Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis presents the factors that had a material effect on our results of operations during the two years ended December 31, 2025. Also discussed is our financial position as of December 31, 2025, and our consolidated cash flows for 2025 compared to 2024. You should read this discussion in conjunction with the historical consolidated financial statements and related notes included elsewhere in this Form 10-K. For a discussion related to the results of operations for 2024 compared to 2023 and a discussion related to our consolidated cash flows for 2024 compared to 2023, refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report on Form 10–K filed with the Securities and Exchange Commission on February 28, 2025.

Overview

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 meaningful 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 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”).

On December 18, 2025, we completed the sale of a business that is not focused on implantable medical innovations for structural heart disease (the “non-core product group”). On September 3, 2024, we sold our Critical Care product group (“Critical Care”) to Becton, Dickinson and Company (“BD”). We concluded that the non-core product group met the criteria to be classified as held-for-sale in September 2024 and the Critical Care met the criteria to be classified as held-for-sale in June 2024. We determined that, when considered together, the conditions for discontinued operations presentation had been met with respect to each of Critical Care and the non-core product group (collectively, the “discontinued product groups”). As such, the historical financial condition and results of the discontinued product groups have been reflected as discontinued operations in our consolidated financial statements. Our discussion and analysis of our results of operations is reflective of our continuing operations. See Note 5 to the Consolidated Financial Statements for further information.

Financial Highlights and Market Update

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Financial Highlights

Our net sales for 2025 were $6.1 billion, representing an increase of $628.1 million over 2024, driven primarily by sales growth of our TAVR and TMTT products.

Our gross profit increased in 2025, driven by our sales growth. Gross profit as a percentage of sales decreased primarily due to higher operational expenses. The decrease in our net income and diluted earnings per share in 2025 was driven primarily byincreases in personnel-related costs, one-time charges related to impairments on our investments, and increased certain litigation expenses. For further information, see Note 3, Note 9 and Note 20 to the Consolidated Financial Statements.

Healthcare Environment, Opportunities, and Challenges

The medical technology industry is highly competitive and continues to evolve. Our success is measured both by the development of innovative products and the value we bring to our stakeholders. We are committed to developing new technologies and innovations, and we are committed to defending our intellectual property in support of those developments. Our vision for growth is to treat patients with both valvular and non-valvular structural heart disease, such as heart failure, which is a natural progression of the disease for many patients suffering from aortic stenosis and mitral and tricuspid regurgitation. In 2025, we invested 18% of our net sales in research and development. The following is a summary of important developments since January 1, 2025:

•we received United States Food and Drug Administration (“FDA”) approval for the SAPIEN 3 platform for severe aortic stenosis patients without symptoms;

•we received FDA and CE Mark approval for the SAPIEN M3 mitral valve replacement system, launching in both Europe and the U.S. the first transcatheter therapy utilizing a transseptal approach for treatment of patients with symptomatic (moderate-to-severe or severe) mitral regurgitation who are deemed unsuitable for surgery or transcatheter edge-to-edge therapy;

•we received a CE Mark for and launched in Europe the KONECT RESILIA aortic valved conduit, the first ready-to-implant solution with RESILIA tissue specifically designed for bio-Bentall procedures;

•we announced new eight-year data showing that patients receiving aortic surgical valves treated with our proprietary RESILIA tissue technology have significantly improved long-term outcomes compared to those receiving non-RESILIA tissue bioprosthetic valves;

•we announced ENCIRCLE pivotal trial results demonstrating successful patient outcomes supporting our portfolio of mitral and tricuspid therapies;

•we completed enrollment in the CLASP IIF trial for the PASCAL transcatheter valve repair system;

•we announced seven-year data from the PARTNER 3 trial, reaffirming the early and sustained patient benefits of Edwards TAVR; and

•we announced our founding sponsorship of the American Heart Association’s Heart Valve Initiative, a national effort to improve care and outcomes for the more than 28 million people living with heart valve disease worldwide.

We are dedicated to generating robust clinical, economic, and quality-of-life evidence increasingly expected by patients, clinicians, and payors in the current healthcare environment, with the goal of encouraging the adoption of innovative new medical therapies that demonstrate superior outcomes.

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Results of Operations

Net Sales by Geographic Region

(dollars in millions)

Years Ended December 31, Change

Net sales outside of the United States include the impact of foreign currency exchange rate fluctuations, as further detailed in the discussion below. The impact of foreign currency exchange rate fluctuations on net sales is not necessarily indicative of the impact on net income due to the corresponding effect of foreign currency exchange rate fluctuations on international manufacturing and operating costs, and our hedging activities. For more information, see “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A.

Net Sales by Product Group

(dollars in millions)

Years Ended December 31, Change

Transcatheter Aortic Valve Replacement

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Net sales of TAVR products increased in 2025, driven by higher sales of the Edwards SAPIEN platform in 2025, primarily due to higher sales of the Edwards SAPIEN 3Ultra RESILIA valve in the United States and 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.

Transcatheter Mitral and Tricuspid Therapies

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

Surgical Structural Heart

Net sales of Surgical products increased in 2025 primarily due to higher sales of the INSPIRIS RESILIA aortic valve and the MITRIS RESILIA in the United States, Europe and Rest of World, and the KONECT RESILIA tissue valved conduit in the United States.

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Gross Profit

Our gross profit increased in 2025 compared to 2024, driven by our sales growth discussed above. Gross profit as a percentage of net sales decreased in 2025, primarily driven by higher operational expenses.

Selling, General, and Administrative (“SG&A”) Expenses

SG&A expenses increased in 2025 compared to 2024 primarily due to (a) higher field-based personnel-related costs in support of our growth strategy initiatives, primarily in the United States, (b) increased marketing expenses primarily related to TAVR, (c) increased performance-based compensation expenses, and (d) increased professional services costs to support the transition services agreement.

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Research and Development (“R&D”) Expenses

R&D expenses increased in 2025 compared to 2024 primarily due to increased investments in implantable heart failure management innovations.

Intellectual Property Agreement and Certain Litigation Expenses

We incurred certain expenses related to legal settlement and contingency, intellectual property litigation, and tax litigation of $325.4 million and $40.4 million during 2025 and 2024, respectively. For further information, see Note 3, Note 9 and Note 20 to the Consolidated Financial Statements.

Change in Fair Value of Contingent Consideration Liabilities, net

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

Restructuring Charges, Separation Costs, and Other

In 2025 and 2024, we recorded expenses of $13.1 million and $32.9 million, respectively, related to severance associated with realignment initiatives. In 2025 and 2024, we also recorded expenses of $8.5 million and $19.0 million, respectively, primarily related to costs incurred for professional advisory services associated with the sale of Critical Care to BD.

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

Intangible Assets Impairment Charges

Intangible assets impairment loss of $40.0 million in 2025 related to certain developed technology assets. There were no intangible assets impairment charges recognized in 2024.

Other Operating Income, net

Other operating income, net of $67.2 million in 2025 primarily included income from the transition services agreement relating to the sale of Critical Care of $63.7 million. For further information, see Note 5 to the Consolidated Financial Statements.

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Interest Expense

Interest expense was $20.4 million and $19.8 million in 2025 and 2024, respectively. The increase in interest expense resulted primarily from lower capitalizable interest related to facilities construction.

Interest Income

Interest income was $168.8 million and $120.3 million in 2025 and 2024, respectively. The increase in interest income resulted primarily from a higher average investment balance.

Loss on Impairment

Loss on impairment of $146.9 million in 2025 related to our investment in a promissory note and our determination to not exercise an option to acquire one of our VIE investments. For further information, see Note 9 to the Consolidated Financial Statements.

Other Non-operating Income, net

Other non-operating income, net was $7.2 million and $68.9 million in 2025 and 2024, respectively. The decrease in other income was driven primarily by gains from the remeasurement of our previously held equity interests upon acquisition of the investees in 2024. For further information, see Note 10 to the Consolidated Financial Statements.

Provision for Income Taxes

($ in millions)

Years Ended December 31, Change

Effective tax rate 17.0 % 9.8 %

Our effective income tax rate in 2025 and 2024 was 17.0% and 9.8%, respectively. Our effective tax rate for 2025 increased in comparison to 2024 primarily due to the impact of Pillar Two (see below), other local tax increases, and certain non-deductible litigation expenses. For further information, see Note 3 to the Consolidated Financial Statements. The effective rates for 2025 and 2024 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 foreign-derived intangible income.

