Medtronic plc
Medtronic plc
09/03/2026 | Press release | Distributed by Public on 09/03/2026 14:19
Quarterly Report for Quarter Ending July 31, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
UNDERSTANDING OUR FINANCIAL INFORMATION
The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of Medtronic plc and its subsidiaries (Medtronic plc, Medtronic, or the Company, or we, us, or our). For a full understanding of financial condition and results of operations, this discussion and analysis should be read along with Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended April 24, 2026, as filed with the Securities and Exchange Commission (SEC) on June 18, 2026. In addition, this discussion and analysis should be read along with our condensed consolidated financial statements and related notes thereto at and for the three months ended July 31, 2026. Amounts reported in millions within this quarterly report are computed based on the actual amounts, and therefore, the sum of the components may not equal the total amount reported in millions due to rounding. Additionally, certain columns and rows within tables may not sum due to rounding.
Financial Trends
Throughout this Management's Discussion and Analysis, we present certain financial measures that facilitate management's review of the operational performance of the Company and as a basis for strategic planning; however, such financial measures are not presented in our financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S.) (U.S. GAAP). These financial measures are considered non-GAAP financial measures and are intended to supplement, and should not be considered as superior to, financial measures presented in accordance with U.S. GAAP. We believe that non-GAAP financial measures provide information useful to investors in understanding the Company's underlying operational performance and trends and may facilitate comparisons with the performance of other companies in the medical technologies industry.
As presented in the "GAAP to Non-GAAP Reconciliations" section on the following pages, our non-GAAP financial measures exclude the impact of amortization of intangible assets and certain charges or benefits that contribute to or reduce earnings and that may affect financial trends. These measures include certain charges or benefits that result from transactions or events that we believe may or may not recur with similar materiality or impact our operations in future periods (non-GAAP adjustments).
In the event there is a non-GAAP adjustment recognized in our operating results, the tax cost or benefit attributable to that item is separately calculated and reported. Because the effective rate can be significantly impacted by the non-GAAP adjustments that take place during the period, we often refer to our tax rate using both the effective rate and the non-GAAP nominal tax rate. The non-GAAP nominal tax rate is calculated as the income tax provision, adjusted for the impact of non-GAAP adjustments, as a percentage of income before income taxes, excluding non-GAAP adjustments.
Free cash flow, a non-GAAP financial measure, is calculated by subtracting additions to property, plant, and equipment from net cash provided by operating activities.
Refer to the "GAAP to Non-GAAP Reconciliations," "Income Taxes," and "Free Cash Flow" sections for reconciliations of the non-GAAP financial measures to their most directly comparable financial measures prepared in accordance with U.S. GAAP.
EXECUTIVE LEVEL OVERVIEW
Medtronic is the leading global healthcare technology company - alleviating pain, restoring health, and extending life for millions of people around the world. Our primary products include those for cardiac rhythm disorders, cardiovascular disease, neurological disorders and diseases, spinal conditions and musculoskeletal trauma, ear, nose, and throat conditions, urological and digestive disorders, advanced and general surgical care, respiratory and monitoring solutions, and diabetes conditions.
Fiscal year 2027 is a 53-week fiscal year, with the extra week occurring in the first fiscal month of the first quarter and included in the three months ended July 31, 2026 results.
