Edwards Lifesciences Q3 2026 Earnings: TMTT Growth Supports a Higher Outlook

Edwards Lifesciences (NYSE: EW) reported Q3 2026 net sales of $1.72 billion, up 10.5% year over year, while diluted EPS from continuing operations increased to $0.53 from $0.50; adjusted EPS rose 19% to $0.80. TMTT was the fastest-growing product group, and the company raised several full-year sales and earnings guidance ranges.

Core Financial Results

Revenue growth was broad-based across Edwards’ three product groups, led by a 44% increase in TMTT sales. Gross profit grew slightly faster than revenue, but GAAP operating income declined because reported results included a substantially larger impairment charge than in the prior-year quarter.

Adjusted results showed a different operating picture. Adjusted operating margin reached 30.3%, while adjusted EPS benefited from revenue growth and the planned timing of R&D and SG&A investments.

Adjusted results exclude items including impairment charges, litigation-related items, restructuring and separation costs, intangible asset amortization, and certain tax effects.

Business and Product Group Performance

TMTT produced the highest growth rate, while TAVR remained the largest source of revenue. Surgical growth was more limited but remained positive, supported by adoption of the RESILIA tissue portfolio.

TAVR growth was similar in the U.S. and international markets. Procedure volumes benefited from increased attention to proactive treatment of severe aortic stenosis, while average selling prices remained stable globally. Edwards said its U.S. competitive position was stable sequentially and modestly higher year over year, supported by adoption of SAPIEN 3 Ultra RESILIA.

TMTT growth reflected rising use of the company’s mitral and tricuspid repair and replacement portfolio. Global procedure volumes increased at double-digit rates, with contributions from PASCAL, EVOQUE, and SAPIEN M3. The $207 million TMTT figure is adjusted to exclude $2.9 million of Implantable Heart Failure Management revenue.

Surgical sales increased as hospitals continued adopting RESILIA-based therapies. Edwards also expanded the portfolio with the FDA approval of AUTUS and continued a measured U.S. rollout of ECLIPTIS.

Impairment Charges Widened the GAAP-Adjusted Margin Gap

GAAP operating margin fell to 17.4% even as revenue and gross profit increased. A major factor was a $220.2 million impairment of intangible and long-lived assets, compared with $40.0 million in the prior-year period. Reported results also included litigation recoveries and restructuring, separation, and other costs.

Excluding specified items, operating margin was 30.3%. The underlying expense ratios also improved: SG&A declined to 32.7% of sales from 33.1%, while R&D fell to 16.4% from 18.1%. In absolute terms, SG&A increased to $560.9 million, while R&D was nearly unchanged at $281.4 million.

Adjusted gross margin was 78.7%, compared with 77.9% a year earlier. Manufacturing efficiencies and foreign-exchange effects more than offset pressure associated with scaling newer therapies during the quarter. For the full year, however, Edwards continues to expect adjusted gross margin at the lower end of its 78% to 79% range because of currency effects through its hedging program.

Balance Sheet and Capital Allocation

Edwards ended the quarter with approximately $3.1 billion in cash and cash equivalents and about $600 million of debt, leaving it with approximately $2.5 billion in net cash. The company repurchased roughly $700 million of shares through the third quarter and had approximately $1.3 billion remaining under its authorization.

2026 Guidance

Edwards raised its full-year company sales-growth and TAVR outlooks following the quarter. It also increased both ends of the TMTT sales range, while the adjusted EPS revision raised the lower bound but left the upper bound unchanged.

The midpoint of the full-year adjusted EPS range represents 18% growth from the prior year. Edwards also continues to expect full-year operating margin at the high end of its original 28% to 29% guidance range, implying approximately 150 basis points of constant-currency expansion.

Looking ahead, management expects growth to depend more on procedure-volume increases and less on further market-share gains. The company also expects its adjusted effective tax rate to be at the high end of the previously stated 16% to 19% range.

Recent Insider Transactions

The supplied six-month aggregate shows 409,413 shares purchased across 34 transactions and 135,323 shares sold across 21 transactions, resulting in net purchases of 274,090 shares. Among the 10 latest individual records, seven were sales and three were derivative-security exercise conversions; all were reported as direct ownership transactions by officers.

These records describe the reported transactions but do not establish the insiders’ views about the company’s future performance.

Risks for Investors to Monitor

• Greater dependence on procedure growth: Edwards expects future TAVR growth to come mainly from higher procedure volumes and less from market-share gains. Slower procedure growth would therefore have a more direct effect on sales.
• Gross-margin pressure from newer therapies and currency: Scaling newer products creates mix and manufacturing pressure, while currency movements through the hedging program are expected to keep full-year adjusted gross margin near the lower end of guidance.
• Timing of operating investments: Q3 adjusted EPS benefited partly from the planned timing of R&D and SG&A spending. The margin benefit may not carry forward evenly as those investments proceed.
• Tax-rate uncertainty: The adjusted tax-rate outlook remains at the high end of 16% to 19%, reflecting assumptions about Pillar Two legislation and California restrictions on the use of R&D credits.

Summary

Edwards Lifesciences’ third quarter combined double-digit company sales growth with faster expansion in adjusted EPS, led by TMTT and continued TAVR procedure growth. A large impairment charge reduced GAAP operating profitability, while adjusted margins benefited from operating expense ratios and investment timing. The main issues to watch are whether procedure volumes support the higher sales outlook, whether TMTT adoption continues at its current pace, and whether gross margin remains resilient as newer therapies scale.