Many countries are implementing some or all of the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting Pillar Two (“Pillar Two”) rules that impose a global minimum tax of 15% on reported profits. Although Pillar Two provides a framework for applying the minimum tax, countries may enact Pillar Two differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar Two. In addition, in January 2025, the United States issued an executive order announcing opposition to aspects of these rules. As countries continue to enact and refine the Pillar Two rules, we will evaluate the potential effects of Pillar Two on our effective tax rate. In 2025, the Pillar Two provisions resulted in additional tax expense of approximately $19.1 million.

In December 2017, the Tax Cuts and Jobs Act of 2017 (the "2017 Act") was signed into law. The 2017 Act required companies to pay a one-time mandatory deemed repatriation tax on the cumulative earnings of certain foreign subsidiaries that were previously tax deferred. We elected to pay the repatriation tax in installments over eight years. As of December 31, 2024, we had a remaining tax obligation of $78.5 million related to the deemed repatriation. The final installment of $78.5 million was paid in the second quarter of 2025.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the 2017 Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through

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2027. The OBBBA did not have a material impact to our tax expense in 2025 and is not expected to have a material impact on future periods.

As of December 31, 2025, we had $245.3 million of gross California research expenditure tax credits that we expect to use in future periods. The credits may be carried forward indefinitely. Based upon anticipated future taxable income, we expect that it is more likely than not that all California research expenditure tax credits will be utilized, although the utilization of the full benefit is expected to be realized over an extended period of time. Accordingly, no valuation allowance has been provided. We also had $69.5 million of United States foreign tax credits of which $47.2 million are expected to be utilized before the end of the 10-year carryforward period. As a result, we recorded a valuation allowance of $22.3 million on the United States foreign tax credit carryforwards which have been determined to be unrealizable.

As of December 31, 2025, our gross uncertain tax positions were $767.4 million. We estimate that these liabilities would be reduced by $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 $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 audits, 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. Considering ongoing supply chain changes, we have withdrawn our APA renewal application between Japan and the United States for tax years 2025 through 2029.

The audits of our United States federal income tax returns through 2014 have been closed. The IRS audit field work for the 2015 through 2017 tax years was completed during the second quarter of 2021, except for transfer pricing and related matters. The IRS is currently examining the 2018 through 2020 tax years.

The audits of our material state, local, and foreign income tax matters have been concluded for years through 2015.

During 2021, we received a Notice of Proposed Adjustment (“NOPA”) from the IRS for the 2015 through 2017 tax years relating to transfer pricing involving Surgical/TAVR intercompany royalty transactions between our United States and Switzerland subsidiaries. The NOPA proposed a substantial increase to our United States taxable income, which could result in additional tax expense for the 2015 through 2017 period of approximately $260.0 million and reflects a departure from a transfer pricing method we had previously agreed upon with the IRS. We disagreed with the NOPA and pursued an administrative appeal with the IRS Independent Office of Appeals (“Appeals”). The Appeals process culminated in the third quarter of 2023 when we and Appeals concluded that a satisfactory resolution of the matter at the administrative level was not possible.

During the fourth quarter of 2023, Appeals issued a notice of deficiency (“NOD”) increasing our 2015 through 2017 United States federal income tax in amounts resulting from the income adjustments previously reflected in the

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NOPA. The additional tax sought in excess of our filing is $269.3 million before consideration of interest and a repatriation tax offset.

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. 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 are now able to sue for refunds in the appropriate judicial forum.

Surgical/TAVR intercompany royalty transactions covering tax years 2018 through 2025 remain subject to IRS examination, and those transactions and related tax positions remain uncertain as of December 31, 2025. 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, may be significant to 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.

We have received tax incentives in certain non-United States tax jurisdictions, the primary benefit for which will expire in 2032. The tax reductions to cash tax expense as compared to the local statutory rates were $93.9 million ($0.16 per diluted share) and $249.3 million ($0.42 per diluted share) for the years ended December 31, 2025 and 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 $110.0 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 in 2017 or in any subsequent year. We filed a formal appeal of the assessment in the third quarter of 2024. During the fourth quarter of 2024, we received a second notice of assessment from the ITA claiming that we owe additional tax of approximately $16.0 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 of the second assessment 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. 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.

Liquidity and Capital Resources

Our sources of cash liquidity include cash and cash equivalents, short-term investments, cash from operations, and amounts available under credit facilities. We believe that these sources are sufficient to fund the current and long-term requirements of working capital, capital expenditures, and other financial commitments. However, we periodically consider various financing alternatives and may, from time to time, seek to take advantage of favorable interest rate environments or other market conditions.

As of December 31, 2025, cash, cash equivalents, and short-term investments held in the United States and outside of the United States were $3.7 billion and $516.1 million, respectively. During 2025, we repatriated cash of $1.5 billion. We assert that $405.8 million of our foreign earnings continue to be permanently reinvested and our intent is to repatriate, in the future, $720.9 million of our foreign earnings as of December 31, 2025. The estimated net tax liability on the indefinitely reinvested earnings if repatriated is $1.2 million.

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We have a five-year Credit Agreement (the “Credit Agreement”) that 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 December 31, 2025, 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 December 31, 2025, we have not elected to redeem any of the 2018 Notes. As of December 31, 2025, the carrying value of the 2018 Notes was $598.3 million. For further information on our debt, see Note 12 to the Consolidated Financial Statements.

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 2025, under the Board of Directors authorized repurchase program, we repurchased a total of 11.7 million shares at an aggregate cost of $884.7 million, including pursuant to $750.0 million of accelerated share repurchase agreements executed during the period. For further information, see Note 16 to the Consolidated Financial Statements. As of December 31, 2025, we had remaining authority to purchase up to $2.0 billion of our common stock under the share repurchase program.

In December 2025, we completed the sale of our non-core product group. Per the agreement, we could earn additional earnouts of up to $40.0 million based on certain revenue-based milestones. During 2024, we completed acquisitions of multiple medical device companies. We are required to pay up to an additional $200.0 million of potential payments upon achievement of certain regulatory, performance, and sales milestones. For further information, see Note 10 to the Consolidated Financial Statements.

On April 12, 2023, we entered into an intellectual property agreement with Medtronic pursuant to which the parties agreed to a 15-year global covenant not to sue ("CNS") for infringement of certain patents in the structural heart space owned or controlled by each other. In consideration for the global CNS and related mutual access to certain intellectual property rights, we paid Medtronic a one-time, lump sum payment of $300.0 million and are making annual royalty payments that are tied to net sales of certain Edwards products. For more information, see Note 3 to the "Consolidated Financial Statements."

We have purchased options to acquire and have agreed to provide promissory notes to various entities. These arrangements could result in additional cash outlays in the future should we decide to exercise the options or should the entities draw on the promissory notes. For further information, see Note 9 to the Consolidated Financial Statements.

Consolidated Cash Flows - For the Years Ended December 31, 2025and 2024

Net cash flows provided by operating activities of $1,595.2 million for 2025 increased $1,052.9 million from 2024 primarily due to (1) improved operating performance in 2025, and (2) lower tax payments during the year ended December 31, 2025, which included $175.3 million of local tax payments associated with the sale of Critical Care, compared to the year ended December 31, 2024, which included $469.7 million of tax payments related to the

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sale of Critical Care and a $305.1 million tax deposit we made to mitigate interest on potential tax liabilities we are contesting through the judicial process (for further information, see Note 19 to the Consolidated Financial Statements).

Net cash used in investing activities of $712.9 million in 2025 consisted primarily of net purchases of investments of $335.2 million, capital expenditures of $260.2 million, issuances of notes receivable of $140.9 million, a payment for a net working capital adjustment of $36.3 million related to the sale of Critical Care, and payments of acquisition options of $25.1 million, partially offset by net proceeds from the sale of our non-core product group of $78.8 million.

Net cash provided by investing activities of $2.3 billion in 2024 consisted primarily of proceeds from the sale of our Critical Care product group of $3.9 billion partially offset by payments of $1.1 billion to acquire other companies, capital expenditures of $252.4 million, and net purchases of investments of $161.4 million.

We currently anticipate making capital expenditures of approximately $280.0 million in 2026 as we continue to invest in our operations.

Net cash used in financing activities of $956.8 million in 2025 consisted primarily of purchases of treasury stock of $893.4 million and purchase of the remaining noncontrolling interest in a subsidiary of $233.7 million, partially offset by proceeds from stock plans of $174.1 million.

Net cash used in financing activities of $983.0 million in 2024 consisted primarily of purchases of treasury stock of $1.2 billion, partially offset by proceeds from stock plans of $179.5 million.

