Good morning, and welcome to the Boston Scientific Second Quarter 2025 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Lauren Tengler, Vice President, Investor Relations. Please go ahead. Lauren T

Thank you, Drew, and thanks to everyone for joining us today. With me on today's call are Mike Mahoney, Chairman and Chief Executive Officer; and Jon Monson, Executive Vice President and Chief Financial Officer. During the Q&A session, Mike and John will be joined by our Chief Medical Officer, Dr. Ken Stein. We issued a press release earlier this morning announcing our Q2 results, which included reconciliations of the non-GAAP measures. The release as well as reconciliations of the non-GAAP measures used in today's call can be found on the Investor Relations section of our website. Please note that on the call, operational revenue excludes the impact of foreign currency fluctuations, and organic revenue further excludes certain acquisitions and divestitures for which there are less than a full period of comparable net sales. For more information, please refer to the Q2 financial and operational highlights deck, which may be found on the Investor Relations section of our website. On this call, all references to sales and revenue are organic and relative growth is compared to the same quarter of the prior year, unless otherwise specified. This call contains forward-looking statements regarding, among other things, our financial performance, business plans, product performance and development. These statements are based on our current beliefs using information available to us as of today's date and are not intended to be guarantees of future events or performance. If our underlying assumptions turn out to be incorrect or certain risks or uncertainties materialize, actual results could vary materially from those projected by the forward-looking statements. Factors that may cause such differences are discussed in our periodic reports and other filings with the SEC, including the Risk Factors section of our most recent annual report on Form 10-K. Boston Scientific disclaims any intention or obligation to update these forward-looking statements, except as required by law. At this point, I'll turn it over to Mike.

