TAVR Platform Drives Sales Growth
TAVR net sales increased 11.3% in Q2, driven by higher sales of the Edwards SAPIEN 3 Ultra RESILIA valve across the U.S., Europe, and Japan; foreign currency tailwinds added $8.4 million.
Source: 10-Q Item 2 MD&A
Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Edwards Lifesciences’ Q2 FY2026 results showcased robust underlying demand for its structural heart products, with revenue growth led by its TAVR platform and a 47.7% surge in transcatheter mitral and tricuspid therapies (TMTT). The quarter, however, was marred by a one-time $188.2 million deferred tax asset valuation allowance from new California legislation, which pushed the effective tax rate to 53.6% and caused net income to drop 27.4% from the prior year. Gross margin held steady at 77.5%, reflecting strong pricing power, but the tax charge overshadowed otherwise solid operating performance.
Revenue
$1.74B
+13.63% YoY
EPS (Diluted)
$0.42
-25.00% YoY
Gross Margin
77.5%
-0.1 pts YoY
Operating Income
$513.2M
+24.81% YoY
Source: SEC XBRL
Edwards Lifesciences (EW) reported Q2 FY2026 revenue of $1.74B, up 13.6% year over year. Operating margin was 29.5%, up 2.7 points from 26.8% a year earlier. EW's fiscal Q2 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 0.78 | 0.76 | Beat +2.1% |
| Mar 2026 | 0.78 | 0.75 | Beat +4.2% |
| Dec 2025 | 0.58 | 0.64 | Miss -8.8% |
| Sep 2025 | 0.67 | 0.61 | Beat +9.6% |
Adjusted (non-GAAP) EPS of $0.78 versus the $0.76 analyst consensus — a +2.1% beat for Jun 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $0.42.
4 reported segments · SEC XBRL
Segment revenue totals $1.74B, which is the $1.74B of consolidated revenue on the income statement.
Compiled by AI from 10-Q Item 2 of this filing
TAVR net sales increased 11.3% in Q2, driven by higher sales of the Edwards SAPIEN 3 Ultra RESILIA valve across the U.S., Europe, and Japan; foreign currency tailwinds added $8.4 million.
Source: 10-Q Item 2 MD&A
TMTT net sales surged 47.7% to $198.6 million, propelled by the PASCAL repair system, EVOQUE tricuspid replacement, and SAPIEN M3 mitral valve; the company received CE Mark for SAPIEN M3 RESILIA and FDA approval for TRIFORMIS RESILIA.
Source: 10-Q Item 2 MD&A
The effective tax rate jumped to 53.6% from 16.1% last year, mainly due to a $188.2 million non-cash valuation allowance against California R&D tax credits following budget legislation that permanently limited their utilization; the company also faces ongoing IRS transfer-pricing disputes that could materially impact future periods.
Source: 10-Q Item 2 MD&A
Operating cash flow increased 21.9% YTD to $695.7 million, aided by lower tax payments; free cash flow was $563.9 million, supporting $575.1 million in share repurchases, including a $500 million accelerated buyback.
Source: 10-Q Item 2 MD&A
Compiled by AI from 10-Q Item 2 of this filing · 2 high, 3 medium, 0 low
Increased tariffs on imports and potential retaliatory tariffs could raise costs and reduce demand for products. The company is pursuing mitigation strategies but cannot predict the outcome, and failure to mitigate could materially harm business and financial results.
Source: 10-Q Item 2 MD&A
The IRS is seeking substantial additional taxes for 2015–2017 and 2018–2020 related to intercompany royalty transactions, with combined potential exposure exceeding $1.5 billion. Litigation outcomes are uncertain and could materially affect financial condition and results of operations.
Source: 10-Q Item 2 MD&A
Recent California budget legislation permanently limited the use of R&D tax credits, forcing a $188.2 million valuation allowance. Future tax law changes, including Pillar Two global minimum tax rules, may further increase the effective rate and reduce net income.
Source: 10-Q Item 2 MD&A
As a global company, movements in exchange rates can negatively impact reported net sales and gross margins. In Q2, foreign currency effects created a 0.7 percentage point headwind on gross margin, partially offset by hedging and lower manufacturing costs.
Source: 10-Q Item 2 MD&A
Revenue growth is heavily reliant on continued success of the SAPIEN TAVR platform and rapid commercialization of newer TMTT products. Delays in regulatory approvals, adverse clinical outcomes, or competitive pressures could slow growth.
Source: 10-Q Item 2 MD&A
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 1.74 $B | 1.53 $B | +13.63% |
Cost of Revenue $M | 392.40 $M | 344.40 $M | +13.94% |
Gross Profit $B | 1.35 $B | 1.19 $B | +13.54% |
Operating Income $M | 513.20 $M | 411.20 $M | +24.81% |
Net Income $M | 241.90 $M | 333.20 $M | -27.40% |
EPS (Basic) $ | 0.42 $ | 0.57 $ | -26.32% |
EPS (Diluted) $ | 0.42 $ | 0.56 $ | -25.00% |
R&D Expense $M | 278.90 $M | 276.20 $M | +0.98% |
SG&A Expense $M | 561.20 $M | 502.00 $M | +11.79% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
Edwards Lifesciences delivered strong Q1 FY2026 revenue growth of 16.7% to $1.65B, with operating income surging 21.0%, though operating cash flow dropped sharply by 84.4% to $43.8M amid aggressive share buybacks of $421.8M.
Edwards Lifesciences (EW) delivered 11.5% revenue growth to $6.07B in FY2025, but net income plunged 74.3% to $1.07B largely due to elevated SG&A costs and the absence of prior-year one-time gains, while operating cash flow surged 194.2% to $1.60B.
Other companies in Health Care Equipment