Greetings, and welcome to the Edwards Lifesciences' Third Quarter 2025 Conference Call. Please note, this conference is being recorded. I will now turn the conference over to your host, Mark Wilterding, Senior Vice President, Global Finance. Thank you. You may begin.

Thank you, Diego, and thank you, everyone, for joining us this afternoon. With me on today's call is our CEO, Bernard Zovighian; and our CFO, Scott Ullem. Also joining us for the Q&A portion of the call will be Dan Lippis, our global leader of TAVR and Daveen Chopra, who has global responsibility for TMTT and Surgical. Just after the close of regular trading, Edwards Lifesciences released third-quarter 2025 financial results. During this call, management will discuss the results included in the press release and accompanying financial schedules and then use the remaining time for Q&A. Please note that management will be making forward-looking statements that are based on estimates, assumptions, and projections. These statements speak only as of the date of which they were made, and Edwards does not undertake any obligation to update them after today. Additionally, the statements involve risks and uncertainties that could cause actual results to differ materially. Information concerning factors that could cause these differences can be found in today's press release and Edwards' other SEC filings, all of which are available on the company's website at edwards.com. Unless otherwise noted, our commentary on sales growth refers to constant currency sales growth, which is defined in the quarterly press release issued earlier today. Reconciliations between GAAP and non-GAAP numbers mentioned during the call are also included in today's press release. Quarterly and full-year growth rates refer to continuing operations. With that, I'd like to turn the call over to Bernard for his comments.

