Q1 2026 Earnings Call Transcript

Good morning, and thank you for standing by. Welcome to Abbott Laboratories' First Quarter 2026 Earnings Conference Call. During the question-and-answer session, you will be able to ask your question by pressing the star, one, one keys on your touch-tone phone. This call is being recorded by Abbott Laboratories.

With the exception of any participants' questions asked during the question-and-answer session, the entire call, including the question-and-answer session, is material copyrighted by Abbott Laboratories. It cannot be recorded or rebroadcast without Abbott Laboratories' express written permission. I would now like to introduce Mr. Michael Comilla, Vice President, Investor Relations.

Good morning, and thank you for joining us. With me today are Robert Ford, Chairman and Chief Executive Officer, and Philip Boudreau, Executive Vice President, Finance and Chief Financial Officer. Robert and Philip will provide opening remarks. Following their comments, we will take your questions.

Before we get started, some statements made today may be forward-looking for purposes of the Private Securities Litigation Reform Act of 1995, including the expected financial results for 2026. Abbott Laboratories cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological, and other factors that may affect Abbott Laboratories' operations are discussed in Item 1A, Risk Factors, to our Annual Report on Form 10-K for the year ended 12/31/2025. Abbott Laboratories undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments except as required by law.

On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand Abbott Laboratories' ongoing business performance. These non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at abbott.com. Note that Abbott Laboratories has not provided the related GAAP financial measures on a forward-looking basis for the non-GAAP financial measures for which it is providing guidance because the company is unable to predict, with reasonable certainty and without unreasonable effort, the timing and impact of certain items, which could significantly impact Abbott Laboratories' results in accordance with GAAP.

Unless otherwise noted, our commentary on sales growth refers to comparable sales growth, which includes the prior and current year sales of Exact Sciences, a cancer diagnostics company that Abbott Laboratories acquired on 03/23/2026. Our definition of comparable sales growth can be found on Page 2 of our press release issued earlier today, and a reconciliation table that contains data needed to calculate comparable sales growth can be found on Page 13. With that, I will now turn the call over to Robert.

Thanks, Michael. Good morning, everyone, and thank you for joining us. Our results in the first quarter were aligned with our expectations for the start of the year. That included delivering adjusted earnings per share of $1.15, consistent with our guidance despite absorbing the impact of earlier-than-planned financing costs related to our acquisition of Exact Sciences and a weaker-than-expected respiratory season.

This quarter also marked an important strategic milestone for Abbott Laboratories with the completion of our acquisition of Exact Sciences. This acquisition adds a new high-growth business to the Abbott Laboratories portfolio, further strengthening our leadership position in diagnostics and expanding our presence into one of the fastest growing areas of health care, cancer diagnostics. As we communicated at the time of the acquisition announcement, we forecast the addition of Exact Sciences to add approximately $3 billion of incremental sales in 2026 and accelerate Abbott Laboratories' long-term sales growth rate.

Before I summarize our first quarter results, I wanted to highlight a few pipeline achievements in our medical device business. Those include an earlier-than-planned approval and launch of two new PFA catheters, completion of patient enrollment in our Catalyst left atrial appendage device trial, initiation of development activities to bring an implantable extravascular ICD product to market, and the announcement of positive results from our randomized controlled trial which demonstrated that people with type 2 diabetes on basal insulin therapy benefited from using Libre, including seeing reductions in HbA1c and increased time spent in healthy glucose range.

In addition to these achievements, our teams are preparing to initiate patient enrollment in several important clinical trials in the second half of this year. These trials represent a unique opportunity to position Abbott Laboratories to bring a new wave of highly differentiated technologies to the market. This pipeline of new technologies includes a balloon-expandable TAVR valve, a leadless conduction system pacing device that utilizes our revolutionary AVEIR leadless pacemaker, a mitral replacement valve developed following our acquisition of Cephea Valve Technologies, a peripheral IVL device developed following our acquisition of CSI, and a wearable continuous lactate monitoring sensor that will monitor for sepsis following discharge from a hospital.

