NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A – BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Boston Scientific Corporation have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and with the instructions to Form 10-Q and Article 10 of Regulation S-X, and they do not include all of the information and footnotes required by GAAP for complete financial statements. When used in this report, the terms, "we," "us," "our," and "the Company" mean Boston Scientific Corporation and its divisions and subsidiaries. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. Accordingly, our unaudited consolidated financial statements and footnotes thereto should be read in conjunction with our audited consolidated financial statements and footnotes thereto included in Item 8 of our most recent Annual Report on Form 10-K.
The accompanying unaudited consolidated financial statements include the accounts of the Company's wholly owned- subsidiaries and entities for which we have a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. We consolidate our majority stake investment in Acotec Scientific Holdings Limited on a one quarter lag.
Amounts reported in millions within this Quarterly Report on Form 10-Q are computed based on the amounts in thousands. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded amounts.
Subsequent Events
We evaluate events occurring after the date of our accompanying unaudited consolidated balance sheets for potential recognition or disclosure in our unaudited consolidated financial statements. Those items requiring recognition in the financial statements have been recorded and disclosed accordingly.
Those items requiring disclosure (non-recognized subsequent events) in the financial statements have been disclosed accordingly. Refer to Note H – Commitments and Contingencies for further details.
NOTE B – ACQUISITIONS AND STRATEGIC INVESTMENTS
Our accompanying unaudited consolidated financial statements include the operating results for acquired entities from the respective dates of acquisition. We have not presented supplemental pro forma financial information for completed acquisitions or divestitures given their results are not material to our accompanying unaudited consolidated financial statements. Further, transaction costs were immaterial to our accompanying unaudited consolidated financial statements and were expensed as incurred.
On March 31, 2026, we entered into a definitive agreement to acquire 100 percent of Scivita Medical Technology Co., Ltd. (Scivita Medical), a privately held medical technology company focused on the development and commercialization of innovative medical endoscopes and related products. We have been an investor in Scivita Medical since 2024 and currently own an equity stake of approximately one percent. The transaction price to acquire the remaining stake is expected to result in an upfront cash payment of $200 million in addition to cash acquired upon closing and up to an additional $30 million in future payments upon achievement of commercialization milestones. The transaction is expected to close during the third quarter of 2026, subject to customary closing conditions. The Scivita Medical portfolio complements our existing Endoscopy and Urology portfolios which will provide physicians with more treatment options to meet specific patient needs.
On January 15, 2026, we announced our entry into a definitive agreement to acquire 100 percent of Penumbra, Inc. (Penumbra), a publicly traded medical technology company primarily focused on thrombectomy products for use in peripheral vascular procedures in the removal of blood clots and blockages. At the time of announcement, the purchase price was valued at $374 per share, or approximately $14.500 billion. On March 16, 2026, we and Penumbra each received a request for additional information (Second Request) from the United States Federal Trade Commission (FTC) in connection with its review of the transaction. We and Penumbra are responding to the Second Request and continue to work cooperatively with the FTC in its review. The transaction is expected to be completed in the second half of 2026, subject to receipt of Penumbra's stockholder
approval and the satisfaction of other customary closing conditions, including regulatory clearances. The Penumbra business will be integrated into our Cardiovascular division.
2026 Acquisitions
On January 27, 2026, we completed our acquisition of 100 percent of Nalu Medical, Inc. (Nalu Medical), a privately held medical technology company focused on developing and commercializing innovative and minimally invasive solutions for patients with chronic pain. We had been an investor in Nalu Medical since 2017 and previously held an equity stake of approximately nine percent. The transaction to acquire the remaining stake consisted of an upfront cash payment of approximately $523 million, net of cash acquired. The Nalu Medical business is being integrated into our Neuromodulation division.
Purchase Price Allocation
We accounted for this transaction as a business combination in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 805, Business Combinations (FASB ASC Topic 805). The preliminary purchase price was comprised of the amounts presented below:
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| (in millions) | Nalu Medical | | | | |
| Payment for acquisition, net of cash acquired | $ | 523 | | | | | |
| Fair value of prior interest | 66 | | | | | |
| $ | 588 | | | | | |
We recorded the assets acquired and liabilities assumed at their respective fair values as of the closing date of the transaction. The preliminary purchase price allocation was comprised of the components presented below, which represent the preliminary determination of the fair value of assets acquired and liabilities assumed, with the excess of the purchase price over the fair value of net identifiable assets acquired recorded to goodwill. The final determination of the fair value of certain assets and liabilities will be completed within the measurement period in accordance with FASB ASC Topic 805.
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| (in millions) | Nalu Medical | | |
| Goodwill | $ | 274 | | | |
| Amortizable intangible assets | 262 | | | |
| Other assets acquired | 55 | | | |
| Net deferred tax assets | 13 | | | |
| Liabilities assumed | (16) | | | |
| $ | 588 | | | |
Goodwill was primarily established due to synergies expected to be gained from leveraging our existing operations, as well as revenue and cash flow projections associated with future technologies, none of which is deductible for tax purposes.
We allocated a portion of the purchase price to the specific intangible asset categories as follows:
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| Amount Assigned (in millions) | | Weighted Average Amortization Period (in years) |
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| Amortizable intangible assets: | | | |
| Technology-related | $ | 250 | | | 12 |
Customer relationships | 12 | | | 12 |
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| $ | 262 | | | |
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Our intangible assets consist of technical processes, intellectual property and institutional understanding with respect to products and processes that we intend to leverage in future products or processes. We used the multi-period excess earnings
method, a form of the income approach, to derive the fair value of the technology-related intangible assets and are amortizing them on a straight-line basis over their assigned estimated useful lives.
2025 Acquisitions
On January 24, 2025, we completed our acquisition of 100 percent of Cortex, Inc. (Cortex), a privately held medical technology company focused on the development of a diagnostic mapping solution which may identify triggers and drivers outside of the pulmonary veins that are foundational to atrial fibrillation (AF). The transaction price consisted of an upfront cash payment of $239 million, net of cash acquired, and up to an additional $50 million in future payments upon achievement of clinical and other milestones. The Cortex business is being integrated into our Cardiovascular division.
Purchase Price Allocation
We accounted for this transaction as a business combination in accordance with FASB ASC Topic 805. The final purchase price was comprised of the amount presented below:
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| (in millions) | | | Cortex | | |
| Payment for acquisition, net of cash acquired | | | $ | 239 | | | |
| Fair value of contingent consideration | | | 38 | | | |
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| | | $ | 277 | | | |
We recorded the assets acquired and liabilities assumed at their respective fair values as of the closing date of the transaction. The final purchase price allocation was comprised of the components presented below, with the excess of the purchase price over the fair value of net assets acquired recorded to goodwill:
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| (in millions) | | | Cortex |
| Goodwill | | | $ | 208 | |
| Amortizable intangible assets | | | 66 | |
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| Other assets acquired | | | 1 | |
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Net deferred tax assets | | | 12 | |
| Liabilities assumed | | | (10) | |
| | | $ | 277 | |
Goodwill was primarily established due to synergies expected to be gained from leveraging our existing operations, as well as revenue and cash flow projections associated with future technologies, none of which is deductible for tax purposes.
We allocated a portion of the purchase price to the specific intangible asset categories as follows:
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| Amount Assigned (in millions) | | Weighted Average Amortization Period (in years) |
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| Amortizable intangible assets: | | | |
| Technology-related | $ | 66 | | | 13 |
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| $ | 66 | | | |
Our intangible assets consist of technical processes, intellectual property and institutional understanding with respect to products and processes that we intend to leverage in future products or processes. We used the multi-period excess earnings method, a form of the income approach, to derive the fair value of the technology-related intangible assets and are amortizing them on a straight-line basis over their assigned estimated useful lives.
Contingent Consideration
Changes in the fair value of our contingent consideration liability during the first quarter of 2026 associated with current and prior period acquisitions were as follows:
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| (in millions) | |
| Balance as of December 31, 2025 | $ | 385 | |
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| Contingent consideration net expense (benefit) | (30) | |
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| Balance as of March 31, 2026 | $ | 354 | |
The maximum amount for certain contingent consideration is not determinable as it is uncapped and based on a percent of certain sales. As of March 31, 2026, the fair value of such uncapped contingent consideration is estimated at $132 million. As of March 31, 2026, the maximum amount that we could be required to pay under our other capped contingent consideration arrangements (undiscounted) is approximately $671 million. Refer to Note B – Acquisitions and Strategic Investments to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for additional information.
