Boston Scientific Corporation
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Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K (this Annual Report) contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “estimate,” “intend,” “aim,” "goal," "target," "continue," "hope," "may" and similar words. These forward-looking statements include, among other things, statements regarding our financial and operating performance; acquisitions; clinical trials; business plans and product performance; new and anticipated product approvals and launches; intellectual property; regulations and accounting pronouncements; legal proceedings; tax matters and regulations; and macroeconomic and geopolitical conditions. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. 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.
The forward-looking statements in this Annual Report are based on certain risks and uncertainties, including the risk factors described in Item 1A under the heading “Risk Factors” and the specific risk factors discussed herein and in connection with forward-looking statements made throughout this Annual Report, which could cause actual results to vary materially from the expectations and projections expressed or implied by our forward-looking statements. These risks and uncertainties, in some cases, have affected and in the future could affect our ability to implement our business strategy and may cause actual results to differ materially from those contemplated by the statements expressed in this Annual Report. As a result, readers are cautioned not to place undue reliance on any of our forward-looking statements. Risks and uncertainties that may cause such differences include, among other things: economic conditions, including the impact of foreign currency fluctuations; future U.S. and global political, competitive, reimbursement and regulatory conditions, including changing trade and tariff policies; geopolitical events and tensions; manufacturing, distribution and supply chain disruptions and cost increases; disruptions caused by cybersecurity events; disruptions caused by public health emergencies or extreme weather or other climate change-related events; labor shortages and increases in labor costs; variations in outcomes of ongoing and future clinical trials and market studies; new product introductions and the market acceptance of those products; market competition for our products; expected pricing environment; expected procedural volumes; the closing and integration of acquisitions; demographic trends; intellectual property rights; litigation; financial market conditions; the execution and effect of our restructuring program; the execution and effect of our business strategy, including our cost-savings and growth initiatives; our ability to achieve sustainability goals; and future business decisions made by us and our competitors. New risks and uncertainties may arise from time to time and are difficult to predict. All of these factors are difficult or impossible to predict accurately and many of them are beyond our control. For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item 1A. Risk Factors contained in this Annual Report, which we may update in Part II, Item 1A. Risk Factors in Quarterly Reports on Form 10-Q that we have filed or will file hereafter. We disclaim any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in our expectations or in events, conditions, or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements, except as required by law. This cautionary statement is applicable to all forward-looking statements contained in this Annual Report.
ITEM 1. BUSINESS
Our Company
Boston Scientific Corporation is a global developer, manufacturer and marketer of medical devices that are used in a broad range of interventional medical specialties. Our mission is to transform lives through innovative medical solutions that improve the health of patients around the world. As a medical technology leader for more than 45 years, we have advanced the practice of less-invasive medicine by helping physicians and other medical professionals diagnose and treat a wide range of diseases and medical conditions and improve patients’ quality of life by providing alternatives to surgery and other medical procedures that are typically traumatic to the body. We advance science for life by providing a broad range of high-performance solutions to address unmet patient needs and reduce the cost of health care. When used in this report, the terms "we," "us," "our" and "the Company" mean Boston Scientific Corporation and its divisions and subsidiaries.
Business Strategy
We operate pursuant to five strategic imperatives. We aim to: Strengthen Category Leadership, Expand into High Growth Adjacencies, Drive Global Expansion, Fund the Journey to Fuel Growth and Develop Key Capabilities. We believe that our
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execution of these strategic imperatives will help us deliver on our mission, drive innovation and increase value for our customers and employees, while strengthening our leadership position in the medical device industry and delivering profitable revenue growth.
We expect to continue to invest in our core businesses and pursue opportunities to diversify and further expand our presence in strategic, high-growth adjacencies and new global markets, including growth within the countries we define as emerging markets. Maintaining and expanding our international presence is an important component of our long-term growth strategy. Through our international presence, we seek to increase net sales and market share, leverage our relationships with leading physicians and their clinical research programs, accelerate the time to bring new products to market and gain access to worldwide technological developments that we can implement across our product lines. Our research and development efforts are focused largely on the development of next-generation and novel technology offerings across multiple programs and all divisions. In the past several years, we have completed numerous acquisitions in support of our growth strategy, both strengthening our core businesses and expanding into high growth adjacent markets. We continue to develop digital tools and technologies that enable us to compete more effectively and deliver first class remote physician education, drive deeper patient engagement and increase digitally-enabled sales force productivity.
