All right. Thanks, everybody, for joining us this morning. Very pleased to have with us at our conference Scott Allum from Edwards Life Sciences, CFO, longtime CFO, not to make a big deal out of it, but sort of coming around the final lap in the role. So exciting times ahead, but so appreciated having worked with you around the name for all these years.

Yeah, likewise. Thanks, Matt. And I'm also here with two colleagues of mine, Jerry Ann Sarte, who is taking over as head of investor relations at Edwards Life Sciences next month, and Sidney Bailey, who is an experienced member of our investor relations team and has recently returned from leave. So we'll both be here all day. Thanks, everyone, for your interest in Edwards.

Yeah, you bet. So maybe to start off, you know, we were just chatting a minute ago about some of the takeaways from CRT. I don't think in the 23 and a half minutes that we have, we'll have a chance to get into those in detail. But, you know, at a higher level, one of the questions that we get around Edwards is sustainable, is the ability to deliver on this sort of double-digit sustainable growth and the components of that. So maybe, you know, how at a high level when you get that question, if you get that question, how do you piece together sort of the established, if you will, TAVR business and the opportunities there plus the faster-growing emerging businesses under TMTT and elsewhere? Yeah.

So it's not just a question that we respond to. It's actually our strategy, right? We've designed our company strategy to generate distinguished organic sales growth. And we do it through principally investing in these technologies and platforms that are differentiated and that offer therapies to populations of patients that are large in size. And, of course, they fall into a couple categories. TAVR has been really the cornerstone of our growth for decades now at Edwards Life Sciences and continues to be a big driver of innovation and growth for the company. And I know we'll want to talk about this more during this session. Transcatheter mitral and tricuspid therapies is a similar strategy of TAVR in that we're bringing a minimally invasive solution for patients suffering from a structural heart disease and doing it in a way that is distinguished because it's supported by scientific evidence of the safety and efficacy of these therapies. And then surgical is our long-term flagship business at Edwards Life Sciences where we continue to innovate both for mitral and aortic valves and now soon tricuspid surgical valve replacement as well. And so the combination of those three businesses plus new initiatives in structural heart, like structural heart failure therapies, is really what gives us confidence in our ability to generate double-digit top-line growth, constant currency on average annually.

Okay. So maybe, you know, one follow-up on that is the contribution from TMTT. It started, obviously, smaller, growing a lot faster. Evoke is kind of entering, you know, the early to middle innings of growth, maybe. But when does that become the bigger dollar contributor to growth? Because I think that's, for some time, has been kind of, I don't want to call it the dream, but the long-term strategy, knowing that TAVR wouldn't always grow in the teens or wherever it was going several years ago, as that kind of matured, that mitral and tricuspid would start taking the helm. So when, on a dollar basis, is that two years away? Is that three years away? What could you tell us?

Yeah, well, we haven't really laid out the year-by-year dollar contribution to growth, but, you know, our long-term guidance is for TMTT to grow to $2 billion in revenues in 2030 and to continue to grow thereafter. And for TAVR to grow mid-single digits, mid-to-high single digits over time, on average annually, off of its current base. So you can run different scenarios for what that looks like. But I think more importantly, suffice it to say, TMTT is representing an increasing component of Edwards' consolidated growth rate. So the business was over $500 million in 2025. we expect it to be 740 to 780 million dollars in size in 2026 and then continuing to grow beyond that obviously to that two billion dollar number in 2030 and um so it's it's a combination of TAVR growing mid to high single digits TMTT continuing at this growth rate 35 to 45 percent in 2026 and then surgical continuing to perform as well that that contribute to this expectation of double-digit, 10%-ish growth over time.

Okay, and so, you know, we might look at TMTT and say, well, okay, it's growing faster, and then it's growing a little less fast and a little less fast. But the reality is, under TMTT, you're actually rolling on sort of growth drivers. So, you know, we're in the early innings with Tricuspid and with, you know, mitral repair, you know, you could say, or mitral repair in the market for a couple of years now and taking share from the market leader in the U.S. But then we have mitral this year replacement and then tricuspid replacement. So maybe, you know, just getting started with mitral replacement, maybe talk a little bit about how that might be similar, how that might be different from what you've seen over the past couple of years in tricuspid replacement.