Material Cash Requirements

A summary of our material cash requirements as of December 31, 2025 is as follows (in millions):

Payments Due by Period

Contractual Obligations Total Year 1 Years 2-3 Years 4-5 After 5Years

Litigation settlement obligation (minimum payments) 50.0 50.0 — — —

Pension obligations (a) 2.9 2.9 — — —

_______________________________________________________________________________

(a) The amount included in “Year 1” reflects anticipated contributions to our various pension plans. Anticipated contributions beyond one year are not determinable. The total accrued benefit liability for our pension plans recognized as of December 31, 2025 was $28.9 million. This amount is impacted by, among other items, pension expense funding levels, changes in plan demographics and assumptions, and investment returns on plan assets. Therefore, we are unable to make a reasonably reliable estimate of the amount and period in which the liability might be paid, and did not include this amount in the contractual obligations table. For further information, see Note 15 to the Consolidated Financial Statements for further information.

(b) Purchase and other commitments consists primarily of open purchase orders for the acquisition of goods and services in the normal course of business and sponsorship obligations related to the American Heart Association’s Heart Valve Initiative. We have excluded open purchase orders with a remaining term of less than one year. For certain purchase and other commitments, such as commitments to fund equity method or other investments, the timing of the payment is not certain. In these cases, the maturity dates in the table reflect our best estimates.

(c) As of December 31, 2025, the gross liability for uncertain tax positions, including interest, was $920.8 million and relates primarily to transfer pricing matters. Based upon the information currently available and numerous possible outcomes, we cannot reasonably estimate the amount and period in which the liability might be paid, and did not include this amount in the contractual obligations table. In addition, we plan to vigorously contest

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through the judicial process the additional tax claimed by the IRS related to transfer pricing issues for the 2015 through 2017 tax years which may require additional cash outflows. For further information, see Note 19 to the Consolidated Financial Statements for further information on these matters.

(d) We acquire assets still in development, enter into research and development arrangements, acquire businesses, and sponsor certain clinical trials that often require milestone, royalty, or other future payments to third-parties, contingent upon the occurrence of certain future events. We have excluded from the table above those contingent milestone payments and other contingent liabilities for which we cannot reasonably predict future payments or for which we can avoid making payment by unilaterally deciding to stop development of a product or cease progress of a clinical trial and certain sales-based royalties in excess of minimum payment thresholds related to litigation settlements. We estimate that these contingent payments could be up to $1.1 billion if all milestones or other contingent obligations are met.

Critical Accounting Policies and Estimates

Our results of operations and financial position are determined based upon the application of our accounting policies, as discussed in the notes to the Consolidated Financial Statements. Certain of our accounting policies represent a selection among acceptable alternatives under generally accepted accounting principles in the United States of America (“GAAP”). In evaluating our transactions, management assesses all relevant GAAP and chooses the accounting policy that most accurately reflects the nature of the transactions.

The application of accounting policies requires the use of judgments and estimates. These matters that are subject to judgments and estimates are inherently uncertain, and different amounts could be reported using different assumptions and estimates. Management uses its best estimates and judgments in determining the appropriate amount to reflect in the consolidated financial statements, using historical experience and all available information. We also use outside experts where appropriate. We apply estimation methodologies consistently from year to year.

We believe the following are the critical accounting policies that could have the most significant effect on our reported results and require subjective or complex judgments by management.

Revenue Recognition

When we recognize revenue from the sale of our products, the amount of consideration we ultimately receive varies depending upon the return terms, sales rebates, discounts, and other incentives that we may offer, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The estimate of variable consideration requires significant judgment. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely upon an assessment of historical payment experience, historical relationship to revenues, estimated customer inventory levels, and current contract sales terms with direct and indirect customers. Product returns are typically not significant because returns are generally not allowed unless the product is damaged at time of receipt. If the historical data and inventory estimates used to calculate the variable consideration do not approximate future activity, our financial position, results of operations, and cash flows could be impacted.

In addition, in limited circumstances, we may allow customers to return previously purchased products, such as for next-generation product offerings. For these transactions, we defer recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer. Uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls, and variation in product utilization all affect the estimates related to sales returns and could cause actual returns to differ from these estimates.

Our sales adjustment related to distributor rebates given to our distributors represents the difference between our sales price to the distributor and the negotiated price to be paid by the end-customer. We validate the distributor rebate accrual quarterly through either a review of the inventory reports obtained from our distributors or an estimate of the distributor's inventory. This distributor inventory information is used to verify the estimated liability for future distributor rebate claims based on historical rebates and contract rates. We periodically monitor current pricing trends and distributor inventory levels to ensure the credit for future distributor rebates is fairly stated.

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Business Combinations

We account for business combinations using the acquisition method of accounting. The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires judgment and involves the use of estimates and assumptions, such as projected revenues, projected gross margins, the amount and timing of future cash flows, growth rates, discount rates, expected technology life cycles, and useful lives of assets. Discount rates may vary across acquisitions based on the purchase price, forecasts, and relative risks of each acquired company. These estimates are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the acquisition date, we may record adjustments to the fair value of the tangible and intangible assets acquired and liabilities assumed if new information is obtained related to facts and circumstances that existed as of the acquisition date.

Intangible Assets and Long-lived Assets

We acquire intangible assets in connection with business combinations and asset purchases. The acquired intangible assets are recorded at fair value, which is determined based on a discounted cash flow analysis. The determination of fair value requires significant estimates, including, but not limited to, projected revenues, projected gross margins, the amount and timing of projected future cash flows, the discount rate used to discount those cash flows, the assessment of the asset's life cycle, including the timing and expected costs to complete in-process projects, and the consideration of legal, technical, regulatory, economic, and competitive risks. Discount rates may vary across acquisitions based on the purchase price, forecasts, and relative risks of each acquired company.

In-process research and development assets acquired in business combinations are reviewed for impairment annually, or whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired. Additionally, management reviews the carrying amounts of other intangible and long-lived assets whenever events or circumstances indicate that the carrying amounts of an asset may not be recoverable. The impairment reviews require significant estimates about fair value, including estimation of future cash flows, selection of an appropriate discount rate, and estimates of long-term growth rates.

Income Taxes

The determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Realization of certain deferred tax assets, primarily tax credits, net operating loss and other carryforwards, is dependent upon generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. Failure to achieve forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in our effective tax rate on future earnings.

We have made an accounting policy election to recognize the United States tax effects of global intangible low-taxed income as a component of income tax expense in the period the tax arises.

We are subject to income taxes in the United States and numerous foreign jurisdictions. Our income tax returns are periodically audited by domestic and foreign tax authorities. These audits include questions regarding our tax filing positions, including the timing and amount of deductions and the allocation of income amongst various tax jurisdictions. We evaluate our tax positions and establish liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. Significant judgment is required in evaluating our uncertain tax positions, including estimating the ultimate resolution to intercompany pricing controversies between countries when there are numerous possible outcomes. We review these tax uncertainties quarterly and adjust the liability as events occur that affect potential liabilities for additional taxes, such as the progress of tax audits, lapsing of applicable statutes of limitations, negotiations between tax authorities, identification of new issues, and issuance of new legislation, regulations, or case law.

For further information on our income taxes, see Note 2 and Note 19 to the Consolidated Financial Statements.

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Legal Contingencies

We are or may be a party to, or may otherwise be responsible for, pending or threatened lawsuits, including those related to products and services currently or formerly manufactured or performed by us, workplace and employment matters, matters involving real estate, our operations or health care regulations, or governmental investigations. We accrue for loss contingencies to the extent that we conclude that it is probable that a loss will be incurred and the amount of the loss can be reasonably estimated. If a reasonable estimate of a known or probable loss cannot be made, but a range of probable losses can be estimated, the low-end of the range of losses is recognized if no amount within the range is a better estimate than any other. If we determine that a loss is possible, but not probable, and the range of the loss can be reasonably determined, then we disclose the range of the possible loss. These matters raise difficult and complex factual and legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit is brought, and differences in applicable law. As such, significant judgment is required in determining our legal accruals. We describe our legal proceedings in Note 20 to the Consolidated Financial Statements.

New Accounting Standards

Information regarding new accounting standards is included in Note 2 to the Consolidated Financial Statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Our business and financial results are affected by fluctuations in world financial markets, including changes in currency exchange rates and interest rates. We manage these risks through a combination of normal operating and financing activities and derivative financial instruments. We do not use derivative financial instruments for trading or speculative purposes.

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio and our long-term debt. Our investment strategy is focused on preserving capital and supporting our liquidity requirements, while earning a reasonable market return. We invest in a variety of debt securities, primarily time deposits, commercial paper, United States government and agency securities, asset-backed securities, corporate debt securities, and municipal debt securities. The market value of our investments may decline if current market interest rates rise. As of December 31, 2025, we had $1.3 billion of investments in debt securities which had an average remaining term to maturity of 0.28 years. Taking into consideration the average maturity of our debt securities, a hypothetical 0.5% to 1.0% absolute increase in interest rates at December 31, 2025 would have resulted in a $1.9 million to $3.8 million decrease in the fair value of these investments. Such a decrease would only result in a realized loss if we choose or are forced to sell the investments before the scheduled maturity, which we currently do not anticipate.

