Q1 2024 Boston Scientific Corp Earnings Call

Operator: Good morning, and welcome to the Boston Scientific First Quarter 2024 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to John Monson, Senior Vice President, Investor Relations. Please go ahead.

Good morning, and welcome to the Boston Scientific first quarter 'twenty 'twenty four earnings call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero on your telephone keypad after today's presentation there.

He will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to John Monson, Senior Vice President Investor.

Jonathan R Monson: Relations. Please go ahead.

Jonathan R Monson: Thank you Drew and welcome everyone, and thanks for joining us today. With me on today's call are Mike Mahoney, Chairman and Chief Executive Officer, and Dan Brennan, Executive Vice President and Chief Financial Officer. We issued a press release earlier this morning announcing our Q1 results, which included reconciliations of the non-GAAP measures used in the release. We have posted a link to that release, as well as reconciliations of the non-GAAP measures used in today's call, in the Investor Relations section of our website under the heading Financials and Filing.

Jonathan R Monson: Thank you drew and welcome everyone and thanks for joining US today with me on today's call are Mike Mahoney, Chairman and Chief Executive Officer, and Dan Brennan Executive Vice President and Chief Financial Officer, We issued a press release earlier. This morning announcing our Q1 results, which included reconciliations of the non-GAAP measures used in the release we have.

Jonathan R Monson: Posted a link to that release as well as reconciliations of the non-GAAP measures used in today's call to the Investor relation relations section of our website under the heading financials and filings the duration of this morning's call will be approximately one hour, Mike and Dan will provide comments on Q1 performance as well as the outlook for our business, including Q2 and.

Jonathan R Monson: The duration of this morning's call will be approximately one hour. Mike and Dan will provide comments on Q1 performance as well as the outlook for our business, including Q2 and full year 2024 guidance. And then we'll take your questions.

Jonathan R Monson: Full year 2024 guidance and then we'll take your questions. During today's Q&A session, Mike and Dan will be joined by our Chief Medical Officer, Dr. Ken Stein before we begin I'd like to remind everyone that on the call operational revenue growth excludes the impact of foreign currency fluctuations and organic revenue growth further excludes acquisitions and dive.

Jonathan R Monson: During today's Q&A session, Mike and Dan will be joined by our Chief Medical Officer, Dr. Ken Stein. Before we begin, I'd like to remind everyone that on this call, operational revenue growth excludes the impact of foreign currency fluctuations, and organic revenue growth further excludes acquisitions and divestitures for which there are less than a full period of comparable net sales. Relevant acquisitions and divestitures excluded for organic growth are the majority stake investment in Acotech Scientific Holding Limited and the acquisitions of Apollo Endosurgery and Relievit MedSystems, which closed in February, April, and November 2023, respectively, as well as our acquisition of the Endoluminal Vacuum Therapy Portfolio from Vbron, which closed in March 2024. Divestitures include the endoscopy pathology business, which closed in April 2023.

Jonathan R Monson: Chairs for which there are less than a full period of comparable net sales relevant acquisitions and divestitures excluded for organic growth are the majority stake investment in <unk> scientific holding Ltd, and the acquisitions of Apollo Endo surgery, and relieve it med systems, which closed in February April and November 2023, respectively.

Jonathan R Monson: As well as our acquisition of the Endo luminal vacuum therapy portfolio from B Braun, which closed in March 2024.

Jonathan R Monson: She chairs include the endoscopy pathology business, which closed in April 2023.

Jonathan R Monson: Guidance excludes the previously announced agreement to acquire Axonix, Inc., which is expected to close in the second half of 2024, subject to customary closing conditions. For more information, please refer to our Q1 Financial and Operational Highlights Deck, which may be found on our Investor Relations website. On this call, all references to sales and revenue, unless otherwise specified, are organic. This call contains forward-looking statements within the meaning of federal securities law, which may be identified by words like anticipate, expect, may, believe, estimate, and other similar words.

This excludes the previously announced agreement to acquire Axon ex Inc, which is expected to close in the second half of 2024 subject to customary closing conditions for more information. Please refer to our Q1 financial and operational highlights deck, which may be found on our Investor relations website on.

Jonathan R Monson: On this call all references to sales and revenue unless otherwise specified are organic this call contains forward looking statements within the meaning of federal Securities law, which may be identified by words like anticipate expect may believe estimate and other similar words. They include among other things statements about our growth and market share new an aunt.

Jonathan R Monson: They include, among other things, statements about our growth and market share, new and anticipated product approvals and launches, acquisitions, clinical trials, cost savings, and growth opportunities, our cash flow and expected use of cash, our financial performance, including sales, margins, and earnings, as well as our tax rates, R&D spend, and other expenses. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed or implied by our forward-looking statements.

Jonathan R Monson: Spate of product approvals and launches acquisitions clinical trials cost savings and growth opportunities, our cash flow and expected use of cash our financial performance, including sales margins and earnings as well as our tax rates R&D spend and other expenses, if our underlying assumptions turn out to be incorrect or a certain risks or uncertainties materialize.

Jonathan R Monson: Actual results could vary materially from the expectations and projections expressed or implied by our forward looking statements factors that may cause such differences include those described in the risk factors section of our most recent 10-K and subsequent 10-Qs filed with the SEC. These statements speak only as of today's date, and we disclaim any intention or obligation to.

Jonathan R Monson: Factors that may cause such differences include those described in the risk factors section of our most recent 10-K and subsequent 10-Qs filed with the SEC. The statements speak only as of today's date, and we disclaim any intention or obligation to update them except as required by law. At this point, I'll turn it over to Mike.

Jonathan R Monson: Date them, except as required by law at this point I'll turn it over to Mike Mike. Thanks, Sean and thank you to everyone for joining US today, our first quarter results surpassed our expectations fueled by our innovative portfolio, including the nearly 90 new products, we launched globally in 2023, the execution of our category leadership strategy and then in the <unk>.

Michael F. Mahoney: Thanks, Sean. Thank you to everyone for joining us today. Our first quarter results surpassed our expectations, fueled by our innovative portfolio, including the nearly 90 new products we launched globally in 2023, the execution of our category leadership strategy, and the winning spirit of our global team. In first quarter 24, total company operational sales grew 15%, and organic sales grew 13% versus first quarter 23, which exceeds the high end of our guidance range of 7 to 9%.

Michael F. Mahoney: Winning spirit of our global team.

Michael F. Mahoney: In the first quarter of 24 total company operational sales grew 15% and organic sales grew 13% versus first quarter, 'twenty, three which exceeded the high end of our guidance range of 7% to 9%.

Michael F. Mahoney: Our strong growth continues to be diversified across businesses and regions. In the quarter, six of our eight business units in all of our regions grew double digits. We believe that most business units grew faster than their respective markets with differentiated portfolios and strong commercial execution supported by healthy procedural demand. First quarter adjusted EPS was $0.56, which grew 21% versus 2023, which exceeds the high end of our guidance range of $0.50 to $0.52. The first quarter adjusted operating margin was 26.2%.

Michael F. Mahoney: Strong growth continues to be diversified across businesses and regions in the quarter of six of our eight business units and all of our regions grew double digits. We believe that most business units grew faster than their respective markets with differentiated portfolios and strong commercial execution supported by a healthy procedural demand.

Michael F. Mahoney: First quarter adjusted EPS was 56 cents, which grew 21% versus.

Michael F. Mahoney: 2023, which exceeded the high end of our guidance range of 50 to 52 cents.

Michael F. Mahoney: First quarter adjusted operating margin was 26, 2%.

Michael F. Mahoney: Turning to our second quarter and full year 24 outlook, we are guiding to organic growth of 10% to 12% for second quarter 24 and raising our full year guidance from 8% to 9% to 10% to 12%, reflecting momentum from our innovative portfolio, healthy procedural volumes, and continued execution by our global. Our second quarter 24 adjusted EPS guidance is 57 to 59 cents. We may expect our full-year adjusted EPS to be between $229 and $234, representing growth of 12% to 14%. Dan will provide more details on our financials, and I'll provide additional highlights on our first quarter, along with comments on our 24-hour outlook.

Turning to our second quarter and full year 'twenty four outlook, we are guiding to organic growth of 10% to 12% for second quarter, 'twenty, four and raising our full year guidance from eight to nine to 10% to 12%, reflecting momentum from our innovative portfolio healthy procedural volumes and continued execution by our global team.

Michael F. Mahoney: Our second quarter 24, adjusted EPS guidance is 57% to 59 cents. When we expect our full year adjusted EPS to be $2 29 to $2 34, representing growth of 12% to 14%.

Michael F. Mahoney: Dan will provide more details on our financials and I'll provide additional highlights on our first quarter along with comments on our 24 outlook.

Michael F. Mahoney: Regionally, on an operational basis, the U.S. grew 13% versus the first quarter, with particular strength in EP, fueled by the launch of Ferropulse midway through the quarter, as well as in our Watchmen, ICTX, Urology, and Endoscopy business. Europe, Middle East, and Africa grew 13% on an operational basis versus the first quarter of 2023. This above market growth was led by exceptional performance in EP as well as double-digit growth in our endoscopy, urology, and PI business.

Michael F. Mahoney: Regionally on an operational basis. The U S grew 13% versus first quarter with particular strength in E. P. Fueled by the launch of Ferro pulse midway through the quarter as well as on our watchman I see T X urology and endoscopy business units.

Michael F. Mahoney: Europe Middle East Europe, Middle East and Africa grew 13% on an operational basis versus first quarter 'twenty. Three this above market growth was led by exceptional performance in E T as well as double digit growth in our endoscopy urology N. P. I businesses, we expect to continue to outpace the market driven by continued broad based momentum across our.

Michael F. Mahoney: We expect to continue to outpace the market driven by continued broad-based momentum across our business and investment in emerging markets. Asia PAC grew 26% operationally versus first quarter 23, led by strong double-digit performance in all of our cardiovascular business units. Japan grew double digits driven by Agent DCB, Resume, in our Access Solutions product.

Michael F. Mahoney: This investment in emerging markets.

Michael F. Mahoney: Asia Pac grew 26% operationally versus first quarter 'twenty three led by strong double digit performance in all of our cardiovascular business units Japan.

Michael F. Mahoney: Japan grew double digits, driven by agent D C b resume and our access solution.