We have a firm commitment to corporate social responsibility and living our values as a global business and global corporate citizen. This includes taking actions to drive innovative care, contribute to the communities where we live and work, protect the environment, invest in our employees' health and well-being, and many other initiatives that we believe ultimately help us create value responsibly. Refer to Corporate Responsibility below for additional information regarding measures we are undertaking.
Product Offerings
Our portfolio of devices and therapies helps physicians diagnose and treat complex cardiovascular, respiratory, digestive, oncological, neurological and urological diseases and conditions. Our core businesses are organized into two reportable segments: MedSurg and Cardiovascular. In the fourth quarter of 2025, an organizational change combined our legacy Cardiology and Peripheral Interventions businesses into a single Cardiovascular business. The change had no impact on our reportable segments. The following describes our key product offerings and new product innovations by reportable segment and business unit.
MedSurg
Endoscopy
Our Endoscopy business unit develops and manufactures minimally invasive devices for diagnosing and treating gastrointestinal and pancreaticobiliary conditions and for supporting weight loss in patients with obesity. Our product offerings include hemostatic clips designed to stop and help prevent bleeding during endoscopic procedures (Resolution 360™ and MANTIS™ Clips), stent systems used for relieving biliary obstructions (WallFlex™ Biliary Stent Systems) and for endoscopic drainage of pancreatic pseudocysts (AXIOS™ Stents and Electrocautery Enhanced Delivery Systems), single-use scopes used for diagnostic and therapeutic procedures in the pancreaticobiliary system (SpyGlass™), and in endoscopic retrograde cholangiopancreatography (ERCP) procedures (EXALT™ Model D Single-Use Duodenoscopes), our portfolio of endoluminal surgery products (OverStitch™ Endoscopic Suturing System and Orbera™ Intragastric Balloon System) and our portfolio of infection prevention products.
Urology
Our Urology business unit develops and manufactures devices to treat various urological conditions for both male and female anatomies, including kidney stones, benign prostatic hyperplasia (BPH), prostate cancer, erectile dysfunction and male incontinence, over active bladder and pelvic floor disorders. Our product offerings include a comprehensive line of stone management products, including ureteral stents, catheters, baskets, guidewires, sheaths and balloons, single-use digital flexible ureteroscopes (LithoVue™), laser systems used in urology procedures (Lumenis Pulse™ Holmium Laser Systems with MOSES™ Technology), and for the treatment of BPH (GreenLight XPS™ Laser System and Rezūm™ Systems), our portfolio of prosthetic urology products (including AMS 700™ Penile Implant with the TENACIO™ Pump to treat erectile dysfunction and our AMS 800™ Artificial Urinary Sphincter to treat male urinary incontinence), hydrogel systems which help reduce side effects that men may experience after receiving radiotherapy to treat prostate cancer (SpaceOAR™), and our portfolio of products to treat pelvic floor disorders, including our Axonics™ Sacral Neuromodulation System (Axonics™) and our Bulkamid™ Uretheral Bulking System.
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Neuromodulation
Our Neuromodulation business unit develops and manufactures devices to treat various neurological movement disorders and manage chronic pain. Our product offerings include our WaveWriter Alpha™ Spinal Cord Stimulator (SCS) System, designed to provide improved pain relief to a wide range of patients who suffer from chronic pain, our Intracept™ Intraosseous Nerve Ablation System, the only U.S. Food and Drug Administration (FDA)-cleared system to treat vertebrogenic pain, a form of chronic low back pain, our G4™ Generator and consumable portfolio in Radiofrequency Ablation (RFA) for pain management and our Vercise Genus™ Deep Brain Stimulation (DBS) System for the treatment of Parkinson's disease, tremor and intractable primary and secondary dystonia.
