EW 10-K & 10-Q changes, risk factors and insider trading

•Risks associated with the sale of our Critical Care product group Global EconomicMacroeconomic and Other ExternalIndustry Risks

•Risks associated with internationalglobal saleseconomic, political and operationssocial conditions

•Regulatory actionsRisks relating to animal-borne illnesses

Our continued growth and success depend on our ability to innovate and develop new and differentiated products in a timely manner and effectively market these products. Without the timely innovation and development of products,development, our products could be rendered obsolete or less competitive because of the introduction of a competitor's newer technologies or changing customer preferences. Innovating products requires the devotion of significant financial and other resources to research and development activities; however, there is no certainty that the products we are currently developing will complete the development process, or that we will obtain the regulatory or other approvals required to market such products in a timely manner or at all. Even if we timely innovate and develop products, our ability to successfully market them could be constrainedlimited by a number of different factors, including competitive products and pricing, barriers in patient activation (including disease awareness, detection, and diagnosis), restrictive requirements in the U.S. national coverage determination for transcatheter aortic valve replacement procedures, the need for regulatory clearance, restrictions imposed on approved indications, capacity constraints within hospital systems, including staffing shortages and the availability of catheterization laboratories, and uncertainty over third-party reimbursement. Failure in any of these areas could have a material effect on our prospects.

The manufacture and sterilization of many of our products isare highly complex due in part to rigorous regulatory requirements. Quality is extremely important for many reasons, including due to the serious and costly consequences of a product failure. Safety is also critically important. Problems can arise for a number of reasons, including disruption of facility utilities, equipment malfunction, failure to follow protocols and procedures, raw material problems,problems (including cost volatility and availability), software problems, cybercybersecurity incidents, or human error. Disruptions can occur at any time, including during production line transfers and expansions. Disruptions can also occur if our manufacturing and warehousing facilities are damaged by earthquakes, hurricanes, volcanoes, fires, and other natural disasters or catastrophic circumstances. As we expand into new markets and scale new products for commercial production, we may face unanticipated delays or surges in demand which could strain our production capacity and lead to other types of disruption. If any of these manufacturing, logistics, or quality problems arise or if we or one of our suppliers or logistics partners otherwise fail to meet internal quality standards or those of the FDA or other applicable regulatory body, our reputation could be damaged, we could become subject to a safety alert or a recall,recall (whether voluntary or mandated), we could incur product liability and other costs, product approvals and production could be delayed, and our business could otherwise be materially adversely affected.

We face substantial competition and compete with technologies of many types and companies of all sizes on the basis of cost-effectiveness, technological innovations, product performance, brand name recognition, breadth of product offerings, real or perceived product advantages, pricing and availability and rate of reimbursement. In addition, given the trend toward value-based healthcare, if we are not able to continue to demonstrate the full value of our differentiated products to healthcare providers and payors, our competitive position could be adversely affected. We have in the past and are continuing to experience constrained procedure volumes and sales for our products because more products, including Edwards’ own products, are competing for the same facilities and staffing within hospitals. See "“Competition"” under "“Business"” in Part I, Item 1 included herein.

We work with leading global physicians and research institutions who provide considerable knowledge and experience. These physicians may assist us as researchers, marketing consultants, product trainers and consultants, inventors, and as public speakers. If new laws, regulations, or other developments limit our ability to appropriately engage these professionals or with the research institutions of which they are a part or to continue to receive their advice and input or we are otherwise unsuccessful in maintaining strong working relationships with these physicians or their research institutions, the development, marketing, and successful use of our products could suffer, which could have a material adverse effect on our business, financial condition, and results of operations. In addition, we rely on hospital systems to be able to hire staff and have available facilities, including catheterization laboratories, to perform procedures using our products. With multiple new technologies competing for these facilities, including technologies we develop and introduce in both our TAVR and TMTT product groups, a decision by a hospital system, particularly a large hospital system, not to adequately staff or provide facilities necessary to perform procedures using our products, or a decision to use a competitors’ products caninstead of ours, has in the past and may continue in the future to meaningfully adversely impact our ability to sell our products.products, Thoseresulting limitationsin lower sales and revenue than we forecasted, which could have a material adverse effect on our business, financial condition, and results of operations.

We are subject to risks associated with public health crises, including pandemics and epidemics, suchthe astiming COVID-19.and Othereffects publicof health crises, including any future epidemics or pandemics,which are highly uncertain and difficult to predict, and could disrupt our business and the hospital systems and supply chains in which we operate and result in material adverse impacts on our business, financial condition, and results of operations.

•Delays orDelays, shortages and price increases due to trade or regulatory embargoes.

Additionally, any significant increases in the cost of raw materials, whether due to inflationary pressure, supply constraints, the imposition of tariffs, regulatory changes, or otherwise, could adversely impact our operating results. A change or addition to our vendors could require significant effort due to the rigorous regulations and requirements of the FDA and other regulatory authorities; it could be difficult to establish additional or replacement sources on a timely basis or at all, which could have a material adverse effect on our business.business, financial condition, and results of operations.

The operation of our business depends on our information technology systems.systems and the information technology systems of certain of our service providers and suppliers. We rely on our information technology systems to, among other things, effectively manage sales and marketing data, accounting and financial functions, inventory management, product development tasks, clinical data, customer service and technical support functions. Our information technology systems are vulnerable to damage or interruption from earthquakes, fires, floods and other natural disasters, terrorist attacks, power losses, computer system or data network failures,failures or outages, security breaches, and data corruption.