The recurring Level 3 fair value measurements of our contingent consideration liability that we expect to be required to settle include the following significant unobservable inputs:
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| Contingent Consideration Liability | Fair Value as of March 31, 2026 | Valuation Technique | Unobservable Input | Range | Weighted Average(1) | | |
| Revenue-based Payments and Commercialization Milestones | $150 million | Discounted Cash Flow | Discount Rate | 6% | - | 15% | 8% | | |
| Probability of Payment | 90% | - | 100% | 99% | | |
| Projected Year of Payment | 2026 | - | 2032 | 2028 | | |
| Clinical-based, Regulatory and Other Milestones | $204 million | Discounted Cash Flow | Discount Rate | 4% | - | 5% | 5% | | |
| Probability of Payment | 50% | - | 86% | 77% | | |
| Projected Year of Payment | 2026 | - | 2029 | 2028 | | |
(1) Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. For projected year of payment, the amount represents the median of the inputs and is not a weighted average.
Projected contingent payment amounts related to our clinical, regulatory and revenue-based payments and commercialization milestones are discounted back to the current period, primarily using a discounted cash flow model. Significant increases or decreases in projected revenues, probabilities of payment, discount rates or the time until payment is made would have resulted in a significantly lower or higher fair value measurement as of March 31, 2026.
Strategic Investments
The aggregate carrying amount of our strategic investments was comprised of the following:
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| As of |
| (in millions) | March 31, 2026 | | December 31, 2025 |
| Equity method investments | $ | 309 | | | $ | 396 | |
Measurement alternative investments(1, 2) | 396 | | | 286 | |
| $ | 705 | | | $ | 681 | |
(1) Measurement alternative investments are privately-held equity securities without readily determinable fair values that are measured at cost less impairment, if any, adjusted to fair value for any observable price changes in orderly transactions for the identical or a similar investment of the same issuer, recognized in Other, net within our accompanying unaudited consolidated statements of operations.
(2) Includes publicly-held equity securities measured at fair value with changes in fair value recognized in Other, net within our accompanying unaudited consolidated statements of operations.
These investments are classified as Other long-term assets within our accompanying unaudited consolidated balance sheets, in accordance with GAAP and our accounting policies.
As of March 31, 2026, the cost of our aggregated equity method investments exceeded our share of the underlying equity in net assets by $334 million, which represents amortizable intangible assets, in-process research and development (IPR&D), goodwill and deferred tax liabilities.
NOTE C – GOODWILL AND OTHER INTANGIBLE ASSETS
The gross carrying amount of goodwill and other intangible assets and the related accumulated amortization for intangible assets subject to amortization and accumulated goodwill impairment charges are as follows:
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| As of March 31, 2026 | | As of December 31, 2025 |
| (in millions) | Gross Carrying Amount | | Accumulated Amortization/ Write-offs | | Gross Carrying Amount | | Accumulated Amortization/ Write-offs |
| Technology-related | $ | 14,985 | | | $ | (9,549) | | | $ | 14,692 | | | $ | (9,346) | |
| Patents | 497 | | | (387) | | | 493 | | | (382) | |
| Other intangible assets | 2,511 | | | (1,766) | | | 2,482 | | | (1,732) | |
| Amortizable intangible assets | $ | 17,992 | | | $ | (11,702) | | | $ | 17,667 | | | $ | (11,461) | |
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| Goodwill | $ | 28,436 | | | $ | (9,900) | | | $ | 28,182 | | | $ | (9,900) | |
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| IPR&D | $ | 770 | | | | | $ | 813 | | | |
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| Indefinite-lived intangible assets | $ | 770 | | | | | $ | 813 | | | |
The increase in our balance of goodwill and intangible assets is related primarily to our recent acquisitions. Refer to Note B – Acquisitions and Strategic Investments for further detail.
The following represents a roll forward of our goodwill balance by reportable segment:
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| (in millions) | MedSurg | | Cardiovascular | | | | Total |
| Balance as of December 31, 2025 | $ | 7,709 | | | $ | 10,574 | | | | | $ | 18,282 | |
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| Goodwill acquired | 274 | | | — | | | | | 274 | |
| Impact of foreign currency fluctuations and purchase price adjustments | (5) | | | (14) | | | | | (19) | |
| Balance as of March 31, 2026 | $ | 7,977 | | | $ | 10,560 | | | | | $ | 18,536 | |
Goodwill and Other Intangible Asset Impairments
We did not record any goodwill or other intangible asset impairment charges in the first quarter of 2026 or 2025. We test our goodwill balances in the second quarter of each year as of April 1 for impairment, or more frequently if impairment indicators are present or changes in circumstances suggest an impairment may exist. During the first quarter of 2026, an organizational change impacted the composition of reporting units within our Cardiovascular operating segment. Goodwill was reassigned to the affected reporting units based on their relative fair values and an interim goodwill impairment test as of the date of the reorganization was performed. The fair value of each affected reporting unit exceeded its carrying amount indicating no impairment. This change had no impact on our operating segments or reportable segments. Refer to Note A – Significant Accounting Policies to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for further discussion of our annual goodwill and other intangible asset impairment testing.
NOTE D – HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS
Derivative Instruments and Hedging Activities
Our risk from changes in currency exchange rates consists primarily of monetary assets and liabilities; forecasted intercompany and third-party transactions; and net investments in certain subsidiaries. We employ derivative and nonderivative instruments, primarily forward currency contracts, to reduce the risk to our earnings and cash flows associated with changes in currency exchange rates. The success of our currency risk management program depends, in part, on forecasted transactions denominated primarily in euro, Chinese renminbi, Japanese yen, British pound sterling, Korean won, Australian dollar and Swiss franc.
Certain of our currency derivative instruments are designated as cash flow hedges under FASB ASC Topic 815, Derivatives and Hedging, and are intended to protect the U.S. dollar value of forecasted transactions. We also designate certain forward currency contracts as net investment hedges to hedge a portion of our net investments in certain of our entities with functional currencies denominated in euro, Chinese renminbi and Japanese yen. We designate certain euro-denominated debt as net investment hedges to hedge a portion of our net investments in certain of our entities with functional currencies denominated in euro. As of March 31, 2026 and December 31, 2025, we designated as a net investment hedge our €900 million in aggregate principal amount of 0.625% senior notes issued in November 2019 and due in 2027 (December 2027 Notes).
We also use forward currency contracts that are not part of designated hedging relationships as a part of our strategy to manage our exposure to currency exchange rate risk related to monetary assets and liabilities and related forecast transactions.
Refer to Note A – Significant Accounting Policies to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for further discussion relating to derivative instruments and hedging activities.
The following table presents the contractual amounts of our hedging instruments outstanding:
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| (in millions) | | FASB ASC Topic 815 Designation | | As of |
| March 31, 2026 | | December 31, 2025 |
| Forward currency contracts | | Cash flow hedge | | $ | 7,977 | | | $ | 7,270 | |
| Forward currency contracts | | Net investment hedge | | 1,339 | | | 1,292 | |
Foreign currency-denominated debt(1) | | Net investment hedge | | 997 | | | 997 | |
| Forward currency contracts | | Non-designated | | 4,316 | | | 4,163 | |
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| Total Notional Outstanding | | | | $ | 14,630 | | | $ | 13,723 | |
(1) Foreign currency-denominated debt is the €900 million debt principal associated with our December 2027 Notes designated as a net investment hedge.
The remaining time to maturity as of March 31, 2026 is within 60 months for all forward currency contracts designated as cash flow hedges and generally less than one year for all non-designated forward currency contracts. The forward currency contracts designated as net investment hedges generally mature between one and two years. The euro-denominated debt principal designated as a net investment hedge has a contractual maturity of December 1, 2027.
The following presents the effect of our derivative and nonderivative instruments designated as cash flow and net investment hedges under FASB ASC Topic 815 within our accompanying unaudited consolidated statements of operations. Refer to Note L – Changes in Other Comprehensive Income for the total amounts relating to derivative and nonderivative instruments presented within our accompanying unaudited consolidated statements of comprehensive income (loss).