Thanks, Lauren, and thank you, everyone, for joining us today. Our second quarter results outperformed our expectations, led by our Cardiovascular segment closing a phenomenal first half to 2025. In second quarter '25, total company operational sales grew 22% and organic sales grew 17%, which exceeds the high end of our guidance range of 13% to 15% and far outpacing our underlying weighted average market growth rate. Second quarter adjusted EPS of $0.75 grew 23%, also exceeding the high end of our guidance range of $0.71 to $0.73, inclusive of charges related to the worldwide discontinuation of our ACURATE valve. Second quarter adjusted operating margin was 27.6%. Turning to our third quarter and our full year '25 outlook. We're guiding to organic growth of 12% to 14% for third quarter '25 and raising our full year guidance from 12% to 14% to 14% to 15%, reflecting the momentum across our global businesses. Our third quarter adjusted EPS guide is $0.70 to $0.72, and we now expect our full year adjusted EPS to be $2.95 to $2.99, representing growth of 18% to 19%, inclusive of updated assumptions for tariffs and impact related to ACURATE. John will provide more details within the financial section. I'll now provide some additional highlights on the quarter. Regionally, on an operational basis, the U.S. grew 31%, driven by our category-leading and broad-based cardiovascular portfolio. Europe, Middle East, Africa grew 2% on an operational basis and 7% excluding the discontinuation of our ACURATE valve. As a reminder, the vast majority of the $200 million in ACURATE revenue was generated in EMEA. Within EMEA, growth within the quarter was led by double-digit growth for FARAPULSE, WATCHMAN and Complex PCI. Asia Pacific grew 15% operationally, led by strong double-digit growth across our largest markets in the region: Japan, China and Australia. Japan grew high teens driven by FARAPULSE, which has moved into the leading position in PFA with over 15,000 patients treated since launch in Japan, supported by new account openings and the launch of FARAWAVE NAV. China also returned to mid-teens growth in the second quarter with diversified growth across businesses led by FARAPULSE and IVUS. And we expect this mid-teens growth to continue in China in the second half of the year. I'll now provide some additional commentary on our business units. Urology sales grew 28% operationally and 6% organically. Growth in the quarter was driven by the stone management and prosthetic urology franchises with double-digit growth in Rezum, which received expanded indication for large glands in the U.S. within the quarter. Integration of Axonics business has progressed well as we have worked through short-term commercial disruption and destocking in the first half of the year. Endoscopy delivered a strong quarter, growing 8% globally and double digits in the U.S. with global performance driven by strong growth in our anchor products, including EXALT-D, MANTIS, AXIOS and OverStitch, which saw notable growth from both ESG and closure procedures. In the second half of the year, we expect continued high single-digit growth led by our proprietary technologies and strategic partnerships globally. Neuromodulation sales grew 7% in the quarter with mid-teens growth in our brain franchise, led by continued adoption of the Cartesia X/HX leads and Illumina 3D in the U.S., both of which drive optimized patient outcomes. The pain franchise grew mid-single digits, led by strong double-digit growth in Intracept, which surpassed 50,000 patients treated with our innovative technology backed by robust clinical evidence. Cardiology delivered another outstanding quarter with sales growing 28%. Within Cardiology, Interventional Cardiology therapy sales grew 9% and excluding ACURATE grew very strong double digits. For the second half of 2025, we expect an approximate 800 basis point impact to ICTx growth in the second half from the discontinuation of ACURATE. Coronary therapy's high teens growth was driven by AGENT DCB and our global imaging portfolio, buoyed by additional support from the U.S. coronary societies upgrading intravascular imaging to a Class Ia recommendation for complex lesions, further validating its clinical value. In the U.S., AGENT DCB growth accelerated with new account openings and strong reorders, supported by confidence in long-term reimbursement with permanent CPT I codes established in the quarter that will go into effect in January '27. We continue to invest in expanding our portfolio and are pleased with the progress of our fracture trial, studying the Bolt IVL system in coronary patients, which is expected to complete enrollment by the first half of '26. Additionally, we closed the acquisition of SoniVie in the second quarter, which continued to enroll in the THRIVE IDE, a global randomized and sham-controlled study designed to demonstrate the effectiveness and safety of the TIVUS system in hypertensive patients. Cardiac Rhythm Management sales grew 1%. In Q2, our diagnostic franchise grew low double digits, fueled by strong growth of our LUX-Dx ICM device with our latest generation LUX-Dx II launching in Europe in the quarter. In core CRM, our low-voltage business declined low single digits and our high-voltage business was roughly flat for the year. In the second half, we do expect contribution from our expanded conduction system pacing portfolio in the U.S. and Europe and anticipate FDA approval of the EMPOWER leadless pacemaker by year-end. WATCHMAN grew 28% in this quarter, reflecting continued concomitant uptake in the U.S. and the strong safety profile of our latest generation WATCHMAN FLX Pro, which recently received CE Mark. We continue to invest in further in the LAAC market, including the development of our fourth-generation WATCHMAN device, which we anticipate initiating the IDE trial for next year. We continue to see considerable physician interest in concomitant procedures with over 60% of WATCHMAN implanting EPs in the U.S. having performed a concomitant procedure. Recently, we enrolled our first patient in the OPTION-A trial, studying concomitant use of WATCHMAN and FARAPULSE in Asia. We also received expanded labeling for WATCHMAN as a first-line therapy in post-ablation patients in the U.S. following the positive OPTION data, supporting continued confidence in our long-term outlook. Electrophysiology sales grew 94%, lapping our first full quarter of the FARAPULSE launch in the U.S. and growing mid-teens sequentially, supported by accelerated placements of the OPA mapping system, our portfolio of access solutions and uptake of concomitant procedures. Global momentum continued through the quarter, driven by the safety, predictability and versatility of the FARAPULSE device, particularly in de novo AFib ablations for paroxysmal and persistent AF, which we recently received expanded labeling in the U.S. We anticipate CE Mark as well as approval in Japan and China for this expanded labeling in the coming months. We continue to invest in clinical evidence to expand the served patient population with our FARAPULSE technology, including the recent initiation of the ReMATCH AF trial designed to study FARAWAVE and FARAPOINT in redo persistent AF patients, which currently represent approximately 1/3 of AF ablations. Also within the quarter, we announced positive 12-month primary endpoint results from the second phase of the ADVANTAGE AF trial, which will be used to support approval of the FARAPOINT PFA catheter as an adjunct technology to treat atrial flutter in patients with persistent Afib, which we expect to receive by year-end '25. Peripheral Intervention sales grew 17% operationally and 7% organically. Our Interventional Oncology and embolization franchise grew strong double digits, led by our broad embolization and cancer therapies portfolio. In the quarter, we closed the acquisition of Intera Medical, strengthening our interventional oncology portfolio by adding a complementary therapy to expand our offerings to treat both primary and metastatic forms of liver cancer. Within our vascular franchise, we saw low single-digit growth in arterial with low single-digit drug-eluting growth driven by our participation in the China VBP, which we anticipate will result in our ability to serve more patients across China. In venous, we did see strong double- digit growth led by continued strength in Varithena and notable growth in ECOS, particularly internationally. We continue to be pleased with the integration of Silk Road, which we expect to improve growth in the second half of the year, driven by a stabilization and investment of the commercial team. In closing, I'm very proud of the commercial execution of our high- performing global team and both in the near- and long-term growth catalysts across our businesses, which we look forward to sharing more details at our upcoming Investor Day on September 30 in New York City. With that, I'll hand over to Jon to provide more details on the financials.

