Edwards Lifesciences Corp (EW) — Q1 2024 Earnings Call Transcript

Thanks a lot, Diego, and good afternoon, and thank you all for joining us. With me on today's call is our CEO, Bernard Zovighian, and our CFO, Scott Ullem. Also joining us for the Q&A portion of the call will be Larry Wood, our Global President of TAVR and Surgical Structural Heart; Daveen Chopra, our global leader of TMTT; Wayne Markowitz, our Global Leader of Surgical Structural Heart; and Katie Szyman, our Global Leader of Critical Care. Just after the close of regular trading, Edwards Lifesciences released first quarter 2024 financial results. During today's call, management will discuss these results included in the press release and accompanying financial schedules and then use the remaining time for Q&A. Please note that management will be making forward-looking statements that are based on estimates, assumptions, and projections. These statements include, but are not limited to, financial guidance and expectations for longer-term growth opportunities, regulatory approvals, clinical trials, litigation, reimbursement, competitive matters, and foreign currency fluctuations. These statements speak only as of the date on which they were made, and Edwards does not undertake any obligation to update them after today. Additionally, the statements involve risks and uncertainties that could cause actual results to differ materially. Information concerning factors that could cause these differences and important product safety information may be found in the press release, our 2023 annual report on Form 10-K, and Edwards' other SEC filings, all of which are available on the company's website at edwards.com. Finally, unless otherwise noted, our commentary on sales growth refers to constant currency sales growth, which is defined in the quarterly press release issued earlier today. Reconciliations between GAAP and non-GAAP numbers mentioned during this call are also included in today's press release. With that, I'd like to turn the call over to Bernard for his comments. Bernard?