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| Effect of Hedging Relationships on Accumulated Other Comprehensive Income |
| Amount Recognized in OCI on Hedges | | Unaudited Consolidated Statements of Operations(1) | | Amount Reclassified from AOCI into Earnings |
| (in millions) | Pre-Tax Gain (Loss) | Tax Benefit (Expense) | Gain (Loss) Net of Tax | | Location of Amount Reclassified | | Pre-Tax (Gain) Loss | Tax (Benefit) Expense | (Gain) Loss Net of Tax |
| Three Months Ended March 31, 2026 |
| Forward currency contracts | | | | | | | |
| Cash flow hedges | $ | 99 | | $ | (22) | | $ | 76 | | | Cost of products sold | | $ | 3 | | $ | (1) | | $ | 2 | |
Net investment hedges(2) | 17 | | (4) | | 13 | | | Interest expense | | (3) | | 1 | | (2) | |
| Foreign currency-denominated debt | | | | | | | |
Net investment hedges(3) | 21 | | (5) | | 17 | | | Other, net | | — | | — | | — | |
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| Effect of Hedging Relationships on Accumulated Other Comprehensive Income |
| Amount Recognized in OCI on Hedges | | Unaudited Consolidated Statements of Operations(1) | | Amount Reclassified from AOCI into Earnings |
| (in millions) | Pre-Tax Gain (Loss) | Tax Benefit (Expense) | Gain (Loss) Net of Tax | | Location of Amount Reclassified | | Pre-Tax (Gain) Loss | Tax (Benefit) Expense | (Gain) Loss Net of Tax |
| Three Months Ended March 31, 2025 |
| Forward currency contracts | | | | | | | |
| Cash flow hedges | $ | (70) | | $ | 16 | | $ | (55) | | | Cost of products sold | | $ | (41) | | $ | 9 | | $ | (31) | |
Net investment hedges(2) | (17) | | 4 | | (13) | | | Interest expense | | (5) | | 1 | | (4) | |
| Foreign currency-denominated debt | | | | | | |
Net investment hedges(3) | (38) | | 9 | | (30) | | | Other, net | | — | | — | | — | |
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(1) In all periods presented in the table above, the pre-tax (gain) loss amounts reclassified from AOCI to earnings represent the effect of the hedging relationships on earnings.
(2) For our outstanding forward currency contracts designated as net investment hedges, the net gain or loss reclassified from AOCI to earnings as a reduction of Interest expense represents the straight-line amortization of the excluded component as calculated at the date of designation. This initial value of the excluded component has been excluded from the assessment of effectiveness in accordance with FASB ASC Topic 815. In the current and prior periods, we did not recognize any gains or losses on the components included in the assessment of hedge effectiveness in earnings.
(3) For our outstanding euro-denominated debt principal designated as a net investment hedge, the change in fair value attributable to changes in the spot rate is recorded in the CTA component of OCI. No amounts were reclassified from AOCI to current period earnings.
As of March 31, 2026, pre-tax net gains or losses for our derivative instruments designated, or previously designated, as cash flow and net investment hedges under FASB ASC Topic 815 that may be reclassified from AOCI to earnings within the next twelve months are presented below (in millions):
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| | FASB ASC Topic 815 Designation | | Location on Unaudited Consolidated Statements of Operations | | Amount of Pre-Tax Gain (Loss) that may be Reclassified to Earnings |
| Designated Hedging Instrument | | | |
| Forward currency contracts | | Cash flow hedge | | Cost of products sold | | $ | 6 | |
| Forward currency contracts | | Net investment hedge | | Interest expense | | 22 | |
Net gains and losses on currency hedge contracts not designated as hedging instruments offset by net gains and losses from currency transaction exposures are presented below:
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| | Location on Unaudited Consolidated Statements of Operations | | Three Months Ended March 31, | | |
| (in millions) | | | 2026 | | 2025 | | | | |
| Net gain (loss) on currency hedge contracts | | Other, net | | $ | 10 | | | $ | (42) | | | | | |
| Net gain (loss) on currency transaction exposures | | Other, net | | (21) | | | 42 | | | | | |
| Net currency exchange gain (loss) | | | | $ | (11) | | | $ | (0) | | | | | |
Fair Value Measurements
Refer to Note D – Hedging Activities and Fair Value Measurements to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for discussion relating to our derivative and nonderivative instruments and fair value measurements.
The following are the balances of our derivative and nonderivative assets and liabilities:
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| | | Location on Unaudited Consolidated Balance Sheets(1) | | As of |
| (in millions) | | | March 31, 2026 | | December 31, 2025 |
| Derivative and Nonderivative Assets: | | | | | | |
| Designated Hedging Instruments | | | | | | |
| Forward currency contracts | | Other current assets | | $ | 68 | | | $ | 99 | |
| Forward currency contracts | | Other long-term assets | | 111 | | | 57 | |
| | | | | 180 | | | 156 | |
| Non-Designated Hedging Instruments | | | | | | |
| Forward currency contracts | | Other current assets | | 40 | | | 25 | |
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| Total Derivative and Nonderivative Assets | | | | $ | 219 | | | $ | 181 | |
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| Derivative and Nonderivative Liabilities: | | | | | | |
| Designated Hedging Instruments | | | | | | |
| Forward currency contracts | | Other current liabilities | | $ | 74 | | | $ | 109 | |
| Forward currency contracts | | Other long-term liabilities | | 79 | | | 102 | |
Foreign currency-denominated debt(2) | | Long-term debt | | 1,034 | | | 1,055 | |
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| | | | | 1,187 | | | 1,266 | |
| Non-Designated Hedging Instruments | | | | | | |
| Forward currency contracts | | Other current liabilities | | 43 | | | 42 | |
| Total Derivative and Nonderivative Liabilities | | | | $ | 1,230 | | | $ | 1,308 | |
(1) We classify derivative and nonderivative assets and liabilities as current when the settlement date of the contract is one year or less.
(2) Foreign currency-denominated debt is the €900 million debt principal associated with our December 2027 Notes designated as a net investment hedge. A portion of this notional is subject to de-designation and re-designation based on changes in the underlying hedged item.
Recurring Fair Value Measurements
Assets and liabilities measured at fair value on a recurring basis consist of the following:
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| As of |
| | March 31, 2026 | | December 31, 2025 |
| (in millions) | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
| Assets | | | | | | | | | | | | | | | |
| Money market funds and time deposits | $ | 684 | | | $ | — | | | $ | — | | | $ | 684 | | | $ | 1,075 | | | $ | — | | | $ | — | | | $ | 1,075 | |
| Publicly-held equity securities | 16 | | | — | | | — | | | 16 | | | 17 | | | — | | | — | | | 17 | |
| Hedging instruments | — | | | 219 | | | — | | | 219 | | | — | | | 181 | | | — | | | 181 | |
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| | $ | 700 | | | $ | 219 | | | $ | — | | | $ | 919 | | | $ | 1,092 | | | $ | 181 | | | $ | — | | | $ | 1,273 | |
| Liabilities | | | | | | | | | | | | | | | |
| Hedging instruments | $ | — | | | $ | 1,230 | | | $ | — | | | $ | 1,230 | | | $ | — | | | $ | 1,308 | | | $ | — | | | $ | 1,308 | |
| Contingent consideration liability | — | | | — | | | 354 | | | 354 | | | — | | | — | | | 385 | | | 385 | |
| Licensing arrangements | — | | | — | | | — | | | — | | | — | | | — | | | 7 | | | 7 | |
| | $ | — | | | $ | 1,230 | | | $ | 354 | | | $ | 1,584 | | | $ | — | | | $ | 1,308 | | | $ | 392 | | | $ | 1,700 | |
Our investments in money market funds and time deposits are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. These investments are classified as Cash and cash equivalents or Other current assets within our accompanying unaudited consolidated balance sheets, in accordance with GAAP and our accounting policies. In addition to $684 million invested in money market funds and time deposits as of March 31, 2026 and $1.075 billion as of December 31, 2025, we held $850 million in interest-bearing and non-interest-bearing bank accounts as of March 31, 2026 and $965 million as of December 31, 2025.
Our recurring fair value measurements using Level 3 inputs include those related to our contingent consideration liability. Refer to Note B – Acquisitions and Strategic Investments for a discussion of the changes in the fair value of our contingent consideration liability.
Non-Recurring Fair Value Measurements
We hold certain assets and liabilities that are measured at fair value on a non-recurring basis in periods after initial recognition. The fair value of a measurement alternative investment is not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. Refer to Note B – Acquisitions and Strategic Investments for a discussion of our strategic investments and Note C – Goodwill and Other Intangible Assets for a discussion of the fair values of our intangible assets including goodwill.
The fair value of our outstanding debt obligations, excluding finance leases, was $10.586 billion as of March 31, 2026 and $11.154 billion as of December 31, 2025. We determined fair value by using quoted market prices for our publicly registered senior notes, classified as Level 1 within the fair value hierarchy, and face value for commercial paper, term loans and credit facility borrowings outstanding. Refer to Note E – Contractual Obligations and Commitments for a discussion of our debt obligations.