Thank you, Mark, and welcome everyone. Thank you for joining us today. We are pleased with the year-to-date performance of the company, including the most recent third quarter. Our focus on structural heart has positioned us to execute our growth strategy with agility this year and also gives us confidence in 2026 and beyond. This strong Q3 results represent another quarter of double-digit sales growth. Sales in the quarter grew 12.6% to $1.55 billion driven by our comprehensive portfolio across multiple therapeutic areas: aortic, pulmonic, mitral, and tricuspid, as well as an established presence in countries around the world. We were pleased with the better-than-expected results reflecting the performance of our talented employees. Based on our strong performance in Q3, we are raising full-year sales growth guidance to the high end of a previous 9% to 10% range and are also raising our EPS guidance range to between $2.56 and $2.62. As we look ahead to '26 and beyond, the company is in a good position with multiple growth drivers to deliver sustainable top-line growth. While the composition and contribution from product lines and regions could vary, you could expect Edwards to grow sales and profitability in line with our commitment from last year. We look forward to talking more about this at the upcoming investor conference in December. This week was an important week for Edwards. And this quarterly call comes on the heels of TCT, where I was pleased to see many of you at the conference. Physicians featured a significant amount of compelling data on Edwards' groundbreaking transcatheter therapies, including SAPIEN, EVOQUE, and SAPIEN M3. Our unique leadership commitment to high-quality evidence was once again showcased by the multiple late-breaking clinical trials as well as concurrent publication in the New England Journal of Medicine and Lancet. On Monday, at TCT, physicians presented 7-year data for the PARTNER III pivotal trial, which represents the most extensive clinical follow-up to date for low-risk TAVR and surgical patients. The results confirm that rates of all-cause mortality for TAVR remain low and comparable to the surgical control arm. Additionally, SAPIEN performance and durability indicators were excellent and comparable to SAVR. Also, during the TCT conference, 10 years of follow-up on multiple generations of SAPIEN was featured. Long-term data from the PARTNER IIa and the PARTNER II S3i studies demonstrated sustainable performance, excellent durability, and consistent clinical outcomes of Edwards' TAVR matching the performance of SAVR. So overall, when taken together, the SAPIEN platform has been the most studied valve, with more than 15 years of world-class clinical trials involving over 10,000 patients, 10 New England Journal of Medicine publications, and 1.2 million patients treated around the world. It is clear, but in addition to offering an early clinical benefit with superiority at 1 year for low-risk patients, the excellent performance of TAVR with SAPIEN 3 is now proven at 7 years. This impressive durability is further supported by the 10-year results of the PARTNER II trials. At the end of the day, this groundbreaking evidence sets a new global benchmark, one that is exceptionally reassuring for both patients and physicians and sets the stage for continued long-term adoption of SAPIEN to treat patients suffering from aortic stenosis. TCT also featured multiple important studies focused on Edwards' portfolio of mitral and tricuspid replacement therapies, including the largest real-world registry data on EVOQUE and the 1-year result of the first-ever pivotal trial for any transfemoral mitral replacement therapy via ENCIRCLE trial for SAPIEN M3. Just over 2 years ago, TRISCEND II 6-month data was presented at TCT 2023. To date, more than 5,000 patients have benefited from this novel therapy solving the large unmet patient needs. And the 1,000-plus patients whose real-world data presented at this year’s TCT demonstrate that the clinical community is embracing this technology broadly across many centers and is excelling at caring for these patients with consistent procedure times and high-quality results for both safety and efficacy. The TVT data on 30 days show consistent TR elimination in 19% of patients, with a very low major life-threatening bleeding rate of 1.3% and a new pacemaker rate of 15%. To put this EVOQUE pacemaker rate into perspective, it is now competitive to the pacemaker rate seen today in self-expanding TAVR valves available in major regions. It is inspiring to see the practice of medicine progressing for improved patient care. Turning to mitral replacement, we know that there are many patients who cannot be treated with today's existing technology, including TEER, and at TCT, the ENCIRCLE study demonstrated meaningful early benefits for these patients on all important measures like mortality, quality of life, and reinforcing the growth potential of this therapy in the years ahead. The introduction of SAPIEN M3 marks the beginning of increased physician awareness and referrals to the heart team to support treatment for these many patients in need. Over the past decade, we built a comprehensive portfolio of TMTT technologies. These ensure physicians have an opportunity to select the optimal treatment for their mitral and tricuspid patients, whether replacement or TEER. This is creating compounding value across the care continuum for all stakeholders, especially patients. And in terms of the impact to Edwards, while the contribution to growth from our portfolio of repair and replacement therapy could vary by quarter or year, we know PASCAL, EVOQUE, and M3 will be key contributors as TMTT grows to an estimated $2 billion by 2030. I am proud of the Edwards team and our physician partners for advancing each of these important clinical trials. Edwards is the world's only company to provide physicians with a complete portfolio of therapies addressing aortic, mitral, pulmonic, and tricuspid valve diseases, built on the foundation of our unique strategy and an unprecedented body of evidence. Leveraging our 65 years of deep expertise, we are also extending into heart failure and aortic regurgitation which are next-generation contributors to patient impact and growth. We have aligned our internal resources to support growth across these multiple therapeutic areas. This focus on structural heart has positioned the company for agile execution of our strategy and provides a foundation for sustainable multiyear growth. When I reflect on all of this, I am proud of our impact—when Edwards leads, everyone benefits: physicians, providers, payers, and most importantly, patients who can enjoy restored quality of life and live longer. Now I'd like to provide an overview of the third quarter sales performance by product group. In TAVR, our third quarter global sales of $1.15 billion increased 10.6% over the