Thanks, Mike. Second quarter consolidated revenue of $5.061 billion represents 22.8% reported growth versus second quarter 2024 and includes a 120 basis point tailwind from foreign exchange, which was favorable versus our expectations. Excluding this $50 million foreign exchange tailwind, operational revenue growth was 21.6% in the quarter. Sales impact from closed acquisitions contributed 420 basis points, resulting in 17.4% organic revenue growth, exceeding our second quarter guidance range of 13% to 15%. Q2 2025 adjusted earnings per share of $0.75 grew 23% versus 2024, exceeding the high end of our guidance range of $0.71 to $0.73, primarily driven by our strong sales performance in the quarter. Adjusted gross margin for the second quarter was 69.4%, representing a 100 basis point decline versus the second quarter of 2024, driven by the negative impact from inventory charges related to the worldwide discontinuation of our ACURATE valve. Based on the current schedule of expected tariffs, we now anticipate a full year headwind of approximately $100 million, down from our approximate $200 million estimate that we provided on our Q1 earnings call. We continue to expect full year adjusted gross margin to be roughly in line with 2024. Second quarter adjusted operating margin was 27.6%, expanding 50 basis points versus the second quarter of 2024, driven by strong drop-through on our top line performance and smart spend controls, offsetting the charges related to ACURATE. On a GAAP basis, second quarter operating margin was 16.2%. Moving to below the line. Second quarter adjusted interest and other expenses totaled $110 million, slightly unfavorable to our expectations. On an adjusted basis, our tax rate for the second quarter was 12.6%, which includes favorable discrete tax items. Our operational tax rate was 14.2% for the second quarter. Fully diluted weighted average shares outstanding ended at 1.494 billion shares in the second quarter. Free cash flow for the second quarter was $1.129 billion with $1.286 billion from operating activities, less $157 million in net capital expenditures. We now expect full year 2025 free cash flow to be approximately $3.5 billion. As of June 30, 2025, we had cash on hand of $534 million. And during the quarter, we were pleased to receive a credit rating upgrade from Moody's to A3. And with this upgrade, we now hold A- equivalent credit ratings from all 3 major agencies. Our gross debt leverage ratio was 2.1x. Our top capital allocation priority remains strategic tuck-in M&A and high-growth adjacencies, followed by share repurchases. And in alignment with this strategy, we recently closed the acquisitions of SoniVie and Intera Oncology, which complement our existing Interventional Cardiology and Peripheral Interventions businesses, respectively. Our legal reserve was $300 million as of June 30, with $47 million of this reserve already funded through our qualified settlement funds. I will now walk through guidance for Q3 and full year 2025. We now expect full year 2025 reported revenue growth to be in a range of 18% to 19% versus 2024. Excluding an approximate 50 basis point tailwind from foreign exchange based on current rates, we expect full year 2025 operational growth to be in the range of 17.5% to 18.5%. Excluding a 350 basis point contribution from closed acquisitions, we expect full year 2025 organic revenue growth to be in a range of 14% to 15% versus 2024. We expect third quarter 2025 reported revenue growth to be in the range of 17% to 19%. Excluding an approximate 50 basis point tailwind from foreign exchange based on current rates, we expect third quarter 2025 operational growth to be in the range of 16.5% to 18.5%. Excluding an approximate 450 basis point contribution from closed acquisitions, we expect third quarter 2025 organic revenue growth to be in a range of 12% to 14%. Based on our first half margin performance, we now expect to expand full year adjusted operating margin by 75 to 100 basis points while increasing our level of investment in R&D to fuel durable, differentiated revenue growth. We now expect full year 2025 adjusted below-the-line expense to be approximately $440 million. Under current legislation, including enacted laws and issued guidance, we forecast a full year 2025 operational tax rate of approximately 14% and an adjusted tax rate of approximately 12.5%. For 2026, we had previously forecasted a 200 to 300 basis point headwind to our tax rate, driven by changes to certain provisions scheduled under the TCJA. With the recent passage of the OBBB, this anticipated headwind has largely been eliminated. We'll share more specific 2026 tax rate guidance on our Q4 2025 earnings call. We expect full year 2025 adjusted earnings per share to be in a range of $2.95 to $2.99, representing growth of 18% to 19% versus 2024, including an approximate $0.04 headwind from foreign exchange. We expect third quarter adjusted earnings per share to be in a range of $0.70 to $0.72. In closing, I'm pleased with our strong second quarter financial performance and look forward to executing on our full year guidance of 14% to 15% organic revenue growth, 75 to 100 basis points of adjusted operating margin expansion and 18% to 19% adjusted earnings per share growth. For more information, please check our Investor Relations website for Q2 2025 financial and operational highlights, which outlines more details on Q2 results and 2025 guidance. And with that, I'll turn it back to Lauren, who will moderate the Q&A.

Thanks, Jon. Drew, let's open up for questions for the next 35 minutes or so. In order for us to take as many questions as possible, please limit yourself to 1 question and 1 related follow-up. Please go ahead.

