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What changed in Edwards Lifesciences's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Edwards Lifesciences's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+320 added−320 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-28)

Top changes in Edwards Lifesciences's 2025 10-K

320 paragraphs added · 320 removed · 252 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

81 edited+18 added−25 removed44 unchanged
Biggest changeIn TMTT, our primary competitor is Abbott, and there are a considerable number of large and small companies with development efforts in these fields. In Surgical, our primary competitors include Medtronic, Abbott, and Artivion, Inc (formerly CryoLife). Sales and Marketing Our portfolio includes some of the most recognizable cardiovascular device product brands in treating structural heart disease today.
Biggest changeIn Surgical, our primary competitors include Medtronic and Abbott. Sales and Marketing Our portfolio includes some of the most recognizable cardiovascular device product brands in treating structural heart disease today. We have a number of product lines that require sales and marketing strategies that are tailored to deliver high-quality, cost-effective products and technologies to customers worldwide.
Our future growth opportunities include offering solutions for treating patients with both valvular and non-valvular structural heart disease, such as heart failure, which is a natural progression of the disease for many patients suffering from aortic stenosis and mitral and tricuspid regurgitation.
Our future growth opportunities include offering solutions for treating patients with both valvular and non-valvular structural heart disease, such as heart failure, which is a natural progression of the disease for many patients suffering from aortic stenosis, mitral and tricuspid regurgitation and aortic regurgitation.
The FDA may withdraw product clearances or approvals due to failure to comply with regulatory standards, or the occurrence of unforeseen problems following initial approval, and require notification of health professionals and others with regard to medical devices that present unreasonable risks of substantial harm to the public health.
The FDA may withdraw product clearances or approvals due to failure to comply with regulatory standards, or the occurrence of unforeseen problems following initial approval, and require notification of health professionals and others with regard to medical devices that present unreasonable risks of substantial harm to public health.
We are also subject to additional laws and regulations that govern our business operations, products, and technologies, including: • federal, state, and foreign anti-kickback laws and regulations, which generally prohibit payments to anyone, including physicians, as an inducement to purchase or recommend a product; • the Stark law, which prohibits physicians from referring Medicare or Medicaid patients to a provider that bills these programs for the provision of certain designated health services if the physician (or a member of the physician's immediate family) has a financial relationship with that provider; • federal and state laws and regulations that protect the confidentiality of certain patient health information, including patient records, and restrict the use and disclosure of such information, in particular, the Health Insurance Portability and Accountability Act of 1996; • the Physician Payments Sunshine Act, which requires public disclosure of the financial relationships of United States physicians and teaching hospitals with applicable manufacturers, including medical device, pharmaceutical, and biologics companies; 7 Table of Contents • the False Claims Act, which prohibits the submission of false or otherwise improper claims for payment to a federally funded health care program, and health care fraud statutes that prohibit false statements and improper claims to any third-party payor; and • the United States Foreign Corrupt Practices Act, which can be used to prosecute United States companies for arrangements with foreign government officials or other parties, or for not keeping accurate financial records or maintaining adequate internal controls to prevent and detect arrangements with foreign government officials or other parties.
We are also subject to additional laws and regulations that govern our business operations, products, and technologies, including: • federal, state, and foreign anti-kickback laws and regulations, which generally prohibit payments to anyone, including physicians, as an inducement to purchase or recommend a product; • the Stark law, which prohibits physicians from referring Medicare or Medicaid patients to a provider that bills these programs for the provision of certain designated health services if the physician (or a member of the physician's immediate family) has a financial relationship with that provider; • federal and state laws and regulations that protect the confidentiality of certain patient health information, including patient records, and restrict the use and disclosure of such information, in particular, the Health Insurance Portability and Accountability Act of 1996; 7 Table of Contents • the Physician Payments Sunshine Act, which requires public disclosure of the financial relationships of United States physicians and teaching hospitals with applicable manufacturers, including medical device, pharmaceutical, and biologics companies; • the False Claims Act, which prohibits the submission of false or otherwise improper claims for payment to a federally funded health care program, and health care fraud statutes that prohibit false statements and improper claims to any third-party payor; and • the United States Foreign Corrupt Practices Act, which can be used to prosecute United States companies for arrangements with foreign government officials or other parties, or for not keeping accurate financial records or maintaining adequate internal controls to prevent and detect arrangements with foreign government officials or other parties.
Our manufacturing and sterilization processes are designed to render tissue biologically safe from all known infectious agents and viruses. Quality Assurance We are committed to providing quality products to patients and have implemented modern quality systems and concepts throughout the organization.
Our manufacturing and sterilization processes are designed to render tissue biologically safe from all known infectious agents and viruses. Quality Assurance We are committed to providing high-quality products to patients and have implemented modern quality systems and concepts throughout the organization.
The telephone number at that address is (949) 250-2500. We make available, free of charge on our website located at www.edwards.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after filing such reports with the Securities and Exchange Commission ("SEC").
The telephone number at that address is (949) 250-2500. We make available, free of charge on our website located at www.edwards.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after filing such reports with the Securities and Exchange Commission (“SEC”).
Edwards Lifesciences has been a leader in our field for over six decades. Since our founder, Miles Lowell Edwards, first dreamed of using engineering to address diseases of the human heart, we have steadily built a company on the premise of imagining, building, and realizing a better future for patients. Our innovative work encompasses both surgical and transcatheter therapies.
Edwards Lifesciences has been a leader in our field for over six decades. Since our founder, Miles “Lowell” Edwards, first dreamed of using engineering to address diseases of the human heart, we have steadily built a company on the premise of imagining, building, and realizing a better future for patients. Our innovative work encompasses both surgical and transcatheter therapies.
Switzerland is not a member state of the EU, but is linked to the EU through bilateral treaties; therefore, the free movement of goods, including medical devices, between the EU and Switzerland after implementation of the MDR required a revised Mutual Recognition Agreement ("MRA") that had not been agreed to until recently and which requires additional regulatory steps on registration and labeling.
Switzerland is not a member state of the EU, but is linked to the EU through bilateral treaties; therefore, the free movement of goods, including medical devices, between the EU and Switzerland after implementation of the MDR required a revised Mutual Recognition Agreement (“MRA”) that had not been agreed to until recently and which requires additional regulatory steps on registration and labeling.
The strategic talent imperatives are developed to identify talent related initiatives that support achievement of the KODs. In addition, the Chief Executive Officer ("CEO") and his leadership team have talent management related performance goals tied to their compensation; these Performance Management Objectives are reviewed on an annual basis, tracked, and then reported to and evaluated by our Board of Directors.
The strategic talent imperatives are developed to identify talent related initiatives that support achievement of the KODs. In addition, the Chief Executive Officer (“CEO”) and his leadership team have talent management related performance goals tied to their compensation; these Performance Management Objectives are reviewed on an annual basis, tracked, and then reported to and evaluated by our Board of Directors.
Government and private sector initiatives to limit the growth of health care costs, including price regulation and competitive pricing, coverage and payment policies, comparative effectiveness reviews, technology assessments, increasing evidentiary demands, and managed-care arrangements, are continuing in many countries where we do business, including the United States, Europe, and Japan.
Government and private sector initiatives to limit the growth of health care costs, including price regulation and competitive pricing, coverage and payment policies, comparative effectiveness reviews, technology assessments, increasing evidentiary demands, and managed-care arrangements, are continuing in many geographies where we do business, including the United States, Europe, and Japan.
Our Board of Directors routinely engages with leadership to review and discuss our human capital management ("HCM"), with time dedicated at each regularly scheduled meeting to discuss talent management, which includes topics such as talent strategy, succession planning, employee development, critical role talent acquisition, employee health, safety, and welfare, results of employee surveys, and compensation.
Our Board of Directors routinely engages with leadership to review and discuss our human capital management (“HCM”), with time dedicated at each regularly scheduled meeting to discuss talent management, which includes topics such as talent strategy, succession planning, employee development, critical role talent acquisition, employee health, safety, and welfare, results of employee surveys, and compensation.
These various initiatives have created increased price sensitivity over medical products generally and may impact demand for our products and technologies. The delivery of our products is subject to regulation by the United States Department of Health and Human Services ("HHS") and comparable state and foreign agencies responsible for reimbursement and regulation of health care items and services.
These various initiatives have created increased price sensitivity over medical products generally and may impact demand for our products and technologies. The delivery of our products is subject to regulation by the United States Department of Health and Human Services (“HHS”) and comparable state and foreign agencies responsible for reimbursement and regulation of health care items and services.
We compete with divisions of larger companies as well as smaller companies that offer competitive product lines in certain geographies in which we operate. We also compete with both established and newer technologies that target the patients served by our products. New product development and technological change characterize the areas in which we compete.
We compete with divisions of larger companies as well as smaller companies that offer competitive product lines in certain geographies in which we operate. We also compete with both established and newer technologies that address the patients served by our products. New product development and technological change characterize the areas in which we compete.
HHS' Centers for Medicare & Medicaid Services ("CMS") may also review whether and/or under what circumstances a procedure or technology is reimbursable for Medicare beneficiaries. Changes in current coverage and reimbursement levels could have an adverse effect on market demand and our pricing flexibility.
HHS' Centers for Medicare & Medicaid Services (“CMS”) may also review whether and/or under what circumstances a procedure or technology is reimbursable for Medicare beneficiaries. Changes in current coverage and reimbursement levels could have an adverse effect on market demand and our pricing flexibility.
We undertake reasonable measures to protect our intellectual property rights. Litigation has been necessary to enforce certain patent rights held by us, and we plan to continue to defend and prosecute our rights with respect to such patents. Moreover, we own certain United States registered trademarks used in our business.
We undertake reasonable measures to protect our intellectual property rights. Litigation has been necessary to enforce certain intellectual property rights held by us, and we plan to continue to defend and prosecute our rights with respect to such intellectual property. Moreover, we own certain United States registered trademarks used in our business.
This consistent and scalable approach looks across all our product groups, regions, and significant functions to align and elevate priorities, critical capabilities, and organizational evolutions in line with our strategic plan. This integrated approach informs our yearly objectives and fuels our talent roadmap across the strategic horizon.
This consistent and scalable approach looks across all our product groups, regions, and significant functions to align and elevate priorities, critical capabilities, and organizational evolutions in line with our strategic plan. This integrated approach informs our annual objectives and fuels our talent roadmap across the strategic horizon.
Our HCM governance includes a global talent development review ("TDR") process to align our talent strategies with our business strategy, assess talent against future organizational needs, evaluate critical talent populations, and enhance the strength of our succession planning. We track our performance regularly.
Our HCM governance includes a global talent development review (“TDR”) process to align our talent strategies with our business strategy, assess talent against future organizational needs, evaluate critical talent populations, and enhance the strength of our succession planning. We track our performance regularly.
Item 1. Business Overview Edwards Lifesciences Corporation is the leading global structural heart innovation company, driven by a passion to improve patient lives. Through breakthrough technologies, world-class evidence and partnerships with clinicians and healthcare stakeholders, our employees are inspired by our patient-focused culture to deliver life-changing innovations to structural heart patients who need them most.
Item 1. Business Overview Edwards Lifesciences Corporation is the leading global structural heart innovation company, driven by a passion to improve patient lives. Through breakthrough technologies, world-class evidence, and meaningful partnerships with clinicians and healthcare stakeholders, our employees are inspired by our patient-focused culture to deliver life-changing innovations to those who need them most.
In the U.S. alone, one cardiovascular patient dies every 33 seconds. Cardiovascular disease is progressive in that it tends to worsen over time and often affects the structure of an individual's heart. Our vision is to transform patient care where patients are diagnosed earlier, treated in a routine fashion, live longer, and enjoy a better quality of life.
In the U.S. alone, one cardiovascular patient dies every 34 seconds. 1 Cardiovascular disease is progressive in that it tends to worsen over time and often affects the structure of an individual's heart. Our vision is to transform patient care where patients are diagnosed earlier, treated in a routine fashion, live longer, and enjoy a better quality of life.
Human Capital Management Strategy Human Capital Management ("HCM") Governance The primary goals of our talent management strategy are to attract, develop and retain a motivated, professional workforce and to strive for alignment on our patient-focused innovation strategy.
Human Capital Management Strategy Human Capital Management (“HCM”) Governance The primary goals of our talent management strategy are to attract, develop and retain a motivated, professional workforce and to strive for alignment on our patient-focused innovation strategy.
Alternatively, a clinician (typically an interventional cardiologist) may implant an Edwards transcatheter valve or repair system via a catheter-based approach that does not require traditional open-heart surgery and can be done while the heart continues to beat. Corporate Background Our principal executive offices are located at One Edwards Way, Irvine, California 92614.
Alternatively, an interventional cardiologist or cardiac surgeon may implant an Edwards transcatheter valve or repair system via a catheter-based approach that does not require traditional open-heart surgery and can be done while the heart continues to beat. Corporate Background Our principal executive offices are located at One Edwards Way, Irvine, California 92614.
Our operations are frequently inspected by the many regulators that oversee medical device manufacturing, including the United States Food and Drug Administration ("FDA"), European Notified Bodies, and other regulatory entities. The medical technology industry is highly regulated and our facilities and operations are designed to comply with all applicable quality systems standards, including the International Organization for Standardization ("ISO") 13485:2016.
Our operations are frequently inspected by the many regulators that oversee medical device manufacturing, including the United States Food and Drug Administration (“FDA”), European Notified Bodies, and other regulatory entities. The medical technology industry is highly regulated and our facilities and operations are designed to comply with all applicable quality systems standards, including the International Organization for Standardization (“ISO”) 13485:2016.
These laws or any future legislation, including deficit reduction legislation, could impact medical procedure volumes, reimbursement for our products, and demand for our products or the prices at which we sell our products. Seasonality Our quarterly sales are influenced by many factors, including new product introductions, acquisitions, regulatory approvals, patient and physician holiday schedules, and other factors.
These laws or any future legislation, including deficit reduction legislation, could impact medical procedure volumes, reimbursement for our products, and demand for our products or the prices at which we sell our products. 9 Table of Contents Seasonality Our quarterly sales are influenced by many factors, including new product introductions, acquisitions, regulatory approvals, patient and physician holiday schedules, and other factors.
Our latest innovation, the MITRIS RESILIA valve, is commercially available in the United States, Europe, and Japan, as well as other geographies, where it has been widely adopted by surgeons as the leading product in our mitral valve portfolio.
Our MITRIS RESILIA valve is commercially available in the United States, Europe, Japan and China, as well as other geographies, where it has been widely adopted by surgeons as the leading product in our mitral valve portfolio.
In addition, our unique portfolio of repair and replacement technologies for both mitral and tricuspid heart valves provides a broad set of treatment options to serve the many diverse and complex patients in need.
In addition, our unique portfolio of repair and replacement technologies for aortic, mitral, tricuspid and pulmonic heart valves provides a broad set of treatment options to serve the many diverse and complex patients in need.
Our Board of Directors also annually approves the strategic talent imperatives 9 Table of Contents that are tied to our Key Operating Drivers ("KODs"). Our KODs are tracked using a point system across our entire organization that focus the Company and management toward short-, medium-, and long-term goals.
Our Board of Directors also annually approves the strategic talent imperatives that are tied to our Key Operating Drivers (“KODs”). Our KODs are tracked using a point system across our entire organization that focus the Company and management toward short-, medium-, and long-term goals.
Moreover, the FDA and several other United States agencies administer controls over the export of medical devices from the United States and the import of medical devices into the United States, which could also subject us to sanctions for noncompliance.
Moreover, the FDA and several other United States agencies administer controls over the export of medical devices from, and the import of such devices into, the United States, which could also subject us to penalties for noncompliance.
Additional details regarding talent development, compensation, and employee health and safety can be found in our Corporate Impact Report posted on our website at www.edwards.com under "Investors — Governance & Corporate Impact." References to our website in this Annual Report on Form 10-K are provided for convenience only and the content on our website is not being incorporated by reference herein and does not constitute a part of this Report. 11 Table of Contents
Additional details regarding talent development, compensation, and employee health and safety can be found in our Corporate Impact Report posted on our website at www.edwards.com under “Investors — Governance & Corporate Impact.” References to our website in this Annual Report on Form 10-K are provided for convenience only and the content on our website is not being incorporated by reference herein and does not constitute a part of this Report.
Edwards remains committed to its strategy of transformative product innovation, robust and expanding clinical evidence to support approvals and adoption, as well as comprehensive support to ensure excellent real-world patient outcomes. Cardiovascular disease is the number-one cause of death in the world and is the top disease in terms of health care spending in nearly every country.
Edwards remains committed to its strategy of transformative product innovation, high-quality, expansive clinical evidence to support approvals and adoption, as well as comprehensive support to ensure excellent real-world patient outcomes. Cardiovascular disease is the number-one cause of death in the world and is the top disease in terms of health care spending in nearly every country.
Headcount and Labor Representation As of December 31, 2024, we had approximately 15,800 employees worldwide, the majority of whom were located in the United States, Singapore, and Costa Rica. None of our North American employees are represented by a labor union. In various countries outside of North America, we interact with trade unions and works councils that represent employees.
