspid valve disease. Now we also see growth taking place in mitral and tricuspid disease due to the halo effect of our transcatheter options that are now available to treat this disease state.

It's bringing patients off the sidelines. So I want to show you this video, which features our real life surgical patients. They are younger, living longer and expecting more from life. You'll see that they're living active and fulfilling lives after surgery and they want to stay active without having to be on blood thinners for life, and they want valves that will last and help them the lifetime management of their disease. They are looking for the best solutions to improve their quality of life.

I'm always inspired when I see how our patients' lives are being impacted with the use of our technologies. So let's talk a little bit about what we're doing in surgical to deliver on the promise for patients and physicians. So RESILIA tissue is the benchmark for valve durability. It's now on all of our flagship products in our surgical business, and you see it also on SAPIEN 3 Ultra RESILIA in our transcatheter portfolios as Dan mentioned earlier.

To date, we have over 650,000 patients treated with our RESILIA innovations, and we have a breadth of data on RESILIA, approximately 20 studies involving 7,000 patients. And we're not stopping. We're going to continue to expand and innovate with our technologies using RESILIA tissue, as you can see on the screen, and you heard Daveen just mentioned previously.

And we're going to continue to drive data generation -- long-term data generation that talks about the impact of RESILIA tissue on our patients. So our RESILIA portfolio is truly transforming patient lives around the world. Together, INSPIRIS, KONECT and MITRIS illustrate how RESILIA is doing just that.

INSPIRIS is the leading surgical aortic valve globally around the world. And as mentioned, it has provided extended durability with RESILIA tissue. It is also the only surgical aortic valve with VFit technology that expands for future TAVR valve-in-valve procedures, which allows for best patient lifetime management.

We also know that there is significant opportunity to treat patients with INSPIRIS around the world. Let me tell you about our patient Matsuo, you saw on the patient video. He's 74 years old and after receiving an INSPIRIS aortic valve to treat his aortic stenosis, he continues to be a marathon runner and he shares his journey of resilience and gratitude after receiving this aortic valve.

So it's pretty impressive what our patients do when they're given a second chance at life. So let's talk about another innovation in our aortic portfolio. KONECT is the first and only ready-to-implant aortic valve conduit. We have seen significant growth in the U.S. in Bentall procedures since the launch of KONECT back in 2020. We also saw excellent clinical results presented at STS in January of this year, and we launched KONECT recently in Europe with very positive surgeon response for this technology that they've waited 5 years for based on the feedback that they've heard from their U.S. colleagues.

Now KONECT, as I mentioned, is an ideal solution for patients that need Bentall surgery. And there's nothing more powerful than when you have a cardiac surgeon that chooses a technology that they believe in, not just for their patients, but for themselves when they become the patient. And that's exactly what Dr. Robertson did.

So let's hear directly from him about his experience with KONECT.

[Presentation]

So Dr. Robertson is based in Santa Monica. So he's obviously enjoying with locale and continuing to be active and walking on the beach, but his story really highlights the trust that clinicians place in KONECT, not just for their patients but obviously for themselves. So let's talk about another innovation on our portfolio MITRIS. So MITRIS has been specifically designed for the mitral position and it brings the durability of RESILIA tissue to these patients. It has also been designed to make implantation even easier for surgeons and better for patients.

It is the leading mitral replacement valve in the U.S., and we launched MITRIS in China earlier this year and continuing the rollout of MITRIS in Europe where it was launched last year. And patient enrollment is complete in the global MOMENTIS study. So another patient from our patient [ Fidia ] Saowapa. She's a 51-year-old accountant from Thailand, who had heart disease as a result of rheumatic fever.

She chose a MITRIS RESILIA valve with her doctor due to her active lifestyle and again, to have freedom from blood thinners. These patient stories highlight the impacts that our technologies have on the lives of patients around the world. So now let me share with you the data that supports our innovations and the experiences that these patients feel on a day-to-day basis.

So one of our biggest data releases in surgical this year was a presentation of the 8-year clinical outcomes of those RESILIA tissue valves versus non-RESILIA tissue valves. And the numbers are impressive. There were approximately in this study, 1,000 patients at 8 years, where 99.3% of patients with RESILIA valves were free from structural valve deterioration and reoperation and showed excellent sustained clinical hemodynamics when compared to non-RESILIA valves.

This means that patients can count on long-term performance and durability with RESILIA tissue valves. And we're not stopping there. In 2026, we will see bringing more clinical evidence to support our innovations. We'll see the landmark 10-year results from the RESILIA aortic pivotal trial study, and we will also have outcomes from the 1-year MITRIS study, which is the largest core lab adjudicated MITRIS study.

And this is all part of our commitment to back up our innovations with robust real-world evidence. Now looking beyond aortic and mitral disease, as Daveen has mentioned, there's a huge unmet need in tricuspid regurgitation. In the U.S. alone, we estimate approximately 1.6 million people suffer from moderate-to-severe tricuspid regurgitation. As we mentioned, these transcatheter options to address this disease has now brought more patients off the sidelines seeking treatment that previously had no other options.

So these patients deserve a full complement of solutions, and we, in surgical, are working hard to be able to do that. And that's where TRIFORMIS comes in. It will be the first surgical valve specifically designed and indicated for the tricuspid position. It's designed specifically for the unique anatomy of the tricuspid valve, making it easier to implant and improving outcomes for patients.

And with more awareness and treatment options, we do finally feel that now we can collectively address this patient need, not just with transcatheter options but also for those that need a surgical intervention. And we are excited to say that we're planning to have TRIFORMIS rollout in the back half of 2026 in the U.S.

So with INSPIRIS, KONECT, MITRIS and soon TRIFORMIS, you will see that Edwards offers the broadest portfolio of surgical structural heart therapies. And with this breadth, it means that we can provide the best solutions for more patients than ever before. Now our innovation pipeline in surgical is robust. We have multiple launches planned for the coming years from INSPIRIS, KONECT, MITRIS, as I mentioned, TRIFORMIS next year and next-generation valves, we are always looking for new ways to help our patients.

We also are exploring new spaces like left atrial appendage exclusion to keep pushing the boundaries of what's possible to help meet patient needs in the areas and the procedures that we are in. So looking ahead, surgical in 2026 is projecting mid-single-digit growth in 2026. We expect increased RESILIA adoption and new product launches to help drive this growth. And the number of aortic and mitral patients is growing. And with new transcatheter innovations that are bringing more patients to seek treatment. These patients, some of them are resulting in having a surgical intervention because they have -- they're not capable to be -- or excuse me, not able to be treated through transcatheter options. We feel very confident in our outlook and our ability to deliver innovative surgical technologies in structural heart for patients and for physicians. So thank you so much for your time. And I want to bring back up to the front, our CEO, Bernard.

Excellent YJ. Thanks also to Daveen and Dan. Great presentation for TAVR and TMTT. So what I want to do now is a brief recap about what you just heard about our core innovation, TAVR, TMTT and Surgical. So in TAVR, SAPIEN has set a global benchmark right now. And this is enabling us to enter a new era of proactive disease management. Dan talked about that. We have so many catalysts still there.