I will now summarize our first quarter results before I turn the call over to Philip, and I will start with Diagnostics, where sales increased 2% on a comparable basis. Core Lab Diagnostics growth of 3% was driven by growth in the U.S., Europe, and Latin America. Sales of Core Lab diagnostic tests, which exclude capital equipment and digital health solutions, increased on both a year-over-year and sequential basis, and this is a trend that we expect to continue and drive higher growth in the second half of the year compared to the first half. In our Rapid and Molecular Diagnostics business, sales declined 10%, reflecting lower demand for respiratory virus testing due to a much weaker respiratory season compared to last year.

And in Cancer Diagnostics, sales grew 13% on a comparable basis, driven by mid-teens growth of Cologuard and high-teens growth in international markets. Moving to Nutrition, where sales finished slightly ahead of our expectations for the quarter. As discussed on our January earnings call, results in the quarter reflect the impact of lower sales volumes compared to the prior year and the effect of strategic pricing actions implemented in 2025 with an objective of reaccelerating volume growth. While we are still early in the transition back toward a more sustainable balance between price- and volume-driven growth, I am encouraged by the progress we are making.

Early data indicates we are seeing the intended effect, with volume growth beginning to follow our pricing actions. We continue to expect that these pricing actions, combined with the launch of several new products, will result in growth improving over the course of the year. Turning to EPD, which grew 9% in the quarter. Growth was broad-based across the markets we serve, which included double-digit growth in several countries across Latin America and Asia Pacific regions.

Demand in these markets continues to be supported by favorable long-term health care, economic, and demographic trends. With a broad product offering across five therapeutic areas, and an expanding biosimilars portfolio, which includes several market-leading oncology therapies, we are well positioned to serve the growing customer base in these markets. I will wrap up with Medical Devices, where sales grew 8.5%. Growth was led by strong performance in our cardiovascular device businesses.

This included double-digit growth in Electrophysiology, Heart Failure, and Rhythm Management. In Electrophysiology, growth of 13% included contributions from two pulsed field ablation catheter launches in the quarter. The launch of our Volt PFA catheter contributed to growth of 14% in the U.S., and the launch of our TactiFlex Duo catheter helped drive mid-teens growth in Europe. As we broaden the launch of both catheters, we expect growth in our Electrophysiology business to accelerate.

In Rhythm Management, sales grew 13%, marking the third consecutive quarter that we have delivered double-digit growth and continued our track record of significantly outperforming the market. In Heart Failure, growth of 12% was driven by our market-leading portfolio of Heart Assist devices, which offer treatment for chronic and temporary conditions. In Diabetes Care, continuous glucose monitoring sales were $2 billion and grew 7.5%. Growth in the quarter reflects an impact from a delay in the renewal process related to an international tender.

We also saw the expected impact from a challenging comparison to last year. This comparison relates to shelf restocking dynamics that occurred in 2025, a topic that we discussed on an earnings call last year. As we look forward to the second quarter, we expect CGM to return to double-digit growth. So, in summary, our results in the quarter were in line with our expectations to start the year.

We remain confident in our expectations for an acceleration in growth in the second half of the year, and we have clear visibility to the key drivers of that acceleration and are highly focused on executing on them. Those drivers include, first, executing our growth strategy in Nutrition, which is underway and on track with our expectations. Second, we see a clear path to accelerating growth in both Electrophysiology and Core Lab Diagnostics, supported by best-in-class portfolios, new product launches, and improving market conditions. Third, we will continue our proven track record of delivering strong EPD and across our Medical Devices portfolio.

And finally, we are successfully integrating Exact Sciences, which adds a compelling high-growth business to the Abbott Laboratories portfolio, further strengthening our ability to deliver long-term sustainable growth. I will now turn the call over to Philip.

Thanks, Robert. As a result of the March 23 close of our acquisition of Exact Sciences, our first quarter financial results include the results of the Exact Sciences business from the close date through the end of the quarter. As Michael mentioned, our press release issued this morning provides sales growth in the quarter on a comparable basis, which includes the full-quarter sales of Exact Sciences in both the prior and current year. To align with our reporting of comparable sales growth, our full-year 2026 sales growth outlook of 6.5% to 7.5% is now on a comparable basis as well.