Headcount and Labor Representation As of December 31, 2025, we had approximately 16,000 employees worldwide, the majority of whom were located in the United States, Singapore, and Costa Rica. None of our North American employees are represented by a labor union. In various countries outside of North America, we interact with trade unions and works councils that represent employees.
Our learning and development strategy aims to have a balanced focus on building leadership and technical capabilities, with resources dedicated to building learning and development for global leaders, such as our course on ethical decision making for managers, and developing technical skills and capabilities for unique talent segments.
Our learning and development strategy aims to have a balanced focus on building leadership and technical capabilities, with resources dedicated to building learning and development for global leaders, such as our course on ethical decision making for managers, and developing technical skills and capabilities for our functional teams.
Our RESILIA tissue, with published clinical data showing 99% freedom from structural valve deterioration through seven years 1 , has set the new standard for tissue valve durability. Our flagship INSPIRIS RESILIA aortic valve, offers RESILIA tissue and VFit technology. INSPIRIS is the leading aortic surgical valve in the world.
Our differentiated RESILIA tissue technology, with published clinical data showing over 99% freedom from structural valve deterioration through eight years, 3 has set the new standard for tissue valve durability. Our flagship INSPIRIS RESILIA aortic valve offers RESILIA tissue and VFit technology. INSPIRIS is the leading aortic surgical valve in the world.
We purchase certain materials and components used in manufacturing our products from external suppliers. In addition, we purchase certain supplies from single sources for reasons of sole source availability or constraints resulting from regulatory requirements. We work with our suppliers to mitigate risk and seek continuity of supply while maintaining quality and reliability.
In addition, we purchase certain supplies from single sources for reasons of sole source availability or constraints resulting from regulatory requirements. We work with our suppliers to mitigate risk and seek continuity of supply while maintaining quality and reliability.
Many of our devices that we develop and market are in a category for which the FDA has implemented stringent clinical investigation and pre-market clearance or approval requirements. The process of obtaining FDA clearance or approval to market a product is resource intensive, lengthy, and costly.
Many devices that we develop and market are in a category for which the FDA has implemented stringent clinical investigation and pre-market clearance or approval requirements. The process of obtaining FDA clearance or approval to market a product is resource intensive, lengthy, and costly. A number of our products are pending regulatory clearance or approval to begin commercial sales.
We comply with all current global guidelines regarding risks for products incorporating animal tissue intended to be implanted in humans. We follow rigorous sourcing and manufacturing procedures intended to safeguard humans from potential 4 Table of Contents risks associated with diseases such as bovine spongiform encephalopathy ("BSE").
We comply with current global guidelines regarding risks for products incorporating animal tissue intended to be implanted in humans. We follow rigorous sourcing and manufacturing procedures intended to safeguard humans from potential risks associated with diseases such as bovine spongiform encephalopathy (“BSE”).
Each of our manufacturing sites is evaluated regularly with respect to a broad range of Environmental, Health, and Safety criteria. Research and Development In 2024, we made significant investments in research and development, both internally and through acquisitions, as we worked to develop therapies that we believe have the potential to change the practice of medicine.
Each of our manufacturing sites is evaluated regularly with respect to a broad range of Environmental, Health, and Safety criteria. 5 Table of Contents Research and Development In 2025, we made significant investments in research and development, both internally and through acquisitions, as we worked to develop therapies that we believe have the potential to change the practice of medicine for structural heart patients.
The FDA also conducts inspections to determine compliance with the quality system regulations concerning the manufacturing and design of devices and current medical device reporting regulations, recall regulations, clinical testing regulations, and other requirements.
The FDA also conducts inspections to determine compliance with the regulations concerning the manufacturing and design of devices, medical device reporting, recalls, clinical testing, and other requirements.
Research and development spending increased 9% year over year, representing 19% of 2024 sales. This increase was primarily the result of significant investments in our transcatheter structural heart programs, including an increase in clinical research for our mitral, aortic, and tricuspid therapies.
Research and development spending increased approximately 2% year over year, representing approximately 18% of 2025 sales. This increase was primarily the result of significant investments in our transcatheter structural heart programs, including an increase in clinical research for our mitral, aortic, and tricuspid therapies.
Our products are categorized into the following groups: Transcatheter Aortic Valve Replacement ("TAVR"), Transcatheter Mitral and Tricuspid Therapies ("TMTT"), and Surgical Structural Heart ("Surgical").
Our products are categorized into the following groups: Transcatheter Aortic Valve Replacement (“TAVR”), Transcatheter Mitral and Tricuspid Therapies (“TMTT”), and Surgical Structural Heart (“Surgical”).
The FDA regulates the design, development, testing, clinical studies, manufacturing, labeling, promotion, and record keeping for medical devices, and reporting of adverse events, recalls, or other field actions by manufacturers and users to identify potential problems with marketed medical devices.
The FDA regulates the design, development, testing, clinical studies, manufacturing, labeling, promotion, and record keeping for medical devices, and reporting of adverse events, recalls, or other field actions by manufacturers and users to protect public health.
Of the total sales outside of the United States, 59% were in Europe, 15% were in Japan, and 26% were in Rest of World. We sell our products in approximately 100 countries, including Germany, Japan, France, United Kingdom, Italy, Canada, and China.
Of the total sales outside of the United States, 60% were in Europe, 14% were in Japan, and 26% were in Rest of World. We sell our products in approximately 100 countries, including Germany, Japan, France, United Kingdom (“U.K.”), Italy, Canada, China, and Spain.
In many of the other foreign countries in which we market our products, we may be subject to regulations affecting, among other things: • product standards and specifications; • packaging requirements; • labeling requirements; • product collection and disposal requirements; • quality system requirements; 8 Table of Contents • import restrictions; • tariffs; • duties; and • tax requirements.
As with any highly regulated market, significant changes in the regulatory environment could adversely affect future sales. 8 Table of Contents In many of the other foreign countries in which we market our products, we may be subject to regulations affecting, among other things: • product standards and specifications; • packaging requirements; • labeling requirements; • product collection and disposal requirements; • quality system requirements; • import restrictions; • tariffs; • duties; and • tax requirements.
Many of our trademarks have also been registered for use in certain foreign countries where registration is available and where we have determined it is commercially advantageous to do so. 6 Table of Contents Government Regulation and Other Matters Our products and facilities are subject to regulation by numerous government agencies, including the FDA, European Union ("EU") member states competent authorities, and the Japanese Pharmaceuticals and Medical Devices Agency.
Many of our trademarks have also been registered for use in certain foreign countries where registration is available and where we have determined it is commercially advantageous to do so. 6 Table of Contents Government Regulation and Other Matters Our products and facilities are subject to regulation by numerous government health agencies, including the U.S.
A majority of the sales and marketing approach outside of the United States is direct sales, although it varies depending on each country's size and state of development. Raw Materials and Manufacturing We operate manufacturing facilities in various geographies around the world. We manufacture our TAVR, TMTT, and Surgical products primarily in the United States, Singapore, Costa Rica, and Ireland.
A majority of the sales and marketing approach outside of the United States is direct sales and sales of products under consignment arrangements, although it varies depending on each country's size and state of development. 4 Table of Contents Raw Materials and Manufacturing We operate manufacturing facilities in various geographies around the world.
We rely extensively on our sales and field clinical specialist personnel who work closely with our customers in hospitals. Field clinical specialists routinely attend procedures where Edwards' products are being used in order to provide guidance on the use of our devices, thereby enabling physicians and staff to reach expert proficiency and deliver positive patient outcomes.
Field clinical specialists routinely attend procedures where Edwards' products are being used in order to provide guidance on the use of our therapies, thereby enabling physicians and staff to reach expert proficiency and deliver differentiated patient outcomes.
Our strategy is to develop and produce safe and effective therapies supported by rigorous clinical studies with extensive data and with innovative features that can enhance patient benefits and product performance and reliability, as well as benefit healthcare systems.
Our strategy is to develop and produce safe and effective therapies supported by high-quality clinical studies with extensive data and with innovative features that can enhance patient benefits and product performance and reliability, as well as benefit healthcare systems. The benefits associated with our products are in part due to the level of customer and clinical support we provide.
We use a diverse and broad range of raw and organic materials in the design, development, and manufacture of our products. We manufacture our non-implantable products from fabricated raw materials including resins, chemicals, electronics, and metals. Most of our replacement heart valves are manufactured from natural tissues harvested from animal tissue as well as fabricated materials.
We manufacture our non-implantable products from fabricated raw materials including resins, chemicals, electronics, and metals. Most of our replacement heart valves are manufactured from natural tissues harvested from animal tissue as well as fabricated materials. We purchase certain materials and components used in manufacturing our products from external suppliers.
In the United States, we sell substantially all of our products through our direct sales forces. In 2024, 59% of our net sales were derived from sales to customers in the United States. Outside of the United States. In 2024, 41% of our net sales were derived outside of the United States through our direct sales forces and independent distributors.
In 2025, 58% of our net sales were derived from sales to customers in the United States. Outside of the United States. In 2025, 42% of our net sales were derived outside of the United States through our direct sales forces and independent distributors.
Additionally, even if a product is cleared or approved, the FDA may impose restrictions or require testing and surveillance programs to monitor the effects of these products once commercialized.
Ultimately, the FDA may not authorize the commercial release of a medical device if it determines the device is not safe and effective or does not meet other regulatory standards. Additionally, even if a product is cleared or approved, the FDA may impose restrictions or require testing and surveillance programs to monitor the effects of these products once commercialized.
Our future growth opportunities include offering solutions for treating patients with both valvular and non-valvular structural heart disease, such as heart failure, which is a natural progression of the disease for many patients suffering from aortic stenosis and mitral and tricuspid regurgitation. 5 Table of Contents Overview Edwards Lifesciences Corporation is the leading global structural heart innovation company, driven by a passion to improve patient lives.
Our future growth opportunities include offering solutions for treating patients with both valvular and non-valvular structural heart disease, such as heart failure, which is an unfortunate natural progression of the disease for many patients suffering from aortic stenosis, mitral and tricuspid regurgitation, and aortic regurgitation.
We aim to deliver this by centering our decisions on the following focus areas whose overriding priority is "The Patient" - Business, People, Communication, and Community.
We believe this commitment can be best achieved by always selecting the best candidate and building a culture that celebrates excellence. We aim to deliver this by centering our decisions on the following focus areas whose overriding priority is The Patient: Business, People, Communication, and Community.
Our experienced research and development staff are focused on product design and development, quality, clinical research, and regulatory compliance. To pursue primary research efforts, we have developed alliances with several leading research institutions and universities, and also work with leading clinicians around the world in conducting scientific studies on our existing and developing products.
To pursue primary research efforts, we have developed alliances with several leading research institutions and universities and also work with leading clinicians around the world in conducting scientific studies on our existing and developing products. Proprietary Technology Patents, trademarks, and other proprietary rights are important to the success of our business.
Approval time frames from the Japanese Ministry of Health, Labour and Welfare vary from simple notifications to review periods of one or more years, depending on the complexity and risk level of the device. In addition, importation of medical devices into Japan is subject to the "Good Import Practices" regulations.
Clinical studies are subject to a stringent Japanese “Good Clinical Practices” standard. Approval time frames from the Japanese Ministry of Health, Labour and Welfare vary from simple notifications to review periods of one or more years, depending on the complexity and risk level of the device.
Also, for certain of our product lines and where appropriate, our corporate sales team actively pursues approval of Edwards Lifesciences as a qualified supplier for hospital group purchasing organizations ("GPOs") that negotiate contracts with suppliers of medical products.
Also, where appropriate, our corporate sales team actively pursues approval of Edwards Lifesciences as a qualified supplier for hospital group purchasing organizations (“GPOs”) that negotiate contracts with suppliers of medical products. Additionally, we have contracts with a number of United States and European national and regional buying groups, including healthcare systems and Integrated Delivery Networks.
For more information on net sales from these three main groups, see " Net Sales by Product Group " in Part II, Item 7 " Management's Discussion and Analysis of Financial Condition and Results of Operations ." Transcatheter Aortic Valve Replacement We are the global leader in transcatheter heart valve replacement technologies designed for the minimally-invasive replacement of aortic heart valves.
For more information on net sales from these three main groups, see “ Net Sales by Product Group” in Part II, Item 7 “ Management's Discussion and Analysis of Financial Condition and Results of Operations .” Transcatheter Aortic Valve Replacement The Edwards SAPIEN family of valves remains a best-in-class therapy for lifetime management of patients with severe aortic stenosis.
Additionally, we have contracts with a number of United States and European national and regional buying groups, including healthcare systems and Integrated Delivery Networks. Where we choose to market our products is also influenced by the existence of, or potential for, adequate reimbursement to hospitals and other providers by national healthcare systems. United States.
Where we choose to market our products is also influenced by the existence of, or potential for, adequate reimbursement to hospitals and other providers by national healthcare systems. United States. In the United States, we sell substantially all of our products through our direct sales forces.
Sales of our surgical therapies in the United States also continue to gain traction with KONECT RESILIA , the first pre-assembled, ready to implant, tissue valved conduit for complex combined procedures.
Our KONECT RESILIA aortic valved conduit, the first pre-assembled, ready to implant, tissue valved conduit for complex combined procedures, continues to gain strong adoption in the United States and was launched in Europe in 2025.
We strive to offer competitive employee well-being packages and are committed to fair and equitable pay practices. We track compensation patterns in all geographies where we operate, and we regularly look for ways to ensure fair and equitable pay.
We are committed to fair and equitable pay practices and strive to offer competitive employee well-being packages.
Edwards provides in-depth learning and development resources for employees at all levels, including blended learning opportunities such as in-person, virtual, and online courses, capability assessments, coaching, and developmental experiences.
We believe in developing talent from within and have a long-term commitment to building the leadership and technical skills for the present and future needs of the business. Edwards provides in-depth learning and development resources for employees at all levels, including blended learning opportunities such as in-person, virtual, and online courses, capability assessments, coaching, and developmental experiences.
We are not dependent on any single customer and no single customer accounted for 10% or more of our net sales in 2024. To achieve optimal outcomes for patients, we conduct educational symposia and best practices training for our physician, hospital executive, service line leadership, nursing, and clinical-based customers.
To achieve optimal outcomes for patients, we conduct educational symposia and best practices training for our physician, hospital executive, service line leadership, nursing, and clinical-based customers. We rely extensively on our sales and field clinical specialist personnel who work closely with our customers in hospitals.
Proprietary Technology Patents, trademarks, and other proprietary rights are important to the success of our business. We also rely upon trade secrets, know-how, continuing innovations, licensing opportunities, and non-disclosure agreements to develop and maintain our competitive position.
We also rely upon trade secrets, know-how, continuing innovations, licensing opportunities, and non-disclosure agreements to develop and maintain our competitive position. We own or have rights to a substantial number of patents and have patent applications pending both in the United States and in foreign countries.
The majority of these procedures are conducted without the use of general anesthesia and patients are discharged home within one to two days. Transcatheter aortic valve replacement with the SAPIEN 3 family of valves enables patients to recover more quickly and return to a better quality of life sooner than patients receiving traditional open heart surgical therapies.
Transcatheter aortic valve replacement with the SAPIEN family of valves enables patients to recover more quickly and return to a better quality of life sooner than patients receiving traditional open heart surgical therapies. Edwards' transcatheter aortic heart valves were first commercialized in Europe in 2007, in the United States in 2011, and in Japan in 2013.
These entities confirm our compliance with the various laws and regulations governing the development, testing, manufacturing, labeling, marketing, and distribution of our products.
FDA, European Union (“EU”) member states competent authorities, and the Japanese Pharmaceuticals and Medical Devices Agency. These entities oversee the various laws and regulations governing the development, testing, manufacturing, labeling, marketing, and distribution of our products.
We are committed to fostering an environment where all employees can grow and thrive, understanding that diverse perspectives enable our commitment to innovation. We believe this commitment can be best achieved by always selecting the best candidate and building a culture that celebrates excellence.
We recognize the need for diverse perspectives and experiences, and we foster inclusion, belonging, and collaboration across Edwards. We are committed to fostering an environment where all employees can grow and thrive, understanding that diverse perspectives enable our commitment to innovation.
Presented at the 103rd Annual Meeting of the American Association for Thoracic Surgery, May 2023. 3 Table of Contents The cardiovascular segment of the medical technology industry is dynamic and subject to significant change due to cost-of-care considerations, regulatory reform, industry and customer consolidation, and evolving patient needs.
The cardiovascular segment of the medical technology industry is dynamic and subject to significant change due to cost-of-care considerations, regulatory reform, industry and customer consolidation, and evolving patient needs. The ability to provide products and technologies that demonstrate value while improving clinical outcomes is becoming increasingly important for medical technology manufacturers.
The EVOQUE system, the world's first transcatheter tricuspid valve replacement therapy to receive regulatory approval, addresses tricuspid valve regurgitation by replacing the native valve with a bioprosthetic valve. In addition to these therapies, we are pursuing a transcatheter mitral replacement strategy which we believe would position us for leadership in the mid-to-long term.