In TMTT, this comprehensive portfolio. We had 2 waves of growth in the past. Daveen talked about that. We have 2 new ones in the U.S. starting in 2026. This is also enabling us to have -- to start this personalized therapy for patients and expanding patient access.

In Surgical, new therapies and leading innovation to transform patient lives globally. Across all, what you can expect from us is we will continue to partner with physicians, the way we do it in a very high-quality manner, with medical societies, regulators, payers, patients to clearly innovate, big innovation, advance science and ensure that patients have access to Edwards therapy, best therapy in the world.

So we have had 65 years of success. And I trust you still saying we still have a lot to come here. I don't believe I have seen a cycle -- like the cycle we are here with so many catalysts, new technologies, new therapies, new indication, addressing patient group that have no other solutions today, where we are going to create new markets. So it is pretty exciting to see this very unique innovation strategy in action.

We love all of this. We are very committed where we stay behind it. At the same time, we see many, many emerging opportunities to be able to reach more patients and to complement our portfolio. So you are going to hear more and we are going to start with Dan and the TAVR AR opportunity.

Dan?

Thanks, Bernard. Thank you so much. Well, it's early and the disease is not well understood, and there is a ton to learn, and it's going to require a significant commitment, and this is aortic regurgitation, but it is a very large clinical unmet need, and it sounds like the perfect challenge and opportunity for Edwards Lifesciences.

I want to start with some basic education between aortic stenosis and aortic regurgitation. I think it's important. So aortic stenosis is a narrowing of the valve. It's a restriction of the opening of the aortic valve. This is because the leaflets are calcified. They're heavily calcified and their movement is restricted, right? So you have less oxygenated blood going to the organs of the body and the left ventricle has to work really hard to get the blood out to those organs because the narrowing is so restricted in the opening that the leaflets really struggle to open.

That calcium on the aortic valve is the perfect thing for a transcatheter valve to anchor on, right? That's what makes it so compelling and so successful. It's very, very different with aortic regurgitation. We have incomplete closing of the aortic valve. The leaflets are typically healthy and you get a dilated valve. The annulus moves away from itself and so the leaflets can't close properly.

So you get this hole and now you've got backflow. So now that oxygenated blood is not getting to vital organs because it keeps coming back on itself, you get this leak and the heart has to work harder and harder to get the blood to those vital organs. And so you get the problem -- a similar problem just in a different way, but you don't have that calcium anymore to anchor on. And so transcatheter technologies need to be very different to find a solution for these patients.

You know what's for sure, it is a deadly disease, and it goes largely untreated. It's not as easy to diagnose by echocardiography. And so it is typically underdetected, it's definitively under referred and it's definitively undertreated. And just like aortic stenosis, if untreated, very, very high mortality, unlike aortic stenosis, not that many options for surgery than surgery.

And so we believe that despite early and despite not well understood and despite a lot of work ahead, this is the perfect place for Edwards Lifesciences' talented team and deep expertise to go after this important disease state, meaningful clinical unmet need, and we think that this will provide an important growth opportunity for us in the mid- to long term.

We like our strategy a lot. Our intention is to run hard at this with complementary technologies. We believe complementary technologies will enable the broadest amount of patients to be treated, right? It's, again, early days. We -- with J-Valve, which is now under the Edwards name, [ SOJOURN ], this is in clinical trial. This is our pivotal trial, our JOURNEY pivotal trial is enrolling. Everybody knows that we entered into an agreement to acquire JenaValve. That is under FTC review, but we remain confident that we're going to get a positive ruling there. And assuming that ruling is positive, then we would expect that to close in Q1 of 2026.

So it's early. And just like we did with TAVR AS, we're going to have to apply the same playbook. Committed leadership, evidence generation, continuous innovation to try and advance this therapy for patients. The opportunity here is going to be in the work. But we believe with a large clinical unmet need and our expertise, we're confident we can make a meaningful impact on these patients, and we're confident that this will provide a meaningful growth opportunity for us in the mid- to longer term.

So thanks for listening, and I'll hand over to Todd Brinton, who's going to tell us more about heart failure and interventional heart failure. Thank you.

Thanks, Dan. All right. Good morning, everyone. I'm here to talk to you about structural heart failure. So -- all right. So this is a huge growing epidemic due to the aging population and current health trends and the impact is substantial. So as a reminder, when we talk about structural heart failure, we're referring to the large number of patients that have symptoms of heart failure due to either valvular or non-valvular structural heart disease. It's the large number of heart failure patients out there.

I'm here as the Chief Scientific Officer, but also as a practicing interventional cardiologist for almost 20 years, and I've had the responsibility for the care of patients with heart failure. So keeping in mind, as patients go untreated, they enter a devastating downward spiral as highlighted really by this graph here, with their quality life deteriorating rapidly and ultimately leading to hospitalizations as highlighted by these red dots.

Now as the disease progresses, heart failure hospitalizations become more frequent, which not only impacts the patient, but it impacts the entire health care system. But let's talk about the why. It turns out that the key driver of this decline is increased intracardiac pressure. As patients progress through the disease, intracardiac pressure rises, and this mirrors the decline in quality of life. These 2 things run in parallel.

Luckily, we now have evolving solutions to address this challenging problem. One of these is mechanical pressure reduction with technologies like our investigational APTURE left atrial to coronary sinus shunt. There's also implantable sensor therapies that help patients better manage their disease. So let's go a little deeper on pressure sensor management.

The cardiac pressure management is changing the way the patients interact with their disease. What you're seeing here in this diagram is the lowering of pressure through the use of medications with feedback from a pressure sensor management strategy. You can see as pressures get lower, patients improve.

In fact, there is clear evidence of improved outcomes for these patients. In fact, a recent meta-analysis published in the Journal of the American College of Cardiology just demonstrated a very, very large reduction, a 36% reduction in heart failure hospitalizations at 1 year.

And for the first time, a 25% reduction in mortality in patients with heart failure with reduced ejection fraction at 2 years, pretty impressive. But what if we could do even better. So the growth of our implantable heart failure management business will offer a comprehensive toolbox of pressure sensor management solutions.

I want to draw your attention to the diagram on the left, the heart, the cardiac structures and the great vessels. What you see by the blue dot is the pulmonary artery. Interesting enough, this is exciting that we can monitor pulmonary pressures and improve the management of patients. But what if we expanded to the red dot, direct measurement of intracardiac left atrial pressure may yield even better results.

In fact, every cardiologist was trained on intracardiac pressures, including myself. Any question we had, we took the patient to the cath lab and did a right heart cath. So these direct pressures are how we manage our patients. It's how we make better decisions about our care.

So as Bernard stated earlier, we've built a strong foundation in structural heart disease, pioneering innovations in valvular heart disease. We have deep and extensive knowledge of delivering therapies into the structural heart. We know how to deliver. We know how to develop implants.