Michael F. Mahoney: China delivered excellent results, growing strongly double digits with 7 of our 8 business units growing double digits. I'll now provide some additional commentary on our business units. In urology, sales grew 10% both operationally and organically versus first quarter 23, with double digit growth in stone management, as well as prosthetic urology. Resume performed well in the quarter, both in the U.S. and internationally, and secured reimbursement status in France.

Michael F. Mahoney: Solutions products.

Michael F. Mahoney: China delivered excellent results growing strong double digits with seven of our eight business units growing double digits.

Speaker Change: I'll now provide some additional commentary on our business units.

Speaker Change: In urology sales grew 10%, both operationally inorganically versus first quarter 'twenty, three with double digit growth in stone management as well as prosthetic urology.

Speaker Change: Resumed performed well in the quarter, both in the U S and internationally and secured reimbursement status in France. We look forward to closing the previously announced acquisition of Exxon X now expected in the second half of 'twenty 'twenty four.

Michael F. Mahoney: We look forward to closing the previously announced acquisition of Axonix, now expected in the second half of 2024. Endoscopy sales grew 12% operationally and 10% organically versus first quarter 23. Strong first quarter results were driven by the breadth of our portfolio, underpinned by differentiated anchor products such as Axios and our single-use imaging products. In the quarter, we also received the CE mark for our mantis clip, and NICE in the UK issued positive guidance for the ESG endoscopic bariatric surgery procedure. Both expected to further momentum in our growing endoluminal surgery franchise. Neuromodulation cells grew 10% operationally and declined 1% organically versus first quarter 23.

Speaker Change: Endoscopy sales grew 12% operationally and 10% organically versus first quarter twenty-three.

Speaker Change: Strong first quarter results were driven by the breadth of our portfolio underpinned by differentiated anchor products, such as <unk> and our single use imaging products.

Speaker Change: Within the quarter. We also received CE Mark for Mantas clip and nice in the U K issued positive guidance for the ESG endoscopic bariatric surgery procedure. Both are expected to further momentum and a growing endo luminal surgery franchise.

Speaker Change: Neuromodulation sales grew 10% operationally and declined 1% organically versus first quarter 'twenty three.

Speaker Change: Our brain franchise grew high single digits in the quarter with low double digit U S growth driven by our comprehensive directional stimulation offering enabled by image guided programming.

Michael F. Mahoney: Our brain franchise grew high single digits in the quarter, with low double-digit U.S. growth driven by our comprehensive directional stimulation offering enabled by image-guided programming. In the first quarter, our pain franchise grew low double digits operationally, but declined mid-single digits on an organic basis, with continued pressure on our U.S. SCS patients. In the U.S., during the first quarter, we did receive FDA approval and recently launched the Waverider symptom non-surgical back pain indication and our next generation fast autodose.

Speaker Change: In the first quarter, our pain franchise grew low double digits operationally, but declined mid single digits on an organic basis with continued pressure in our U S SCS business.

Speaker Change: In the U S. During first quarter, we did receive FDA approval and our recently launched the way brighter symptom nonsurgical back pain indication in our next generation fast auto dose.

Speaker Change: Importantly, they're relieving the business continues to perform very well with steady expansion of payer coverage and we expect sales from the novel interests that procedure to grow about 50% in 2024.

Speaker Change: Peripheral interventions sales grew 16% operationally and 11% organically versus first quarter twenty-three doubled.

Michael F. Mahoney: Importantly, the Relievium business continues to perform very well with steady expansion of payer coverage, and we expect sales from the novel intercept procedure to grow by 50% in 2024. Perflow Intervention sales grew 16% operationally and 11% organically versus first quarter 23%. Double-digit growth in arterial was bolstered by our drug looting portfolio, supported by the strength of clinical evidence and global commercial execution. In Venus, we saw continued above-market growth from Verathena, and Clot Management continued to perform well in line with expectations.

Speaker Change: Double digit growth in arterial was bolstered by our drug eluting portfolio supported by the strength of clinical evidence and global commercial execution.

Speaker Change: And venous we saw continued above market growth from Verathon, Neenah, and clot management continued to perform well in line with expectations.

Speaker Change: Our interventional oncology franchise grew strong double digits in first quarter, driven by our broad offering of embolization devices, including the bold coil family and cancer therapies.

Speaker Change: In the quarter. If there is fear also grew double digits in data from their real World study proactive was presented demonstrating positive outcomes in patients with intermediate and advanced HCC retreated with Aerosphere.

Michael F. Mahoney: Our interventional oncology franchise grew strong double digits in the first quarter, driven by our broad offering of embolization devices, including the EMBOLD coil family and cancer therapy. In the quarter, Therisphere also grew double digits, and data from the real-world study Proactive was presented, demonstrating positive outcomes in patients with intermediate and advanced HCC who were treated with Therisphere.

Speaker Change: Cardiology sales delivered another excellent quarter with both operational and organic sales growing 18% versus first quarter 2023.

Speaker Change: Within cardiology interventional cardiac <unk>.

Speaker Change: Interventional cardiology therapy sales grew an impressive 13% organically versus first quarter 'twenty three.

Speaker Change: Growth in coronary therapies was driven by continued strength in our international regions led by our imaging portfolio and agent D C B in Japan.

Michael F. Mahoney: Cardiology sales delivered another excellent quarter with both operational and organic sales growing 18% versus first quarter 2023. Within cardiology, interventional cardiology therapy sales grew an impressive 13% organically versus first quarter 23. Growth in coronary therapies was driven by continued strength in our international region, led by our imaging portfolio and agent DCB in Japan. In the U.S., we're also pleased with the ongoing launch of Avigo Plus, which is our AI-guided imaging platform.

Speaker Change: In the U S. We're also pleased with the ongoing launch of a V go plus which is our AI guided imaging platform.

Speaker Change: We also received FDA approval of our agent D. C. B in first quarter, and we expect to initiate a limited launch in second quarter as we ramp supply following the earlier than anticipated regulatory approval.

Speaker Change: Our structural heart valves franchise. Once again grew mid teens in first quarter led by accurate Neo two which continues to see growth from both new and existing accounts. We have now submitted for CE Mark for our next generation accurate Prime valve, which we continue to expect to launch in Europe in 2025.

Michael F. Mahoney: We also received FDA approval of our agent DCB in the first quarter, and we expect to initiate a limited launch in the second quarter as we ramp supply following the earlier than anticipated regulatory approval. Our Structural Heart Valves franchise once again grew in the mid-teens and first quarter, led by Acura Neo2, which continues to see growth from both new and existing accounts. We have now submitted for the CE mark for our next generation accurate prime valve, which we continue to expect to launch in Europe in 2025.

Speaker Change: Watchman had another strong quarter growing 19% organically and maintaining our market leading share position.

In the U S watchman flex probe moved into full launch and we received FDA clearance for the true steer suitable sheets, allowing physicians to achieve more optimal device positioning and the widest range of L. A anatomies.

Speaker Change: International growth was driven by ongoing momentum in.

Speaker Change: Ongoing momentum within the quarter, and we received approval and launched Watchman Flex Pro in Japan, and Canada, which will support continued growth in these markets.

Michael F. Mahoney: Watchman had another strong quarter, growing 19% organically and maintaining our market-leading share position. In the U.S., Watchman FlexPro moved into full launch, and we received FDA clearance for the TrueSteer steerable sheet, allowing physicians to achieve more Optimal Device Positioning in the Widest Range of LAA Anatomy.

Speaker Change: Cardiac rhythm management sales grew 5% organically in the first quarter 'twenty three in first quarter I diagnostics franchise also grew double digits led by strong market adoption of our second generation Lux Dx ICM device.

Michael F. Mahoney: International growth was driven by ongoing momentum, ongoing momentum within the quarter, and we received approval and launched Watchman Flex Pro in Japan and Canada, which will support continued growth in these markets. Cardiac rhythm management sales grew 5% organically in the first quarter. In the first quarter, our diagnostics franchise also grew double digits, led by strong market adoption of our second generation Lux DX ICM device. In core CRM, our low-voltage business grew mid-single digits, and our high-voltage business grew low-single digits.

Speaker Change: And of course, CRM or low voltage business grew mid single digits in our high voltage business grew low single digits.

Speaker Change: Our emblem S. ICD continues to maintain a strong share position, we've seen very limited impact in Europe or the U S from a recent competitor's launch.

Speaker Change: We expect to remain the clear market leader in this space and look forward to the upcoming data presentation at HRS of modular a T P.

Speaker Change: Which is a pivotal trial studying the use of the emblem S ICD and <unk>.

Speaker Change: Conjunction with our empower illegals pacemaker to function as a single chamber pacemaker.

Speaker Change: Well as to provide anti tachycardia pacing when needed.

Michael F. Mahoney: Our emblem SICD continues to maintain a strong share position, and we've seen very limited impact in Europe or the U.S. from a recent competitor's launch. We expect to remain the clear market leader in this space and look forward to the upcoming data presentation at HRS of modular ATP, which is a pivotal trial studying the use of the emblem SICD in conjunction with our Empowered Leadless Pacemaker to function as a single chamber pacemaker, as well as to provide anti-tachycardia pacing when needed.

Speaker Change: We anticipate FDA approval of the modular CRM system, and Standalone empower Liberals pacemaker and 25.

Speaker Change: Electrophysiology sales grew 72%, both operationally and organically versus first quarter twenty-three driven by the adoption of the transformative fair pulse platform.

Speaker Change: International first quarter sales grew 59% with continued fair appulse account openings and robust utilization in Europe.

Michael F. Mahoney: We anticipate FDA approval of the modular CRM system and stand-alone empowered leadless pacemaker in 2025. Electrophysiology sales grew 72% both operationally and organically versus first quarter 23, driven by the adoption of the transformative Fair Pulse platform. International first quarter sales grew 59% with continued Veripulse account openings and robust utilization in Europe.

Speaker Change: U S first quarter sales grew 85% organically.

Speaker Change: <unk> by the mid first quarter launch of thorough pulse, where I've already made good progress entering into high volume accounts supported by compelling clinical evidence commercial execution and the investment in our supply chain.

Speaker Change: Early feedback and fair pulse has been extremely positive with rapid adoption from both RF and cryo users.