The EVOQUE system, the world's first transcatheter tricuspid valve replacement therapy to receive regulatory approval, addresses tricuspid valve regurgitation by replacing the native valve with a bioprosthetic valve. The SAPIEN M3 transcatheter mitral valve replacement system is based on the proven SAPIEN valve and is designed specifically for mitral patients.
We are proud of our patient-focused culture, and the way we work together globally to bring life-saving innovations to patients in need. We recognize the need for diverse perspectives and experiences, and we foster inclusion, belonging, and collaboration across Edwards.
We track compensation patterns in all geographies where we operate, and we regularly look for ways to ensure fair and equitable pay. 10 Table of Contents We are proud of our patient-focused culture, and the way we work together globally to bring life-saving innovations to patients in need.
While several technologies are in the development and clinical phases, the PASCAL Precision transcatheter repair system (in Europe, the United States, and Japan), EVOQUE tricuspid valve replacement system (in Europe and the United States), and Cardioband tricuspid valve reconstruction system (in Europe) are commercially available.
The PASCAL transcatheter repair system (in Europe, the United States, and Japan), EVOQUE tricuspid valve replacement system (in Europe and the United States), and SAPIEN M3 mitral valve replacement system (in Europe and the United States) are commercially available. The PASCAL system addresses the needs of patients with mitral or tricuspid regurgitation through leaflet approximation.
We believe the demand for surgical structural heart therapies is growing worldwide, and that our innovation strategy will continue to strengthen our leadership and positive impact on patients. Sales of our surgical tissue heart valve products represented 18%, 19%, and 19% of our net sales in 2024, 2023, and 2022, respectively. Competition The medical technology industry is highly competitive.
We believe the demand for surgical structural heart therapies is growing worldwide, and that our innovation strategy will continue to strengthen our leadership and positive impact on patients. 2 Généreux, P., A. Schwartz, J.B. Oldemeyer, et al.
Although the more variable national requirements under which medical devices were formerly regulated have been substantially replaced by the European Union Medical Devices Directive, individual nations can still impose unique requirements that may require supplemental submissions.
Although the more variable national requirements under which medical devices were formerly regulated have been substantially replaced by the European Union Medical Devices Directive Regulation (“MDR”). This regulation requires legal manufacturers to declare that their products conform to the essential regulatory requirements after which the products may be placed on the market bearing the CE Mark.
We own or have rights to a substantial number of patents and have patent applications pending both in the United States and in foreign countries. We continue to innovate and file new patent applications to protect our new products and technologies.
We continue to innovate and file new patent applications to protect our new products and technologies.
Edwards remains committed to its strategy of transformative product innovation, robust and expanding clinical evidence to support approvals and adoption, as well as comprehensive support to ensure excellent real-world patient outcomes. Cardiovascular disease is the number-one cause of death in the world and is the top disease in terms of health care spending in nearly every country.
We remain committed to our strategy of transformative product innovation, robust and expanding clinical evidence to support approvals and adoption, as well as comprehensive support to ensure excellent real-world patient outcomes. Sales of our TMTT products represented 9%, 7%, and 4% of our net sales in 2025, 2024, and 2023, respectively.
In 2024, EARLY TAVR trial data were presented, demonstrating the superiority of early TAVR intervention in severe asymptomatic aortic stenosis patients with the SAPIEN 3 platform versus clinical surveillance.
In 2024, EARLY TAVR trial data demonstrated the superiority of early TAVR intervention in severe asymptomatic aortic stenosis patients with the SAPIEN 3 platform versus clinical surveillance. 2 The SAPIEN 3 platform was the world’s first transcatheter heart valve with a transcatheter heart valve in the transcatheter heart valve (“THV-in-THV”) indication for patients assessed at high-risk for surgical replacement, offering patients the ability to have a second minimally invasive procedure.
We have a number of product lines that require sales and marketing strategies that are tailored to deliver high-quality, cost-effective products and technologies to customers worldwide. Because of the diverse global needs of the population that we serve, our distribution system consists of several direct sales forces as well as independent distributors.
Because of the diverse global needs of the population that we serve, our distribution system consists of several direct sales forces as well as independent distributors. We are not dependent on any single customer and no single customer accounted for 10% or more of our net sales in 2025.
The ability to provide products and technologies that demonstrate value and improve clinical outcomes is becoming increasingly important for medical technology manufacturers. We believe that we are a leading global competitor in each of our product lines. In TAVR, our primary competitors include Medtronic plc ("Medtronic"), Abbott Laboratories ("Abbott"), and Boston Scientific Corporation.
We believe that we are a leading global competitor in each of our product lines. In TAVR, our primary competitors include Medtronic plc (“Medtronic”) and Abbott Laboratories (“Abbott”). In TMTT, our primary competitor is Abbott, and there are a considerable number of large and small companies with development efforts in these fields.
Answers to questions that are not covered in the townhall meeting are posted online internally. 10 Table of Contents Total Benefits and Well-being We understand that good health leads to better performance.
Answers to questions that are not covered in the townhall meeting are posted online on our internal intranet. Benefits and Well-being We believe that good health is the foundation for great performance, both at work and at home. That is why we offer a comprehensive benefits and well-being program designed to support the whole person.
We offer competitive employee benefits and well-being packages that include, among other things, health and wellness insurance, health savings accounts, family support services, and a variety of site-specific programs. We regularly evaluate our benefits package to make modifications that are aligned with the competitive landscape, legislative changes, and the unique needs of our population.
Our offerings include health and wellness insurance, health savings accounts, family support services, and site-specific programs tailored to local needs. We continuously review and enhance our benefits to stay competitive, comply with evolving legislation, and meet the unique needs of our workforce.
Edwards' transcatheter aortic heart valves 2 Table of Contents were first commercialized in Europe in 2007, in the United States in 2011, and in Japan in 2013. Edwards has partnered with the physician community to generate optimistic data that has expanded access to patients of all risk profiles.
Edwards has partnered with the physician community to generate robust data that has expanded access to patients regardless of risk profiles or symptom status.
Additionally, the Edwards SAPIEN 3 system and Alterra system offer a minimally invasive option for pulmonary valve replacement for patients with congenital heart disease. Sales of our TAVR products represented 75%, 77%, and 79% of our net sales in 2024, 2023, and 2022, respectively.
Edwards’ leadership strategy of differentiated innovation, world-class evidence generation and indication expansion is driving guideline and policy evolution and improved patient access and long-term adoption of the SAPIEN platform. Additionally, the Edwards SAPIEN 3 system and Alterra system offer a minimally invasive option for pulmonary valve replacement for patients with congenital heart disease.
In Europe, particular emphasis is being placed on more sophisticated and faster procedures for the reporting of adverse events to the competent authorities. In May 2017, the EU implemented a new regulatory scheme for medical devices under the Medical Device Regulation ("MDR").
Legal manufacturers' quality systems for products are also subject to certification and audit by an independent notified body. In Europe, particular emphasis is being placed on more sophisticated and faster procedures for the reporting of adverse events to the national competent authorities. In addition, in the European Economic Area, we import some of our devices to supply product to Switzerland.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeBusiness and Operating Risks • Failure to successfully innovate and market products • Unsuccessful clinical trials or procedures • Manufacturing, logistics, or quality problems • Competition • Dependence on key physicians. research institutions, and hospital systems • Public health crises, including pandemics and epidemics • Reliance on vendors, suppliers, and other third parties • Damage, failure, or interruption of our information technology systems, including due to cybersecurity attacks and breaches • Failure to recruit and retain qualified talent or execute management succession plans • Failure to integrate acquired businesses • Risks associated with the sale of our Critical Care product group Global Economic and Other External Risks • Risks associated with international sales and operations • Inability to obtain government reimbursement or reductions in reimbursement levels • Industry consolidation Legal, Compliance and Regulatory Risks • Inability to protect our intellectual property • Inability to defend against intellectual property claims from third parties • Compliance with government regulations • Risks related to data privacy and security laws • Losses from product liability claims • Use of products in unapproved circumstances • Substantial costs from environmental, health and safety regulations • Climate change • Regulatory actions relating to animal-borne illnesses 12 Table of Contents Business and Operating Risks Failure to successfully innovate and develop new and differentiated products in a timely manner and effectively market these products could have a material effect on our prospects.
Biggest changeBusiness and Operating Risks • Failure to successfully innovate and market products • Unsuccessful clinical trials or procedures • Manufacturing, logistics, or quality problems • Competition 12 Table of Contents • Dependence on key physicians. research institutions, and hospital systems • Public health crises, including pandemics and epidemics • Reliance on vendors, suppliers, and other third parties • Use of, or failure to effectively and timely utilize, emerging technologies, including artificial intelligence (“AI”) • Damage, failure, or interruption of our information technology systems, including due to cybersecurity attacks and breaches • Failure to recruit and retain qualified talent or execute management succession plans • Failure to integrate acquired businesses • Risks associated with the sale of our Critical Care product group Global Macroeconomic and Industry Risks • Risks associated with global economic, political and social conditions • Risks related to our international operations • Inability to obtain government reimbursement or reductions in reimbursement levels • Industry consolidation Legal, Compliance and Regulatory Risks • Inability to protect our intellectual property • Inability to defend against intellectual property claims from third parties • Reduced access and demand for our products as a result of, and compliance with, health care legislation and other government regulations • Risks related to domestic and foreign income and non-income taxes • Risks related to data privacy and security laws • Losses from product liability claims • Use of products in unapproved circumstances • Substantial costs from environmental, health and safety regulations • Climate change • Risks relating to animal-borne illnesses Business and Operating Risks Failure to successfully innovate and develop new and differentiated products in a timely manner and effectively market these products could have a material effect on our prospects.
Our continued growth and success depend on our ability to innovate and develop new and differentiated products in a timely manner and effectively market these products. Without the timely innovation and development of products, our products could be rendered obsolete or less competitive because of the introduction of a competitor's newer technologies or changing customer preferences.
Our continued growth and success depend on our ability to innovate and develop new and differentiated products in a timely manner and effectively market these products. Without timely innovation and development, our products could be rendered obsolete or less competitive because of the introduction of a competitor's newer technologies or changing customer preferences.
These include, but are not limited to, conditions impacting inflation, credit and capital markets, interest rates, tax law, including tax rate and policy changes, factors affecting global economic stability, and the political environment relating to health care.
These include, but are not limited to, conditions impacting inflation, credit and capital markets, interest rates, tax law, including tax rate and policy changes, factors affecting global economic stability, tariffs and the political environment relating to health care.
We experience from time to time, and may continue to experience, supply interruptions due to a variety of factors, including: • General economic conditions that could adversely affect the financial viability of our vendors; • Vendors' election to no longer service or supply medical technology companies, including due to the burdens of applicable quality requirements and regulations or for no reason at all; • The limitation or ban of certain chemicals or other materials used in the manufacture of our products; and • Delays or shortages due to trade or regulatory embargoes.
We experience from time to time, and may continue to experience, supply interruptions due to a variety of factors, including: • General economic conditions that could adversely affect the financial viability of our vendors; • Vendors' election to no longer service or supply medical technology companies, including due to the burdens of applicable quality requirements and regulations or for no reason at all; • The limitation or ban of certain chemicals or other materials used in the manufacture of our products; and • Delays, shortages and price increases due to trade or regulatory embargoes.
If government and other third-party payors decline to reimburse our customers for our products or impose other cost containment measures to reduce reimbursement levels, our ability to profitably sell our products will be harmed.
If government or other third-party payors decline to reimburse our customers for our products or impose other cost containment measures to reduce reimbursement levels, our ability to profitably sell our products will be harmed.
Further, cybersecurity threats and the techniques used in cybersecurity attacks change, develop, and evolve rapidly, including from emerging technologies, such as advanced forms of artificial intelligence ("AI") and quantum computing. In addition, we rely upon technology suppliers, including cloud‑based data management applications hosted by third‑party service providers, whose cybersecurity and information technology systems are subject to similar risks.
Further, cybersecurity threats and the techniques used in cybersecurity attacks change, develop, and evolve rapidly, including from emerging technologies, such as advanced forms of AI and quantum computing. In addition, we rely upon technology suppliers, including cloud‑based data management applications hosted by third‑party service providers, whose cybersecurity and information technology systems are subject to similar risks.
We are required to comply with increasingly complex and changing legal and regulatory requirements that govern the collection, use, storage, security, transfer, disclosure, and other processing of personal data in the United States and in other countries, which may include, but are not limited to, the Health Insurance Portability and Accountability Act (“HIPPA”), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, the General Data Protection Regulation ("GDPR") adopted by the EU and the California Privacy Rights Act ("CRPA") and the California Consumer Privacy Act, as amended by the CRPA (the “CCPA”).
We are required to comply with increasingly complex and changing legal and regulatory requirements that govern the collection, use, storage, security, transfer, disclosure, and other processing of personal data in the United States and in other countries, which may include, but are not limited to, the Health Insurance Portability and Accountability Act (“HIPPA”), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, the General Data Protection Regulation (“GDPR”) adopted by the EU and the California Privacy Rights Act (“CRPA”) and the California Consumer Privacy Act, as amended by the CRPA (the “CCPA”).
If any of these manufacturing, logistics, or quality problems arise or if we or one of our suppliers or logistics partners otherwise fail to meet internal quality standards or those of the FDA or other applicable regulatory body, our reputation could be damaged, we could become subject to a safety alert or a recall, we could incur product liability and other costs, product approvals and production could be delayed, and our business could otherwise be materially adversely affected.
If any of these manufacturing, logistics, or quality problems arise or if we or one of our suppliers or logistics partners otherwise fail to meet internal quality standards or those of the FDA or other applicable regulatory body, our reputation could be damaged, we could become subject to a safety alert or a recall (whether voluntary or mandated), we could incur product liability and other costs, product approvals and production could be delayed, and our business could otherwise be materially adversely affected.
We are subject to risks arising from concerns and/or regulatory actions relating to animal-borne illnesses, including "mad cow disease.” Certain of our products, including pericardial tissue valves, are manufactured using bovine tissue.
We are subject to risks arising from concerns and/or regulatory actions relating to animal-borne illnesses, including “mad cow disease.” Certain of our products, including pericardial tissue valves, are manufactured using bovine tissue.
Concerns relating to the potential transmission of animal-borne illnesses, including BSE, commonly known as "mad cow disease," from cows to humans may result in reduced acceptance of products containing bovine materials. Certain medical device regulatory agencies have considered whether to continue to permit the sale of medical devices that incorporate bovine material.
Concerns relating to the potential transmission of animal-borne illnesses, including BSE, commonly known as “mad cow disease,” from cows to humans may result in reduced acceptance of products containing bovine materials. Certain medical device regulatory agencies have considered whether to continue to permit the sale of medical devices that incorporate bovine material.
We are subject to risks involved with transferring the Critical Care product group and operating under interim operating model arrangements, such as increased complexity of operations, including, but not limited to, those related to finance, quality, and information 15 Table of Contents technology, diversion of management’s attention to our business, and additional related risks and costs which can have an adverse effect on our business, financial condition, and results of operations.
We are subject to risks involved with transferring the Critical Care product group and functioning under interim operating model arrangements, such as increased complexity of operations, including, but not limited to, those related to finance, quality, and information technology, diversion of management’s attention to our business, and additional related risks and costs which can have an adverse effect on our business, financial condition, and results of operations.
Failure to protect our information technology infrastructure and our products against cybersecurity attacks, network security breaches, service interruptions, or data corruption could materially disrupt our operations and adversely affect our business and operating results. The operation of our business depends on our information technology systems.
Failure to protect our information technology infrastructure and our products against cybersecurity attacks, network security breaches, service interruptions, or data corruption could materially disrupt our operations and adversely affect our business and operating results. The operation of our business depends on our information technology systems and the information technology systems of certain of our service providers and suppliers.
Increases in the value of the United States dollar relative to the Euro or the Japanese yen, as well as other currencies, have the opposite effect. Significant increases or decreases in the value of the United States dollar could have a material adverse effect on our sales, cost of sales, or results of operations.
Increases in the value of the United States dollar relative to the Euro or the Japanese yen, as well as other currencies, have the opposite effect. Significant increases or decreases in the value of the United States dollar could have a material adverse effect on our sales, cost of sales, or results of operations. Additionally, the U.S.
The introduction of cost containment incentives, combined with closer scrutiny of health care expenditures by both private health insurers and employers, has resulted in increased discounts and contractual adjustments to hospital charges for services performed. Hospitals or physicians may respond to such cost-containment pressures by substituting lower cost products or other therapies.
The introduction of cost containment incentives, combined with closer scrutiny of health care expenditures by both private health insurers and employers, has resulted in increased discounts and contractual adjustments to hospital charges for services performed. Hospitals or physicians may respond to such cost-containment pressures by substituting lower cost products or other therapies, to the extent they are available.
Such clinical trials and procedures are inherently uncertain and there can be no assurance that these trials or procedures will be enrolled or completed in a timely or cost-effective manner or result in a commercially viable product or indication; failure to do so could have a material adverse effect on our prospects.