So in addition to the management of left heart failure we just discussed, there are lots of emerging opportunities. This number -- a large number of patients with unaddressed patient disease. We're driven to continue solving large complex unmet needs with our pioneering transcatheter innovations and our trusted partnerships with clinicians. We're confident in our abilities to tackle these expanded opportunities to improve patients' lives.

But let me reiterate the burden and the opportunity. Intervening early with the right solution is critical. By meeting patients where they are, we're shifting the trajectory, altering the course of structural heart disease for patients. We have an opportunity here. We can give patients a new outlook on life. We can keep them out of the hospital, and we can give them quality of life that they want and they ultimately deserve. That's what the strategy is here. So with that, I'm going to pass this on to my colleague, Diane Gomez-Thinnes, who will go through IHFM.

[Presentation]

Well, hello, everyone, and I'm pleased to be here to share our progress with the newest addition to the Edwards portfolio implantable heart failure management. At Edwards, we are out to shape the future of heart failure management. We seek to address the unmet needs of a significant number of patients at risk for hospitalization and transform the standard of care by empowering not just clinicians but also patients with data.

Our strategy, which includes investment in technology and evidence will enable this data-driven management approach to scale beyond a historically narrow group of early adopters. Heart failure is a major and growing burden that requires a novel and a scalable solution. Over 1 million patients in the U.S. are hospitalized due to heart failure each year, and that volume continues to grow.

Patients face worsening quality of life, including physical limitations, emotional distress and social isolation. And the risk for rehospitalizations and mortality is high in this population. And as Todd mentioned, the cost of care is quite significant.

Further, the strain on the heart failure cardiology community will expand as only about 1,500 advanced heart failure specialists are in the U.S. working to change the trajectory for these patients. The patient and the health care provider needs are clear and daunting, but there is progress. Patient access to important pressure sensor-guided management solutions has improved. The NCD that was released earlier this year truly removes a major barrier for U.S. heart failure patients. This and the mounting clinical evidence truly support these innovations.

Cordella is our pulmonary artery pressure sensor solution, which begins in the cath lab with a short outpatient procedure. The sensor connects the patient to the Cordella platform. Patients are engaged and informed, finding the system easy to use. They prefer the unique seated position for readings, and they pay attention to their daily trends.

Data flows to the clinical care team now feeding a cycle of data-driven proactive heart failure management. And this patient experience leads to a high level of long-term engagement and therefore, compliance. Patients will also often change behaviors based on their data. In our early clinical experience, 1 in 2 patients made lifestyle changes.

And lastly, our growing volume of data will continue to provide us valuable insights to fuel further development for solutions for both patients and clinicians. Cordella is a strong first differentiated offering from IHFM.

Empowerment of patients and providers requires a user-friendly platform that facilitates scalable and engaging workflows for both the clinic and the home. And the system's comprehensive and actionable data provides confidence and peace of mind, while medical therapy decisions are being made.

And this management approach should replace today's more reactive symptom-driven standard of care that U.S. patients see today. The patient-centric experience is a differentiator. A patient's ability to see their own pressure and vitals data paired with the ease of ceded reading leads to strong and sustained engagement and compliance, putting some control back into a patient's hands.

And the patient behavior modifications that we see today are a positive step toward a future where a patient can self-manage and adjust medications without waiting for a physician to take action each time. Our path to transforming heart failure management is to establish a new data-driven and patient-engaged standard of care.

We are executing on a road map of innovation that includes novel implantable pulmonary artery and left atrial pressure sensors for both indirect and direct measures of pressure and a platform that aids in decision-making and streams workflows. We are committed to building the evidence to inspire adoption and demonstrate the value of data-driven management, an approach which now engages the patient in their own care and moves the field from reactive and descriptive assessments to predictive and proactive care.

2025 has been a foundation-building year for IHFM, and we continue to make progress expanding new capabilities in our transition as a commercial business. We are executing on a technology road map, simplifying the Cordella procedure and enhancing our software platform. And we've added to our portfolio with a new left atrial pressure solution, V-LAP. We are growing the evidence for the Cordella platform with new long-term data demonstrating sustained benefit and impressive levels of patient engagement.

And we are actively enrolling in 2 studies, our PROACTIVE-HF 2 study for Cordella and the VECTOR-HF II with V-LAP. We are pleased by the favorable feedback we received from physicians and their patients, who are choosing Cordella. We are collecting learnings from our current Cordella early user evaluation phase, which informs our next stage of commercialization.

And looking forward to 2026, we will continue to develop and deploy new features to enhance the Cordella platform. We're expanding our data sciences capabilities and building both near-term and longer-term data for both Cordella and V-LAP. We will continue to partner with our customers to unlock scalability and maximize the impact on patient care. Transforming this category will take time as awareness grows and our solution evolves and takes hold. We are excited for the future, and we are committed to building this new patient engaged standard of care in heart failure management. Thank you all. And with that, we will move into a 15-minute break. Thank you.

[Break]

All right. Good morning, everyone. For those online, thanks for rejoining us from a break. So I'm Scott Ullem, and you've heard a lot this morning about our plans for Edwards Lifesciences. I'm going to bring that together through a financial lens and talk about how our objectives and our plans reflect and resource Edwards corporate strategy.

So financial outcomes a result, of course, the plans that we have in place and the investments we're making to generate the results that you'll see in the financial profile now. So it's really 3 elements. The first is, of course, strong organic top line growth, and we've got this portfolio of structural heart therapies that support the top line.

The second is healthy and expanding margins. So starting with gross margins, which are high-impact, high-value products made efficiently, combined with operating expenses and operating margin that will expand 50 to 100 basis points constant currency in the years ahead. And the combination of those 2 yield a leveraged earnings per share profile for the next -- as we look forward.

The third piece, of course, is smart capital allocation. Our capital allocation priorities have not changed, and we'll talk about that in a few minutes. So starting with sales. Again, this is a portfolio now of therapies that contribute to Edwards growth rate on the top line. It's not just one business. It's multiple different therapies that contribute to our sales growth. That sales growth is fueled by research and development. It's fueled by a lot of different elements, but none more important or noticeable than R&D. So the reason why we expect to grow 8% to 10% in 2026 is partly due to investments in research and development that we made 3 years and 5 years and 10-plus years ago.

The third piece is sustained leadership position supported by evidence-based impact and value to patients and clinicians and health care systems and payers. So to give you a closer look, this year, we expect to be at sales in the range of $6 billion. So we've seen significant growth over the last several years. And the composition of that is 60-40, so 60% U.S., 40% OUS. It's this global footprint that positions Edwards to bring therapies to patients around the world.

And we now have resources in place in all major regions to support the company's growth. So you heard a lot about the sales plans and our growth opportunities across our existing innovation, core innovations as well as our emerging opportunities for patients who are addressed today, but then among the 20 million structural heart patients, those of whom are unaddressed today and where we've got an opportunity to bring therapies to benefit those patients in the years ahead.

So the second element is our margin profile. So we've got strong gross profit margins, as you know, again, by bringing high-impact, high-value therapies to market after manufacturing and distributing them efficiently. And it's a big part of our operations model, and I think it reflects our world-class global supply chain and quality organization.