Speaker Change: Electrophysiologist appreciate fair pulses unique safety profile ease of use effectiveness and efficiency of the procedure.

Michael F. Mahoney: U.S. first-quarter sales grew 85% organically, propelled by the mid-first-quarter launch of Theropulse, where we have already made good progress entering into high-volume accounts supported by compelling clinical evidence, commercial execution, and investment in our supply chain. Early feedback on Ferropulse has been extremely positive, with rapid adoption from both RF and Cryo users. Electrophysiologists appreciate Ferropulse's unique safety profile, ease of use, effectiveness, and efficiency of the procedure.

Speaker Change: We expect our broad EP portfolio, coupled with our other AF solutions to drive significant global growth in 'twenty four and beyond.

Speaker Change: We also intend to extend our leadership in P. F E by investing in innovation clinical evidence and global capabilities.

Speaker Change: Within the quarter, we commenced enrollment of the navigate P F clinical trial.

Speaker Change: Studying integrated cardiac mapping with a fair review software and fairway of non enabled catheter.

Speaker Change: Both of which are expected to launch in the U S. During the second half of the year.

Speaker Change: We also completed enrollment of phase two and the advantaged a F clinical trial studying our fairpoint device for C. T. I oblations, which is expected to launch in the U S in 2020 five.

Michael F. Mahoney: We expect our broad EP portfolio, coupled with our other AF solutions, to drive significant global growth in 2024 and beyond. We also intend to extend our leadership at PFA by investing in innovation, clinical evidence, and global capability. Within the quarter, we commenced enrollment in the NAVIGATE PF clinical trial, studying integrated cardiac mapping with Fairview software and Fairwave non-enabled catheter, both of which are expected to launch in the U.S. during the second half.

Speaker Change: We also anticipate data from phase one of the advantage trial for persistent AF to be presented in fourth quarter 2024.

Speaker Change: We also look forward to our clinical late breakers at the upcoming HRS meeting in May.

Speaker Change: Which aims to highlight the unique capabilities of variables.

Also of note. This week, we released our 2023 performance report highlighting the company's actions to improve patient outcomes, while prioritizing our environmental social and governance goals we.

Michael F. Mahoney: We also completed enrollment in phase 2 in the ADDvantage AF clinical trial, studying our FairPoint device for CTI ablation, which is expected to launch in the U.S. in 2025. And we also anticipate data from phase one of the ADDvantage trial for persistent AF to be presented in the fourth quarter of 2024. We also look forward to our clinical late breakers at the upcoming HRS meeting in May, which aims to highlight the unique capabilities of Ferropol.

Speaker Change: We continue to make progress in all three.

Speaker Change: Three key areas innovating care to meet patient needs empowering people and shaping a healthier planet, while performing with integrity.

Speaker Change: While we always have more to do I know that our values driven culture and the commitment of our global teams to challenge to this challenge what's possible with continuing to raise the bar.

Speaker Change: Clothing, and I'm very grateful to our global employees, who work every day to advance science for life, we make we remain committed to investing for the long term, while delivering top tier financial performance and 2024 and beyond.

Michael F. Mahoney: Also of note, this week we released our 2023 performance report highlighting the company's actions to improve patient outcomes while prioritizing our environmental, social, and governance goals. We continue to make progress in all three key areas. Innovating Care to Meet Patient Needs. Empowering people and shaping a healthier planet while performing with integrity. While we always have more to do, I know that our values-driven culture and the commitment of our global teams to challenge what's possible will continue to raise the bar.

Speaker Change: And with that I'll hand, it over to Dan to provide more details on the financials. Thanks, Mike first quarter 2024 consolidated revenue of $3 billion $856 million represents 13, 8% reported growth versus the first quarter of 2023 and includes a 120 basis point headwind from foreign exchange in line with our expectations.

Daniel Brennan: Excluding this $40 million headwind from foreign exchange operational revenue growth was 15% in the quarter sales from the closed acquisitions and divestitures contributed 190 basis points, resulting in $13, 1% organic revenue growth exceeding our first quarter guidance range of 7% to 9%.

Michael F. Mahoney: In closing, I'm very grateful to our global employers who work every day to advance science for life. We remain committed to investing for the long term while delivering top-tier financial performance in 2024 and beyond. And with that, I'll hand it over to Dan to provide more details on the financials. Thanks, Mike.

Daniel Brennan: Q1, 2024 adjusted earnings per share of 56 cents grew 26% versus 2023 exceeding the high end of our guidance range of 50 to 52.

Daniel Brennan: My first quarter 2024 consolidated revenue of $3,856,000,000 represents 13.8% reported growth versus first quarter 2023 and includes a 120 basis point headwind from foreign exchange, in line with our expectations. Excluding this $40 million headwind from foreign exchange, operational revenue growth was 15% in the quarter. Sales from the closed acquisitions and divestitures contributed $190,000, resulting in 13.1% organic revenue growth, exceeding our first quarter guidance range of 7% to 9%. U1 2024 Adjusted Earnings Per Share of $0.56 grew 20.6% vs. 2023, exceeding the high end of our guidance range of $0.50 to $0.52, primarily driven by our strong sales. Adjusted gross margin for the first quarter was 69 Adjusted gross margin was slightly lower than anticipated, primarily driven by inventory charges and a less favorable product mix due to increased levels of capital placements in the quarter.

Daniel Brennan: Primarily driven by our strong sales performance.

Daniel Brennan: Adjusted gross margin for the first quarter was 69, 8%, which includes an approximate 30 basis point year over year headwind from foreign exchange adjusted gross margin was slightly lower than anticipated, primarily driven by inventory charges and less favorable product mix due to increased levels of capital placements in the quarter.

Despite a lower Q1, we continue to expect full year adjusted gross margin to be at or slightly below our 2023 full year rate driven by increasing mixed benefit from our new launches lower inventory charges and the full recognition of our annual standard manufacturing cost improvements in the second half of the year.

Daniel Brennan: First quarter adjusted operating margin was 26, 2%, we remain committed to expanding adjusted operating margin by 30 to 50 basis points in 2024, as we balanced progress towards our long range plan goal of 150 basis points of improvement from 'twenty to 'twenty four to 'twenty 'twenty six with the flexibility to make critical investments to support key.

On a GAAP basis first quarter operating margin was 17, 5%.

Moving to below the line first quarter adjusted interest and other expenses totaled $80 million on.

Daniel Brennan: On an adjusted basis, our tax rate for the first quarter was 10, 7%, which includes favorable discrete tax items and the benefit from stock compensation accounting, our operational tax rate was 13, 7% for the quarter.

Daniel Brennan: Despite a lower Q1, we continue to expect full-year adjusted gross margin to be at or slightly below our 2023 full-year rate, driven by increasing mixed benefits from our new launches, lower inventory charges, and the full recognition of our annual standard manufacturing cost improvements in the second half of the year. First Quarter Adjusted Operating Margin was 26.2%. We remain committed to expanding adjusted operating margin by 30 to 50 basis points in 2024 as we balance progress towards our long-range plan goal of 150 basis points of improvement from 2024 to 2026 with the flexibility to make critical investments to support key launches. On a gap basis, first quarter operating margin was 17.5%.

Daniel Brennan: Fully diluted weighted average shares outstanding ended at 1.482 billion shares in the first quarter.

Daniel Brennan: Free cash flow for the first quarter was a negative $15 million with $164 million from operating activities less $179 million and net capital expenditures, which includes payments of $251 million related to acquisitions restructuring litigation and other special items.

Daniel Brennan: In 2024, we continue to expect full year free cash flow to exceed $2 billion, which includes approximately $800 million of expected payments related to special items as of March 31, 2024, we had cash on hand of $2 $3 billion.

Daniel Brennan: Inclusive of the $2 billion 2 billion Euro denominated senior note offering completed on February 27th, which we intend to use to partially fund the Exxon acquisition. During the first quarter, we repaid approximately $500 million of senior notes upon maturity and our gross debt leverage was two five times as of March 31.

Daniel Brennan: Moving to below the line, adjusted interest and other expenses totaled $80 million in the first quarter. On an adjusted basis, our tax rate for the first quarter was 10.7%, which includes favorable discrete tax items and the benefit from stock compensation accounting. Our operational tax rate was 13.7% for the quarter. Fully diluted weighted average shares outstanding ended at 1,482,000,000 shares in the first quarter.

Daniel Brennan: Our top capital allocation priority remains strategic tuck in M&A, followed by annual share repurchases to offset dilution from employee stock grants and alignment with our acquisition strategy. We recently closed the acquisition of the and aluminum vacuum therapy portfolio from B, Braun, which complements our existing endoscopy portfolio and is expected to be.

Daniel Brennan: Immaterial to earnings per share in 2024.

Daniel Brennan: Our legal reserve was $283 million as of March 31, a decrease of $94 million versus Q4, 2023 and $71 million of this reserve is already funded it through our qualified settlement funds.

Daniel Brennan: Free cash flow for the first quarter was a negative $15 million, with $164 million from operating activities, less $179 million in net capital expenditures, which included payments of $251 million related to acquisitions, restructuring, litigation, and other special items. In 2024, we continue to expect full-year free cash flow to exceed $2 billion, which includes approximately $800 million of expected payments related to special items. As of March 31st, 2024, we have cash on hand of $2.3 billion, inclusive of the $2 billion, 2 billion euro-denominated senior note offering completed on February 27th, which we intend to use to partially fund the Axonics equity fund. During the first quarter, we repaid approximately $500 million of senior notes upon maturity, and our gross debt leverage was 2.5 times as of March 31st.

Daniel Brennan: I'll now walk through guidance for Q2, and the full year of 2024, we expect full year 2020 for reported revenue growth to be in a range of 11% to 13% versus 2023, excluding an approximate 50 basis point headwind from foreign exchange based on current rates, we expect full year 2024.

Daniel Brennan: For operational revenue growth to be 11, 5% to 13, 5%.

Daniel Brennan: Excluding a 150 basis point contribution from closed acquisitions, we expect full year 2020 for organic revenue growth to be in a range of 10% to 12% versus 2023.

Daniel Brennan: We expect second quarter 2020 for reported revenue growth to be in a range of 10, five to 12, 5% versus second quarter 2023, excluding an approximate 100 basis point headwind from foreign exchange based on current rates, we expect second quarter 2024 operational.

