Boston Scientific beat Q2 2026 guidance with sales up 7.5% to $5.44B and adjusted EPS of $0.86, but Electrophysiology and Watchman growth slowed sharply, full-year guidance was cut, and an August cyberattack has since put even that outlook out of reach.
Revenue
$5.4B
+7.5% YoY
Net income
$907M
+13.8% YoY
Diluted EPS
$0.61
+15.2% YoY
Operating margin
21.6%
Overview
Boston Scientific's second quarter of 2026 (three months to June 30) beat the company's own targets. Revenue rose 7.5% to $5.44 billion. Diluted EPS under GAAP (standard accounting rules) was $0.61, up from $0.53. Adjusted EPS, which is management's measure that strips out amortization and one-off items, was $0.86, above the $0.82–$0.84 the company had guided to in April.
The quarter was weaker underneath than those headline figures suggest. The two products behind most of Boston Scientific's growth over the past two years both slowed sharply: Electrophysiology, the heart-rhythm ablation business built on the Farapulse pulsed-field ablation system, and Watchman, an implant that closes off part of the heart to lower stroke risk. The 10-Q attributes this to "increased competition within our Electrophysiology business unit and a deceleration of certain WATCHMAN procedures." Management lowered its full-year outlook on the same day. Five weeks after the quarter closed, a cyberattack disrupted the company's manufacturing and shipping, and it has since said that even the lowered guidance is unlikely to be met (see Guidance, and what changed after the quarter below).
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Net sales
$5,442M
$5,061M
+7.5%
Organic sales growth (excl. currency and acquisitions)
7.0%
—
—
Gross margin
70.7%
67.7%
+3.0 pts
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The EPS growth rate is the one the filing reports, calculated from unrounded amounts. From the rounded per-share figures it works out to 15.1%.
Takeaway: Revenue and profit both beat guidance, but growth in Boston Scientific's two main engines slowed sharply. Electrophysiology grew 24% year over year in Q1 and 9% in Q2, and US electrophysiology sales grew just 3.2%. Watchman slowed from 19% to 4%. Management cut its full-year organic growth outlook from 6.5–8.0% to 5–6%, and the late-August cyberattack has since made even that lowered target unlikely. Q2 was probably the last quarter this year that is not distorted by one-off disruption.
Where the growth came from
Boston Scientific reports two segments: Cardiovascular (two-thirds of sales) and MedSurg. Currency added only 0.5 percentage points this quarter. The company says no acquisitions qualified for exclusion from organic growth in either year, so "organic" growth (which removes currency moves and the first year of sales from acquired businesses) was the same as currency-neutral growth: 7.0%.
Business
Q2 2026
Q2 2025
Reported growth
Interventional Cardiology & Vascular Therapies
$1,333M
$1,178M
+13.2%
Electrophysiology
$916M
$840M
+9.0%
Cardiac Rhythm Management
$585M
$590M
-0.8%
Watchman
$507M
$486M
+4.3%
Interventional Oncology & Embolization
$283M
$251M
+12.7%
Cardiovascular
$3,624M
$3,345M
+8.3% (7.8% organic)
Endoscopy
$793M
$737M
+7.6%
Urology
$684M
$676M
+1.1%
Neuromodulation
$341M
$303M
+12.7%
MedSurg
$1,818M
$1,716M
+5.9% (5.4% organic)
Electrophysiology and Watchman slowed abruptly. Subtracting Q2 from the six-month totals in the 10-Q gives each Q1 figure:
Business
Q1 2026 growth
Q2 2026 growth
H1 2026 growth
Electrophysiology
+24.0% ($905M)
+9.0% ($916M)
+16.0% ($1,821M)
Watchman
+19.3% ($507M)
+4.3% ($507M)
+11.3% ($1,014M)
Electrophysiology sales were almost unchanged from Q1 to Q2, and Watchman sales were flat. The weakness was concentrated in the US. US electrophysiology sales rose only 3.2% ($606M vs. $587M), while international sales rose 23.0% ($310M vs. $252M). US Watchman sales grew 2.9%. The 10-Q cites competition in electrophysiology, where other companies' pulsed-field ablation systems now compete with Farapulse. This matters beyond one quarter. A shareholder class action filed in March 2026 alleges the company made misleading statements about its US electrophysiology growth outlook. It stems from a stock drop on February 4, 2026, after the Q4 2025 results. The filing does not address the merits of the claims.