We're also, at the same time, expanding our field organization. So having Edwards personnel in the field close to providers and operators is really an important part of our strategy, and we invest to make that happen. We're going to continue to invest to bolster that field force. And the third piece, of course, is continuing to invest on a prioritized basis in research and development and other areas that can really help fuel our growth, but fuel it in a way that also gives us an opportunity to improve our operating margins over time.

So here's a walk across of the current 2025 expected operating margin of 27% to 28% to next year's estimated operating margin of about 100 basis points higher. It starts, of course, with strong organic revenue growth and those increased sales generate increased profit. The gross margin level, we'll see volume efficiency. So scaling our business, being able to manufacture therapies and technologies at higher volumes gives us an opportunity to manufacture at lower rates. We're going to continue to see leverage from our manufacturing footprint.

We've got facilities across all 3 of our key production regions, Europe, the Americas and Asia Pacific, and we'll see leverage from those manufacturing facilities and that network that we have in place to produce implants and delivery systems. And for those of you who were here last night, you got to look at some of those delivery systems and how we design those for ultimate commercialization.

New product introductions end up being a drag on gross margins in the short term. So when we're making technologies and introducing new products generally at lower volumes, that's a drag on gross profit margins, but it's swamped by the benefits we get from mix and improving volumes in existing therapies.

And of course, annualization of tariffs will also be a little bit of a headwind in 2026. We had some tariff expense in 2025, but not for the full year. We are planning that we'll experience that for the full year in 2026. In terms of operations, similar to the efficiencies that we get on the production side, we also get efficiencies in general and administrative spending, as the business continues to grow and as we support this global footprint with general and administrative activities.

We're going to continue to prioritize research and development initiatives. So we're continuing to grow research and development spending but with pretty disciplined prioritization of what platforms we're investing in, what platforms we're accelerating and what platforms we may be deprioritizing or deaccelerating based upon progress that we make across those different R&D platforms.

Foreign exchange ends up being a little bit of a benefit to operating margins this year. About 30 basis points of operating margin increase will be from foreign exchange flowing through the P&L. And we're going to continue to invest in that field force, I mentioned before, to really drive patient access initiatives and support patient activation initiatives as well as continuing to grow the business with the right infrastructure, the right personnel, the right resources in the field.

And then finally, new investments. So making investments in emerging opportunities like the acquisition of JenaValve is going to be a short-term headwind to operating margins. But you roll all that up together, and we're expecting about a 100 basis point expansion in operating margins in 2026. So research and development. I mentioned before, prioritizing R&D is an important part of our strategy. And right now, about 3/4 of our research and development spend estimated to be $1.1 billion in 2026 comes from the generation of scientific evidence.

So spend relating to clinical trials, clinical affairs, regulatory affairs, medical affairs are all in -- are part of that research and development budget. The other 1/4 is sustaining research and development. So R&D to support our existing therapies, and that's an important part of what we do on the engineering side in research and development.

You can see on the right hand, what I mentioned before, which is research and development spending continuing to increase but at a lower rate than the top line will increase. So the result of that is we have margins that went from 19.4% last year, estimated 18% this year, declining to 17% or so in 2026. So we're pleased with that trajectory. It's part of this 50 to 100 basis point operating margin expansion that we've guided to.

So here's how that translates in terms of earnings per share. This year, $2.56 to $2.62 is our guidance for the full year 2025. The biggest increase, of course, in earnings per share next year is core business operations offset by some of the additional investments that we're making in emerging opportunities, but the net of that gets us to $0.29 to $0.35 in EPS. Tax is a little bit of a headwind.

We're increasing our tax rate guidance for 2026 by about 100 basis points on the bottom end and the top end to 16% to 19% and the impact of that is around $0.03 at the midpoint of the range. The combination of interest income, share count and foreign exchange ends up being about flat by the time we get down to earnings per share, which is unusual. In the years past, we've had a lot of impact from FX starting at the top line and flowing down through the P&L. We don't see that based upon current rates. Of course, they're changing every day. But based upon current rates, we're seeing pretty nominal impacts through the P&L from FX.

So that gets us to $2.80 to $2.95 for 2026 and then growing in 2027 and beyond, leverage to the top line. So assume on average, constant currency around 10% top line growth, expect that we'll have bottom line growth -- EPS growth in excess of that level.

Okay. Finally, strategic capital deployment. So there are a couple of different elements to it. Of course, the first piece is investing to support our growth and specifically including PP&E. So our production capacity in these production facilities around the world, including our new facility that we're building right now in Valencia, Spain, consumes a lot of that capital that we are generating through cash flow.

The second piece is external investments. So Edwards is an active acquirer and an active investor to supplement our internal work that we're doing to develop new therapies. And those investments come in the form of minority investments, seed capital. We invest in intellectual property. We buy options to acquire companies based upon certain milestones that they may meet in the future. And so that's an important direction for some of this cash flow that the company generates.

The third piece is returning capital to shareholders. We have a consistent track record of buying back stock. I'll show that in just a second. So here's a closer look at capital spending. We're expecting around $280 million in CapEx in 2026, a little bit of an increase over our expected 2025 levels. CapEx is a little bit lumpy. It doesn't fall into 90-day periods perfectly, but overall, we're spending about $0.25 billion a year on capital. Where are we investing? Half of that comes in our production facilities and global supply chain and the balance is in infrastructure, like you've seen around here and the research and development investments that we make to help support the company's growth.

So share repurchase, I mentioned, is an important feature of how we manage our balance sheet and how we allocate our capital. And you can see over time, we've done a pretty aggressive job of buying in our share count. We first prioritize offsetting the impacts of incentive compensation and performance-based stock awards. We want to offset that dilution, but we're also looking for opportunities regularly to bring down the net share count over time. And you can see we've done that. You should expect that we will continue to buy back stock.

We have about $2 billion of authorization remaining, and we're always looking for opportunities to do that at the right time. So bringing this all together, here's a comprehensive look at our financial guidance for 2026. You can note on the upper right-hand corner, what I mentioned before, which is the FX impact to sales is nominal this year. The $6.4 billion to $6.8 billion of guidance incorporates only a little bit of foreign exchange impact, hardly worth mentioning. And we're expecting gross margins similar to 2025 in the 78% to 79% range with operating margins 28% to 29%.

About 30 basis points of that is the benefit of FX. So I think net 70 basis point range of operating margin expansion in 2026. So overall, our financial strategy, these objectives and plans that I've taken you through are designed to create enhanced shareholder value. So this combination of double-digit top line growth, around 10% on average constant currency going forward, plus operating margin expansion, yielding leveraged EPS growth, we think, is the right financial formula to support the company's growth and to provide a great opportunity for investors.

So with that, we'll wrap up the financial presentation. Bernard is going to do a wrap-up for what you've heard this morning, and then we'll take a quick break before Q&A. So Bernard, over to you.