The following is a summary of net sales, diluted earnings per share, and operating cash flow for the three months ended July 31, 2026:
GAAP to Non-GAAP Reconciliations
The tables below present our GAAP to non-GAAP reconciliations for the three months ended July 31, 2026 and July 25, 2025:
| Three months ended July 31, 2026 | |||||||||||||||||||||||||||||
| (in millions, except per share data) | Income Before Income Taxes |
Income Tax Provision (Benefit) |
Net Income attributable to Medtronic | Diluted EPS | Effective Tax Rate | ||||||||||||||||||||||||
| GAAP | $ | 1,769 | $ | 289 | $ | 1,470 | $ | 1.14 | 16.4 | % | |||||||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||||||||
| Amortization of intangible assets | 412 | 75 | 337 | 0.26 | 18.2 | ||||||||||||||||||||||||
|
Restructuring and associated costs(1)
|
89 | 19 | 70 | 0.05 | 21.2 | ||||||||||||||||||||||||
|
Acquisition and divestiture-related items(2)
|
50 | 9 | 41 | 0.03 | 18.2 | ||||||||||||||||||||||||
|
(Gain)/loss on minority investments(3)
|
(64) | - | (64) | (0.05) | (0.1) | ||||||||||||||||||||||||
|
Certain tax adjustments, net(4)
|
- | (5) | 5 | - | - | ||||||||||||||||||||||||
| Non-GAAP | $ | 2,257 | $ | 387 | $ | 1,860 | $ | 1.45 | 17.2 | % | |||||||||||||||||||
| Three months ended July 25, 2025 | |||||||||||||||||||||||||||||
| (in millions, except per share data) | Income Before Income Taxes |
Income Tax Provision (Benefit) |
Net Income attributable to Medtronic | Diluted EPS | Effective Tax Rate | ||||||||||||||||||||||||
| GAAP | $ | 1,302 | $ | 255 | $ | 1,040 | $ | 0.81 | 19.6 | % | |||||||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||||||||
|
Amortization of intangible assets(5)
|
459 | 85 | 374 | 0.29 | 18.5 | ||||||||||||||||||||||||
|
Restructuring and associated costs(1)
|
67 | 15 | 51 | 0.04 | 22.4 | ||||||||||||||||||||||||
|
Acquisition and divestiture-related items(2)
|
58 | 10 | 48 | 0.04 | 17.2 | ||||||||||||||||||||||||
| Certain litigation charges, net | 27 | 6 | 21 | 0.02 | 22.2 | ||||||||||||||||||||||||
|
(Gain)/loss on minority investments(3)
|
113 | 7 | 107 | 0.08 | 6.2 | ||||||||||||||||||||||||
|
Other(6)
|
(39) | (8) | (30) | (0.02) | 20.5 | ||||||||||||||||||||||||
|
Certain tax adjustments, net(4)
|
- | (16) | 16 | 0.01 | - | ||||||||||||||||||||||||
| Non-GAAP | $ | 1,987 | $ | 354 | $ | 1,626 | $ | 1.26 | 17.8 | % | |||||||||||||||||||
(1)The charges primarily relate to employee termination benefits, facility related and contract termination costs, and asset write offs.
(2)The charges primarily include business combination costs, changes in fair value of contingent consideration, and exit of business-related charges. Exit of business-related charges primarily relate to the impending separation of the Diabetes Business and costs associated with the Company's June 2021 decision to stop the distribution and sale of the Medtronic HVAD System.
(3)We exclude unrealized and realized gains and losses on our minority investments as we do not believe that these components of income or expense have a direct correlation to our ongoing or future business operations.
(4)The net charges for the three months ended July 31, 2026 and July 25, 2025, primarily relate to amortization of previously established deferred tax assets arising from previous intercompany intellectual property transactions. The net charges for the three months ended July 31, 2026, were partially offset by the release of reserves for uncertain tax positions on prior period intercompany transactions.
(5)The Company recognized $45 million of accelerated amortization on certain intangible assets within the Cardiovascular Portfolio.
(6)Reflects adjustments to the Company's Italian payback accruals resulting from the June 30, 2025 Legislative Decree published by the Italian government for years 2015 to 2018.
Free Cash Flow
Free cash flow, a non-GAAP financial measure, is calculated by subtracting additions to property, plant, and equipment from net cash provided by operating activities. Management uses this non-GAAP financial measure, in addition to U.S. GAAP financial measures, to evaluate our operating results. Free cash flow should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with U.S. GAAP. Reconciliations between net cash provided by operating activities (the most comparable U.S. GAAP measure) and free cash flow are as follows:
| Three months ended | |||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | |||||||||
| Net cash provided by operating activities | $ | 1,793 | $ | 1,088 | |||||||
| Additions to property, plant, and equipment | (503) | (504) | |||||||||
| Free cash flow | $ | 1,290 | $ | 584 | |||||||
Refer to the Summary of Cash Flows section for drivers of the change in cash provided by operating activities.
Macroeconomic Trends
Looking ahead, a number of macroeconomic and geopolitical factors could negatively impact our business, including without limitation:
•Competitive product launches and pricing pressure, geographic macroeconomic developments including changes in global trade policies and fluctuations in currency exchange rates, general price inflation, changes in interest rates, reimbursement challenges, impacts from changes in the mix of our product offerings, delays in product registration approvals, national and provincial tender pricing for certain products, particularly in China, replacement cycle challenges, and supply chain challenges from time to time.