In addition, our information technology infrastructure and products are vulnerable to cybersecurity attacks. Cybersecurity attacks can include, but are not limited to, computer viruses, denial-of-service attacks, phishing attacks, ransomware attacks, and other introduction of malware to computers and networks; social engineering or other unauthorized access through the use of compromised credentials; exploitation of design flaws, bugs, or security vulnerabilities; intentional or unintentional acts by employees or other insiders with access privileges; and intentional acts of vandalism by third parties and sabotage. Further, cybersecurity threats and the techniques used in cybersecurity attacks change, develop, and evolve rapidly, including from emerging technologies, such as advanced forms of artificial intelligence ("AI") and quantum computing. In addition, we rely upon technology suppliers, including cloud‑based data management applications hosted by third‑party service providers, whose cybersecurity and information technology systems are subject to similar risks. While we are not aware of any cybersecurity attacks that have materially affected our business, financial condition, or operations, the preventative measures we have implemented to date may not be sufficient to prevent, mitigate, or offset a future incident that may materially and adversely impact us.

As part of our strategy, we actively manage a portfolio of businesses, technologies, services, and products as well as enter into potential strategic alliances. If we are unable to acquire businesses or technologies or other transactions on a timely basis or at all, we will not be able to execute our strategy and our business and results of operations may be adversely impacted. The integration of acquired businesses and technologies may be costly and may divert significant amounts of resources, including management and employee time and attention, away from the development and commercialization of our other products. Our failure to successfully manage the integration and growth of acquired businesses and technologies and our existing structural heart therapies could have an adverse impact on our business. We may not receive the anticipated benefits of acquisitions despite such expenses and diversion of resources, and acquisitions may not prove to be profitable. Furthermore, we may face unforeseen challenges in executing our strategic plans to expand our products and therapies, which could cause our business and results of operations to suffer. Acquired businesses may have liabilities, or be subject to claims, litigation or investigations that we did not anticipate or which exceed our estimates at the time of the acquisition.

From time to time, we identify operations and products that are underperforming or that do not fit with our longer-term business strategy, such as our recent divestiture of our Critical Care product group, or there may be unforeseen operating difficulties and significant expenditures during the integration of an acquired business, technology, service or product into our existing operations. ToWe thehave extentwritten thatdown the value of thesecertain acquired assets decline,in wethe past, and may be required to writedo downso in the valuefuture. ofWe have also previously decided to, and may in the assets.future Wedecide mayto, dispose of these underperforming operations or products or voluntarily cease operations related to a product. In addition, we have previously been required, and may in the future be requiredrequired, to record charges or write-downs in connection with acquisitions and divestitures, including charges related to developed technology and/or in-process research and development assets. We have also been, and may in the future be, party to disputes arising from divestitures or ceased operations related to certain products, which have previously and may in the future result in litigation, liability or reputational harm. Any of these events could adverselyhave affecta material adverse effect on our business, financial condition, and results of operations.

On September 3, 2024, we sold our Critical Care product group to Becton, Dickinson and Company. We are subject to risks involved with transferring the Critical Care product group and operatingfunctioning under interim operating model arrangements, such as increased complexity of operations, including, but not limited to, those related to finance, quality, and information technology, diversion of management’s attention to our business, and additional related risks and costs which can have an adverse effect on our business, financial condition, and results of operations.

Global EconomicMacroeconomic and Other ExternalIndustry Risks

DomesticWe conduct extensive global operations and Global Economic Conditions. We have been impacted and may continue to be negatively impacted by general domesticglobal economic, political and global economicsocial conditions, although we cannot predict the extent to which such conditions may negatively impact our business. These include, but are not limited to, conditions impacting inflation, credit and capital markets, interest rates, tax law, including tax rate and policy changes, factors affecting global economic stability, tariffs and the political environment relating to health care. These and other conditions could also adversely affect our customers, payers, vendors and other stakeholders and may impact their ability or decision to purchase our products or make payments on a timely basis.

Other economic, political, and social risks. In addition to the factors enumerated above, weWe are from time to time impacted by a variety of other factorsrisks associated with doing business internationally that can harm our future results, including the following:

•trade protection measures, quotas, embargoes, import or export requirements, and duties, tariffs, or surcharges (including existing or potential future tariffs imposed by the U.S. on goods from other countries and tariffs imposed by other countries on U.S. goods);

If government andor other third-party payors decline to reimburse our customers for our products or impose other cost containment measures to reduce reimbursement levels, our ability to profitably sell our products will be harmed.

We sell our products and technologies to hospitals and other health care providers, nearly all of which receive reimbursement for the health care services provided to patients from third-party payors, such as government programs (both domestic and outside of the United States), private insurance plans, and managed care programs. The ability of customers to obtain appropriate reimbursement for their products from private and governmental third-party payors is critical to our success. The availability of reimbursement affects which products customers purchase and thecould pricesimpact they are willing to pay.pricing. Reimbursement varies from country to country and can significantly impact acceptance of new products.

Government and other third-party payors are increasingly attempting to contain health care costs by limiting both coverage and the level of reimbursement for medical products and services. Reimbursement levels may be decreased in the future. Additionally, future legislation, regulation, or reimbursement policies of third-party payors may otherwise adversely affect the demand for and price levels of our products. The introduction of cost containment incentives, combined with closer scrutiny of health care expenditures by both private health insurers and employers, has resulted in increased discounts and contractual adjustments to hospital charges for services performed. Hospitals or physicians may respond to such cost-containment pressures by substituting lower cost products or other therapies.therapies, to the extent they are available.