NOTE E – CONTRACTUAL OBLIGATIONS AND COMMITMENTS
Borrowings and Credit Arrangements
The debt maturity schedule for our long-term debt obligations is presented below:
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| (in millions, except interest rates) | Issuance Date | Maturity Date | As of | Coupon Rate(1) |
March 31, 2026 | December 31, 2025 |
| | | | | |
December 2027 Senior Notes(2) | November 2019 | December 2027 | 1,036 | | 1,058 | | 0.625% |
March 2028 Senior Notes(2) | March 2022 | March 2028 | 864 | | 881 | | 1.375% |
| March 2028 Senior Notes | February 2018 | March 2028 | 344 | | 344 | | 4.000% |
| March 2029 Senior Notes | February 2019 | March 2029 | 272 | | 272 | | 4.000% |
March 2029 Senior Notes(2) | February 2024 | March 2029 | 864 | | 881 | | 3.375% |
| June 2030 Senior Notes | May 2020 | June 2030 | 1,200 | | 1,200 | | 2.650% |
March 2031 Senior Notes(2) | March 2022 | March 2031 | 864 | | 881 | | 1.625% |
March 2031 Senior Notes(2) | February 2025 | March 2031 | 979 | | 999 | | 3.000% |
March 2032 Senior Notes(2) | February 2024 | March 2032 | 1,439 | | 1,469 | | 3.500% |
March 2034 Senior Notes(2) | March 2022 | March 2034 | 576 | | 588 | | 1.875% |
March 2034 Senior Notes(2) | February 2025 | March 2034 | 748 | | 764 | | 3.250% |
| November 2035 Senior Notes | November 2005 | November 2035 | 350 | | 350 | | 6.250% |
| March 2039 Senior Notes | February 2019 | March 2039 | 450 | | 450 | | 4.550% |
| January 2040 Senior Notes | December 2009 | January 2040 | 300 | | 300 | | 7.375% |
| March 2049 Senior Notes | February 2019 | March 2049 | 650 | | 650 | | 4.700% |
| Unamortized Debt Issuance Discount and Deferred Financing Costs | | 2026 - 2049 | (72) | | (76) | | |
| Finance Lease Obligation | | Various | 124 | | 125 | | |
| Long-term debt | | | $ | 10,988 | | $ | 11,137 | | |
(1) Coupon rates are semi-annual, except for the euro-denominated notes, which bear an annual coupon.
(2) These notes are euro-denominated and presented in U.S. dollars based on the exchange rate in effect as of March 31, 2026 and December 31, 2025, respectively.
Revolving Credit Agreement
On February 26, 2026, we entered into a new $3.000 billion revolving credit agreement (the 2026 Revolving Credit Agreement) with a global syndicate of commercial banks and we terminated our previous revolving credit agreement (the 2021 Revolving Credit Agreement). The 2026 Revolving Credit Agreement matures on February 26, 2031, with one-year extension options subject to certain conditions, including certain lender approvals. Loans under the 2026 Revolving Credit Agreement will bear interest at applicable base rates plus an applicable margin based on our credit ratings. In addition, we will pay a facility fee based on our credit rating and the total amount of revolving credit commitments (generally irrespective of usage). The 2026 Revolving Credit Agreement contains customary representations, warranties, and covenants, including financial covenants as discussed below under Financial Covenant, as well as customary events of default, which may result in the termination of commitments and acceleration of any outstanding loans.
The 2026 Revolving Credit Agreement provides backing for our commercial paper program, and outstanding commercial paper directly reduces borrowing capacity under the 2026 Revolving Credit Agreement. We had no amounts outstanding under the 2026 Revolving Credit Agreement as of March 31, 2026. We had no amounts outstanding under the 2021 Revolving Credit Agreement as of December 31, 2025. Refer to Note E – Contractual Obligations and Commitments to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for additional information on the 2021 Revolving Credit Agreement.
364-Day Revolving Credit Agreement
On February 26, 2026, we entered into a $2.000 billion 364-day revolving credit agreement (the 364-Day Revolving Credit Agreement) with a global syndicate of commercial banks. The 364-Day Revolving Credit Agreement matures on the date that is 364 days from the earlier of (i) the date that any loans under the 364-Day Revolving Credit Agreement are available to be drawn on, or (ii) the closing of our proposed acquisition of Penumbra. Loans under the 364-Day Revolving Credit Agreement will bear interest at applicable base rates plus an applicable margin based on our credit ratings. In addition, we will pay a facility fee based on our credit rating and the total amount of revolving credit commitments (generally irrespective of usage), as well as a ticking fee based on the credit rating on the undrawn portion of the commitments, accruing from 120 days after the effective date of the 364-Day Revolving Credit Agreement. The 364-Day Revolving Credit Agreement contains substantially similar representations, warranties, covenants, events of default, and financial covenants as the 2026 Revolving Credit Agreement. We had no amounts outstanding under the 364-day Revolving Credit Agreement as of March 31, 2026.
364-Day Delayed Draw Term Loan Agreement
On February 26, 2026, we entered into a $6.000 billion term loan credit agreement (the Term Loan Credit Agreement) with a global syndicate of commercial banks. The Term Loan Credit Agreement permits us to borrow (i) a 364-day delayed draw term loan in an aggregate principal amount of up to $1.000 billion (the Tranche A Loan), and (ii) a 364-day delayed draw term loan in an aggregate principal amount of up to $5.000 billion (the Tranche B Loan), in each case to fund our proposed acquisition of Penumbra. Each of the Tranche A Loan and the Tranche B Loan may only be drawn upon the closing of our proposed acquisition of Penumbra and will mature 364 days thereafter. Prior to the closing date of our proposed acquisition of Penumbra, the Tranche B Loan commitments will be automatically reduced by an amount equal to net cash proceeds received from any equity issuance or debt incurrence, subject to certain exceptions. After the closing date of our proposed acquisition of Penumbra, we are required to prepay any outstanding Tranche B Loans with the net cash proceeds of any subsequent equity issuance or debt incurrence, subject to certain exceptions.
Loans under the Term Loan Credit Agreement will bear interest at applicable base rates, plus an applicable margin based on our credit ratings. In addition, we are required to pay a ticking fee based on the credit rating of the unused commitments, accruing from 120 days after the effective date of the Term Loan Credit Agreement, and will also pay a duration fee equal to 0.10% per annum on the aggregate outstanding principal amount of the Tranche B Loan, payable 90 days following the closing date of our proposed acquisition of Penumbra. The Term Loan Credit Agreement contains substantially similar representations, warranties, covenants, events of default, and financial covenants as the 2026 Revolving Credit Agreement and 364-Day Revolving Credit Agreement. We had no amounts outstanding under the Term Loan Credit Agreement as of March 31, 2026.
Financial Covenant
As of March 31, 2026, we were in compliance with the financial covenant required by our credit agreements described above.
| | | | | | | | | | | | | | |
| | Covenant Requirement | | Actual |
| | | as of March 31, 2026 | | as of March 31, 2026 |
Maximum permitted leverage ratio(1) | | 4.25 times | | 1.87 times |
| | | | |
(1) Ratio of total debt to deemed consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), as defined by each of the 2026 Revolving Credit Agreement, the 364-Day Revolving Credit Agreement and the Term Loan Credit Agreement.
Under each of the 2026 Revolving Credit Agreement, 364-Day Revolving Credit Agreement and Term Loan Credit Agreement, we are required to maintain a maximum permitted leverage ratio, as defined in the agreements, of 3.75 times. The credit agreements provide for higher leverage ratios, at our election, for the period following a qualified acquisition, as defined in the agreements, for which consideration exceeds $1.000 billion. In the event of such an acquisition, for the four succeeding quarters immediately following, including the quarter in which the acquisition occurs, the maximum permitted leverage ratio is 4.75 times. It steps down for the fifth, sixth and seventh succeeding quarters to 4.50 times, 4.25 times and 4.00 times, respectively. Thereafter, a maximum leverage ratio of 3.75 times is required through the remaining term of the applicable credit agreement. The financial covenant is substantially similar to the covenant that was required under the 2021 Revolving Credit Agreement. On November 15, 2024, we announced the closing of our acquisition of Axonics, Inc. (Axonics) which we had previously designated as a qualified acquisition under the 2021 Revolving Credit Agreement, increasing the maximum permitted leverage ratio to 4.75 times at that time. We continued such designation under the new credit agreements. Consequently, as of March 31, 2026, the maximum permitted leverage ratio is 4.25 times. We believe that we have the ability to comply with the financial covenant for the next 12 months.