Thank you, Mark. We are pleased with our total company performance with first quarter sales growth of 10% to $1.6 billion versus the year-ago period. As a result, we are raising our 2024 sales guidance to the high end of 8% to 10%. As we look ahead, I'd like to share some perspective about the strategic direction of our company. Edwards is well positioned to extend our leadership and deliver sustainable growth, driven by the strategic investments we have made across our transcatheter platforms to address the large and growing needs of patients impacted by aortic, mitral, and tricuspid disease. We remain confident in the many opportunities to grow TAVR over the long term. In addition, TMTT is becoming an increasingly significant contributor to Edwards' growth, and we expect this will continue. An important element in our valve innovation leadership is our advanced tissue technology. We have been an innovator in tissue technology for more than 50 years and we are pleased with our latest technology, RESILIA. With differentiated evidence of advanced durability, this technology is used across our comprehensive portfolio with a focus on lifetime management of patients we serve. We are pleased that 0.5 million patients will benefit from this tissue technology by the end of 2024. As the global leader in structural heart, we remain deeply committed to bringing the highest-quality evidence, groundbreaking technology, and world-class physician support to advance science and meaningfully improve patient care. This year, we are already making significant progress on multiple clinical trials and next-gen technologies. In January, we achieved an important milestone with the completion of patient treatment in progress. A pivotal trial studying the treatment of moderate aortic stenosis patients, a population estimated to be twice as large as severe aortic stenosis. In February, EVOQUE became the first transcatheter therapy to receive U.S. FDA approval for the treatment of patients with tricuspid regurgitation. EVOQUE is a groundbreaking treatment option that not only has the potential to improve quality of life but also shown favorable clinical trends in all-cause mortality, reintervention, and heart failure hospitalization. In March, at the annual CRT Conference, we announced compelling results from two large real-world studies, demonstrating continued excellent outcomes for patients treated with the Edwards SAPIEN valve platform. And earlier this month, at the American College of Cardiology Conference, we announced data from the HUDDLE study initiated by Edwards in 2021 with our partner at NFL Alumni Health to study and examine the prevalence of structural heart disease among groups historically known to experience disparities in access to care. Edwards is committed to helping identify and dismantle barriers to access for communities that are underserved due to race, gender, and socioeconomic status. Each of these reflects our deep commitment to advancing patient care through our differentiated strategy and reinforces our confidence in sustaining the growth of transcatheter-based structural heart intervention. Now I will provide some additional detail on Q1 results by product group. In TAVR, first quarter global sales of $1 billion increased 8% year-over-year when adjusted for billing days. Q1 marked the first quarter that Edwards TAVR sales exceeded $1 billion, an exciting milestone for our team and a testament to clinician confidence in our leading technology. Performance was driven by growth in the U.S. and Japan; Edwards' global competitive position, and selling prices were both stable. In the U.S., our year-over-year first quarter TAVR sales growth rate was higher than our global constant currency growth rate. We estimate total procedure growth was stable. Procedure volumes increased as the quarter progressed. We remain pleased with the continued performance of our best-in-class TAVR platform. SAPIEN 3 Ultra RESILIA builds on Edwards' long-standing leadership in tissue technology and durability. This innovative technology now makes up the majority of our sales in the U.S. This platform is supported by robust real-world data for more than 10,000 patients in the TVT Registry demonstrating excellent outcomes across hundreds of centers. The technology optimizes tissue treatment and is designed to extend the durability of a valve, a feature that will be increasingly important as the therapy continues to treat patients with longer life expectancy. We are also proud to continue our deep commitment to advancing science for AS patients through the progress and early TAVR trials. As discussed in January, we completed enrollment and treatment of patients in progress—approximately 2 years of expectation. We also expect to release the results of early TAVR at the TCT Conference this year. Symptom assessment is one of the most significant barriers to referral, and the early TAVR trial evaluates the impact of TAVR on asymptomatic patients with severe AS. We believe if data are compelling, early TAVR may have a meaningful impact on deciding when to treat patients while also streamlining referral and patient care for all severe AS patients. Outside of the U.S., in the first quarter, our constant currency TAVR sales growth was slightly below our global TAVR growth. Strong growth in Japan and the rest of the world was partially offset by slower-than-expected growth in Europe. In Europe, our results were softer than expected in Q1, but we expect full year 2024 performance to normalize. We are actively preparing for the launch of SAPIEN 3 Ultra RESILIA in Europe, and we anticipate introducing the technology into the European market in Q2. In Japan, we continue to see strong TAVR adoption driven by SAPIEN 3 Ultra RESILIA. We believe AS remains a significantly undertreated disease among the substantial elderly population and continue to focus on expanding the ability of evidence supporting this therapy. In closing, we are confident that Edwards is positioned for healthy and sustainable TAVR growth well into the future, driven by our development of differentiated TAVR technology, our deep commitment to advancing patient care through high-quality clinical evidence, and our investment in patient activation initiatives. Importantly, we are proud of our groundbreaking research into the treatment of AS through our early TAVR and PROGRESS trial, which could fundamentally change how AS patients are treated. We remain confident in our full year TAVR sales growth of 8% to 10%. We expect a higher year-over-year second-half growth rate than in the first and second quarter.