The sales growth outlook includes the full-year sales of Exact Sciences in both the prior and current year. Compared to our previous full-year adjusted earnings per share guidance range midpoint of $5.68, our new guidance range midpoint of $5.48 reflects $0.20 of dilution related to the Exact Sciences acquisition, consistent with our assumption at the time of the announced transaction. Turning to our first quarter results, sales increased 3.7% on a comparable basis, and adjusted earnings per share of $1.15 grew 6% compared to the prior year. Foreign exchange had a favorable year-over-year impact of 4% on first quarter sales.

Earlier in the quarter, we saw the U.S. dollar weaken, which resulted in a favorable impact on sales compared to exchange rates at the time of our earnings call in January. Regarding other aspects of the P&L, adjusted gross margin was 56.3% of sales, adjusted R&D was 6.7% of sales, and adjusted SG&A was 29.3% of sales. Based on current rates, we expect exchange to have a favorable impact of approximately 1% on full-year reported sales. For the second quarter, we expect exchange to have a relatively neutral impact on sales.

And for the second quarter, we forecast adjusted earnings per share of $1.25 to $1.31. We will now open the call for questions.

Thank you. At this time, we will conduct a question-and-answer session. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press 1-1 again.

For optimal sound quality, we kindly ask that you use your handset instead of your speakerphone when asking your question. Again, that is 1-1 to ask a question. Please stand by while we compile our roster. Our first question will come from David Roman from Goldman Sachs.

Your line is open.

Thank you, and good morning, everyone. Thanks for taking the question. Maybe I will start with the updated guidance. I know you touched on some of this during the call, but could you go into further detail on your guidance philosophy and your thought process in establishing the revised outlook?

And then the extent to which the outlook is, in your mind, fully de-risked and captures upside potential but also contemplates any downside unforeseen risks?

Yes, sure. I think the philosophy here, David, is that we have included Exact Sciences into the history, and our philosophy has always been to ensure that our investors have clear, transparent, detailed breakdowns of our performance. We did that during COVID. If you remember, we always split out the COVID sales.

We got feedback that investors really wanted to understand the underlying part of the business and the COVID part of the business. When we did the acquisition of St. Jude, the acquisition closed in the first quarter, and we did the same approach there, to fold in St. Jude into a more comparable basis.

We think it provides investors the most relevant growth rate, a growth rate that reflects the new asset portfolio on a very clean apples-to-apples basis. As it relates to the guidance, we made a little bit of a conservative choice on some aspects that we felt in the first quarter. For example, if you look at the respiratory season, we forecast Q1 to be a relatively weak season compared to other seasons that we had seen in the past, and it was even weaker than what we had forecasted. As we looked at other comparable health care businesses that we look at—for example, OTC meds, which is a very good triangulation—we are seeing those types of businesses also have this year-over-year effect.

One of the ways to think about it is that you have parts in the year where you are going to have this effect; you have it at the start of the year and you have it at the end of the year. One of the ways to think about it is, if we were to make up that lower respiratory season at the back end of the year, then we would have to assume an above-average respiratory season, at least from a testing perspective, and I am only going to find that out just before Thanksgiving. So I thought it prudent not to forecast that we are going to make it up in Q4, this respiratory aspect. That does not mean we will not be ready.

We have the portfolio, the manufacturing capabilities, and the distribution to be able to do that. We just decided that it was not prudent to bake that into the forecast. The rest of the areas of the business, the sales growth outlook, is very much in line with our January outlook. If I go back to how I described our year and the year progression, there are a couple of key blocks that really drive our growth throughout the year.

The first block is sustaining the growth of our MedTech business and our pharma business—MedTech business low double digits, our pharma business above 7%. These are businesses that have consistently and reliably delivered this type of performance. Whether it is market conditions or new product launches in these businesses, we feel very good about our ability to sustain that kind of performance. The second bucket would be more of trajectory-changing businesses, and I would put Core Lab and Nutrition into those buckets.

They are a little bit different, though, David. On our Core Lab business, we talked about the impact of China and the VBP, and obviously COVID. That was about a $1 billion headwind that we faced last year. Other parts of the business—geographies and platforms—are doing very well, and we continue to see that.

What I have seen over the last six months really gives me confidence that we are very much on track, or slightly ahead, of that recovery in Diagnostics and that growth trajectory change. The teams there have done an incredible job in China and especially here in the U.S., too. I think the teams have done really well in terms of being able to gain market share. The Nutrition transition is a little bit earlier in that stage, but I still feel that what we are seeing right now, the timely decisions we took in the middle of Q4, are starting to show activity in terms of driving volume growth.