•Recent developments in global trade policy have introduced new uncertainties for our business. The U.S., China, and other jurisdictions have recently imposed or proposed additional tariffs on imported goods. While we are taking proactive steps to mitigate the effects of these tariffs, the evolving nature of international trade policy continues to present a risk to our cost structure and financial performance. On February 20, 2026, the U.S. Supreme Court ruled that President Trump's tariff policies under the International Emergency Economic Powers Act ("IEEPA") are unconstitutional. Following that ruling, U.S. Customs and Border Protection ("CBP") implemented procedures for the processing of IEEPA tariff refunds, and the Company has participated in those processes where appropriate. We continue to monitor developments in global trade policy, including changes to tariff regimes and related administrative actions. The impact of such developments, including further escalation or expansion of trade barriers, could have a material adverse effect on our results of operations.
•The planned exit of certain businesses, including our Diabetes Business, may involve separation activities, costs, and risks associated with transitioning operations, arrangements, and infrastructure. The timing and execution of these activities, as well as any related disposition steps, could affect our future results and financial condition.
NET SALES
Starting in the first quarter of fiscal year 2027, the Cardiovascular Portfolio divisions transitioned from Cardiac Rhythm & Heart Failure, Structural Heart & Aortic, and Coronary & Peripheral Vascular to Electrophysiology Therapies (EPT), Interventional Cardiology Therapies (ICT), CardioVascular Surgery (CVS), and Peripheral Vascular Health (PVH). Our EPT division includes the Cardiac Rhythm Management and the Cardiac Ablation businesses. Our ICT division includes the Coronary and Renal Denervation and the Structural Heart businesses. Our CVS division includes the Cardiac Surgery and the Aortic businesses. Our PVH division includes the Peripheral Vascular Health business. Additionally, a product line from the Medical Surgical Portfolio in the Surgical & Endoscopy division moved to the Neuroscience Portfolio in the Neuromodulation division. Starting in the fourth quarter of fiscal year 2026, the Diabetes Business was no longer considered a reportable segment. Prior period net sales have been recast to conform to the new presentation.
The charts below illustrate the percent of net sales by business for the three months ended July 31, 2026 and July 25, 2025:
The table below illustrates net sales by segment and division and market geography for the three months ended July 31, 2026 and July 25, 2025:
|
Three months ended
|
|||||||||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | % Change | ||||||||||||||
| Electrophysiology Therapies | $ | 2,218 | $ | 1,712 | 30 | % | |||||||||||
| Interventional Cardiology Therapies | 894 | 834 | 7 | ||||||||||||||
| CardioVascular Surgery | 477 | 436 | 9 | ||||||||||||||
| Peripheral Vascular Health | 338 | 302 | 12 | ||||||||||||||
| Cardiovascular | 3,927 | 3,285 | 20 | ||||||||||||||
| Cranial & Spinal Technologies | 1,365 | 1,211 | 13 | ||||||||||||||
| Specialty Therapies | 774 | 702 | 10 | ||||||||||||||
| Neuromodulation | 539 | 514 | 5 | ||||||||||||||
| Neuroscience | 2,678 | 2,427 | 10 | ||||||||||||||
| Surgical & Endoscopy | 1,740 | 1,601 | 9 | ||||||||||||||
| Acute Care & Monitoring | 539 | 471 | 14 | ||||||||||||||
| Medical Surgical | 2,279 | 2,073 | 10 | ||||||||||||||
| Reportable segment net sales | 8,884 | 7,785 | 14 | ||||||||||||||
| Diabetes | 843 | 721 | 17 | ||||||||||||||
|
Other operating segment(1)
|
29 | 33 | (12) | ||||||||||||||
|
Other adjustments(2)
|
- | 39 |
NM(3)
|
||||||||||||||
| Total net sales | $ | 9,756 | $ | 8,578 | 14 | % | |||||||||||
|
U.S.
|
International
|
||||||||||||||||||||||||||||||||||
| Three months ended | Three months ended | ||||||||||||||||||||||||||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | % Change | July 31, 2026 | July 25, 2025 | % Change | |||||||||||||||||||||||||||||
| Cardiovascular | $ | 1,853 | $ | 1,479 | 25 | % | $ | 2,074 | $ | 1,806 | 15 | % | |||||||||||||||||||||||
| Neuroscience | 1,813 | 1,624 | 12 | 864 | 803 | 8 | |||||||||||||||||||||||||||||
| Medical Surgical | 982 | 884 | 11 | 1,297 | 1,188 | 9 | |||||||||||||||||||||||||||||
| Reportable segment net sales | 4,649 | 3,988 | 17 | 4,236 | 3,797 | 12 | |||||||||||||||||||||||||||||
| Diabetes | 240 | 217 | 11 | 603 | 504 | 20 | |||||||||||||||||||||||||||||
|
Other operating segment(1)
|
17 | 20 | (12) | 12 | 14 | (14) | |||||||||||||||||||||||||||||
|
Other adjustments(2)
|
- | - | - | - | 39 |
NM(3)
|
|||||||||||||||||||||||||||||
| Total net sales | $ | 4,906 | $ | 4,224 | 16 | % | $ | 4,850 | $ | 4,354 | 11 | % | |||||||||||||||||||||||
(1)Includes operations and ongoing transition agreements from businesses the Company has exited or divested.