Cardiovascular
Interventional Cardiology and Vascular Therapies (ICVT)
Our Interventional Cardiology and Vascular Therapies business unit develops and manufactures technologies to diagnose and treat complex coronary, peripheral and venous diseases, including calcific and obstructive arterial disease, thromboembolic conditions and venous insufficiency. Our portfolio includes intravascular imaging and multi-modality guidance systems that enhance procedural visualization and decision-making (OptiCross™ IVUS Imaging Catheters and AVVIGO™+ Multi-Modality Guidance System), vessel preparation and plaque modification technologies for heavily calcified and resistant coronary lesions (ROTAPRO™ Rotational Atherectomy Systems and WOLVERINE™ Coronary Cutting Balloon), coronary drug-eluting and drug-coated therapies designed to treat coronary arterial disease and in-stent restenosis (SYNERGY™ Everolimus-Eluting Stent Systems and AGENT™ Drug-Coated Balloon) and peripheral vascular therapies for the treatment of peripheral artery disease (Eluvia™ Drug-Eluting Vascular Stent Systems and Ranger™ Drug-Coated Balloons). In addition, the portfolio comprises minimally invasive therapies to remove or dissolve blood clots in deep veins and pulmonary arteries (AngioJet™ Thrombectomy Systems and EKOS™ Ultrasound Assisted Thrombolysis) and injectable treatments that improve symptoms associated with superficial venous reflux and varicose veins (Varithena™ Polidocanol Injectable Foam).
In the second quarter of 2025, we completed our acquisition of the remaining shares of Bolt Medical, Inc. (Bolt Medical), the developer of an intravascular lithotripsy advanced laser-based platform for the treatment of coronary and peripheral artery disease. In addition, we completed the acquisition of the remaining shares of SoniVie Ltd. (SoniVie), a privately held medical device company that has developed the TIVUS™ Intravascular Ultrasound System. An investigational technology, the TIVUS System is designed to denervate nerves surrounding blood vessels to treat a variety of hypertensive disorders, including renal artery denervation for hypertension.
On January 15, 2026, we announced our entry into a definitive agreement to acquire 100 percent of Penumbra, Inc. (Penumbra), a publicly traded medical technology company primarily focused on innovative medical thrombectomy products for use in peripheral vascular procedures in the removal of blood clots and blockages. The Penumbra portfolio includes the Lightning Bolt™ and Lightning Flash™ Computer Assisted Vacuum Thrombectomy (CAVT™) Systems. The purchase price is valued at $374 per share, or approximately $14.500 billion. The transaction is expected to close during 2026, subject to customary closing conditions. We plan to fund the transaction consideration through a combination of cash on hand and newly issued debt in an aggregate amount equal to approximately $11.000 billion, and the remaining portion of the transaction consideration will be paid in shares of our common stock.
Watchman
Our WATCHMAN™ Left Atrial Appendage Closure (LAAC) Devices are designed to close the left atrial appendage in patients with non-valvular atrial fibrillation (AF) who are at risk for ischemic stroke and eligible for anticoagulation therapy. WATCHMAN™ is the first device to offer a non-pharmacologic alternative to oral anti-coagulants that has been studied in a randomized clinical trial and is the leading device in percutaneous LAAC globally.
In the second quarter of 2025, we received CE mark for the WATCHMAN FLX™ Pro Left Atrial Appendage Closure Device, which is optimized for healing and designed to improve visualization during device placement and treat a broader range of patient anatomies.
Electrophysiology
Our Electrophysiology business unit develops and manufactures less-invasive medical technologies used in the diagnosis and treatment of rate and rhythm disorders of the heart, including a broad portfolio of therapeutic and diagnostic catheters and a variety of equipment used in the Electrophysiology lab. Our product offerings include our FARAPULSE™ Pulsed Field
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Ablation (PFA) System for the treatment of AF, our OPAL HDx™ Mapping System, offering catheter-based, 3-D cardiac mapping and navigation solutions, our VersaCross Connect™ Access Solutions portfolio, Polarsheath™ and Faradrive™ Steerable Sheath providing safe and efficient access to the left side of the heart, and our portfolio of cyroablation and radiofrequency cardiac ablation systems for the treatment of AF.