Thank you, Bernard, and good afternoon, everyone. As Bernard mentioned, we are pleased with our first quarter total company sales performance and progress on our strategic milestones. In addition, we achieved $0.66 of adjusted earnings per share. Our GAAP earnings per share of $0.58 included one-time expenses associated with our planned spin-off of Critical Care. A full reconciliation between our GAAP and adjusted EPS for this and other items is included with today's release. For the second quarter, we're projecting sales of $1.62 billion to $1.70 billion and adjusted earnings per share of $0.67 to $0.71. And now I'll cover additional details of our P&L. In Q1, our adjusted gross profit margin was 76% compared to 77.5% in the same period last year. This expected year-over-year reduction was driven by a more favorable impact from foreign exchange in the prior year. We continue to expect our full year 2024 adjusted gross profit margin to be between 76% and 78%, driven by high-value technologies that yield strong gross profit margins. Selling, general, and administrative expenses in the quarter were $490 million or 30.6% of sales compared to $436 million in the prior year. This increase was driven by an expansion of transcatheter field-based personnel in support of our growth strategy. We expect full year 2024 SG&A as a percent of sales to be approximately 30% as we continue to invest in field-based personnel and patient activation initiatives. Research and development expense in the first quarter grew 9% over the prior year to $285 million or 17.8% of sales. This increase was primarily the result of continued investments in our transcatheter aortic valve innovations, including increased clinical trial activity. For the full year 2024, we continue to expect R&D to be 17% to 18% of sales as we invest in developing new technologies and generating evidence for our structural heart disease initiatives, with the goal of treating even more patients. Turning to taxes, our reported tax rate this quarter was 14.3% or 14%, excluding the impact of special items. Our favorable non-GAAP rate in the first quarter includes a higher-than-expected benefit from stock-based compensation. We continue to expect our 2024 tax rate, excluding special items, to be between 14% and 17%. Foreign exchange rates decreased first quarter reported sales growth by 40 basis points or $5 million compared to the prior year. Foreign exchange rates negatively impacted our first quarter gross profit margin by 160 basis points compared to the prior year. Relative to our January guidance, FX rates had a nominal impact on first quarter earnings per share. At current FX rates, we now expect a $70 million or 1% negative impact to full year 2024 sales versus the prior year. Regarding the previously announced spinoff of Critical Care, preparations are ongoing. We anticipate completing the unaudited carve-out financial statements next month and we are on track to obtain a tax-free ruling from the IRS by year-end. We are currently assessing capital structure options for the spin-off company, and we plan to share details with investors later this year. During the first quarter, we incurred $41 million of one-time costs associated with the spin-off. Additional one-time costs will be incurred throughout 2024. Free cash flow for the first quarter was reduced by a $305 million deposit, contingent upon the resolution of a tax dispute, and $20 million of payments associated with the spin-off of Critical Care. Excluding the impact of these items, adjusted free cash flow was $206 million, and we continue to expect full year 2024 adjusted free cash flow will grow to between $1.1 billion and $1.4 billion. So before turning the call back over to Bernard, I'll finish with an update on our balance sheet. We continue to maintain a strong and flexible balance sheet of approximately $1.7 billion in cash, cash equivalents, and short-term investments as of March 31. We continue to expect average diluted shares outstanding for 2024 to be between 600 million and 610 million. We have approximately $1 billion remaining under our current share repurchase authorization.

Thank you, Scott. We are pleased with a strong start to the year as we continue to focus on helping even more patients worldwide and driving growth with leading innovative technologies. We remain confident in our increased 2024 financial outlook and look forward to launching breakthrough technologies and progressing multiple important clinical trials while aggressively investing into our future. In closing, we believe Edwards is uniquely positioned to deliver sustainable growth driven by our significant investment focused on structural heart to address the large and growing needs of patients impacted by aortic, mitral, and tricuspid disease. With that, I pass it back to Mark to open up Q&A.

Thank you very much, Bernard. We're ready to take questions now. In order to allow for broad participation, we ask that you please limit the number of questions to one plus one follow-up. If you have additional questions, please reenter the queue, and management will answer as many participants as possible during the remainder of the call. Diego, please go ahead with additional details on accessing the Q&A portion of the call.

Great and congrats on a nice quarter. Two for me. I wanted to start first with EVOQUE. Clearly, TMTT had a really strong quarter. It came in well above consensus and some of the most optimistic numbers I was hearing. So I wanted to get a sense of what you're seeing, how much of the TMTT was EVOQUE. And clearly, you raised guidance. I imagine this is just the early stages of adoption here?

Thanks, Robbie. This is a good question. So we are obviously very pleased about the early physician feedback, which has been very, very strong on EVOQUE. We were able to achieve an excellent procedural outcome. Now back to your question about our performance in Q1, very little was about EVOQUE. We have seen a very clear momentum on PASCAL, particularly PASCAL in Europe and the U.S. We are very pleased about our expansion and adoption of PASCAL globally, basically. But I'm going to ask Daveen to add some details here.

Yes. Thanks so much, Bernard. Thanks for the question, Robbie. Yes. And to follow up on Bernard's comments, obviously, the vast majority of our growth came from PASCAL. Overall, though, we continue to be really pleased with the initial launch of EVOQUE both in Europe and the U.S. Right now, we're just starting to steadily activate sites. We've had really good clinical outcomes, very consistent with what we saw in the clinical trial. And we see really predictable times and predictable procedure times, something that, obviously, physicians really love to see. We see that both at old sites that have been activated as well as new sites that we've opened up in Europe. The only thing comment I'll make is it's really early in our journey, but our experience in Europe, especially where we've had PASCAL approved for tricuspid since 2020, really reinforces the fact or the need that we want to have a portfolio of both repair and replacement technologies because tricuspid patients are so complex and so diverse. So I'll stop there.