Third-party payors may deny reimbursement if they determine that a device used in a procedure was not used in accordance with cost-effectivecoverage treatment methodsrequirements as determined by such third-party payors or was used for an unapproved indication. Third-party payors may also deny reimbursement for experimental procedures and devices. We believe or have demonstrated through studies or analyses that many of our existing products are cost-effective, even though the one-time cost may be significant, because they are intended to improve quality of life and can reduce overall health care costs overin athe longshort- periodand of time.long-term. We cannot be certain that these third-party payors will recognize these cost savings and quality of life benefits instead of merely focusing on the lower initial costs associated with competing therapies.therapies, to the extent they exist. If our products aredo not consideredmeet cost-effectivecoverage requirements by third-party payors, our customers may not be reimbursed for them, resulting in lower sales of our products.

The health care industry has been consolidating, and organizations such as GPOs, independent delivery networks, and large single accounts, such as the United States Veterans Administration, continue to consolidate purchasing decisions for many of our health care provider customers. As a result, transactions with customers are larger and more complex, and tend to involve more long-term contracts. The purchasing power of these larger customers has increased, and may continue to increase, causing downward pressure on product pricing. If we are not one of the providers selected by one of these organizations, we may be precluded from making sales to its members or participants. Even if we are one of the selected providers, we may be at a disadvantage relative to other selected providers that are able to offer volume discounts based on purchases of a broader range of medical equipment and supplies. Further, we may be required to commit to pricing that has a material adverse effect on our revenues, profit margins, business, financial condition, and results of operations. We expect that market demand, governmental regulation,regulations, third-party reimbursement policies, and societal pressures will continue to drive consolidation and increase pricing pressure.

We spend significant resources to protect and enforce our intellectual property rights, sometimes resulting in expensive and time-consuming litigation that is complex and may ultimately be unsuccessful. Our inability to protect our intellectual property could have a material adverse effect on our businessbusiness, orfinancial condition, results of operations, and prospects.

During recent years, we and our competitors have been involved in substantial litigation regarding patent and other intellectual property rightsrights, which is typically costly and time-consuming. Please see Note 20 to our Consolidated Financial Statements in this report for information regarding our legal proceedings. We may be forced to defend against claims and legal actions alleging infringement of the intellectual property rights of others, and, if our defense is unsuccessful, we could have significant liabilities to third parties or face injunctions that bar the sale of our products, or could require us to seek licenses from third parties. Such licenses may not be available on commercially reasonable terms, may prevent us from manufacturing, selling, or using certain products, or may be non-exclusive, which could provide our competitors access to the same technologies.

We and our customers are subject to healthcare legislation and other rigorous governmental regulations and we may incur significant expenses to comply with these regulations and develop products that are compatible with these regulations. In addition, failure to comply with these regulations could subject us to substantial sanctions and may impact our ability to sell our products in certain countries which could adversely affect our business, financial condition, and results of operations.

The medical technologies we create, study, manufacture, and market globally are subject to rigorous regulation and scrutiny by the FDA and various other federal, state, and foreign governmental authorities, including the European Union's European Commission (the "“Commission"”), whowhich promulgated the European Medical Device Regulation ("“EU MDR"”). Government regulation applies to nearly all aspects of our products’ lifecycles, including testing, clinical study, manufacturing, transporting, sourcing, safety, labeling, storing, packaging, recordkeeping, reporting, advertising, promoting, distributing, marketing, and importing or exporting of medical devices and products. In general, unless an exemption applies, a medical device or product must receive regulatory approval or clearance before it can be marketed or sold. Modifications to existing products or the marketing of new uses for existing products also may require regulatory approvals, approval supplements, or clearances. If we are unable to obtain these required approvals, we may be required to cease manufacturing and sale, or recall or restrict the use of such modified device, pay fines, or take other action until such time as appropriate clearance or approval is obtained. More specifically relating to the EU MDR which came into effect in May 2017 and became applicable in May 2021 with a staggered transition period, all regulated products must be assessed by notified bodies (organizations designated by EU member states) as to whether they meet the technical requirements of the EU MDR before entering the market in Europe. During the transition period, with the influx of submissions to the notified bodies, any delay on obtaining approvals may result in a disruption of device supply or a further delay in getting a device to market. In addition, in the EU, we import some of our devices through our offices in Switzerland. Switzerland is not a member state of the EU, but is linked to the EU through bilateral treaties; therefore, the free movement of goods, including medical devices, between the EU and Switzerland after implementation of the EU MDR required a revised MRA. If an MRA covering the EU MDR is not put in place, then non-EU manufacturers may be required to make significant changes, including replacement of Swiss economic operators with operators based in EU member states, and changes will need to be made to our device labeling and/or packaging to satisfy EU MDR requirements. If these measures are unable to be taken, it may no longer be possible to place such devices on the EU market.

Regulatory agencies may refuse to grant approval or clearance, or review and disagree with our interpretation of approvals or clearances, or with our decision that regulatory approval is not required or has been maintained. Regulatory submissions may require the provision of additional data and may be time consuming and costly, and their outcome is uncertain. Regulatory agencies may also change policies, adopt additional regulations, or revise existing regulations, each of which could prevent or delay approval or clearance of devices, or could impact our ability to market a previously cleared, approved, or unregulated device. Additionally, the United States federal government has shut down several times in recent years, most recently on October 1, 2025, during which many government agencies, including the FDA, furloughed critical employees and stopped critical activities. A prolonged government shutdown could significantly affect the FDA’s timely review of any regulatory filings or applications we submit, which could result in delays or failures to obtain or maintain regulatory approvals, clearances or to comply with regulatory requirements. Our failure to comply with these regulatory requirements of the FDA, the Commission, or other applicable regulatory requirements in the United States or elsewhere might subject us to administratively or judicially imposed sanctions. These sanctions may include, among others, warning letters, fines, civil penalties, criminal penalties, injunctions, debarment, product seizure or detention, product recalls and total or partial suspension of production, sale and/or promotion. Any of the foregoing actions could result in decreased sales including as a result of negative publicity and product liability claims, and could have a material adverse effect on our business, financial condition, results of operations, and prospects. In addition to the sanctions for noncompliance described above, commencement of an enforcement proceeding, inspection, or investigation could divert substantial management attention from the operation of our business and have an adverse effect on our business, financial condition, and results of operations.