Sure. Just to acknowledge the important point you made, Matt, this is the first time when this vision that we had long ago has really presented itself where we've got repair and replacement therapies for patients with both mitral or tricuspid regurgitation so we had this is you've followed us for so long you know this was a long time dream of ours and we started with this transcatheter edge-to-edge repair technology in the form of our pascal uh therapy and now we've got pascal for mitral tricuspid evoke for tricuspid and sapien m3 for mitral valve replacement and that combination of therapies is a really powerful element of our strategy because it gives physicians options when they're trying to treat patients who historically have had only one option which is surgery and a lot of patients are not eligible for surgery or not recommended for surgery by their physicians for these diseases so to your question about mitral sapien m3 is the first transcatheter transfemoral replacement device for patients suffering from mitral regurgitation we've learned a lot about the disease over the years from our pascal experience but sapien m3 offers this unique combination of addressing the complex anatomy of the mitral valve with a with a coil but also using a proven multi-generation sapien valve to actually perform the work of the native mitral valve that's being replaced. And so it's a very sophisticated, safe, and effective procedure that we're excited now we have approval to offer in multiple different geographies.

Okay. So training ramp, you know, I mean, there's a couple of differences, right? So one is, as you got into early evoke, there was, you obviously want to be engaged in these cases, you know, completely engaged because it's a new platform. And so I guess similar in that way, but maybe a little bit different in the sense that, you know, there are some other therapies that are, you know, treating those patients in mitral now. There's repair, which everyone, you know, is, whether it's your system or Abbott's system, folks are comfortable with the safety profile. And then there's surgical repair, which is also pretty entrenched. So fair to say just a little bit different in those regards. Maybe in the beginning, a tighter lane for finding the patients with M3 versus more of an open field in tricuspid. Is that a fair way to characterize it?

Well, maybe. I guess what I'd add to your description, though, Matt, is patients are eligible for different types of therapeutic interventions. And a patient who may be eligible and recommended for a Pascal procedure may not be recommended or eligible for a Sapien M3 procedure, and vice versa. And it's the reason why this toolkit approach that we've taken is so important. It's not okay just to have one device that you try to make for all patients because patients' anatomies, especially for patients with mitral regurgitation, are complex and different. Patients may have a challenge with the cordae, with the leaflets of the mitral valve, the left ventricle may be diseased, and all these different elements of the way these diseases manifest themselves inform the right treatment alternative. It's the reason why we have both a repair and a replacement solution.

Okay, that's fair. So maybe some of the new growth opportunities. These are a little bit, I mean, I would throw in there also, like InnoVal for Mitral, which is a couple of cycles away of joining M3 in that space. But maybe talk a little bit about the heart failure, structural heart opportunity, you know when we can start to see that ramp when when investors will notice some of those programs um and then and then given you know the opportunity and uh ar um you know how that starts to play out with j-valve sure so first on um on heart failure therapies you know we decided um as we learned more about these different diseases especially mitral and tricuspid regurgitation that there was overlap between the structural heart patients we have been treating

and patients suffering from structural heart failure in a way that we think we've got real expertise that we can provide and technology that we can introduce to treat those patients with heart failure and so it's the reason why we're now starting to build a foundation for implantable heart failure management with our cordella device and this is patients who historically have not had real treatment options that give the patient visibility to their condition and give the patient and the physician visibility to lifestyle changes and and pharmaceutical regimen adjustments that can help them battle this disease more effectively so we're excited about Cordella. We're also excited about Vectorius, which is a technology that was created by a business that's based in Israel that Edwards invested in long ago, and we recently bought the portion of it that we had not already owned. And we think the combination of Cordella and Vectorius is an important cornerstone for starting this effort that we're undertaking in heart failure so these are the these are the first two investments not the last two investments in structural heart failure again because we think it's a a significant population of patients who need better therapies okay and sort of zooming out if you think about surgical as providing part of the foundation for what has what has enabled your structural transcatheter businesses is to lift off over time and be more successful.