Great. Maybe a follow-up. I caught the comments that the U.S. TAVR grew faster than the global organic TAVR growth rate and that procedure has accelerated throughout the quarter. So how are you thinking about TAVR growth for the rest of the year? And do you feel like the U.S. has finally recovered after some of the setbacks you saw during the disruptive years of COVID?

Thanks, Robbie. Let me start, and again, I will ask Larry to add some insights here. So when we put together a guidance for the year, the guidance of 8% to 10%, we knew that the growth would ramp throughout the year and that Q1 would be our lowest growth quarter. So we feel confident about our 8% to 10%. We feel confident about what's happening in the U.S. Share and price are stable. So we feel good about all of that. Larry, do you want to add anything?

Yes. I don't have a lot to add. We saw good progression throughout the quarter. It's always a little slow in January as we come out of the break, but we are pleased with how the quarter went overall. We remain excited about the year. We have a lot of activities on patient activation. We have a huge data set coming out of TCT that I think all of us will be excited to see what those data say and how they inform the field. So I continue to believe we have a long runway long-term with TAVR, and it is good to see the U.S. kind of out of COVID, I think, finally in the rearview mirror, and we can just focus on accelerating patient care.

Congrats on a good quarter. Maybe on TAVR again, curious why European growth was slower than expected. And then on the billing days, were those U.S. or OUS and do those come back in any quarter?

Yes, thanks. Overall, we felt good about the quarter, and we just talked about the U.S. We saw a lot of strength in Japan, but Europe grew year-over-year and it grew sequentially, and we lost a couple of billing days. But even with that, we were a little bit disappointed with our overall growth in Europe. We saw some pretty aggressive pricing from competitors that I think led to some trialing. But we're really excited that we're launching S3UR that actually starts this month, and we're excited to bring that technology to Europe. We expect these to normalize through the course of the year.

I can give a little bit more commentary on the billing days. So outside of the U.S. is where we really felt it. We saw 2 billing days difference in Europe and Japan. Overall, globally, we saw 1 billing day difference. And to your question about do we see any more impact later in the year? Yes, in Q3, we've got a billing days impact that goes the other direction as well.

Alright, that's helpful. And then on TAVR and some of that you've been doing with Egnite and kind of helping drive center growth and diagnosis. Curious to see how that's going and at what point do you start to scale those programs out and see the impact on TAVR growth?

Yes. We have a lot of patient activation activities where there's a lot of work that we do. We have multiple fronts, and Egnite is just one part of our strategy there. But we're excited about what these technologies can do. There are so many patients, if you look at the publication, and I know he's spoken to you guys before, there's just a lot of patients upstream that aren't moving through the system at the speed in which they should. I think there's a patient identification aspect, and there's a referral aspect. So we have multiple work streams working on this. I think the appreciation and understanding for the undertreatment of aortic stenosis is growing. As that grows and people start to understand the magnitude of the problem, it gives more opportunity for our patient activation strategy to take hold.

And maybe in addition, Larry, I'm very proud about what we are doing. We are the only one basically having a deep commitment to advancing science for AS patients through the progress and early TAVR trial. This is truly our commitment, but we feel that there is a ton of potential. These patients are underdiagnosed, and we are committed to offering treatment for them. So as a company, I'm very proud of how we do all of this.

I just wanted on TAVR, I wanted to confirm, Bernard, that Q2 TAVR growth will be better than Q1, in response to Robbie's question. And why do you expect TAVR growth to accelerate in the second half? And how are you guys factoring in the SMART trial results? And I have one follow-up.

Yes. Yes, we do expect to have procedures to ramp. That's always been a part of our plan, and we continue to expect that to happen. I think it's a lot of our patient activation work. The market continues to improve, and we're very pleased where we finished Q4 last year. We were happy with the ramp in Q1. So I think we do expect to see an increase in Q2 over Q1. But even with that, we expect the second half to have a higher growth rate than the first half. So I think that that's good. As it relates to the SMART trial, I mean, we talked a lot about it at ACC. The decision on what valve to use is multifactorial. It's never been about one criteria or one data point. We continue to have confidence in our platform and the value proposition with our Ultra RESILIA technology and all the other things that we're doing. We always model in competition, but we feel very good about our platform and our leadership.

