Boston Scientific BSX · USD

NOTE M – SEGMENT REPORTING We aggregate our core businesses into two reportable segments: MedSurg and Cardiovascular, each of which generates revenues from the sale of medical devices. In accordance with FASB ASC Topic 280, Segment Reporting, we identified our reportable segments based on the nature of our products, production processes, type of customer, selling and distribution methods and regulatory environment, as well as the economic characteristics of each of our operating segments. In the fourth quarter of 2025, we reorganized our operating segments; this change had no impact on our reportable segments. Our chief operating decision maker (CODM) is our President and Chief Executive Officer.We measure and evaluate our reportable segments based on their respective net sales, cost of goods sold, selling, general and administrative expenses, research and development expenses, operating income, excluding intersegment profits, and operating income as a percentage of net sales, all based on internally-derived standard currency exchange rates to exclude the impact of foreign currency, which may be updated from year to year. We exclude from segment expenses and segment operating income certain corporate-related expenses and certain transactions or adjustments that our CODM considers to be non-operational, such as amounts related to amortization expense, goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and European Union (EU) Medical Device Regulation (MDR) implementation costs. Although we exclude these amounts from segment expenses and segment operating income, they are included in reported Income (loss) before income taxes within our consolidated statements of operations and are included in the reconciliation below. The CODM uses segment operating income in the strategic plan, annual operating plan and other forecasting cycles. During these forecasting cycles, the CODM compares budget versus actual results to evaluate both internal and external events and conditions, which are used in assessing the performance of the reportable segments and to allocate resources across our reportable segments. Refer to Note N – Revenue for net sales by reportable segment presented in accordance with GAAP.

NOTE N – REVENUEWe generate revenue primarily from the sale of single-use medical devices and present revenue net of sales taxes within our consolidated statements of operations. In the fourth quarter of 2025, we reorganized our business structure into four operating segments. The following tables disaggregate our revenue from contracts with customers by business unit and geographic region (in millions). Generally, we allocate revenue from contracts with customers to geographic regions based on the location where the sale originated. We have revised prior periods to conform to current year presentation.Year Ended December 31,202520242023BusinessesU.S.Int'lTotalU.S.Int'lTotalU.S.Int'lTotalEndoscopy$1,802 $1,115 $2,916 $1,651 $1,036 $2,687 $1,511 $970 $2,482 Urology2,000 709 2,709 1,557 643 2,200 1,369 595 1,964 Neuromodulation914 285 1,199 847 259 1,106 736 240 976 MedSurg4,715 2,108 6,824 4,054 1,939 5,993 3,617 1,805 5,422 Interventional Cardiology & Vascular Therapies2,007 2,632 4,639 1,607 2,592 4,199 1,436 2,355 3,791 Watchman1,791 167 1,958 1,371 145 1,516 1,155 119 1,274 Electrophysiology2,311 1,014 3,325 1,256 648 1,904 370 430 800 Cardiac Rhythm Management1,425 907 2,332 1,403 876 2,279 1,405 813 2,218 Interventional Oncology & Embolization615 381 996 518 338 856 442 294 736 Cardiovascular8,149 5,101 13,250 6,156 4,599 10,755 4,808 4,011 8,819 Total Net Sales$12,864 $7,210 $20,074 $10,210 $6,538 $16,747 $8,425 $5,816 $14,240 Refer to Note M – Segment Reporting for information on our reportable segments.Year Ended December 31,Geographic Regions202520242023U.S.$12,864 $10,210 $8,425 Europe, Middle East and Africa3,451 3,228 2,856 Asia-Pacific3,080 2,686 2,400 Latin America and Canada678 624 560 Total Net Sales$20,074 $16,747 $14,240 Emerging Markets(1)$2,985 $2,680 $2,310 (1) Our Emerging Markets countries include all countries except the United States, Western and Central Europe, Japan, Australia, New Zealand and Canada.Deferred RevenueContract liabilities are classified within Other current liabilities and Other long-term liabilities within our accompanying consolidated balance sheets. Our deferred revenue balance was $682 million as of December 31, 2025 and $635 million as of December 31, 2024. Our contract liabilities are primarily composed of deferred revenue related to the LATITUDE™ Patient Management System within our Cardiovascular business, for which revenue is recognized over the average service period based on device and patient longevity.