(2)Reflects adjustments to the Company's Italian payback accruals as further described below.
(3)Not meaningful (NM).
The increase in net sales for the three months ended July 31, 2026, as compared to the corresponding period in the prior fiscal year, was driven primarily by growth in most businesses, as further described in the business sections below, including an extra week occurring in the first fiscal month of the first fiscal quarter in 2027 with an estimated benefit to reported growth of approximately $570 million and by impacts of foreign currency fluctuations. In addition, the net sales were partially offset by changes in estimates relating to our Italian payback accrual resulting from the Legislative Decree published by the Italian government in June 2025 and formalized into law in August 2025 for years 2015 to 2018. For the three months ended July 25, 2025, the accrual decreased by $39 million as an adjustment to net sales in the condensed consolidated statements of income.
Cardiovascular
Cardiovascular products include pacemakers, insertable cardiac monitors, cardiac resynchronization therapy devices, implantable cardioverter defibrillators, leads and delivery systems, products for the treatment of atrial fibrillation, information systems for the management of patients with Electrophysiology Therapy devices, products designed to reduce surgical site infections, coronary and peripheral stents and related delivery systems, balloons and related delivery systems, endovascular stent graft systems, heart valve
replacement technologies, cardiac tissue ablation systems, open heart and coronary bypass grafting surgical products, and renal denervation systems for the treatment of hypertension. Cardiovascular also includes Care Management Services and Cath Lab Managed Services (CLMS) within the Electrophysiology Therapies division. Cardiovascular's net sales for the three months ended July 31, 2026 were $3.9 billion, an increase of 20 percent, as compared to the corresponding period in the prior fiscal year, resulting from growth across most businesses.
The graphs below illustrate the percent of Cardiovascular net sales by division for the three months ended July 31, 2026 and July 25, 2025:
Electrophysiology Therapies (EPT) net sales for the three months ended July 31, 2026 increased 30 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by Cardiac Ablation Solutions due to growth in the pulsed field ablation portfolio and Cardiac Rhythm Management due to growth in Cardiac Pacing Therapies and Defibrillation Solutions.
Interventional Cardiology Therapies (ICT) net sales for the three months ended July 31, 2026 increased 7 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by TAVR, Symplicity Spyral renal denervation system, guide catheters and balloons.
CardioVascular Surgery (CVS) net sales for the three months ended July 31, 2026 increased 9 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by Aortic and growth in Cardiac Surgery due to growth in Avalus Ultra surgical valve and VitalFlow ECMO system.
Peripheral Vascular Health (PVH) net sales for the three months ended July 31, 2026 increased 12 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by growth in Peripheral Vascular and endoVenous.
In addition to the macroeconomic and geopolitical factors described in the Executive Level Overview, looking ahead, we expect Cardiovascular could be affected by the following:
•Global adoption and growth of Aurora EV-ICD.
•Growth of the Cobalt and Crome portfolio of ICDs and CRT-Ds.
•Continued growth and utilization of the TYRX Envelope for implantable devices.
•Market acceptance and growth of OmniaSecure defibrillation lead. OmniaSecure received CE Mark in March 2026.
•Continued global penetration of our Micra transcatheter pacing portfolio.
•Continued global growth of Azure pacing system.
•Continued acceptance and growth of the SelectSecure 3830 lead.
•Continued growth and acceptance of Reveal LINQ and expansion of the LINQ II cardiac monitor.
•Continued acceptance, adoption, and growth of our innovative portfolio of products in the Electrophysiology Therapies division, including the PulseSelect pulsed field ablation system and the Affera mapping and ablation system with Sphere-9 catheter.
•Continued growth and market acceptance of the Affera Mapping and Ablation System, Sphere-9 catheter, and Sphere-360 pulsed field ablation single-shot catheter. The Sphere-360 catheter received CE Mark in January 2026. In August 2026, there was an expanded CE Mark indication for Affera Mapping and Ablation System and Sphere-9 catheter for treatment of ventricular arrhythmias.
