Gross Margin Expansion
Gross margin rose to 70.7% from 67.7% a year ago, driven by increased sales of higher-margin products, a benefit from the recovery of previously incurred tariffs, and a decrease in inventory charges, only partially offset by unfavorable foreign currency effects.
Electrophysiology Growth and Competition
Reported net sales growth in the Cardiovascular segment was led by the coronary therapies franchise (notably the AGENT Drug-Coated Balloon) and the Electrophysiology business (FARAPULSE PFA System), though the latter experienced increased competition and a deceleration of certain WATCHMAN procedures.
Pending Penumbra Acquisition
The planned acquisition of Penumbra, valued at approximately $14.5 billion, is expected to close in the second half of 2026, subject to FTC review and other closing conditions. The deal will be funded through $11 billion in cash and newly issued debt, plus shares, and would be integrated into the Cardiovascular division.