Thanks, Scott, and to all of our presenters this morning. So let me do a quick recap about what you heard this morning. We are this pretty amazing company, committed to delivering sustainable, differentiated growth with a very clear strategy, bringing big innovation, high-quality science to solve large and complex patient needs. And all of this is resulting in creating and defining new therapeutic area for us, and for patients. And we are uniquely positioned to shape the future of Structural Heart with this most comprehensive portfolio of differentiated therapies. Many innovations that we talked about you this morning are first of the kind, and designed to help patients live better and longer.

I started my presentation this morning talking about how special we are as a company. And what makes us special is the combination of our success as a company over the years, our very unique strategy, solely focusing on Structural Heart, taking risk, having a long-term commitment, and our culture, caring about patients every day. We have 16,000 employees globally across about 100 countries, a little bit more. And every day, they wake up, they go to work and they care about patients. We are also very committed to strengthening the communities wherever we are present, wherever our employees are living and working.

Our Board of Directors, very diverse background, highly experienced, guiding the company to the best of their ability. They are focused, they are engaged, they are present, always available. I'm very thankful of having this kind of Board of Directors around me.

To recap our financial outlook, 2026 will be another year of distinguished performance after having had a strong 2025. What I like about where we are, it is going to be led by our core innovation across TAVR, Surgical, and TMTT. It is not just the one, it is all of them. We have also many catalysts that are going to have a big impact in '26, '27 and '28. As a matter of fact, for '27 and beyond, we have a very strong P&L, very healthy balance sheet to fund our very unique innovation strategy.

So in summary, we are very well positioned for sustained and differentiated performance. Our strategy is clear, create long-term value for patients, health care systems and shareholders by focusing on structural heart disease, solely focusing on structural heart disease, solving large and complex patient needs and pioneering new therapies. So in summary, this is Edward's innovation with purpose, powered by science, centered on the patients.

Thank you very much for listening this morning. I think as a team, we prepared this morning to make it comprehensive and exciting for all of you. We are going to take now a very short break of about 5 minutes to prepare for Q&A.

Who is ready for some Q&A? All right. Good. We are, too. So in front of you, we've got all the speakers that you heard from earlier today. We've got a lot of great analysts with a lot of great questions. We're going to try to get to as many of you as possible. [Operator Instructions] At the end of the Q&A session, Bernard is going to make some brief closing remarks, and then we're going to go to a patient video, and then I'll come back with some logistics in terms of what's next around the lunch. So with that, first question, maybe, David.

David Roman from Goldman Sachs. Maybe we could start on the TMTT side. Clearly, a lot of drivers here. But as you put the 2026 guidance into context of the $2 billion in 2030, it starts to put a lot of onus on those outer year periods. So can you maybe just walk us through how you get from what it will roughly be $200 million of incremental growth in '26 to something that needs to be multiples of that as you look forward?

Sure. Let me give you a little background. Thanks so much for the question. So first, at the highest level, as I mentioned probably in my last slide, if you look at TMTT next year, most of the growth and most of the revenue is driven really by our first 2 products, PASCAL mitral and EVOQUE. So I'll first start with strategy. And then now you see next year in the U.S., the next 2 growth drivers, both SAPIEN M3 in the beginning of the year, and in Q4, PASCAL tricuspid. So the first 2 growth drivers are really a lot of that $740 million to $780 million next year. And we have 2 new growth drivers coming in after.

And so then if you look now kind of at the numbers, from 2024 to 2025, we grew about $180 million, $185 million year-over-year. And next year to a midpoint, it's growing about $220 million. So it's increasing. We expect that to continue to increase each year, because ultimately, those core patients are coming in for PASCAL mitral, and EVOQUE, and then we have these kind of new growth drivers adding in. So you can imagine that in the incremental dollar growth from year-over-year, that number continues to grow, and to help us get to what we feel comfortable about saying is reaching that $2 billion in 2030 overall.

Travis?

I wanted to ask on the PROGRESS trial. First, last year, I think the outlook slides had PROGRESS as the TAVR growth driver, and it wasn't in this year's slide. So I don't know if that was the reason, will ask you on that? And then how long do you think it will take, if the data is positive, for this to impact TAVR growth? And do you need guidelines to change? And how much do you have in your targets for Moderate?

Do you want to take it, Dan?

Yes, I'm happy to start, right? So PROGRESS, first of all, excited about the opportunity that we have with PROGRESS, right? Right now, that trial has finished enrollment, closed enrollment, but we're still in the follow-up phase. We think that if we follow that normal path, we'll be ready to present at TCT next year. So we're blinded, completely blinded to what that data looks like, et cetera.

And I think in terms of impact, I mean, clearly, it's an independent layer of growth for us, right? It's definitely a catalyst more for mid, long term. But when I think about these indications, particularly asymptomatic and Moderate indications in the future, very different indications to what we had with high risk, low risk, intermediate risk. These had a predicate. These were like the predicate existed for surgery, the referral patterns in place. With these newer indications, that predicate doesn't exist. And so the process of education, democratization of all this is a completely different muscle that we have to do upstream.

That being said, we already see the impact of this type of data, looking at asymptomatic and looking at what it's doing for proactive disease management. So we anticipate the impact of Moderate will be quite similar, not a light switch, but a durable impact on our growth over time. And so that's kind of what we're looking forward to, and we're looking forward to the opportunity once we know more about the data.

Dan, Moderate was one of the fastest enrolling study, no?

Well, I guess we know 2 things about Moderate. One is it enrolled very fast, right? It enrolled ahead of expectation, which kind of gives us a good sense of what the market opportunity is, what the unmet need is for these patients. So that was encouraging. It enrolled very fast. The other thing that we know is we have a continued access program with the PROGRESS trial. So patients continue to be enrolled in a continued access program as part of that clinical trial. And the demand in that is still very, very strong. So they're the only 2 things that we know. And as far as what the data is, we learn more about that at TCT.

Shagun.

Shagun Singh, RBC Capital. I just wanted to touch on guidance and get a better sense of what's factored in. How did you arrive at the 8% to 10%? As you think about the momentum you have in 2025, how should we think about that in that context? Is it more of a base case and it's still early in the year? And then also on EPS, the JenaValve dilution, you're still having conversations with the FTC. Why was that the right approach to guidance? And what is factored in for '26?

Yes. Thanks for the question. So on sales, this year, in 2025, we started at 8% to 10% guidance as well. And we think that's the right way to start for 2026. we're optimistic about '26. We think it's going to be a strong year. But we're also cognizant of the fact that it's early. We're still in 2025. There are risks that can enter into the equation. And so we're going to be monitoring those carefully. We think that 8% to 10% is the right starting point for 2026. We always encourage people to model to the midpoint of our guidance ranges. And so that's at least where we are at this point.

I think in terms of earnings per share and JenaValve, we could have taken a couple of different approaches. Was it in? Is it out? What we decided to do was make some assumptions about what the impact of owning JenaValve could be depending upon when we close it, depending upon what we learn once we own it and what integration plans we would develop. And so those are included in that $2.80 to $2.95 guidance for EPS next year. Now when we find out the result of this process that we've been in, we will provide an update on what the earnings per share impact could be. We're hopeful that we are closing that acquisition. If we do not close it, we will increase earnings per share guidance, at least for that isolated element of EPS in 2026, and we would talk about what the amount is when the time comes.

