Medtronic Plc Q4 FY2025 earnings call

• Cardiovascular: Innovation drove 8% growth, CAS reached $1B revenue, PFA products like Sphere-9 and Sphere 360 driving momentum. - Neuroscience: Neuromodulation as category leader, BrainSense Adaptive DBS launched with market release in US, Europe, and Japan. - Medical Surgical: LigaSure vessel sealing winning share, Hugo robotic platform progressing with urology, hernia, and GYN indications. - Diabetes: Turnaround with double-digit growth, Separation plan announced to focus on high-margin growth drivers, with Que Dallara leading the new Diabetes company.

Cardiovascular: Q4 revenue grew 8%, with Cardiac Ablation Solutions (CAS) nearly 30% growth, reaching $1 billion in FY '25; Cardiac Rhythm Management (CRM) grew 7%; Structural Heart grew 10%. Neuroscience: Cranial and Spinal Technologies mid-single-digit growth; Neuromodulation grew 10%, with BrainSense Adaptive DBS launched in US and Europe. Medical Surgical Portfolio/Surgical: Grew 2%, with LigaSure vessel sealing technology winning share, and Hugo soft tissue robotic platform progressing. Diabetes: Grew 12%, sixth quarter of double-digit growth, with MiniMed 780G installed base and Simplera Sync sensor launch. Revenue contributions: Cardiovascular, Neuroscience, Medical Surgical, and Diabetes each played significant roles in overall growth.

• Fiscal ‘26 organic revenue growth expected ~5%, including 4.5%-5% growth in Q1. - EPS guidance ~4% excluding tariffs, with range of $5.50-$5.60 in fiscal ‘26. - Fiscal ‘27 expected high single-digit EPS growth post-diabetes separation, driven by revenue growth, FX tailwind, and margin/share retirement benefits.

• Tariffs impact on COGS, estimated $200M-$350M. - Mix headwinds from CAS and Diabetes in gross margin. - FX exposure, though efforts to lower exposure through natural hedges and hedging programs.

Q: About guidance philosophy and pipeline on revenue side, and EPS growth ex tariffs A: Geoff and Thierry discussed bullishness on growth drivers, markets, and positions; EPS construction with operating profit growth and pressure points from tariffs and tax.

Q: Is 7% operating profit including tariffs, and diabetes EPS headwind A: 7% operating profit excluding tariffs; diabetes EPS headwind from Simplera sensor rollout.

Q: EPS growth in fiscal ‘27 without diabetes spin benefits A: Thierry emphasized fundamentals and continued growth potential despite one-time benefits.

Q: Earnings growth back-end loaded and margins A: Thierry and Geoff discussed mix impact, pricing, cost progress, and natural hedges to lower FX exposure.

Q: Renal denervation preparation and revenue ramp A: Sean Salmon discussed training, education, and support for renal denervation service lines, paralleling PFA adoption but with longer ramp.

Q: Diabetes pipeline and differentiation A: Que Dallara discussed Simplera Sync launch, pump and CGM options, form factor upgrades, and closed-loop algorithm development.

Q: Spine business performance and market growth A: Geoff and Brett Wall discussed AiBLE ecosystem driving spine growth, competitive advantage over peers.

Q: CAS business ramp and portfolio management A: Geoff and Sean Salmon discussed CAS ramp with PFA products, and portfolio management focus on high-margin growth areas and tuck-in M&A.