Coronary products picked up the slack. Interventional Cardiology & Vascular Therapies grew 13.2%, and 17.4% in the US. The 10-Q credits the coronary franchise, "led by our AGENT Drug-Coated Balloon" (a balloon catheter coated with a drug that helps keep a reopened artery from narrowing again). In MedSurg, Neuromodulation grew 12.7%, driven by the Intracept and Nalu pain-treatment systems and deep brain stimulation. Endoscopy grew 7.6% on the AXIOS stent. Urology was nearly flat (+1.1%), which the filing attributes to China's volume-based procurement (government bulk tenders that push prices down) in kidney-stone products and to "commercial disruption" in sacral neuromodulation (a bladder-control implant).
By region, according to the Q2 earnings release (Exhibit 99.1 to the July 29 8-K): US sales grew 6.2%, EMEA (Europe, Middle East and Africa) 4.2% excluding currency, Asia-Pacific 11.2%, and Latin America and Canada 16.2% excluding currency. Total international sales grew faster than US sales ($2,017M, +9.8%, vs. $3,426M, +6.2%).
Acquisitions: none contributed to organic growth under the company's definition. The six-month cash flow statement shows $718M spent on acquisitions, mainly Nalu Medical (closed January 27, 2026), and $1.5B for a roughly 34% stake in MiRus LLC. That stake includes an exclusive option to buy MiRus's transcatheter aortic valve (TAVR) business. The $14.5B acquisition of Penumbra (devices that remove blood clots) announced in January 2026 was still pending at quarter-end. The FTC issued a "Second Request" for more information in March, and Penumbra stockholders approved the deal on May 6. The company expected to close in the second half of 2026 and planned to fund about $11B of the price with cash and new debt, with the rest in shares.
Profitability: why GAAP profit rose faster than sales
Operating income rose 43.8% while sales rose 7.5%. Operating margin, the share of revenue left after running the business and before interest and tax, was 21.6%, up from 16.2%. Much of that gap comes from one-off items, not a better-run business:
Lower special charges. Restructuring charges fell to $8M from $83M, and Q2 2025 included a $46M intangible-asset impairment (a write-down of the value of acquired technology). There was none this year.
A tariff refund. Cost of products sold includes an $83M benefit from recovering tariffs paid earlier under the International Emergency Economic Powers Act (IEEPA). Gross margin was 70.7%. Without the refund, our estimate is about 69.2%. The filing's gross-margin bridge credits higher-margin products for +0.6 points, while currency cost -0.4 points and "all other," which includes the refund and lower inventory charges, added +2.9 points.
A new litigation charge of $76M partly offset these gains.
Below operating income, the comparison runs the other way. Q2 2025 included a $220M investment gain in "Other, net" (the company's stake in Bolt Medical was revalued when it bought the rest of Bolt), and Q2 2026 had a $12M investment loss. That is why pre-tax income grew only 12.6% ($1,060M vs. $941M) and net income 13.8%. Share count also helped EPS: diluted shares fell to 1,474.8M from 1,493.5M after a $2B accelerated share repurchase (about 40 million shares, per the earnings release).
GAAP vs. adjusted EPS. The $0.25 gap between $0.61 GAAP and $0.86 adjusted EPS is mostly amortization of acquired intangibles ($0.14). The rest is acquisition-related charges ($0.05), litigation ($0.04), restructuring ($0.02) and deferred-tax items ($0.05). It is partly offset by the tariff refund, which the company excludes from adjusted results (-$0.05). Excluding the refund from adjusted EPS is the conservative choice: the refund did not inflate the $0.86 beat. Adjusted EPS grew 14.6%, close to GAAP EPS growth of 15.2%.
