보스턴 사이언티픽(BSX) 2026년 3분기 실적 발표 콘퍼런스 콜: 사이버 영향 및 부진한 전망

핵심 요약

• 보스턴 사이언티픽은 2026년 3분기 매출이 보고 기준, 영업 기준, 자체(유기적) 기준 모두 전년 동기 대비 1.5% 증가한 51억 3,800만 달러를 기록했다고 발표했다. 조정 주당순이익(EPS)은 3% 감소한 0.73달러를 기록했다.
• 사이버 보안 침해 사고로 인해 분기 자체 매출 성장률이 약 300베이시스포인트(bp, 약 1억 5,000만 달러) 감소했으며, 조정 EPS는 약 0.07달러 낮아졌다. 운영은 9월 8일까지 복구되었다.
• 경영진은 2026년 4분기 자체 매출이 1%~3% 감소하고 조정 EPS는 0.77달러~0.79달러를 기록할 것으로 예상하고 있다. 고객 재고가 정상화됨에 따라 사이버 사고로 인해 매출 성장률이 200~300bp 추가 하락하는 역풍이 발생할 것으로 전망된다.
• 와치맨(WATCHMAN) 매출은 6% 감소했고 전기생리학 매출은 5% 줄어들며 약화된 좌심방이 폐색술(LAAC) 시술 동향, 경쟁 압박 및 PFA 점유율 하락을 반영했다.
• 경영진은 2027년이 현재 사이클의 저점이 될 것으로 예상하며, 인수 절차가 진행 중인 페넘브라(Penumbra) 인수를 제외하면 매출과 조정 EPS가 성장하기 어려울 것이라고 언급했다.
• 보스턴 사이언티픽은 구조조정 프로그램을 통해 3년간 5억 달러 이상의 비용 절감 효과를 거둘 것으로 기대하고 있으며, 이 중 절반 이상은 2027년 말까지 연간 환산 절감액(exit-rate) 기준으로 달성할 수 있을 것으로 전망하고 있다.

주요 재무 실적

사업 및 영업 실적

영업 기준 미국 매출은 전년 동기 대비 변동이 없었다. 유럽·중동·아프리카(EMEA)는 6% 성장한 반면, 아시아·태평양은 사이버 사고와 중국 내 가격 압박으로 인해 1% 감소했다. 경영진은 물량 기반 조달(VBP) 및 기타 가격 규제 조치가 확대됨에 따라 중국 매출 성장률이 한 자릿수대로 둔화될 것으로 예상하고 있다.

신경조절(Neuromodulation) 부문은 통증 제품군의 광범위한 성장, 날루 PNS(Nalu PNS) 및 뇌 제품군의 호조에 힘입어 13% 성장했다. 비뇨기과(Urology) 부문은 사이버 장애와 중국 가격 압박으로 인해 3% 감소했다. 경영진은 최근의 요로결석 관리 제품 승인과 상업적 생산성 증대 이니셔티브를 통해 2027년 중 비뇨기과 부문의 성장 프로필이 개선될 것으로 기대하고 있다.

내시경(Endoscopy) 부문은 중국 VBP와 사이버 보안 사고의 영향으로 1% 감소했다. 경영진은 AXIOS를 필두로 한 기초 실적은 여전히 견조하지만, 2027년 4분기에 관련 영향이 기저화될 때까지는 중국 가격 압박이 성장에 부담을 줄 것으로 전망했다.

심혈관(Cardiovascular) 부문 매출은 2% 증가했다. 중재적 심장학 및 혈관 치료(Interventional Cardiology & Vascular Therapies)는 중재적 심장학의 19% 성장과 혈관 치료의 1% 성장에 힘입어 12% 증가했다. AGENT DCB는 현재 40만 명 이상의 환자 치료에 사용되었다. 혈관 치료의 성장은 사이버 장애 및 TCAR 공급 제한으로 인해 제약을 받았으나, 경영진은 2027년 초까지 이를 완전히 해결할 수 있을 것으로 보고 있다.

중재적 종양학 및 색전술(Interventional Oncology & Embolization)은 암 치료제 및 테러스피어 360(TheraSphere 360)의 채택에 힘입어 5% 성장했으나, 2027년 초 완화될 것으로 예상되는 공급 제약으로 인해 일부 상쇄되었다.

심장 리듬 관리(Cardiac Rhythm Management) 부문은 2% 감소했다. 진단(Diagnostics) 부문은 높은 한 자릿수 비율로 성장한 반면, 저전압 및 고전압 제품은 각각 중간 한 자릿수 및 낮은 한 자릿수 비율로 감소했다.

와치맨(WATCHMAN) 매출은 미국 내 7% 감소와 해외 4% 성장을 포함하여 6% 하락했다. 미국 내 동시 시술은 약 35% 증가했으나, 단독 시술은 10%대 후반의 감소율을 보였다. 경영진은 전반적인 LAAC 둔화의 주요 원인을 의료진이 최근 발표된 임상 데이터를 평가함에 따라 환자 발굴 및 의뢰 패턴이 변화했기 때문으로 분석했다.

전기생리학 매출은 5% 감소했다. 경영진은 경쟁 기술 및 폼팩터가 시장에 진입함에 따라 파라펄스(FARAPULSE)의 PFA 점유율이 감소했다고 밝혔다. 회사는 2027년 하반기 2D ICE, 2028년 초 파라웨이브 울트라(FARAWAVE Ultra), 2029년 파라플렉스(FARAFLEX)로 포트폴리오가 확장될 때까지 점유율 압박이 지속될 것으로 예상하고 있다.

경영진 가이던스

경영진은 업무 재개 후 누적된 재고를 고객사들이 소진함에 따라, 4분기 사이버 보안 여파로 매출 성장률이 200~300bp 감소하고 EPS는 약 0.04달러~0.05달러 감소할 것으로 예상하고 있다.

2027년에 대해 경영진은 현재 4분기의 사업 여건이 지속될 것으로 보고 있다. 와치맨 및 EP 부문의 압박, 중국 가격 규제, 불리한 제품 조합으로 인해 페넘브라를 제외할 경우 매출과 조정 EPS의 성장이 어려울 것이라고 언급했다. 회사는 잔여 규제 승인을 조건으로 2027년 초 페넘브라 인수 완료가 이뤄질 것으로 계속 기대하고 있으며, 현재 제시된 가이던스에는 해당 거래가 제외되어 있다.

경영진은 신제품 출시와 경쟁 기저효과의 정상화에 힘입어 2028년부터 실적이 개선될 것으로 예상하며, 2029년에는 추가적인 성장 가속화를 목표로 하고 있다. 이러한 예상은 제품 개발, 규제 승인, 시장 채택 및 실행력에 달려 있다.