The financial covenant requirement provides for an exclusion from the calculation of consolidated EBITDA, through maturity, of certain charges and expenses. Permitted exclusions from the calculation of consolidated EBITDA include any non-cash charges and any cash litigation payments (net of any cash litigation receipts), as defined in the credit agreements, provided that the sum of any excluded net cash litigation payments since December 31, 2025 does not exceed $1.160 billion. As of March 31, 2026, we had $1.143 billion of the total permitted exclusion remaining.
Any inability to maintain compliance with this covenant could require us to seek to renegotiate the terms of our credit agreements or seek waivers from compliance with this covenant, both of which could result in additional borrowing costs. Further, there can be no assurance that our lenders would agree to such new terms or grant such waivers on terms acceptable to us. In this case, all commitments under the 2026 Revolving Credit Agreement, 364-Day Revolving Credit Agreement and Term Loan Credit Agreement would terminate, and any amounts borrowed under such agreements would become immediately due and payable. Furthermore, any termination of the 2026 Revolving Credit Agreement or the 364-Day Revolving Credit Agreement, as applicable, may negatively impact the credit ratings assigned to our commercial paper program, which may impact our ability to refinance any then outstanding commercial paper as it becomes due and payable.
Commercial Paper
Our commercial paper program is backed by the 2026 Revolving Credit Agreement and the 364-Day Revolving Credit Agreement, as applicable. Outstanding commercial paper directly reduces borrowing capacity under the applicable agreements. We had no amounts outstanding under our commercial paper program as of March 31, 2026 or December 31, 2025.
Senior Notes
We had senior notes outstanding of $10.935 billion as of March 31, 2026 and $11.343 billion as of December 31, 2025. Our senior notes were issued in public offerings, are redeemable prior to maturity and are not subject to sinking fund requirements. Our senior notes are unsecured, unsubordinated obligations and rank on parity with each other. These notes are effectively junior to liabilities of our subsidiaries (refer to Other Arrangements below).
In February 2025, American Medical Systems Europe B.V. (AMS Europe), an indirect, wholly owned subsidiary of Boston Scientific, completed a registered public offering of €1.500 billion in aggregate principal amount of euro-denominated senior notes comprised of €850 million of 3.000% Senior Notes due 2031 and €650 million of 3.250% Senior Notes due 2034 (collectively, the 2025 Eurobonds). Boston Scientific has fully and unconditionally guaranteed all of AMS Europe's obligations under the 2025 Eurobonds, in addition to all of AMS Europe's obligations under euro-denominated senior notes that were previously issued by AMS Europe in 2024 and 2022, and no other subsidiary of Boston Scientific will guarantee these
obligations. AMS Europe is a “finance subsidiary” as defined in Rule 13-01(a)(4)(vi) of Regulation S-X. The financial condition, results of operations and cash flows of AMS Europe are consolidated in the financial statements of Boston Scientific. The 2025 Eurobonds offering resulted in cash proceeds of $1.558 billion, net of investor discounts and issuance costs.
We used the net proceeds from the 2025 Eurobonds offering to fund the repayment at maturity of AMS Europe’s €1.000 billion 0.750% Senior Notes due March 2025 and to pay accrued and unpaid interest with respect to such notes. Additionally, we used the remaining net proceeds for general corporate purposes, including, among other things, short term investments, reduction of short term debt, funding of working capital and acquisitions. During the second quarter of 2025, we also repaid at maturity our $500 million 1.900% Senior Notes due June 2025 and accrued and unpaid interest with respect to such notes.
Other Arrangements
We have accounts receivable factoring programs in certain European countries and with commercial banks in China and Japan which include promissory notes discounting programs. We account for our factoring programs as sales under FASB ASC Topic 860, Transfers and Servicing. We have no retained interest in the transferred receivables, other than collection and administration, and once sold, the accounts receivable are no longer available to satisfy creditors in the event of bankruptcy. Amounts de-recognized for accounts and notes receivable, which are excluded from Trade accounts receivable, net within our accompanying unaudited consolidated balance sheets, are aggregated by contract denominated currency below (in millions):
| | | | | | | | | | | | | | | | | | | | | | | |
| Factoring Arrangements | As of March 31, 2026 | | As of December 31, 2025 |
Amount
De-recognized | | Weighted Average
Interest Rate | | Amount
De-recognized | | Weighted Average
Interest Rate |
| Euro denominated | $ | 175 | | | 2.6 | % | | $ | 193 | | | 3.6 | % |
| Yen denominated | 221 | | | 1.6 | % | | 230 | | | 1.4 | % |
| | | | | | | |
Other Contractual Obligations and Commitments
We had outstanding letters of credit of $193 million as of March 31, 2026 and $203 million as of December 31, 2025, which consisted primarily of bank guarantees and collateral for workers' compensation insurance arrangements. As of March 31, 2026 and December 31, 2025 we had not recognized a related liability for our outstanding letters of credit within our accompanying unaudited consolidated balance sheets.
We have a supplier financing program offered primarily in the U.S. that enables our suppliers to opt to receive early payment at a nominal discount, while allowing us to lengthen our payment terms and optimize working capital. Our standard payment term in the U.S. is 90 days. All outstanding payables related to the supplier finance program are classified within Accounts Payable within our unaudited consolidated balance sheets and were $145 million as of March 31, 2026 and $144 million as of December 31, 2025.
Refer to Note E – Contractual Obligations and Commitments to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for additional information on our borrowings and credit agreements.
NOTE F – SUPPLEMENTAL BALANCE SHEET INFORMATION
Components of selected captions within our accompanying unaudited consolidated balance sheets are as follows:
Trade accounts receivable, net
| | | | | | | | | | | |
| | As of |
| (in millions) | March 31, 2026 | | December 31, 2025 |
| Trade accounts receivable | $ | 3,154 | | | $ | 3,058 | |
| Allowance for credit losses | (127) | | | (132) | |
| | $ | 3,027 | | | $ | 2,926 | |
Inventories
| | | | | | | | | | | |
| | As of |
| (in millions) | March 31, 2026 | | December 31, 2025 |
| Finished goods | $ | 1,931 | | | $ | 1,849 | |
| Work-in-process | 259 | | | 246 | |
| Raw materials | 928 | | | 849 | |
| | $ | 3,117 | | | $ | 2,943 | |
Property, plant and equipment, net
| | | | | | | | | | | |
| | As of |
| (in millions) | March 31, 2026 | | December 31, 2025 |
| Land | $ | 188 | | | $ | 173 | |
| Buildings and improvements | 2,518 | | | 2,484 | |
| Equipment, furniture and fixtures | 3,916 | | | 3,827 | |
| Capital in progress | 1,115 | | | 1,161 | |
| | 7,737 | | | 7,645 | |
| Less: accumulated depreciation | 3,674 | | | 3,610 | |
| | $ | 4,063 | | | $ | 4,036 | |
NOTE G – INCOME TAXES
The following table provides a reconciliation of our reported tax rate to the rate from continuing operations:
| | | | | | | | | | | | | | | |
| Three Months Ended
March 31, | | |
| 2026 | | 2025 | | | | |
| Reported tax rate | (15.2) | % | | 16.5 | % | | | | |
Impact of certain receipts/charges(1) | 32.6 | % | | 1.5 | % | | | | |
| Rate from continuing operations | 17.4 | % | | 18.0 | % | | | | |
(1) These receipts/charges are taxed at different rates than our rate from continuing operations.
Our reported tax rate is affected by recurring items such as the amount of our earnings subject to differing tax rates in foreign jurisdictions and the impact of certain receipts and charges that are taxed at rates that differ from our rate from continuing operations.
In the first quarter of 2026, the principal reason for the difference between our tax rate from continuing operations and our reported tax rate relates to a discrete tax benefit of $384 million to reflect a change in the anticipated future tax rate at which we expect to recover certain capitalized expenses.
In the first quarter of 2025, the principal reasons for the difference between our tax rate from continuing operations and our reported tax rate relate to certain acquisition-related net charges, and discrete tax benefits primarily related to stock-based compensation.
As of March 31, 2026, we had $609 million of gross unrecognized tax benefits, of which a net $512 million, if recognized, would affect our effective tax rate. As of December 31, 2025, we had $596 million of gross unrecognized tax benefits, of which a net $501 million, if recognized, would affect our effective tax rate. The change in gross unrecognized tax benefits relates to accruals for current year positions.
NOTE H – COMMITMENTS AND CONTINGENCIES
We are involved in various legal proceedings, including intellectual property, product liability, securities and commercial claims and disputes, employment matters, environmental matters, governmental inquiries, investigations and proceedings, and other legal matters that arise from time to time in the ordinary course of our business, including those described below.