We received FDA approval in the United States, and Pharmaceuticals and Medical Device Agency (PMDA) approval in Japan, in the second and third quarters of 2025, respectively, to expand instructions for use labeling to include the treatment of drug refractory, symptomatic persistent AF with the FARAPULSE™ PFA System.
Since the launch of the FARAPULSE™ PFA System in 2024, we have observed rapid conversion from legacy treatment modalities to PFA. It is now the predominant component of our Electrophysiology business unit and revenue.
Cardiac Rhythm Management
Our Cardiac Rhythm Management (CRM) business unit develops and manufactures a variety of implantable devices that monitor the heart and deliver electricity to treat cardiac abnormalities. Our product offerings include implantable cardioverter defibrillators (ICD) (RESONATE™) and implantable cardiac resynchronization therapy defibrillators (CRT-D) (HeartLogic™ Heart Failure (HF) Diagnostic and SmartCRT™ Technology), subcutaneous implantable cardiac defibrillators (S-ICD) (EMBLEM™ MRI S-ICD System), which provide physicians the ability to treat patients who are at risk for sudden cardiac arrest without touching the heart, pacemakers and implantable cardiac resynchronization therapy pacemakers (CRT-P) (ACCOLADE™), remote patient management systems (LATITUDE™) and cardiac monitoring systems (BodyGuardian™ Remote Cardiac Monitoring Systems provide a full range of mobile health solutions and remote monitoring services), and our LUX-Dx II+™ Insertable Cardiac Monitor System, a long-term diagnostic device implanted in patients to detect arrhythmias associated with conditions such as AF, cryptogenic stroke and syncope.
Interventional Oncology and Embolization
Our Interventional Oncology and Embolization business unit develops and manufactures products to treat various forms of cancer. Our portfolio includes technologies used to treat liver cancer, including radioactive glass microsphere therapy for primary liver cancer (TheraSphere™ Y-90) and hepatic arterial infusion systems for secondary liver and bile duct cancers, as well as cryoblation systems for the treatment of kidney, bone and lung cancers. The portfolio also comprises embolization devices used in arterial and venous procedures across the peripheral vasculature (EMBOLD™ Detachable Coil System).
Markets
Competition
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
Boston Scientific Corporation is a global developer, manufacturer and marketer of medical devices that are used in a broad range of interventional medical specialties. Our mission is to transform lives through innovative medical solutions that improve the health of patients around the world. As a medical technology leader for more than 45 years, we have advanced the practice of less-invasive medicine by helping physicians and other medical professionals diagnose and treat a wide range of diseases and medical conditions and improve patients’ quality of life by providing alternatives to surgery and other medical procedures that are typically traumatic to the body. We advance science for life by providing a broad range of high-performance solutions to address unmet patient needs and reduce the cost of healthcare. When used in this report, the terms "we," "us," "our" and "the Company" mean Boston Scientific Corporation and its divisions and subsidiaries.
Executive Summary
The following section describes some of our financial highlights and trends on a consolidated basis. For additional information on our business units and product offerings, refer to Item 1. Business of our most recent Annual Report on Form 10-K.