For further information related to investments, see Note 8 to the Consolidated Financial Statements.

We are also exposed to interest rate risk on our debt obligations. As of December 31, 2025, we had $600.0 million of 2018 Notes outstanding that carry a fixed rate, and also had available a $750.0 million Credit Agreement that carries a variable interest rate based on the Secured Overnight Financing Rate (“SOFR”). As of December 31, 2025, there were no borrowings outstanding under the Credit Agreement. Based on our December 31, 2025 variable debt levels, a hypothetical 1.0% absolute increase in floating market interest rates would not have impacted our interest expense since we had no variable debt outstanding during the year. As of December 31, 2025, a hypothetical 1.0% absolute increase in market interest rates would decrease the fair value of the fixed-rate debt by approximately $13.3 million. This hypothetical change in interest rates would not impact the interest expense on the fixed-rate debt.

For further information related to outstanding debt obligations, see Note 12 to the Consolidated Financial Statements.

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Currency Risk

We are exposed to foreign currency risks that arise from normal business operations. These risks include the translation of local currency balances and results of our non-United States subsidiaries into United States dollars, currency gains and losses related to intercompany and third-party transactions denominated in currencies other than a subsidiary's functional currency, and currency gains and losses associated with global intercompany receivable and payable balances. Our principal currency exposures relate to the Euro and the Japanese yen. Our objective is to minimize the volatility of our exposure to these risks through a combination of normal operating and financing activities and the use of derivative financial instruments in the form of foreign currency forward exchange contracts and cross-currency swap contracts. The total notional amount of our derivative financial instruments entered into for foreign currency management purposes at December 31, 2025 was $2.4 billion. A hypothetical 10% increase (or decrease) in the value of the United States dollar against all hedged currencies would increase (or decrease) the fair value of these derivative contracts by $159.8 million. Any gains or losses on the fair value of derivative contracts would generally be offset by gains and losses on the underlying transactions and the net investment, so the net impact would not be significant to our financial condition or results of operations.

For further information related to outstanding foreign exchange contracts, see Note 2 and Note 14 to the Consolidated Financial Statements.

Credit Risk

Derivative financial instruments involve credit risk in the event the financial institution counterparty should default. It is our policy to execute such instruments with major financial institutions that we believe to be creditworthy. At December 31, 2025, all derivative financial instruments were with bank counterparties assigned investment grade ratings by national rating agencies. We further diversify our derivative financial instruments among counterparties to minimize exposure to any one of these entities. We have not experienced a counterparty default and do not anticipate any non-performance by our current derivative counterparties.

Concentrations of Risk

We invest excess cash in a variety of debt securities, and diversify the investments amongst financial institutions. Our investment policy limits the amount of credit exposure to any one issuer.

In the normal course of business, we provide credit to customers in the health care industry, perform credit evaluations of these customers, and maintain allowances for potential credit losses, which have historically been adequate compared to actual losses. In 2025, we had no customers that represented 10% or more of our total net sales or accounts receivable, net.

Investment Risk

We are exposed to investment risks related to changes in the underlying financial condition and credit capacity of certain of our investments. As of December 31, 2025, we had $1.3 billion of investments in debt securities of various companies, of which $51.3 million were long-term. In addition, we had $227.3 million of investments in equity instruments. Should these companies experience a decline in financial performance, financial condition or credit capacity, or fail to meet certain development milestones, a decline in the investments' value may occur, resulting in unrealized or realized losses. For further information, see Note 8 to the Consolidated Financial Statements.

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Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Report of Independent Registered Public Accounting Firm (PCAOB ID 238) 44

Financial Statements:

Consolidated Balance Sheets as of December 31, 2025 and 2024 46

Consolidated Statements of Operations 47

Consolidated Statements of Comprehensive Income 48

Consolidated Statements of Cash Flows 49

Consolidated Statements of Stockholders' Equity 50

Notes to Consolidated Financial Statements 51

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Edwards Lifesciences Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Edwards Lifesciences Corporationand its subsidiaries(the “Company”) as of December 31, 2025and 2024,and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”).We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework(2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidatedfinancial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025and 2024, and the results of itsoperations and itscash flows for each of the three years in the period ended December 31, 2025in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework(2013)issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidatedfinancial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidatedfinancial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidatedfinancial statements included performing procedures to assess the risks of material misstatement of the consolidatedfinancial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidatedfinancial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidatedfinancial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable

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assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Uncertain Tax Positions Related to Intercompany Transfer Pricing

As described in Note 19 to the consolidated financial statements, the Company had an uncertain gross tax positions balance of $767.4 million as of December 31, 2025, of which a majority is related to intercompany transfer pricing. As disclosed by management, the Company is subject to income taxes in the United States and numerous foreign jurisdictions. The Company’s income tax returns in these jurisdictions are periodically audited by domestic and foreign tax authorities. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income amongst various tax jurisdictions. Significant judgment is required by management in evaluating uncertain tax positions, including estimating the ultimate resolution to intercompany pricing controversies between countries when there are numerous possible outcomes.

The principal considerations for our determination that performing procedures relating to the uncertain tax positions related to intercompany transfer pricing is a critical audit matter are (i) the significant judgment by management when recognizing and evaluating the uncertain tax positions related to intercompany transfer pricing; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's measurement of the uncertain tax positions related to intercompany transfer pricing; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the recognition and evaluation of uncertain tax positions related to intercompany transfer pricing. These procedures also included, among others (i) testing the information used in the calculation of the uncertain tax positions related to intercompany transfer pricing, including United States federal filing positions and the related final income tax returns; (ii) testing the calculation of the uncertain tax positions related to intercompany transfer pricing, by jurisdiction, including management’s assessment of the technical merits of tax positions and estimates of the amount of tax benefit expected to be sustained; (iii) testing management’s assessment of possible outcomes of uncertain tax positions related to intercompany transfer pricing controversies between countries; and (iv) evaluating, for uncertain tax positions related to intercompany transfer pricing, the status and results of income tax audits with the relevant tax authorities. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the measurement of the Company’s uncertain tax positions related to intercompany transfer pricing, including evaluating the reasonableness of management’s assessment of whether tax positions are more-likely-than not to be sustained and the amount of potential tax benefit to be realized and (ii) the application of relevant tax laws.

/s/ PricewaterhouseCoopers LLP

Irvine, California

February 25, 2026

We have served as the Company’s auditor since 1999.

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EDWARDS LIFESCIENCES CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except par value)

December 31,

ASSETS

Current assets

Current assets of discontinued operations (Note 5) — 26.8

Property, plant, and equipment, net (Note 6) 1,811.9 1,686.0

Operating lease right-of-use assets (Note 7) 102.7 98.2

Non-current assets of discontinued operations (Note 5) — 10.8

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Operating lease liabilities (Note 7) 24.5 23.4

Current liabilities of discontinued operations (Note 5) — 2.0

Operating lease liabilities (Note 7) 82.6 78.9

Litigation settlement accrual — 52.7

Commitments and contingencies (Note 7, Note 12, and Note 20)

Stockholders' equity (Note 16)

Accumulated other comprehensive loss (Note 17) (238.3) (244.5)

Total Edwards Lifesciences Corporation stockholders' equity 10,337.6 9,998.4

Noncontrolling interest (Note 9) — 64.5

The accompanying notes are an integral part of these consolidated financial statements.

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EDWARDS LIFESCIENCES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share information)

Years Ended December 31,

Restructuring charges, separation costs, and other (Note 4) 19.1 61.0 —

Intangible assets impairment charges 40.0 — —

Other operating income (67.2) (0.3) —

Loss on impairment 146.9 — —

Other non-operating income, net (Note 18) (7.2) (68.9) (13.9)

Income from discontinued operations, net of tax 13.4 2,773.7 179.4

Less: Net loss attributable to noncontrolling interest (4.1) (4.9) (3.0)

Share information (Note 2):

Earnings per share attributable to Edwards Lifesciences Corporation:

Basic

Diluted

Diluted earnings per share $ 1.83 $ 6.97 $ 2.30

The accompanying notes are an integral part of these consolidated financial statements.