Such clinical trials and procedures are inherently uncertain and there can be 13 Table of Contents no assurance that these trials or procedures will be enrolled or completed in a timely or cost-effective manner or result in a commercially viable product or indication; failure to do so could have a material adverse effect on our prospects.
Our continued success depends, in large part, on our ability to hire and retain qualified people and execute on our talent management and succession plans, and if we are unable to do so, our business and operations may be impaired or disrupted. See " Human Capital Management Strategy " under " Business " in Part I, Item 1 included herein.
Our continued success depends, in large part, on our ability to hire and retain qualified people and execute on our talent management and succession plans, and if we are unable to do so, our business and operations may be impaired or disrupted. See “ Human Capital Management Strategy” under “ Business” in Part I, Item 1 included herein.
A change or addition to our vendors could require significant effort due to the rigorous regulations and requirements of the FDA and other regulatory authorities; it could be difficult to establish additional or replacement sources on a timely basis or at all, which could have a material adverse effect on our business.
A change or addition to our vendors could require significant effort due to the rigorous regulations and requirements of the FDA and other regulatory authorities; it could be difficult to establish additional or replacement sources on a timely basis or at all, which could have a material adverse effect on our business, financial condition, and results of operations.
The CCPA and the CRPA provides consumers with a private right of action against companies that have a security breach due to lack of appropriate security measures.
The CCPA and the CRPA provides consumers with a private right of action against companies that have a security breach due to lack of appropriate security 21 Table of Contents measures.
We rely on our information technology systems to, among other things, effectively manage sales and marketing data, accounting and financial functions, inventory management, product development tasks, clinical data, customer service and technical support functions.
We rely on our information technology systems to, among other things, effectively manage sales and marketing data, accounting and financial functions, inventory 15 Table of Contents management, product development tasks, clinical data, customer service and technical support functions.
We cannot be certain that these third-party payors will recognize these cost savings and quality of life benefits instead of merely focusing on the lower initial costs associated with competing therapies.
We cannot be certain that these third-party payors will recognize these cost savings and quality of life benefits instead of merely focusing on the lower initial costs associated with competing therapies, to the extent they exist.
Our information technology systems are vulnerable to damage or interruption from earthquakes, fires, floods and other natural disasters, terrorist attacks, power losses, computer system or data network failures, security breaches, and data corruption. 14 Table of Contents In addition, our information technology infrastructure and products are vulnerable to cybersecurity attacks.
Our information technology systems are vulnerable to damage or interruption from earthquakes, fires, floods and other natural disasters, terrorist attacks, power losses, computer system or data network failures or outages, security breaches, and data corruption. In addition, our information technology infrastructure and products are vulnerable to cybersecurity attacks.
We spend significant resources to protect and enforce our intellectual property rights, sometimes resulting in expensive and time-consuming litigation that is complex and may ultimately be unsuccessful. Our inability to protect our intellectual property could have a material adverse effect on our business or prospects.
We spend significant resources to protect and enforce our intellectual property rights, sometimes resulting in expensive and time-consuming litigation that is complex and may ultimately be unsuccessful. Our inability to protect our intellectual property could have a material adverse effect on our business, financial condition, results of operations, and prospects.
Third-party payors may deny reimbursement if they determine that a device used in a procedure was not used in accordance with cost-effective treatment methods as determined by such third-party payors or was used for an unapproved indication. Third-party payors may also deny reimbursement for experimental procedures and devices.
Third-party payors may deny reimbursement if they determine that a device used in a procedure was not used in accordance with coverage requirements as determined by such third-party payors or was used for an unapproved indication. Third-party payors may also deny reimbursement for experimental procedures and devices.
The ability of customers to obtain appropriate reimbursement for their products from private and governmental third-party payors is critical to our success. The availability of reimbursement affects which products customers purchase and the prices they are willing to pay. Reimbursement varies from country to country and can significantly impact acceptance of new products.
The ability of customers to obtain appropriate reimbursement for their products from private and governmental third-party payors is critical to our success. The availability of reimbursement affects which products customers purchase and could impact pricing. Reimbursement varies from country to country and can significantly impact acceptance of new products.
Tax authorities have disagreed and may disagree with certain positions we have taken and assess additional taxes that could be material. Please see Note 19 to our Consolidated Financial Statements in this report for information regarding our current audits and disputes with tax authorities.
We are subject to ongoing tax audits in the various jurisdictions in which we operate. Tax authorities have disagreed and may disagree with certain positions we have taken and assess additional taxes that could be material. Please see Note 19 to our Consolidated Financial Statements in this report for information regarding our current audits and disputes with tax authorities.
The medical technologies we create, study, manufacture, and market globally are subject to rigorous regulation and scrutiny by the FDA and various other federal, state, and foreign governmental authorities, including the European Union's European Commission (the "Commission") who promulgated the European Medical Device Regulation ("EU MDR").
The medical technologies we create, study, manufacture, and market globally are subject to rigorous regulation and scrutiny by the FDA and various other federal, state, and foreign governmental authorities, including the European Union's European Commission (the “Commission”), which promulgated the European Medical Device Regulation (“EU MDR”).
Our operations are subject to environmental, health, and safety regulations that could result in substantial costs. Our operations are subject to environmental, health, and safety laws, and regulations concerning, among other things, the generation, handling, transportation, and disposal of hazardous substances or wastes, the cleanup of hazardous substance releases, and emissions or discharges into the air or water.
Our operations are subject to environmental, health, and safety laws, and regulations concerning, among other things, the generation, handling, transportation, and disposal of hazardous substances or wastes, the cleanup of 22 Table of Contents hazardous substance releases, and emissions or discharges into the air or water.
If we or one of our suppliers or logistics partners encounters manufacturing, logistics, safety, or quality problems, our business could be materially adversely affected. The manufacture and sterilization of many of our products is highly complex due in part to rigorous regulatory requirements. Quality is extremely important due to the serious and costly consequences of a product failure.
If we or one of our suppliers or logistics partners encounters manufacturing, logistics, safety, or quality problems, our business could be materially adversely affected. The manufacture and sterilization of many of our products are highly complex due in part to rigorous regulatory requirements.
If our products are not considered cost-effective by third-party payors, our customers may not be reimbursed for them, resulting in lower sales of our products. 17 Table of Contents Continued consolidation in the health care industry could have an adverse effect on our sales and results of operations.
If our products do not meet coverage requirements by third-party payors, our customers may not be reimbursed for them, resulting in lower sales of our products. Continued consolidation in the health care industry could have an adverse effect on our sales and results of operations.
In addition to the factors enumerated above, we are from time to time impacted by a variety of other factors associated with doing business internationally that can harm our future results, including the following: • trade protection measures, quotas, embargoes, import or export requirements, and duties, tariffs, or surcharges; • cultural or other local factors affecting financial terms with customers; • differing labor regulations; • military conflict, political unrest, or wars; and • currency exchange rate fluctuations; that is, decreases in the value of the United States dollar to the Euro or the Japanese yen, as well as other currencies in which we transact business, have the effect of increasing our reported sales even when the volume of sales outside of the United States has remained constant.
We are from time to time impacted by a variety of risks associated with doing business internationally that can harm our future results, including the following: • trade protection measures, quotas, embargoes, import or export requirements, and duties, tariffs, or surcharges (including existing or potential future tariffs imposed by the U.S. on goods from other countries and tariffs imposed by other countries on U.S. goods); • cultural or other local factors affecting financial terms with customers; • global regulations including those related to health care, labor and environmental, social and governance; military conflict, political unrest, or wars; • scrutiny from governmental bodies regarding the pricing of our products; and • currency exchange rate fluctuations; that is, decreases in the value of the United States dollar to the Euro or the Japanese yen, as well as other currencies in which we transact business, have the effect of increasing our reported sales even when the volume of sales outside of the United States has remained constant.
In addition, we have challenged in the past and may decide in the future to challenge any assessments, if made, and may exercise our right to appeal, which could result in expensive and time-consuming litigation that may ultimately be unsuccessful. 16 Table of Contents • Tax Incentives .
In addition, we have challenged in the past and may decide in the future to challenge any assessments, if made, and may exercise our right to appeal, which could result in expensive and time-consuming litigation that may ultimately be unsuccessful. Tax Incentives . We benefit from various global tax incentives extended to encourage investment or employment.
We have been impacted and may continue to be negatively impacted by general domestic and global economic conditions, although we cannot predict the extent to which such conditions may negatively impact our business.
Global Macroeconomic and Industry Risks We may be adversely impacted by global economic, political and social conditions. We conduct extensive global operations and have been impacted and may continue to be negatively impacted by general global economic, political and social conditions, although we cannot predict the extent to which such conditions may negatively impact our business.
Any failure by or loss of a vendor could result in delays and increased costs, which may adversely affect our business.
We rely on third parties in the design, manufacture, and sterilization of our products. Any failure by or loss of a vendor could result in delays and increased costs, which may adversely affect our business.
Our provision for income taxes and our effective tax rate could fluctuate due to changes in the mix of earnings and losses in countries with differing statutory tax rates.
We face a number of risks related to our income taxes in the United States as well as other jurisdictions. Provision for Income Taxes. Our provision for income taxes and our effective tax rate could fluctuate due to changes in the mix of earnings and losses in countries with differing statutory tax rates.
If our incentives are not renewed or we cannot or do not wish to satisfy all or part of the tax incentive conditions, we may lose the tax incentives and could be required to refund tax incentives previously realized.
Several foreign jurisdictions have granted us tax incentives which require renewal at various times in the future. If our incentives are not renewed or we cannot or do not wish to satisfy all or part of the tax incentive conditions, we may lose the tax incentives and could be required to refund tax incentives previously realized.
Even if we timely innovate and develop products, our ability to successfully market them could be constrained by a number of different factors, including competitive products and pricing, barriers in patient activation (including disease awareness, detection, and diagnosis), the need for regulatory clearance, restrictions imposed on approved indications, and uncertainty over third-party reimbursement.
Even if we timely innovate and develop products, our ability to successfully market them could be limited by a number of different factors, including competitive products and pricing, barriers in patient activation (including disease awareness, detection, and diagnosis), restrictive requirements in the U.S. national coverage determination for transcatheter aortic valve replacement procedures, the need for regulatory clearance, restrictions imposed on approved indications, capacity constraints within hospital systems, including staffing shortages and the availability of catheterization laboratories, and uncertainty over third-party reimbursement.
On September 3, 2024, we sold our Critical Care product group to Becton, Dickinson and Company.
We are subject to risks associated with the sale of our Critical Care product group. On September 3, 2024, we sold our Critical Care product group to Becton, Dickinson and Company.
These and other conditions could also adversely affect our customers, payers, vendors and other stakeholders and may impact their ability or decision to purchase our products or make payments on a timely basis. Health Care Legislation and Other Regulations . We are subject to various federal and foreign laws that govern our domestic and international business practices.
These and other conditions could also adversely affect our customers, payers, vendors and other stakeholders and may impact their ability or decision to purchase our products or make payments on a timely basis. Our international operations subject us to certain business risks.
New laws and regulations, violations of these laws or regulations, stricter enforcement of existing requirements, or the discovery of previously unknown contamination could require us to incur costs or could become the basis for litigation or new or increased liabilities that could be material. 20 Table of Contents Climate change, or legal, regulatory or market measures to address climate change, may materially adversely affect our financial condition and business operations.
New laws and regulations, violations of these laws or regulations, stricter enforcement of existing requirements, or the discovery of previously unknown contamination could require us to incur costs or could become the basis for litigation or new or increased liabilities that could be material.
Disruptions can also occur if our manufacturing and warehousing facilities are damaged by earthquakes, hurricanes, volcanoes, fires, and other natural disasters or catastrophic circumstances. As we expand into new markets and scale new products for commercial production, we may face unanticipated delays or surges in demand which could strain our production capacity and lead to other types of disruption.
As we expand into new markets and scale new products for commercial production, we may face unanticipated delays or surges in demand which could strain our production capacity and lead to other types of disruption.
We and our customers are subject to rigorous governmental regulations and we may incur significant expenses to comply with these regulations and develop products that are compatible with these regulations. In addition, failure to comply with these regulations could subject us to substantial sanctions which could adversely affect our business, financial condition, and results of operations.
In addition, failure to comply with these regulations could subject us to substantial sanctions and may impact our ability to sell our products in certain countries which could adversely affect our business, financial condition, and results of operations.
Further, we may be required to commit to pricing that has a material adverse effect on our revenues, profit margins, business, financial condition, and results of operations. We expect that market demand, governmental regulation, third-party reimbursement policies, and societal pressures will continue to drive consolidation and increase pricing pressure.
Further, we may be required to commit to pricing that has a material adverse effect on our revenues, profit margins, business, financial condition, and results of operations.
Legal, Compliance, and Regulatory Risks Our inability to protect our intellectual property or failure to maintain the confidentiality and integrity of data or other sensitive company information, by cyber-attack or other event, could have a material adverse effect on our business.
We expect that market demand, governmental regulations, third-party reimbursement policies, and societal pressures will continue to drive consolidation and increase pricing pressure. 18 Table of Contents Legal, Compliance, and Regulatory Risks Our inability to protect our intellectual property or failure to maintain the confidentiality and integrity of data or other sensitive company information, by cyber-attack or other event, could have a material adverse effect on our business.
We may incur losses from product liability or other claims that could adversely affect our operating results. Our business exposes us to potential product liability risks that are inherent in the design, manufacture, and marketing of medical technologies. Our products are often used in surgical and intensive care settings with seriously ill patients.
We may incur losses from product liability or other claims that could adversely affect our operating results. Our business exposes us to potential product liability risks that are inherent in the design, manufacture, and marketing of medical technologies. Many of the devices we manufacture and sell are designed to be implanted in the human body for long periods of time.
These litigation matters and regulatory actions, recalls or other actions, regardless of outcome, could have a material adverse effect on our business, reputation, and ability to attract and retain customers. Use of our products in unapproved circumstances could expose us to liabilities.
In addition, regulatory sanctions may not be covered by insurance, or insurance may not continue to be available or available on commercially reasonable terms. These litigation matters and regulatory actions, recalls or other actions, regardless of outcome, could have a material adverse effect on our business, reputation, and ability to attract and retain customers.
As a result, our provision for income taxes could be higher than it would have been had we maintained the benefits of the tax incentives. Other economic, political, and social risks.
As a result, our provision for income taxes could be higher than it would have been had we maintained the benefits of the tax incentives. Failure to comply with data privacy and security laws could have a material adverse effect on our business.
With multiple new technologies competing for these facilities, a decision by a hospital system, particularly a large hospital system, not to adequately staff or provide facilities necessary to perform procedures using our products can meaningfully adversely impact our ability to sell our products. Those limitations could have a material adverse effect on our business, financial condition, and results of operations.
With multiple new technologies competing for these facilities, including technologies we develop and introduce in both our TAVR and TMTT product groups, a decision by a hospital system, particularly a large hospital system, not to adequately staff or provide facilities necessary to perform procedures using our products, or a decision to use a competitors’ products instead of ours, has in the past and may continue in the future to meaningfully adversely impact our ability to sell our products, 14 Table of Contents resulting in lower sales and revenue than we forecasted, which could have a material adverse effect on our business, financial condition, and results of operations.
Such licenses may not be available on commercially reasonable terms, may prevent us from manufacturing, selling, or using certain products, or may be non-exclusive, which could provide our competitors access to the same technologies. 18 Table of Contents In addition, third parties could also obtain patents that may require us to either redesign products or negotiate licenses from such third parties, which may be costly, unavailable, or require us to exit a particular product offering.
Such licenses may not be available on commercially reasonable terms, may prevent us from manufacturing, selling, or using certain products, or may be non-exclusive, which could provide our competitors access to the same technologies.
Safety is also critically important. Problems can arise for a number of reasons, including disruption of facility utilities, equipment malfunction, failure to follow protocols and procedures, raw material problems, software problems, cyber incidents, or human error. Disruptions can occur at any time, including during production line transfers and expansions.
Quality is extremely important for many reasons, including due to the serious and costly consequences of a product failure. Safety is also critically important. Problems can arise for a number of reasons, including disruption of facility utilities, equipment malfunction, failure to follow protocols and procedures, raw material problems (including cost volatility and availability), software problems, cybersecurity incidents, or human error.
We believe that many of our existing products are cost-effective, even though the one-time cost may be significant, because they are intended to improve quality of life and reduce overall health care costs over a long period of time.
We believe or have demonstrated through studies or analyses that many of our existing products are cost-effective, because they are intended to improve quality of life and can reduce overall health care costs in the short- and long-term.
In addition, many of the devices we manufacture and sell are designed to be implanted in the human body for long periods of time. Component failures, manufacturing and assembly flaws, design defects, software defects, medical procedure errors, or inadequate disclosure of product-related risks or information could result in an unsafe condition for, injury to, or death of patients.
Component failures, manufacturing and assembly flaws, design defects, software defects, medical procedure errors, or inadequate disclosure of product-related risks or information could result in an unsafe condition for, injury to, or death of patients. Such problems could result in product liability, medical malpractice or other lawsuits and claims, safety alerts, or product recalls in the future.