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

Congrats on another fantastic quarter here. Two for me, kind of intertwined, so it is a related follow-up. Maybe to start, though, the WATCHMAN number was just phenomenal, plus 30% in the U.S., 28 worldwide. Big acceleration. I imagine a lot of that is coming on the back of OPTION and concomitant. But maybe just speak to the durability of that, the breadth and depth of usage that's driving it and what you're hearing in the field just as we think about going into champion next year, which could be another leg of growth for this franchise?

Yes, I'll make some initial comments, and Ken can certainly add more detail to it. We're really pleased with the results in the quarter at 28% and you also saw some good news in the script there. WATCHMAN FLX Pro approvals outside the U.S. and over the next LRP period, we aim to get more contributions outside the U.S. than we currently do today with that device, which has proven to be so safe and effective in the U.S., which is really the reliability and the trust that the physician community and referring physicians have in that device along with our clinical and sales team is driving that. And obviously, the continued investment in clinicals that you've noted on your comments there. Concomitant, as we've said in previous calls is really a breakthrough opportunity for hospitals, physicians and patients to be able to use the WATCHMAN device and the safety and efficacy profile combined with FARAPULSE and the same really superior safety and efficacy profile versus the competition and the ability to do that in the same procedure has proven to be very valuable and we're maximizing it as best we can commercially. Looking forward, we continue to believe that this category could grow in the plus 20% range as it continues to scale larger and larger each quarter. And we'll provide you more updates at Investor Day in terms of our programs on our next-generation valve and continued focus on clinical studies.

Yes, Robbie, I don't have too much to add to that, right? I think it's the positive data from OPTION. We very pleased to see the uptake of concomitant procedures. As Mike said on the call, earlier, right, 60% of our EPM planters are already adopting the use of concomitant procedures. It's a win for everyone. It's better for patients. It's clearly safer, easier for them. It's a win for hospitals as well. We do look forward to presenting the CHAMPION data at a major conference first half of next year. I do think it's important to say, though, it will take time for all of that to play out. We were very pleased to get the updated label from the OPTION to be used as first-line therapy in patients post ablation, but it still will take time for reimbursement to catch up to that updated able. And again, even once we present the data from CHAMPION, we'll still take time for those data if they're positive to make their way into a national coverage decision and into society guidelines.

Great. Maybe just a follow-up on that. Jon, the gross margin missed the Street, but some Eagle Eye people noticed there's $130 million write-down from the ACURATE exit, which is 260 basis points for the quarter, which would have put you in a great position, big year-over-year beat and beat versus the Street. Maybe just speak to the drivers of that. How much of that is new products versus underlying improvements? And how we should think about sort of that underlying gross margin ex tariff through the rest of the year?

Yes. Thanks, Robbie. And maybe a couple of points. Maybe first to the Eagle Eye folks. So the $130 million the accurate discontinuation impacted a number of different areas of the P&L. Within the adjusted P&L, we had some inventory charges in sales returns reserves related to ACURATE that totaled, call it, approximately $100 million. Then we also had restructuring and intangible asset impairment charges that impact the GAAP-only P&L. So that's the $130 million that was in the appendix of our operational highlights that the Eagle Eye folks picked up. So as far as our adjusted gross margin, roughly $100 million impact there from the accurate charges. Importantly, really pleased to see that we're able to offset that through the strong sales performance that you heard Mike go through as well as strong spend control to make sure that we offset the impact there and through the full P&L and delivered the strong EPS performance that you saw in the quarter. And so looking forward, Robbie, we expect gross margin for the year to be roughly flat. So we have the impact of tariffs, the impact, which are now roughly $100 million is our estimate. The impact of those accurate charges, the roughly $100 million that I just talked about being offset predominantly by favorable mix. You saw the WATCHMAN numbers. FARAPULSE continues to perform. As you can see, very well for us, that's accretive to our gross margin. So have those 2 items that we didn't anticipate at the start of the year with the ACURATE charge and tariffs being a large headwind but mix offsetting that largely to get to flat for the year is our expectation for gross margin.

The next question comes from Larry Biegelsen with Wells Fargo.

I'll echo Robbie's congratulations. So for Mike or Dr. Stein, maybe you talked about the growth vectors for your EP business market growth, PFA adoption, new geographies, new products, et cetera. How would you have us think about these pieces and what your EP business could look like in 3 to 5 years? And any color on the proposed ASC codes and what they could mean for you?