We are also subject to various United States and foreign laws pertaining to health care pricing, anti-competition, anti-corruption, and fraud and abuse, including prohibitions on kickbacks and the submission of false claims laws and restrictions on relationships with physicians and other referral sources. TheseFurther, laws are broad in scopewe and our suppliers are subject to evolvingvarious interpretation,United States and foreign regulations regarding environmental, social and governance matters. These laws are global and broad in scope, are rapidly increasing and are constantly evolving, which could require us to incur substantial costs and utilize internal resources to monitor compliance.the Ifregulations we are found notand to becomply. Any alleged or actual violations of these laws may subject us to government investigations and significant criminal or civil sanctions and may impact our ability to sell products in compliance,certain wejurisdictions mayin be requiredaddition to alterother our practices or have sanctions imposed against us and our officers and employees,liabilities, including substantial fines, imprisonment, and exclusion from participation in governmental health care programs. Please see Note 20 to our Consolidated Financial Statements in this report for information regarding our legal proceedings.

We are the leading global leader in patient-focused medical innovations for structural heart disease.disease Driveninnovation company, driven by a passion to helpimprove patients,patient welives. partnerThrough breakthrough technologies, world-class evidence, and meaningful partnerships with the world's leading clinicians and researchershealthcare andstakeholders, investour inemployees researchare andinspired developmentby our patient-focused culture to transformdeliver carelife-changing forinnovations to those impactedwho byneed structuralthem heart disease.most. We conduct operations worldwide and are managed in the following geographical regions: United States, Europe, Japan, and Rest of World. Our products are categorized into the following groups: Transcatheter Aortic Valve Replacement ("“TAVR"”), Transcatheter Mitral and Tricuspid Therapies ("“TMTT"”), and Surgical Structural Heart ("“Surgical"”).

Our net sales for 20242025 were $5.4$6.1 billion, representing an increase of $429.5$628.1 million over 2023,2024, driven primarily by sales growth of our TAVR and TMTT products.

Our gross profit increased in 2024,2025, driven by our sales growth. Gross profit as a percentage of sales decreased primarily due to thehigher impactoperational of foreign currency exchange rate fluctuations.expenses. The increasedecrease in our net income and diluted earnings per share in 20242025 was driven primarily by the aforementioned increaseincreases in netpersonnel-related sales and acosts, one-time after-tax charge of $134.9 million in 2023charges related to animpairments intellectualon propertyour agreement.investments, Seeand increased certain litigation expenses. For further information, see Note 33, Note 9 and Note 20 to the Consolidated Financial Statements.

•we received United States Food and Drug Administration ("“FDA"”) approval and launched the EVOQUE tricuspid valve replacement system for the treatmentSAPIEN of3 tricuspidplatform regurgitationfor insevere theaortic Unitedstenosis Statespatients without symptoms;

•we completed enrollment in the CLASP II TRIIF trial for the PASCAL tricuspidtranscatheter implantvalve repair system;

•Net sales of TAVR products increased in 2025, driven by higher sales of the Edwards SAPIEN platform in 2024,2025, primarily due to higher sales of the Edwards SAPIEN 3 Ultra RESILIA valve in the United States, Europe,States and Japan;Europe. In addition, foreign currency exchange rate fluctuations increased net sales outside of the United States by $26.7 million primarily due to the strengthening of the Euro against the United States dollar.

The increase in net sales in 2025 of TMTT products was primarily due primarily to higher sales of our PASCAL transcatheter edge-to-edge repair system and our continued launch of the EVOQUE tricuspid valve replacement system in the United States and Europe.

Net sales of Surgical products increased in 20242025 primarily due to higher sales of the INSPIRIS RESILIA aortic valve and the MITRIS RESILIA in the United StatesStates, Europe and Europe,Rest of World, and the KONECT RESILIA tissue valved conduit in the United States, and the MITRIS RESILIA valve in the United States.

Our gross profit increased in 2025 compared to 2024, driven by our sales growth discussed above. The decrease in grossGross profit as a percentage of net sales decreased in 20242025, compared to 2023 wasprimarily driven by ahigher 0.6operational percentage point impact from foreign currency rate fluctuations, including the settlement of foreign currency hedging contracts.expenses.

SG&A expenses increased in 20242025 compared to 20232024 primarily due to (a) higher field-based personnel-related costs in support of our growth strategy initiatives, primarily in the United States and Europe,States, (b) costsincreased associatedmarketing withexpenses ourprimarily recentrelated businessto combinationsTAVR, (c) increased performance-based compensation expenses, and (cd) increased professional services costs to support athe transition services agreement.