Daniel Brennan: Our top capital allocation priority remains strategic tuck-in M&A, followed by annual share repurchases to offset dilution from employee stock grants. In alignment with our acquisition strategy, we recently closed the acquisition of the Endoluminal Vacuum Therapy Portfolio from B. Braun, which complements our existing endoscopy portfolio and is expected to be immaterial to earnings per share in 2024. Our legal reserve was $283 million as of March 31st, a decrease of $94 million versus Q4 2023, and $71 million of this reserve is already funded through our Qualified Settlement Fund.

Daniel Brennan: <unk> revenue growth to be 11, five to 13, 5% and excluding a 150 basis point contribution from closed acquisitions, we expect second quarter 2020 for organic revenue growth to be in a range of 10% to 12% versus 2023.

Daniel Brennan: We now expect full year 2024, adjusted below the line expense to be approximately $315 million.

Daniel Brennan: Under current legislation, including enacted laws and issued guidance under OECD pillar two rules, we continue to forecast our full year 2024 operational tax rate of approximately 14% and an adjusted tax rate of approximately 13%.

Daniel Brennan: I'll now walk through guidance for Q2 and the full year 2024. We expect full year 2024 revenue growth to be in a range of 11% to 13% versus 2023. Excluding an approximate 50 basis point headwind from foreign exchange based on current rates, we expect full year 2024 operational revenue growth to be 11.5% to 13.5%. Additionally, excluding a 150 basis point contribution from closed acquisitions, we expect full year 2024 organic revenue growth to be in a range of 10% to 12% versus 2023.

Daniel Brennan: We expect full year adjusted earnings per share to be in a range of $2 29 to.

Daniel Brennan: To $2 34.

Daniel Brennan: Representing 12% to 14% growth versus 2023, including an approximate <unk> <unk> headwind from foreign exchange, which is unchanged from our previous expectations.

Daniel Brennan: We expect second quarter adjusted earnings per share to be in a range of 57 to 59.

Daniel Brennan: For more information please check our Investor Relations website for Q1, 2024 financial and operational highlights, which outlines more details on Q1 results and our 2020 for guidance and with that I'll turn it back to John who will moderate the Q&A.

Daniel Brennan: We expect second quarter 2024 reported revenue growth to be in a range of 10 12 to 12 12% versus second quarter 2023, excluding an approximate 100 basis point headwind from foreign exchange based on current rates. We expect second quarter 2024 operational revenue growth to be 11 12 to 13 12%, and excluding a 150 basis point contribution from closed acquisitions, we expect second quarter 2024 organic revenue growth to be in a range of 10% to 12% versus 2023.

Jonathan R Monson: Thanks, Dan drew let's open it up for questions for the next 40 minutes or so in order for us to take as many questions as possible. Please limit yourself to one question drew please go ahead.

Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then.

Jonathan R Monson: Two again, please limit yourself to one question at this time, we will pause momentarily to assemble our roster.

Jonathan R Monson: The first question comes from Robbie Marcus with JP Morgan. Please go ahead.

Daniel Brennan: We now expect full year 2024 adjusted below the line expense to be approximately $315 million. Under current legislation, including enacted laws and issued guidance under OECD Pillar 2 rules, we continue to forecast a full year 2024 operational tax rate of approximately 14% and an adjusted tax rate of approximately 13%. We expect full-year adjusted earnings per share to be in a range of $2.29 to $2.34, representing 12% to 14% growth versus 2023, including an approximate $0.04 headwind from foreign exchange, which is unchanged from our previous expectations.

Robert Marcus: Oh, great. Thanks for taking the question congrats on a fantastic quarter.

Robert Marcus: Thanks Ravi.

Robert Marcus: I guess with my one question it has to be on Sarah pulse and EP in general.

Robert Marcus: The beat was substantial both U S and O U S. The Doc feedback we hear is phenomenal on Sarah pulse PFA in general.

Speaker Change: So I'd just love to get your view on what Youre seeing in the field the willingness to adopt the new technology, how fast it could go.

Speaker Change: And how much of the guidance raise is just from Sarah pulse here and the opportunity. Thanks a lot.

Speaker Change: Yeah first of all I want to shout out to early pain pioneering work by Chris O'hara. Your amazing work by the fair pulse team and really the work our team has done over multiple years. This is the.

Daniel Brennan: We expect second quarter adjusted earnings per share to be in a range of $0.57 to $0.59. For more information, please check our Investor Relations website for Q1 2024 Financial and Operational Highlights, which outlines more details on Q1 results and our 2024 guidance. And with that, I'll turn it back to John, who will moderate the Q&A.

Speaker Change: The most transformational product that I've seen in my career with the company and Dr. Stein can comment on clinically, but we continue to invest significantly in their current platform and future products and a significant amount of clinical science to really widen the gap.

Speaker Change: N PFA with our pulse system and as I mentioned in the script, we're seeing very rapid.

Jonathan R Monson: Thanks, Dan. Drew, we're going to open it up for questions for the next 40 minutes or so. In order for us to take as many questions as possible, please limit yourself to one question. Drew, please go ahead.

Speaker Change: Rapid adoption from both RF and cryo users.

Speaker Change: We continue to invest in our in our commercial footprint in the U S and we're able to.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker Change: Meet the demand thus far with our talented supply chain teams, but we're also excited about.

Speaker Change: The ongoing momentum in Europe, where we've been live for a number of years, but we continue to increase utilization in Europe and open new centers now that they have a bit more supply than they did in 2023.

Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. Again, please limit yourself to one question. At this time, we will pause momentarily to assemble our roster. The first question comes from Robbie Marcus with J.P. Morgan. Please go ahead.

Speaker Change: And we're also working diligently with our teams in Asia, and Japan and China.

Speaker Change: To train them up so they can also take advantage of fair a pulse.

Speaker Change: Really kind of more of a fourth quarter of 2025 story in Asia. So it's really a it's a remarkable platform and were seeing.

Michael F. Mahoney: Oh, great. Thanks for taking the time to answer the question. Congratulations on a fantastic quarter. I guess with my one question, it has to be about TheraPulse and EP in general. The beat was substantial, both US and OUS. The doctor feedback we hear is phenomenal on TheraPulse, and PFA in general. So I'd just love to get your view on what you're seeing in the field, the willingness to adopt new technology, how fast it could go, and how much of the guidance raised is just from TheraPulse here and the opportunity. Thanks a lot.

Excellent safety results.

Speaker Change: Ease of use rapid adoption and excellent effectiveness Dr.

Speaker Change: Dr. Stein, if you want to comment.

Kenneth M. Stein: Yeah. Thanks, Thanks, Mike Thanks, Ravi and maybe the one thing I'd add I just think in the call.

Kenneth M. Stein: Caution here.

Kenneth M. Stein: Is against thinking of PFA in general that every PFA system is very different and I think everyone really needs to be evaluated on its own as the results you get with PSA.

Kenneth M. Stein: Clearly dependent on catheter design on wave form and.

Kenneth M. Stein: Yeah, first, I want to shout out to the early pioneering work by Chris O'Hara, the amazing work by the Fair Pulse team, and really the work our team has done over many years. This is the most transformational product that I've seen in my career with the company, and Dr. Stein can comment clinically, but we continue to invest significantly in the current platform and in future products, and a significant amount of clinical science to really widen the gap in PFA with our Ferropulse system.

Kenneth M. Stein: And on dosing strategy.

Kenneth M. Stein: And as Mike said, I mean, what people see when they use surplus clinically when people see the data.

Kenneth M. Stein: We've now got published data, including randomized clinical trial data registry data total data well over 18000 patients have been reported at this point.

Kenneth M. Stein: And as Mike said, if just has compelling advantages in terms of safety in terms of efficacy in terms of ease of use and in terms of efficiency.

Kenneth M. Stein: And as I mentioned in the script, we're seeing very rapid adoption from both RF and cryogenic users. We continue to invest in our commercial footprint in the US, and we're able to meet the demand thus far with our talented supply chain team. We're also excited about the ongoing momentum in Europe, where we've been live for a number of years, but we continue to increase utilization in Europe and open new centers now that they have a bit more supply than they did in 2023.

Kenneth M. Stein: And that's what you see driving the rapid uptake both in the U S and globally.

Kenneth M. Stein: Congrats again thanks.

The next question comes from Larry <unk> with Wells Fargo. Please go ahead.

Larry: Good morning.

Larry: Robert Congratulations on a really strong quarter here.

Larry: Just with my one question I feel compelled to ask a big picture question here.

Kenneth M. Stein: And we're also working diligently with our teams in Asia, in Japan and China, to train them up so they can also take advantage of FerriPulse, really kind of a fourth quarter 2025 story in Asia. So it's really, it's a remarkable platform, and we're seeing excellent safety results, ease of use, and rapid adoption. Excellent effectiveness. Dr. Stein, if you want to comment, Yeah, thanks. Thanks, Mike.

Larry: Updated your L. P. In September of last year to 8% to 10% organic growth for 2024 to 2026. The assumption at the time was that growth in 'twenty five would accelerate over 2024.

Larry: <unk> today to 10% to 12% organic growth. So the question is.

Kenneth M. Stein: Yeah, thanks. Thanks, Mike. Thanks, Robbie.

Kenneth M. Stein: Maybe the one thing I'd add, the caution here... is against thinking of PFA in general, that every PFA system is very different, and I think everyone really needs to be evaluated on its own. The results you get with PFA are just completely dependent on catheter design, on waveform, and on dosing strategy. And as Mike said, what people see when they use Farah plus clinically, when people see the data, and we've now got, you know, published data, including randomized clinical trial data, registry data, total data, well over 18,000 patients have been reported at this point.

Larry: Still expect growth to accelerate in 2025, and how should we think about the 8% to 10% CAGR in the context to this strong 2024 guidance. Thanks for taking the question.

Speaker Change: Yes, we outlined at Investor day, the 8% to 10% and our gold up.

Speaker Change: B.

Very high performing Med Tech company.

Speaker Change: And so we're super pleased with the first quarter results.

Speaker Change: Also led to a and the business momentum led to the guide as you referred to a 10 to 12.