So let me add something about it. I know that there were plenty of questions about that trial at ACC. I was not at ACC. But our strategy to bring groundbreaking science, the highest quality of evidence to help over 1 million patients who are not being treated today and being able to unlock this large-tier market potential—that is our strategy. You know us very well. In the last 10 years, we studied 12,000 symptomatic severe aortic patients across mainly FDA-approved studies. Once again, we are the only company conducting groundbreaking research into the treatment of AS through early TAVR in progress. I'm very proud of who we are as a leader in structural heart disease. What happened at ACC was just an interesting study, more than anything else.

And Scott, if I saw correctly, you raised the revenue guidance, but you did not change the EPS guidance. Why is that?

Yes, that's right. We brought revenue guidance up nearly $150 million, and you're right, we kept our $2.70 to $2.80 range the same. There are a couple of reasons. One was we ended up with a lower tax rate in the first quarter than we expected. Not sure that we're going to be able to maintain that low of a tax rate for the rest of this year. The other one is it's just early in the year. We decided early in the year to keep it the same. We think the top end of the range can accommodate multiple different scenarios that could play out in the rest of 2024.

Great, thank you. I did want to ask a more specific question about the TMTT performance, and you talked about the importance of the portfolio. So I guess the first way I wanted to ask you was, is EVOQUE, I guess, helping to pull through or improve the performance of PASCAL? And do you expect that as you go through time with even more of a portfolio across mitral and tricuspid to be able to use that portfolio approach to gain even more share?

Yes, this is Daveen. I'll answer that. No, honestly, if you look at Q1, I don't really think there was any significant kind of direct pull-through from EVOQUE versus PASCAL. Pulling back up, I think us having our portfolio product to treat the maximum number of patients by having repair and replacement technologies for both mitral and tricuspid helps show our leadership, which encourages physicians to continue to work with us as leaders in the space. There's always going to be a continued kind of link in that way. When we look at growth opportunities and what's happening for growth overall, if I look at PASCAL, in Q1, we continue to open up new centers. We continue to grow in the centers we work with and that we continue to deepen our engagement with physicians. That is fantastic. Additionally, we think that will continue for quarters going into the future. We also continue to grow geographically; there are countries in the world where we're just kind of bringing PASCAL for the first time. We're in the initial stages of where we'll be at PASCAL. We think that's going to be an important opportunity. And then clearly, that's PASCAL and number two, EVOQUE. We see EVOQUE being a long runway for us of growth across the board. We've talked about the future; we will bring our SAPIEN M3 transcatheter mitral valve to the market, adding more growth for the future. Having all these technologies together really provides a leadership role that we can have.

Very nice quarter. I want to spend some time on Critical Care. I can't remember the last time I saw a 14% revenue growth in that segment. And particularly as it's sort of prepping to go out on its own, what drove that growth? How sustainable is it?

Yes. Thanks, Joanne, for the question. So for Critical Care, we have capital sales as part of the mix. We just see high variability of demand really every quarter across all our product lines. It was a great quarter for us overall. It's still early in the year. You saw us raise guidance to 8% to 10%, and we're very confident in that range. We don't want to bring it up too much more at this point just because of that variability in demand.

Profitability for the company, Joanne?

No, Critical Care, if possible.

Let's hold off on product line profitability. Suffice it to say, it was a good top-line quarter, and that's helping our bottom line as well.

Sorry about earlier. It just sounds like U.S. TAVR growth was high single digits. Is that fair? Was it about 10%? And what are other drivers that can get you to consistent double-digit growth in the foreseeable future? Just what's your confidence there? And then I wanted to get your take on AHA's Aortic Stenosis initiatives. It seems like they're expanding that to additional centers. Some of our checks have suggested that has a positive impact on TAVR volumes.

Yes. I'll take the first part of that about U.S. TAVR growth. We try not to be too specific about breaking down every region. But what we can say is that TAVR in the U.S. grew faster than our global underlying growth rate for TAVR in the first quarter. Larry, do you want to talk about the other pieces?