It is still early; I cannot declare it done, but we are seeing really good indications that the actions we took, combined with the new product launches, are going to drive that recovery. The third bucket is the integration of Exact Sciences, which adds a high-growth business to the portfolio. It has been performing very well. I would say those are the three big drivers of our sales forecast, and those have not changed.

I am not going to try and call what type of flu season we are going to have starting before Thanksgiving. But if the flu season is as aggressive as we have seen in other years, then we have the manufacturing, distribution, and sales force in place to be able to support that. Hopefully that answers your question.

Thanks so much.

Thank you.

Our next question will come from Robbie Marcus from JPMorgan. Your line is open.

Maybe to follow up on David's question. I appreciate that comparable growth is a much more helpful metric, especially if we are looking out to the future and what the new Abbott Laboratories will be doing on an underlying basis. But when I look at organic growth, which I think is what a lot of people pay attention to in the health of the Abbott Laboratories business coming into the year before the acquisition, it looks to me like growth is moving from the 6.5% to 7.5% guide on the fourth-quarter call to something more like 5.75% to 6.75% if we adjust out Exact Sciences and the lost royalty revenue.

So it does look like there is a bit of a deceleration in the prior organic Abbott Laboratories business. How are you thinking about managing that? How much is one-time versus sustainable? And where do you see the biggest pressure points and how are you addressing them?

I am not sure I follow those numbers, Robbie, but I think what you are trying to get to is, by putting Exact Sciences into a comparable basis, are there parts of the non-Exact business that are underperforming? I would say, as I said to David, if the acquisition had closed after this call—sometime in Q2—we probably would have done what you in the MedTech space would usually expect, which is to keep it separate and then lap it a year. But then you would need me to reconcile every quarter between what the acquisition did and the organic growth rate. Because it closed early in Q1 before this call, we could roll it in on a comparable basis and give our investors full visibility to the new Abbott Laboratories with the addition of Exact Sciences.

I know that might involve a little more work for some of you in terms of modeling, but we tried to make it very easy for you as part of our disclosures. Parts of the business we are focusing on, I went through in detail. The device portfolio and the pharma portfolio—we still feel very strong about those growth rates. We are not backing off those.

There are opportunities to outperform in some of them, and there are more challenging areas in others, whether it is market or competition, but overall we feel very good about sustaining that. Then there are the trajectory-changing businesses, like we have discussed in Diagnostics and Nutrition—we know what the issues were, we know what we are working on, and we are focused on executing. Taking a step back, we are a very diversified company. We lay out all of the different businesses, and even within sectors, we break them out and show performance.

It would be great to have every single business beating all street expectations. Sometimes that does not happen. The important thing is to have a collection of businesses that we feel are very attractive, and that the combination, the sum of them, are able to hit our commitments and deliver on our financial commitment. I look at each business individually, and we also look at the whole.

As a whole, the company is well set up for this year.

Thanks, Robert. Appreciate it.

Sure.

Thank you. Our next question will come from Larry Biegelsen from Wells Fargo. Your line is open.

Good morning. Thanks for taking the question. Robert, I wanted to ask about CGM. We heard your comments about the CGM market in Q1 and the expected acceleration in Q2. The CGM prescription trends in the U.S. look weak.

Could you talk about what is happening in the CGM market? There is a concern that the current indications are saturated. How are you thinking about Libre growth for the rest of the year and longer term? And lastly, remind us of the timing for type 2 non-insulin and the dual ketone sensor and the lactate sensor you mentioned.

Thank you.

Sure. I think it is always important not to look only at weekly prescription data in one country. It is an important country, and the weekly prescription data is a great early indicator for the market, even though that auditing channel does not capture the entire market. It is very different from pharma, where you have a lot of other segments of the market performing.

Using TRx data to ultimately look at how the market is evolving—and only using that—is a little bit myopic. Let me take a bigger view. I am very bullish on the CGM market—I always have been and I continue to be. Our assessment of the number of people who should be on a CGM on a global basis is between 70 million and 80 million people.