리스크 및 주목할 점

• 사이버 장애 이후 고객 재고 정상화가 4분기 매출에 부담을 줄 것으로 예상된다.
• 와치맨은 단독 시술 동향의 약세와 2027년 신규 경쟁 제품 출시라는 과제에 직면해 있다. 경영진의 초기 기본 프레임워크는 현재 시장 상황에서 개선이 없는 것으로 가정한다.
• EP 부문은 단기 신제품 출시가 제한적이어서 2027년 동안 PFA 점유율 하락이 지속될 것으로 예상된다.
• 중국 VBP 및 광범위한 가격 압박은 특히 내시경 및 비뇨기과 부문의 성장률과 총이익률을 낮출 것으로 예상된다.
• 와치맨과 EP의 매출 감소는 불리한 제품 조합을 초래해 2027년 총이익률과 조정 EPS에 추가 압박을 가할 것으로 예상된다.
• 파이프라인 프로그램 여러 건이 지연을 겪었다. 파라웨이브 울트라는 설계 검증 및 타당성 확인 작업이 진행 중이며, 파라플렉스의 일정은 IDE 절차, CMS 승인 및 연구 기관 운영 요건의 영향을 받았다.
• 페넘브라 인수 완료 지연과 금리 인상으로 인해 이전에 제시되었던 첫해 EPS 희석분(0.06달러~0.08달러) 대비 자금 조달 비용이 증가할 것으로 예상된다.

애널리스트 Q&A 주요 내용

경영진은 2027년 전망이 단지 사이버 보안 사고뿐만 아니라 사업 펀더멘털을 반영한다고 밝혔다. 회사는 와치맨 시장 동향이 현재 수준 근처에서 유지되고 EP가 2026년 하반기와 유사한 속도로 점유율을 잃을 것으로 가정하고 있다.

회복 과정에서 경영진은 중재적 심장학, 혈관 및 페넘브라가 회사에서 가장 큰 사업 부문이 되고 가중 평균 시장 성장률을 상회할 것으로 기대하고 있다. 메드서지(MedSurg)는 중간 한 자릿수 범위에서 성장할 것으로 예상되는 반면, 신규 CRM, 와치맨 및 EP 제품은 2028년부터 리듬 솔루션(Rhythm Solutions)의 실적을 개선할 것으로 기대된다.

구조조정 프로그램에는 조직 단순화, 공급망 최적화, 백오피스 혁신, 공유 서비스(shared services) 도입 및 재량 지출 축소가 포함된다. 경영진은 주요 성장 플랫폼에 대한 자금 지원을 계속하면서 3년간 5억 달러 이상의 비용을 절감할 수 있을 것으로 전망한다.

경영진은 2026년 예측에서의 한계를 인정했다. 보스턴 사이언티픽은 예측 신뢰성을 높이기 위해 시나리오 및 민감도 분석, 보다 객관적인 모델, 추가적인 제3자 데이터를 도입했다고 설명했다.

바이탈리스트(VITALYST)의 경우, 보스턴 사이언티픽은 초기 개발 초점을 고위험 PCI에서 급성 심근경색(AMI) 심장성 쇼크로 전환했다. 블랙스톤 라이프 사이언스(Blackstone Life Sciences)가 이 프로그램의 자금을 공동 지원할 예정이며, 경영진은 개발 및 임상 마일스톤 달성 여부에 따라 2030년 상용 출시를 목표로 하고 있다.

실적발표 컨퍼런스 콜 전문

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전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good morning, and welcome to the Boston Scientific Third Quarter 2026 Earnings Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Lauren Tengler, Vice President, Investor Relations. Please go ahead.

Lauren Tengler

Thank you, Drew, and thanks to everyone for joining us. With me today are Mike Mahoney, Chairman and Chief Executive Officer; and Jon Monson, Executive Vice President and Chief Financial Officer. During the Q&A session, Mike and Jon will be joined by Joe Fitzgerald, Executive Vice President and Group President, Cardiology; and our Chief Medical Officer, Dr. Ken Stein.

We issued a press release earlier this morning announcing our Q3 2026 results, which included reconciliations of the non-GAAP measures used in this release. The release as well as reconciliations of the non-GAAP measures used in today's call can be found on the Investor Relations section of our website.

Please note that on the call, operational revenue excludes the impact of foreign currency fluctuations, and organic revenue further excludes certain acquisitions and divestitures for which there is less than a full period of comparable net sales. Guidance excludes our previously announced agreement to acquire Penumbra, which we expect to close in early 2027. For more information, please refer to the Q3 financial and operating highlights deck, which may be found on the Investor Relations section of our website.

On this call, all references to sales and revenue are organic and relative growth as compared to the same quarter of prior year, unless otherwise specified. This call contains forward-looking statements regarding, among other things, our financial performance, business plans, market expectations and product performance and development. These statements are based on our current beliefs using information available to us as of today's date and not intended to be guarantees of future events or performance.

If our underlying assumptions turn out to be incorrect or certain risks or uncertainties materialize, actual results could vary materially from those projected by the forward-looking statements. Factors that may cause such differences are discussed in the earnings release we issued earlier this morning and our periodic reports and other filings with the SEC, including the Risk Factors section of our most recent annual report on the Form 10-K.

Boston Scientific disclaims any intention or obligation to update these forward-looking statements, except as required by law. In addition, this call does not constitute an offer to sell or the solicitation of an offer to buy any securities or solicitation of any vote or approval in connection with the proposed transaction with Penumbra. Boston Scientific has filed with the SEC a registration statement on Form S-4 containing a proxy statement of Penumbra and a prospectus of Boston Scientific that contains important information about Penumbra, Boston Scientific, the proposed transaction and related matters.

At this point, I'll turn it over to Mike.

Michael Mahoney

Thanks, Lauren. Thank you, everyone, for joining us today. I want to begin by walking through our third quarter results, provide some fourth quarter outlook and then assumptions behind our updated view of 2027. I'll then provide more details on both the region and business unit performance and outlook.

Q3 total company organic sales grew 1.5% versus original guide of 3% to 5%. Q3 adjusted EPS of $0.73 declined 3% versus our guidance range of $0.80 to $0.82. Our Q3 results were impacted by our previously reported cybersecurity incident, which we estimate reduced our sales growth by approximately 300 basis points and adjusted EPS by $0.07 in the quarter.

Importantly, after the 2 week outage as a result of the cyber incident, all operations are back up and running as of September 8. I'm very proud of our team's resiliency and the efforts they made to help us return as quickly as possible to supporting physicians and their patients for their products.