Robbie?

Robbie Marcus, JPMorgan. Bernard, you spend significantly more than anyone else on Structural Heart, and we were talking about this last night. You're starting to see, on TAVR, a little bit of separation, Edwards starting to gain share. You're taking the majority of market growth in mitral repair. You're splitting the market in tricuspid right now, and you still have a repair product to come. So how are you thinking about Edwards investment versus opportunity versus competitors over the next not just 1 year, but 3, 5 years? Is there still a substantial amount of separation yet to come from all the innovation that you're putting through? We saw the innovation center last night. How are you thinking about that?

Clearly, we want to bring best innovation and providing high-quality support to the clinicians to treat their patients the best they can. This could result in some share gain, but it's not our priority. We like it. We enjoy it. Our priority is truly about serving large unmet patient needs. I talk about this many unaddressed patient group, where here we have an opportunity to again create new markets to again pioneer therapy for many patients.

And I think I talked about 6 to 7. This is going to represent multiyear of growth. So for sure, because we are so committed to innovation, our innovations are usually highly differentiated. They bring value also to the entire health care system, including taxpayers and shareholders. But in my mind, the uniqueness of our strategy is to be able to tackle this large growing unaddressed patient population, where certain we can increase the number of patients we are going to help in the next 5 to 10 years. So this is what you are going to see from us. And I'm glad you started feeling it. We feel it. This is what I said earlier this morning. I don't believe we have been in such position in a long, long time with so many catalysts, so many new therapies, where we are pioneering things in addition to having great technologies.

Joanne?

I want to just confirm the dilution from JenaValve is $0.10. I think that's what it originally was supposed to be. Is that what you have dialed in for '26?

No, we didn't announce what the potential dilution could be. Last year, when we talked about the potential impact of JenaValve, we said for half the year, it would look like $0.05 to $0.10. So if you were to extrapolate that and say, well, for the full year, if we were to close on January 1, that would look like $0.10 to $0.20. That's a big range. And we're not sure, when we do get approved, if we're going to close on date X or date Y, which is why we have some assumptions in that $280 million to $295 million, but we are not quantifying them at this point. Again, once we learn the decision, we'll provide more information about what the impact of that acquisition will be.

And then my real question has to do with the NCD, which it looks like it's quite specific. You expect it at the end of 2026. What are the steps to that? Because I know many people in this room will be tracking that and expectations for it.

Yes, I'll take it. So the very first thing is they have to open -- they have to reopen -- the CMS has to reopen it publicly, and then it goes into 2 phases of public commentary period, right? So as soon as it is opened, there's the first phase of public commentary period, and then they close that period, and then it goes into another phase where they announce a draft of the NCD, and then it gets reopened for public commentary, right? And then it closes again and then they announce the final. And that process is variable, and it can take typically up to 12 months. Sometimes it's been a little bit earlier than that. And sometimes it takes longer depending on if data is required or there's more controversy.

So like that's the typical period. That's what we put into our assumption. So assuming that it follows the normal process, which we definitively think it should, then the sooner it opens, then the sooner it closes, and that's why we think that it's sort of towards the end of next year. It's a high priority. We know that. It's been communicated that it's a high priority for them, but timing is uncertain. The staff at CMS is stretched, and there's a lot going on with the political environment, but we know that it's a high priority. So we're looking forward to opening as soon as possible.

Chris?

Chris Pasquale, Nephron. Bernard, on your growth catalyst slide, you had aortic regurgitation out in the '28 and beyond category. I'm curious how that sort of squares with the idea that you guys still expect to close the JenaValve deal. Is that '28 and beyond based solely on SOJER? Or does that assume that Trilogy could be a commercializable product?

No, what I wanted to represent is not necessarily -- especially when it is a completely new therapy, not necessarily when we are going to start treating patients, but more about when we are going to start feeling an impact to the Edwards top line. So which is why let's assume we closed JenaValve in 2026, 2027 will be a year of, obviously, acceleration, fixing a number of things, starting bringing this to patients. The true impact to revenue, we will start to feel it in 2028 and beyond. So I wanted to be very balanced in the impact of the catalyst, especially when it is completely new. When it is a new technology, it is different. Let's say, you have PASCAL TR, for instance. At the time of launch, we are going to feel it. So it depends what's existing and what's new.

Larry?

Larry Biegelsen, Wells Fargo. So Dan, I wanted to ask about X4. Just if you could please talk about the improvements you're making to the valve and the delivery system. Any color on the additional clinical data? And it looks like you're still expecting -- you're expecting approval in 2027 from what I can tell from the slides. Can you comment on that, please?

Yes. We don't know when we're expecting approval, because we haven't laid out an approval pathway yet. We've closed -- the ALLIANCE trial completed enrollment at the very end of last year, and that's going under clinical follow-up, now it's a 1-year endpoint, right? So we kind of haven't worked through the data of that yet. But this is -- we're so excited about X4. I mean it is a complete game changer and a very different platform to S3 with this variable sizing feature, and has the real opportunity to change how we personalize our sizing to patients. And we bring a lot of other features, which physicians are quite excited about.

But you learn the most when you get into clinic, right? And when we go into clinic, in clinical trial, this time with the ALLIANCE trial, we've got engineers there, we've got clinical specialists there, and we're seeing with our own eyes what is happening with the device. And this is where the innovation process really accelerates. We've set a really, really high bar with S3, and that gets higher with S3UR.

And so when the engineers have come back and said, "Hey, I think we could do this. I think we could do that," which they do all the time, then it comes down to a decision, are you freezing something or are you adding those sorts of things? Do you want it in next-generation device or in your first generation? We've decided to take a couple of elements which we think are quite meaningful and sort of put them into the first-generation X4 device. Because it's a completely new platform, we're probably going to have to get more data on that to satisfy FDA, et cetera. And so we're planning to do that in 2026. And hopefully, that answers the question.

Matt?

Matt Miksic, Barclays. A question for Dan, maybe Bernard. It's a question that we get often from investors, and I find we talk to clinicians on early TAVR, there's kind of like a pretty stark disagreement in the community, it feels like. And so it's confusing. I think when we talk to someone who says like this is great, we think this is like in line with your view, in line with our view, this is going to move adoption forward and penetration. And other folks just don't seem as -- and I don't know if it's because they're busy, academic centers or whatever it is, they just don't seem to be as positive about what it means to growth. And I just was hoping you could maybe tease out the differences and why it's important for some clinicians and centers and maybe view it as less important for others.

Thank you. So let me start, and Dan can provide additional comments. I would say that's typical. We are used to it. Each time we are pioneering something new, you have 2 camps, at least, the believer, and the one who are still looking in the rear mirror. And asymptomatic is not a device-to-device trial. It is a disease trial. And so remember, all of you are very deep into what we do as a company, correct? Remember TAVR 20 years ago. So it's like it is tough for people, all of them, to be behind it, if there is a time to change current belief.

Now with that, Dan, you can share a little bit more about what we learned from this TAVR.