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EDWARDS LIFESCIENCES CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

Years Ended December 31,

Other comprehensive income (loss), net of tax (Note 17):

Foreign currency translation adjustments 45.6 (59.6) 4.3

Unrealized (loss) gain on hedges (47.5) 37.0 (23.1)

Unrealized pension credits (costs) 4.9 0.1 (9.9)

Unrealized gain on available-for-sale investments 3.2 20.8 40.8

Other comprehensive income (loss), net of tax 6.2 (1.7) 12.1

The accompanying notes are an integral part of these consolidated financial statements.

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EDWARDS LIFESCIENCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

Years Ended December 31,

Cash flows from operating activities

Gain on sale of product groups (Note 5) (33.9) (3,348.2) —

Changes in operating assets and liabilities:

Accounts and other receivables, net (23.0) 121.2 (141.2)

Prepaid expenses and other current assets (23.7) 22.7 (81.8)

Accounts payable and accrued liabilities 395.1 89.5 146.0

Intellectual property agreement accrual (76.5) (36.8) (33.0)

Long-term prepaid royalties (Note 3) 8.3 8.3 (109.9)

Cash flows from investing activities

Investments in unconsolidated entities (Note 8) (64.8) (60.3) (15.8)

Purchases of held-to-maturity investments (Note 8) (43.3) (45.9) (66.4)

Purchases of available-for-sale investments (Note 8) (3,091.8) (899.9) (9.1)

Business combinations, net of cash (Note 10) — (1,061.8) (95.2)

Payments for acquisition options (Note 9) (25.1) (46.2) (30.0)

Issuances of notes receivable (140.9) (63.0) (62.5)

Investments in intangible assets — (30.0) (13.3)

Proceeds from sale of non-core product group (Note 5) 78.8 — —

Net cash (used in) provided by investing activities (712.9) 2,312.9 173.8

Cash flows from financing activities

Purchase of remaining noncontrolling interest in subsidiary (Note 9) (233.7) — —

Net cash used in financing activities (956.8) (983.0) (711.0)

The accompanying notes are an integral part of these consolidated financial statements.

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EDWARDS LIFESCIENCES CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in millions)

Common Stock Treasury Stock

Other comprehensive income, net of tax 12.1 12.1 12.1

Changes to noncontrolling interest (Note 9) — 72.4 72.4

Other comprehensive loss, net of tax (1.7) (1.7) (1.7)

Other comprehensive income, net of tax 6.2 6.2 6.2

The accompanying notes are an integral part of these consolidated financial statements.

EDWARDS LIFESCIENCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

Edwards Lifesciences Corporation (“Edwards Lifesciences,” “Edwards,” or the “Company”) conducts operations worldwide and is managed in the following geographical regions: United States, Europe, Japan, and Rest of World. Edwards Lifesciences is focused on technologies that treat structural heart disease. The products and technologies provided by Edwards Lifesciences are categorized into the following main groups: Transcatheter Aortic Valve Replacement (“TAVR”), Transcatheter Mitral and Tricuspid Therapies (“TMTT”), and Surgical Structural Heart (“Surgical”).

On December 18, 2025, the Company sold a business that was not focused on implantable medical innovations for structural heart diseases (the “non-core product group”) and on September 3, 2024, the Company sold its Critical Care product group ("Critical Care"). The historical results of Critical Care and the non-core product group (collectively, the “discontinued product groups”) are reflected as discontinued operations in the Company's consolidated financial statements for the applicable periods presented. Unless otherwise indicated, the information in the notes to the consolidated financial statements refer only to Edwards Lifesciences' continuing operations. For further information, see Note 5.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Edwards Lifesciences, its wholly-owned subsidiaries, and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. For further information, see Note 9. The Company attributes the net income or losses of its consolidated VIEs to controlling and noncontrolling interests using the hypothetical liquidation at book value method. All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period financial statements to conform to classifications used in the current period.

Use of Estimates

The consolidated financial statements of Edwards Lifesciences have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) which have been applied consistently in all material respects. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates.

Foreign Currency Translation

When the local currency of the Company's foreign entities is the functional currency, all assets and liabilities are translated into United States dollars at the rate of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted-average exchange rate prevailing during the period. The effects of foreign currency translation adjustments for these entities are deferred and reported in stockholders' equity as a component of Accumulated Other Comprehensive Loss. The effects of foreign currency transactions denominated in a currency other than an entity's functional currency are included in Other Non-operating Income, net.

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those products or services.

The Company generates nearly all of its revenue from direct product sales and sales of products under consignment arrangements. Revenue from direct product sales is recognized at a point in time when the

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EDWARDS LIFESCIENCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

performance obligation is satisfied upon delivery of the product. Revenue from sales of consigned inventory is recognized at a point in time when the performance obligation is satisfied once the product has been implanted or used by the customer. The Company periodically reviews consignment inventories to confirm the accuracy of customer reporting. Sales taxes and other similar taxes that the Company collects concurrently with revenue-producing activities are excluded from revenue. The Company does not typically have any significant unusual payment terms beyond 90 days in its contracts with customers.

The amount of consideration the Company ultimately receives varies depending upon the return terms, sales rebates, discounts, and other incentives that the Company may offer, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely upon an assessment of historical payment experience, historical relationship to revenues, estimated customer inventory levels, and current contract sales terms with direct and indirect customers.

The Company's sales adjustment related to distributor rebates given to the Company's distributors represents the difference between the Company's sales price to the distributor and the negotiated price to be paid by the end-customer. This distributor rebate is recorded as a reduction to sales and a reduction to the distributor's accounts receivable at the time of sale to a distributor. The Company periodically monitors current pricing trends and distributor inventory levels to ensure the credit for future distributor rebates is fairly stated.

The Company offers volume rebates to certain group purchasing organizations (“GPOs”) and customers based upon targeted sales levels. Volume rebates offered to GPOs are recorded as a reduction to sales and an obligation to the GPOs, as the Company expects to pay in cash. Volume rebates offered to customers are recorded as a reduction to sales and either a reduction to accounts receivable if the Company expects a net payment from the customer, or as an obligation to the customer if the Company expects to pay in cash. The provision for volume rebates is estimated based upon customers' contracted rebate programs, projected sales levels, and historical experience of rebates paid. The Company periodically monitors its customer rebate programs to ensure that the allowance and liability for accrued rebates is fairly stated.

Product returns are typically not significant because returns are generally not allowed unless the product is damaged at the time of receipt. In limited circumstances, the Company may allow customers to return previously purchased products, such as for next-generation product offerings. For these transactions, the Company defers recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer.

A limited number of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the transaction price is allocated to each performance obligation based on its relative standalone selling price charged to other customers.

The Company applies the optional exemption of not disclosing the amount of the transaction price allocated to unsatisfied performance obligations for contracts with an original expected duration of one year or less.

Shipping and Handling Costs

Shipping costs, which are costs incurred to physically move product from the Company's premises or third party distribution centers, including storage, to the customer's premises, are included in Selling, General, and Administrative Expenses. Handling costs, which are costs incurred to store at the Company's premises, move, and prepare products for shipment, are included in Cost of Sales. For the years ended December 31, 2025, 2024, and 2023, shipping costs of $72.6 million, $83.9 million, and $94.5 million, respectively, were included in Selling, General, and Administrative Expenses.

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EDWARDS LIFESCIENCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Cash Equivalents

The Company considers highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. These investments are valued at cost, which approximates fair value.

Investments

The Company invests its excess cash in debt securities, including time deposits, commercial paper, United States government and agency securities, asset-backed securities, corporate debt securities, and municipal debt securities. Investments with maturities of one year or less are classified as short-term, and investments with maturities greater than one year are classified as long-term. Investments that the Company has the ability and intent to hold until maturity are classified as held-to-maturity and carried at amortized cost. Investments in debt securities that are classified as available-for-sale are carried at fair value with unrealized gains and losses included in Accumulated Other Comprehensive Loss. The Company determines the appropriate classification of its investments in debt securities at the time of purchase and reevaluates such designation at each balance sheet date.

The Company also has long-term equity investments in companies that are in various stages of development. These investments are reported at fair value or under the equity method of accounting, as appropriate. Equity investments that do not have readily determinable fair values are recorded at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. The Company accounts for investments in limited partnerships and limited liability corporations, whereby the Company owns a minimum of 5% of the investee's outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company's investment and adjusted each period for the Company's share of the investee's income or loss, and dividends paid.

Realized gains and losses on investments that are sold are determined using the specific identification method, or the first-in, first-out method, depending on the investment type, and recorded to Other Non-operating Income, net. Income relating to investments in debt securities is recorded to Interest Income.

Equity investments without readily determinable fair value are considered impaired when there is an indication that the fair value of the Company's interest is less than the carrying amount. Equity method investments are considered impaired when there is an indication of an other-than-temporary decline in value below the carrying amount. Impairments of equity investments are recorded in Other Non-operating Income, net.