In recent years, we have successfully negotiated closure of several long-standing legal matters and have received favorable rulings in several other matters, however, there continues to be outstanding litigation and disputes. Adverse outcomes in one or more of these matters could have a material adverse effect on our ability to sell certain products and on our operating margins, financial position, results of operations and/or liquidity.
Intellectual property rights, particularly patents and trade secrets, play a significant role in product development and differentiation. From time to time, we face litigation initiated against us by others, including our competitors, claiming that our current or former product offerings infringe patents owned or licensed by them. Intellectual property litigation is inherently complex and unpredictable. In addition, competing parties frequently file multiple suits to leverage patent portfolios across product lines, technologies and geographies and to balance risk and exposure between the parties. In some cases, several competitors are parties in the same proceeding, or in a series of related proceedings, or litigate multiple features of a single class of devices. These dynamics frequently drive settlement not only for individual cases, but also for a series of pending and potentially related and unrelated cases. Although monetary and injunctive relief is typically sought, remedies and restitution are generally not determined until the conclusion of the trial court proceedings and can be modified on appeal. Accordingly, the outcomes of individual cases are difficult to time, predict or quantify and are often dependent upon the outcomes of other cases in other geographies.
Product liability, securities, environmental and commercial claims have been asserted against us and similar or other claims may be asserted against us in the future related to events not known to management at the present time. We maintain an insurance policy providing limited coverage against securities claims and we are substantially self-insured with respect to product liability and environmental claims and fully self-insured with respect to intellectual property infringement claims. The absence of significant third-party insurance coverage increases our potential exposure to unanticipated claims or adverse decisions. Product liability claims, securities, environmental and commercial litigation and other legal proceedings in the future, regardless of their outcome, could have a material adverse effect on our ability to sell certain products and on our operating margins, financial position, results of operations and/or liquidity.
In addition, like other companies in the medical device industry, we are subject to extensive regulation by national, state and local governmental agencies in the U.S. and other countries in which we operate. From time to time, we receive inquiries and have ongoing discussions with governmental agencies with respect to our operations, such as the Securities and Exchange Commission (SEC), the Department of Justice (DOJ) and other U.S. and foreign regulators. These include ongoing and any future investigations with respect to alleged Foreign Corrupt Practices Act (FCPA) violations, U.S.-based subpoenas and DOJ Civil Investigative Demands (CID), and qui tam actions or other governmental investigations often involving regulatory, marketing and other business practices. From time to time, we also self-disclose potential concerns to regulators. It is our standard practice to cooperate with governmental agencies when responding to such inquiries and investigating such matters. These governmental investigations and inquiries could result in the commencement of civil and criminal proceedings, substantial fines, penalties and administrative remedies and have a material adverse effect on our financial position, results of operations and/or liquidity. For additional information, refer to Note I – Commitments and Contingencies to our audited financial statements contained in Item 8 of our most recent Annual Report on Form 10-K.
In accordance with FASB ASC Topic 450, Contingencies, we accrue anticipated costs of settlement, damages, losses for claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range.
Our accrual for legal matters that are probable and estimable was $229 million as of March 31, 2026 and $242 million as of December 31, 2025 and includes certain estimated costs of settlement, damages and defense primarily related to product liability cases or claims and matters assumed from acquired companies. We record certain legal charges, credits and costs of defense, which we consider to be unusual or infrequent and significant as Litigation-related net charges (credits) within our accompanying unaudited consolidated financial statements. We did not record any litigation-related net charges (credits) during the first quarter of 2026 or 2025. All other legal charges, credits and costs are recorded within Selling, general and administrative expenses within our accompanying unaudited consolidated statements of operations.
We continue to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could materially adversely impact our operating results, cash flows and/or our ability to comply with our financial covenant required by our credit arrangements.
In management's opinion, we are not currently involved in any legal proceedings, other than those disclosed in our most recent Annual Report on Form 10-K and those specifically identified below, which, individually or in the aggregate, could have a material adverse effect on our financial condition, operations and/or cash flows. Unless included in our legal accrual or otherwise indicated below, a range of loss associated with any individual material legal proceeding cannot be reasonably estimated.
Patent Litigation
On November 20, 2017, The Board of Regents, University of Texas System and TissueGen. Inc. (collectively, UT), served a lawsuit against us in the Western District of Texas. The complaint against the Company alleges patent infringement of two U.S. patents owned by UT, relating to “Drug Releasing Biodegradable Fiber Implant” and “Drug Releasing Biodegradable Fiber for Delivery of Therapeutics,” and affects the manufacture, use and sale of our Synergy™ Stent System. UT primarily seeks a reasonable royalty. On March 12, 2018, the District Court for the Western District of Texas dismissed the action and transferred it to the United States District Court for the District of Delaware. On September 5, 2019, the Court of Appeals for the Federal Circuit affirmed the dismissal of the District Court for the Western District of Texas. In April 2020, the United States Supreme Court denied the UT’s Petition for Certiorari. UT proceeded with its case against the Company in Delaware. In January 2023, a jury trial was held on the issue of whether the one UT patent still asserted in the case was valid and whether it was infringed by the Company. On January 31, 2023, a jury concluded that UT’s patent was valid and willfully infringed by the Company, and awarded UT $42 million in damages. Following the trial, UT filed a motion seeking prejudgment interest and enhanced damages. The Company filed a motion seeking judgment as a matter of law in its favor or alternatively a new trial. On June 5, 2024, the Court granted the Company’s motion for judgment as a matter of law of no willful infringement, but otherwise denied the Company’s motions. The Court also denied UT’s motion for enhanced damages, awarded approximately $7 million in pre-judgment interest, and awarded post-judgment interest. On July 3, 2024, UT and the Company each filed a notice of appeal. Oral Argument is scheduled for June 8, 2026.
Product Liability Litigation
Multiple product liability cases or claims related to transvaginal surgical mesh products designed to treat stress urinary incontinence and pelvic organ prolapse have been asserted against us, predominantly in the United States, Canada, the United Kingdom, Scotland, Ireland, and Australia. Plaintiffs generally seek monetary damages based on allegations of personal injury associated with the use of our transvaginal surgical mesh products, including design and manufacturing claims, failure to warn, breach of warranty, fraud, violations of state consumer protection laws and loss of consortium claims. We have entered into individual and master settlement agreements or are in the final stages of entering agreements with certain plaintiffs' counsel, to resolve the majority of these cases and claims. All settlement agreements were entered into solely by way of compromise and without any admission or concession by us of any liability or wrongdoing.
We have established a product liability accrual for remaining claims asserted against us associated with our transvaginal surgical mesh products and the costs of defense thereof. We continue to engage in discussions with plaintiffs’ counsel regarding potential resolution of pending cases and claims, which we continue to vigorously contest. The final resolution of the cases and claims is uncertain and could have a material impact on our results of operations, financial condition and/or liquidity. Trials involving our transvaginal surgical mesh products have resulted in both favorable and unfavorable judgments for us. We do not believe that the judgment in any one trial is representative of potential outcomes of all cases or claims related to our transvaginal surgical mesh products.
On February 20, 2026, counsel representing individuals claiming they have been injured by their spinal cord stimulation (SCS) devices filed a motion with the Judicial Panel on Multidistrict Litigation (JPML). The motion seeks the transfer of various actions for coordinated or consolidated pretrial proceedings (In re: Abbott and Boston Scientific Spinal Cord Stimulator Products Liability Litigation, MDL No. 3181). The motion identified eight cases filed against the Company alleging various injuries and damages arising from the Company’s SCS products. Several additional cases have subsequently been filed and included in the motion since the JPML motion was filed. The Judicial Panel on Multidistrict Litigation has set a hearing on the motion for May 28, 2026.
Other Proceedings
On March 5, 2026, purported Company shareholder John Rudolph Troike, individually and on behalf of all others similarly situated, filed a putative securities class action complaint in the United States District Court for the District of Massachusetts against the Company, Michael F. Mahoney, Jonathan R. Monson, Kenneth M. Stein, Joseph M. Fitzgerald, and Nicholas Spadea-Anello, stemming from the drop in the Company’s stock price on February 4, 2026 following the release of the Company’s fourth quarter and full year 2025 results. The complaint alleges violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 based on allegedly false and misleading statements concerning the Company’s financial guidance and anticipated growth in the U.S. electrophysiology division. The complaint seeks, among other relief, unspecified compensatory damages, unspecified equitable relief, and costs and expenses.