We incurred certain expenses related to legal settlement and contingency, intellectual property litigationlitigation, and tax litigation of $40.4$325.4 million and $203.5$40.4 million during 20242025 and 2023,2024, respectively. On April 12, 2023, we entered into an Intellectual Property Agreement (the "Intellectual Property Agreement") with Medtronic, Inc. ("Medtronic") and recorded a $37.0 million charge in March 2023 and a $139.0 million charge in April 2023. For morefurther information, see Note 33, Note 9 and Note 20 to the Consolidated Financial Statements.

The change in fair value of contingent consideration liabilities resulted in gains of $26.2$12.5 million during 2023,2025, primarily due to changes in projected probabilities of milestone achievement.achievements.

For morefurther information, see Note 4 to the Consolidated Financial Statements.

Other operating incomeincome, net of $0.3$67.2 million in 20242025 primarily included income from athe transition services agreement relating to the sale of $30.3Critical millionCare (of $63.7 million. For further information, see Note 5 to the Consolidated Financial Statements), partially offset by a $30.0 million charge for a charitable contribution to the Edwards Lifesciences Foundation.Statements.

Interest income was $120.3$168.8 million and $67.2$120.3 million in 20242025 and 2023,2024, respectively. The increase in interest income resulted primarily from a higher average investment balance and a higher average yield on our investments.balance.

Other non-operating incomeincome, net was $7.2 million and $68.9 million and $13.9 million in 20242025 and 2023,2024, respectively. The increasedecrease in other income was driven primarily by gains from the remeasurement of our previously held equity interests upon acquisition of the investees.investees in 2024. For morefurther information, see Note 10 to the Consolidated Financial Statements.

Our effective income tax rate in 20242025 and 20232024 was 9.8%17.0% and 11.1%,9.8%, respectively. Our effective tax rate for 20242025 decreasedincreased in comparison to 20232024 primarily due to anthe increaseimpact inof Pillar Two (see below), other local tax benefits from foreign earnings taxed at lower rates net of an increase in tax on global intangible low-taxed incomeincreases, and favorablecertain globalnon-deductible incomelitigation taxexpenses. auditFor settlements.further information, see Note 3 to the Consolidated Financial Statements. The effective rates for 20242025 and 20232024 were lower than the federal statutory rate of 21% primarily due to (1) foreign earnings taxed at lower rates, (2) United States federal and California research and development credits, and (3) the tax benefit from employeeforeign-derived share-basedintangible compensation.income.

As of December 31, 2024,2025, our gross uncertain tax positions were $678.8$767.4 million. We estimate that these liabilities would be reduced by $319.9$377.0 million from offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments, foreign income taxes, state income taxes, and timing adjustments. The net amount of $358.9$390.4 million, if not required, would favorably affect our effective tax rate.

In the normal course of business, the Internal Revenue Service ("“IRS"”) and other taxing authorities are in different stages of examining various years of our tax filings. During these auditsaudits, we may receive proposed audit adjustments that could be material. Therefore, there is a possibility that an adverse outcome in these audits could have a material effect on our financial condition and results of operations. We strive to resolve open matters with each tax authority at the examination level and could reach an agreement with a tax authority at any time. While we have accrued for matters we believe are more likely than not to require settlement, the final outcome with a tax authority may result in a tax liability that is materially different from that reflected in the consolidated financial statements. Furthermore, we may later decide to challenge any assessments, if made, and may exercise our right to appeal. The uncertain tax positions are reviewed quarterly and adjusted as events occur that affect potential liabilities for additional taxes, such as lapsing of applicable statutes of limitations, proposed assessments by tax authorities, negotiations between tax authorities, identification of new issues, and issuance of new legislation, regulations, or case law. We believe that adequate amounts of tax and related penalty and interest have been provided for any adjustments that may result from our uncertain tax positions.

In the first quarter of 2022, we executed an Advance Pricing Agreement (“APA”) between Japan and Switzerland covering distribution transactions for tax years 2020 through 2024, and in 2023, we executed an APA between Japan and the United States covering tax years 2020 through 2024. We also executed an APA in the fourth quarter of 2024 between Japan and Singapore covering tax years 2022 through 2026 with roll-back terms to cover the distribution of TAVR products beginning in 2020 and the distribution of Surgical products beginning in 2018. AlsoConsidering inongoing thesupply fourthchain quarter of 2024,changes, we filedhave withwithdrawn the Japanese tax authorities anour APA renewal application between Japan and the United States coveringfor tax years 2025 through 2029. We expect to file the APA renewal application with the United States tax authorities in the first quarter of 2025.

We plan to vigorously contest the additional tax claimed by the IRS through the judicial process. Final resolution of this matter is not likely within the next 12 months. We believe the amounts previously accrued related to this uncertain tax position are appropriate for a number of reasons, including the interpretation and application of relevant tax laws and accounting standards to our facts and, accordingly, have not accrued any additional amount based on the NOD and other proceedings to date. Nonetheless, the outcome of the judicial process cannot be predicted with certainty, and it is possible that the outcome of that process could have a material impact on our consolidated financial statements. As noted below, similar material tax disputes may arise for the 2018 through 2024 tax years. We made deposits with the IRS of $75 million in November 2022 and $305.1 million in March 2024 to prevent the further accrual of interest on that portion of any additional tax and interest we may ultimately be found to owe while we prepare to contest through the judicial process the IRS's entitlement to any of the additional tax claimed by the IRS. The IRS converted those deposits to advance payments, and, on December 20, 2024, we filed administrative claims for refunds of those payments with the IRS for the 2015 through 2017 tax years. We expectare thatnow the IRS will either deny or fail to act on those refund claims, thereby enabling usable to sue for refunds in the appropriate judicial forum.