You know, that surgical legacy valve and valve leaflet design. And, you know, it seems like, and this was coming out of CRT this past weekend, you know, there's a realization that many of the sort of disease states, you know, are heading towards heart failure that are up until now being treated separately. And I'd put, you know, mitral and maybe tricuspid and maybe even TAVR into that category. So over the long term, I guess, you know, is that something that, you know, it's multivalve strategies or other things, and this is a longer term comment, but, you know, that comprehensive, you know, care for the patient who's, you know, without intervention or, you know, highly likely to end up in heart failure, putting together more comprehensive multi-device, multi-therapy solutions for that patient? Is that kind of part of the, you know, the long game?

It sure is. And you're right. We have so much to learn, and we're really better understanding now the interplay between these different structural heart conditions and diseases that patients face. But there's no singular journey. Different patients progress at different rates, and the cause and effect can vary as well. It's one of the reasons why we're so excited about getting into structural heart failure because there has been a dearth of therapeutic alternatives historically for these patients. heart failure is the number one most expensive and highest mortality condition that patients face and so there's a real opportunity for a company like edwards to introduce new technologies but we also want to do it in a way that is um you know strategic and thoughtful and really helps us focus in areas where we have a core competency to bring to bear and um and we feel like we're getting started in that journey now in a meaningful way with Cordella and Vectorius. You also mentioned in your previous question, aortic regurgitation. And you know that we've made this acquisition of an aortic regurgitation technology that we're pretty excited about. And we're a ways away from having a commercialized product, but we feel good about the learnings that we've developed. We feel good about the technology challenges and our ability to address those and eventually to commercialize a solution for a catheter-based replacement of a diseased aortic valve that's a very different disease than aortic stenosis. So that's on the horizon as well.

Okay. So I'd be remiss not to mention early TAVR and sort of asymptomatic or moderate AS as other kind of growth drivers, opportunities, expansion opportunities within TAVR. Maybe talk a little bit about what you've seen so far, what we might see over the next couple of years, and what some of the catalysts like guidelines might be to help sort of realize those opportunities.

So the early TAVR trial that you're talking about It was a breakthrough trial for Edwards Life Sciences, and we presented the results at the TCT conference in the fall of 2024. In 2025, we started to see the momentum resulting from those clinical trial results, and it came in the form of more physician interest and focus or refocus on aortic stenosis. the trial demonstrated that symptoms don't matter that patients with severe aortic stenosis need to get their valve replaced regardless of whether symptoms can be identified or isolated or associated with the disease of aortic stenosis a diseased valve, that level of severity needs to be replaced and so we're excited about that learning we're excited about the ability to treat more patients who have this disease and as you know now cms is going through the process of evaluating the current national coverage determination and we'll see the first draft of that early this summer and we hope that that leads to a more accommodating ncd that helps patients with symptoms and without symptoms navigate more easily the referral pathway to actually getting their valve replaced Got it.

And I guess there was some split in the community. Those folks who felt like they had, I guess, a great deal of control and connection with their patients who come in and are diagnosed with AS might say, well, why would we want to treat this patient early? We know the exact right time, the day and the hour, when we can treat this patient and get the most out of this next valve. And then the other part of the community, I think, would recognize, well, you know, there are a lot of folks who come in who aren't quite, you know, symptomatic, but they're severe, and I never see them again, you know, and we don't know if they actually just expire in the interim. And so there's like two minds, I think. But one of the things that has changed is maybe a pivot towards, you know, this next valve has to last, you know, your lifetime to this next valve is maybe the first of a couple of valves or maybe three valves that you may have in your lifetime, sort of lifetime management. How is that sort of, you know, how are you seeing that reflected in adoption or in hesitancy around performing TAVR, this realization that, sure, it may last 10 years, it may last 12, it may last nine if you're young, but lifetime management is the strategy that doctors seem to be talking more about.

Yeah, and as are we. But you hit on an important point.

That's two points. Two important points, I think.