| (in millions, except percentages and per share data) | Three Months Ended June 30, | 2026 versus 2025 | 2026 versus 2025 | ||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||
| Reported net sales | $ | 5,442 | $ | 5,061 | $ | 381 | 7.5 | % | |||||||||||||
| Reported net income (loss) attributable to Boston Scientific common stockholders | 907 | 797 | 110 | 13.8 | % | ||||||||||||||||
Adjusted net income (loss) attributable to Boston Scientific common stockholders (non-GAAP measure) | 1,275 | 1,127 | 148 | 13.1 | % | ||||||||||||||||
| Net income (loss) per common share — diluted | 0.61 | 0.53 | 0.08 | 15.2 | % | ||||||||||||||||
Adjusted net income (loss) per common share — diluted (non-GAAP measure) | 0.86 | 0.75 | 0.11 | 14.6 | % | ||||||||||||||||
| (in millions, except percentages and per share data) | Six Months Ended June 30, | 2026 versus 2025 | 2026 versus 2025 | ||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||
| Reported net sales | $ | 10,646 | $ | 9,724 | $ | 922 | 9.5 | % | |||||||||||||
| Reported net income (loss) attributable to Boston Scientific common stockholders | 2,247 | 1,471 | 776 | 52.8 | % | ||||||||||||||||
Adjusted net income (loss) attributable to Boston Scientific common stockholders (non-GAAP measure) | 2,464 | 2,248 | 216 | 9.6 | % | ||||||||||||||||
| Net income (loss) per common share — diluted | 1.51 | 0.98 | 0.53 | 53.6 | % | ||||||||||||||||
Adjusted net income (loss) per common share — diluted (non-GAAP measure) | 1.66 | 1.51 | 0.15 | 10.2 | % | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||
| 2026 versus 2025 | 2026 versus 2025 | |||||||||
| Net sales reported growth | 7.5 | % | 9.5 | % | ||||||
| Impact of foreign currency fluctuations | (0.5) | % | (1.4) | % | ||||||
| Net sales operational growth (non-GAAP measure) | 7.0 | % | 8.1 | % | ||||||
| Impact of certain acquisitions and divestitures | — | % | — | % | ||||||
| Net sales organic growth (non-GAAP measure) | 7.0 | % | 8.1 | % | ||||||
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During the second quarter and first six months of 2026, the increase in our reported net sales was primarily driven by innovation and strong commercial execution in our Interventional Cardiology and Vascular Therapies and Electrophysiology business units. Refer to Results of Operations for a discussion of our net sales by business. During the second quarter of 2026, the increase in our reported net income attributable to Boston Scientific common stockholders was primarily driven by higher net sales. During the first six months of 2026, the increase in our reported net income attributable to Boston Scientific common stockholders was primarily driven by higher net sales and a discrete tax benefit recorded in the first quarter of 2026. Refer to Tax Rate for additional details pertaining to the discrete tax benefit.
To supplement our unaudited consolidated financial statements prepared on a generally accepted accounting principles in the United States (GAAP) basis, we disclose certain non-GAAP measures, including operational and organic net sales growth, adjusted net income attributable to Boston Scientific common stockholders and adjusted net income per common share - diluted. Operational net sales growth excludes the impact of foreign currency fluctuations. Organic net sales growth excludes the impact of foreign currency fluctuations and net sales attributable to certain acquisitions and divestitures for which there are less than a full period of comparable net sales. There were no applicable acquisitions in the first six months of 2026 or 2025. Our adjusted net income attributable to Boston Scientific common stockholders and adjusted net income per common share - diluted exclude certain charges and/or credits as reported in our net income attributable to Boston Scientific common stockholders and net income per common share - diluted for purposes of assessing operating performance.
Adjusted measures, including operational and organic net sales growth, adjusted net income attributable to Boston Scientific common stockholders and adjusted net income per common share - diluted, exclude certain items required by GAAP, are not prepared in accordance with GAAP and should not be considered in isolation from, or as a replacement for, the most directly comparable GAAP measure. Refer to Additional Information for a discussion of management’s use of these non-GAAP financial measures.
Macroeconomic Environment
Our business is affected by global macroeconomic and geopolitical conditions. There continues to be significant uncertainty with respect to global trade policies, including changing tariff rates, tariff imposition delays, and the potential for reciprocal restrictive trade policies by the U.S. or other governments around the world, which could adversely impact our operations and results. We may also experience higher distribution costs and supply chain disruptions, including those arising from global conflicts and energy market volatility. While we seek to mitigate these impacts, their extent and duration remain uncertain and could negatively impact our business and results of operations. For additional information, refer to Item 1A. Risk Factors and Macroeconomic Environment contained in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our most recent Annual Report on Form 10-K.