We have received tax incentives in certain non-United States tax jurisdictions, the primary benefit for which will expire in 2029.2032. The tax reductions to cash tax expense as compared to the local statutory rates were $271.9$93.9 million ($0.45$0.16 per diluted share) and $333.2$249.3 million ($0.55$0.42 per diluted share) for the years ended December 31, 20242025 and 2023,2024, respectively.

During the first quarter of 2024, we received a notice of assessment from the Israel Tax Authority (the "“ITA"”) wherein the ITA claimed that we owed approximately $110$110.0 million of tax excluding interest and penalties in connection with a claimed 2017 transfer of intellectual property. We maintain that we did not transfer intellectual property outside of Israel andin intend2017 toor vigorouslyin defendany thatsubsequent positionyear. throughWe administrative proceedings including withfiled a formal appeal of the assessment that was filed duringin the third quarter of 2024. If necessary, we expect to defend that position through judicial proceedings. During the fourth quarter of 2024, we received a second notice of assessment from the ITA claiming that we owe additional tax of approximately $16$16.0 million excluding interest and penalties for the 2018 through 2022 tax years based entirely on the collateral impacts of the 2017 assessment. We plan to filefiled a formal appeal of the second assessment in the first quarter of 20252025. and,In ifthe necessary,third quarter of 2025, the ITA agreed that intellectual property was not transferred in 2017 and withdrew its assessment. While the appeals process for the 2018 through 2022 years runs through March 2026, we expect the 2018 through 2022 assessment to also be withdrawn prior to expiration of the appeals process based on the ITA’s conclusion that IP was not transferred in 2017. If not withdrawn, we will defend our position through judicial proceedings. There can be no assurance that this matter will be resolved in our favor and an adverse outcome could have a material effect on our consolidated financial statements.

We are the leading global structural heart disease innovation company, driven by a passion to improve patient lives. Through breakthrough technologies, world-class evidence, and partnerships with clinicians and healthcare stakeholders, our employees are inspired by our patient-focused culture to deliver life-changing innovations to those who need them most. We conduct operations worldwide andthat are managed in the following geographical regions: United States, Europe, Japan, and Rest of World. Our products are categorized into the following groups: Transcatheter Aortic Valve Replacement (“TAVR”), Transcatheter Mitral and Tricuspid Therapies (“TMTT”), and Surgical.

In February 2026, we acquired Autus Valve Technologies, Inc. (“Autus”) for total consideration of $128.9 million with contingent consideration of up to $132.5 million payable based on the achievement of certain regulatory and sales milestones. The results of Autus have been included in our condensed consolidated financial statements from the date of the acquisition.

Our net sales for the first threesix months of 2026 were $1.6$3.4 billion, representing an increase of $235.9$444.7 million compared to the first threesix months of 2025, driven primarily by sales of our TAVR and TMTT products.

Our gross profit increased in the threesix months ended MarchJune 31,30, 2026, driven primarily by our sales growth. Gross profit as a percentage of sales decreased primarily due to the impact from foreign currency rate fluctuations andpartially additionaloffset by lower manufacturing expenses related to expansion of new therapies.expenses. The increasedecrease in our diluted earnings per share in the threesix months ended MarchJune 31,30, 2026, was driven by an increase in our tax expense partially offset by our aforementioned operational performance.

Net sales of TAVR products increased for the three and six months ended MarchJune 31,30, 2026, driven by higher sales of the Edwards SAPIEN platform in 2026, primarily due to higher sales of the Edwards SAPIEN 3 Ultra RESILIA valve in the United States, Europe, and Japan. In addition, during the three and six months ended MarchJune 31,30, 2026, foreign currency exchange rate fluctuations increased net sales outside of the United States by $32.0$8.4 million and $40.4 million, respectively, primarily due to the strengthening of the Euro against the United States dollar.

In January 2026, we received United States Food and Drug Administration (“FDA”) approval for the SAPIEN 3 transcatheter pulmonic valve delivery system, an advancement designed specifically to support pediatric and adult patients living with congenital heart disease.

Net sales of TMTT products increased for the three and six months ended MarchJune 31,30, 2026, primarily due to higher sales of our PASCAL transcatheter edge-to-edge repair system andsystem, EVOQUE tricuspid valve replacement system, and SAPIEN M3 mitral valve replacement system in the United States and Europe.

Net sales of Surgical products increased for the three and six months ended MarchJune 31,30, 2026, primarily due to higher sales of the INSPIRIS RESILIA aortic valve, the MITRIS RESILIA valve, and KONECT RESILIA tissue valved conduit in the United States and Europe.

Our gross profit increased in the three and six months ended MarchJune 31,30, 2026, primarily driven by our sales growth discussed above. GrossThe change in gross profit as a percentage of net sales decreased for the three and six months ended MarchJune 31,30, 2026,2026 was primarily driven by a 0.30.7 percentage point and 0.5 percentage point negative impactimpact, respectively, from foreign currency rate fluctuations, including the settlement of foreign currency hedging contracts, andpartially additionaloffset by lower manufacturing expenses related to expansion of new therapies.expenses.

SG&A expenses increased for the three and six months ended MarchJune 31,30, 2026, primarily due to higher headcount related expenses and commercial activities to support patient care. Foreign currency exchange rate fluctuations increased expenses by $14.6$6.0 million and $20.6 million during the three and six months ended MarchJune 31,30, 2026, respectively, primarily due to the weakening of United States dollar against the Euro.

R&D expenses increased for the three and six months ended MarchJune 31,30, 2026, primarily due to increased investments in implantable heart failure management and advanced technology innovation.