Turning to Q4. We anticipate that there will be a 200 to 300 basis points of impact from the cyber incident as we work through elevated customer orders at the end of Q3 to replenish inventory levels. Additionally, since our second quarter earnings call, EP share pressure has intensified further accelerated by the cyber incident. We have also seen pricing dynamics in China become more challenging.

To that end, we are guiding to organic revenue declines of minus 1% to minus 3% for 4th quarter of '26 and adjusted EPS of $0.77 to $0.79. This results in a full year '26 organic revenue growth guide of approximately 4% and EPS of $3.16 to $3.18. Boston Scientific has enjoyed several years of exceptional growth, driven by strategic investments and strong execution globally, particularly within our EP and WATCHMAN franchises. In '26, we've seen that cycle turn, and those 2 businesses are now weighing on our total company growth as we navigate competition and market dynamics.

We believe that 2027 will be the trough in the cycle, and we have several investments and new innovations coming over the course of the next 3 years that we expect will support stabilization and growth for both the EP and WATCHMAN businesses. And while the remaining 75% of our business has grown consistently, we anticipate there will be additional price headwinds in China in '27 and the growth likely won't be enough to offset the pressure from EP and WATCHMAN next year. As a result, we believe we'll be challenged to grow sales and adjusted EPS in '27, excluding our pending acquisition of Penumbra.

Having said all that, we are taking immediate actions to prepare for the future including through our previously announced restructuring program and the evolution of our operating structure while ensuring that we continue to make the right strategic investments across a number of growth platforms. We have a very strong cadence of launches in '27 and '28, and anticipate entering several new markets over the next few years that will unlock $25 billion in new market opportunity by 2030. Importantly, we expect these actions to drive meaningful improvement in both our revenue and adjusted EPS performance as we aim to exit the cycle in '27 and return to delivering high performance in '28 with further improvement expected in '29.

I'll now provide some more details on Q3 and full year '26. Turning to our regional performance. The U.S. was flat year-over-year on an operational basis, driven by ICVT, IO&E and neuromodulation. Europe, Middle East and Africa grew 6% on an operational basis with strong performance across many of our businesses. But within the quarter, there was some impact from cyber, offset by a transient headwind in third quarter '25 from our ERP platform go live. Asia Pacific declined 1% operationally with growth impacted by the cyber incident as well as price pressure in China. Pricing dynamics in China continue to evolve in a number of our businesses, seeing VBP and other pricing impacts as a result. We expect growth in this market will moderate to single-digit growth.

Turning to our business units. I'll start with Neuromodulation. Sales grew 13%. In Pain, growth was broad-based across the portfolio with exceptional performance with our Nalu PNS technology. But within the quarter, data was presented from the IMPROVE study evaluated our Intracept technology with real-world outcomes showing improvements in pain function and quality of life at 3 months. In Brain, growth was driven by our Cartesia X lead and Illumina 3D software, which enable more precise placement and programming.

Urology declined 3% this quarter with impact from the cyber incident as well as expanding pricing pressure in China. In stone management, we have received a number of approvals for key products, including FDA clearance of our Navigator Flex suction sheath, CE mark and FDA clearance for distribution of the 7.5 Slim scope and FDA clearance of our LithoVue Elite single-use ureteroscope. As we look forward, we expect these new stone launches as well as stabilization and productivity from our S&M commercial organization to help our urology improve its growth profile over the course of 2027.

Endoscopy sales declined 1% versus Q3 '25, inclusive of an impact from China VBP and cyber. Importantly, the underlying performance of this business continues to be strong, led by AXIOS, our differentiated technology, and as we look ahead, we expect our Endoscopy performance to be slightly pressured closer to mid-single-digit market growth into an annualized impact from the China VBP in fourth quarter '27.

Cardiovascular sales delivered growth of 2% and Interventional Cardiology & Vascular Therapies sales grew 12%. Our Interventional Cardiology business had another exceptional quarter, growing 19% with continued strength in our global imaging franchise and drug-eluting technologies. We had another outstanding quarter of our AGENT DCB, which is backed by strong clinical evidence and now has been used to treat over 400,000 patients to date. We remain focused on both the near- and longer-term growth opportunities for this business. And last quarter, we received IDE approval of the VITAL PCI trial that is studied in our VITALYST circulatory support technology in the high-risk PCI population.

However, evolving clinical evidence in this space, we've made the decision to shift our strategy and focus our development and clinical efforts on the AMI cardiogenic shock indication, we believe that our device design has the potential to be well suited to treat patients experience in cardiogenic shock and look forward to initiating clinical efforts in '27.

Our VITALYST program is one of the largest internal R&D programs and an important long-term growth driver. To solidify funding for the AMI Shock Program, we have entered an agreement with Blackstone Life Sciences and aim to bring this important technology to market in 2030.

Our Vascular Therapies business grew 1% with some impact from cyber as well as TCAR supply constraints. Importantly, we anticipate that our key car supply to improve throughout fourth quarter with full resolution by early next year.

Our SEISMIQ launch continues to go well. And within the quarter, we received FDA clearance for SEISMIQ IVL -- sorry, SEISMIQ IVL to treat patients with severely calcified peripheral artery disease in small vessel, expanding our size matrix to now treat above the knee and below the knee. We also received FDA approval for the RANGER 035 drug-coated balloon, offering an expanded size and providing a highly complementary offering as most IVL procedures that are performed in lower limbs are also followed by drug-eluting technologies.

We remain excited about the opportunity to add Penumbra team to the -- we are excited about the opportunity to add the Penumbra team, and they're highly differentiated in the complementary portfolio to Boston Scientific. We continue to work with the regulators and now expect to close in early '27, subject to the receipt of the remaining regulatory clearances.

Our Interventional Oncology & Embolization business grew 5% driven by strong performance in our cancer therapies franchise, partially offset by some supply constraints that we anticipate will be resolved in early 2027. We continue to see strong adoption of our TheraSphere 360, as well as momentum with our hepatic artery infusion technology, providing a portfolio of options for cancer treatment.

Cardiac Rhythm Management sales declined minus 2% with some impact from the cyber incident as we navigated usage and activation of technologies that leverage remote monitoring while our systems were down. In Q3, our diagnostics franchise grew high single digits. Our low-voltage business declined mid-single digits and high-voltage business declined low single digits. We anticipate that our performance will improve over the course of '27 with new launches and ongoing momentum.

Before I turn to WATCHMAN and EP, I want to acknowledge the pressures in these 2 businesses and the impact that it has on our overall growth. We are acting now to strengthen the LAAC market and focus our EP resources where we can compete most effectively while investing in innovation that we believe can improve over time.