Well, they're probably even more than that.

Make a note of that, actually.

Tally them all up. No, I think the most important thing that came out of this early TAVR trial is debunking the myth that watchful waiting was an appropriate way to care for these patients. You know, aortic stenosis, treating aortic stenosis is not poetry and jazz. It's science. A diseased aortic valve that has severe regurgitation needs to be replaced, regardless of what impression you may have of how that patient is acting. The valve needs to be replaced. And early TAVR was designed to test that thesis, and it was definitive and clear that that is the right protocol. I think that it does lead to this question about lifetime management, and it's the reason why we've been designing the family of therapies that we make in such a way to support patients who have lifetime needs, including surgical valves. So our current Inspiris surgical valve is designed to accommodate a future TAVR in SAVR, future transcatheter valve to replace the surgical valve if and when the surgical valve reaches end of life. Similar story for transcatheter valves where patients can first receive a larger transcatheter valve, like a 29 millimeter, and later, if necessary, a 26 millimeter or a 23 millimeter inside that original prosthetic replacement. And so this is a lot of the work that we're doing internally to make sure that patients, young or old or in between, have therapeutic alternatives to treat their diseases.

And then maybe in the couple minutes that we have left here, just pivoting into the middle of the P&L and margins, you know, I have gotten the question, and you've gotten it more than me, obviously, at various times. You know, why aren't we getting more leverage? Why can't, you know, these are high margin products. Why can't Edwards' margins be higher? But you've been, of course, you know, investing in a lot of things, not just R&D, but, you know, building out capacity and training and market development and so on. So, you know, maybe talk a little bit about at a double digit growth rate, which is different margin conversation than a high teens growth rate in terms of leverage. But at that, what's the, you know, maybe what are some of the considerations that help you strike the balance between, you know, how much we're driving to the operating line and how much we're investing in sustainable growth?

So priority number one at Edwards is investing for sustainable, durable, organic sales growth. That's the number one objective. We can accomplish that objective while also achieving margin expansion. And so, you know, this year we're expecting about 150 basis points of operating margin expansion. Over time, in the years ahead, we are expecting and planning 50 to 100 basis points of operating margin expansion, which gives us both fuel to drive the top line, but also an ability to get leverage in the P&L and grow EPS at a rate higher than sales growth.

Okay. So pretty straightforward. I mean, part of those investments, I think, you know, many, many, many companies, when they invest in manufacturing, are investing in the, you know, cost of goods line, essentially, in terms of fixed, fixed operating costs and then leverage, you know, you know, rolling out new products, you're in a state of suboptimal, you know, unit gross margins, I'm sure, for some period of time. and then the labor intensity of these high margin but high labor, does that at all change where we see these investments versus where another company that's adding production lines for an FDA-approved product might be adding them? Yeah, you're right.

Our fixed and variable expense ratio looks a little bit different than a company with a lot of PP&E involved in the production process. But suffice it to say that the growth strategy requires a lot of different expertise inside of Edwards all working together. So our production engineers work very closely with our new product development engineers in constructing therapies that are safe, effective, and manufacturable at scale. and of course it all gets supported by our force out in the field where we're continuing to add resources in the form of field clinical specialists who support physicians performing procedures and all the other the other folks who are out supporting our our hospital sites around the world so we feel like we've got the right framework in place we feel like we've got an excellent team that is really working harmoniously together to help grow the business and do it in a way that is financially sustainable as well.

Okay, so outside this room, oil, Middle East are big topics. You know, not to dive into it, we're over time by a few minutes, but last time energy costs were up, didn't seem like they took much out of your performance, your P&L. Maybe just a quick word on exposure to Middle East and exposure to energy.

Yeah. So it's too soon to say whether energy is going to be impacted for the longer term for us or anyone else, but I can tell you that our number one focus right now in the Middle East is making sure that our employees are safe and well-protected and able to continue to help the technologies that we produce get to the point of care for patients who need them.

That's where we're really focused right now in the Middle East. understandable okay well thanks so much with that we'll call it really appreciate you coming thank you all