We incurred certain litigation expenses related to legal proceedings, intellectual property litigation and tax litigation of $37.1$6.3 million and $10.9$15.5 million during the three months ended MarchJune 31,30, 2026 and 2025, respectively and $43.4 million and $26.4 million during the six months ended June 30, 2026 and 2025, respectively (see Note 12 to the Condensed Consolidated Financial Statements).

Other operating income of $14.2$11.0 million and $19.1$25.2 million in the three and six months ended MarchJune 31,30, 2026 and 2025,2026, included income from transition services agreements of $13.2$11.5 million and $17.9$24.7 million, respectively (see Note 4 to the Condensed Consolidated Financial Statements).

Interest incomeincome, net was $33.5$30.0 million and $36.5$63.5 million for the three and six months ended MarchJune 31,30, 20262026, respectively, and $37.4 million and $73.9 million for the three and six months ended June 30, 2025, respectively. The decrease in interest income was primarily due to a lower average investment balance and lower yield during the three and six months ended MarchJune 31,30, 2026.

Loss on impairment of $123.6$40.0 million and $163.6 million in the three and six months ended MarchJune 31,30, 20262026, wasrespectively, were due to the carrying amounttermination of the option agreement to acquire one of our VIE investments and the carrying amount of another VIE investment not being recoverable (see Note 6 to the Condensed Consolidated Financial Statements).

Other non-operating income,(income) expense, net

Other non-operating income, net was $71.5$16.6 million and $2.6$88.1 million for the three and six months ended MarchJune 31,30, 2026 and 2025,2026, respectively. The increase in other non-operating income was driven primarily by a gain from the remeasurement of our previously held interest upon acquisition of Autus and Consolidated VIE (see Note 7 to the Condensed Consolidated Financial Statements).

Our effective income tax rate attributable to continuing operations was 17.1%53.6% and 16.2%16.1% for the three months ended MarchJune 31,30, 2026 and 2025, respectively and 36.4% and 16.1% for the six months ended June 30, 2026 and 2025, respectively. The increase in the effective rate between the threesix months ended MarchJune 31,30, 2026 and 2025 was primarily due to (1) a $188.2 million valuation allowance recorded against certain deferred tax assets in the second quarter of 2026 as a result of enactment of California budget legislation on June 29, 2026, which, as noted below, permanently limits the utilization of most business tax credits, including carryovers of research and development tax credits, (2) a decrease in the benefit from foreign earnings taxed at a lower rate,rates, and (3) an increase in global minimum tax (“"Pillar Two,”" as noted below), andpartially aoffset decreaseby (4) an increase in the tax benefit from employee share-based compensation. InAs addition,a result, the effective ratestax rate for the threesix months ended MarchJune 31,30, 2026 andwas 2025higher werethan the federal statutory rate of 21.0%. For the six months ended June 30, 2025, the effective tax rate was lower than the federal statutory rate of 21.0% primarily due to (1) foreign earnings taxed at lower rates, (2) United States federal and California research and development credits, and (3) the tax benefit from foreign-derived deduction eligible income.

In the first quarter of 2022, weWe executed an AdvanceAdvanced Pricing Agreement (“APA”) between Japan and Switzerland covering distribution transactions for tax years 2020 through 2024, and in 2023, we executed an APA between Japan and the United States covering tax years 2020 through 2024. We also executed an APA in the fourth quarter of 2024 between Japan and Singapore covering tax years 2022 through 20262026, with roll-backrollback termsprovisions to covercovering the distribution of TAVR products beginning in 2020 and the distribution of Surgical products beginning in 2018.

At MarchJune 31,30, 2026, all material state, local, and foreign income tax matters have been concluded for years through 2015.2019.

Surgical/TAVR intercompany royalty transactions covering tax years 2018 through 2026 remain subject to IRS examination, and those transactions and related tax positions remain uncertain as of MarchJune 31,30, 2026. We have considered this information, as well as information regarding the NOD and other proceedings described above, in our evaluation of our uncertain tax positions. The impact of these unresolved transfer pricing matters, net of any correlative tax adjustments, could have a material impact on our consolidated financial statements. Based on the information currently available and numerous possible outcomes, we cannot reasonably estimate what, if any, changes in our existing uncertain tax positions may occur in the next 12 months and, therefore, have continued to record the uncertain tax positions as a long-term liability.

AfterDuring the firstsecond quarter of 2026, we received two draft Notices of Proposed Adjustment that were issued as final (the “DraftFinal NOPAs”) fromprior to the IRSend forof the 2018second through 2020 tax years.quarter. The first of the DraftFinal NOPAs relates to certain tax elections made in 2018 and proposes an increase to our U.S. taxable income in the amount of approximately $233.5 million for 2018. The second of the DraftFinal NOPAs relates to the transfer pricing of certain intercompany royaltylicense transactions related to our Surgical and TAVR product groups and proposes increases to our U.S. taxable income for 2018, 2019, and 2020 in the amounts of $625.3 million, $530.7 million, and $683.6 million, respectively. The proposed increases in the second of the Draft NOPAs will reduce the adjustment in the first of the Draft NOPAs as the two adjustments relate to overlapping income. We are evaluating the Draft NOPAs and intend to engage with the IRS examination function regarding the factual and legal matters described therein. If we and the IRS examination function are(“Exam”) unablecontinue to agreeengage onin discussions and have adjusted the audit timeline to accommodate a resolution,potential thenresolution. If we do not reach a resolution with Exam, we expect the IRS to receiveissue finalanother NOPAsNOPA byin endthe third quarter of 2026 imposing 40% transfer pricing penalties on the tax underpayments attributable to the increased taxable income resulting from the IRS’s proposed transfer pricing adjustments received in the second quarter of 20262026. andWe also anticipate receiving the related Revenue Agent’s Report by the end of the third quarter of 2026. IfWith werespect receiveto aany Revenueunagreed Agent’s Report,issues, we intend to pursue all available remedies, including administrative appeals and litigation, which could extend over several years. We believe that the amounts previously accrued related to these uncertain tax positions are adequate and, accordingly, no additional amounts have been recorded. However, an adverse outcome could have a material adverse impact to our consolidated financial statements in the period of resolution.