On WATCHMAN, sales declined minus 6%, declining to 7% in the U.S. and growing 4% internationally. Within the U.S., concomitant procedures grew approximately 35% and stand-alone procedures declined high teens versus third quarter '25. We continue to believe that the overall LAAC market slowdown primarily reflects changes in patient identification and referral patterns as physicians assess the clinical evidence published over the last year.

Importantly, we are executing against our investment priorities that we laid out in our 2Q call. We held over 200 Med Ed events in second quarter and third quarter providing an opportunity for more than 2,000 referrers and implanters to gain a deeper understanding of the clinical evidence available. We've added more dedicated commercial resources to WATCHMAN to support both concomitant and standalone procedures and support the referral pathway.

In the third quarter, we saw increased patient engagement, further reinforcing the strong demand for alternatives to oral anticoagulation and highlighting the significant unmet need of my patients who can't, shouldn't or won't take lifelong OAC. We continue to believe that focusing on these priorities will support our improvement in the LAC market over time.

With our third quarter performance largely in line with expectations despite the cyber incident, we are maintaining our previous outlook for our WATCHMAN business. In fourth quarter, within the U.S., we anticipate no improvement in the year-over-year stand-alone procedure performance and continued deceleration in concomitant procedure growth against the very high baseline. Internationally, we anticipate similar performance in Q3 and Q4, resulting in sequential flat low single-digit declines versus Q3 '26 globally.

Turning to '27. We believe our investments along with the potential label change will improve the market over time. However, until we see the market improve, we are assuming that the market performance will be similar to Q4 with additional pressure due to a new competitive launch. We believe in the benefit of this therapy and continue to innovate and invest for the future. And within the quarter, we commenced enrollment in the Elite AF clinical trial to evaluate the safety and effectiveness of the next-generation WATCHMAN Elite platform. We anticipate bringing this fourth-generation technology to market in '29. And additionally, we look forward to the late-breaking data presentation of our SIMPLAAFY trial at TCT, studying post-implant drug therapy using WATCHMAN FLX Pro in assessing whether a less intensive drug regimen may help mitigate post-implant bleeding risk.

Turning to EP. Sales declined 5% within our international region. But within the quarter, we continue to expand our OPAL footprint and drive more utilization of our mapping systems with our FARAWAVE and FARAPOINT catheters. The EP market has transformed over the past few years, led by our differentiated FARAPULSE platform. We have seen our strong market share position erode as new technologies are introduced and adoption of these different PFA form factors has been highly dynamic.

While the cyber incident has accelerated some of the share shift, we do expect continued erosion of our PFA share position until we launched FARAWAVE Ultra, now expected in early '28, we expect our EP performance to meaningfully improve in '28 as we expand our PFA ecosystem with 2D ICE in the second half of '27 and FARAWAVE Ultra in '28 and FARAFLEX, wide-area focal catheter in '29. In the near term, we're focusing our teams where we know we can win. We have the most utilized and studied technology for de novo [ AFib ] procedures with our FARAWAVE catheters.

We have a differentiated portfolio available, including our VersaCross transseptal needle and WATCHMAN technology, and we continue to invest to bring differentiated innovation to this large and fast-growing market.

In closing, I want to restate that I remain very confident in Boston Scientific's long-term outlook. We operate in attractive markets with approximately 75% of our business, historically growing approximately 6% for many quarters. We have an impactful cadence of future growth catalysts anticipated in '27 and '28 that we expect to drive meaningful improvement to our growth profile in '28 and beyond. We remain focused on execution and delivering our updated '26 guidance, taking appropriate action to evolve our organization that will create greater focus, speed and accountability, while ensuring we are continuing to invest in our long-term growth drivers.

I'm incredibly grateful to our global employees for their resiliency and winning spirit and across all of our businesses and regions, I've seen our colleagues step up in extraordinary ways, adapting quickly and supporting one another and doing what it takes to ensure we are focused on what matters, improving patient lives through a relentless pursuit of innovation.

With that in hand, I'll hand over to Jon to provide more details.

Jonathan Monson

Thanks, Mike. Before I provide details on our third quarter financial performance, I want to express my gratitude to our customers, physicians and employees for their patience and partnerships as we work through the recent cyber incident. I'm very proud of our global teams who have worked diligently to restore operations and continue to support our customers and the patients that they serve. The cyber incident caused significant disruption to our business operations and it materially impacted our third quarter financial results. Despite these challenges, we remain focused on taking the necessary actions to drive improved financial performance.

So turning now to the quarter. Third quarter consolidated revenue of $5.138 billion represents 1.5% reported growth versus third quarter 2025 and includes a neutral impact from foreign exchange which was in line with expectations. As a result, operational and organic revenue growth were also 1.5% in the quarter, below our third quarter guidance range of 3% to 5%.

We estimate the cyber incident had a net negative impact of approximately 300 basis points on third quarter organic revenue growth. This impact reflects the 8 business day disruption to our global network during which we are unable to manufacture or ship product, partially offset by revenue recovered as operations resumed.

Third quarter 2026 adjusted earnings per share of $0.73 declined 3% versus 2025, below our third quarter guidance range of $0.80 to $0.82. As Mike mentioned, third quarter results include an approximate $0.07 unfavorable impact from the cyber incident primarily driven by lower-than-expected sales and the additional manufacturing and operation -- operating costs associated with the cyber incident.

Adjusted gross margin for the third quarter was 68.0% representing a 300 basis point decrease versus the third quarter of 2025, primarily driven by unfavorable manufacturing absorption during the cyber-related disruption. Third quarter adjusted operating margin was 26.5%, contracting 150 basis points versus the third quarter of 2025, primarily driven by the impact of the cyber incident on gross margin. On a GAAP basis, third quarter operating margin was 16.1%. These results include an approximate $80 million charge primarily related to certain product liability cases.

Moving to below the line. Third quarter adjusted interest and other expenses totaled $124 million, which was in line with expectations. On an adjusted basis, our tax rate for the third quarter was 14.3%, which was higher than expected due to certain discrete tax items. Fully diluted weighted average shares outstanding ended at $1.452 billion in the third quarter and free cash flow for the third quarter was $867 million, with $1.047 billion from operating activities less $180 million in net capital expenditures. As of September 30, 2026, we had cash on hand of $609 million and our gross debt leverage ratio was 1.9x.

Our capital allocation approach remains disciplined and growth oriented. Our top priorities remain strategic tuck-in M&A and opportunistic share repurchases, while we continue to evaluate and fund the opportunities that we believe will create the greatest long-term value for our shareholders. We look forward to closing our acquisition of Penumbra, which we believe will strengthen our long-term growth profile through its innovative portfolio and strong strategic fit within our cardiovascular business.