Other public health crises, including any future epidemics or pandemics, are highly uncertain and difficult to predict, and could result in material adverse impacts on our business, financial condition, and results of operations. We rely on third parties in the design, manufacture, and sterilization of our products.
We are subject to risks associated with public health crises, including pandemics and epidemics, the timing and effects of which are highly uncertain and difficult to predict, and could disrupt our business and the hospital systems and supply chains in which we operate and result in material adverse impacts on our business, financial condition, and results of operations.
Furthermore, we may face unforeseen challenges in executing our strategic plans to expand our products and therapies, which could cause our business and results of operations to suffer.
Furthermore, we may face unforeseen challenges in executing our strategic plans to expand our products and therapies, which could cause our business and results of operations to suffer. Acquired businesses may have liabilities, or be subject to claims, litigation or investigations that we did not anticipate or which exceed our estimates at the time of the acquisition.
In addition, a Mutual Recognition Agreement still under negotiation for the Medical Device Regulation may result in a lack of free movement of medical devices between the EU and Switzerland, may impact our access in the EU and may, ultimately, have a material effect on our business, financial condition, and results of operations.
For example, in the United States, continued implementation of the Affordable Care Act and the 21st Century Cures Act, or any future legislation, including deficit reduction legislation, could impact medical procedure volumes, reimbursement for our products, and demand for our products or the prices at which we sell our products. 19 Table of Contents In addition, a Mutual Recognition Agreement still under negotiation for the Medical Device Regulation may result in a lack of free movement of medical devices between the EU and Switzerland, may impact our access in the EU and may, ultimately, have a material effect on our business, financial condition, and results of operations.
In addition, we may be required to record charges or write-downs in connection with acquisitions and divestitures, including charges related to developed technology and/or in-process research and development assets. Any of these events could adversely affect our results of operations. We are subject to risks associated with the sale of our Critical Care product group.
In addition, we have previously been required, and may in the future be required, to record charges or write-downs in connection with acquisitions and divestitures, including charges related to developed technology and/or in-process research and development assets.
The effective dates of implementation, the interactions of tax reforms in multiple jurisdictions, and uncertainty related to dispute resolution mechanisms could impact our provision for income taxes. • Tax Audits . We are subject to ongoing tax audits in the various jurisdictions in which we operate.
The effective dates of implementation, the interactions of tax reforms in multiple jurisdictions, uncertainty related to dispute resolution mechanisms, and any ultimate agreement regarding treatment of the U.S. tax regime as a qualified side-by-side Pillar Two system, could impact our provision for income taxes. Tax Audits .
We are also subject to various United States and foreign laws pertaining to health care pricing, anti-competition, anti-corruption, and fraud and abuse, including prohibitions on kickbacks and the submission of false claims laws and restrictions on relationships with physicians and other referral sources.
In addition to the sanctions for noncompliance described above, commencement of an enforcement proceeding, inspection, or investigation could divert substantial management attention from the operation of our business and have an adverse effect on our business, financial condition, and results of operations. 20 Table of Contents We are also subject to various United States and foreign laws pertaining to health care pricing, anti-competition, anti-corruption, and fraud and abuse, including prohibitions on kickbacks and the submission of false claims laws and restrictions on relationships with physicians and other referral sources.
Although we maintain product liability and other insurance with coverages we believe are adequate, product liability or other claims may exceed insurance coverage limits, fines, and penalties. In addition, regulatory sanctions may not be covered by insurance, or insurance may not continue to be available or available on commercially reasonable terms.
We establish reserves and may incur charges in excess of those reserves. Although we maintain product liability and other insurance with coverages we believe are adequate, product liability or other claims may exceed insurance coverage limits, fines, and penalties.
See " Competition " under " Business " in Part I, Item 1 included herein. 13 Table of Contents The success of many of our products depends upon certain key physicians, research institutions, and hospital systems. We work with leading global physicians and research institutions who provide considerable knowledge and experience.
The success of many of our products depends upon certain key physicians, research institutions, and hospital systems. We work with leading global physicians and research institutions who provide considerable knowledge and experience. These physicians may assist us as researchers, marketing consultants, product trainers and consultants, inventors, and public speakers.
To the extent that the value of these assets decline, we may be required to write down the value of the assets. We may dispose of these underperforming operations or products or voluntarily cease operations related to a product.
We have written down the value of certain acquired assets in the past, and may be required to do so in the future. We have also previously decided to, and may in the future decide to, dispose of underperforming operations or products or voluntarily cease operations related to a 16 Table of Contents product.
These laws are broad in scope and are subject to evolving interpretation, which could require us to incur substantial costs to monitor compliance.
Further, we and our suppliers are subject to various United States and foreign regulations regarding environmental, social and governance matters. These laws are global and broad in scope, are rapidly increasing and are constantly evolving, which could require us to incur substantial costs and utilize internal resources to monitor the regulations and to comply.
For more information about these laws as they relate to our business, see the section entitled “ Government Regulation and Other Matter s” in Part I, Item 1, “ Business .” In addition, the United States Foreign Corrupt Practices Act, the United Kingdom Bribery Act, and similar laws in other jurisdictions contain prohibitions against bribery and other illegal payments, and make it an offense to fail to have procedures in place that prevent such payments.
For more information about these laws as they relate to our business, see the section entitled “ Government Regulation and Other Matter s” in Part I, Item 1, “ Business .” We and our customers are subject to healthcare legislation and other rigorous governmental regulations and we may incur significant expenses to comply with these regulations.
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These physicians may assist us as researchers, marketing consultants, product trainers and consultants, inventors, and as public speakers.
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Disruptions can occur at any time, including during production line transfers and expansions. Disruptions can also occur if our manufacturing and warehousing facilities are damaged by earthquakes, hurricanes, volcanoes, fires, and other natural disasters or catastrophic circumstances.
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We are subject to risks associated with public health crises, particularly with respect to the pressures that such crises create on the hospital systems and supply chains in which we operate. We are subject to risks associated with public health crises, including pandemics and epidemics, such as COVID-19.
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We have in the past and are continuing to experience constrained procedure volumes and sales for our products because more products, including Edwards’ own products, are competing for the same facilities and staffing within hospitals. See “ Competition” under “ Business” in Part I, Item 1 included herein.
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Global Economic and Other External Risks Because we operate globally, our business is subject to a variety of risks associated with international sales and operations.
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We are subject to risks associated with public health crises.
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Our extensive global operations and business activity as well as the fact that many of our manufacturing facilities and suppliers are outside of the United States expose us to certain financial, economic, political, and other risks, including those listed below. Domestic and Global Economic Conditions.
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Our use of, or our failure to effectively and timely utilize, emerging technologies, including AI, could adversely impact our business and financial results. We use AI and other emerging technologies in various facets of our operations and our business. The legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain.
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For example, in the United States, continued implementation of the Affordable Care Act and the 21st Century Cures Act, or any future legislation under the new Administration and new Congress, including deficit reduction legislation, could impact medical procedure volumes, reimbursement for our products, and demand for our products or the prices at which we sell our products.
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The rapid advancement of these technologies entails risks, including potential deficiencies in AI-generated information and increased regulatory, cybersecurity, privacy, intellectual property and data-related risks. Another risk may arise if we are unable to timely utilize AI for technological innovation and business operation efficiency in a manner that is faster and more effective than our competitors.
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Penalties resulting from any violation of these laws could adversely affect us and our business. Taxes. We are subject to income taxes in the United States as well as other jurisdictions. • Provision for Income Taxes.
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In addition, compliance with new or changing laws, regulations or industry standards relating to AI may impose significant costs on us and limit our ability to effectively develop, deploy or use AI technologies.
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We benefit from various global tax incentives extended to encourage investment or employment. Several foreign jurisdictions have granted us tax incentives which require renewal at various times in the future.
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Furthermore, if we are unable to effectively manage the use of AI technologies by our employees and service providers, our confidential information, intellectual property and reputation could be put at risk.
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Please see Note 20 to our Consolidated Financial Statements in this report for information regarding our legal proceedings.
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Failure to appropriately respond to this evolving landscape may result in reputational, competitive and business harm as well as litigation and regulatory action and fines, penalties and expenses related thereto.
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In addition to the sanctions for noncompliance described above, commencement of an enforcement proceeding, inspection, or investigation could divert substantial management attention from the operation of our business and have an adverse effect on our business, financial condition, and results of operations.
Added
We have also been, and may in the future be, party to disputes arising from divestitures or ceased operations related to certain products, which have previously and may in the future result in litigation, liability or reputational harm. Any of these events could have a material adverse effect on our business, financial condition, and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo proactively identify, mitigate, and prepare for potential cybersecurity incidents, we maintain both a business continuity plan and cyber incident response plan with formalized workflows and playbooks. We periodically conduct simulation exercises involving employees at various levels of the organization. We also periodically engage external partners to conduct annual audits of our systems and test our IT infrastructure.
Biggest changeWe also disclose information about our product security and provide relevant contact information for our stakeholders to report any product vulnerabilities. To proactively identify, mitigate, and prepare for potential cybersecurity incidents, we maintain both a business continuity plan and cyber incident response plan with formalized workflows and playbooks.
Our Chief Financial Officer presents information on our enterprise-wide risks to the Board of Directors at each of its regularly scheduled meetings. Our Senior Vice President ("SVP"), Enterprise Risk Management presents to our Board of Directors and our Audit Committee at least once a year on our significant enterprise-wide risks as well as our enterprise-wide risk program.
Our Chief Financial Officer presents information on our enterprise-wide risks to the Board of Directors at each of its regularly scheduled meetings. Our Senior Vice President (“SVP”), Enterprise Risk Management, presents to our Board of Directors and our Audit Committee at least once a year on our significant enterprise-wide risks as well as our enterprise-wide risk program.
This council is responsible for assessing and providing input into the enterprise risks that are presented to the Board of Directors.
This council is responsible for assessing and providing input into the enterprise risks that are presented to the Board of Directors. 24 Table of Contents
Our risks associated with cybersecurity threats are set forth under " Risk Factors" in Part I, Item 1A in this report. 21 Table of Contents Governance Our Board of Directors and our Audit Committee oversee our enterprise-wide risk management, including with respect to cybersecurity.
Our risks associated with cybersecurity threats are set forth under “ Risk Factors” in Part I, Item 1A in this report. Governance Our Board of Directors and our Audit Committee oversee our enterprise-wide risk management, including with respect to cybersecurity.
To minimize the risk and vulnerabilities to our own systems stemming from such use, our Information Security team identifies and addresses known cybersecurity threats and incidents at third-party service providers on a continuous basis.
We recognize that we are exposed to cybersecurity threats associated with our use of third-party service providers. To minimize the risk and vulnerabilities to our own systems stemming from such use, our Information Security team identifies and addresses known cybersecurity threats and incidents at third-party service providers on a continuous basis.
In addition, our Chief Information Security Officer (“CISO”) meets regularly with the Audit Committee on risks related to cybersecurity and information security. The oversight of our cybersecurity program at the management level rests with the Executive Leadership Team (“ELT”) who has designated the CISO to lead and execute on the cybersecurity program.
In addition, our Chief Information Security Officer (“CISO”) provides a report on cybersecurity and information security matters to the Audit Committee at each regularly scheduled meeting, minimally once a quarter. The oversight of our cybersecurity program at the management level rests with the Executive Leadership Team (“ELT”) who has designated the CISO to lead and execute on the cybersecurity program.
To proactively manage cybersecurity risk in our organization, our management team has instituted an Edwards Information Technology Security Policy that is available to all employees through the employee handbook and on our intranet. We also conduct regular cybersecurity awareness and training campaigns for existing employees.
To proactively manage cybersecurity risk in our organization, our management team has instituted an Edwards Information Technology Security Policy that is available to all employees through the employee handbook and on our intranet. We conduct information security training as part of our compliance program that occurs at least annually and is mandatory for all new employees.
Internal and external stakeholders can access the Edwards Integrity Helpline 24/7 online or by phone, to report any security incidents for escalation. We also disclose information about our product security and provide relevant contact information for our stakeholders to report any product vulnerabilities.
We also administer a cybersecurity training program for the Board of Directors. We also maintain insurance policies that may cover damages as a result of a cybersecurity incident. Internal and external stakeholders can access the Edwards Integrity Helpline 24/7 online or by phone, to report any security incidents for escalation.
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Through these channels and others, we work to proactively identify potential vulnerabilities in our information security system. We recognize that we are exposed to cybersecurity threats associated with our use of third-party service providers.
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We periodically conduct simulation exercises involving employees at various levels of the organization. Our Information Security Program is designed to align with industry standards such as the National Institute of Standards and Technology Cybersecurity Framework, Center for Internet Security Framework and Open Web Application Security Project Top 10, among others.
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We leverage these frameworks to build security controls that are both specific to Edwards and aligned with 23 Table of Contents best practices. In addition to tracking best practice frameworks, we also work with trusted third parties to help us assess and audit our cybersecurity program and annually audit our systems and test our IT infrastructure.
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Through these channels and others, we work to proactively identify potential vulnerabilities in our information security system and continually enhance our processes. As part of our efforts to track and shape industry best practices, the Information Security team is an affiliated member and active contributor of the Health Information Sharing and Analysis Center (“H-ISAC”).

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The locations and uses of our major properties are as follows: North America Irvine, California (1) Corporate Headquarters, Research and Development, Regulatory and Clinical Affairs, Manufacturing, Marketing, Administration Draper, Utah (1),(2) Manufacturing, Administration Naperville, Illinois (2) Manufacturing, Administration Central America Cartago, Costa Rica (1),(2) Manufacturing, Administration Europe Nyon, Switzerland (1) Administration, Marketing Prague, Czech Republic (2) Administration Shannon, Limerick, Ireland (1),(2) Manufacturing Asia Singapore (1),(2) Manufacturing, Distribution, Administration Tokyo, Japan (2) Administration, Marketing, Distribution Shanghai, China (2) Administration, Marketing Caesarea, Israel (2) Research and Development _______________________________________________________________________________ (1) Owned property.
Biggest changeProperties The locations and uses of our major properties are as follows: North America Irvine, California (1) Corporate Headquarters, Research and Development, Regulatory and Clinical Affairs, Manufacturing, Marketing, Administration Draper, Utah (1),(2) Manufacturing, Administration Naperville, Illinois (2) Manufacturing, Administration Central America Cartago, Costa Rica (1),(2) Manufacturing, Administration Europe Nyon, Switzerland (1) Administration, Marketing Prague, Czech Republic (2) Administration Shannon, Limerick, Ireland (1),(2) Manufacturing Valencia, Spain (3) Manufacturing Asia Singapore (1),(2) Manufacturing, Distribution, Administration Tokyo, Japan (2) Administration, Marketing, Distribution Shanghai, China (2) Administration, Marketing Caesarea, Israel (2) Research and Development _______________________________________________________________________________ (1) Owned property.
(2) Leased property. We believe our properties have been well maintained, are in good operating condition, and are adequate for current needs. We do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities.
(2) Leased property. (3) Under construction. We believe our properties have been well maintained, are in good operating condition, and are adequate for current needs. We do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Please see Note 20 to our Consolidated Financial Statements in this Annual Report for a description of our legal proceedings, which is incorporated by reference herein. 22 Table of Contents Item 4. Mine Safety Disclosures Not applicable. 23 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings Please see Note 20 to our Consolidated Financial Statements in this Annual Report for a description of our legal proceedings, which is incorporated by reference herein. We are subject to various environmental laws and regulations both within and outside of the United States.
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Our operations, like those of other medical device companies, involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilization processes. While it is difficult to quantify the potential impact of continuing compliance with environmental protection laws, management believes that such compliance will not have a material impact on our financial results.
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Our threshold for disclosing material environmental legal proceedings involving a governmental authority where potential monetary sanctions are involved is $1 million. Item 4. Mine Safety Disclosures Not applicable. 25 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 23 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24 Item 6. [Reserved] 25 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 25 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 39 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 25 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. [Reserved] 27 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 41 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRepurchases under the program may be made on the open market, including pursuant to a Rule 10b5-1 plan, and in privately negotiated transactions. The repurchase program does not have an expiration date.
Biggest changeIn September 2025, the Board of Directors approved up to an additional $1.5 billion of repurchases under this program. Repurchases under the program may be made on the open market, including pursuant to a Rule 10b5-1 plan, and in privately negotiated transactions.
The cumulative total return listed below assumes an initial investment of $100 at the market close on December 31, 2019 and reinvestment of dividends. Stockholder returns over the indicated period should not be considered indicative of future stockholder returns.
The cumulative total return listed below assumes an initial investment of $100 at the market close on December 31, 2020 and reinvestment of dividends. Stockholder returns over the indicated period should not be considered indicative of future stockholder returns.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange (the "NYSE") under the symbol "EW." Number of Stockholders On January 31, 2025, there were 7,197 stockholders of record of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol “EW.” Number of Stockholders On January 31, 2026, there were 6,691 stockholders of record of our common stock.