During the first quarter of 2024, we received a notice of assessment from the Israel Tax Authority (the “ITA”) wherein the ITA claimed that we owe approximately $110.0 million of tax excluding interest and penalties in connection with a claimed 2017 transfer of intellectual property. On July 31, 2025, the ITA formally informed us that it was withdrawing its 2017 assessment but reserves the right to evaluate whether intellectual property was transferred in later years. We maintain that we did not transfer intellectual property outside of Israel and would vigorously defend that position through administrative proceedings including with appeals if the issue is raised in later years. If necessary, we expect to defend that position through judicial proceedings. During the fourth quarter of 2024, we received a notice of assessment from the ITA claiming that we owe additional tax of approximately $16.0 million excluding interest and penalties for the 2018 through 2022 tax years based entirely on the collateral impacts of the 2017 assessment. We filed a formal appeal in the first quarter of 2025. In the third quarter of 2025, the ITA agreed that intellectual property was not transferred in 2017 and withdrew its assessment. In the first quarter of 2026, we were notified that the ITA had withdrawn its assessment for the 2018 and 2019 taxable years. For taxable years 2020-2022,2020 through 2022, the ITA has until the expiration of each year’s respective statute of limitations to respond to our appeal. If the 2020 through 2022 assessments are not withdrawn, we will defend our position through judicial proceedings.

As of MarchJune 31,30, 2026, cash and cash equivalents, and short-term investments held in the United States and outside of the United States were $3.2$3.7 billion and $436.7$540.5 million, respectively.

We have a five-year Credit Agreement (the “Credit Agreement”) which provides for a $750.0 million multi-currency unsecured revolving credit facility and matures on July 15, 2027. We may increase the amount available under the Credit Agreement by up to an additional $250.0 million in the aggregate and extend the maturity date for an additional year, subject to the agreement of the lenders. As of MarchJune 31,30, 2026, no amounts were outstanding under the Credit Agreement.

In June 2018, we issued $600.0 million of 4.3% fixed-rate unsecured senior notes (the “2018 Notes”) due June 15, 2028. We may redeem the 2018 Notes, in whole or in part, at any time and from time to time at specified redemption prices. As of MarchJune 31,30, 2026, we have not elected to redeem any of the 2018 Notes. As of MarchJune 31,30, 2026, the carrying value of the 2018 Notes was $598.5$598.7 million.

From time to time, we repurchase shares of our common stock under share repurchase programs authorized by the Board of Directors. We consider several factors in determining when to execute share repurchases, including, among other things, expected dilution from stock plans, cash capacity, and the market price of our common stock. During the threesix months ended MarchJune 31,30, 2026, under the Board-authorized repurchase program, we repurchased a total of 4.96.9 million shares at an aggregate cost of $520.1$558.7 million, including pursuant to a $500.0 million accelerated share repurchase agreements executed during the period (see Note 11 to the Condensed Consolidated Financial Statements). As of MarchJune 31,30, 2026, we had remaining authority to purchase approximately $1.5 billion of our common stock under the share repurchase program.

In February 2026, we completed the acquisition of Autus for total consideration of $128.9 million, which included cash consideration of $35.1 million and was funded using our existing cash. As of MarchJune 31,30, 2026, the potential future payments upon achievement of certain regulatory, performance, and sales milestones pursuant to our business acquisition agreements could aggregate up to a total of $332.5 million.

At MarchJune 31,30, 2026, there had been no material changes in our cash requirements from known contractual and other obligations, including commitments for capital expenditures, as disclosed in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended December 31, 2025.

Consolidated Cash Flows -— For the threesix months ended MarchJune 31,30, 2026 and 2025:

Net cash used in investing activities of $92.8$286.0 million for the threesix months ended MarchJune 31,30, 2026, consisted primarily of capital expenditures of $64.9$131.8 million, issuance of notes receivablesreceivable of $55.2$53.2 million, and anet paymentpayments of $35.1$33.7 million related to acquirebusiness a company,combinations, partially offset by net proceedspurchases fromof investments of $62.7$63.0 million.

Net cash providedused byin investing activities of $85.3$86.8 million for the threesix months ended MarchJune 31,30, 2025, consisted primarily of net proceeds from investments of $198.4 million, partially offset by capital expenditures of $56.0$105.3 millionmillion, andissuance of notes receivable of $70.6 million, a payment for a net working capital adjustment of $36.3 million related to the sale of Critical Care.Care, and payment of acquisition options of $17.0 million, partially offset by net proceeds from investments of $145.8 million.

Net cash used in financing activities of $451.2$451.5 million for the threesix months ended MarchJune 31,30, 2026, consisted primarily of purchases of treasury stock of $521.8$575.1 million, partially offset by proceeds from stock plans of $68.9$122.7 million.

Net cash used in financing activities of $258.0$205.3 million for the threesix months ended MarchJune 31,30, 2025, consisted primarily of purchases of treasury stock of $308.6$314.1 million, partially offset by proceeds from stock plans of $49.9$107.1 million.