At its 2024 Investor Conference, Edwards Lifesciences provided insightful guidance and growth expectations for the upcoming years, with a particular focus on its key business segments: TAVR (transcatheter aortic valve replacement), TMTT (transcatheter mitral and tricuspid therapies), Surgical, and Heart Failure. The company offered a detailed outlook for 2025, along with its long-term projections, highlighting its strategic initiatives, competitive advantages, and ambitions for innovation. Here’s a breakdown of the key takeaways:

2025 Revenue and Growth Guidance

Edwards is forecasting steady growth in 2025 across its core business segments, albeit with some potential headwinds from market dynamics and external factors.

• TAVR (Transcatheter Aortic Valve Replacement): The company expects TAVR sales to grow by 5-7% year-over-year, reaching $4.1 billion to $4.4 billion. This growth is slightly below the consensus estimate of $4.36 billion. While the lower end of the range factors in challenges such as competitive launches and capacity constraints in TAVR centers, the higher end assumes strong momentum from the company’s patient pathway efforts and potential early approval of the asymptomatic TAVR indication in the U.S.
• TMTT (Transcatheter Mitral and Tricuspid Therapies): Edwards anticipates a robust 50-60% growth for TMTT, with revenue expected to range between $500 million and $530 million. This growth is primarily driven by expanding clinical evidence for mitral repair, stronger outcomes in tricuspid therapies, and the increasing referral pipeline. The consensus for TMTT was $492 million, indicating that Edwards is optimistic about exceeding expectations. Looking ahead, Edwards targets $2 billion in TMTT revenue by 2030.
• Surgical: Surgical is expected to grow at a more modest pace of mid-single digits, with revenue projected between $970 million and $1.05 billion. While the high-end of the forecast reflects strong adoption of advanced Resilia tissue technologies and expanding procedural use beyond aortic stenosis (AS), the low-end assumes continued constraints in healthcare resources.
• Heart Failure: The Heart Failure segment is expected to contribute minimally in 2025, though Edwards sees significant growth potential beyond 2025 as new treatments and technologies gain traction, including the NCD coverage for most U.S. patients by Q1 2025 and ongoing trials like the PRO2.

Profitability Outlook for 2025

• Gross Margin: Edwards expects gross margins for 2025 to fall between 78% and 79%, slightly above the consensus of 77.9%. This forecast includes a potential $100 million negative FX impact, but also factors in the benefits of the company’s foreign exchange hedging program, which is designed to offset some of the adverse effects on the topline.
• Operating Margin: The company anticipates operating margins will range from 27% to 28%, which is in line with consensus estimates. Operating expenses are expected to rise by 5-7% year-over-year, driven by Edwards’ ongoing portfolio optimization and recent rightsizing efforts.

Long-Term Strategic Outlook (2026 and Beyond)

Edwards’ growth trajectory extends well beyond 2025, with ambitious targets for its core businesses:

• Constant Currency Growth: Edwards expects 10% average annual constant currency growth from 2026 onwards, driven by continued advancements in TAVR, TMTT, and Surgical. This is a positive signal for investors, suggesting that Edwards is confident in its ability to generate sustainable growth through innovation and market expansion.
• TAVR: Growth for TAVR is expected to be in the mid-single digits to high-single digits starting in 2026, with new opportunities arising from the broader adoption of TAVR for earlier-stage aortic stenosis (AS) and asymptomatic patients. Additionally, Edwards expects continued expansion in emerging markets and the introduction of new technologies like J-Valve and Jenavalve to help capture the largely untapped TAVR-AR market.
• TMTT: Edwards is particularly bullish on TMTT’s potential, forecasting the segment will reach $2 billion by 2030, driven by expanding adoption of mitral and tricuspid therapies. Management highlighted several key developments, including the next-generation Pascal device and Evoque for tricuspid valve replacement, as crucial to reaching these growth milestones.
• Surgical: The company is optimistic about the future of its Surgical business, which is expected to continue growing in the mid-single digits through 2026 and beyond. This growth will be fueled by the increased adoption of Resilia tissue in surgical procedures, expansion into emerging markets, and the growing procedural mix beyond severe AS.
• Heart Failure: While heart failure is expected to be a relatively small contributor in 2025, Edwards anticipates this segment will play a more significant role in the years ahead, as it progresses through trials and secures broader reimbursement in key markets.

Key Strategic Drivers for Growth

Edwards’ growth strategy centers around several critical initiatives that will drive innovation, product differentiation, and market expansion:

• Early TAVR & Asymptomatic Indications: With the expected guideline updates and trials like the Progress trial for Moderate AS, Edwards sees substantial growth potential in early TAVR and asymptomatic patients. This could significantly expand the patient base eligible for TAVR procedures.
• Expansion in Emerging Markets: Edwards’ Surgical business is already seeing strong growth in Emerging Markets, particularly in Asia-Pacific, where it is targeting a 10% CAGR through 2030. As these markets continue to develop, Edwards anticipates even greater adoption of its premium surgical technologies.
• Next-Generation Products: The development of next-gen devices such as the Pascal for mitral and tricuspid repair and the Sapien M3 for TAVR procedures will be pivotal in maintaining Edwards’ leadership in the heart valve space. Additionally, Edwards is expecting key trial data from studies like the Encircle trial for Sapien M3 and the Clasp IITR trial for Pascal, which should bolster clinical evidence and drive adoption.
• Manufacturing and R&D Optimization: Edwards is focused on optimizing its manufacturing capabilities and leveraging economies of scale as it ramps up production of new products. The company also plans to expand its R&D efforts selectively, with topline growth expected to outpace R&D expense growth.

Conclusion

Edwards Lifesciences continues to demonstrate strong momentum across its diverse portfolio, with particularly promising growth prospects in TAVR, TMTT, and Surgical. While 2025 will be a year of steady progress, the company’s longer-term outlook through 2026 and beyond is even more compelling, with ambitious targets for market expansion, new product introductions, and robust earnings growth. Investors can expect a focus on innovation, operational efficiency, and strategic market development to drive continued success in the years ahead.