Sure. On the AHA program, we're very excited to partner with the AHA on this. Looking for an analogy years ago, the whole door-to-balloon drive created a quality metric based on time. The faster a patient having an MI gets a balloon across that lesion, the survival rate rises dramatically, and it's critical that they do that. For AS, we really don't have quality initiatives around the time from diagnosis to treatment. Most centers start the clock when the patient ends up with the heart team. They think they do it pretty quickly. However, part of the story they miss is the upstream component. From the time that patients got that first echo showing they have severe disease, sometimes there's a long journey before referral to the heart team. What we're trying to do is work on a time metric like door-to-balloon where every patient should get treated within 90 days of diagnosis. One of the first things that does is centers have to go back and look at their own data. Most centers think they're doing well, and when they dig deep into their own data, they find out they're not doing as well as they thought. If we can implement this quality metric, it could dramatically improve patient care as these AS patients do not wait well. They have very high mortality rates. For the higher risk patients, they had a 50% mortality rate a year when left untreated, and that mortality rate starts quickly.

First on EVOQUE, you're launching a pretty meaningful price premium to the other technology out there. Do you see the NTAP in October as a gating factor for commercialization? Or do you think you can make significant progress over the next 6 months prior to that incremental reimbursement kicking in?

Yes. Thanks for the question. We really believe that EVOQUE offers exceptional clinical and economic benefit to both patients and healthcare systems. We think that is a key factor. We've seen increasing interest in demand from physicians wanting to have this technology to treat their patients. We think we're going to see continued centers opening up and continued patient growth each quarter. If you think about the NTAP, CMS is proposing to move forward, and we hope to start that October 1. That helps make up any incremental cost between the EVOQUE procedure versus the existing DRG, which is that DRG for TAVR and TEER. We believe that will continue to add to it. But between now and then, we continue to see demand from physicians and systems because we think this technology does so much for patients.

Probably fair to say that NTAP will have a big impact next year and after, but not necessarily this year.

And then it sounded like there was a purposeful mention of the commitment to field both replacement and repair technologies for both tricuspid and mitral. The early consensus from physicians seems to be the replacement is going to lead the way. How are you thinking about which patients might be best served by each technology? What does that mean for EVOQUE today, and longer term, how might PASCAL do as the CLASP TR trial completes enrollment?

Yes, this is Daveen again. I'll make a couple of comments on this one. Generally, yes, we are believers that both repair and replacement technology for each valve really helps treat the maximum number of patients. These patients and disease states are heterogeneous. There's no one magic bullet. Many patients continue to need different types of technologies. Do we have a clean answer today? No, but we will continue to work on it and have some ideas, definitely.

About 6, 7 years ago, we believed that having repair and replacement for both mitral and tricuspid was going to be important. Today, we are confident that indeed it is the case. This will provide physicians options to treat many patients and make the best decision for their patient. If you're asking what exactly the technology for that patient is, I think it is still early. We still need probably more time and research to do that. But for sure, I think this portfolio puts physicians in the driver seat to make the best decision for their patients, which is what we wanted initially. This is going to unlock this very large opportunity, and we will see sustainable growth from TMTT in the years to come.

And I'll leave it up on your comment about clinical data. It is so important that we continue to enroll in trials like CLASP II TR, our tricuspid trial, which is a randomized study. We're getting data and understanding how these different technologies can really help patients. It's crucial for ourselves.

A follow-up to Chris' question. I just want to make sure that I heard that you expect limited EVOQUE sales until the NTAP kicks in October 1. With G&A at the high end of your previous guidance, how many centers will be ready to perform the procedure by that date?

This is Daveen. On the NTAP comment, we believe right now, each quarter, we continue to open up new centers. We continue to train physicians on it, and it's a steady state, nice growth, providing the technology to more patients. We've seen a lot of demand from physicians for this technology. I think to Bernard's point, NTAP adds continued allowance of growth as it gets to a larger scale, which will really help support growth for 2025 and 2026. And then the second question was— I missed the second part of your question.

I mean, I think the question was how many centers do you think we'll be ready to do procedures once the NTAP is active. I think what we can say is, certainly, the sites that have been involved in clinical trials are going to be ready to activate beyond that. We will be strategic and deliberate about where we activate.

We're going to focus on centers that are already higher-volume tricuspid centers that have their infrastructure set up, and have the right-side imaging capability firmly in place. So it's going to be just steady growth moving to other high-volume tricuspid centers.