In addition to tuck-in M&A, we're leveraging strategic partnerships to advance innovation, ensuring we're directing capital towards high-growth opportunities. Consistent with this approach, we recently entered into an agreement with Blackstone Life Sciences to co-fund the development of our VITALYST Circulatory Support System for the treatment of patients with cardiogenic shock. Under the agreement, Boston Scientific will receive funding from Blackstone, which will be recognized as a reduction to R&D expense as the related costs are incurred.

Upon achievement of certain milestones expected starting in 2030, Blackstone will be eligible to receive a return on the actual amount funded for the program plus royalties on sales of VITALYST. This agreement allows us to continue advancing VITALYST while accelerating investments in other high-growth opportunities.

Before I discuss guidance, I want to acknowledge that we need to rebuild confidence in our forecast. We've implemented meaningful enhancements to our forecasting process, which we believe provide a stronger foundation for more accurate forecasting going forward. And so now I'll walk through our guidance for the fourth quarter and full year 2026.

We now expect full year 2026 reported revenue growth to be approximately 4.25% versus 2025. Excluding an approximate 50 basis point tailwind from foreign exchange based on current rates, we expect full year 2026 operational and organic growth to be approximately 3.75%. We expect fourth quarter 2026 reported revenue to decline in a range of down 3% to down 1% versus fourth quarter 2025. We anticipate no impact from foreign exchange based on current rates, and therefore, expect fourth quarter 2026 operational and organic revenue to also decline in a range of down 3% to down 1%.

As Mike mentioned, our fourth quarter guidance contemplates a headwind from the cyber incident reflecting elevated customer ordering at the end of the third quarter, which we expect to normalize over the course of the fourth quarter. We expect full year 2026 adjusted gross margin to be below full year 2025, reflecting a less favorable product mix, investment in our global supply chain and quality systems and the additional impact of the cyber incident.

We now expect full year 2026 adjusted operating margin to be approximately 27.6%, reflective of gross margin pressures. We continue to expect full year 2026 adjusted below the line expense to be approximately $485 million.

Under current legislation, including enacted laws and issued guidance, we now expect a full year 2026 adjusted tax rate of approximately 12%. We expect full year 2026 free cash flow to be approximately $3.6 billion, reflecting a reduced operating income outlook. We expect full year 2026 adjusted earnings per share to be in a range of $3.16 to $3.18, representing growth of 3% to 4% versus 2025, including an approximate $0.06 headwind from foreign exchange, and we expect fourth quarter adjusted earnings per share to be in the range of $0.77 to $0.79.

As Mike outlined, we anticipate continued top line pressure into 2027, which we expect will make it challenging to grow revenue and adjusted earnings per share, excluding Penumbra. We expect our underlying business dynamics in Q4 to persist into 2027 and believe our fourth quarter guidance provides a reasonable baseline for next year's revenue and adjusted earnings per share outlook. Importantly, we're taking decisive actions to drive greater focus, speed and accountability, most notably through our company-wide restructuring program. This comprehensive initiative is focused on org structure evolution, supply chain optimization, back-office transformation and reductions in other categories of spend. We expect these efforts to deliver sustained cost efficiencies while allowing us to prioritize investments that support long-term growth.

In closing, we believe we're well positioned in attractive markets. We're making the right investments and taking the necessary steps to strengthen our financial performance. I'm confident that these actions will position us to stabilize Boston Scientific in 2027 and then drive improved revenue and adjusted earnings per share growth in 2028 and then further acceleration in 2029. For more information, please check our Investor Relations website for third quarter 2026 financial and operational highlights, which outlines more details on third quarter results and 2026 guidance.

And so Lauren, with that, I'll turn it back to you to moderate the Q&A.

Lauren Tengler

Thanks, Jon. Drew, let's open it up for questions for the next 30 minutes or so. In order for us to take as many questions as possible, please limit yourself to one question. Drew, please go ahead.

Operator

[Operator Instructions] The first question comes from Robbie Marcus with JPMorgan.

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Robert Marcus

A lot to dig into. I'll stick with one here and focus on guidance. Maybe you could -- and there's a lot of questions I'm getting from investors. So hopefully, this will help clarify. How do we think about sort of the actual underlying impact from the hack disruption in third quarter? It sounds like there was some order benefits. What's the actual impact and why bleeding into fourth quarter? And with the no growth comment on 2027, how much of that is conservatism related to the hack and how much is new information of end market and product timing?

Michael Mahoney

Jon, do you want to take the cyber question?

Jonathan Monson

Sure. Yes. Thanks, Robbie. So let me lay out the impacts of cyber. So in Q3, we estimate a roughly 300 basis point headwind to our revenue from cyber, so call it roughly $150 million of headwind on the top line and then bottom line impact to EPS of $0.07. So the impact of the lost sales -- we did have unfavorable manufacturing absorption that contributed to the $0.07 of EPS as well as other direct costs, expedited shipping, cost of experts that impacted Q3 cyber. For the fourth quarter, we expect an ongoing impact of approximately 200 to 300 basis points.

And so what we saw, Robbie, coming out of the cyber incident is a level of stocking of -- from customers. And over the fourth quarter, we'll burn off some of those inventory levels. So that's why you see the ongoing impact into the fourth quarter of that 200 to 300 bps. And that drops through down to EPS, roughly $0.04 to $0.05 of impact in the fourth quarter.

Michael Mahoney

Yes. Maybe just some comments on the '27 question. When we think about it, we obviously aim to exceed these expectations. But just to frame and we'll give our guidance, obviously, in January. We really do expect some of the underlying business dynamics that we see in the fourth quarter to persist in 2027. So if you look at that, you've got a number of our businesses doing extremely well, interventional cardiology, vascular, IO&E, endoscopy's underlying business is doing quite well despite the pressures in China.

So the overall base business, we feel has consistently grown about 6%. We expect about 1 point of impact due to the comprehensive China pricing issues, and that represents about 75% of the business.

So the 2 key areas -- questions are, what will be the impact of WATCHMAN and EP in 2027? So for the basis of our early framing of guidance, we wanted to be appropriately conservative. So we're assuming that the WATCHMAN market dynamics do not improve over current state. And we're obviously doing a lot to turn that around. But those underlying markets today are growing about negative 7, negative 8-ish percent in that area. And we do have a competitive launch coming in 2027. So the error bars are on the market around the WATCHMAN assumptions are quite wide, given that we are assuming no improvement in the market despite some of our efforts and an anticipated label change where we're assuming that the market baseline stays similar to Q4 with competitive entry in '27.