Results of Operations
Net Sales
The following section describes our net sales by reportable segment and business. In the fourth quarter of 2025, an organizational change combined our legacy Cardiology and Peripheral Interventions businesses into a single Cardiovascular business. We have revised prior periods to conform to the current year presentation. The change had no impact on our reportable segments. For additional information on our business units and product offerings, refer to Item 1. Business of our most recent Annual Report on Form 10-K.
| Increase/(Decrease) | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | Three Months Ended June 30, | $ | Reported Basis | Impact of Foreign Currency Fluctuations | Operational Basis | Impact of Certain Acquisitions / Divestitures(1) | Organic Basis | ||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Endoscopy | $ | 793 | $ | 737 | $ | 56 | 7.6 | % | (0.7) | % | 7.0 | % | — | % | 7.0 | % | |||||||||||||||||||||||||||||||
| Urology | 684 | 676 | 7 | 1.1 | % | (0.3) | % | 0.8 | % | — | % | 0.8 | % | ||||||||||||||||||||||||||||||||||
| Neuromodulation | 341 | 303 | 39 | 12.7 | % | (0.6) | % | 12.2 | % | — | % | 12.2 | % | ||||||||||||||||||||||||||||||||||
| MedSurg | 1,818 | 1,716 | 102 | 5.9 | % | (0.5) | % | 5.4 | % | — | % | 5.4 | % | ||||||||||||||||||||||||||||||||||
| Cardiovascular | 3,624 | 3,345 | 279 | 8.3 | % | (0.6) | % | 7.8 | % | — | % | 7.8 | % | ||||||||||||||||||||||||||||||||||
| Net Sales | $ | 5,442 | $ | 5,061 | $ | 381 | 7.5 | % | (0.5) | % | 7.0 | % | — | % | 7.0 | % | |||||||||||||||||||||||||||||||
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| Increase/(Decrease) | ||||||||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | Six Months Ended June 30, | $ | Reported Basis | Impact of Foreign Currency Fluctuations | Operational Basis | Impact of Certain Acquisitions / Divestitures(1) | Organic Basis | |||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||
| Endoscopy | $ | 1,529 | $ | 1,410 | $ | 119 | 8.5 | % | (1.6) | % | 6.9 | % | — | % | 6.9 | % | ||||||||||||||||||||||||||||||
| Urology | 1,330 | 1,310 | 21 | 1.6 | % | (0.9) | % | 0.6 | % | — | % | 0.6 | % | |||||||||||||||||||||||||||||||||
| Neuromodulation | 659 | 574 | 86 | 14.9 | % | (1.2) | % | 13.7 | % | — | % | 13.7 | % | |||||||||||||||||||||||||||||||||
| MedSurg | 3,519 | 3,293 | 226 | 6.9 | % | (1.3) | % | 5.6 | % | — | % | 5.6 | % | |||||||||||||||||||||||||||||||||
| Cardiovascular | 7,126 | 6,430 | 696 | 10.8 | % | (1.4) | % | 9.4 | % | — | % | 9.4 | % | |||||||||||||||||||||||||||||||||
| Net Sales | $ | 10,646 | $ | 9,724 | $ | 922 | 9.5 | % | (1.4) | % | 8.1 | % | — | % | 8.1 | % | ||||||||||||||||||||||||||||||
(1) There were no applicable acquisitions in the second quarter and first six months of 2026 or 2025.
MedSurg
Endoscopy
Our Endoscopy business develops and manufactures devices to diagnose and treat a broad range of gastrointestinal (GI) conditions with innovative, less-invasive technologies. In the second quarter and first six months of 2026, reported net sales growth was primarily driven by our biliary franchise, led by our AXIOS™ Stent and Delivery System, and our core GI franchise.
Urology
Our Urology business develops and manufactures devices to treat various urological conditions for both male and female anatomies, including kidney stones, benign prostatic hyperplasia (BPH), prostate cancer, erectile dysfunction and incontinence. In the second quarter and first six months of 2026, reported net sales growth was relatively flat, primarily driven by underperformance in our stone franchise as a result of volume-based-procurement in China, and commercial disruption in our sacral neuromodulation franchise.
Neuromodulation
Our Neuromodulation business develops and manufactures devices to treat various neurological movement disorders and manage chronic pain. In the second quarter and first six months of 2026, reported net sales growth was primarily driven by our comprehensive pain portfolio, led by our Intracept™ Intraosseous Nerve Ablation System and Nalu Peripheral Nerve Stimulation System, and our deep brain stimulation franchise.