Okay, and indication if that trial is positive to get FDA approval, is that going to be exclusive to SAPIEN? Any color on how much creep you've seen, if any, for docs treating asymptomatic patients today?

Yes, thanks. None of us know the trial results as yet. That won't happen until later this year. If the trial is positive, the more positive the trial is, the more benefit you get from it. But it's really about how patients get referred for therapy, and that's going to be key. It speaks to the treatment in referral for aortic stenosis and the time frame we should do that more than a specific therapy. This is a randomized trial against the SAPIEN platform. You're going to have to have those low mortality rates. Our platform shines because we had a 99% survival rate at one year, and a 90% survival rate at 5 years.

Going back to the trend in Europe and your confidence and visibility to a recovery there for your business. Is it more that you think the price discounting is going to ease? Because you have RESILIA coming in that region, it will offset and that's the acceleration? What else can you tell us that gives you confidence there?

Yes. We had a good Q4 in Europe, and this does feel like it's probably more temporary. We're going to put a little more focus on that. We do sell at a premium in Europe, and some competitors were aggressive with discounting. We need to compete with our value proposition and new technology. We are super excited to launch RESILIA in Europe. We believe physicians will make their long-term product decisions based on what's best for the patients.

Okay. And following up here on just the selling days. I think you said, Scott, in Q3, the billing days go the other way, positive for you. Order of magnitude similar to Q1 and then geographic impact? Sure. In the third quarter, the order of magnitude, same thing. It's about a day globally and very similar geographically, Europe or Eastern Europe, a day or two, everywhere else about a day. It's really a day across the board in the third quarter. A global impact of one day.

Congrats on a good start to the year. Larry, I was hoping—appreciate this whole initiative, the patient acquisition initiative. You guys talked about at your Analyst Day and on the Q4 call, the AI, utilization of AI, and some piloting at some centers. I was wondering if you could give any color on how much faster you're seeing growth at those centers, if at all yet, if you can quantify that? Just to get a sense of like if this does get implemented more broadly, what it could mean from a growth perspective?

Yes. I appreciate the question, Danielle. It's a little hard to quantify. We're still putting some of these systems in place. It's not just identifying the patients; people have to start treating the patients once they're identified. We're pleased with the pilots we've run in the places. We clearly identify an upstream population that some centers didn't know existed. This is going to drive growth over an extended period of time. But this is going to be an effort over time. We have 100% validated undertreatment of aortic stenosis. We've done it in enough centers with enough different people backed by publications, including leading academic programs.

Sure. And I guess just one quick follow-up on TAVR plus asymptomatic. I mean you talked a bit about this at the Analyst Day. But asymptomatic is almost more about easing workflow and decision-making processes. Assuming the trial plus this initiative is successful, should we see growth acceleration, specifically in TAVR in 2025? I know you're not going to give '25 guidance, but I thought I'd try.

Yes. I'm not going to give guidance. I want to be cautious not to speculate on trials that are in-flight. We'll see the data at TCT. After we see that data, I'll be happy to talk about the repercussions and how it plays out. The patient journey is complicated. Patients get diagnosed with severe aortic stenosis, and they have this layer of do you have symptoms, are the symptoms attributable to aortic stenosis, and are the symptoms enough to refer you for care? A number of patients, even though guidelines say any symptoms or cost for referral, are being held upstream because someone has decided the symptoms aren't significant enough. If asymptomatic is successful, we should streamline care significantly, making it a much smoother referral process. This will make a big difference.

Thank you so much. Thanks, everyone. I want to close with some big-picture comments about the quarter. Obviously, we are very pleased with the strong performance for the company growing 10%. This is the result of the strategy we put in place years ago. What we have today is a diversified portfolio with TAVR, mitral, tricuspid, and surgical—all of them contributing to the performance of the company. TAVR, for sure, is the largest business for us, and it's still our #1 focus. TAVR has a lot of growth potential. But mitral and tricuspid are now contributing in a very meaningful manner for the performance of the company. This is why we are confident longer term that we will deliver sustainable growth, quarter after quarter, year after year with all of the catalysts we are having. Again, thanks for your interest. If you have any additional questions, please do not hesitate to reach out to Scott, Mark, or myself. Have a great day. Thank you.