There are different types of patients in that number, but overall 70 to 80 million people. The market today is around 10 to 12 million people. There are about half a billion people with diabetes, so I have already narrowed it down quite a bit, and even in that narrowed-down world, we are still very underpenetrated. If you look back at our growth trajectory, going back fifteen years at quarterly revenue, it is never always up and to the right on a perfect 45-degree line.

There are periods of modest growth—call it 8% to 10%—followed by very long periods of strong acceleration in the teens to 20% growth. Those acceleration periods are typically driven by different catalysts: reimbursement, geographic expansion, and new product launches. I see a lot of catalysts still ahead. On reimbursement, you mentioned CMS type 2 non-insulin coverage.

I expect proposed language for that coming soon. I cannot tell you the exact month, but I know it is going to happen, and it is going to add close to 10 million people that do not have coverage now and will be able to have coverage, which will accelerate commercial coverage too. I have not included that in my guidance, but it is a sweet spot for us in terms of our channel strength, promotional strength, and reimbursement coverage. Internationally, out of the top 10 markets in the world, only four have gone full-blown basal coverage, so there are another six very large markets still in process.

We have built evidence to support that movement, not only from a physician side but also from patient advocacy. We showed in an RCT, which I talked about earlier, that patients on basal do better with Libre. There is so much opportunity still internationally and in the U.S. I do not think the patient TAM is tapped.

You will have moments where growth modulates a little bit, and then the next catalysts come in and drive growth. You have to look at the bigger picture: you have 70 to 80 million people who can be on this product. Even if you look at a yearly revenue number that is lower than what we are seeing today because you have different types of patient groups, you are looking at a $3.035 trillion opportunity here that is available to us, and we are focused on that—focused on building competitive advantage, whether product technology advantage, cost advantage, or scale advantage. On innovation as another catalyst, we are still committed to and expect approval of our dual-analyte system.

On the pump side, you have about 1 million patients that previously had very little access. You are going to have about 5 million SGLT2 users that are not using the product who will now benefit from having continuous ketone monitoring. We are working on Libre 5. Our view is always about sustaining our competitive advantage through cost advantage and product innovation. I still feel very good about this market.

We look at weekly TRxs too, and we see the trends. There are areas we can do better, and we are working on that, but the bigger picture is that we are very well positioned for a very large market.

Alright. Thanks so much.

Thank you. Our next question will come from Vijay Kumar from Evercore ISI. Your line is open.

Hi, Robert. Good morning, and thank you for taking my question. I will stick to Exact. Given that the deal is closed—this is an asset which has done phenomenally well over the years, doing mid-teens growth—talk about your plans for sustaining strong growth of Cologuard.

Is there an international angle here for Cologuard? And related to that, comparable growth is now 6.5% to 7.5%, and we know Exact is growing faster. Is there some conservatism baked into the guidance? Could there be upside given Exact is growing faster?

Thank you.

Sure. The integration is going very well. We have named Jake Orville as our new leader in that business. He previously led the screening business—the Cologuard business—and he is reporting directly to me.

It is reported in our Diagnostics queue, but it is operating standalone and reports straight to me. We are very excited. I have traveled with reps and talked to physicians. I am very bullish about accelerating this business.

Sustaining Cologuard growth—when we looked at this strategically, we wanted to think about it not as a one-product deal, but as an opportunity to enter an extremely exciting and high-growth space: not just screening with Cologuard, but therapy selection and MRD testing. These are great opportunities. Our goal in doing this is to be across the entire cancer diagnostics span, and we believed that Exact was a beachhead building block for us to do that. Within that, Cologuard is the key growth driver, and it is a very sustainable growth opportunity.

Demand is high and continues to increase. It is very underpenetrated right now. About 50 million Americans are not up to date with CRC screening, so there is an opportunity in the U.S. and internationally. Internationally, it is very underpenetrated.

One of the things that we bring is established regulatory, KOL, health care system, and distribution relationships across many markets. We have already set aside a group focused on developing the screening and cancer testing market in international markets. On screening guidelines, the age in 2021 was lowered from 50 to 45, adding a lot of new patients. We are seeing people at 30 and 35 being diagnosed with stage 3, which is not good.