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (a) (b) October 1, 2024 through October 31, 2024 — $ — — $ 1,398.5 November 1, 2024 through November 30, 2024 — — — 1,398.5 December 1, 2024 through December 31, 2024 1,704,349 66.60 1,704,349 1,398.5 Total 1,704,349 66.60 1,704,349 (a) In August 2024, the Board of Directors approved a stock repurchase program providing for up to $1.5 billion of repurchases of our common stock.
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (a) October 1, 2025 through October 31, 2025 425,194 $ 73.82 425,194 $ 2,022.1 November 1, 2025 through November 30, 2025 17,885 84.22 17,885 2,020.6 December 1, 2025 through December 31, 2025 81,464 84.76 81,464 2,013.7 Total 524,543 75.88 524,543 (a) In August 2024, the Board of Directors approved a stock repurchase program providing for up to $1.5 billion of repurchases of our common stock.
Shares purchased pursuant to the ASR agreement are presented in the table above in the periods in which they were received. 24 Table of Contents Performance Graph The following graph compares the performance of our common stock with that of the S&P 500 Index and the S&P 500 Health Care Equipment Index.
The repurchase program does not have an expiration date. 26 Table of Contents Performance Graph The following graph compares the performance of our common stock with that of the S&P 500 Index and the S&P 500 Health Care Equipment Index.
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(b) In August 2024, we entered into a $500.0 million accelerated share repurchase ("ASR") agreement and received, on September 5, 2024, an initial delivery of 5.8 million shares of our common stock, representing approximately 80 percent of the total contract value. The ASR concluded on December 27, 2024 and we received an additional 1.7 million shares.
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Total Cumulative Return 2021 2022 2023 2024 2025 Edwards Lifesciences $ 142.00 $ 81.78 $ 83.58 $ 81.15 $ 93.45 S&P 500 128.71 105.40 133.10 166.40 196.16 S&P 500 Health Care Equipment 119.35 96.84 105.60 117.15 126.87
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Total Cumulative Return 2020 2021 2022 2023 2024 Edwards Lifesciences $ 117.32 $ 166.60 $ 95.95 $ 98.05 $ 95.20 S&P 500 118.40 152.39 124.79 157.59 197.02 S&P 500 Health Care Equipment 117.63 140.40 113.92 124.22 137.81

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe decrease in gross profit as a percentage of net sales in 2024 compared to 2023 was driven by a 0.6 percentage point impact from foreign currency rate fluctuations, including the settlement of foreign currency hedging contracts. 30 Table of Contents Selling, General, and Administrative ("SG&A") Expenses SG&A expenses increased in 2024 compared to 2023 primarily due to (a) higher field-based personnel-related costs in support of our growth strategy initiatives, primarily in the United States and Europe, (b) costs associated with our recent business combinations and (c) professional services costs to support a transition services agreement.
Biggest changeSelling, General, and Administrative (“SG&A”) Expenses SG&A expenses increased in 2025 compared to 2024 primarily due to (a) higher field-based personnel-related costs in support of our growth strategy initiatives, primarily in the United States, (b) increased marketing expenses primarily related to TAVR, (c) increased performance-based compensation expenses, and (d) increased professional services costs to support the transition services agreement. 32 Table of Contents Research and Development (“R&D”) Expenses R&D expenses increased in 2025 compared to 2024 primarily due to increased investments in implantable heart failure management innovations.
In the first quarter of 2022, we executed an Advance Pricing Agreement (“APA”) between Japan and Switzerland covering distribution transactions for tax years 2020 through 2024, and in 2023, executed an APA between Japan and the United States covering tax years 2020 through 2024.
In the first quarter of 2022, we executed an Advance Pricing Agreement (“APA”) between Japan and Switzerland covering distribution transactions for tax years 2020 through 2024, and in 2023, we executed an APA between Japan and the United States covering tax years 2020 through 2024.
Certain of our accounting policies represent a selection among acceptable alternatives under generally accepted accounting principles in the United States of America ("GAAP"). In evaluating our transactions, management assesses all relevant GAAP and chooses the accounting policy that most accurately reflects the nature of the transactions. The application of accounting policies requires the use of judgments and estimates.
Certain of our accounting policies represent a selection among acceptable alternatives under generally accepted accounting principles in the United States of America (“GAAP”). In evaluating our transactions, management assesses all relevant GAAP and chooses the accounting policy that most accurately reflects the nature of the transactions. The application of accounting policies requires the use of judgments and estimates.
We disagreed with the NOPA and pursued an administrative appeal with the IRS Independent Office of Appeals ("Appeals"). The Appeals process culminated in the third quarter of 2023 when we and Appeals concluded that a satisfactory resolution of the matter at the administrative level was not possible.
We disagreed with the NOPA and pursued an administrative appeal with the IRS Independent Office of Appeals (“Appeals”). The Appeals process culminated in the third quarter of 2023 when we and Appeals concluded that a satisfactory resolution of the matter at the administrative level was not possible.
Discount rates may vary across acquisitions based on the purchase price, forecasts, and relative risks of each acquired company. In-process research and development assets acquired in business combinations is reviewed for impairment annually, or whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired.
Discount rates may vary across acquisitions based on the purchase price, forecasts, and relative risks of each acquired company. In-process research and development assets acquired in business combinations are reviewed for impairment annually, or whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired.
The NOPA proposed a substantial increase to our United States taxable income, which could result in additional tax expense for the 2015 through 2017 period of approximately $240.0 million and reflects a departure from a transfer pricing method we had previously agreed upon with the IRS.
The NOPA proposed a substantial increase to our United States taxable income, which could result in additional tax expense for the 2015 through 2017 period of approximately $260.0 million and reflects a departure from a transfer pricing method we had previously agreed upon with the IRS.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis presents the factors that had a material effect on our results of operations during the two years ended December 31, 2024. Also discussed is our financial position as of December 31, 2024, and our consolidated cash flows for 2024 compared to 2023.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis presents the factors that had a material effect on our results of operations during the two years ended December 31, 2025. Also discussed is our financial position as of December 31, 2025, and our consolidated cash flows for 2025 compared to 2024.
Surgical/TAVR intercompany royalty transactions covering tax years 2018 through 2024 remain subject to IRS examination, and those transactions and related tax positions remain uncertain as of December 31, 2024. We have considered this information, as well as information regarding the NOD and other proceedings described above, in our evaluation of our uncertain tax positions.
Surgical/TAVR intercompany royalty transactions covering tax years 2018 through 2025 remain subject to IRS examination, and those transactions and related tax positions remain uncertain as of December 31, 2025. We have considered this information, as well as information regarding the NOD and other proceedings described above, in our evaluation of our uncertain tax positions.
In June 2018, we issued $600.0 million of 4.3% fixed-rate unsecured senior notes (the "2018 Notes") due June 15, 2028. We may redeem the 2018 Notes, in whole or in part, at any time and from time to time at specified redemption prices. As of December 31, 2024, we have not elected to redeem any of the 2018 Notes.
In June 2018, we issued $600.0 million of 4.3% fixed-rate unsecured senior notes (the "2018 Notes") due June 15, 2028. We may redeem the 2018 Notes, in whole or in part, at any time and from time to time at specified redemption prices. As of December 31, 2025, we have not elected to redeem any of the 2018 Notes.
Our sales adjustment related to distributor rebates given to our United States distributors represents the difference between our sales price to the distributor and the negotiated price to be paid by the end-customer. We validate the distributor rebate accrual quarterly through either a review of the inventory reports obtained from our distributors or an estimate of the distributor's inventory.
Our sales adjustment related to distributor rebates given to our distributors represents the difference between our sales price to the distributor and the negotiated price to be paid by the end-customer. We validate the distributor rebate accrual quarterly through either a review of the inventory reports obtained from our distributors or an estimate of the distributor's inventory.
During the fourth quarter of 2024, we received a notice of assessment from the ITA claiming that we owe additional tax of approximately $16 million excluding interest and penalties for the 2018 through 2022 tax years based entirely on the collateral impacts of the 2017 assessment.
During the fourth quarter of 2024, we received a second notice of assessment from the ITA claiming that we owe additional tax of approximately $16.0 million excluding interest and penalties for the 2018 through 2022 tax years based entirely on the collateral impacts of the 2017 assessment.
We may increase the amount available under the Credit Agreement by up to an additional $250.0 million in the aggregate and extend the maturity date for an additional year, subject to the agreement of the lenders. As of December 31, 2024, no amounts were outstanding under the Credit Agreement.
We may increase the amount available under the Credit Agreement by up to an additional $250.0 million in the aggregate and extend the maturity date for an additional year, subject to the agreement of the lenders. As of December 31, 2025, no amounts were outstanding under the Credit Agreement.
During the first quarter of 2024, we received a notice of assessment from the Israel Tax Authority (the "ITA") wherein the ITA claimed that we owed approximately $110 million of tax excluding interest and penalties in connection with a claimed 2017 transfer of intellectual property.
During the first quarter of 2024, we received a notice of assessment from the Israel Tax Authority (the “ITA”) wherein the ITA claimed that we owed approximately $110.0 million of tax excluding interest and penalties in connection with a claimed 2017 transfer of intellectual property.
(e) We acquire assets still in development, enter into research and development arrangements, acquire businesses, and sponsor certain clinical trials that often require milestone, royalty, or other future payments to third-parties, contingent upon the occurrence of certain future events.
(d) We acquire assets still in development, enter into research and development arrangements, acquire businesses, and sponsor certain clinical trials that often require milestone, royalty, or other future payments to third-parties, contingent upon the occurrence of certain future events.
The impact of foreign currency exchange rate fluctuations on net sales is not necessarily indicative of the impact on net income due to the corresponding effect of foreign currency exchange rate fluctuations on international manufacturing and operating costs, and our hedging activities. For more information, see " Quantitative and Qualitative Disclosures About Market Risk" in Part II, Item 7A .
The impact of foreign currency exchange rate fluctuations on net sales is not necessarily indicative of the impact on net income due to the corresponding effect of foreign currency exchange rate fluctuations on international manufacturing and operating costs, and our hedging activities. For more information, see “ Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A .
We believe the amounts previously accrued related to this uncertain tax position 33 Table of Contents are appropriate for a number of reasons, including the interpretation and application of relevant tax laws and accounting standards to our facts and, accordingly, have not accrued any additional amount based on the NOD and other proceedings to date.
We believe the amounts previously accrued related to this uncertain tax position are appropriate for a number of reasons, including the interpretation and application of relevant tax laws and accounting standards to our facts and, accordingly, have not accrued any additional amount based on the NOD and other proceedings to date.
We estimate that these contingent payments could be up to $2.5 billion if all milestones or other contingent obligations are met. Critical Accounting Policies and Estimates Our results of operations and financial position are determined based upon the application of our accounting policies, as discussed in the notes to the Consolidated Financial Statements .
We estimate that these contingent payments could be up to $1.1 billion if all milestones or other contingent obligations are met. Critical Accounting Policies and Estimates Our results of operations and financial position are determined based upon the application of our accounting policies, as discussed in the notes to the Consolidated Financial Statements .
The estimate of variable consideration requires significant judgment. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.
We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.
Our vision for growth is to treat patients with both valvular and non-valvular structural heart disease, such as heart failure, which is a natural progression of the disease for many patients suffering from aortic stenosis and mitral and tricuspid regurgitation. In 2024, we invested 19% of our net sales in research and development.
Our vision for growth is to treat patients with both valvular and non-valvular structural heart disease, such as heart failure, which is a natural progression of the disease for many patients suffering from aortic stenosis and mitral and tricuspid regurgitation. In 2025, we invested 18% of our net sales in research and development.
In addition, we plan to vigorously contest through the judicial process the additional tax claimed by the IRS related to transfer pricing issues for the 2015 through 2017 tax years which may require additional cash outflows. See Note 19 to the Consolidated Financial Statements for further information on these matters.
In addition, we plan to vigorously contest 38 Table of Contents through the judicial process the additional tax claimed by the IRS related to transfer pricing issues for the 2015 through 2017 tax years which may require additional cash outflows. For further information, see Note 19 to the Consolidated Financial Statements for further information on these matters.
During the fourth quarter of 2023, Appeals issued a notice of deficiency ("NOD") increasing our 2015 through 2017 United States federal income tax in amounts resulting from the income adjustments previously reflected in the NOPA. The additional tax sought in excess of our filing is $269.3 million before consideration of interest and a repatriation tax offset.
During the fourth quarter of 2023, Appeals issued a notice of deficiency (“NOD”) increasing our 2015 through 2017 United States federal income tax in amounts resulting from the income adjustments previously reflected in the 35 Table of Contents NOPA. The additional tax sought in excess of our filing is $269.3 million before consideration of interest and a repatriation tax offset.
We conduct operations worldwide and are managed in the following geographical regions: United States, Europe, Japan, and Rest of World. Our products are categorized into the following groups: Transcatheter Aortic Valve Replacement ("TAVR"), Transcatheter Mitral and Tricuspid Therapies ("TMTT"), and Surgical Structural Heart ("Surgical").
We conduct operations worldwide and are managed in the following geographical regions: United States, Europe, Japan, and Rest of World. Our products are categorized into the following groups: Transcatheter Aortic Valve Replacement (“TAVR”), Transcatheter Mitral and Tricuspid Therapies (“TMTT”), and Surgical Structural Heart (“Surgical”).
See Note 3 to the Consolidated Financial Statements . Healthcare Environment, Opportunities, and Challenges The medical technology industry is highly competitive and continues to evolve. Our success is measured both by the development of innovative products and the value we bring to our stakeholders.
For further information, see Note 3, Note 9 and Note 20 to the Consolidated Financial Statements. Healthcare Environment, Opportunities, and Challenges The medical technology industry is highly competitive and continues to evolve. Our success is measured both by the development of innovative products and the value we bring to our stakeholders.
For a discussion related to the results of operations for 2023 compared to 2022 and a discussion related to our consolidated cash flows for 2023 compared to 2022, refer to Part II, Item 7, " Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2023 Annual Report on Form 10–K filed with the Securities and Exchange Commission on February 12, 2024.
For a discussion related to the results of operations for 2024 compared to 2023 and a discussion related to our consolidated cash flows for 2024 compared to 2023, refer to Part II, Item 7, “ Management's Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report on Form 10–K filed with the Securities and Exchange Commission on February 28, 2025.
As of December 31, 2024, the carrying value of the 2018 Notes was $597.7 million. For further information on our debt, see Note 12 to the Consolidated Financial Statements . From time to time, we repurchase shares of our common stock under share repurchase programs authorized by the Board of Directors.
As of December 31, 2025, the carrying value of the 2018 Notes was $598.3 million. For further information on our debt, see Note 12 to the Consolidated Financial Statements . From time to time, we repurchase shares of our common stock under share repurchase programs authorized by the Board of Directors.
Our discussion and analysis of our results of operations is reflective of our continuing operations. See Note 5 to the Consolidated Financial Statements .
Our discussion and analysis of our results of operations is reflective of our continuing operations. See Note 5 to the Consolidated Financial Statements for further information.
We have excluded from the table above those contingent milestone payments and other contingent liabilities for which we cannot reasonably predict future payments or for which we can avoid making payment by unilaterally deciding to stop development of a product or cease progress of a clinical trial, certain sales-based royalties in excess of minimum payment thresholds related to litigation settlements, and obligations under an acquisition agreement that has not yet closed.
We have excluded from the table above those contingent milestone payments and other contingent liabilities for which we cannot reasonably predict future payments or for which we can avoid making payment by unilaterally deciding to stop development of a product or cease progress of a clinical trial and certain sales-based royalties in excess of minimum payment thresholds related to litigation settlements.
The audits of our material state, local, and foreign income tax matters have been concluded for years through 2015. During 2021, we received a Notice of Proposed Adjustment (“NOPA”) from the IRS for the 2015 through 2017 tax years relating to transfer pricing involving Surgical/TAVR intercompany royalty transactions between our United States and Switzerland subsidiaries.
During 2021, we received a Notice of Proposed Adjustment (“NOPA”) from the IRS for the 2015 through 2017 tax years relating to transfer pricing involving Surgical/TAVR intercompany royalty transactions between our United States and Switzerland subsidiaries.
We also had $121.6 million of United States foreign tax credits of which $103.8 million are expected to be utilized before the end of the 10-year carryforward period. As a result, we recorded a valuation allowance of $17.8 million on the United States foreign tax credit carryforwards which have been determined to be unrealizable.
We also had $69.5 million of United States foreign tax credits of which $47.2 million are expected to be utilized before the end of the 10-year carryforward period. As a result, we recorded a valuation allowance of $22.3 million on the United States foreign tax credit carryforwards which have been determined to be unrealizable.
The audits of our United States federal income tax returns through 2014 have been closed. The IRS audit field work for the 2015 through 2017 tax years was completed during the second quarter of 2021, except for transfer pricing and related matters. The IRS is currently examining the 2018 through 2020 tax years.
The IRS audit field work for the 2015 through 2017 tax years was completed during the second quarter of 2021, except for transfer pricing and related matters. The IRS is currently examining the 2018 through 2020 tax years. The audits of our material state, local, and foreign income tax matters have been concluded for years through 2015.