NOTE I – COMMITMENTS AND CONTINGENCIES We are involved in various legal proceedings, including intellectual property, product liability, securities and commercial claims and disputes, employment matters, environmental matters, governmental inquiries, investigations and proceedings, and other legal matters that arise from time to time in the ordinary course of our business, including those described below.In recent years, we have successfully negotiated closure of several long-standing legal matters and have received favorable rulings in several other matters, however, there continues to be outstanding litigation and disputes. Adverse outcomes in one or more of these matters could have a material adverse effect on our ability to sell certain products and on our operating margins, financial position, results of operations and/or liquidity.Intellectual property rights, particularly patents and trade secrets, play a significant role in product development and differentiation. From time to time, we face litigation initiated against us by others, including our competitors, claiming that our current or former product offerings infringe patents owned or licensed by them. Intellectual property litigation is inherently complex and unpredictable. In addition, competing parties frequently file multiple suits to leverage patent portfolios across product lines, technologies and geographies and to balance risk and exposure between the parties. In some cases, several competitors are parties in the same proceeding, or in a series of related proceedings, or litigate multiple features of a single class of devices. These dynamics frequently drive settlement not only for individual cases, but also for a series of pending and potentially related and unrelated cases. Although monetary and injunctive relief is typically sought, remedies and restitution are generally not determined until the conclusion of the trial court proceedings and can be modified on appeal. Accordingly, the outcomes of individual cases are difficult to time, predict or quantify and are often dependent upon the outcomes of other cases in other geographies. Product liability, securities, environmental and commercial claims have been asserted against us and similar or other claims may be asserted against us in the future related to events not known to management at the present time.

NOTE H – INCOME TAXES Our Income (loss) before income taxes consisted of the following:Year Ended December 31,(in millions)202520242023Domestic$(311)$(261)$(394)Foreign3,696 2,542 2,379 Total$3,385 $2,282 $1,985 The related expense (benefit) for income taxes consisted of the following:Year Ended December 31,(in millions)202520242023CurrentFederal$242 $310 $189 State22 31 15 Foreign241 184 116 Total Current505 526 320 DeferredFederal(66)(131)(82)State(53)(52)(22)Foreign107 92 176 Total Deferred(12)(90)73 Total expense (benefit) for income taxes$493 $436 $393 We adopted ASC Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09) on a prospective basis beginning with the year ended December 31, 2025. The reconciliation of income taxes at the federal statutory rate to the reported rate for income taxes pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows: Year Ended December 31, 2025 (in millions)AmountPercentU.S. Federal Statutory Tax Rate$711 21.0 %State and Local Income Taxes, Net of Federal Income Tax Effects(1)(39)(1.2) %Foreign Tax EffectsCosta RicaStatutory Tax Rate Differential(349)(10.3) %IrelandStatutory Tax Rate Differential(136)(4.0) %Other27 0.8 %Other Foreign Jurisdictions4 0.1 %Effect of Cross-Border Tax LawsGlobal Intangible Low-Taxed Income328 9.7 %Other(29)(0.9) %Tax CreditsResearch and Development Tax Credits(61)(1.8) %Nontaxable or Nondeductible ItemsCompensation-Related(37)(1.1) %Other33 1.0 %Other Adjustments42 1.2 %Reported Tax Rate$493 14.6 %(1) State taxes in California, New Jersey, Massachusetts, Minnesota, Illinois and Michigan made up the majority (greater than 50%) of the tax effect in this category.The reconciliation of income taxes at the federal statutory rate to the reported rate for income taxes for years prior to our adoption of ASU 2023-09 is as follows:Year Ended December 31,20242023U.S. federal statutory income tax rate21.0 %21.0 %State income taxes, net of federal benefit0.1 %0.7 %Domestic taxes on foreign earnings9.2 %6.9 %Effect of foreign taxes(12.2)%(15.3)%Acquisition-related1.5 %2.2 %Research credit(3.1)%(2.9)%Valuation allowance0.4 %7.5 %Compensation-related(0.1)%0.5 %Non-deductible expenses0.6 %0.4 %Uncertain tax positions1.3 %(0.5)%Return to provision0.5 %(0.1)%Change in tax rates0.1 %(0.6)%Other, net(0.2)%— %Reported tax rate19.1 %19.