Could I eventually see the age lowered from 45 to 40? I think I can, because there is a medical need for that, and that would add another 20 million people in the U.S. The value proposition of Cologuard is incredible. With increasing demand for screening, there is a fixed amount of colonoscopy capacity—about 6 million per year pretty consistently.

If you look at gastroenterologists and enrollment rates in medical schools, they are coming down. You can see a world with increased demand for screening and less supply to do colonoscopies. Cologuard does really well here. Not only is it convenient at home, but its sensitivity at 95% is equivalent to colonoscopy.

The combination of increased demand and this bottleneck supports strong growth. The average wait time for colonoscopy is between three to nine months depending on the state, so there is already a backlog. Another unique aspect is the commercial model: a 1,000-person salesforce calling on primary care. It takes time to build that.

About 200 thousand health care professionals prescribe Cologuard every quarter, and everything is integrated into health records and your phone—a very seamless experience. Rescreens are becoming a strong growth contributor. Twenty-five percent of our tests today are rescreens, and you are eligible every three years. With all the data, you can interact with customers to remind them.

We are seeing very high rescreen rates that get even higher as rescreens progress—about 500,000 patients per year just for rescreens. Care gap programs are also unique. CRC screening is one of the quality metrics CMS uses for star ratings, and payers and providers get three times the quality score for Cologuard versus a FIT test. We are seeing a lot of interest from healthcare systems and providers to stay ahead and ensure they are scoring their quality metric points.

Internationally, will it be Cologuard? It could be in some markets; it could be other tests in other markets, but there is clearly a need. I traveled to Asia and Europe in the first quarter and spoke to health ministers. Top three priorities included getting cancer screening up and going in their countries.

They see it as a problem and see Abbott Laboratories as one of the solutions. I feel very good about this business, and the integration is going very well. Culturally, both companies are very compatible and very focused on the patient, innovation, and driving growth.

Thank you.

Our next question will come from Matt Taylor from Jefferies. Your line is open.

Good morning. Thanks for taking my question. Could you talk a little bit about the trends in Structural Heart and, within that, address what is going on in left atrial appendage closure? Not only do you have programs including the next-gen 360, which I think people are excited about, but could you comment on what you think the impact could be from the CHAMPION study from your competitor?

You have a similar study, Catalyst, that will read out here in a year or two. We would love an overview of Structural Heart and LAAC.

That is an interesting question because historically we had our left atrial appendage closure device within our Structural Heart business, and we decided to move it outside of Structural Heart and put it into our Electrophysiology business. We did that at the end of last year, starting January 1, where we moved the salesforce, clinical teams, and eventually manufacturing. We did that because we felt it would be beneficial for Electrophysiology and, quite frankly, would be more beneficial for our Structural Heart business. I will focus on Structural Heart trends.

We have been doing pretty well. In our queue, we have a reconciliation of the impact of moving those sales out of Structural Heart into EP—that is a big contributor to the disconnection between the street model and what we delivered. On top of that, we have seen some competitive intensity increase in the mitral space as one of our main competitors expanded their portfolio. My team can do a better job there; they know that.

We need to improve our execution in the U.S. We have made some changes to leadership, and I am expecting our U.S. commercial team to respond to the challenge. Internationally, growth continues to be very strong across the entire portfolio, and we are delivering double-digit growth in Mitral, TriClip, and our Structural Interventions business. While there will be some geographic differences, I continue to expect our Structural Heart growth to be high single digits for the full year.

We have a couple of trial readouts. We have completed enrollment in our Catalyst trial. I do not have a big reaction to my competitor's trial; I will wait until ours comes out and then comment. It is a high-growth, attractive business.

Our next-generation product is very exciting, and moving it to our EP business should provide better acceleration for that product and allow our Structural Heart team to stay focused on valvular products.

Thank you very much.

Our next question will come from Travis Steed from BofA Securities. Your line is open.

Hey, everybody. I wanted to ask on the Nutrition business. I heard you mention that volume is starting to recover a bit. Any other color you can give on getting confidence in that business returning to growth in the back half and volume picking up? And how you are thinking about ongoing portfolio management and value creation, and how Nutrition fits in that strategic thinking?

As I said, we are starting to see the impact. We did a comprehensive price assessment at a product and geographic level. We evaluated our gaps versus competition. We did not reduce price uniformly; we kept it focused on products that, based on our experience, would demonstrate a positive volume response to reduced price.