Similarly, in EP, EP will be a challenging year for us in '27, and we're very optimistic about '28 and '29 based on our product launch cadence. But in '27, we are lacking new product launches. The market continues to be fairly healthy, but we expect to continue to see share in 2027 in EP, similar to the rates that we've seen in the second half of 2026. Until we successfully launched a ICE program in second half of '27, an excellent platform upgrade with FARAWAVE Ultra, ideally late fourth quarter, early first quarter, '27. And as you know, we've initiated our clinical trial FARAFLEX platform, which will be an early '29 launch. So hopefully, that gives you some context for 2027.

Operator

The next question comes from Larry Biegelsen with Wells Fargo.

Larry Biegelsen

So super helpful color on 2026 and 2027. Mike, just talk about your confidence in improving sales and EPS growth in '28. I'm not looking for specifics, obviously, but what are the drivers it looks like FARAFLEX, the launch was pushed out to 2029 in the slides, if I'm reading that correctly. And I think there are some concerns about new PFA competition coming in '28 with the novel wave form. And so how are you factoring that in?

Michael Mahoney

Yes. Thank you. Just a backdrop a bit and maybe not new news. '23 to '25, we experienced a very high growth cycle much on the heels of our base business being strong and the tremendous growth of our WATCHMAN and EP. We also had a decent first half despite some of our forecasting challenges growing 8% in the first half of 2026. We are clearly in the middle of a down cycle, which is a short-term phenomenon for Boston Scientific that you will see -- that we predicted in fourth quarter based on our guide in 2027.

We are very confident about the return to growth and kind of pushing off the bottom in '27 as we enter '28. And a high-level formula for growth in '28, potentially below our WAMGR, but solid growth and growth above our WAMGR in '29 really are the -- if you look at our 3 segments. Our biggest segment, as you look at 2028, will be our Interventional Cardiology, Vascular and Penumbra business. We expect that collection of businesses to comfortably grow above their market WAMGR as Penumbra goes organic and they continue to drive excellent momentum.

And with a very strong portfolio cadence in that business with our IVL platforms in peripheral and vascular potentially hypertension in 2028 and a strong cadence of imaging capabilities as well as launches within our EP, IO&E platform. So that will represent our biggest segment, very much on offense growing above WAMGR and propelling the growth of the company.

Our MedSurg business, with a number of key launches, you saw a couple of key approvals just this quarter in our urology business. We expect our MedSurg segment businesses to essentially grow at our market WAMGR or grow at their market WAMGR, call it, mid-single digits. So then it really comes down to what happens to EP and WATCHMAN and CRM. The good news in CRM is we'll be launching a significant platform launch with [ mCRM ], our defibrillator platform, which we expect CRM will comfortably return to growth in 2028 to help that segment.

And then in WATCHMAN, we will anniversary a competitive launch in 2028. We'll be in the midst of a trial of our fourth-generation platform. As you know, we've got a very, very strong share in WATCHMAN, and we expect to maintain that strong leadership position during this case. We'll also aim to have an approved label change ideally by 2028. So we see the WATCHMAN business kind of maximum down and will return to a healthier position in 2028.

Similar with our EP business, again, it's driven by portfolio and cadence. And as I mentioned before, we'll have our ICE platform launch, our full year of FARAPULSE Ultra and pending approval or Flex business. So we expect the overall Rhythm Solutions business with a stronger growth in CRM and improving cadence of effective launches in EP and WATCHMAN to significantly improve the growth profile of Rhythm in '28, whereas 2027 that segment is driving the challenges.

Operator

The next question comes from Joanne Wuensch with Citi.

Joanne Wuensch

Two parts. One part is, internally, it sounds like you're doing quite a bit to build the bridge between today and 2028, which could include any number of things such as sales force realignment expense reduction, et cetera, et cetera. Could you please address what you're doing internally to build that bridge? And then second of all, the Penumbra delay, is there a way to share the steps to that resolution?

Michael Mahoney

Sure. We're certainly -- and Jon, you can comment a bit more. As you would expect, we're aligning our cost structure to a reality of what we see in fourth quarter in 2027. So the team has gotten ahead of that about 6 months ago and are implementing a pretty meaningful restructuring program, both in terms of where we -- our discretionary spend headcount. We want to delayer the company a bit more, increase some of the spans and layers in the organization and get after some SG&A offsets. So that program is very much in flight.

Importantly, we maintain the really important cultural values of Boston Scientific that makes it a special place to work and focus on advancing science for life and our winning spirit. So we believe we will continue to drive an important culture within Boston Scientific focused on the future despite the needed restructuring initiatives. Importantly, while we're doing that, we're also continuing to invest in these big growth platforms that will drive the company's growth back to a decent growth in '28 and above market WAMGR and entering all these new markets that we're taking on. So I think it's important that we show the discipline to drive those cost savings and invest in our growth drivers at the same time.

Jonathan Monson

And Joanne, I'd just add with the restructuring program, I'll fill in a couple of pieces there. So anticipate to achieve over $500 million of savings from the program over the next 3 years, been some tough decisions, but I've been very pleased with how we've been tracking. We're a little ahead of where I thought we'd be at this point in the program. I expect to achieve over half of those savings exiting 2027. So back to Larry's question, that contributes to our confidence in 2028. Mike went through the top line, but from an EPS perspective as well.

Program itself, focused on streamlining org structures, back-office transformation to streamline our processes, leverage shared services. There's a supply chain optimization looking across our global supply network, to better leverage technology, AI and streamline across supply chain and then a broader initiative just looking at other pools of spend like T&E meetings, like use of external vendors to reduce our spend there. So it's a very broad initiative, but very focused. And again, I've been pleased with how we've been tracking. We're a little ahead of our schedule there.

Michael Mahoney

And sorry, Joanne, on the Penumbra comments, maybe some good and bad news. Overall, we're super impressed with the Penumbra results for 2026. And the good news is with a bit of an extended closing period, we've continued to get to know the Penumbra team extremely well, how they run the business, the synergies that are very obvious on growth side and some on the cost side when you combine 2 powerful businesses with intervention cardiology vascular in the Penumbra business. So we're very bullish on the Penumbra team, the progress to innovation pipeline they have and how they will work very seamlessly within Boston Scientific to drive ongoing strength in Penumbra and our ICVT business.

On the regulatory process has taken a bit of time. We're still very confident in closing the transaction. But based on some of the discussions with the regulatory authorities, we anticipate an early first quarter close.

Operator

The next question comes from Rick Wise with Stifel.