On March 16, 2026, purported Company shareholder Greg Valen (the “Valen Derivative Complaint”), and on April 23, 2026, purported Company shareholder Elliot Feder (the “Feder Derivative Complaint”), each filed a shareholder derivative complaint in the United States District Court for the District of Massachusetts against the Company, Michael F. Mahoney, Jonathan R. Monson, Kenneth M. Stein, Joseph M. Fitzgerald, Nicholas Spadea-Anello, Yoshiaki Fujimori, David C. Habiger, Edward J. Ludwig, Jessica L. Mega, Susan E. Morano, Cheryl Pegus, John E. Sununu, David S. Wichmann, and Ellen M. Zane, each containing substantially the same set of factual allegations as those asserted in the related securities class action case above. Each complaint seeks, among other relief, unspecified compensatory damages, unspecified equitable relief, and costs and expenses. On April 8, 2026, the Court stayed the Valen Derivative Complaint until the final resolution of the anticipated motion to dismiss in the related securities class action case.
On March 23, 2026, the Company received a letter dated March 18, 2026, from a purported Company shareholder, Roberta Poznick, demanding that the Company’s Board of Directors take action against Michael F. Mahoney, Jonathan R. Monson, Kenneth M. Stein, Joseph M. Fitzgerald, Nicholas Spadea-Anello, Yoshiaki Fujimori, David C. Habiger, Edward J. Ludwig, Jessica L. Mega, Susan E. Morano, Cheryl Pegus, John E. Sununu, David S. Wichmann, Ellen M. Zane, and other unidentified individuals and entities relating to substantially the same set of factual allegations as those asserted in the related securities class action case above.
NOTE I – WEIGHTED AVERAGE SHARES OUTSTANDING
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| (in millions) | 2026 | | 2025 | | | | |
| Weighted average shares outstanding — basic | 1,484.9 | | | 1,477.2 | | | | | |
| Net effect of common stock equivalents | 10.1 | | | 15.9 | | | | | |
| Weighted average shares outstanding - diluted | 1,495.0 | | | 1,493.1 | | | | | |
The following securities were excluded from the calculation of weighted average shares outstanding - diluted because their effect in the periods presented below would have been antidilutive:
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| (in millions) | 2026 | | 2025 | | | | |
Stock options outstanding(1) | 1 | | 1 | | | | |
(1) Represents stock options outstanding pursuant to our employee stock-based compensation plans with exercise prices that were greater than the average fair market value of our common stock for the related periods.
We base Net income (loss) per common share - diluted upon the weighted-average number of common shares and common stock equivalents outstanding during each year. Potential common stock equivalents are determined using the treasury stock method. We exclude stock options and stock awards from the calculation if the effect would be anti-dilutive.
We issued approximately three million shares of our common stock in the first quarter of 2026 and approximately five million shares in the first quarter of 2025. Shares were issued following the exercise of stock options, vesting of restricted stock units or purchases under our employee stock purchase plan. We did not repurchase any shares of our common stock in the first quarter of 2026 or 2025. On February 18, 2026, our Board of Directors approved an increase to the existing authorization to repurchase up to $1.000 billion of our common stock by an additional $4.000 billion. As a result, our stock repurchase program is now authorized to repurchase up to $5.000 billion of our common stock. As of March 31, 2026, we had the full amount remaining available under the authorization.
NOTE J – SEGMENT REPORTING
We aggregate our core businesses into two reportable segments: MedSurg and Cardiovascular, each of which generates revenues from the sale of medical devices. In accordance with FASB ASC Topic 280, Segment Reporting, we identified our reportable segments based on the nature of our products, production processes, type of customer, selling and distribution methods and regulatory environment, as well as the economic characteristics of each of our operating segments. In the fourth quarter of 2025, we reorganized our operating segments; this change had no impact on our reportable segments. Our chief operating decision maker (CODM) is our President and Chief Executive Officer.
We measure and evaluate our reportable segments based on their respective net sales, cost of goods sold, selling, general and administrative expenses, research and development expenses, operating income, excluding intersegment profits, and operating income as a percentage of net sales, all based on internally-derived standard currency exchange rates to exclude the impact of foreign currency, which may be updated from year to year. We exclude from segment expenses and segment operating income certain corporate-related expenses and certain transactions or adjustments that our CODM considers to be non-operational, such as amounts related to amortization expense, goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), litigation-related net charges (credits) and European Union (EU) Medical Device Regulation (MDR) implementation costs. Although we exclude these amounts from segment expenses and segment operating income, they are included in reported Income (loss) before income taxes within our accompanying unaudited consolidated statements of operations and are included in the reconciliation below. The CODM uses segment operating income in the strategic plan, annual operating plan and other forecasting cycles. During these forecasting cycles, the CODM compares budget versus actual results to evaluate both internal and external events and conditions, which are used in assessing the performance of the reportable segments and to allocate resources across our reportable segments. Refer to Note K – Revenue for net sales by reportable segment presented in accordance with GAAP.
A reconciliation of sales and operating income for the reportable segments to the applicable line items within our accompanying unaudited consolidated statements of operations is as follows. Prior period amounts have been restated at constant currency to conform to current year presentation.
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| Three Months Ended March 31, 2026 |
(in millions, except percentages) | MedSurg | % of Net Sales | Cardiovascular | % of Net Sales | Total |
| Net sales of reportable segments | $ | 1,700 | | | $ | 3,502 | | | $ | 5,202 | |
| Impact of foreign currency fluctuations | | | | | 1 | |
| Total net sales | | | | | $ | 5,203 | |
| Segment expenses: | | | | | |
| Cost of products sold | 478 | | 28.1 | % | 1,067 | | 30.5 | % | |
| Selling, general and administrative expenses | 557 | | 32.8 | % | 959 | | 27.4 | % | |
| Research and development expenses | 127 | | 7.5 | % | 343 | | 9.8 | % | |
Other segment items(1) | 5 | | 0.3 | % | 7 | | 0.2 | % | |
Segment operating income(2) | 533 | | 31.3 | % | 1,125 | | 32.1 | % | 1,658 | |
| Unallocated amounts: | | | | | |
| Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments | | | | | (199) | |
Goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and EU MDR implementation costs | | | | | (126) | |
| Amortization expense | | | | | (232) | |
| Operating income (loss) | | | | | 1,101 | |
| Other income (expense), net | | | | | 61 | |
| Income (loss) before income taxes | | | | | $ | 1,162 | |
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| Three Months Ended March 31, 2025 |
(in millions, except percentages) | MedSurg | % of Net Sales | Cardiovascular | % of Net Sales | Total |
| Net sales of reportable segments | $ | 1,609 | | | $ | 3,157 | | | $ | 4,766 | |
| Impact of foreign currency fluctuations | | | | | (104) | |
| Total net sales | | | | | $ | 4,663 | |
| Segment expenses: | | | | | |
| Cost of products sold | 435 | | 27.0 | % | 926 | | 29.3 | % | |
| Selling, general and administrative expenses | 512 | | 31.8 | % | 873 | | 27.7 | % | |
| Research and development expenses | 121 | | 7.5 | % | 283 | | 9.0 | % | |
Other segment items(1) | 6 | | 0.3 | % | 6 | | 0.2 | % | |
Segment operating income(2) | 536 | | 33.3 | % | 1,068 | | 33.8 | % | 1,604 | |
| Unallocated amounts: | | | | | |
| Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments | | | | | (255) | |
Goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and EU MDR implementation costs | | | | | (209) | |
| Amortization expense | | | | | (219) | |
| Operating income (loss) | | | | | 921 | |
| Other income (expense), net | | | | | (116) | |
| Income (loss) before income taxes | | | | | $ | 805 | |
(1) Includes royalty expense.
(2) Calculated as Net sales of reportable segments less Segment expenses.