Underlying costs were well controlled. Sales and administrative expenses (SG&A) grew 5% and fell to 33.1% of sales from 33.9%. R&D grew 5% to $554M. Segment operating margin improved in Cardiovascular (33.1% vs. 32.1%) and fell in MedSurg (32.9% vs. 35.1%), where cost of products sold rose to 28.9% of sales from 27.3%.
First half of 2026
Metric
H1 2026
H1 2025
YoY Change
Net sales
$10,646M
$9,724M
+9.5% (8.1% organic)
Operating income
$2,279M
$1,740M
+31.0%
Net income attributable to BSX
$2,247M
$1,471M
+52.8%
Diluted EPS (GAAP)
$1.51
$0.98
+53.6%
Adjusted EPS
$1.66
$1.51
+10.2%
Operating cash flow
$1,822M
$1,827M
flat
The 53.6% jump in first-half GAAP EPS is mostly a Q1 tax item: a $384M discrete tax benefit from a change in the tax rate at which the company expects to recover certain capitalized expenses. It produced a negative reported tax rate for the half (-1.0%). Adjusted EPS growth of 10.2% is the better guide to the underlying trend. Operating cash flow was flat despite higher sales, which the filing attributes to higher employee and working-capital payments. Leverage (debt relative to earnings) was 2.02x EBITDA under the credit-agreement definition, and the company had $1.689B of commercial paper outstanding. The $6B term loan arranged for Penumbra had not been drawn.
Guidance, and what changed after the quarter
Guidance cut on July 29. The earnings release lowered full-year 2026 guidance to organic growth of 5–6% (from 6.5–8.0% in April) and adjusted EPS of $3.28–$3.32 (from $3.34–$3.41). Q3 guidance was 3–5% organic growth and adjusted EPS of $0.80–$0.82. First-half organic growth was 8.1%, so the full-year range implies second-half organic growth of only about 2–4%. Management was already expecting its growth products to stay slow.
New restructuring plan. On July 21 the board approved a 2026 Restructuring Plan: $700–$800M of pre-tax charges through 2029, mostly moving production lines between plants and severance. The company expects it to cut gross annual pre-tax costs by about $500M and says it will reinvest "a substantial portion" of that. The charges will fall outside adjusted EPS but will weigh on GAAP results for several years.
Cyberattack (after the 10-Q was filed). On August 25, 2026 the company detected a cybersecurity incident. Its 8-K filed September 8 says the incident caused a network outage that "impacted the Company's ability to manufacture as well as process and ship customer orders." That filing also reported that major distribution centers and sterilization facilities were running again and that manufacturing had resumed at most sites. It said the incident "is likely to have a material impact" on Q3 and full-year 2026 results, and that the company is "unlikely to meet" the July net sales and adjusted EPS guidance. Updated guidance is due with Q3 results on October 28, 2026. The company said it may recover some of the lost revenue as backlogs clear, and that it does not expect a material impact on its long-term financial condition.
Our read. The Q2 numbers are clean and slightly ahead of plan. The trend is not. Growth slowed sharply in the two businesses that justified Boston Scientific's premium valuation, and the US Farapulse slowdown is also the subject of a securities lawsuit. Q3 will be hard to read because the cyberattack will obscure underlying demand, and the Penumbra deal is still under FTC review. The best clean test of whether US electrophysiology growth is stabilizing will probably be Q4 2026 or early 2027. Until then, watch whether the coronary balloon and neuromodulation strength continues, and how much of the lost Q3 revenue the company says it recovered.
Source: Boston Scientific Form 10-Q for the quarter ended June 30, 2026 (filed August 3, 2026). Regional growth rates, the share-repurchase count and April/July guidance are from the company's earnings releases (Exhibit 99.1 to 8-Ks filed April 22 and July 29, 2026). Restructuring plan and cybersecurity details are from 8-Ks filed July 27, August 26 and September 8, 2026. The ex-refund gross margin and Q1 business-level figures are our calculations from the 10-Q.