When the price is passed on to the consumer, we are seeing an immediate effect, but it takes time for some of that price to get passed on, because of channel inventory. That is why we wanted to get ahead of it quickly in Q4 of last year. When you see the lower prices get passed through to the consumer, you see the intended effect. For example, in our U.S.

Adult Nutrition business, specifically Ensure, that was a product we knew had some elasticity in its price. We have seen volume grow across all the retailers that have passed that on in the U.S. We are tracking this on a monthly basis, using the first half of 2025 as the baseline, and my team looks at this weekly with available data. I feel good about where we are.

I am not going to say it is all done—there is still work to do. Product launches allow us to gain distribution, and we need to expand distribution into the channel. The team is incredibly focused and resilient. As it relates to the portfolio, I like the diversity of our business model—across business segments, products, geographies, customer bases, payer types, and innovation cycles.

We do not want to be heavily weighted on one or two products. That diversity provides us a unique perspective on the global health care system. We constantly evaluate our portfolio: Is the market still attractive? How is our competitive position?

Do we expand, maintain, or potentially reduce? We do this on an ongoing basis with management and with our board at least once a year, sometimes twice. Evaluating our portfolio for value creation is not a once-every-five-year exercise. If we see an opportunity, we have demonstrated we can act upon it.

I am never going to make a long-term strategic decision based on near-term challenges. Nutrition is going through some near-term challenges and a transition and recovery phase, and my focus is on getting our business back to the growth rate we had seen over the last four or five years.

Great. Thanks a lot.

Thank you. Our next question will come from Joanne Wuensch from Citi. Your line is open.

Good morning, and thank you for taking the question. I am surprised we are fifteen minutes into this and no one has asked about macro issues, so I am going to go there. What are you seeing in terms of potential impacts from the conflict in the Middle East on your business—on oil and resin costs—and big picture, what you are seeing in terms of patient volumes and reimbursement, outside of your comments on respiratory snow days and things like that? Thank you.

The way Abbott Laboratories has been built, it has been built to withstand these kinds of events. Our discipline is to ensure that we try to get ahead of it. As it relates to oil costs, it is too early to tell. We are not seeing any of that in our costs right now.

We are not seeing freight rates increase from our suppliers right now, but we are monitoring it. We have a whole team that monitors and stays close to it. One of the things we do to stay ahead is that each of our businesses has dedicated teams—Monday through Friday, 8 AM to 6 PM—working on gross margin improvement: anticipating cost shocks, becoming more efficient and effective, and negotiating with suppliers. It is too early to tell, but I do not think there is a big impact because we have teams in place working to mitigate.

The impact we saw in Q1 was very minimal. I would not call it a demand impact. It was more about getting product into the region. Shipping lanes became constrained; everyone wanted spots on planes and different types of transport.

We need to stay ahead of that. We run pretty efficiently with our inventory, so now we need to make sure we have more inventory in our affiliates and warehouses in the areas, so we have enough product and do not have back orders. I did not see a drop-off in demand or reimbursement challenges as a result of the conflict. It was more ensuring that we could get product into the area.

The teams that Abbott Laboratories has in the region have unfortunately been through a lot and seen a lot, and I give them a lot of credit. They have to grow and drive the business under very tough challenges.

Thank you. Our next question will come from Josh Jennings from TD Cowen. Your line is open.

Robert, hoping to get more details on the EP franchise and the Volt launch internationally and now in the U.S. Internationally, any quantification of how Volt is impacting share recapture in the ablation catheter segment? For the U.S., with the early approval of Volt 2.0, any updates in terms of timing or how your team is going to move forward into a full launch this year? And overall, can you help us think about Abbott Laboratories' updated views on EP market growth—volumes and pricing?

That is fifty-five minutes with the first EP question. The team has done an incredible job over the past years of driving double-digit growth during a window where we did not have PFA. That window is now closed, so our expectations and outlooks are on the rise. The U.S. launch of Volt and the European launch of TactiFlex Duo are underway.

Both launches are in what we call a limited market release phase. We do that with all of our products across devices and diagnostics. Before we go full-blown, we believe there is an intermediate step between a controlled environment or clinical trial and full commercial launch. That helps us understand resourcing, positioning, and uncover insights you might not get during a clinical trial.