Debt securities in an unrealized loss position are written down to fair value through Other Non-operating Income, net if the Company intends to sell the security or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. For debt securities in an unrealized loss position that do not meet the aforementioned criteria, the Company assesses whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the length of time and the extent to which the security's fair value has been below cost, changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors. When a credit loss exists, the Company compares the present value of cash flows expected to be collected from the debt security to the amortized cost basis of the security to determine the allowance amount that should be recorded, if any.

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EDWARDS LIFESCIENCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accounts Receivable

The majority of the Company’s accounts receivable arise from direct product sales and sales of products under consignment arrangements, and have payment terms that generally require payment within 30 to 90 days. The Company does not adjust its receivables for the effects of a significant financing component at contract inception if collection of the receivable is expected within one year or less from the time of sale. In countries where the Company has experienced a pattern of payments extending beyond the stated terms and collection of the receivable is expected beyond one year from the time of sale, the Company assesses whether the customer has a significant financing component and discounts the receivable and reduces the related revenues over the period of time that the Company estimates those amounts will be paid using the country’s market-based borrowing rate for such period.

The Company provides reserves against accounts receivable for estimated losses that may result from a customer’s inability to pay based on customer-specific analysis and general matters such as current assessments of past due balances, economic conditions and forecasts, and historical credit loss activity. Amounts determined to be uncollectible are charged or written-off against the reserve.

Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. Market value for raw materials is based on replacement costs, and for other inventory classifications is based on net realizable value.

A write-down for excess or slow moving inventory is recorded for inventory that is obsolete, damaged, nearing its expiration date (generally triggered at six months prior to expiration), or slow moving (generally defined as quantities in excess of a two-year supply).

The Company allocates general and administrative costs that are related to the production process to inventory. These costs include insurance, manufacturing accounting and human resources personnel, and information technology. During the years ended December 31, 2025, 2024, and 2023, the Company allocated $80.2 million, $84.2 million, and $78.0 million, respectively, of general and administrative costs to inventory. General and administrative costs included in inventory at December 31, 2025 and 2024 were $36.9 million and $44.0 million, respectively.

At December 31, 2025 and 2024, $225.1 million and $181.7 million, respectively, of the Company's finished goods inventories were held on consignment.

Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost. Depreciation is principally calculated for financial reporting purposes on the straight-line method over the estimated useful lives of the related assets, which range from 10 to 40 years for buildings and improvements, from 3 to 15 years for machinery and equipment, and from 3 to 5 years for software. Leasehold improvements are amortized over the life of the related facility leases or the asset, whichever is shorter. Straight-line and accelerated methods of depreciation are used for income tax purposes. Construction in progress is not depreciated until the asset is ready for its intended use.

Depreciation expense for property, plant, and equipment was $148.2 million, $137.6 million, and $119.9 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Leases

The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments. The Company's incremental borrowing rate is determined based on the estimated rate of interest for collateralized borrowing over a similar term as the associated lease. Right-of-use assets also include any lease payments made at or before lease commencement and any initial direct costs incurred, and exclude any lease incentives received.

The Company determines the lease term as the noncancellable period of the lease, and may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of 12 months or less are not recognized on the balance sheet. Certain of the Company’s leases include variable lease payments that are based on costs incurred or actual usage, or adjusted periodically based on an index or a rate. The Company’s leases do not contain any residual value guarantees.

The Company accounts for the lease and non-lease components as a single lease component for all of its leases except vehicle leases, for which the lease and non-lease components are accounted for separately.

Operating leases are included in Operating Lease Right-of-Use Assets and Operating Lease Liabilities on the Company’s consolidated balance sheets. For further information, see Note 7.

Business Combinations

Businesses that the Company acquires are included in its results of operations as of the acquisition date. The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. Contingent consideration obligations incurred in connection with a business combination are recorded at their fair values on the acquisition date and remeasured on a quarterly basis, with changes in their fair value recorded as an adjustment to earnings, until the related contingencies have been resolved. When the assets acquired do not meet the definition of a business combination, the transaction is accounted for as an asset acquisition. In an asset acquisition, the cost of the acquisition is allocated to the assets acquired and liabilities assumed based on their relative fair values. Upfront payments related to in-process research and development projects with no alternative future use are expensed upon acquisition.

Contingent Consideration

The Company records contingent consideration resulting from a business combination at its fair value on the acquisition date. The fair value of the contingent consideration is determined based primarily on the following factors:

•discount rates used to present value the projected cash flows;

•the probability of success of clinical events and regulatory approvals, and/or meeting commercial milestones; and

•projected payment dates.

On a quarterly basis, the Company remeasures these obligations and records changes in their fair value as an adjustment to earnings. Changes to contingent consideration obligations can result from adjustments to discount rates, accretion of the discount rates due to the passage of time, changes in the Company’s estimates of the likelihood or timing of achieving development or commercial milestones, changes in the probability of certain clinical events, or changes in the assumed probability associated with regulatory approval.

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The assumptions related to determining the value of contingent consideration include a significant amount of judgment, and any changes in the underlying estimates could have a material impact on the amount of contingent consideration expense recorded in any given period.

Intangible Assets and Long-lived Assets

The Company acquires intangible assets in connection with business combinations and asset purchases. The acquired intangible assets are recorded at fair value, which is determined based on a discounted cash flow analysis. The determination of fair value requires significant estimates, including, but not limited to, projected revenues, projected gross margins, the amount and timing of projected future cash flows, the discount rate used to discount those cash flows, the assessment of the asset's life cycle, including the timing and expected costs to complete in-process projects, and the consideration of legal, technical, regulatory, economic, and competitive risks. Discount rates may vary across acquisitions based on the purchase price, forecasts, and relative risks of each acquired company.

Goodwill is reviewed for impairment annually in the fourth quarter of each fiscal year, or whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the Company performs a quantitative impairment test. The Company determined, after performing a qualitative review of each reporting unit, that it is more likely than not that the fair value of each of its reporting units substantially exceeds the respective carrying amounts. Accordingly, in 2025, 2024, and 2023, the Company did not record any goodwill impairment loss.

Indefinite-lived intangible assets relate to in-process research and development acquired in business combinations. The estimated fair values of in-process research and development projects acquired in a business combination which have not reached technological feasibility are capitalized and accounted for as indefinite-lived intangible assets subject to impairment testing until completion or abandonment of the projects. Upon successful completion of the project, the capitalized amount is amortized over its estimated useful life. If the project is abandoned, all remaining capitalized amounts are written off immediately. Indefinite-lived intangible assets are reviewed for impairment annually in the fourth quarter of each fiscal year, or whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss is recognized when the asset's carrying value exceeds its fair value. In-process research and development projects acquired in an asset acquisition are expensed unless the project has an alternative future use.

Management reviews the carrying amounts of other finite-lived intangible assets and long-lived tangible assets whenever events or circumstances indicate that the carrying amounts of an asset may not be recoverable. Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit, and adverse legal or regulatory developments. If it is determined that such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair market value. Estimated fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. For the purposes of identifying and measuring impairment, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

In 2025, the Company recorded a $40.0 million impairment loss related to certain developed technology assets. In 2024, the Company did not record any impairment loss related to its intangible assets. For further information, see Note 11.

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Income Taxes

The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company recognizes the financial statement benefit of a tax position only after determining that a position would more likely than not be sustained based upon its technical merit if challenged by the relevant taxing authority and taken by management to the court of last resort. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon settlement with the relevant tax authority. The Company recognizes interest and penalties related to income tax matters in income tax expense. The Company has made an accounting policy election to recognize the United States tax effects of global intangible low-taxed income as a component of income tax expense in the period the tax arises.

Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. The Company evaluates quarterly the realizability of its deferred tax assets by assessing its valuation allowance and adjusting the amount, if necessary. The factors used to assess the likelihood of realization are both historical experience and the Company's forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Failure to achieve forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in the Company's effective tax rate on future earnings.

Research and Development Costs

Research and development costs are charged to expense when incurred.

Earnings per Share

Basic earnings per share is computed by dividing net income by the weighted-average common shares outstanding during the period. Diluted earnings per share is computed based on the weighted-average common shares outstanding plus the effect of dilutive potential common shares outstanding during the period calculated using the treasury stock method. Dilutive potential common shares include employee equity share options, nonvested shares, and similar equity instruments granted by the Company. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive.