We are dedicated to generating robust clinical, economic, and quality-of-life evidence increasingly expected by patients, clinicians, and payors in the current healthcare environment, with the goal of encouraging the adoption of innovative new medical therapies that demonstrate superior outcomes. 27 Table of Contents Results of Operations Net Sales by Geographic Region (dollars in millions) Years Ended December 31, Change 2024 2023 $ % United States $ 3,206.0 $ 2,947.9 $ 258.1 8.8 % Europe 1,321.7 1,180.2 141.5 12.0 % Japan 339.8 350.8 (11.0) (3.1) % Rest of World 572.0 531.1 40.9 7.7 % Outside of the United States 2,233.5 2,062.1 171.4 8.3 % Total net sales $ 5,439.5 $ 5,010.0 $ 429.5 8.6 % Net sales outside of the United States include the impact of foreign currency exchange rate fluctuations, as further detailed in the discussion below.
We are dedicated to generating robust clinical, economic, and quality-of-life evidence increasingly expected by patients, clinicians, and payors in the current healthcare environment, with the goal of encouraging the adoption of innovative new medical therapies that demonstrate superior outcomes. 29 Table of Contents Results of Operations Net Sales by Geographic Region (dollars in millions) Years Ended December 31, Change 2025 2024 $ % United States $ 3,543.1 $ 3,206.0 $ 337.1 10.5 % Europe 1,517.5 1,321.7 195.8 14.8 % Japan 354.7 339.8 14.9 4.4 % Rest of World 652.3 572.0 80.3 14.0 % Outside of the United States 2,524.5 2,233.5 291.0 13.0 % Total net sales $ 6,067.6 $ 5,439.5 $ 628.1 11.5 % Net sales outside of the United States include the impact of foreign currency exchange rate fluctuations, as further detailed in the discussion below.
The effective rates for 2024 and 2023 were lower than the federal statutory rate of 21% primarily due to (1) foreign earnings taxed at lower rates, (2) 32 Table of Contents United States federal and California research and development credits, and (3) the tax benefit from employee share-based compensation.
The effective rates for 2025 and 2024 were lower than the federal statutory rate of 21% primarily due to (1) foreign earnings taxed at lower rates, (2) United States federal and California research and development credits, and (3) the tax benefit from foreign-derived intangible income.
(d) As of December 31, 2024, the gross liability for uncertain tax positions, including interest, was $786.7 million and relates primarily to transfer pricing matters.
(c) As of December 31, 2025, the gross liability for uncertain tax positions, including interest, was $920.8 million and relates primarily to transfer pricing matters.
Financial Highlights and Market Update 26 Table of Contents Financial Highlights Our net sales for 2024 were $5.4 billion, representing an increase of $429.5 million over 2023, driven by sales growth of our TAVR and TMTT products. Our gross profit increased in 2024, driven by our sales growth.
Financial Highlights and Market Update 28 Table of Contents Financial Highlights Our net sales for 2025 were $6.1 billion, representing an increase of $628.1 million over 2024, driven primarily by sales growth of our TAVR and TMTT products. Our gross profit increased in 2025, driven by our sales growth.
During 2024, under the Board of Directors authorized repurchase program, we repurchased a total of 16.7 million shares at an aggregate cost of $1.2 billion, including pursuant to a $500.0 million accelerated share repurchase agreement. For further information, see Note 16 to the Consolidated Financial Statements .
During 2025, under the Board of Directors authorized repurchase program, we repurchased a total of 11.7 million shares at an aggregate cost of $884.7 million, including pursuant to $750.0 million of accelerated share repurchase agreements executed during the period. For further information, see Note 16 to the Consolidated Financial Statements .
For further information, see Note 9 to the Consolidated Financial Statements. 35 Table of Contents Consolidated Cash Flows - For the Years Ended December 31, 2024 and 2023 Net cash flows provided by operating activities of $542.3 million for 2024 decreased $353.5 million from 2023 primarily due to tax payments of $1.2 billion in 2024, which included $469.7 million of tax payments related to the sale of Critical Care and a $305.1 million tax deposit we made to mitigate interest on potential tax liabilities we are contesting through the judicial process.
Consolidated Cash Flows - For the Years Ended December 31, 2025 and 2024 Net cash flows provided by operating activities of $1,595.2 million for 2025 increased $1,052.9 million from 2024 primarily due to (1) improved operating performance in 2025, and (2) lower tax payments during the year ended December 31, 2025, which included $175.3 million of local tax payments associated with the sale of Critical Care, compared to the year ended December 31, 2024, which included $469.7 million of tax payments related to the 37 Table of Contents sale of Critical Care and a $305.1 million tax deposit we made to mitigate interest on potential tax liabilities we are contesting through the judicial process (for further information, see Note 19 to the Consolidated Financial Statements ).
We have received tax incentives in certain non-United States tax jurisdictions, the primary benefit for which will expire in 2029. The tax reductions as compared to the local statutory rates were $271.9 million ($0.45 per diluted share) and $333.2 million ($0.55 per diluted share) for the years ended December 31, 2024 and 2023, respectively.
We have received tax incentives in certain non-United States tax jurisdictions, the primary benefit for which will expire in 2032. The tax reductions to cash tax expense as compared to the local statutory rates were $93.9 million ($0.16 per diluted share) and $249.3 million ($0.42 per diluted share) for the years ended December 31, 2025 and 2024, respectively.
Legal Contingencies We are or may be a party to, or may otherwise be responsible for, pending or threatened lawsuits, including those related to products and services currently or formerly manufactured or performed by us, workplace and employment matters, matters involving real estate, our operations or health care regulations, or governmental investigations.
For further information on our income taxes, see Note 2 and Note 19 to the Consolidated Financial Statements . 40 Table of Contents Legal Contingencies We are or may be a party to, or may otherwise be responsible for, pending or threatened lawsuits, including those related to products and services currently or formerly manufactured or performed by us, workplace and employment matters, matters involving real estate, our operations or health care regulations, or governmental investigations.
In the normal course of business, the Internal Revenue Service ("IRS") and other taxing authorities are in different stages of examining various years of our tax filings. During these audits we may receive proposed audit adjustments that could be material.
The net amount of $390.4 million, if not required, would favorably affect our effective tax rate. In the normal course of business, the Internal Revenue Service (“IRS”) and other taxing authorities are in different stages of examining various years of our tax filings. During these audits, we may receive proposed audit adjustments that could be material.
Provision for Income Taxes ($ in millions) Years Ended December 31, Change 2024 2023 $ % Provision for income taxes $ 152.1 $ 152.4 $ (0.3) (0.2) % Effective tax rate 9.8 % 11.1 % Our effective income tax rate in 2024 and 2023 was 9.8% and 11.1%, respectively.
Provision for Income Taxes ($ in millions) Years Ended December 31, Change 2025 2024 $ % Provision for income taxes $ 216.9 $ 152.1 $ 64.8 42.6 % Effective tax rate 17.0 % 9.8 % Our effective income tax rate in 2025 and 2024 was 17.0% and 9.8%, respectively.
Realization of certain deferred tax assets, primarily tax credits, net operating loss and other carryforwards, is dependent upon generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods.
Income Taxes The determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Realization of certain deferred tax assets, primarily tax credits, net operating loss and other carryforwards, is dependent upon generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods.
The IRS converted those deposits to advance payments, and, on December 20, 2024, we filed administrative claims for refunds of those payments with the IRS for the 2015 through 2017 tax years. We expect that the IRS will either deny or fail to act on those refund claims, thereby enabling us to sue for refunds in the appropriate judicial forum.
The IRS converted those deposits to advance payments, and, on December 20, 2024, we filed administrative claims for refunds of those payments with the IRS for the 2015 through 2017 tax years. We are now able to sue for refunds in the appropriate judicial forum.
Nonetheless, the outcome of the judicial process cannot be predicted with certainty, and it is possible that the outcome of that process could have a material impact on our consolidated financial statements. As noted below, similar material tax disputes may arise for the 2018 through 2024 tax years.
Nonetheless, the outcome of the judicial process cannot be predicted with certainty, and it is possible that the outcome of that process could have a material impact on our consolidated financial statements.
The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill.
The excess of the purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill.
The increase in other income was driven primarily by gains from the remeasurement of our previously held equity interests upon acquisition of the investees. For more information, see Note 10 to the Consolidated Financial Statements .
Other Non-operating Income, net Other non-operating income, net was $7.2 million and $68.9 million in 2025 and 2024, respectively. The decrease in other income was driven primarily by gains from the remeasurement of our previously held equity interests upon acquisition of the investees in 2024. For further information, see Note 10 to the Consolidated Financial Statements .
We currently anticipate making capital expenditures of approximately $250.0 million in 2025 as we continue to invest in our operations. Net cash used in financing activities of $983.0 million in 2024 consisted primarily of purchases of treasury stock of $1.2 billion, partially offset by proceeds from stock plans of $179.5 million.
Net cash used in financing activities of $983.0 million in 2024 consisted primarily of purchases of treasury stock of $1.2 billion, partially offset by proceeds from stock plans of $179.5 million.
As of December 31, 2024, our gross uncertain tax positions were $678.8 million. We estimate that these liabilities would be reduced by $319.9 million from offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments, state income taxes, and timing adjustments. The net amount of $358.9 million, if not required, would favorably affect our effective tax rate.
As of December 31, 2025, our gross uncertain tax positions were $767.4 million. We estimate that these liabilities would be reduced by $377.0 million from offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments, foreign income taxes, state income taxes, and timing adjustments.
Many countries are implementing some or all the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting Pillar Two rules ("Pillar Two") that impose a global minimum tax of 15%. Under Pillar Two, a company is required to determine a combined effective tax rate for all entities located in a jurisdiction.
Many countries are implementing some or all of the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting Pillar Two (“Pillar Two”) rules that impose a global minimum tax of 15% on reported profits.
See Note 15 to the Consolidated Financial Statements for further information. (c) Purchase and other commitments consists primarily of open purchase orders for the acquisition of goods and services in the normal course of business. We have excluded open purchase orders with a remaining term of less than one year.
(b) Purchase and other commitments consists primarily of open purchase orders for the acquisition of goods and services in the normal course of business and sponsorship obligations related to the American Heart Association’s Heart Valve Initiative. We have excluded open purchase orders with a remaining term of less than one year.
Transcatheter Mitral and Tricuspid Therapies The increase in net sales of TMTT products was due primarily to higher sales of our PASCAL transcatheter edge-to-edge repair system and our continued launch of the EVOQUE tricuspid valve replacement system in the United States and Europe. 29 Table of Contents Surgical Structural Heart Net sales of Surgical products increased in 2024 primarily due to higher sales of the INSPIRIS RESILIA aortic valve in the United States and Europe, the KONECT RESILIA tissue valved conduit in the United States, and the MITRIS RESILIA valve in the United States.
Transcatheter Mitral and Tricuspid Therapies The increase in net sales in 2025 of TMTT products was primarily due to higher sales of our PASCAL transcatheter edge-to-edge repair system and EVOQUE tricuspid valve replacement system in the United States and Europe.
We believe the following are the critical accounting policies which could have the most significant effect on our reported results and require subjective or complex judgments by management. 37 Table of Contents Revenue Recognition When we recognize revenue from the sale of our products, the amount of consideration we ultimately receive varies depending upon the return terms, sales rebates, discounts, and other incentives that we may offer, which are accounted for as variable consideration when estimating the amount of revenue to recognize.
Revenue Recognition When we recognize revenue from the sale of our products, the amount of consideration we ultimately receive varies depending upon the return terms, sales rebates, discounts, and other incentives that we may offer, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The estimate of variable consideration requires significant judgment.
As of December 31, 2024, we had $232.7 million of gross California research expenditure tax credits that we expect to use in future periods. The credits may be carried forward indefinitely.
The OBBBA did not have a material impact to our tax expense in 2025 and is not expected to have a material impact on future periods. As of December 31, 2025, we had $245.3 million of gross California research expenditure tax credits that we expect to use in future periods. The credits may be carried forward indefinitely.
This distributor inventory information is used to verify the estimated liability for future distributor rebate claims based on historical rebates and contract rates. We periodically monitor current pricing trends and distributor inventory levels to ensure the credit for future distributor rebates is fairly stated. Business Combinations We account for business combinations using the acquisition method of accounting.
We periodically monitor current pricing trends and distributor inventory levels to ensure the credit for future distributor rebates is fairly stated. 39 Table of Contents Business Combinations We account for business combinations using the acquisition method of accounting. The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values.
Additionally, management reviews the carrying amounts of other intangible and long-lived assets whenever events or circumstances indicate that the carrying amounts of an asset may not be recoverable.
Additionally, management reviews the carrying amounts of other intangible and long-lived assets whenever events or circumstances indicate that the carrying amounts of an asset may not be recoverable. The impairment reviews require significant estimates about fair value, including estimation of future cash flows, selection of an appropriate discount rate, and estimates of long-term growth rates.
We assert 34 Table of Contents that $555.2 million of our foreign earnings continue to be permanently reinvested and our intent is to repatriate, in the future, $1.0 billion of our foreign earnings as of December 31, 2024. The estimated net tax liability on the indefinitely reinvested earnings if repatriated is $2.5 million.
During 2025, we repatriated cash of $1.5 billion. We assert that $405.8 million of our foreign earnings continue to be permanently reinvested and our intent is to repatriate, in the future, $720.9 million of our foreign earnings as of December 31, 2025.
Upon closing we paid $1.1 billion, net of cash received. These agreements include up to an additional $670.0 million of potential payments upon achievement of certain regulatory, performance, and sales milestones. For further information, see Note 10 to the Consolidated Financial Statements .
During 2024, we completed acquisitions of multiple medical device companies. We are required to pay up to an additional $200.0 million of potential payments upon achievement of certain regulatory, performance, and sales milestones. For further information, see Note 10 to the Consolidated Financial Statements .
We have a Five-year Credit Agreement (the "Credit Agreement") which provides for a $750.0 million multi-currency unsecured revolving credit facility and matures on July 15, 2027.
The estimated net tax liability on the indefinitely reinvested earnings if repatriated is $1.2 million. 36 Table of Contents We have a five-year Credit Agreement (the “Credit Agreement”) that provides for a $750.0 million multi-currency unsecured revolving credit facility and matures on July 15, 2027.
Net Sales by Product Group (dollars in millions) Years Ended December 31, Change 2024 2023 $ % Transcatheter Aortic Valve Replacement $ 4,106.1 $ 3,879.8 $ 226.3 5.8 % Transcatheter Mitral and Tricuspid Therapies 352.1 197.6 154.5 78.2 % Surgical Structural Heart 981.3 932.6 48.7 5.2 % Total net sales $ 5,439.5 $ 5,010.0 $ 429.5 8.6 % Transcatheter Aortic Valve Replacement The increase in net sales of TAVR products was driven by: • higher sales of the Edwards SAPIEN platform in 2024, primarily due to sales of the Edwards SAPIEN 3 Ultra RESILIA valve in the United States, Europe, and Japan; 28 Table of Contents partially offset by: • foreign currency exchange rate fluctuations, which decreased net sales outside of the United States by $13.6 million primarily due to the weakening of the Japanese yen against the United States dollar, partially offset by the strengthening of the Euro against the United States dollar.
Net Sales by Product Group (dollars in millions) Years Ended December 31, Change 2025 2024 $ % Transcatheter Aortic Valve Replacement $ 4,487.7 $ 4,106.1 $ 381.6 9.3 % Transcatheter Mitral and Tricuspid Therapies 550.6 352.1 198.5 56.4 % Surgical Structural Heart 1,029.3 981.3 48.0 4.9 % Total net sales $ 6,067.6 $ 5,439.5 $ 628.1 11.5 % Transcatheter Aortic Valve Replacement 30 Table of Contents Net sales of TAVR products increased in 2025, driven by higher sales of the Edwards SAPIEN platform in 2025, primarily due to higher sales of the Edwards SAPIEN 3 Ultra RESILIA v alve in the United States and Europe.
Interest Expense Interest expense was $19.8 million and $17.6 million in 2024 and 2023, respectively. The increase in interest expense resulted primarily from lower capitalizable interest related to facilities construction. Interest Income Interest income was $120.3 million and $67.2 million in 2024 and 2023, respectively.
For further information, see Note 5 to the Consolidated Financial Statements. 33 Table of Contents Interest Expense Interest expense was $20.4 million and $19.8 million in 2025 and 2024, respectively. The increase in interest expense resulted primarily from lower capitalizable interest related to facilities construction. Interest Income Interest income was $168.8 million and $120.3 million in 2025 and 2024, respectively.
For more information, see Note 3 to the Consolidated Financial Statements . 31 Table of Contents Change in Fair Value of Contingent Consideration Liabilities, net The change in fair value of contingent consideration liabilities resulted in gains of $26.2 million during 2023, primarily due to changes in projected probabilities of milestone achievement.
Change in Fair Value of Contingent Consideration Liabilities, net The change in fair value of contingent consideration liabilities resulted in gains of $12.5 million during 2025, primarily due to changes in projected probabilities of milestone achievements.