Yes, Larry, it's -- well, it's a little bit all of the above. And we will get a lot deeper into that, as you say, that long-range plan look at our Investors Day. I think sort of -- again, the quick answer beyond it's all of the above is its continued market growth in the United States as you look at the safety profile with FARAWAVE, as with the predictability of the case is as you look at the efficacy, accumulating data now actually for superior outcomes compared to thermal ablation. Very pleased with what we're seeing internationally. Again, as Mike mentioned in the script, over 15,000 cases have already been performed in Japan, where even though we were third to the market, we are already the clear leaders in PFA. Very pleased with the adoption that we're seeing to date of our FARAVIEW process on OPAL, our FARAWAVE NAV catheter. And you mentioned the ASC, the proposed rule which in the United States from CMS, which would allow ablations to be performed in the ASC, if that's finalized, we see that as an advantage for us. We do think that we are uniquely positioned to take advantage of procedures in the ASC. And again, it gets to the safety, it gets to the predictability, but it also gets to some of the economic advantages using FARAWAVE with FARAVIEW compared to the competition.

The next question comes from Joanne Wuensch with Citibank.

I'm going to add my congratulations. I'd like to pivot a little bit to the MedSurg business, I think that gets overlooked a fair bit solid high single-digit revenue growth across the segments. What would you like to highlight in there? And what do you think we may be missing?

Joanne, thanks for the question. I would say one I want to highlight, endoscopy. The U.S. business grew double digits, well above the market, grew 8% globally. That's despite some headwinds that we've talked about in the past with some low-cost scope competitors in Asia and Europe, which our team has really done a nice job of addressing. So we anticipate some of that headwind being mitigated as we look to 2026. So despite that, really strong performance in endo, as you know, high-margin business for us as well. Also pleased to see the enhancement and improvement in neuromodulation. The team there grew strong double digits in DBS and the Relievant acquisition has been integrated extremely well and really providing that strong accretive growth to the company and a wider solution for pain physicians. And we continue, I would say, to have improved momentum in spinal cord stimulation. The team made a number of commercial changes over the past year or so, and that team is starting to come together and strengthening. So we anticipate continued momentum with that neuromodulation business over the horizon. And our urology business is a fantastic franchise. It's grown a little bit under what we typically expect them to deliver, and we signaled that at the end of the first quarter call, given some supply chain constraints that we're working through that will get better in the second half of the year and also some low- cost competition again, that the team is addressing very proactively. The Axonics integration is a super important integration for the franchise and for the company. In the first half of the year there, we really worked through some commercial model changes, some turnaround, which we anticipated. And that team has now kind of restrengthened. We also had quite a bit of stocking that we had to work through in the first half of the year. So we anticipate an improvement in the Axonics growth in the second half of the year and a very strong 2026 for Axonics. So overall, MedSurg has performed well. And hopefully, that color was helpful to you.

The next question comes from Rick Wise with Stifel.

Maybe just start us off, if you would, by thinking about the ASC setting and how it sets up growth for next year. And help us think through one thing, obviously, in the hospital, you're seeing very strong concomitant attachment rates or uptake rates. If the PFA moves to the ASC, I don't think that concomitant would be as prevalent. Help us think through those moving pieces and is this still the ASC a net positive given maybe potentially lower WATCHMAN implants. Just help us think through all that, if you would.

Yes. Thanks, Rick. And it's a really nuanced point that you're raising. So I'll give you our view on it. And let me just start maybe with the upshot. We still do see it as a positive. What you need to think about are really 2 things. One is the pace at which procedures are going to move out into the ASC. And again, this is a proposed rule, assuming that it gets approved, there will be -- it's not a step change into the ASC. Today, there are approximately 20 states in the union where there are not CONs need or other regulations that would limit docs from opening an ASA, makes up approximately 40% of the market. But the other 30 states, the other 60% of the market, it's a much more gradual ability to build out into the ASC. I think the other thing that's important here is even once you have an ASC, the physicians are going to be thoughtful in asking who are the patients where you do the procedures in the ASC versus who are the patients where you still opt to do it in a hospital setting, whether it's an inpatient or an outpatient basis in the hospital. And so our anticipation would be that you begin, right, by taking the simplest patients. So de novo, paroxysmal afib that you start with the patients who are the least frail. And those are the opposite of the patients, right, who are candidates for the concomitant procedure or WATCHMAN. The younger you are, the less comorbidities you have, the lower your risk for stroke. And so at the outset, again, it would be our anticipation that folks begin with the easier, simpler, more straightforward cases. And those are just not patients who would have concomitant procedures anyway. And it will just take time to start moving more complex procedures out into the ASC. So again, net some -- we absolutely see the ASC as a positive for us. gets back to what I said earlier to Larry. We really see ourselves as having a really important differentiated advantages based on the entire FARAPULSE ecosystem as this transition begins.

As a follow-up, Mike, maybe you could expand a little bit on your thoughts about SoniVie with the deal now closed. How do we think about this, is renal innovation here now, given the recent approvals? Is this just Boston a flyby initial checkout of the RDN scene and waiting for things to evolve? And maybe just share with us if you can, just are there key clinical time lines or data or FDA timing? Just help level set us here.