Cardiovascular
Our Cardiovascular business develops and manufactures devices and medical technologies for diagnosing and treating a variety of diseases and abnormalities of the heart, as well as products to diagnose and treat peripheral arterial and venous diseases and various forms of cancer. In the second quarter and first six months of 2026, reported net sales growth was primarily driven by our coronary therapies franchise, led by our AGENT™ Drug-Coated Balloon, and our Electrophysiology business unit, led by our Farapulse™ Pulsed Field Ablation (PFA) System. Net sales for the second quarter and first six months of 2026 were impacted by increased competition within our Electrophysiology business unit and a deceleration of certain WATCHMAN™ procedures.
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Gross Profit
Our gross profit was $3.848 billion during the second quarter of 2026, $3.424 billion during the second quarter of 2025, $7.462 billion for the first six months of 2026, and $6.633 billion for the first six months of 2025. The following is a reconciliation of our gross profit margin and a description of the drivers of the changes from period to period:
| Three Months | Six Months | |||||||||
| Period ended June 30, 2025 | 67.7% | 68.2% | ||||||||
| Sales pricing, volume and mix | 0.6% | 0.7% | ||||||||
| Net impact of foreign currency fluctuations | (0.4)% | (0.6)% | ||||||||
| All other, including inventory charges and other period expenses | 2.9% | 1.8% | ||||||||
| Period ended June 30, 2026 | 70.7% | 70.1% | ||||||||
In the second quarter of 2026, the primary factors that impacted gross profit margin were increased sales of higher margin products, the benefit recognized in connection with the recovery of previously incurred tariffs and a decrease in inventory charges, slightly offset by an unfavorable impact from foreign currency. These factors also impacted gross profit margin during the first six months of 2026, along with a decrease in the impact of inventory step-up adjustments associated with acquisitions.
Operating Expenses
The following table provides a summary of our key operating expenses:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | $ | % of Net Sales | $ | % of Net Sales | $ | % of Net Sales | $ | % of Net Sales | ||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | $ | 1,803 | 33.1 | % | $ | 1,716 | 33.9 | % | $ | 3,583 | 33.7 | % | $ | 3,312 | 34.1 | % | ||||||||||||||||||||||||||||||
| Research and development expenses | 554 | 10.2 | % | 526 | 10.4 | % | 1,069 | 10.0 | % | 969 | 10.0 | % | ||||||||||||||||||||||||||||||||||
Selling, General and Administrative (SG&A) Expenses
During the second quarter of 2026, SG&A expenses increased $87 million, or 5 percent, compared to the prior year period and were 80 basis points lower as a percentage of net sales. During the first six months of 2026, SG&A expenses increased $271 million, or 8 percent, compared to the prior year period and were 40 basis points lower as a percentage of net sales. The increase in SG&A expenses in both periods was primarily driven by selling expenses associated with higher net sales.
Research and Development (R&D) Expenses
We remain committed to advancing medical technologies and investing in meaningful R&D projects across our businesses. During the second quarter of 2026, R&D expenses increased $28 million, or 5 percent, compared to the prior year period and were 20 basis points lower as a percentage of net sales. During the first six months of 2026, R&D expenses increased $100 million, or 10 percent, compared to the prior year period and were 10 basis points lower as a percentage of net sales. The increase in R&D expenses in both periods was primarily driven by investments across our businesses in order to maintain a pipeline of products that we believe will contribute to future sales growth.