Speaker Change: So we're pleased with taking our full year guidance up 20, we did also receive fair pulse earlier than we expected. So at this point, we'll hold off and look at our 2025 guidance.

Kenneth M. Stein: And as Mike said, it just has compelling advantages in terms of safety, in terms of efficacy, in terms of ease of use, and in terms of efficiency. And that's what you see driving the rapid uptake both in the US and globally.

Speaker Change: Later in the year, but we're super pleased with amendment momentum that we have across all regions and all business units.

Speaker Change: But at this point, we're not going to commit to accelerating growth in 2025.

Larry Biegelsen: The next question comes from Larry Biegelsen with Wells Fargo. Please go ahead.

Speaker Change: Certainly our aim would be to do that but it would be premature to.

Michael F. Mahoney: Good morning. I'll echo Robbie's congratulations on a really strong quarter. Just with my one question, I feel compelled to ask a big picture question here. You updated your LRP in September of last year to 8% to 10% organic growth for 2024 to 2026. The assumption at the time was that growth in 2025 would accelerate over 2024. You're guiding today for 10% to 12% organic growth. So the question is, do you still expect growth to accelerate in 2025? And how should we think about the 8% to 10% CAGR in the context of this strong 2024 guidance? Thanks for taking the time to answer the question.

Speaker Change: Confirm that at this point.

Speaker Change: Alright, Thanks, Mike.

The next question.

Speaker Change: The next question comes from Rick Wise with Stifel. Please go ahead.

Frederick Wise: Good morning, Mike.

I guess I'd I'd focus on perhaps are accurate.

Frederick Wise: It sounds like it's performing well internationally.

But can you can you maybe expand on where you are both internationally.

Frederick Wise: The new product you spoke about and Youre feeling about next steps.

Frederick Wise: In the United States are you feeling more optimistic more cautious about timing and just any incremental color would be just great. Thank you so much.

Michael F. Mahoney: Yes, we outlined it yesterday, the eight to 10% and our goal to be a very high-performance med tech company. And so we're super pleased with the first quarter results. That also led to business momentum leading to the guide, as you referred to at 10 to 12, so we're pleased with taking our full year guidance up to 20. You know, we did also receive fair pulse earlier than we expected. So at this point, we'll hold off and look at our 2025 guidance later in the year.

Speaker Change: Sure. Thanks, Rick.

Speaker Change: Doing well by the way.

Speaker Change: We're very pleased with the results in Europe, we continue to grow above market in Europe.

Speaker Change: And have excellent adoption across most major countries in Europe.

And importantly, as you said, we've invested quite a bit in this portfolio and we're excited about the prime submission that we just recently did in Europe, which will enhance the valve further and provide additional valve sizes as well. So we expect that to go well in Europe.

Speaker Change: In the U S is really not to be any new commentary.

Michael F. Mahoney: But we're super pleased with the momentum that we have across all regions and all business units. But at this point, we're not gonna commit to accelerating growth in 2025. Certainly, our aim would be to do that, but it'd be premature to confirm that at this point.

That we haven't stated publicly we are waiting for the full year a follow up.

Speaker Change: Also we are working to be working with the regulators and we will communicate in a future date.

Speaker Change: <unk> of the release of that clinical data and our next steps in the U S.

Frederick Wise: Thank you. The next question comes from Rick Wise with Stifel. Please go ahead.

Thank you very much.

Speaker Change: The next question comes from Joanne Wuensch with Citi. Please go ahead.

Michael F. Mahoney: Good morning, Mike. I guess I'd focus on perhaps Acura Neo. It sounds like it's performing well internationally, but can you maybe expand on where you are both internationally, the new product you spoke about, and your feelings about next steps in the United States? Are you feeling more optimistic, more cautious about timing? Any incremental call would be just great. Thank you so much.

Joanne Karen Wuensch: Good morning.

Joanne Karen Wuensch: Another nice quarter.

Joanne Karen Wuensch: Question on the operating margins I think your L. R P, which is 450 basis points over with it over the two year period.

Joanne Karen Wuensch: Hmm mm.

Speaker Change: But anyway.

Speaker Change: All right.

Not to interrupt you I was hoping just over the three year period 2024 to 2026 was the 150 basis points.

Speaker Change: Excellent. Thank you for that clarification.

Michael F. Mahoney: Sure. Thanks, Rick. I hope you're doing well, by the way.

Speaker Change: I'm looking at the quarter delivery it looks like some of the leverage came from R&D and some of that came from SG&A I'm, just curious how youre thinking about providing that leverage over that three year period. Thank you.

Michael F. Mahoney: We're very pleased with the results in Europe. We continue to grow above market in Europe and have excellent adoption across most major countries in Europe. And importantly, as you said, we've invested quite a bit in this portfolio, and we're excited about the prime submission that we just recently did in Europe, which will enhance the valve further and provide additional valve sizes as well. So we expect that to go well in Europe.

Speaker Change: Yeah, I think over the three year period, all lines will contribute and I think it's really a great part of the history of the company and the kind of the DNA of the margin expansion story is at any given point in time, you know all lines can contribute so gross margin at that $69 eight I didn't love that this quarter, but I'm optimistic that that improves through the year, but.

Michael F. Mahoney: In the U.S., there's really not going to be any new commentary that we haven't stated publicly. We are waiting for the full year follow-up. We also will be working with the regulators, and we'll communicate at a future date the timing of the release of that clinical data and our next steps in the U.S.

Speaker Change: We said at Investor Day, and we've reiterated on our January call that gross margin probably is not going to contribute this year to the 30 to 50 basis points. So this year, it's more of an opex leverage story, but absolutely in 'twenty five and 26 I think gross margin can contribute recall, we used to be at 72, 4% gross margin back in 2019, we're maniacally focused on getting back.

Joanne Karen Wuensch: The next question comes from Joanne Wuensch with Citi.

Speaker Change: <unk> and improving that from where it is today and have the plans to do that so I think the summary is as we look to improve the 150 basis points over the three years that puts us kind of at the doorstep of 28% at the end of 'twenty, six which is a nice spot to be it puts that 30% long term goal that we have are really in focus and all.

Daniel Brennan: Good morning and another nice quarter. Question on the operating margins. I think your LRP was for 150 basis points over, was it over the two-year period? I would assume it was over the two-year period. But anyway, and as I was over, it was, it was, not to interrupt you Joanne, it was over just over the three-year period 2024 to 2026 was 150 basis points excellent. Thank you for that clarification. But as I'm looking at the quarter delivery, it looks like some of the leverage came from R&D, and some of it came from SG&A. I'm just curious how you're thinking about providing that leverage over the three-year period. Thank you.

Speaker Change: All lines of the P&L can contribute along that journey.

Speaker Change:

Speaker Change: The next question sure. The next question comes from Vijay Kumar with Evercore ISI. Please go ahead.

Vijay Muniyappa Kumar: Hey, guys. Thanks for taking my question and congrats on a solid pretty sure Mike maybe my one question on <unk>.

Vijay Muniyappa Kumar: The E B portfolio.

Vijay Muniyappa Kumar: Yeah.

Vijay Muniyappa Kumar: B.

Vijay Muniyappa Kumar: The bill.

Daniel Brennan: Yeah, I think over the three-year period, all lines will contribute. And I think it's really a great part of the history of the company and the kind of DNA of the margin expansion story that at any given point in time, all lines can contribute. So gross margin at that 69.8. I didn't love that this quarter.

Vijay Muniyappa Kumar: 70% or I'll call it 85% of U S.

Vijay Muniyappa Kumar: Can you give us a little bit color on was there any stocking dynamic how much of that was driven by new account openings versus that procedure uptake.

Vijay Muniyappa Kumar: And sort of related to that does new tech add on payment does it matter wherever you want.

Vijay Muniyappa Kumar: But I'm optimistic that that improves through the year. But we said at Investor Day, and we reiterated it on our January call, that gross margin probably is not going to contribute this year to the 30 to 50 basis points. So this year, it's more of an OPEX leverage story. But absolutely, in 25 and 26, I think gross margin can contribute. Recall, we used to be at 72.4% gross margin back in 2019.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: The results in the U S. 85% as you mentioned it was a really a mid quarter launch.

Speaker Change: So the teams move pretty quickly to have some impact in the first quarter and we look forward to good results, obviously in the second quarter and the rest of the year based on momentum.

Speaker Change: So there's not any big one time stocking.

Speaker Change: So this is driven by new account openings.

Speaker Change: I would say very rapid adoption.

Speaker Change: The technology and therefore continued.

Vijay Muniyappa Kumar: You know, we're maniacally focused on getting back and improving that from where it is today, and we have the plans to do that. So I think the summary is, as we look to improve by 150 basis points over the three years, that puts us kind of on the doorstep of 28% at the end of 26, which is a nice spot to be. It puts that 30% long-term goal that we have really in focus, and all lines of the P&L can contribute along that journey.

Speaker Change: Utilization of the product once they have the.

Speaker Change: Platform. We're also seeing multiple hospitals buying their second council, which also is a great sign.

Speaker Change: Because it shows.

The adoption and using it routinely every day and so it's really a new account openings and increased adoption once they start using the platform.

Speaker Change: That's that's driving the U S results and as I mentioned in Europe, which I think is impressive now that they are a bit more supply. They continue to open more accounts and increase the utilization of the existing accounts with a fair pulse platform on the TPG, we think it's a bit less.

Michael F. Mahoney: The next question comes from Vijay Kumar with Evercore ISI. Please go ahead.

Michael F. Mahoney: Hey guys, thanks for taking my question and congrats on a really solid print share. Mike, maybe one question on the EP portfolio. The, you know, 70% overall growth, 85% U.S., how can you give us a little bit of color on, was there any stocking dynamic, how much of this was driven by the account openings versus that procedure uptake, and sort of related to that, does NewTek add-on payment matter, does it matter, where are we?

Speaker Change: Significant for fair pulse, but it's something we'll continue to evaluate and we'll provide you updates as we see them.

Speaker Change: Describe that's on a path I'm sorry, yes.

Speaker Change: And Vijay I think just important maybe to point out.

Speaker Change: First off right and tap applies to inpatient Medicare fee for service, which is really a small minority of AF ablation today have.

Speaker Change: <unk> said that we still do believe that Farrah pulse can use the proposed and tap related one of our customers.