Sure. Thanks, Rick. We really like where we're positioned with hypertension. So we've liked the market for a while. As you know, we had a previous RF product that we discontinued a number of years ago. We absolutely feel that the ultrasound technology is -- will be preferred. We have to prove it in a clinical trial over radio frequency in terms of its effectiveness and safety profile. So we really like the technology of SoniVie. We made an investment in that company and we acquired it, I guess it closed in early first quarter -- second quarter. So we closed recently. So it's the technology that we had been watching for quite a while, and we jumped on that and acquired it prior to this reimbursement decision. So our timing really was nice there. We're quite -- we're early in our clinical trial. So we won't be first to market. There'll be 2 others but our timing of anticipated approval, which will outline more at Investor Day isn't that far behind. And given the relationships that we have in this marketplace, what we think is a platform that has enhanced features and benefits over the current generations, we think we'll be well positioned to take advantage of this market over the LRP and beyond. And I think this market certainly could become a multibillion-dollar market over time, not overnight. And I think given that market TAM opportunity, given the growth that we'll see, but it will still need additional key milestone takedowns on reimbursement, commercial coverage and so forth. So this market has the potential to be quite large over time and our position with the device that we have, I think could make this very disruptive for us, assuming we have a positive clinical trial and the market develops.

The next question comes from David Roman with Goldman Sachs.

I was hoping we could dive a little bit deeper into the evolution of the EP portfolio because clearly, you've seen strong adoption on FARAPULSE. But as we look at both indication expansion and new product launches, it would actually seem like there's quite a bit of runway yet to go here. So maybe if we could just kind of think about where you've had adoption so far, most likely in de novo PVIs, maybe some use in persistence. You're accelerating your investment in mapping. FARAPOINT should be coming at some point later this year, early next year. I don't think you have an ice catheter yet. You have the Baylis portfolio. So can you maybe help us think about where you are in kind of capturing the totality of the EP market from a procedure and indication perspective, but then also as you think about the disposables used in an EP case, where you are in capturing the totality of the opportunity there? And then I have one P&L follow-up.

Yes, David. And I'll just begin. Again, it's everything you just said. Strategy has always been to aim for category leadership and category leadership includes everything you just talked about. I think, first off, just in terms of today's usage of FARAPULSE, as Mike mentioned in the script, right, pleased to have gotten the indication expansion into persistent Afib as well as paroxysmal Afib. To be frank, we were already seeing a very large amount of use in persistent population already. One of the great things about FARAWAVE is just how really elegantly beautifully it suited for doing -- going beyond just pulmonary vein isolation and using posterior wall ablation as well. And we've been very impressed already by seeing just how many physicians have adopted that as the predominant workflow that they're using. I think it's a very important message, right, that, that PVI alone is really not sufficient to address the majority of patients who are getting ablated with atrial fibrillation today. Gets into moving into the mapping, as I said earlier, we've been very pleased with the uptake of FARAVIEW on the OPAL system. But it also does involve us having the complete toolkit. So involving [indiscernible] solutions, which we acquired when we acquired Baylis. We do have an ice catheter under development, but more on that at Investor Day. And then we do have a full portfolio of additional ablation catheters. One thing I'd like to point out, FARAWAY is already -- we already got a second-generation PFA catheter on the market before most of our competitors have a proven first-generation catheter on the market. We will have continued iteration of FARAWAVE platform. We still anticipate approval of our FARAPOINT catheter second half of this year. We have a so-called large focal or mapping ablation catheter. FARAFLEX that's already in its first human use trials, very pleased with how that's progressing. And I think maybe the sum here is we're not one and done with far away. We've got an absolute commitment to continuing to iterate both in terms of ablation catheters, but also in terms of the entire ecosystem around it.

The other thing I'll add to that, besides the widening of the portfolio, which is what Ken talked about, which we have a lot of investment in internally and through our VC portfolio and partners, there's also a regional growth. As Ken mentioned, we're 1/3 of market in Japan. Now we're the clear market leader in Japan. The Japanese market will benefit from the persistent label that will be coming in the second half of this year. So that should further strengthen and we continue to roll out mapping systems there. We're very, very early days in China, which is a very, very big market for us. So a lot of emphasis on that. So we put a lot of time and attention in this. We not only want to be the clear leader in PFA, but our aim is to be the overall leader in EP in the future.

I appreciate all the perspective. And maybe just on the P&L. Jon, I think if you go back to Q1, you talked a little bit about a slower start to the year on OpEx this quarter, I think you utilized OpEx as a way to offset what looks to be like a $0.06 headwind-ish from the dynamics with ACURATE. Are you at a point now given the top line it's becoming more challenging to spend all the upside and that we should start to see more operating leverage? Or is there something more deliberate going on in OpEx?

