Edwards Lifesciences Soars on TMTT Surge: Q1 Earnings Signal Strong Structural Heart Momentum

Edwards Lifesciences (EW.N) delivered a robust Q1 2025 performance, with sales and earnings exceeding expectations, driven by its transcatheter mitral and tricuspid therapies (TMTT) segment, which grew an impressive 58% year-over-year. The company also raised its full-year sales guidance, signaling confidence in its structural heart innovation pipeline.

Q1 Results: A Balancing Act of Growth and Cost Control

Total sales reached $1.41 billion, a 6.2% increase from the same period in 2024, with adjusted EPS of $0.64 outpacing analyst forecasts. Gross margins held steady at 78.7%, while operational efficiency shone through reduced SG&A expenses ($466 million, or 33% of sales) and strategic R&D prioritization, focusing on structural heart technologies.

Segment Breakdown: TMTT Emerges as the Growth Engine

The star of the quarter was TMTT, which posted sales of $115 million, a 58% surge fueled by strong adoption of the PASCAL and EVOQUE systems in the U.S. and Europe. The segment’s momentum is now global: the SAPIEN M3, the world’s first transcatheter mitral valve replacement system, secured CE Mark approval in Q1, positioning Edwards to capitalize on a growing mitral valve disease market.

In contrast, the TAVR (Transcatheter Aortic Valve Replacement) segment grew modestly by 3.8%, reflecting a maturing market. However, the pending FDA approval for the asymptomatic indication in Q2 2025 could reignite U.S. TAVR demand. Surgical sales rose 1% to $251 million, with China’s MITRIS launch and European KONECT pipeline updates offering long-term promise.

Financial Outlook: Guidance Raised Amid Currency Tailwinds

Edwards lifted its 2025 sales guidance to $5.7–$6.1 billion, up $100 million from prior expectations, citing favorable currency trends and TMTT’s outperformance. TMTT’s full-year sales guidance was raised to $530–$550 million, while TAVR and Surgical growth targets remained unchanged.

Despite these positives, analysts remain cautious on margin pressures. Adjusted EPS guidance stayed flat at $2.40–$2.50, as tariffs and the pending JenaValve acquisition—which could add $150 million in annual sales but also dilute results—loom as headwinds.

Strategic Priorities: TMTT Expansion and Market Penetration

CEO Bernard Zovighian emphasized the company’s focus on accelerating TMTT adoption with the SAPIEN M3 and EVOQUE systems. He also highlighted plans to expand TAVR access in underpenetrated markets, such as Asia-Pacific, where aortic stenosis diagnosis rates lag behind the U.S. and Europe.

The JenaValve acquisition, expected to close in mid-2025, adds a low-cost manufacturing base and next-gen TAVR designs, though integration risks remain. Edwards also aims to mitigate currency pressures through hedging and operational cost controls.

Risks and Challenges

• Currency Volatility: A weaker dollar could cut into international sales, though Edwards expects offsetting benefits from FX improvements in its guidance.
• Regulatory Hurdles: Delays in JenaValve’s U.S. FDA approval or SAPIEN M3’s U.S. launch could stall growth.
• Competitive Dynamics: Abbott’s Perceval S and Medtronic’s MitraClip continue to challenge Edwards’ dominance in structural heart therapies.

Conclusion: A Leader in a Growing Market

Edwards Lifesciences’ Q1 results underscore its position as a leader in structural heart innovation. With TMTT sales now contributing meaningfully to growth—surging from just $75 million in 2023 to a projected $530–$550 million in 2025—the segment is becoming a critical revenue driver.

The raised guidance and solid balance sheet ($3.1 billion in cash) suggest the company is well-positioned to navigate near-term challenges. However, investors must weigh the risks of margin pressures and regulatory delays against the long-term potential of its pipeline.

With a market cap of $26 billion and a forward P/E ratio of 22x (vs. 24x for peers), Edwards trades at a slight discount to its peers, offering an attractive entry point for those betting on structural heart therapies’ long-term growth.

As Zovighian noted, the company is “writing the next chapter in structural heart innovation.” For investors, the question is whether the TMTT story can sustain its 50%+ growth trajectory—and whether Edwards can convert its technological edge into sustained shareholder returns. The data so far suggests cautious optimism.