Michael F. Mahoney: Yeah, so the results in the US, 85%, as you mentioned, it was really a mid-quarter launch. So the teams moved pretty quickly to have some impact in the first quarter. And we look forward to, you know, good results, obviously, in the second quarter and the rest of the year based on momentum. So there's not any big one-time stocking.

Speaker Change: And actually I think it's important.

Speaker Change: From a physician perspective, and a hospital perspective that we're not in a position of having to create unique ICD 10 codes that are product specific.

Speaker Change: That's really not helpful.

Speaker Change: Either to physicians or to hospitals.

Speaker Change: That's very helpful. Thanks, guys.

Speaker Change: The next question comes from Travis Steed with Bank of America. Please go ahead.

Michael F. Mahoney: So, you know, this is driven by new account openings and, I would say, very rapid adoption of the technology and, therefore, continued utilization of the product once they have the platform. We're also seeing multiple hospitals buying their second council, which also is a great sign because it shows adoption and using it routinely every day. And so it's really new account openings and increased adoption once they start using the platform. And that's driving the U.S. results.

Travis Steed: Hey, everybody congrats again on the good quarter I wanted to ask about the new DRG for ablation in left atrial appendage closure.

Travis Steed: And then in the overall la market.

Travis Steed: But do you think that market can kind of sustain this 20% plus growth through before the indication expansions or do you kind of need to deal with the indication expansions at some point sooner sooner rather than later.

Speaker Change: I'll make comments on the Doctor side, we're pleased with our watchman performance, we grew globally, 19%, but keep in mind, that's coming off of a nearly a 30% comp from first quarter 2023.

Kenneth M. Stein: And as I mentioned in Europe, which I think is impressive, now that they have a bit more supply, they continue to open more accounts and increase the utilization of the existing accounts on the FairPulse platform. On the TPT, we think it's a bit less significant for FairPulse, but it's something we'll continue to evaluate, and we'll provide you updates as we see them. I'll just carve that; that's on the end of the tab. I'm sorry.

And we still maintain if not enhance our strong share position.

Speaker Change: And we're excited.

Speaker Change: Not only with the share position, but with the growth of watchman, but also some upcoming trials that can can further highlight with option and champion.

Speaker Change: Which we believe if successful will significantly widen the market Tam for watchman. So a doctor side. If you want to comment on any of that and also the concomitant item yeah. Thanks, Mike Yeah. So Travis first on the trials.

Kenneth M. Stein: Yeah, and Vijay, I think just important. Maybe to point out, first off, right, the NTAP applies to inpatient Medicare fee-for-service, which is really a small minority of AF oblations today. Having said that, you know, we still do believe that TheraPulse can use the proposed NTAP related to one of our customers, and actually, from a physician perspective and a hospital perspective, I think it's important, from a physician perspective and a hospital perspective, that we're not in a position of having to create unique ICD-10 codes that are product-specific, that that's really not helpful to either physicians

Speaker Change: I mean first of all this is still a healthy market. This is still a very underpenetrated therapy. When you look at the patients who are at high risk for stroke and a half we stand to benefit.

Speaker Change: From the watchman procedure.

Speaker Change: The trials that Mike mentioned right. The first one is the option trial that evaluates the use of watchman as an alternative to oral anticoagulants Fong of ablation.

Travis Steed: It's very helpful. Thanks, Paige. The next question comes from Travis Steed with Bank of America. Please go ahead. Hey everybody, congrats again on a good quarter. I wanted to ask about the new DRG for

Speaker Change: We hope to be able to present the results of that trial late this year or early next year, then that's followed by champion.

Speaker Change: <unk>, which is the all comers trial versus the novel oral anticoagulants and again, we expect that to report out in 2026. So.

Travis Steed: The next question comes from Travis Steed with Bank of America.

Michael F. Mahoney: I'll make comments, and Dr. Stein, we're pleased with our Watchmen performance. We grew globally by 19%, but keep in mind that's coming off of nearly a 30% comp from first quarter 2023. And we still maintain, if not enhance, our strong share position.

Speaker Change: These are now.

Speaker Change: In the relatively near term that we're going to see those data points.

Speaker Change: Before that right I think it is worth talking a little bit about that concomitant DRG. That's part of the proposed rule from CMS were really gratified to see that this is this is something that's good for everyone.

Michael F. Mahoney: And we're excited, not only about the share position but also about the growth of Watchmen, but also some upcoming trials that Ken can further highlight with Option and Champion, which we believe, if successful, will significantly widen the market, TAM, for Watchmen. So Dr. Stein, if you want to comment on any of that and also the concomitant item, yeah, thanks, Mike.

Speaker Change: This is good for patients. This is good for hospitals.

Speaker Change: When you think about patients who are undergoing an ablation procedure first off I'll tell you that even back when I was doing these procedures.

Speaker Change: Most every patient who came in for one wanted to know would they be able to stop there all anticoagulants and that is still true today.

Kenneth M. Stein: Yeah, so Travis, first on the trials, I mean, first of all, this is still a healthy market. This is still a very underpenetrated therapy when you look at the patients who are at high risk for stroke and AF who stand to benefit from the Watchman procedure. The trials that Mike mentioned, right, the first one is the option trial.

Speaker Change: And.

Speaker Change: When you think about it from a patient centered perspective.

Speaker Change: Being able to do this all at one setting and avoiding the incremental risks that you have and undergoing two procedures.

Speaker Change: It really it just makes sense. It also makes sense from a hospital standpoint, when you just look at the procedural efficiencies.

Kenneth M. Stein: That evaluates the use of Watchman as an alternative to oral anticoagulants following ablation. And we hope to be able to present the results of that trial late this year or early next year. Then that's followed by Champion, which is the all comers trial versus the novel oral anticoagulants. And again, we expect that to report out in 2026. So these are now in the relatively near term that we're gonna see those data points. Before that.

Speaker Change: How that's going to help hospitals improve capacity.

Speaker Change: To be doing more AF ablation and doing more watchman procedures over time.

Speaker Change: So we're excited to see this we think this is good for patients. We think this is good for hospitals.

And we look forward to getting that data out from trials like option and champion that's even going to further increase the impetus for doing these procedures.

Kenneth M. Stein: Right. I think it is worth talking a little bit about that concomitant DRG that's part of the proposed rule from CMS. We're really gratified to see that. This is something that's good for everyone. This is good for patients and good for hospitals. You know, when you think about patients who are undergoing an ablation procedure, first off, I'll tell you that even back when I was doing these procedures, almost every patient who came in at 4.1 wanted to know if they would be able to stop their oral anticoagulants, and that is still true today.

Speaker Change: Great. Thanks, a lot.

The next question comes from Daniel <unk> Telsey with UBS. Please go ahead.

Lawrence H. Biegelsen: Hey, good morning, everyone. Thanks, so much for taking the question I'll also add my congrats on a really strong quarter.

Daniel Brennan: For my one question I wanted to look at some of the I'll call them legacy business is not sure. If that's fair and just trying to maybe slower growth businesses. I mean CRM mid single digit growth is very strong interventional cardiology at double digits very strong just curious about how to think about sort of slower growth in <unk>.

Kenneth M. Stein: When you think about it from a patient-centered perspective, being able to do this all at one setting and avoiding the incremental risks that you have when you have two procedures, it really just makes sense. It also makes sense from a hospital standpoint when you just look at the procedural efficiencies and how that's gonna help hospitals improve capacity to be doing more AF ablations and doing more Watchman procedures over time. So we're excited to see it.

Daniel Brennan: DRG I'm thinking more on the drug Eluting stent portfolio, obviously, and then CRM can they sustain these kinds of growth profiles given that the end markets are from a volume perspective are arguably probably some of your slower growth end markets and what needs to happen from an innovation perspective.

Kenneth M. Stein: We think this is good for patients. We think this is good for hospitals, and we look forward to getting the data out from trials like OPTION and CHAMPION that's going to further increase the impetus for doing these procedures.

Speaker Change: Is that sort of growth. Thanks, so much.

Speaker Change: Thanks, Danielle really appreciate you asking that question I would say the innovation has already happened.

Speaker Change: Let me just explain a bit more we call it ICT X our interventional.

Danielle Antalffy: The next question comes from Danielle Antalffy with UBS. Please go ahead.

Speaker Change: Cardiology business essentially.

Michael F. Mahoney: Hey, good morning, everyone. Thanks so much for taking the questions. I'll also say congratulations on a really strong quarter. For my one question, I wanted to look at some of the, I'll call them, legacy businesses. Not sure if that's fair to the tribe and maybe slower growth businesses. I mean, a CRM with mid single-digit growth is very strong. Interventional cardiology of double digits, very strong. Just curious about how to think about this sort of slower growth in interventional cardiology.

Speaker Change: And years ago that was dominated by a drug eluting stents.

Speaker Change: Today drug Eluting stents, I think represent close to 4% of our overall mix and likely be 3% and 2% in the following years. So it's really a very small portion of Boston scientific and a and a smaller portion.

Speaker Change: CTX, so what's driving the 13% growth within ICT X is our advanced imaging portfolio, so you're seeing more and more patients come with more complex calcium and the growing adoption of <unk> imaging, especially with our vehicle plus platform.

Michael F. Mahoney: I'm thinking more of the drug-eluding STEM portfolio, obviously, and then CRM. Can they sustain these kinds of growth profiles given that the end markets, from a volume perspective, are arguably probably some of your slower growing end markets, and what needs to happen from an innovation perspective to sustain that sort of growth?

Speaker Change: To identify that and help.

Speaker Change: Effectiveness of these procedures, so you've seen wide adoption in Europe of our imaging platform wide adoption in Asia and growing adoption in the U S. Based on this new platform. So it's really the the imaging capabilities as well as our complex coronary capabilities to break calcium with Wolverine and our other products and then in Asia.

Michael F. Mahoney: Thanks so much. Thanks, Danielle.

Michael F. Mahoney: Thanks, Danielle. I really appreciate you asking that question. I would say the innovation has already happened. Let me just explain a bit more.

Speaker Change: They've been very successful in launching our agent drug coated balloon and we recently received approval for that will have some minor benefit in the second quarter 'twenty four from that product in the U S. We expect enhanced growth from that product in 20 in the second half of 'twenty, four and particularly in 2025 so.