Thanks, David. You hit the dynamics pretty well for the second quarter or first quarter. Say, in the second quarter, there was some holdback on OpEx and investment back into the business. As you recall, as we started the quarter on April 2, we had the updates on tariffs. And then midway through the quarter, we announced the ACURATE discontinuation. So a bit of a holdback on OpEx in Q2 which was important to offset the ACURATE charge that we stepped through earlier. So then as we move into the second half of the year, a couple of dynamics there, we'll see the tariff impact really take hold approximately $100 million which predominantly impacts the second half of the year. And then we do anticipate continuing to reinvest back into the business to drive differentiated revenue growth for the near and long term. So that's the focus of the company. So I'd expect to see R&D tick up a bit in Q3 and in the second half of the year. A lot we're excited about across the portfolio there. And we'd likely look to invest across the commercial team and to make some commercial investment as well with launch activity going on to continue to drive the growth that we're seeing. So on the whole, I am really pleased with the 75 to 100 basis points of op margin expansion that we're expecting for the year. And I think we're doing a nice job of balancing drop through to the bottom line and margin expansion with reinvestment back into the business. And I think you see more of that in the second half year.

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

Congrats on a good quarter. I guess kind of before later this year, you're going to be updating the LRP at the Analyst Day, but just kind of bigger picture, how you kind of see the pluses and minuses shaking up over the next few years versus the last couple of years? And your weighted average market growth now is kind of approaching 10%. And so just think about the confidence and to continue to kind of outgrow your markets as you've kind of always done historically.

Well, I think that we have like half a day with you at Investor Day to talk about your question. So as nothing breakthrough here, but our goal is to continue to improve our weighted average market growth rate through our organic portfolio, the choices we make in our venture and our M&A, which we've done over many, many years. So we anticipate that to continue. At the same time, we expect our leaders to grow faster than the markets. Not every division, every region does it every quarter, but the majority of them do. So we have a strong track record of growing faster than our weighted average market growth rate. And we are -- as Jon mentioned, we are enhancing our R&D spend, and we have many number of important shots on goal to drive differentiated growth over the next 5 years. And we'll talk a lot about that at Investor Day.

Great. . And then, Jon, just quickly on the tax rate with some of the new legislation that came out and if there was any kind of update on how you're thinking about the tax rate going forward?

Yes. So we previously, Travis, as you know, expected a 200 to 300 basis point headwind to the tax rate under the TCJA and certain rigs there that were set to increase in 2026 and beyond under that now old legislation. Under the OBBB, with new rates that were established there and other provisions, that headwind has largely gone away. So that's the impact to Boston Scientific from the new tax legislation. As we get to the normal course and the Q4 earnings call, we'll update on our specific guide for tax for 2026. But that was for the team here. good outcome from the recent legislation.

The next question comes from Michael Polark with Wolfe Research.

I have one on Medicare rule making. Another thing that came out during rate season was the physician fee for LAA was proposed down 16%. Year-on-year, the societies came out against this. There's so much going right in that business with WATCHMAN form factor innovation, concomitant, CHAMPION ahead. How much of a challenge does this present, if any? And do you agree with Medicare's math?

Yes, Michael, we certainly think payment ought to be appropriate to the amount of work that's involved in doing a procedure and I'd say my concern as some of has done procedures is whether they are really appropriately valuing the complexity the decision-making that's involved in managing these patients. We certainly are committed to giving the medical societies the support that they need from us to help mitigate any impact of this proposal. I think, frankly, in terms of impact on growth, I still firmly believe docs are going to do the right thing for patients and are going to pick the most clinically appropriate treatment. When it comes to something as important as preventing stroke, I'd be very hopeful that this kind of a reimbursement cut, if it does persist into the final rule, still will not prevent patients from getting the treatments they need.

The next question comes from Danielle Antalffy with UBS.

I'll add to everyone's congratulations on another very strong quarter. Just 2 questions for me. Number one, on WATCHMAN and FARAPULSE and asking a question from another direction and that's capacity, which I appreciate the recent approval in the ASC, that's definitely helpful. But a lot of these EPs are also doing WATCHMAN procedures. Yes, now they can do it concomitantly. But at what point do we start to see capacity be an issue? And I guess the -- are you seeing that yet? And then the follow-up question is related to that. You guys had said you're still pretty early in the FARAPULSE launch broadly, I mean, you're year-end, but you're still not getting into the sort of lower volume centers. Have you guys started to get into these lower-volume centers? Are you seeing previously pretty low-volume centers doing higher volumes at this point because now they have access to this device that democratizes ablation.