prior year. TAVR growth in the quarter was better than expected as clinicians demonstrated a renewed focus on prioritizing treatment for patients suffering from aortic stenosis. During the quarter, sales growth increased in multiple regions, supported by new evidence, guideline updates, and expanded education. Growth was comparable in the U.S. and OUS. On a global basis, Edwards' pricing and competitive position remain largely stable. We are pleased that the management of aortic stenosis is experiencing significant transformation. Supported by the combination of evidence of superiority in low-risk patients in 1 year, unprecedented data on long-term value performance and durability, expanded asymptomatic indications, and updated ESC/EACTS guidelines, combined with the global expert consensus publication. These guidelines for valvular heart disease establish a simplified care pathway for severe AS patients and enable a proactive approach to disease management. They underscore that timely intervention should be considered for all severe aortic stenosis patients regardless of symptoms and heart function, which is a meaningful step forward from the prior practice of watchful waiting. In the U.S., strong third-quarter procedure growth was driven by a continued focus within the clinical community on the importance of timely intervention and streamlining the management of patients with severe AS. We were encouraged by the release of the updated American Society of Echocardiography guidelines, which categorize severe AS as a critical finding that should be communicated with urgency and encourage echocardiologists to actively participate in patient management. The evolution of policy and guideline changes together with the potential of a new U.S. NCD will provide important catalysts, resulting in a multiyear growth opportunity for U.S. TAVR. Outside of the U.S., we continue to focus on increasing therapy adoption, especially in areas where many patients go without care. In Europe, Edwards' sales growth was driven by the broad-based adoption of our SAPIEN platform, in addition to the exit of a competitor, which resulted in a rebalancing of the market and a modest contribution to our sales. In Japan, TAVR sales growth continued to improve, reflecting a gradual recovery in market growth. In the rest of the world, growth remains strong. In summary, due to our strong Q3 results, we are raising our full-year TAVR guidance to 7% to 8% from our previous 6% to 7% range. Longer term, we continue to expect mid- to high single-digit growth in TAVR, supported by proven long-term evidence, new indications, further guideline and policy changes, and finally, the potential to serve patients with moderate AS. Now let's turn to our TMTT product group. Our differentiated PASCAL mitral and tricuspid repair system and our unique replacement portfolio of EVOQUE and SAPIEN M3 delivered another strong quarter of growth. Third quarter sales of $144 million increased 53% year-over-year, fueled by the strong performance of both PASCAL and EVOQUE. Globally, we observed a continued trajectory of double-digit global procedure growth for mitral and significantly higher growth for tricuspid. The new ESC/EACTS guidelines released in the third quarter also included updates related to the management of patients with mitral and tricuspid diseases, which further supports increased global use of transcatheter therapies for these patients. Continued global adoption of PASCAL and EVOQUE in new and existing centers fueled additional substantial growth. We've upsold physician excitement and support of a differentiation of PASCAL and the strong predictable outcome of EVOQUE, including consistent tricuspid regurgitation elimination. Over the last quarter, we released several new groundbreaking clinical evidence updates presented at the ESC Congress. Pricing to outcomes now show a hard endpoint benefit of EVOQUE versus optimal medical therapy. The data show that the most severe TR patients experienced a combined reduction in mortality and heart failure hospitalization, which is a meaningful advancement. In addition, as previously mentioned at TCT, we were pleased to share the largest real-world data set of EVOQUE early commercial experience from the STS, ACC, and TVT Registry. The data showed excellent outcomes with consistent elimination of TR and a positive safety profile. We also presented additional TRISCEND I and TRISCEND II sub-analysis TCT. And the totality of this new evidence strengthens confidence in tricuspid replacement therapy with EVOQUE and the impact it can have on this greatly underserved patient population. Moving to SAPIEN 3, M3, our early introduction in Europe is off to a great start, providing exceptional clinical outcomes to patients in need and supported by our dedicated field team. The 1-year results from the ENCIRCLE pivotal trial, studying SAPIEN M3 showed excellent outcomes for this first approved transseptal mitral valve. The data showed that in a critically sick group of patients who were unsuitable for TEER and surgery, they now had an option to eliminate their MR while drastically improving their quality of life with a high survival rate. We now expect U.S. approval by early 2026. In closing, with PASCAL, EVOQUE, and SAPIEN M3, we are advancing our vision to meet the complex needs of underserved patients with mitral and tricuspid disease, with a differentiated portfolio comprised of repair and replacement technology. We are pleased with our year-to-date performance in TMTT and remain on track to achieve our full-year sales guidance of $530 million to $550 million. In our Surgical product group, third quarter global sales of $258 million increased 5.6% over the prior year. Growth was driven by continued adoption of our RESILIA therapy in addition to positive procedure growth for the many patients best treated surgically. Our RESILIA portfolio achieved double-digit growth with contributions from INSPIRIS, KONECT, and MITRIS therapies. We continue to generate dividends on the RESILIA portfolio and expand access globally. We see market approval for KONECT in Europe; at the end of the second quarter, we have been able to expand this therapy to patients across European countries during the third quarter. I think it is also important to highlight the strong Edwards surgical valve performance in the recent PARTNER III 7-year data. The majority of patients in the control arm were treated with Edwards' surgical valves, and the results were comparable to TAVR at 7 years. This performance reflects over 65 years of valve leadership and innovation. In summary, we continue to expect that our full-year 2025 surgical global sales will be in the mid-single digits, driven by RESILIA portfolio adoption across our key markets and growth in heart valve procedures for patients best treated surgically. And now Scott will cover the details of the company financial performance.