Frederick Wise

Mike, I was hoping maybe you could further unpack the MedSurg outlook a little bit. You said, I think, just a moment ago, you expected the combined business to grow mid-single digits sort of in line with the WAMGR market growth. But maybe talk us through each piece. Historically, these are businesses that total grew 7% or 8%. Why can't we dream or aspire for you to get back to that kind of range? And maybe what needs to happen in urology endoscopy and neuro to get back there? And what are the key drivers here as we look ahead to the next year or 2?

Michael Mahoney

Yes, I would agree. 5 to 6 mid-single-digit growth is not what we want MedSurg to be and not what it's been and not what the potential is. Just to break through the 3 of them really quickly. Neuromodulation is doing very well. Our Brain franchise is doing well. We've really diversified our Pain business into more minimally invasive alternatives in addition to spinal cord stim. And we continue to have additional growth drivers in that business with the whole new SCS launch that will happen in 2028. So overall, I would assume kind of over a period of time, the Neuromod business will continue to be accretive to the MedSurg growth profile.

Our Endo business is very strong. We've got a list of quite a few product launches in that area with scopes and our versatile platform and a number of others. The headwind in 2027 for Endo is China. Significant pricing erosion we will see in our China business in 2027. So the Endo business will anniversary that China pricing impact in fourth quarter 2027. So we expect kind of our Endo business to be at that mid-single-digit growth range in '27 accelerated '28 based on launching and getting -- lapping that China piece.

The challenge, quite frankly, has been urology. And we've been wrong on calling the growth trend in urology. Obviously, a lot of efforts are going on in that area. So we expect the Urology business to improve in 2027, not back to its previous levels, but certainly not at a negative growth profile that we see in 2026. And this business is all about people and portfolio. We just announced in our script there, we've got 3 stone launches that -- or, 3 stone approvals, which has been the one segment that's been lagging the growth for that franchise. So we expect our core stone business to improve in 2027.

And as you know, you've heard for many quarters now, we've struggled a bit with the Axonics integration. We've done great with the [ Relievant ] integration, with [ Apollo ] integration, but we struggled with Axonics based on significant commercial turnover. We've done a lot to hire a lot of new reps and clinical people in that area. It takes a bit of time for them to get season in their territories, but we expect to see improvement in that in 2027.

So in short, '27, we think Endo-Uro will be in that kind of lower to mid-single-digit range. and neuro slightly higher and Endo and Uro both lapping significant China VBP pricing in fourth quarter '27 to have a stronger '28. But we -- overall, we do aim to get back to kind of that 7 to 8-ish numbers that we used to see.

Operator

The next question comes from Travis Steed with Bank of America.

Travis Steed

I wanted to ask on the pipeline. There was a lot of things kind of across the board pushed out. Is there something bigger picture going on the pipeline of the derisking of the pipeline? And also, Jon, you mentioned better forecasting abilities. So just curious if you could elaborate on that as well.

Jonathan Monson

Yes, Travis, I'll start on the forecasting question and then turn to Mike and Joe's in the room here to go through the pipeline. 2026 has been a challenging year for us, as Mike said, after several years of exceptional growth. driven in large part by EP and WATCHMAN, we've seen that cycle turn. So we're in a tough business cycle now because of the dynamics predominantly within those 2 businesses. And we've struggled to forecast that this year, and we need to be better. I recognize that, Mike knows that, Joe knows that. The whole team here knows that.

We feel we've got a clear picture of the business dynamics now. We've laid that out. We're taking action with the restructuring program. We have our new operating model, which will drive greater focus, greater speed, greater accountability. And from a forecasting process perspective, we've made a number of enhancements implemented more sensitivity and scenario analysis, more objective models, more third-party data that we pull in.

So we feel all of that together, you'll see improved forecasting actually from us on a go-forward basis. And with the guidance that we put forth for the fourth quarter here and the framework for 2027, very, very focused on delivering on that.

Mike, Joe, pipeline?

Michael Mahoney

Maybe just quick things. We pride ourselves in executing. '26 has not been the year we've executed so well. So we're -- we've done a lot to tighten our performance. Jon just went through some of our forecasting areas. In terms of overall business, the business has gotten larger. So one of the reasons for the -- for Joe now becoming COO and breaking of the sector [indiscernible] more focus on these sectors. So we improve our efficiency and reliability in terms of the dates that we give you for these big launches.

We do have a very impressive pipeline that's coming for the company. We're down for a bit, but we're far from out and these pipeline products will come through and return Boston Scientific to its high-performance reputation that we want to earn back with you. Some of these products are complicated with clinical trials and regulatory processes. So we've kind of seen about a 6-month delay in some of these big platforms. We want to make sure we launch them at that high scale with high-quality and we aim to do that, but the pipeline is very rich, and we can go through some of those elements and Joe can provide more detail. But we're not happy with some of the slips. We've put a lot of focus on it, and we know the impact it has in the business.

Operator

The next question comes from Josh Jennings with TD Cowen.

Joshua Jennings

Mike, I was hoping to just clarify just the outlook for the WAMGR as you've given strong -- good color -- high-level color on '27 and '28. 2026 WAMGR is 7%. You got some pipeline products potentially could expand. But is the assumption baked into some of your high-level color in the out years that WAMGR is sustainable at that 7% level? And then just a side question, maybe just hoping to get an updated outlook on your view of the LAAC market and growth there as we move into '27 and '28?

Michael Mahoney

Yes. On the WAMGR, we don't -- we're not used to growing below our WAMGR. We think it's still about 7%. We've seen some pressure overall and maybe the Uro market and Endo markets that have pushed it down a bit to that 7% level. EP market continues to remain very strong. Obviously, the WATCHMAN market has pulled that WAMGR to that 7% range, but the WATCHMAN market is about a $2 billion market overall. Importantly, as you look at the LRP, we're entering markets that grow faster than our WAMGR. The IVL market, potentially the hypertension market and some big launches in EP and segments that we don't play in today with ICE and also with FARAFLEX.

So I think overall, kind of that 7% WAMGR today in that 7% to maybe -- and then you're adding Penumbra, which is that scale accretive WAMGR to the business or at least in line. So I think that kind of 7% range now and maybe 7% to 8% over the next 3 years is about the right way to call it. When we look at '27 based on the comments that we made -- I'm sorry, when we look at '27, obviously growing below the WAMGR based on the comments that we made. And in 28, we aim to get back to closer to those WAMGR numbers and beyond.

Operator

The next question comes from Marie Thibault with U.S. Bank BTIG.