This amount is impacted by, among other items, pension expense funding levels, changes in plan demographics and assumptions, and investment returns on plan assets. Therefore, we are unable to make a reasonably reliable estimate of the amount and period in which the liability might be paid, and did not include this amount in the contractual obligations table.
Therefore, we are unable to make a reasonably reliable estimate of the amount and period in which the liability might be paid, and did not include this amount in the contractual obligations table. For further information, see Note 15 to the Consolidated Financial Statements for further information.
We analyzed the quantitative and qualitative factors relevant to the divestiture of Critical Care and the aforementioned non-core product group (collectively, the "discontinued product groups"), including its significance to our overall net income and total assets, and determined that, when considered together, the conditions for discontinued operations presentation with respect to the discontinued product groups had been met.
We determined that, when considered together, the conditions for discontinued operations presentation had been met with respect to each of Critical Care and the non-core product group (collectively, the “discontinued product groups”). As such, the historical financial condition and results of the discontinued product groups have been reflected as discontinued operations in our consolidated financial statements.
Material Cash Requirements A summary of our material cash requirements as of December 31, 2024 is as follows (in millions): Payments Due by Period Contractual Obligations Total Year 1 Years 2-3 Years 4-5 After 5 Years Debt $ 600.0 $ — $ — $ 600.0 $ — Operating leases 114.2 26.4 42.4 21.6 23.8 Interest on debt 78.1 19.8 39.3 19.0 — Transition tax on unremitted foreign earnings and profits (a) 78.5 78.5 — — — Litigation settlement obligation (minimum payments) 62.5 50.0 12.5 — — Pension obligations (b) 2.6 2.6 — — — Purchase and other commitments (c) 93.1 41.3 51.8 — — Total contractual cash obligations (d), (e) $ 1,029.0 $ 218.6 $ 146.0 $ 640.6 $ 23.8 _______________________________________________________________________________ (a) As of December 31, 2024, we had recorded $78.5 million of income tax liabilities related to the one-time transition tax that resulted from the enactment of the 2017 Act.
Material Cash Requirements A summary of our material cash requirements as of December 31, 2025 is as follows (in millions): Payments Due by Period Contractual Obligations Total Year 1 Years 2-3 Years 4-5 After 5 Years Debt $ 600.0 $ — $ 600.0 $ — $ — Operating leases 130.9 28.3 41.5 20.1 41.0 Interest on debt 49.1 20.3 28.8 — — Litigation settlement obligation (minimum payments) 50.0 50.0 — — — Pension obligations (a) 2.9 2.9 — — — Purchase and other commitments (b) 97.1 43.2 39.9 14.0 — Total contractual cash obligations (c), (d) $ 930.0 $ 144.7 $ 710.2 $ 34.1 $ 41.0 _______________________________________________________________________________ (a) The amount included in “Year 1” reflects anticipated contributions to our various pension plans.
We maintain that we did not transfer intellectual property outside of Israel and intend to vigorously defend that position through administrative proceedings including with a formal appeal of the assessment that was filed during the third quarter of 2024. If necessary, we expect to defend that position through judicial proceedings.
We maintain that we did not transfer intellectual property outside of Israel in 2017 or in any subsequent year. We filed a formal appeal of the assessment in the third quarter of 2024.
(b) The amount included in "Year 1" reflects anticipated contributions to our various pension plans. Anticipated contributions beyond one year are not determinable. The total accrued benefit liability for our pension plans recognized as of December 31, 2024 was $32.1 million.
Anticipated contributions beyond one year are not determinable. The total accrued benefit liability for our pension plans recognized as of December 31, 2025 was $28.9 million. This amount is impacted by, among other items, pension expense funding levels, changes in plan demographics and assumptions, and investment returns on plan assets.
Net cash used in financing activities of $711.0 million in 2023 consisted primarily of purchases of treasury stock of $879.6 million, partially offset by proceeds from stock plans of $169.9 million.
Net cash used in financing activities of $956.8 million in 2025 consisted primarily of purchases of treasury stock of $893.4 million and purchase of the remaining noncontrolling interest in a subsidiary of $233.7 million, partially offset by proceeds from stock plans of $174.1 million.
Gross profit as a percentage of sales decreased primarily due to the impact of foreign currency exchange rate fluctuations. The increase in our net income and diluted earnings per share in 2024 was driven primarily by the aforementioned increase in net sales and a one-time after-tax charge of $134.9 million in 2023 related to an intellectual property agreement.
Gross profit as a percentage of sales decreased primarily due to higher operational expenses. The decrease in our net income and diluted earnings per share in 2025 was driven primarily by increases in personnel-related costs, one-time charges related to impairments on our investments, and increased certain litigation expenses.
Restructuring Charges, Separation Costs, and Other In September 2024, we recorded an expense of $32.9 million primarily related to severance expenses associated with a global workforce realignment impacting approximately 360 employees.
Restructuring Charges, Separation Costs, and Other In 2025 and 2024, we recorded expenses of $13.1 million and $32.9 million, respectively, related to severance associated with realignment initiatives. In 2025 and 2024, we also recorded expenses of $8.5 million and $19.0 million, respectively, primarily related to costs incurred for professional advisory services associated with the sale of Critical Care to BD.
We believe that these sources are sufficient to fund the current and long-term requirements of working capital, capital expenditures, and other financial commitments. However, we periodically consider various financing alternatives and may, from time to time, seek to take advantage of favorable interest rate environments or other market conditions.
However, we periodically consider various financing alternatives and may, from time to time, seek to take advantage of favorable interest rate environments or other market conditions. As of December 31, 2025, cash, cash equivalents, and short-term investments held in the United States and outside of the United States were $3.7 billion and $516.1 million, respectively.
Intellectual Property Agreement and Certain Litigation Expenses We incurred certain expenses related to intellectual property litigation and tax litigation of $40.4 million and $203.5 million during 2024 and 2023, respectively. On April 12, 2023, we entered into an Intellectual Property Agreement (the "Intellectual Property Agreement") with Medtronic, Inc.
Intellectual Property Agreement and Certain Litigation Expenses We incurred certain expenses related to legal settlement and contingency, intellectual property litigation, and tax litigation of $325.4 million and $40.4 million during 2025 and 2024, respectively. For further information, see Note 3, Note 9 and Note 20 to the Consolidated Financial Statements .
For additional details on our income taxes, see Note 2 and Note 19 to the Consolidated Financial Statements .
For further information, see Note 9 to the Consolidated Financial Statements.
As of December 31, 2024, we had remaining authority to purchase $1.4 billion of our common stock under the share repurchase program. In addition, in February 2025, we entered into a $250.0 million accelerated share repurchase agreement. For further information, see Note 24 to the Consolidated Financial Statements .
As of December 31, 2025, we had remaining authority to purchase up to $2.0 billion of our common stock under the share repurchase program. In December 2025, we completed the sale of our non-core product group. Per the agreement, we could earn additional earnouts of up to $40.0 million based on certain revenue-based milestones.
Net cash provided by investing activities of $173.8 million in 2023 consisted primarily of net proceeds from investments of $627.9 million partially offset by capital expenditures of $253.0 million, a payment of $95.2 million to acquire a majority interest in another company, and payments of $30.0 million for options to acquire other companies.
Net cash used in investing activities of $712.9 million in 2025 consisted primarily of net purchases of investments of $335.2 million, capital expenditures of $260.2 million, issuances of notes receivable of $140.9 million, a payment for a net working capital adjustment of $36.3 million related to the sale of Critical Care, and payments of acquisition options of $25.1 million, partially offset by net proceeds from the sale of our non-core product group of $78.8 million.
The one-time transition tax liability, as adjusted, is payable in three remaining annual installments, as outlined in the contractual obligations table presented under " Material Cash Requirements " below. As of December 31, 2024, we had a remaining tax obligation of $78.5 million related to the deemed repatriation.
The 2017 Act required companies to pay a one-time mandatory deemed repatriation tax on the cumulative earnings of certain foreign subsidiaries that were previously tax deferred. We elected to pay the repatriation tax in installments over eight years. As of December 31, 2024, we had a remaining tax obligation of $78.5 million related to the deemed repatriation.
The Pillar Two provisions may have a material impact on our consolidated financial statements in 2025 and future years, depending on future legislation, regulatory guidance, and business events. Liquidity and Capital Resources Our sources of cash liquidity include cash and cash equivalents, short-term investments, cash from operations, and amounts available under credit facilities.
Liquidity and Capital Resources Our sources of cash liquidity include cash and cash equivalents, short-term investments, cash from operations, and amounts available under credit facilities. We believe that these sources are sufficient to fund the current and long-term requirements of working capital, capital expenditures, and other financial commitments.
We have completed enrollment in the United States and Canada of patients in our MOMENTIS clinical study to demonstrate the durability of RESILIA tissue in the mitral position. Gross Profit Our gross profit increased in 2024, driven by our sales growth discussed above.
Surgical Structural Heart Net sales of Surgical products increased in 2025 primarily due to higher sales of the INSPIRIS RESILIA aortic valve and the MITRIS RESILIA in the United States, Europe and Rest of World, and the KONECT RESILIA tissue valved conduit in the United States. 31 Table of Contents Gross Profit Our gross profit increased in 2025 compared to 2024, driven by our sales growth discussed above.
In addition, as a next step in our disposal plan to exit businesses that are not focused on implantable medical innovations for structural heart disease, we have committed to a plan to sell a non-core product group, with the sale expected to occur in 2025.
On December 18, 2025, we completed the sale of a business that is not focused on implantable medical innovations for structural heart disease (the “non-core product group”). On September 3, 2024, we sold our Critical Care product group (“Critical Care”) to Becton, Dickinson and Company (“BD”).
The increase in interest income resulted primarily from a higher average investment balance and a higher average yield on our investments. Other Non-operating Income, net Other non-operating income was $68.9 million and $13.9 million in 2024 and 2023, respectively.
The increase in interest income resulted primarily from a higher average investment balance. Loss on Impairment Loss on impairment of $146.9 million in 2025 related to our investment in a promissory note and our determination to not exercise an option to acquire one of our VIE investments. For further information, see Note 9 to the Consolidated Financial Statements .
Removed
Overview We are the global leader in patient-focused medical innovations for structural heart disease. Driven by a passion to help patients, we partner with the world's leading clinicians and researchers and invest in research and development to transform care for those impacted by structural heart disease.
Added
Overview We are the leading global structural heart disease innovation company, driven by a passion to improve patient lives. Through breakthrough technologies, world-class evidence, and meaningful partnerships with clinicians and healthcare stakeholders, our employees are inspired by our patient-focused culture to deliver life-changing innovations to those who need them most.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeCurrency Risk We are exposed to foreign currency risks that arise from normal business operations.
Biggest changeFor further information related to outstanding debt obligations, see Note 12 to the Consolidated Financial Statements. 41 Table of Contents Currency Risk We are exposed to foreign currency risks that arise from normal business operations.
We invest in a variety of debt securities, primarily time deposits, commercial paper, United States and foreign government and agency securities, asset-backed securities, corporate debt securities, and municipal debt securities. The market value of our investments may decline if current market interest rates rise.
We invest in a variety of debt securities, primarily time deposits, commercial paper, United States government and agency securities, asset-backed securities, corporate debt securities, and municipal debt securities. The market value of our investments may decline if current market interest rates rise.
At December 31, 2024, all derivative financial instruments were with bank counterparties assigned investment grade ratings by national rating agencies. We further diversify our derivative financial instruments among counterparties to minimize exposure to any one of these entities. We have not experienced a counterparty default and do not anticipate any non-performance by our current derivative counterparties.
At December 31, 2025, all derivative financial instruments were with bank counterparties assigned investment grade ratings by national rating agencies. We further diversify our derivative financial instruments among counterparties to minimize exposure to any one of these entities. We have not experienced a counterparty default and do not anticipate any non-performance by our current derivative counterparties.
In the normal course of business, we provide credit to customers in the health care industry, perform credit evaluations of these customers, and maintain allowances for potential credit losses, which have historically been adequate compared to actual losses. In 2024, we had no customers that represented 10% or more of our total net sales or accounts receivable, net.
In the normal course of business, we provide credit to customers in the health care industry, perform credit evaluations of these customers, and maintain allowances for potential credit losses, which have historically been adequate compared to actual losses. In 2025, we had no customers that represented 10% or more of our total net sales or accounts receivable, net.
For more information related to outstanding foreign exchange contracts, see Note 2 and Note 14 to the Consolidated Financial Statements. Credit Risk Derivative financial instruments involve credit risk in the event the financial institution counterparty should default. It is our policy to execute such instruments with major financial institutions that we believe to be creditworthy.
For further information related to outstanding foreign exchange contracts, see Note 2 and Note 14 to the Consolidated Financial Statements. Credit Risk Derivative financial instruments involve credit risk in the event the financial institution counterparty should default. It is our policy to execute such instruments with major financial institutions that we believe to be creditworthy.
Based on our December 31, 2024 variable debt levels, a hypothetical 1.0% absolute increase in floating market interest rates would not have impacted our interest expense since we had no variable debt outstanding during the year.
Based on our December 31, 2025 variable debt levels, a hypothetical 1.0% absolute increase in floating market interest rates would not have impacted our interest expense since we had no variable debt outstanding during the year.
Taking into consideration the average maturity of our debt securities, a hypothetical 0.5% to 1.0% absolute increase in interest rates at December 31, 2024 would have resulted in a $1.8 million to $3.5 million decrease in the fair value of these investments.
Taking into consideration the average maturity of our debt securities, a hypothetical 0.5% to 1.0% absolute increase in interest rates at December 31, 2025 would have resulted in a $1.9 million to $3.8 million decrease in the fair value of these investments.
As of December 31, 2024, we had $600.0 million of 2018 Notes outstanding that carry a fixed rate, and also had available a $750.0 million Credit Agreement that carries a variable interest rate based on the Secured Overnight Financing Rate ("SOFR"). As of December 31, 2024, there were no borrowings outstanding under the Credit Agreement.
As of December 31, 2025, we had $600.0 million of 2018 Notes outstanding that carry a fixed rate, and also had available a $750.0 million Credit Agreement that carries a variable interest rate based on the Secured Overnight Financing Rate (“SOFR”). As of December 31, 2025, there were no borrowings outstanding under the Credit Agreement.
Such a decrease would only result in a realized loss if we choose or are forced to sell the investments before the scheduled maturity, which we currently do not anticipate. 39 Table of Contents For more information related to investments, see Note 8 to the Consolidated Financial Statements. We are also exposed to interest rate risk on our debt obligations.
Such a decrease would only result in a realized loss if we choose or are forced to sell the investments before the scheduled maturity, which we currently do not anticipate. For further information related to investments, see Note 8 to the Consolidated Financial Statements. We are also exposed to interest rate risk on our debt obligations.
The total notional amount of our derivative financial instruments entered into for foreign currency management purposes at December 31, 2024 was $2.2 billion. A hypothetical 10% increase (or decrease) in the value of the United States dollar against all hedged currencies would increase (or decrease) the fair value of these derivative contracts by $105.2 million.
The total notional amount of our derivative financial instruments entered into for foreign currency management purposes at December 31, 2025 was $2.4 billion. A hypothetical 10% increase (or decrease) in the value of the United States dollar against all hedged currencies would increase (or decrease) the fair value of these derivative contracts by $159.8 million.
Should these companies experience a decline in financial performance, financial condition or credit capacity, or fail to meet certain development milestones, a decline in the investments' value may occur, resulting in unrealized or realized losses. See Note 8 to the Consolidated Financial Statements for additional information. 40 Table of Contents
Should these companies experience a decline in financial performance, financial condition or credit capacity, or fail to meet certain development milestones, a decline in the investments' value may occur, resulting in unrealized or realized losses. For further information, see Note 8 to t he Consolidated Financial Statements. 42 Table of Contents
Investment Risk We are exposed to investment risks related to changes in the underlying financial condition and credit capacity of certain of our investments. As of December 31, 2024, we had $1.1 billion of investments in debt securities of various companies, of which $148.5 million were long-term. In addition, we had $159.4 million of investments in equity instruments.
Investment Risk We are exposed to investment risks related to changes in the underlying financial condition and credit capacity of certain of our investments. As of December 31, 2025, we had $1.3 billion of investments in debt securities of various companies, of which $51.3 million were long-term. In addition, we had $227.3 million of investments in equity instruments.
As of December 31, 2024, we had $1.1 billion of investments in debt securities which had an average remaining term to maturity of 0.16 years.
As of December 31, 2025, we had $1.3 billion of investments in debt securities which had an average remaining term to maturity of 0.28 years.
As of December 31, 2024, a hypothetical 1.0% absolute increase in market interest rates would decrease the fair value of the fixed-rate debt by approximately $18.2 million. This hypothetical change in interest rates would not impact the interest expense on the fixed-rate debt. For more information related to outstanding debt obligations, see Note 12 to the Consolidated Financial Statements.
As of December 31, 2025, a hypothetical 1.0% absolute increase in market interest rates would decrease the fair value of the fixed-rate debt by approximately $13.3 million. This hypothetical change in interest rates would not impact the interest expense on the fixed-rate debt.

Other EW 10-K year-over-year comparisons