Thanks a lot, Bernard. As Bernard mentioned, we are encouraged with our stronger-than-expected third-quarter performance and the progress we made during the quarter, advancing our strategic initiatives. Our double-digit sales growth drove adjusted earnings per share of $0.67, well above our expectations, driven by both stronger-than-expected top-line performance and certain spending delayed to Q4. Our GAAP earnings per share for the quarter was $0.50. A full reconciliation between our GAAP and adjusted EPS for this and other items is included with today's release. I'll now cover additional details of our P&L. For the third quarter, our adjusted gross profit margin was 77.9%, in line with our expectations, compared to 80.7% in the same period last year. This year-over-year change was primarily driven by foreign exchange and operational expenses. We continue to expect our full-year 2025 adjusted gross profit margin to be within our original guidance range of 78% and 79%. Our guidance continues to assume some pressure from the weakening dollar. Selling, general, and administrative expense in the third quarter was $515 million or 33.1% of sales compared to $420 million—$421 million in the prior year. We continue to expect increased SG&A spending this period due to deferral of certain first-half spending and investments expected in the fourth quarter to advance our strategy. R&D expense was $281 million in the third quarter or 18.1% of sales compared to $253 million or 18.7% of sales in the same period last year. This increase in spending and decrease in R&D as a percentage of sales reflects our intentional strategic prioritization of investments in our expanding structural heart portfolio. Third quarter adjusted operating profit margin of 27.5% benefited from our better-than-expected sales performance and the deferral of certain spending to the fourth quarter. As mentioned on our Q1 and Q2 earnings calls, we continue to expect lower second-half operating margin levels compared to the first half driven by the timing of key investments. We continue to anticipate full-year 2025 operating margins of 27% to 28%, implying a Q4 operating margin in the mid-20s, consistent with prior guidance. We remain committed to annual constant currency operating profit margin expansion over the full-year 2025 level in 2026 and beyond consistent with our guidance at last year's investor conference. Turning to taxes. Our reported tax rate this quarter was 16.1%, or 16.9%, excluding the impact of special items, in line with our expectations for the quarter. We continue to expect our 2025 tax rate, excluding special items, to be between 15% and 18%. Turning to the balance sheet. We continue to maintain a strong and flexible balance sheet with approximately $3 billion in cash and cash equivalents as of the end of the quarter. The Board of Directors has increased the company's repurchase authorization, resulting in approximately $2 billion remaining under the current authorization. Average diluted shares outstanding during the quarter were 586 million. Based on year-to-date share repurchases of over $800 million, including the previously announced accelerated share repurchase of $500 million, we now expect lower full-year shares outstanding to be between 585 million to 590 million versus original guidance of 585 million to 595 million. Foreign exchange rates increased third quarter reported sales growth by 210 basis points or $24 million compared to the prior year. FX rates negatively impacted our third quarter gross profit margin by 110 basis points compared to the prior year. As a reminder, our program is designed to mitigate the foreign exchange impact on earnings per share compared to our initial guidance for the year. At current rates, we continue to expect FX to have an approximately $30 million upside to full-year 2025 sales compared to the prior year. I'll finish with comments related to sales and earnings per share guidance. As Bernard mentioned, we are increasing our underlying growth rate guidance for TAVR to 7% to 8%, with sales of $4.4 billion to $4.5 billion and our total company sales growth guidance to now be at the high end of 9% to 10%. For the fourth quarter, we're projecting total company sales of $1.51 billion to $1.59 billion and adjusted earnings per share of $0.58 to $0.64, bridging to our full-year earnings per share range of $2.56 and $2.62. We're looking forward to providing more forward-looking commentary at our investor conference on December 4. We remain confident in delivering the long-term financial goals for the company and each business unit that we provided at last year's investor conference. And I do have one additional piece of personal news. After 12 years at Edwards, I'm going to be transitioning out of the CFO role by mid-2026. The company has initiated a process to select a successor. We have considered this transition and a CFO succession plan carefully, and I'm confident we'll have a smooth transition. I look forward to serving as a strategic adviser to Edwards after a new CFO is in place. And now is a good time to pass the baton. The company is in a strong strategic and financial position, and I have confidence that Edwards will continue to perform at a high level in the years ahead. I care deeply about Edwards and know what a special company it is, and it has been an honor and a privilege to serve as CFO for almost half of the company's history as a publicly traded company, and I'm committed to a smooth transition next year. So with that, back to you, Bernard.