Michael F. Mahoney: We call it ICTX, our interventional cardiology business, essentially. Years ago, that was dominated by drug-eluting stents. Today, drug-eluting stents, I think, represent close to 4% of our overall mix and likely will be 3% and 2% in the following years, so it's really a very small portion of Boston Scientific and a smaller portion of ICTx. So what's driving the 13% growth within ICTx is our advanced imaging portfolio. So you're seeing more and more patients come with more complex calcium and the growing adoption of IVUS imaging, especially with our Vigo Plus platform, to identify it and help the effectiveness of these procedures.

Speaker Change: The team there has really done a great job of.

Completely revamping our portfolio and the growth trajectory of ICT X also included in that is our structural heart business in Europe.

Speaker Change: On CRM that grew 5% and we kind of essentially grow in line I would say with the market with pacemakers and defibrillators S. ICD business continues to be quite robust, but the bigger growth driver in our CRM business is our diagnostics business and we invested in that many years ago with our prevention platform and all.

Speaker Change: With our now our second generation loop recorder ICM device, so we've really reshaped the portfolio significantly.

Michael F. Mahoney: So you're seeing wide adoption in Europe of our imaging platform, wide adoption in Asia, and growing adoption in the U.S. based on this new platform. So it's really the imaging capabilities as well as our complex coronary capabilities to break calcium with Wolverine and our other products. And then in Asia, they've been very successful in launching our agent drug coated balloon, and we recently received approval for that. We'll have some minor benefit in second quarter 24 from that product in the U.S.

Speaker Change: And both of those markets so.

Speaker Change: To continue to support the growth of the company.

Speaker Change: Okay.

Speaker Change: The next question comes from Josh Jennings with TD Cowen. Please go ahead.

Hi, good morning, Thanks for taking the questions.

Wanted to ask about the EP business and just hoping to get an update on your view of the diagnostic mapping opportunity.

Joshua Thomas Jennings: If you didn't navigate.

Joshua Thomas Jennings:

Speaker Change: There'll be a software module.

Speaker Change: Is going to be in play.

Michael F. Mahoney: But we expect enhanced growth from that product in the second half of 24, and particularly in 2025. So the team there has really done a great job. Completely revamping the portfolio and the growth trajectory of ICTX, also included in that is our structural art business in Europe. On CRM, you know, that grew 5%, and we kind of essentially grow in line, I would say, with the market for pacemakers and defibrillators. The SICD business continues to be quite robust, but the bigger growth driver in our CRM business is our diagnostics business, and we invested in that many years ago So we've really reshaped the portfolio significantly in both of those markets to continue to support the growth of the company.

Speaker Change: The question is really are you seeing increased demand in these early stages of PSA launch for arrhythmia.

Speaker Change: And just how are you.

Speaker Change: How are you viewing the opportunity for Boston to take share in this diagnostic mapping segment of the E&P World. Thank you for taking the question.

The Doctor side, if you take that one.

Hey, Josh.

Speaker Change: <unk>.

Joshua Thomas Jennings: It's still early in the launch and I think one thing that I do want to sort of emphasize as you look at how things are playing out in the launch is we're really.

Speaker Change: Working with accounts to say don't change a lot of your workflow at the outset.

Speaker Change: Get used to using Farah pulse and see how it works in your cases, and then start modifying your workflow.

Speaker Change: So really what we've seen early in launch really are deliberately not a big shift in whether or not people are mapping not a big shift in what mapping platform, they're using now having said that.

Joshua Thomas Jennings: The next question comes from Josh Jennings with TD Cowan. Please go ahead.

Kenneth M. Stein: Good morning, thanks for taking the questions. I wanted to ask about the EP business and give an update on your view of the diagnostic mapping opportunity you initiated in the Navigate PF study. The Fairview Software Module is going to be in play. I guess the question is really, are you seeing increased demand in these early stages of the PFA launch for Rhythmia? And just how are you? How are you viewing the opportunity for Boston to take a share in this diagnostic mapping segment of the EP world? Thanks for taking the time to answer the question.

Speaker Change: Right.

Speaker Change: We have deliberately built our next generation product and that's the third wave NAV enabled catheter right that interfaces with the Fairview software and as I think everyone's seen we've.

Speaker Change: Initiated are.

Speaker Change: First human use studies of that.

Speaker Change: Earlier this year.

Speaker Change: That really will bring some unique advantages.

Speaker Change: To people, who want to use a navigation system as they're using Farah pulse.

Kenneth M. Stein: Dr. Stein if you'd take that one. Yeah, hey Josh.

Kenneth M. Stein: It's still early in the launch, and one thing that I do want to sort of emphasize as you look at how things are playing out in the launch is that we're really working with accounts to say, don't change a lot of your workflow at the outset. Get used to using FaroPulse, see how it works in your cases, and then start modifying your workflow.

Speaker Change: It is our <unk>.

Speaker Change: Desire and our belief that there will be people, who don't feel a need to use any mapping when theyre doing pulmonary vein isolation with Sarah pulse, who are adopting a very efficient workflow thats been used in a lot of centers in Europe, there will be others, who want to continue to use a navigation maps.

Christopher Pasquale: So really, what we've seen early in launch is deliberately not a big shift in whether or not people are mapping, not a big shift in what mapping platform they're using. Now, having said that, right, we have deliberately built our next generation product, and that's the PharaWave Nav-enabled catheter that interfaces with the PharaView software, and as I think everyone's seen, we initiated our first human use studies That really will bring some unique advantages to people who want to use a navigation system while they're using PharaPulse.

Speaker Change: <unk> system.

Speaker Change: We have no intention of forcing people to use our system, we're not going to lock it down.

Speaker Change: But this new software platform really does bring some very compelling advantages to people who will use it.

Speaker Change: Yeah.

Speaker Change: The next question comes from Chris Pasquale with Nephron Research. Please go ahead.

Christopher Pasquale: Thanks I appreciate it how are you thinking about the opportunity for agent in the U S. And you mentioned youre still working to ramp up manufacturing capacity. When do you expect to be in a position to move into a full launch with that product.

Christopher Pasquale: We believe in our belief, right, that there will be people who don't feel a need to use any mapping when they're doing pulmonary vein isolation with theropals who are adopting a very efficient workflow that's been used in a lot of centers in Europe. But there will be others who want to continue to use a navigation mapping system. We have no intention of forcing anyone to use our system. We're not going to lock it down. But this new software platform really does bring some very compelling advantages to people who will use it. The next question comes from Chris Pasquale with Neff Run Radio.

Christopher Pasquale: Sure. So the nice approval excellent trial designed by the clinical team and the products doing extremely well in Japan, and we have high hopes for the product.

Christopher Pasquale: Is it as impacting the second half and more in 2025, So you know.

Currently we're really going through the contracting process with most of the big accounts in the U S and that's initiated.

Christopher Pasquale: And that's going well given there is a high unmet clinical need with instant restenosis.

Christopher Pasquale: And the deliverability.

Michael F. Mahoney: The next question comes from Chris Pasquale with Nefron Research. Please go ahead.

Christopher Pasquale: That's been proven with Asia, So there's high physician demand for it.

Kenneth M. Stein: Sure, so the nice approval, excellent trial design by the clinical team, and the product's doing extremely well in Japan, and we have high hopes for the product as it has impact in the second half and more in 2025. You know, currently, we're really going through the contracting process with most of the big accounts in the U.S. and that's initiated, and that's going well, given there is a high unmet clinical need with instant restenosis and the deliverability that's been proven with Asians, so there's high physician demand for it, but we are going through the contracting process with the major health systems now, and you'll start seeing some sales in the second quarter, and we expect that to ramp more significantly throughout the second half of the year and accelerate more in 2025.

Christopher Pasquale: But we are going through the contracting process with the major health systems, now and you'll start seeing some sales in the second quarter, and we expect that to ramp more significantly in throughout the second half of the year and accelerate more than 25.

Speaker Change: Yeah, and Chris and just to remind everyone right.

Speaker Change: Labeled indication in the U S. In stent restenosis that comprises approximately 10% of current PCI volume.

Speaker Change: Internationally. We also see DCP is used and we believe there is a potential use case outside of instant restenosis small vessel disease bifurcation lesions potentially even some acute coronary syndrome.

Chris: And once we launched in the U S. We are evaluating opportunities to expand the label and those expanded indications could potentially take us up to 20% of of current PCI volume.

Speaker Change: Great Thanks for that.

Kenneth M. Stein: Yeah, and Chris, and just me.

Speaker Change: Next question comes from Matthew O'brien with Piper Sandler. Please go ahead.

Kenneth M. Stein: Yeah, and Chris, and just to remind everyone, right, you know, our current label indication in the U.S., instant restenosis, that comprises approximately 10% of current PCI volume. Internationally, we also see DCBs used, and we believe there is a potential use case outside of instant restenosis, small vessel disease, bifurcation lesions, potentially even some acute coronary syndrome. And once we launch in the US, we are evaluating opportunities to expand the label, and those expanded indications could potentially take us up to 20% of current PCI volume.

Matthew O'brien: Good morning, and thanks for taking the question I don't have perfect numbers here, but in looking at the U S. E. T number in Q1, it looks like it looks like you did somewhere around $40 million in their pulse revenue between the generator and the catheter itself.

Matthew O'brien: Is that roughly the right number and then when I start to carry this out through the rest of the year close to the guidance increase then I'm getting something more like three to even $400 million of fair pulse. This year is that around the right number and can you manufacture enough product to support that thank you.

Speaker Change: Yes, we want.

Matthew O'brien: The next question comes from Matthew O'Brien with Piper Sandler. Please go ahead.

Speaker Change: Firm your math.

Speaker Change: At this point, we're not going to be breaking out.

Matthew O'brien: Morning. Thanks for taking the question.

Speaker Change: Their pulse cases numbers number of accounts dollars and so forth yet if you recall back to the watchman days, we really waited till it was about close to $1 billion platform before he provided that based on the materiality of the company.

Michael F. Mahoney: I don't have perfect numbers here, but looking at the USEP number in Q1, it looks like you did somewhere around $40 million in FerriPulse revenue between the generator and the catheter itself. Is that roughly the right number? And then when I start to carry this out through the rest of the year, plus the guidance increase, I'm getting something more like $300 million to even $400 million at FerriPulse this year. Is that around the right number? And can you manufacture enough product to support that? Thank you.