Marie Thibault

I wanted to circle back to the commentary on no growth for 2027 when it comes to EPS. We heard Jon talk about some of the restructuring efforts that are being put in place. I know this quarter, you were able to offset things like expedited shipping costs related to the cyber attack, you were able to offset some of that with a better OpEx control. So think about all of this, when we think about no growth in adjusted EPS next year, is it really about product mix and some of those less profitable products being the contributors to sales growth? Or why shouldn't we expect some adjusted EPS growth given some of the efforts you're putting in place?

Jonathan Monson

Mix is the biggest factor, Marie. So as we talked about, do you see pressure on the top line, that pressure predominantly is with WATCHMAN and EP. So we'll feel the mix impact of that within gross margin. And then with the China pricing pressure that we see escalating, that will also impact gross margin in 2027 as well. And we do have some investment that we continue to make across supply chain, our quality systems.

So as you look ahead to 2027, and we'll give the guide in all the detail on the Q4 earnings call, but expect significant pressure in gross margin next year. And we'll continue to invest in the portfolio. We have a lot that we're excited about in the portfolio and want to make sure we're fully funding those initiatives. Now again, we will have restructuring that will help to offset some of those costs. We'll continue to be very disciplined with spend in 2027. But as you put that all together, I'd expect our EPS next year to be roughly in line with revenue and again, on our commentary, expect to be challenged to grow next year.

Operator

The next question comes from Pito Chickering with Deutsche Bank.

Pito Chickering

Can you talk about what's causing the delay of the THRIVE data and therefore, the TIVUS launch and on VITALIST, I think you said you weren't looking at high-risk PCI. Can you talk about what you're seeing with the product? And do you think the market is still attractive with just shock?

Ken Stein

Yes, Pito, it's Ken. Maybe let me start with VITALIST. So there was data from a competitor released last year that I think called into question the broad use of mechanical circulatory support for high-risk PCI. We still believe that there is a role for that therapy there. But we do, I think, as a field, need to figure out a better patient selection. The pivot to first studying cardiogenic shock is very important to realize just how much of an unmet medical need there is in AMI cardiogenic shock. There is still mortality approaching 50% patients who present with acute MI on shock, and it occurs in up to 10% of patients who are having an acute MI.

Data was presented a couple of years ago. The DanGer Shock trial showed beyond a doubt that mechanical circulatory support can reduce mortality in those patients. So this is both an area of major need and an area where we know that mechanical circulatory support can improve outcomes. And we believe that with our VITALYST platform, we have differentiated advantages over the current incumbent in terms of dealing with shock.

VITALYST has a novel catheter design that improves positional stability that's particularly important in dealing with shock patients, where the catheter needs to stay in place in the CCU for a longer period of time, along with strategies aimed at just minimizing the complexity of managing these patients and minimizing vascular complications. And so that's why we're so excited about the potential for the VITALYST platform and will actually we like the move into AMI shock as the first trial.

Lauren Tengler

And then on THRIVE?

Ken Stein

THRIVE, really, again, it's just a matter of continuing to execute on enrollment in the clinical trial. Enrollment, I think, frankly, has been a little bit slower than we would have hoped as we navigated the transition and the integration of the SoniVie team into the Boston Scientific ecosystem. But again, are confident that we can get that on track and that we will eventually finish enrollment in the trial. I believe in the technology. We do believe that ultrasound is the best of the energy sources that we can use for doing renal denervation. And we continue to believe that the THRIVE platform has differentiated advantages over the 2 current approved devices for renal denervation for hypertension.

Operator

The next question comes from Matthew O'Brien with Piper Sandler.

Matthew O'Brien

Just a follow up on the pushback on the pipeline because that's what we're all kind of banking on at this point. Is the pipeline coming through? You just mentioned TIVUS and what's happening there. But with Ultra and with Flex, is it product related? Is it enrollment? Is it manufacturing? What's slowing things down in terms of getting those to market? And then just anything more you can provide a number and a modest push on the timing there? Is it more regulatory questions, specific product-related questions, just anything on those things.

Michael Mahoney

Yes, we won't provide any more updates on Penumbra other than what I commented on. We're very bullish on the transaction, and we're aiming to close that as early as we can. Likely, it will be pushing into early '27. In terms of the -- some of the product delays, Joe's here, Joe, can you just comment on...

Joseph Fitzgerald

I'll take Ultra first. As you know, Ultra is a PMA supplement, does not require a clinical study. So most of the issues we have there are just on getting through what we call design verification and validation. And if you look at Ultra, that's a hardware, software and a catheter project. So the, let's call it, one quarter delay that you see is just a summary of issues that we have to work through with V&V has nothing to do with anything on the clinical trial because we don't need clinical data to get Ultra approved.

On FARAFLEX, I would call it 3 things. It is related to our negotiations with FDA on getting the actual IDE approved. We've had slight delays with CMS full approval. And there are some operational challenges getting everything that's needed to complete a FARAFLEX case done to expand the number of sites. So we believe we will have that largely -- we just got CMS, and we believe our supply chain to support the study will be pretty robust by end of year. So I think when we get on the Q4 call, a good question for us will be how is enrollment going in the FARAFLEX study, which we expect that to ramp each successive week and month going forward.

Operator

I understand there is time for one last question, that would be from Matt Taylor with Jefferies.

Matthew Taylor

I wanted to follow up on the Penumbra, not on the timing. But could you talk about the kind of growth that you expect from that platform? And before you had said in the first year, it could be $0.06 to $0.08 dilutive, but some of the math there has changed. I was wondering if you could update us on that -- it's decelerated a little bit in the last couple of quarters. So I just want to get an update.

Jonathan Monson

Yes. Thanks, Matt. I'll take the dilution piece and then Mike and Joe can give quick comments on the growth profile. But we're excited to add Penumbra. You can see from their results, they're performing very well, high growth, would be a great addition to our cardiovascular portfolio. So we announced Penumbra in mid-January, anticipate closing in early 2027 at this point. At the time of announcement, we had said we expected $0.06 to $0.08 of dilution and that assumes no divestitures that assumes interest rates that were in place at that time. We have seen increases in interest rates since then, so that will drive incremental financing costs. And I think we'll put additional pressure on the EPS dilution that we'd expect. But once we close the deal, we'll provide much more detail.

Lauren Tengler

Thanks so much, Jon. Thank you for joining us today. We appreciate your interest in Boston Scientific. If we were unable to get to your question or if you have any follow-ups, please don't hesitate to reach out to investor -- the Investor Relations team. Before you disconnect, Drew will give you all of the pertinent details for the replay. Thanks, everyone.

Operator

Thank you. Please note, a recording will be available in one hour by dialing either 1 (877) 344-7529 or 1 (412) 317-0088 using replay code 850-6317 until November 11, 2026, at 11:59 p.m. Eastern Time. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.