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| Three Months Ended
March 31, | |
Depreciation expense (in millions) | 2026 | | 2025 | | | |
| MedSurg | $ | 29 | | | $ | 27 | | | | |
| Cardiovascular | 89 | | | 78 | | | | |
| | | | | | |
| | | | | | |
| Consolidated depreciation expense | $ | 118 | | | $ | 106 | | | | |
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| As of |
Total assets (in millions) | March 31, 2026 | | December 31, 2025 |
| MedSurg | $ | 3,726 | | | $ | 3,392 | |
| Cardiovascular | 8,251 | | | 7,999 | |
| Total assets of reportable segments | 11,977 | | | 11,391 | |
| | | |
| Goodwill | 18,536 | | | 18,282 | |
| Other intangible assets, net | 7,060 | | | 7,019 | |
| All other corporate assets | 6,778 | | | 6,981 | |
| | $ | 44,351 | | | $ | 43,673 | |
| | | | | | | | | | | | | |
| As of |
Long-lived assets (in millions) | March 31, 2026 | | December 31, 2025 | | |
| U.S. | $ | 1,948 | | | $ | 1,919 | | | |
| Ireland | 750 | | | 750 | | | |
| Costa Rica | 640 | | | 637 | | | |
| Other countries | 725 | | | 730 | | | |
| Property, plant and equipment, net | 4,063 | | | 4,036 | | | |
| Goodwill | 18,536 | | | 18,282 | | | |
| Other intangible assets, net | 7,060 | | | 7,019 | | | |
Operating lease right-of-use assets in Other long-term assets | 547 | | | 465 | | | |
| | $ | 30,207 | | | $ | 29,802 | | | |
NOTE K – REVENUE
We generate revenue primarily from the sale of single-use medical devices and present revenue net of sales taxes within our accompanying unaudited consolidated statements of operations. In the fourth quarter of 2025, we reorganized our business structure into four operating segments. The following tables disaggregate our revenue from contracts with customers by business unit and geographic region (in millions). Generally, we allocate revenue from contracts with customers to geographic regions based on the location where the sale originated. We have revised prior periods to conform to current year presentation.
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| Three Months Ended March 31, |
| 2026 | | 2025 |
| Businesses | U.S. | | Int'l | | Total | | U.S. | | Int'l | | Total |
| Endoscopy | $ | 446 | | | $ | 290 | | | $ | 736 | | | $ | 420 | | | $ | 253 | | | $ | 673 | |
| Urology | 465 | | | 182 | | | 646 | | | 469 | | | 165 | | | 633 | |
| Neuromodulation | 236 | | | 82 | | | 318 | | | 204 | | | 67 | | | 271 | |
| MedSurg | 1,147 | | | 554 | | | 1,701 | | | 1,093 | | | 484 | | | 1,577 | |
| Interventional Cardiology & Vascular Therapies | 552 | | | 692 | | | 1,244 | | | 467 | | | 657 | | | 1,124 | |
| Watchman | 462 | | | 44 | | | 506 | | | 390 | | | 34 | | | 425 | |
| Electrophysiology | 603 | | | 302 | | | 905 | | | 511 | | | 219 | | | 730 | |
| Cardiac Rhythm Management | 349 | | | 229 | | | 578 | | | 358 | | | 220 | | | 578 | |
| Interventional Oncology & Embolization | 170 | | | 99 | | | 268 | | | 142 | | | 87 | | | 228 | |
| Cardiovascular | 2,137 | | | 1,366 | | | 3,503 | | | 1,868 | | | 1,218 | | | 3,085 | |
| Total Net Sales | $ | 3,284 | | | $ | 1,920 | | | $ | 5,203 | | | $ | 2,960 | | | $ | 1,702 | | | $ | 4,663 | |
Refer to Note J – Segment Reporting for information on our reportable segments.
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| Three Months Ended March 31, | | |
| Geographic Regions | 2026 | | 2025 | | | | |
| U.S. | $ | 3,284 | | | $ | 2,960 | | | | | |
| Europe, Middle East and Africa | 932 | | | 846 | | | | | |
| Asia-Pacific | 803 | | | 701 | | | | | |
| Latin America and Canada | 185 | | | 155 | | | | | |
| Total Net Sales | $ | 5,203 | | | $ | 4,663 | | | | | |
Deferred Revenue
Contract liabilities are classified within Other current liabilities and Other long-term liabilities within our accompanying unaudited consolidated balance sheets. Our deferred revenue balance was $686 million as of March 31, 2026 and $682 million
as of December 31, 2025. Our contract liabilities are primarily composed of deferred revenue related to the LATITUDE™ Patient Management System within our Cardiovascular business, for which revenue is recognized over the average service period based on device and patient longevity. Our contract liabilities also include deferred revenue related to the LUX-Dx II+™ Insertable Cardiac Monitor system, also within our Cardiovascular business, for which revenue is recognized over the average service period based on device longevity and usage..
Variable Consideration
For additional information on variable consideration, refer to Note A – Significant Accounting Policies to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K.
NOTE L – CHANGES IN OTHER COMPREHENSIVE INCOME
The following tables provide the reclassifications out of Other comprehensive income (loss), net of tax attributable to Boston Scientific common stockholders:
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| (in millions) | Foreign Currency Translation Adjustment | | Net Change in Derivative Financial Instruments | | | | Net Change in Defined Benefit Pensions and Other Items | | Total |
| Balance as of December 31, 2025 | $ | (561) | | | $ | (48) | | | | | $ | (2) | | | $ | (610) | |
| Other comprehensive income (loss) before reclassifications | 135 | | | 76 | | | | | 1 | | | 212 | |
| (Income) loss amounts reclassified from accumulated other comprehensive income | (2) | | | 2 | | | | | (0) | | | (0) | |
| Total other comprehensive income (loss) | 132 | | | 79 | | | | | 1 | | | 211 | |
| Balance as of March 31, 2026 | $ | (428) | | | $ | 31 | | | | | $ | (1) | | | $ | (399) | |
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| (in millions) | Foreign Currency Translation Adjustment | | Net Change in Derivative Financial Instruments | | | | Net Change in Defined Benefit Pensions and Other Items | | Total |
| Balance as of December 31, 2024 | $ | 136 | | | $ | 155 | | | | | $ | (16) | | | $ | 275 | |
| Other comprehensive income (loss) before reclassifications | (212) | | | (55) | | | | | (0) | | | (267) | |
| (Income) loss amounts reclassified from accumulated other comprehensive income | (4) | | | (31) | | | | | (0) | | | (35) | |
| Total other comprehensive income (loss) | (216) | | | (86) | | | | | (0) | | | (302) | |
| Balance as of March 31, 2025 | $ | (80) | | | $ | 69 | | | | | $ | (17) | | | $ | (28) | |
Refer to Note D – Hedging Activities and Fair Value Measurements for further detail on our net investment hedges recorded in Foreign currency translation adjustment and our cash flow hedges recorded in Net change in derivative financial instruments.
NOTE M – NEW ACCOUNTING PRONOUNCEMENTS
Periodically, new accounting pronouncements are issued by the FASB or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date. Prior to their effective date, we evaluate the pronouncements to determine the potential effects of adoption on our accompanying unaudited consolidated financial statements.
Standards to be Implemented
In November 2024, the FASB issued ASC Update No. 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures. Update No. 2024-03 aims to improve transparency of expense disclosures to enhance investor understanding of an entity's performance and to assist in comparing an entity's performance over time and with that of other entities. Update No. 2024-03 modifies the disclosures over certain costs and expenses and requires entities to disclose (1) the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion,
included in each relevant expense caption, (2) within the same disclosure, certain amounts that are already required to be disclosed under current GAAP, (3) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and (4) the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Update No. 2024-03 allows for early adoption and requires either prospective adoption to financial statements issued for reporting periods after the effective date, or retrospectively to any or all prior periods presented in the financial statements. We are currently assessing the impact of Update No. 2024-03 to our unaudited consolidated financial statements.
In September 2025, the FASB issued ASC Update No. 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40). Update No. 2025-06 modernizes the accounting for software costs by removing all references to a sequential software development method, requiring entities to begin capitalizing software costs when (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used for its intended purpose. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Update No. 2025-06 allows for early adoption and permits either a prospective, modified prospective, or retrospective adoption approach. We do not expect the adoption of Update No. 2025-06 to have a material impact to our unaudited consolidated financial statements.
In September 2025, the FASB issued ASC Update No. 2025-07 Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (606): Derivatives scope refinements and scope clarification for share-based noncash consideration from a customer in a revenue contract. Update No. 2025-07 clarifies the application of derivative accounting to certain contracts and refines the guidance for share-based noncash consideration received from customers. Specifically, Update No. 2025-07 introduces a scope exception for contracts that are not exchange-traded and whose underlying is tied to operations or activities specific to one of the parties to the contract. It also clarifies that share-based noncash consideration from a customer should initially be accounted for under Topic 606 until the right to receive or retain such consideration becomes unconditional. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Update No. 2025-07 allows for early adoption and the amendments can be applied either prospectively or on a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings. We do not expect the adoption of Update No. 2025-07 to have a material impact to our unaudited consolidated financial statements.
No other new accounting pronouncements issued or effective in the period had or are expected to have a material impact on our accompanying unaudited consolidated financial statements.