Speaker Change: But it's going extremely well and importantly, we made significant investments in the supply chain two to three years ago to be ready for where we are today and the supply chain team continues to perform extremely well and they're able thus far too to meet the demand in Europe, and the U S and in the future in Asia.

Speaker Change: Yeah.

Speaker Change: The next question. The next question comes from Matt Taylor with Jefferies. Please go ahead.

Michael F. Mahoney: Yeah, we won't confirm your math. You know, at this point, we're not going to be breaking out fair pulse cases, numbers, number of accounts, dollars, and so forth yet. If you recall back to the Watchmen days, we really waited till it was about a close to a billion dollar platform before we provided that based on the materiality of the company. But it's going extremely well. And importantly, we made significant investments in the supply chain two to three years ago to be ready for where we are today.

Matthew Taylor: Hi, Thanks for thanks for taking the question.

Matthew Taylor: I actually wanted to follow up on your agent commentary.

Matthew Taylor: Two small questions. One is can you talk about the materiality in Japan, and when you mentioned the indication.

Matthew Taylor: Indicating expansion could you talk about what those could look like and when we could see them in the U S.

Just maybe it's really not a whole lot of new color in Japan, but they they launched it last year and it was adopted very very quickly and it's leading to the.

Michael F. Mahoney: And the supply chain team continues to perform extremely well, and they're able thus far to meet demand in Europe and the US and in future in Asia. The next question comes from Matt Taylor with Jeffreys. Please go ahead.

Matthew Taylor: Strong double digit growth in Japan that we saw in the quarter.

Speaker Change: In terms of indication expansion Dutch site, if you want to take that one yeah, Matt again, I think probably the the first new indications, we think about looking for would be small vessel bifurcation lesions.

Matthew Taylor: The next question comes from Matt Taylor with Jeffreys. Please go ahead.

Matthew Taylor: Uhh, just maybe, really not a whole lot of new colors in Japan, but they launched it last year and it was adopted very, very quickly, and it's leading to the strong double-digit growth in Japan that we saw in the quarter. In terms of indication expansion, Dr. Stein, if you want to take that one. Yeah Matt, again I think probably the

Speaker Change: Still working through.

Speaker Change: Regulatory strategy on that so not prepared to give you a timeline for when we would initiate any of that work.

Speaker Change: Alright, great. Thank you for the color.

Speaker Change: The next question comes from Matt <unk> with Barclays. Please go ahead.

Kenneth M. Stein: Yeah, Matt, again, I think probably the first new indication we think about looking for would be small vessel bifurcation lesions. Still working through regulatory strategy on that. So not prepared to give you a timeline for when we would initiate any of that work. All right, great. Thank you for the call. The next question comes from Matt Miksic with Barclays. Please go ahead. Hey, thanks for taking the question.

Matthew Taylor: Hey, Thanks for taking the question. So just maybe one follow up on the cadence.

This year in the U S.

Matthew Taylor: And you know how.

Matthew Taylor: Yeah.

Matthew Taylor: Adoption navigation kind of plays into that.

Matthew Taylor: Color, but what we can expect.

Matthew Miksic: The next question comes from Matt Miksic with Barclays. Please go ahead.

Speaker Change: As you get into the rest of the quarters would be would be great. Thanks, so much.

Speaker Change: Thanks, Matt.

Michael F. Mahoney: Thanks, Matt. There is probably not too much new commentary here.

Speaker Change: Probably not too much new commentary here I think.

Michael F. Mahoney: I think you know, Fair Pulse overall, we're developing very strong capabilities to install, support, and train doctors and really scale that up in the US, given the high demand for it. And we're able, resource-wise, to put a lot of focus on that as we continue to expand that. And there obviously are a lot of strong relationships we have with those EPs, given our Watchmen experience and our CRM experience.

Speaker Change: I'm sure a pulse overall.

Speaker Change: We're developing very strong capabilities to install support and trained doctors and really scale that up in the U S.

Speaker Change: Given the high demand for it and we and we're able to resource wise, we put a lot of focus on that as.

Speaker Change: As we continue to expand that and there obviously are a lot of strong relationships, we have with those EPS given our watchman experience in RCM experience. So it's a lot of resource planning and training and executing everyday in the field to open up new accounts. Dr. Stein gave some commentary on the mapping.

Michael F. Mahoney: So it's a lot of resource planning and training, and execution every day in the field to open up new accounts. Dr. Stein gave some commentary on the mapping. So today, some accounts don't use mapping when they're driving maybe an optimal workflow. And many accounts are using their existing mapping, and we don't intend to force our customers to move away from that. However, we do, as Dr. Stein mentioned, based on what we've seen with our mapping navigation system, we do think there will be incremental clinical benefits and productivity gains in using that.

Speaker Change: So today some accounts don't use mapping them when they are driving maybe optimal workflow and many accounts are using their existing mapping system and we don't intend to force our customers to move away. However, we do not sign mentioned based on what we've seen with the are.

Speaker Change: Our mapping navigation system, we do think there will be incremental clinical benefits and productivity gains and using that so we are starting to see an increase in rhythm.

Michael F. Mahoney: So we are starting to see an increase in arrhythmia orders, and we anticipate enhanced arrhythmia therapulse mapping orders as we go through the second half of this year because there will be clinical benefits from it. But as Dr. Stein mentioned, we really want to have hospitals choose the correct mapping system. And Therapulse works excellent today with competitors. We would expect some enhanced benefits with ours.

Speaker Change: And we anticipate enhanced arrhythmia.

Speaker Change: Pulse mapping orders as we go through the second half of this year, because it will be clinical benefits from it as Dr. Stein mentioned.

Speaker Change: We really want to have hospitals choose the correct mapping system and fair pulse works excellent today with the competitors, but we would expect some enhanced benefit with ours.

Speaker Change: That's great. Thank you.

Kenneth M. Stein: And just to verify, is there time for one last question?

Speaker Change: And just to verify.

Speaker Change: Is there time for one last question.

Jonathan R Monson: Andrew, we'll take one more, please. That'll come from Michael Polark with Wolf Research. Please go ahead. Morning, thank you for sneaking me in. I want to ask about the gross margin commentary and the inventory charges. Dan, can you quantify the impact in the quarter?

Speaker Change: Andrew will take one more please that will come from Michael <unk> with Wolfe Research. Please go ahead.

Michael: Good morning. Thank you for sneaking me in I want to ask on the gross margin commentary the inventory charges Dan can.

Michael: Can you quantify the impact in the quarter and what is the nature of those charges, what's going on and the other thing I heard was increased mix of capital in the quarter I think it seems highly likely to be thorough pulse generator, driven but if theres anything else.

Michael K. Polark: That'll come from Michael Polark with Wolf Research. Please go ahead. Good morning, thank you for sneaking me in.

Daniel Brennan: Sure, thanks for the question, Mike. We're not going to quantify the inventory charges, but it was much more than we're used to in a given quarter, and that's why we called it out, and it had an impact. I will say a piece of it, not an insignificant piece of it, is kind of due to the success of Ferropulse. So it's not all bad, per se, relative to our results, but it's still inventory charges, and it still reduced the gross margin in the quarter.

Speaker Change: Underneath of that comment I'd welcome the color. Thank you.

Sure. Thanks for the question, Mike, we're not going to quantify the inventory charges, but it was.

Speaker Change: Much more than we're used to in a in a given quarter and thats why we called it out and it has an impact I will say a piece of it.

Speaker Change: Not an insignificant piece of it is due to the success of Ferro pulse. So it's not all bad per se relative.

Speaker Change: Relative to our results, but it's still inventory charges and it still reduced.

Speaker Change: Gross margin in the quarter, but that's what gives me the confidence and the optimism that heading into the rest of the year, we won't see inventory charges at the level that we saw them in Q1 as we go through 2024 on the capital Yes, a piece of that is related to Ferro pulse, but we also as Mike mentioned, we also have a really successful launch in our.

Daniel Brennan: But that's what gives me the confidence and the optimism that heading into the rest of the year, we won't see inventory charges at the level that we saw them in Q1 as we go through 2024. On the capital, yes, a piece of that is related to Ferropulse, but we also, as Mike mentioned, we also have a really successful launch in our IVIS business, which has some capital with it, and not insignificantly, we also have some in the urology business associated with Illuminis.

Speaker Change: Our IV business, which has some capital with it and not insignificantly as well we have some in the urology business associated with Illumina.

Daniel Brennan: So it was probably led by the launch of Ferropulse, but we did have a little bit more in some of the other launches in some of the other businesses with respect to capital. But the overall message should be 69.8, a little lower than we would have liked, but we still have a goal this year of getting back to that 70.7 or slightly below that for the year for gross margin.

Speaker Change: So it was probably led by the launch of firewalls, but we did have a little bit more.

Speaker Change: In some of the other launches and some of the other businesses with respect to capital, but overall message should be 69, eight a little lower than we would've liked but still have a goal this year of getting back to that.

Speaker Change: 77 or slightly below that for the year for.

Jonathan R Monson: Thanks, everyone, for joining us today. We appreciate your interest in Boston Scientific. If we were unable to get to your question, or if you have any follow-ups, please don't hesitate to reach out to the investor relations team. Before you disconnect, Drew will give you all the pertinent details for the replay. Please note, a recording will be available for one hour by dialing either 1-800-637-8255 or 1-800-637-8255.

Speaker Change: For gross margin.

Speaker Change: Thank you so much.

Speaker Change: Okay Alright.

Speaker Change: Thanks, everyone for joining us today, we appreciate your interest in Boston scientific if we were unable to get to your question or if you have any follow ups. Please don't hesitate to reach out to the Investor Relations team before you disconnect drew will give you all of the pertinent details for the replay.

Speaker Change: Please note a recording will be available in one hour by dialing either 187734475 to nine or 141 to 3170088 using replay code eight seven to six.

Operator: Please note, a recording will be available for one hour by dialing either 1-877-344-7529 or 1-412-317-0088 using replay code 872-6199 until May 1st, 2024 at 11:59 p.m. ET. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

199 until May 1st 2024, and 11, 11 59 P M Eastern time.

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