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The table below presents the computation of basic and diluted earnings per share (in millions, except for per share information):

Years Ended December 31,

Net Income for Earnings Per Share Calculations:

Net income from continuing operations, net of tax $ 1,056.0 $ 1,396.0 $ 1,220.0

Less: Net loss attributable to noncontrolling interest (4.1) (4.9) (3.0)

Weighted Average Shares:

Dilutive effect of stock plans 1.0 1.6 2.7

Dilutive weighted-average shares outstanding 585.8 599.3 609.4

Earnings per Share:

Basic:

Diluted:

Diluted earnings per share $ 1.83 $ 6.97 $ 2.30

Outstanding stock options, unvested restricted stock units, and unvested market-based restricted stock units to purchase approximately 8.1 million, 8.4 million, and 6.6 million shares for the years ended December 31, 2025, 2024, and 2023, respectively, were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive.

Stock-based Compensation

The Company measures and recognizes compensation expense for all stock-based awards based on estimated fair values. Stock-based awards consist of stock options, restricted stock units (service-based and market-based), and employee stock purchase subscriptions. Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over each award's requisite service period (vesting period) on a straight-line basis. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Upon exercise of stock options or vesting of restricted stock units, the Company issues common stock.

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Total stock-based compensation expense was as follows (in millions):

Years Ended December 31,

Selling, general, and administrative expenses 88.8 82.5 74.0

Research and development expenses 40.2 36.4 30.2

Total stock-based compensation expense, net of tax $ 129.9 $ 120.8 $ 103.0

Upon a participant's retirement, all unvested stock options are immediately forfeited. In addition, upon retirement, a participant will immediately vest in 25% of service-based restricted stock units for each full year of employment with the Company measured from the grant date. All remaining unvested service-based restricted stock units are immediately forfeited. For market-based restricted stock units, upon retirement and in certain other specified cases, a participant will receive a pro-rated portion of the shares that would ultimately be issued based on attainment of the performance goals as determined on the vesting date. The pro-rated portion is based on the participant's whole months of service with the Company during the performance period prior to the date of termination.

Derivatives

The Company uses derivative financial instruments to manage its currency exchange rate risk and its interest rate risk. It is the Company's policy not to enter into derivative financial instruments for speculative purposes.

Derivative financial instruments involve credit risk in the event the counterparty should default. The Company diversifies its derivative financial instruments among counterparties to minimize exposure to any one of these entities. The Company also uses International Swap Dealers Association master-netting agreements. The master-netting agreements provide for the net settlement of all contracts through a single payment in a single currency in the event of default, as defined by the agreements.

The Company uses foreign currency forward exchange contracts and cross-currency swap contracts to manage its exposure to changes in currency exchange rates from (1) future cash flows associated with intercompany transactions and certain local currency expenses expected to occur within approximately 1.5 years (designated as cash flow hedges), (2) its net investment in certain foreign subsidiaries (designated as net investment hedges) and (3) foreign currency denominated assets or liabilities (designated as fair value hedges). The Company also uses foreign currency forward exchange contracts that are not designated as hedging instruments to offset the transaction gains and losses associated with the revaluation of certain assets and liabilities denominated in currencies other than their functional currencies, resulting principally from intercompany and local currency transactions.

All derivative financial instruments are recognized at fair value in the consolidated balance sheets. For each derivative instrument that is designated as a fair value hedge, the gain or loss on the derivative included in the assessment of hedge effectiveness is recognized immediately to earnings, and offsets the loss or gain on the underlying hedged item. The Company reports in Accumulated Other Comprehensive Loss the gain or loss on derivative financial instruments that are designated, and that qualify, as cash flow hedges. The Company reclassifies these gains and losses into earnings in the same line item and in the same period in which the underlying hedged transactions affect earnings. Changes in the fair value of net investment hedges are reported in Accumulated Other Comprehensive Loss as a part of the cumulative translation adjustment and would be reclassified into earnings if the underlying net investment is sold or substantially liquidated. The portion of the change in fair value related to components excluded from the hedge effectiveness assessment are amortized into earnings over the life of the derivative. The gains and losses on derivative financial instruments for which the Company does not elect hedge accounting treatment are recognized in the consolidated statements of operations in

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each period based upon the change in the fair value of the derivative financial instrument. Upon settlement, cash flows from net investment hedges are reported as investing activities in the consolidated statements of cash flows, and cash flows from all other derivative financial instruments are reported as operating activities.

Recently Adopted Accounting Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09 on income taxes which requires entities to provide additional information in the rate reconciliation and additional disaggregated disclosures about income taxes paid. This guidance requires public entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold. The guidance was effective for annual periods beginning after December 15, 2024. The Company adopted this guidance for the year ended December 31, 2025 and applied the guidance prospectively. For further information, see Note 19.

New Accounting Standards Not Yet Adopted

In September 2025, the FASB issued ASU 2025-07 on derivatives and hedging and revenue from contracts with customers. The amendment provides clarity on application of derivative accounting to certain nonexchange-traded contracts with features based on operations or activities of one of the parties to the contract. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within those periods and can be applied on a prospective or modified retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06 on internal-use software related to accounting for internal-use software costs. The amendment in this update improve the operability of the guidance by clarifying the criteria for capitalization, which begins when both of the following occur: (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. The guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those periods. Early adoption is permitted. The guidance can be applied on a fully prospective basis, a modified basis for in-process projects, or a full retrospective basis. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03 on income statement presentation to require disclosure, in the notes to the financial statements, of disaggregated information about certain costs and expenses, including purchases of inventory, employee compensation, and depreciation and amortization included in each relevant expense caption within continuing operations. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements.

3. INTELLECTUAL PROPERTY AGREEMENT AND CERTAIN LITIGATION EXPENSES

The Company incurred intellectual property litigation expenses, settlements, and external legal costs of $325.4 million, $40.4 million and $203.5 million during 2025, 2024 and 2023, respectively. For further information, see Note 9 and Note 20.

On April 12, 2023, Edwards entered into an intellectual property agreement (the “Intellectual Property Agreement”) with Medtronic, Inc. (“Medtronic”) pursuant to which the parties agreed to a 15-year global covenant not to sue (“CNS”) for infringement of certain patents in the structural heart space owned or controlled by each other. In consideration for the global CNS and related mutual access to certain intellectual property rights, Edwards paid to Medtronic a one-time, lump sum payment of $300.0 million and is making annual royalty payments that are tied to net sales of certain Edwards products. Based upon the terms of the Intellectual Property Agreement, the Company identified the relevant elements for accounting purposes and allocated the $300.0 million upfront payment based on their respective fair values. The Company recorded a $37.0 million pre-tax charge in Certain Litigation Expenses in March 2023 primarily related to prior commercial sales incurred through March 31, 2023. The

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Company recorded a prepaid royalty asset of $124.0 million in April 2023 related to future commercial sales, which is amortized to expense over the term of the Intellectual Property Agreement. Separately, the Company recorded a $139.0 million pre-tax charge in Certain Litigation Expenses in April 2023 related to products currently in development. As of December 31, 2025 and 2024, the prepaid royalty asset balance was $101.6 million and $109.9 million, respectively, included in Prepaid Expenses and Other Assets.

4. RESTRUCTURING CHARGES, SEPARATION COSTS, AND OTHER

In December 2025, the Company recorded an expense of $13.1 million related to severance associated with a realignment initiative. In September 2024, the Company recorded restructuring expense of $32.9 million primarily related to severance associated with a global workforce realignment impacting approximately 360 employees.

The following table presents details of the restructuring liability, in millions, which is included in Accrued and Other Liabilities:

Restructuring Liability

Balance at December 31, 2023 $ —

Restructuring charges 32.9

Restructuring charges 13.1

On June 3, 2024, the Company entered into a definitive agreement to sell Critical Care to Becton, Dickinson and Company (“BD”) and the sale closed on September 3, 2024. The Company recorded expenses of $8.5 million and $19.0 million during the years ended 2025 and 2024, respectively, primarily related to costs incurred for professional advisory services associated with the sale. For further information, see Note 5.

5. DISCONTINUED OPERATIONS

On December 18, 2025, the Company completed the sale of its non-core product group for $81.8 million up-front consideration (net cash proceeds of $78.8 million), resulting in a gain of $36.9 million (included in Income fromDiscontinued Operations, net of tax). The transaction included additional potential earnouts of up to $40 million. In connection with the sale of its non-core product group, the Company entered into a transition services agreement (“TSA”) to provide certain support services for up to one year from the closing date of the sale (with certain extension rights as provided therein), the impact of which is not expected to be material. On September 3, 2024, the Company completed the sale of Critical Care to BD for $4.2 billion resulting in a gain of $3.3 billion (included in Income fromDiscontinued Operations, net of tax). The discontinued product groups were historically reported in each of the Company's segments (United States, Europe, Japan, and Rest of World).