Sure. Danielle, thanks for the question. I'd say just on capacity, really no difference versus previous comments. Thankfully, the procedure is very safe to FARAPULSE, WATCHMAN or concomitant. It's a very safe and effective albeit complex procedure that docs have a lot of confidence in. The hospitals do a good job of knowing the predictability and time allotment for these procedures because they've done a lot of them. So they're able to better plan. We don't like the proposed reimbursement cuts for physicians. However, on the hospital side, these are strong procedures in terms of profitability for hospitals. So we do see some hospitals investing more and more in adding additional labs and potentially prioritizing as best they can for these types of procedures. So to date, we don't see a big constraint. There's still a pretty healthy backlog across most centers for WATCHMAN, FARAPULSE or concomitant, which, I guess, is a good sign for the future. And as Ken talked about earlier, this ASC potential ruling, which go into effect in 2016, if it all goes through, we see about 20 states in the U.S. that potentially could act on this that don't have certificate of needs that would represent about 40% of the Afib volume. So that won't happen overnight. But over time, you'll see more and more of the PVI posterior wall, these types of procedures moving more to ASC, which will provide some additional capacity. So I think the ASC ruling will help with capacity, and we continue to work on technology solutions to drive better procedure time, more productivity and concomitant procedures. There was a second part of the question.

Lower volume centers? Are you seeing any?

Lower volume centers, for sure, we put the majority of focus in Europe, in U.S. and Japan on the highest volume centers for obvious reasons. But as we continue to expand the rollout in Europe, primarily in U.S. and Japan, we are moving into some smaller centers as we continue to scale our commercial capabilities and our clinical footprint.

And I understand there's time for one last questioner.

That's right.

That will come from Matthew O'Brien with Piper Sandler.

Maybe I think Mike talked about the concomitant percentage, about 60% of all procedures now or all of your doctors have done at least 1 concomitant procedure. How has that trended over maybe the last 6 to 12 months, especially following the option readout? And then I do have a quick follow-up.

Maybe I would -- just to clarify that. So the 60% is of the electrophysiologists who do WATCHMAN implants. And of course, it's a mix of interventional cardiology, structural heart physicians as well as electrophysiologists who do these procedures. But of the EPs who do the procedures who are also the ones who do ablation, right, 60% of EPs who have been WATCHMAN implanters have already jumped on to the concomitant bandwagon. Now I think just in terms of understanding sort of where the growth there is, right, remember, although some folks were doing concomitant procedures even before CMS established the unique DRG to pay for it, really, we only have reimbursement at the hospital level for concomitant beginning in October of last year. And then the OPTION data was only released in November of last year. So right, this is all still a very new phenomenon, and we still see physicians needing to understand how you adopt in the workflow. So sequentially, still seeing important growth in the concomitant in the concomitant procedure.

Okay. Yes, Dr. Stein, I know, we're early days there. I guess the follow-up question would really be kind of dovetailing off of David Roman's question about the breadth of the portfolio that you have here. In mapping now with concomitant with obviously best-in-class product with WATCHMAN by a mile. Just your ability because I know a big concern that investors have is just competition coming in, you've got some established competitors with big mapping footprint out there. So just your ability to kind of defend yourself or just said another way, the most you're building here between OPAL, all the catheters plus concomitant cases. How wide is that moat in your opinion and how much wider can it get?

Well, we continue to aim to be, as I mentioned, the clear PFA leader, and we aim to be the #1 overall in EP as we widen that portfolio. I think a good testament is what happened in Japan. We're 1/3 to market in Japan without a persistent label indication, which our competitors had. And now we're the clear leader in Japan, and we'll be adding persistent label to it. So we do feel like we have some unique advantages that are highly differentiated with FARAPULSE and Ken detailed out, and you'll see at the Investor Day quite a bit, how we're widening the portfolio for -- and then plus the underlying market growth is nearly 20% right now. And clearly, that will slow down over time. But it will still be likely mid-teens growth and the largest, fastest-growing market in med tech. There wasn't a question on this, but I feel like I want to call out our Interventional Cardiology team. Our ICT X business is one of our largest businesses in the company and no questions on it today. And most companies don't talk about coronary therapies and think of drug-liking stands. But it's a great example of a business unit that and our team focused on this across all of our business units. And moving into faster, weighted at faster markets and having unique technology backed by clinical support. In our coronary therapies business this year -- I'm sorry, this quarter, grew high double digits, which is pretty unique for coronary therapies. And given the size of that business, and a lot of that is being driven by our imaging business, which continues to enhance and the execution of our AGENT DCB in terms of its clinical study, the positive coverage decisions we've received and the execution of that commercially. So I think it's a good example of how our business units revamp their portfolio within their own businesses and you have a business now and what's considered a very slow market growing strong double digits.

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