Thank you, Scott. You have been a valued and key partner to me for over 10 years, first as colleagues on the executive leadership team through the CEO transition 2 years ago and now in this last 2.5 years since I became CEO. We have worked closely to find the right time for you personally and also for Edwards for the CFO transition. While we will be saving you in your current role, I am pleased that you will continue in the CFO role until the transition occurs by mid-2026, and remain at Edwards as a strategic adviser beyond the transition period. So I am confident that we will have a smooth handoff during this transition, and we are initiating a process to identify the successor. In closing, after more than 20 years of innovation that has benefited more than 1 million patient lives and this week's 7-year PARTNER III results, Edwards TAVR is positioned for strong sustainable growth as many patients remain undiagnosed and untreated. Moreover, we are achieving many significant milestones in TMTT that give us confidence about treating the many mitral and tricuspid patients in need. And surgical is positioned for durable long-term growth, driven by a portfolio of differentiated technology. In addition, we are leveraging our structural heart expertise and extending into heart failure and aortic regurgitation, which are next-generation contributors to patient impact. Altogether, we are convinced of a tremendous opportunity to drive success in the future through our patient focus, breakthrough technologies, and leadership. With that, back to you, Mark.

Thank you very much, Bernard. Before we open it up for questions, I'd like to remind you about our 2025 investor conference on Thursday, December 4, at our headquarters here in Irvine. This event will include updates on our latest technologies, views on the longer-term market potential, as well as our outlook for 2026. More information and a registration form are available on our website. With that, we're ready to take your questions. Operator instructions.

Our first question comes from Travis Steed with Bank of America.

Congrats on a good quarter. Maybe to start with the TAVR growth in this quarter, the 10.6%. It sounded like just a modest contribution from the Boston exit. So if you can just maybe talk about some of your underlying trends and what was the strength this quarter? And if this is kind of full-year TAVR 7% to 8%, and if you exclude the Boston exit, is that kind of the right way to think about sustainable TAVR growth longer term?

No. Thanks, Travis. Yes, we are very pleased about the quarter. We had a strong quarter, better than expected. There are several things that contributed to this great performance in Q3. The first one is we had a significant amount of evidence, so much news on TAVR and SAPIEN for a long time. Remember, the early TAVR, then you know the ESC guidelines on asymptomatic patients, the global consensus document, and then all of them at each congresses, physicians, we were talking about it presenting a sub-analysis. So this created a halo where TAVR is now at the center of a conversation for most of the heart teams in the U.S., but also outside of the U.S. So that's clearly a big catalyst. Also, what we didn't experience that usually we experienced during Q3 is the summer seasonality, which usually is very pronounced. This year, we didn't experience it. So we had a higher Q3 and a lower impact from the summer seasonality. So all of that together basically contributed to the great quarter. If you ask us about Q4 and the rest, we will talk about next year maybe late year. But for Q4, we expect a good Q4, better than we originally thought, but I will not take the Q3 results as the new normal for TAVR.

Great. That's helpful. And then since we were just at TCT a couple of days ago and you had a 7-year and 10-year data there, maybe just talk about now that you've had a few days to talk to doctors, kind of what you're hearing from customers and the physician community and kind of the importance of that data and how it could or might not change practice.

Yes. Maybe I ask Dan, our new leader of the TAVR franchise. He was at TCT. He talked to many customers. He was the architect behind all of the symposium that you attended. So maybe I ask Dan to comment on that.

Yes, Travis. Thanks for the question. Obviously, an important meeting for us and, more importantly, very, very important data that was presented there answering probably the last of the unanswered questions on TAVR, which is what do these TAVR valves look like at the critical window of vulnerability, which is this 5- to 7-year period. And it's nice, it's reassuring to be able to now answer that definitively, at least with the SAPIEN 3 platform. And as you can imagine, physicians were very, very positive. Obviously, the conversations kind of stand with like it's a shame that a lot of people were maybe betting against, it was no surprise to me. Congratulations. And I think overall, everyone is super positive. I think it gives physicians and patients just again reassurance to treat earlier in the disease progression pathway and maybe younger, and that's the direction of TAVR that we see. Also, with the guideline evolution, et cetera, that's the way that it's going. We now see the clinical benefit for treating earlier in the disease pathway. But also new evidence that's come out, Bernard mentioned so much new data coming out just consistently over the last 12 months, but a lot of new evidence to suggest that there's an economic consequence if you treat later in the process. And all this is driving just a renewed focus both domestically and internationally on TAVR programs. So that's probably the best way to sum up TCT.

Congrats on a good quarter.

Your next question comes from Larry Biegelsen with Wells Fargo.

And Scott, congratulations on all the success at Edwards. I know you'll be around for a couple more quarters, but I enjoyed working with you and we'll miss working with you when you leave. So for my question, Bernard, it sounds like you're comfortable with the 10% plus organic growth and 50 to 100 basis points margin expansion next year. What's giving you the confidence this early? And Scott, as of today, would FX positively or negatively impact margins next year? And I had one follow-up.

Yes, thank you, Larry. To be honest, I have always had confidence when I look back. Let me provide some context for my statement. We have been studying the SAPIEN platform for 20 years and iterating on it for the same duration. We understand the value it delivers to patients, having served over 1 million patients. So when we provided guidance last year regarding TAVR growth for the foreseeable future, indicating mid- to high single digits, with the company averaging 10% and leveraging EPS, we were certain about that. Our approach is grounded in rational, science-based strategies that eliminate surprises. While the 7-year timeline might have surprised some, for us, it confirmed our understanding. Therefore, there has been no change to the guidance we provided last December, Larry.