The Company concluded that the non-core product group met the criteria to be classified as held-for-sale in September 2024 and that Critical Care met the criteria to be classified as held-for-sale in June 2024. The Company determined that, when considered together, the conditions for discontinued operations presentation were met with respect to the discontinued product groups. A component of an entity is reported in discontinued operations after meeting the criteria for held-for-sale classification if the disposition represents a strategic shift that had a major effect on the entity's operations and financial results. The Company analyzed the quantitative and qualitative factors relevant to the discontinued product groups, including their significance to the Company’s overall net income and total assets, and determined that those conditions for discontinued operations presentation were met. As such, the historical financial condition and results of the discontinued product groups have been reflected as discontinued operations in the Company's Consolidated Financial Statements. The assets and liabilities associated with

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discontinued product groups are classified as assets and liabilities of discontinued operations in the Company's consolidated balance sheet as of the year ended December 31, 2024.

In connection with the sale of Critical Care, the Company entered into a TSA to provide certain support services for up to 36 months from the closing date of the sale (with certain extension rights as provided therein). These support services may be in the areas of accounting, information technology, human resources, quality assurance, regulatory affairs, customer support, and global supply chain, among others. In connection with the TSA, the Company recognized an unfavorable contract liability of $115.1 million that will be recognized over the TSA term. As of December 31, 2025 and 2024, the remaining unfavorable contract liability was $37.3 million and $88.8 million, respectively, included in Accrued and Other Liabilities and Other Liabilities.

In addition, Edwards and BD entered into other agreements to provide a framework for the ongoing activities between the Company and BD after the sale and until the end of the TSA including, but not limited to, interim operating model agreements to support the commercial operations until there has been a full transfer of all regulatory licenses to BD and completion of services under the TSA agreement, a manufacturing and supply agreement, and a quality agreement. Under these agreements, the Company will continue to provide certain services to BD during the term of these agreements including serving as an undisclosed selling and purchasing agent for the Critical Care business on behalf of BD for a period of up to 36 months following completion of the sale of Critical Care.

As of December 31, 2025 and 2024, the Company had a net payable of approximately $123.4 million and a net receivable of approximately $28.8 million, respectively, from BD related to the services under the agreements. The Company recorded income from the TSA of $63.7 million and $30.3 million during the years ended December 31, 2025 and 2024, respectively, which was recorded in Other Operating Income on the Company's consolidated statements of operations.

During the year ended December 31, 2025, the Company paid BD $36.3 million for certain working capital adjustments in connection with the sale of Critical Care.

Details of Income from Discontinued Operations are as follows (in millions):

Twelve Months EndedDecember 31,

Selling, general, and administrative expenses 22.2 169.0 242.1

Research and development expenses 5.2 82.2 108.9

Other non-operating income, net (33.6) (3,348.3) (0.5)

Provision for income taxes from discontinued operations 7.8 555.5 46.3

Net income from discontinued operations $ 13.4 $ 2,773.7 $ 179.4

Separation costs are primarily related to consulting, legal, tax, and other professional advisory services associated with the sale of discontinued product groups.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Cash flows attributable to the Company's discontinued operations are included in the Company's consolidated statements of cash flows. Significant non-cash operating and investing activities attributable to discontinued operations consisted of the following (in millions):

Years Ended December 31,

Depreciation and amortization $ — $ 12.0 $ 22.9

Stock-based compensation $ 0.2 $ 16.8 $ 14.6

Inventory write off $ — $ 8.2 $ 23.5

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS

Composition of Certain Financial Statement Captions

Components of selected captions in the consolidated balance sheets are as follows (in millions):

As of December 31,

Inventories

Property, plant, and equipment, net

Buildings and leasehold improvements 1,393.3 1,339.8

Other assets

Long-term prepaid royalties 93.3 101.6

Fair value of derivatives 5.8 34.7

Other long-term assets 16.7 15.0

Accrued and other liabilities

Employee compensation and withholdings $ 467.5 $ 358.6

Legal and insurance (Note 3 and Note 20) 164.2 26.8

Liability under transition services agreement 123.4 —

Property, payroll, and other taxes 84.9 88.1

Research and development accruals 69.2 74.1

Litigation settlement 50.0 73.8

Unfavorable contract liability 27.2 53.7

Fair value of derivatives 25.3 8.3

Accrued realignment reserves 23.4 27.4

Accrued professional services 22.9 20.1

Accrued marketing expenses 17.9 13.8

Accrued relocation costs 14.1 15.4

Other accrued liabilities 122.6 96.4

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Supplemental Cash Flow Information

(in millions)

Years Ended December 31,

Cash paid during the year for:

Non-cash investing and financing transactions:

Capital expenditures accruals $ 51.4 $ 44.1 $ 43.6

______________________________________

(a) Includes cash paid for income taxes from discontinued operations of $29.7 million and $25.2 million for the years ended December 31, 2024, and 2023, respectively. No cash was paid for income taxes from discontinued operations for the year ended December 31, 2025.

Cash, Cash Equivalents, and Restricted Cash

(in millions)

Years Ended December 31,

Continuing operations

Restricted cash included in other current assets 0.5 3.2 3.3

Restricted cash included in other assets 1.0 0.8 0.7

Discontinued operations

Cash and cash equivalents $ — $ 9.6 $ 11.7

Total cash, cash equivalents, and restricted cash $ 2,939.5 $ 3,058.8 $ 1,148.0

Amounts included in restricted cash primarily represent funds placed in escrow related to litigation.

7. LEASES

The Company leases certain office space, manufacturing facilities, land, apartments, warehouses, vehicles, and equipment with remaining lease terms ranging from less than 1 year to 21 years, some of which include options to extend or terminate the leases.

Operating lease costs for the years ended December 31, 2025, 2024, and 2023 were $29.3 million, $28.1 million, and $26.9 million, respectively. Short-term and variable lease costs were not material for the years ended December 31, 2025, 2024, and 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Supplemental balance sheet information related to operating leases was as follows (in millions, except lease term and discount rate):

As of December 31,

Operating lease right-of-use assets $ 102.7 $ 98.2

Operating lease liabilities, current portion $ 24.5 $ 23.4

Operating lease liabilities, long-term portion 82.6 78.9

Total operating lease liabilities $ 107.1 $ 102.3

Maturities of operating lease liabilities at December 31, 2025 were as follows (in millions):

Total lease payments 130.9

Less: imputed interest (23.8)

Total lease liabilities $ 107.1

The following table provides information on the lease terms and discount rates:

Years Ended December 31,

Weighted-average remaining lease term (in years) 8.1 5.9

Weighted-average discount rate 4.1 % 3.4 %

As of December 31, 2025, the Company had additional operating lease commitments of $3.2 million for office spaces that have not yet commenced.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. INVESTMENTS

Debt Securities

Investments in debt securities at the end of each period were as follows (in millions):

Bank time deposits $ 39.1 $ — $ — $ 39.1 $ 57.9 $ — $ — $ 57.9

Available-for-sale

Bank time deposits $ — $ — $ — $ — $ 13.9 $ — $ — $ 13.9

Municipal securities — — — — 2.7 — — 2.7

The cost and fair value of investments in debt securities, by contractual maturity, as of December 31, 2025 were as follows (in millions):

Held-to-Maturity Available-for-Sale

Amortized Cost Fair Value Amortized Cost Fair Value

Due after 1 year through 5 years — — 6.1 6.1

Instruments not due at a single maturity date (a) — — 46.1 45.2

_______________________________________

(a) Consists of mortgage-backed and asset-backed securities.

Actual maturities may differ from the contractual maturities due to call or prepayment rights.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2025 and 2024, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

Less than 12 Months 12 Months or Greater Total

U.S. government and agency securities $ — $ — $ 11.2 $ (0.4) $ 11.2 $ (0.4)

Less than 12 Months 12 Months or Greater Total

U.S. government and agency securities $ — $ — $ 19.9 $ (1.1) $ 19.9 $ (1.1)

The Company reviews its investments in debt securities to determine if there has been an other-than-temporary decline in fair value. Consideration is given to (1) the financial condition and near-term prospects of the issuer, including the credit quality of the security's issuer, (2) the Company's intent to sell the security, and (3) whether it is more likely than not the Company will have to sell the security before recovery of its amortized cost. The unrealized losses on the debt securities were largely due to changes in interest rates, not credit quality, and as of December 31, 2025, the Company did not intend to sell the securities, and it was not more likely than not that it will be required to sell the securities before recovery of the unrealized losses, and, therefore, the unrealized losses are considered temporary.

EW US Equity

EW · 10-K · period ended 2025-12-31

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

EW US Equity☆

EW · 10-K · period ended 2025-12-31

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

EW US Equity