Yes. I guess in hindsight, we experienced a little bit of this with all of our historical indications as well. I remember a huge debate about whether there are really any intermediate risk patients. What is intermediate risk? And what's the color around that? And how do you really identify that? And the STS score was the only way to do that, but that kept changing as the percentage of surgical patients, because that's a real-time score, right? That updates and there's more TAVR procedures being done, then that becomes irrelevant.

So this is -- I can understand at the point of care, there's debate. We feel really bullish about the opportunity. That's for sure. But it is a different indication. Like I said before, this is not an indication that typically gets referred. Typically, it's treated by a surgeon, or typically -- this is now entering real upstream in the referring pathway, right? The whole dogma of watchful waiting and waiting for symptoms is being kind of blown up in real time. And so the education pathway, like I've been saying before, the democratization of that upstream will take some time, right? But we're already seeing the changes and the impact of the data on how TAVR is being performed in all severe aortic stenosis patients. And so I think the way that we look at it, and I think we've been saying this fairly consistently, and it will be the same for Moderate, there is no expectation of a light switch on our end, right?

What we do anticipate, though, is constant positive contribution to market access, to patient access, and to market growth over the mid- to long term. And these layers, they build on each other. And as the data gets stronger and as we have these debates, and as more evidence is presented, whether it be clinical or economic, then we start to see this coming. One thing that I will also add, right now, it's so difficult in the United States, and we get our best data in the United States is the current NCD for TAVR does not cover asymptomatic patients. And so there really is no incentive for anyone to code a patient.

So we get real difficulty -- we have real difficulty truly understanding what is happening in the clinical practice. But with that change, we might see more color on that. But again, I don't expect it to be a light switch. I expect this to take some time. And that's what's exciting about the growth opportunity, not just on the short term, but over the long term.

And let me add one fact here. For me, one leading indicator is the fact that ESC changed the guidelines. ESC is a very conservative body. Usually, they are lagging what's happening in the U.S. And here, they changed the guidelines. They are pioneer behind the ESC guidelines. They are deep into the data. That's for me the best leading indicator.

Danielle?

Dan, this question is for you. So at TCT, we saw the PREVU trial, I thought that was pretty interesting. And I'm wondering maybe give us a sense of how you guys are thinking about that and the underdiagnosis of patients and maybe talk a little bit about what you guys are doing in the field to try to help there?

Thanks, Danielle. Yes, the PREVU trial and that study is super interesting, and I think brings a completely different lens to the prevalence and incidence of the disease to the patients. And when I say a different lens, most of our previous understanding of -- and I'm going to speak on behalf of aortic stenosis, but I think it's also true for mitral and tricuspid disease as well, is from what we understand from diagnosed patients, right? So you see what's happening in system, patients who have been diagnosed through echo and you make assumptions from there. Whereas this study went about a completely different and it looked at the lens of out-of-system patients. So excluding in-system patients and looking and trying to discover who out there, who is not known, ends up having disease. So we get a better understanding of the out-of-system opportunity.

When you correlate those 2 data, particularly for aortic stenosis, it's right in line with what our predictions were, right, across the board. And so when we looked at that data, I have to admit I had to get my pencil out and carry the one and do a whole bunch of math that you do every day. It's not my strong point. That's why we have great colleagues like Scott and everyone else. But like AI, right?

But when you do it, it lines up really quite nicely with what our previous understanding was. From the severe disease perspective, potentially we may have been a little bit conservative, but not much. I mean it's right in range there. And so I think it's a complementary data set. And so it's always nice when something like that comes out and kind of confirms how we should look at the market.

And I think I'll just add on to that and even say that it was across all the disease sets we saw that. And it's kind of cool, I think, and a lot of us were like, wow, it's not just aortic stenosis, it's all of -- and our models are worse for -- tricuspid and mitral are not as well studied as aortic stenosis, but we saw that there are large groups of these people that are underdiagnosed. And so if you think about the efforts that Dan and his group have been doing to help inpatient people get diagnosed to move through the system and it's the same that we'd be doing for mitral tricuspid as we move forward, it just lines up with the things we were already thinking that there's a big opportunity here.

Marie.

Marie Thibault, BTIG. I think my question is on Implantable Heart Failure for Diane. I wanted to just understand what your team has been doing to help build the Cordella patient referral pathway, making sure patients move through that workflow well. And also, can you educate me on patient segmentation for V-LAP versus the Cordella product? Who's best for which product?

Thanks for the question, Marie. For us, this past 12 months has really been a foundation building year for the business. And we have been really deliberate about focusing in for Cordella with an early user experience and beginning to hire a modest sales force to really go out and understand the sales process. And so we look forward to moving into 2026 for our next stage of commercialization. What I can tell you is we have brought on board a tremendously experienced cardiovascular sales force and clinical team that really understands how to build markets. So through them, we're focused on building the foundation for our future commercialization stage.

And with regards to V-LAP, we're excited about this technology. Surely, it shows the commitment that Edwards has to this space, bringing on a second technology in Implantable Heart Failure Management. The team is highly talented, and we're excited about seeing the progress they make as they are enrolling in their studies currently in U.S. and Europe. And so it's time for us to take to really understand the patients that will benefit from one technology versus the other.

To maybe respond to your question about segmentation, it is too early. So what you have seen this morning from Todd's presentation, we do believe that pressure management is going to be very important. Pressure management together with putting the patient at the center of their care. Direct pressure management with V-LAP is probably differentiated. It is still early. We have a vision. We have a strategy. But it is so early. We cannot talk about patient segmentation right now.

Rick?

I just want to start, Mark, with a quick observation. I've noticed over the years that everybody gets applause here. Every divisional guy gets applause. Even the CEO gets applause. The CFO never gets applause. And when it is Scott -- maybe it's something about the forecast.

That's thoughtful. The other thing that you don't get -- I don't get a walk-up video or a walk-up song. So thanks for...

But this is the last one, so I figured we should do a little something anyway. I just want to say thank you, personally, for these amazing, what, 12 years or something like that. It really is great. It's been great.

My question really is for Daveen. Daveen, gosh, I mean, I see these slides. I mean, it's breathtaking. I mean, it's impressive, it's exciting, it's even thrilling. But Marty threw you under the bus last night and said, we shouldn't care about it because it's hard, it's going to take forever and -- or maybe he was being rude to Ben by saying TAVR is easy. I don't know. Talk to us about the reception you're getting to this full portfolio, amazing pipeline from doctors. And are people embracing your Envision enthusiastically? Or is it just too early in the product evolution game to see that kind of excitement? Just help us understand what you're seeing and feeling and thinking.

No. Thanks so much for the question. It was a great comment Marty made about mitral, tricuspid saying, "Hey, it's probably going to be a little bit slower than TAVR." Fair enough, right? And so I'll probably answer it a couple of ways. If you look at the -- first, from a technology standpoint, right? Think about the early days of TAVR and you compare that original SAPIEN to what we see with like when we got to SAPIEN 3. We, Edwards, along working with physicians, made a lot of improvements to both the product as well as the procedure together to get to where we are today that makes the case so much more efficient with fantastic outcomes.