Yes, Larry, I'll just add to that. First of all, thanks for the nice comments; I appreciate it. Just to reiterate what Bernard said, last year, we said on average, 10% over the year's constant currency. And we think that 10% growth on the top line for Edwards in 2026 will be within the range that we provided at the investor conference. But remember, now with the third-quarter results and the momentum that we see in the business going into the end of the year, we now have a higher bar that we'd need to clear when we're calculating that year-over-year growth rate. As it relates to your question on FX, I thought you might ask the question. We're just going to have to hold off for 5 weeks until we get to December 4. We're still running all the numbers, and we'll take you through when we take you through our guidance; we'll take you through the impact of FX on guidance.

All right. Fair enough. And just for my follow-up, Bernard, as you approach the scheduled trial for the JenaValve deal, what's your level of confidence you could overturn the FTC block? And just remind us of where SAPIEN X4 stands and when we'll see the pivotal data.

These are important questions. So let me take the first one, and maybe Dan takes the second one. We continue to pursue this regulatory approval for JenaValve for a very simple reason. You know us, we have identified these large unmet needs. These patients have no solutions. And we know that when we come into a space, we bring our leadership, our innovation power, our commitment; we make a big difference, patient benefits. So we believe here we have great facts. At the same time, we will know in Q1. So before Q1, I can tell you, Larry. But I really hope that we are going to have a favorable ruling at the end because, again, these patients are waiting.

Just regarding X4, first of all, very excited about our pipeline. X4 has the real potential to be a game changer in TAVR. And that trial, the ALLIANCE trial, will complete at the end of 2024. Right now, the patients are in the follow-up phase, and so until the patients have gone through that period and the trial is complete and the data is analyzed, we don't have a whole lot more to say about X4.

Your next question comes from David Roman with Goldman Sachs.

And Scott, I'll add my congratulations on moving on. I finally remember your first analyst meeting in 2013; I think Edwards was a small-cap growth stock at $4 billion. So I think you're certainly leaving the company in a good position, although we'll miss working with you. Two questions for me. One, just starting on the TAVR side. When you look at the PREVUE-VALVE study that was presented at TCT and think about the early TAVR study in context, can you maybe just help us look forward? And I know we're all focused on like indication expansion and asymptomatic patients. But to what extent is there an opportunity here to see broader diagnostic rates for AS increase that would not only trickle through to your TAVR business but also be a tailwind to the surgical valve business as well?

That's a good question. And we have not talked about it when we were at TCT together. So this study was an investigator-initiated study. And if you look at it in a big picture, it validates our assumption on the size of the AS market potential, the number of patients, but also it validates basically the incidence and prevalence of all valvular heart disease. So at a high level, it's positive. There is more to learn from, but we look at this one as a positive one for the next years to look at. Dan, do you want to add anything to that?

Yes. David, I think a very, very important study and one that I anticipate is going to be referenced a lot, right? And it looks at the prevalence from a unique lens, right? Typically, when we try to establish incidence prevalence and market opportunity, it's coming starting from the basis point of who's actually got an echo. And what this study was trying to do is to take a look at the prevalence, if you like, of the disease from an out-of-system population or nondiagnosed population. And so it kind of brings a completely different lens and a very novel way of doing it to help our understanding of the disease. As Bernard said, when you look at the data that we've had available from an aortic stenosis perspective, it kind of validates some of the assumptions that we had, maybe even suggesting that the disease is larger than what we thought. But it's pretty much in that ballpark. What I would say about what is the opportunity here. As you see, whether it's this evidence, whether it's early TAVR, whether it's the sub-analyses of early TAVR, whether it's the PARTNER III and the new standard now we have for TAVR with long-term durability, all of this is going to get disseminated. It's going to be part of an education process. It's going to be democratized in the community and it's going to lead to greater awareness, greater referral, and greater adoption. And I think that that's part of our strategy, part of the plan why we are investing so heavily. And so confident about the impact, but it all helps. So thanks for the question.

And maybe on the TMTT side, I think you said M3 approval coming in early 2026. Can you maybe help us think through how to compare and contrast the M3 launch with EVOQUE? And I think Dr. Sharma at your analyst meeting on Monday kind of described tricuspid valves as they once forgotten valve, that's starting to gain attention from the clinical community with the now treatment solutions that are out there. But I think mitral valve procedure volumes are low; it's a much more mainstream and well-understood disease states. So help us think about how—what are the factors influencing the M3 launch and whether using the EVOQUE launch is a good template or not?