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Other Operating Expenses
The following provides a summary of certain of our other operating expenses, which are excluded by management for purposes of evaluating operating performance; refer to Additional Information for a further description.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 versus 2025 | 2026 versus 2025 | 2026 | 2025 | 2026 versus 2025 | 2026 versus 2025 | |||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||
| Amortization expense | $ | 233 | $ | 225 | $ | 8 | 3.4 | % | $ | 466 | $ | 444 | $ | 21 | 4.8 | % | ||||||||||||||||||||||||||||||
Restructuring and Restructuring-related Net Charges (Credits)
In February 2023, we committed to a global restructuring program (the 2023 Restructuring Plan). On July 29, 2025, our Board of Directors approved expanding the 2023 Restructuring Plan by up to $250 million in aggregate additional pre-tax charges. The 2023 Restructuring Plan, including the expansion, is estimated to result in total pre-tax charges of approximately $700 million to $800 million. The activities associated with our 2023 Restructuring Plan, including the expansion, were substantially complete at the end of 2025. The following table provides a summary of cumulative pre-tax charges associated with the 2023 Restructuring Plan, including the expansion, by major type of cost:
Type of Cost (in millions) | Total Amount Incurred | ||||
Transfer costs(1) | $ | 357 | |||
Termination benefits(2) | 115 | ||||
Other(3) | 276 | ||||
| $ | 748 | ||||
(2) Plans detailing specific employee impacts are developed for each affected region and business, working with employee representative bodies where required under local laws.
(3) Consists of consulting fees and costs associated with contractual cancellations as well as other costs directly related to the restructuring program, including program management, impairment of right of use lease assets, accelerated depreciation and fixed asset write-offs.
The following table presents our restructuring and restructuring-related net charges:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||
Restructuring net charges (credits)(1) | $ | 8 | $ | 83 | $ | 11 | $ | 93 | ||||||||||||||
Restructuring-related net charges (credits)(2) | 33 | 78 | 66 | 117 | ||||||||||||||||||
(1) These charges are recorded in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 420, Exit or Disposal Cost Obligations.
(2) These charges are primarily recorded within Cost of products sold, SG&A Expenses and R&D Expenses.
The following table presents our restructuring reserve balance:
| As of | |||||||||||||
| (in millions) | June 30, 2026 | December 31, 2025 | |||||||||||
| Restructuring reserve balance | $ | 33 | $ | 59 | |||||||||
On July 21, 2026, our Board of Directors approved, and we committed to, a new global restructuring program. For additional information on the new restructuring plan, refer to Note M - Restructuring-Related Activities to our unaudited consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q (this Quarterly Report).
43
Other, net
The following are the components of Other, net:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||
| Interest income | $ | 11 | $ | 3 | ||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-08-25 | Morano Susan E | Director | Buy | +2,040 | $49.22 | $100,408 |
| 2026-08-05 | Habiger David C | Director | Buy | +2,100 | $47.59 | $99,937 |
| 2026-08-03 | Mahoney Michael F | Chairman, President & CEO | Buy | +186,240 | $48.33 | $9,001,408 |
| 2026-08-04 | Habiger David C | Director | Buy | +140 | $48.59 | $6,802 |
| 2026-08-03 | Habiger David C | Director | Buy | +1,042 | $48.07 | $50,084 |
| 2026-07-31 | LUDWIG EDWARD J | Director | Buy | +5,000 | $45.48 | $227,400 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-11-03 10-Q expected by 2026-11-11 (in 56 days)
- ~2027-02-16 10-K expected by 2027-03-11 (in 161 days)
- ~2027-05-01 10-Q expected by 2027-05-09 (in 235 days)
- ~2027-08-03 10-Q expected by 2027-08-11 (in 329 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-09-08 8-K Cybersecurity Incident
- 2026-08-26 8-K Other Events
- 2026-08-03 10-Q Quarterly Report
- 2026-07-29 8-K Earnings Release; Financial Statements and Exhibits
- 2026-07-27 8-K Costs Associated with Exit
- 2026-05-18 8-K Other Events; Financial Statements and Exhibits
- 2026-05-18 8-K Other Events; Financial Statements and Exhibits
- 2026-05-08 S-8 Employee Benefit Plan Registration
- 2026-05-01 10-Q Quarterly Report
- 2026-04-22 8-K Earnings Release; Financial Statements and Exhibits
- 2026-03-30 S-4/A S-4/A
- 2026-03-30 8-K Other Events; Financial Statements and Exhibits
- 2026-02-27 S-4 Registration (Merger)
- 2026-02-26 8-K Material Agreement Entered; Material Agreement Terminated; Material Financial Obligation; Financial Statements and Exhibits
- 2026-02-23 8-K Officer/Director Change; Regulation FD Disclosure; Other Events; Financial Statements and Exhibits