The feedback from both products is extremely favorable and aligned with our expectations when we were building this portfolio two years ago. We realized we were not first, but we wanted to take advantage of our mapping systems and develop what we believed would be an upgrade to the first generations. We are seeing that with Volt. The conscious sedation aspect of Volt is extremely valuable in the U.S. and internationally, and it is specific to Volt by design.

At the European Heart Rhythm meeting last week, albeit preliminary and small, we saw data suggesting the lesions that Volt creates are more durable. That balances the discussion on the EP market to be not only about efficiency and speed—because there are many patients to treat—but also better outcomes. We believe Volt can deliver speed and efficiency and better outcomes. The TactiFlex Duo feedback is very positive as well—easy to use, very fast lesion creation.

This is on the TactiFlex chassis, so there is a lot of experience with that catheter, and there is a seamless switch between RF and PFA. We are now moving to broaden the launches, which gives us confidence that growth will accelerate, including growing faster than the market by the exit of this year. On market growth, there is debate—is it 15% or 20%? We think the market will be mid- to high-teens, and we are aiming to do better than that.

The near-term outlook for the business looks really strong. More importantly, I like our long-term position. We have two new PFA catheters, a new ICE catheter, a new introducer, and we are constantly making annual upgrades to our mapping system. We have mapping infrastructure in place with clinical specialists—highly valuable to our customers.

We will add a second-generation LAA device to this group. No company in this space has the kind of portfolio, completeness, experience, and field teams that we have. While not all of these products fall into EP as a reportable segment, many EPs also use our devices—pacemakers, ICDs—and our leadless technology is very fast-growing. We have a very differentiated EP product portfolio, and there are a lot of exciting times ahead for our EP business.

Crystal, we will take one more question, please.

Thank you. Our final question will come from Marie Thibault from BTIG. Your line is open.

Good morning. Thanks for squeezing me in. I want to get a little bit closer to understanding what is going on in the Core Lab business. You called out strengths in the U.S., Europe, and Latin America. I think we are moving past some of the China VBP headwinds. Could you characterize the Core Lab trajectory by geography during Q1? Any share gains? Any notable product launches to call out?

You characterized it well. Our sales in China for Core Lab were flat in Q1. Last year, we were down between 15% and 30% every quarter. The teams are making good progress. We are lapping some of the price and volume headwinds, which also contributes.

The market dynamics we faced have improved. I am cautious to say it is all lapped because in VBPs you have different phases—regionals, nationals, etc.—but we have China modeled at a single-digit decline for the year. Could we do better than that? It seems like the team has done better in the first quarter, and I hope they will continue.

In the U.S., the team has done a fantastic job. Growth rates are high single digits and have been like that for some time. We are renewing contracts at a very high renewal rate—call it 90% plus—and share gains are accelerating. Our win rates are 55% plus; in new business, we are able to win one out of two.

Europe is difficult to characterize as one region because of north-south differences, but in general, the business has been mid- to high-single digits pretty reliably. We feel very good about Diagnostics. It has been performing well, with the exception of the impact of VBP in China, and that seems to be lapping. I expect full-year Core Lab growth to be mid-single digits.

I was talking to the leader of that business yesterday—they have strategies to do better than that, with the second half higher than the first, consistent with what we have historically done. The team has done a very good job navigating VBP in China and continuing to drive growth in other parts of the business. In China, about 80% of our portfolio has gone through VBP. You will probably hear about new waves of VBP like a fertility VBP or a cancer VBP, and we have very little share in those segments.

I do not want to say we are past the eye of the hurricane, but it seems like the teams have stabilized China, and the other businesses continue to perform the way they have historically performed. Just before we end the call, I would like to reiterate my comments at the end of my prepared remarks. I remain very confident in our expectation for an acceleration in growth in the second half. We know what the drivers are, we know where the accelerations are, we know where we need to improve execution, and we are laser focused on executing on them.

Thank you all for joining us today.

Thank you, operator. Thank you all for your questions. This now concludes Abbott Laboratories' conference call. A webcast replay of this call will be available after 11 AM Central Time today on our website at abbott.com. Thank you for joining us today.

Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.