No. Thanks so much for the question, Dave. Yes, we did say that we expect U.S. approval in early 2026. And if you look at the SAPIEN M3 launch, we now have a couple of months of the launch in Europe. And in Europe, what we're seeing is that we have a kind of continuing limited control launch. And we're really focusing on the high-value model. We've got really important physician training, Edwards' people really working very closely with physicians to make sure we've got great outcomes in every case. And what we're seeing from physicians is that they're actually pretty excited about this technology. As you said, they treat mitral patients today, and the SAPIEN M3 product is specifically focused on patients who are unsuitable for both TEER as well as surgery. So for them, I think that we do see patients in the system who are unsuitable, and so their excitement is getting to see great results for these patients with M2. However, to your point about comparison to the EVOQUE thing, I think I wouldn't get ahead of ourselves in saying that with us, it's kind of this controlled launch, high training and making sure that we go one center at a time to ensure that we get the best possible outcomes and results.

And your next question comes from Vijay Kumar with Evercore ISI.

Congrats on nice sprint here, Scott. Congratulations to you as well, and wishing you the best of your transition. Maybe my first question on this TAVR performance in 3Q, why isn't this performance a reflection of asymptomatic approval? I'm curious why you think the strength wouldn't sustain?

Yes. Maybe, Dan, you want to take.

Yes. Vijay, I think your question is, is the Q3 performance a reflection of asymptomatic approval. And I'm not sure if you specifically mean adoption or treatment of asymptomatic patients. But certainly, the asymptomatic approval, the indication, the evidence is reflected in what we're seeing here, along with—I mean, I really can't recall over my 15 years a period of 12 months where the scientific and academic podiums have just been so focused on TAVR with so much new evidence, so much new discussion, subanalyses, et cetera. So for sure, the asymptomatic evidence and indication is playing a part here. But as we've also seen in other indication approvals where a new indication shines the light on a previous indication and you see a renewed focus on that, and we're seeing that here for sure, because there's also new data. There's also new data to say that timely and urgent intervention brings both clinical and economic benefit for symptomatic severe aortic stenosis, which is part of the analysis of that data. Regarding is asymptomatic patients entering into the treatment pathway in Q3 and is that driving the current performance, we don't see any specific evidence of that. It has to be caveated by the fact that there isn't coverage for the asymptomatic indication right at the moment. So it's hard to see that encoded CMS data. But we do have ways of looking at upstream patient populations to see what's coming through the funnel, and right now, we don't see any significant evidence that the growth is being driven by referral and treatment of asymptomatic patients. So I think that's an opportunity to come.

And this is probably what is most exciting, Vijay, that we have seen this momentum in Q3 just by having a renewed focus, given all of this data—all this positive data. Also, we benefited from the seasonality of the summer. But it is—the big catalysts are still in front of us. And this is what we have been saying. We are very confident about this multiyear opportunity for TAVR. This is what made us confident again that this is just in my mind, when I say always to the team, it is just the beginning.

Understood. That's helpful. And Scott, maybe one quick one for you. there was a litigation charge. And it was non-GAAP, could you just remind us on what the charge was?

Yes. Thanks for the question, Vijay. There's a lot that happens behind the scenes with just ins and outs of running our business. As you know, in medical technology, it is not uncommon to have litigation activities underway. And so we take reserves periodically based upon what we think that exposure looks like, and you'll see that reflected in today's GAAP P&L.

Your next question comes from Matt Taylor with Jefferies.

I wanted to circle back on TCT. You had a really nice showing kind of across the board. And I think maybe stuff the most to us was how positive the real-world tricuspid data was. And you talked about having a toolbox there, and you'll have that in mitral next year. So my question is really, after this tricuspid data and having the toolbox there, do you expect some acceleration in the tricuspid adoption? Could we also see that in mitral next year? Maybe you could just talk about that in general and the pace of acceleration we might see.