I expect that with many of these new therapies for unaddressed patient groups, mitral replacement, tricuspid replacement, and even with TR, we're going to be going through those same evolutions in the future years, right? If you think about PASCAL, we've been on the market 4 years, and we're already in our fourth iteration. Our next iteration of EVOQUE is coming, our next iteration of M3, and we haven't even launched M3 in the U.S. So there's a part of technology iteration. I talked about the therapy development of kind of that Edwards does as well as the procedural innovation. So I think those are all kind of important to know where the procedure can go to help bring up that curve.

Secondarily, I think your question about the portfolio. Yes, I'm starting to see that people see that Edwards really believes in the mitral and tricuspid patient, that it is more -- the patients are more diverse in their anatomies and clinical presentations than TAVR. As a result, you do need multiple different therapies to kind of treat it. And I see more and more physicians, especially now as we start bringing multiple therapies out, see that vision that, wow, Edwards is understanding it. I can treat more patients, and that's causing a point of wanting to work with us on both and treating more patients. I mentioned is I'm seeing that right now with tricuspid in Europe, where we've had both therapies now for a couple of years. I see that kind of buildup and I see the kind of growth in treatment and more patients have the opportunity and more people wanting to build up with us.

And I think we're starting to see that already in the U.S., where we've got that first PASCAL mitral. We brought in EVOQUE, still feel the tricuspid different, but people start to see our strategy. They know that M3 is coming. They're starting to talk more with us. They know PASCAL tricuspid is coming. They're starting to talk more with us. So yes, I respect Marty's opinion on the pace, right? I think the pace has these kinds of constraints of technology procedure, but the opportunity is big. The technologies are getting better, and the portfolio is coming out to really help optimize care. And we'll keep this over for the long haul. This is not a short-term one-hand wonder. This is a continued growth in helping patients out. I'm excited for this.

Maybe if I could just add something before you do. I laughed a little bit like because he had 2 existential moments in TAVR. The first was the unblinding of the PARTNER-B trial, which was 2011. And then second one was PARTNER III low-risk, which was 8 years later, right? And so '11 to '19, also like we forget the journey that it takes, but that kind of made me giggle a little bit. But Bernard, do you want to add?

Yes. No, I will add maybe 2 things. One is, we are alone. We are pioneering things here. So we are bringing technology, science, educating, bringing physicians with us. It's not like a field with 10 competitors, right? We are alone with this portfolio. So when you pioneer things, it takes time. The beauty is, you are the leader. You educate people. Like we did for TAVR.

Then when I look at numbers, numbers are a lagging indicator. But nevertheless, we all like numbers here. TAVR is going to end the year like $0.5 billion plus, growing 50%. It's not too bad. Next year, $0.7 billion something, growing 40%, not too bad. So we always want to. So I look at these 2 things, and I think it is important. And this is why Daveen and his team are putting so much focus on elevating the innovation across the board, next-gen PASCAL, next-gen EVOQUE, next-gen M3, and all of the science behind it to make sure that even if we are alone, we elevate this space and the care for so many patients.

Matt?

Matt Taylor from Jefferies. So I wanted to ask a couple of related questions on capacity. It seems like that's been less of an issue than it was 2 years ago. And with this NCD coming up, if all goes as planned, I was wondering if you thought we could add 100, 300 centers. So what's a reasonable number of centers that could be added over time? With down the middle NCD, what's the most bullish case? And what's the current state of capacity?

So I'll start with, first of all, you got to do a bunch of assumptions and predictions on what the NCD is actually going to be before you can answer the other questions. So it will depend on what the operator requirements are, what the hospital requirements are, what the mandates are in terms of surgeons or not or other specialty being in the room, like so all those sorts of things could go in a number of different directions. So it's really hard to predict.

But assuming that there is -- and if you look at the most recent entities, which suggest that the pathway that CMS is taking is to simplify those requirements from an entity perspective, then clearly, there will be an opportunity to add centers. The way that we're looking at it, we don't think that the big opportunity is in adding centers, although there will be an opportunity there. But the biggest opportunity will be in the efficiency of existing centers, right? The capacity that is created within the existing centers that do TAVR today, that enables them to treat patients more effectively and expand their own access. We believe that, that is going to create a bigger opportunity than perhaps adding. To add new centers, we have to apply a lot of muscle, right? A lot of muscle, bring them up right. They're going to be lower in volume. They're going to have to go through their path. That's an investment, et cetera. And again, like I said, it is an opportunity, but not as big as what the efficiency gain would be at the point of care of existing centers.

It's crunch time now. We got to keep this moving. Jayson?

Just maybe for Scott. You're showing about 100 basis points of R&D leverage in '25 and in '26. Where does R&D ultimately settle? Like is there a minimum level of R&D investment as a percent of sales that allows you to sustain 10% top line growth? And I guess a similar question, the 50 to 100 basis points of op margin each year going forward, is that largely from R&D?

So second part of your question, part of the 50 to 100 basis point margin expansion is from R&D. It will depend upon the year in terms of whether the expansion is coming from R&D or other operating expenses, SG&A. So it's something that we're going to be flexible and nimble as we're managing. In terms of where R&D as a percentage of sales settles out, similar story. We need to make decisions as we go along about where the opportunities lie. Remember, the #1 objective for our investments at Edwards Life Sciences is to fuel top line organic sustainable sales growth.

And so if we have an opportunity, as we have had during the growth of TMTT, to put the pedal to the metal and increase R&D as a percentage of sales in order to drive top line growth, we'll do that. Right now, based upon what we see, we do expect R&D as a percentage of sales to decline for some period of time even as we continue to grow our spending in R&D. So the answer is, we don't have a specific target, but we do anticipate that it will continue to go down even as we spend more.

Rich?

Richard Newitter, Truist Securities. On TAVR AR, I'm just curious about having kind of the 2-valve strategy. And obviously, there are some regulatory considerations to that. But just let's say you end up with them both. Is there anything in the valve design, the target market differentiation? Just what's the strategy there? And how do you use those 2 in concert?

Yes. Thanks for the question. Like I mentioned in the presentation, we think the best approach for this, there are 2 different types of technologies, and it's such early stage with this disease state that we think that, that best approach from a strategy perspective is to run hard of both, right? Because it gives us the broadest patient population to go after.

Obviously, JenaValve is closer to approval, right? So you get to learn faster with that in clinic, whereas with JC, it will take a little bit longer to get to approval. But that's really the only difference in terms of -- it's not a matter of if it lands or it doesn't land, the only question would be is like, okay, what is the timing to commercialization. But the strategy remains the same and the opportunity is there. We like the approach of putting our expertise against both these technologies to run hard to treat the broadest amount of patients. And that's kind of the high level at a strategy perspective. I don't know if you want to add anything, Bernard?

No, no, you well said that. We have a clear strategy to pioneer this. There are many patients, different anatomy, complex anatomy. The 2 valves, they complement each other, and we like that. So we are going to -- we are hopeful we can close JenaValve in Q1.