NOTE F – LEASES We have operating and finance leases for real estate including corporate offices, land, warehouse space, vehicles and certain equipment. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet, unless the arrangement includes an option to purchase the underlying asset, or an option to renew the arrangement, that we are reasonably certain to exercise (short-term leases). We recognize lease expense on a straight-line basis over the lease term for short-term leases that we do not record on our balance sheet. If there is a change in our assessment of the lease term and, as a result, the remaining lease term extends more than 12 months from the end of the previously determined lease term, or we subsequently become reasonably certain that we will exercise an option to purchase the underlying asset, the lease no longer meets the definition of a short-term lease and is accounted for as either an operating or finance lease and recognized on the balance sheet. In accordance with FASB ASC Topic 842, we account for the lease components and the non-lease components as a single lease component, with the exception of our warehouse leases. Our leases have remaining lease terms of less than 1 year to approximately 51 years, some of which may include options to extend the leases for up to 10 years. If we are reasonably certain we will exercise an option to extend the lease, the time period covered by the extension option is included in the lease term.We determine whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception of the arrangement. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, we utilize the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. Our operating lease right-of-use assets are presented within Other long-term assets and corresponding liabilities are presented within Other current liabilities and Other long-term liabilities on our consolidated balance sheets.

NOTE B – ACQUISITIONS AND STRATEGIC INVESTMENTS Our consolidated financial statements include the operating results for acquired entities from the respective dates of acquisition. We have not presented supplemental pro forma financial information for completed acquisitions or divestitures given their results are not material to our consolidated financial statements. Further, transaction costs were immaterial to our consolidated financial statements and were expensed as incurred.On January 27, 2026, we completed our acquisition of 100 percent of Nalu Medical, Inc. (Nalu Medical), a privately held medical technology company focused on developing and commercializing innovative and minimally invasive solutions for patients with chronic pain. We had been an investor in Nalu Medical since 2017 and previously held an equity stake of approximately nine percent. The transaction to acquire the remaining stake consisted of an upfront cash payment of approximately $517 million, net of cash acquired. The Nalu Medical business will be integrated into our Neuromodulation division.On January 15, 2026, we announced our entry into a definitive agreement to acquire 100 percent of Penumbra, Inc. (Penumbra), a publicly traded medical technology company primarily focused on thrombectomy products for use in peripheral vascular procedures in the removal of blood clots and blockages. The purchase price is valued at $374 per share, or approximately $14.500 billion. The transaction is expected to be completed in 2026, subject to customary closing conditions. The Penumbra business will be integrated into our Cardiovascular division. 2025 AcquisitionsOn July 11, 2025, we completed our acquisition of 100 percent of Anrei Medical (HZ) Co., Ltd. (Anrei Medical), a privately held company that specializes in the design and production of medical devices for minimally invasive procedures primarily serving the field of gastroenterology. The transaction price consisted of an upfront cash payment, net of cash acquired, of approximately $182 million. The Anrei Medical portfolio complements our existing Endoscopy portfolio which will provide physicians with more treatment options to meet specific patient needs.On May 7, 2025, we completed our acquisition of the remaining shares of SoniVie Ltd. (SoniVie), a privately held medical device company that has developed the TIVUS™ Intravascular Ultrasound System.

Risk Management and StrategyWe have established an enterprise cybersecurity program, which is administered by a cross-functional team of cybersecurity professionals that includes employees and third party contractors and vendors, that utilizes various tools, methodologies and processes to assess, identify and manage cybersecurity risks related to our information technology (IT) and operational technology (OT) systems. Our cybersecurity program is designed to monitor and continually enhance our enterprise security posture, including assessments to evaluate readiness and resilience with the goal of preventing incidents and mitigating the impact in the event an incident occurs. We have implemented cybersecurity policies mapped to industry and government standards and frameworks, such as U.S. National Institute of Standards and Technology (NIST) and International Standard of Organization, and our strategy is aligned to the NIST CyberSecurity Framework that provides us a structured approach to managing our cybersecurity risk through its five core functions. We regularly review our cybersecurity policies and require annual cybersecurity training for our employees. We also periodically conduct simulation exercises involving employees at various levels of the organization and provide annual cybersecurity briefings to our Board of Directors. Cybersecurity education has also been provided to our Board of Directors to support incident preparedness. We have an established product cybersecurity program that ensures cybersecurity risk management is incorporated into the entire lifecycle for all of our products. Our product cybersecurity program applies various tools, methodologies and processes to each lifecycle stage and helps ensure that our products are designed, built, tested, deployed and maintained in accordance with medical device cybersecurity standards, best practices, and guidance documents. This serves to build appropriate cybersecurity controls into our medical device products while also meeting regulatory compliance objectives.We engage third-party security partners for specialized services such as incident response, penetration testing, and on-demand cybersecurity support. We also use a managed security service provider to enhance our security operations center with AI-enabled monitoring, analysis, and threat correlation capabilities.

Documents Incorporated by ReferencePortions of the registrant’s definitive proxy statement to be filed within 120 days of December 31, 2025 with the Securities and Exchange Commission in connection with its 2026 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.