Yes, thanks, Matt, for the question. Obviously, we were very excited to see the EVOQUE data coming from TCT. And I think what we saw from EVOQUE is that we see this continued trend of a great real-world outcome. First, starting at ESC a couple of months ago where we saw these hard endpoints for the most severe TR patients—and now we see with the TCT data, the improved safety, both in bleeding and conduction versus what we saw in the randomized trial. And I think what we're seeing is that we're seeing how the elimination of TR is leading to just change in patients' lives. And I think what we're also seeing from Europe, where we have both repair and replacement for tricuspid, is that you really need both technologies to treat the maximum number of patients with the best possible outcomes. And so I think with that, as we get to your point, is having the full portfolio even on tricuspid and now then coming with mitral, you start seeing this compounding effect where when you have multiple treatment options, each patient is getting the best possible outcome, you could treat the maximum possible number of patients. And with that, you see this continued strength and growth. So in TR, I mean, this year, you see overall that our overall business is growing at over 50%. And so I think we're going to see this continued growth in TR and these provide nice tailwinds—nice real-time examples to help continuously support the strong growth in TR to treat an awesome number of patients in the years to come.

Your next question comes from Robbie Marcus with JPMorgan.

Great! Congrats on a good quarter. And Scott, wish you all the best; we'll miss working with you. Two quick ones for me. First one, I know you've been working a lot in the past couple of years to try and improve efficiency in the cath lab, and you have some AI initiatives and educational initiatives. Just wondering how that's going, what you're doing exactly and how much efficiency and extra capacity you've been able to help drive such good TAVR volumes?

Yes. Thanks, Robbie. Maybe I'll take that question for you. Like, we've got a number of programs in flight, if you like, whether it be at an early pilot stage or various stages of ramp. Specifically, as it relates to capacity building or efficiencies, one of the big programs that we have is Benchmark. And that has been in development and being— and all about improving efficiencies for better patient outcomes in the hospitals. It couldn't be a better time to be applying that right now with the renewed focus on TAVR as the timely treatment and more urgent treatment of these patients is in the spotlight. But at a high level, we've got programs that we execute on the ground, right, with our field team. We are in just about every single case. And these are either targeted towards improving the efficiencies in the cath labs or in the program itself, or with referral activity and education of evidence and guidelines and new data, et cetera. We have also partnerships with tech companies and AI-based companies that look at echo screening and upstream identification of patients and workflow solutions so that, that can be done economically. And so we're working on that. We have very sophisticated marketing programs looking at targeting direct-to-patient activity through social media, et cetera. And then just the partnerships that we have with societies and others with GCs, with patients, et cetera, around dissemination and education and clinical evidence. So all of this comes together and kind of helps us sort of run the process of moving the needle of patient activation. And I hope that gives you some idea of what we're doing on the ground with our physician and hospital partners.

And so Dan, you gave here a full picture on all of what we do on the TAVR side. Maybe Daveen, a couple of things on TMTT?

Yes, a couple of quick things. If you think about, right Dan, for a more established procedure like TAVR went through a lot of great examples there. On TMTT, when you're creating a brand-new therapy, right, you can imagine there's so many things to quickly help improve their time in the cath lab, their time to go home, their time for pre-having a patient before you even have a procedure. So what we see is actually with things like replacement technology, both mitral tricuspid and even to some extent with TEER as we establish and grow these new therapies, we are constantly improving efficiencies across the board in almost all aspects. So I think for us, that just comes with the therapy development that happens; it helps really line you up for long-term success.

Thanks. So we do a lot here, and I'm glad we were able to share some of what we do, but we do much more than that.

Maybe if I could just ask a quick follow-up for Scott on—we had really good margin expansion. I think you've committed to 50 to 100 basis points. And I don't want to steal any thunder from the Analyst Day, but you're one of the biggest spenders in R&D at $1.1 billion, and it's clearly given you a great product pipeline and portfolio with a lot of big trials wrapping up. How do you think about R&D and what's the right level of spend over the forward horizon? How are you thinking about that?

Thanks for the question. Look, we think about R&D as an investment in the top line. The most important thing that we do here is innovate to drive sustainable organic top line sales growth. We've also said, though, at last year's investor conference, and you'll hear it again at this year's investor conference, that top line growth will outpace R&D spending growth. And you saw it in the third quarter, where we went from nearly 19% R&D as a percentage of sales last third quarter to 18.1% of sales this quarter. And so that gives you a sense of how R&D as a percentage of sales is going to trend. Again, it's still the most important driver of our strategy, our innovation strategy, and our sustainable top line growth expectations. But it's also something we're going to be pretty disciplined about prioritizing where we're investing those R&D dollars.

And ladies and gentlemen, that's all the time we have for questions today. So I'll now turn it back to Bernard Zovighian for closing remarks.

Okay, everyone. Thanks for your continued interest in Edwards. Scott, Mark, and I welcome any additional questions by telephone. And I wish you a great day. Thank you, everyone.

Thank you. And with that, we conclude today's call. All parties may disconnect. Have a good day.