•Continued acceptance and growth of the self-expanding CoreValve Evolut transcatheter aortic valve replacement (TAVR) platform. This includes Evolut PRO+ which provides enhanced hemodynamics, reliable delivery, enhanced durability, advanced sealing, and Evolut FX, a system designed to improve the overall procedural experience through enhancements in deliverability, implant visibility, and deployment stability. The Evolut FX+ TAVR system maintains the valve performance benefits of the legacy Evolut TAVR platform and is designed to facilitate coronary access.
•Continued acceptance and growth of the Onyx Frontier drug-eluting stent (DES) platform. Onyx Frontier is a DES that introduces an enhanced delivery system and is used for complex percutaneous coronary intervention (PCI).
•Continued acceptance and growth of Prevail, Paclitaxel Coated PTCA Balloon Catheter.
•Strengthening our position in the Interventional Cardiology Therapies division as a result of the April 2026 acquisition of CathWorks Ltd. The acquisition expands the ICT division by aiming to transform how coronary artery disease is diagnosed and treated.
•Market acceptance and reimbursement for the Symplicity Spyral renal denervation system, also known as the Symplicity blood pressure procedure, for the treatment of hypertension. The U.S. Centers for Medicare and Medicaid Services (CMS) finalized National Coverage Determination in October 2025.
•Continued acceptance and growth VitalFlow ECMO. An accessory to VitalFlow EMCO system, VitalFlow Transport Frame Air and Ground, received CE Mark in May 2026.
•Market acceptance and growth of the Penditure LAA Exclusion System. The system received CE Mark in October 2025.
•Acceptance and growth of IN.PACT 018 drug-coated balloons (DCB). IN.PACT 018 adds to the existing IN.PACT Admiral DCB portfolio and is used to treat femoropopliteal disease.
•Continued market acceptance and growth of the Neuroguard IEP stenting system for carotid stenting procedures through our distribution agreement with Contego Medical.
•Continued market acceptance and growth of the Liberant mechanical thrombectomy system.
•Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of, and commercialize the products within our pipeline.
Neuroscience
Neuroscience's products include various spinal implants, bone graft substitutes, biologic products, image-guided surgery and intra-operative imaging systems, robotic guidance systems used in the robot-assisted spine procedures, and systems that incorporate advanced energy surgical instruments. Neuroscience's products also focus on therapies to treat the diseases of the vasculature in and around the brain, including coils, neurovascular stents, and flow diversion products, as well as products to treat the ear, nose, and throat (ENT), and the treatment of overactive bladder and urinary retention. Neuroscience also manufactures products related to implantable neurostimulation therapies and drug delivery systems for the treatment of chronic pain, movement disorders, and epilepsy. Neuroscience's net sales for the three months ended July 31, 2026 was $2.7 billion, an increase of 10 percent, as compared to the corresponding period in the prior fiscal year, resulting from growth across most businesses.
The graphs below illustrate the percent of Neuroscience net sales by division for the three months ended July 31, 2026 and July 25, 2025:
Cranial & Spinal Technologies (CST) net sales for the three months ended July 31, 2026 increased 13 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by the continued adoption of the AiBLE ecosystem of spine implants and enabling technology with growth in Core Spine and Neurosurgery.
Specialty Therapies (Specialty) net sales for the three months ended July 31, 2026 increased 10 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by growth in the Altaviva implantable tibial neuromodulation system, ENT, and Neurovascular, primarily driven by the Scientia acquisition and Flow Diversion, partially offset by the Pipeline Vantage recall.
Neuromodulation (NM) net sales for the three months ended July 31, 2026 increased 5 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by Pain Stim and the Percept RC neurostimulator with BrainSense technology.
In addition to the macroeconomic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Neuroscience could be affected by the following:
•Continued global adoption, growth, and market acceptance of integrated solutions through the AiBLE offering, which integrates spinal implants with enabling technologies (StealthStation, O-arm surgical imaging system, and Midas Rex), Mazor robotic guidance platform, and UNiD patient-specific rods with AI-driven technology for surgical planning and personalized spinal implants. The Stealth AXiS surgical system received U.S. FDA approval for spinal procedures in February 2026, followed by expanded approval for cranial and ENT applications in March 2026. The system received CE mark approval for spinal and cranial procedures in April 2026, and for ENT procedures in June 2026. The system incorporates navigation workflows with a modular robotic architecture.
•Market acceptance and continued global adoption of innovative spine products and procedural solutions within our CST operating unit, such as Catalyft PL & PL40, CD Horizon ModuLeX and Voyager Systems, and our Infinity OCT systems, as well as continued growth from Titan spine titanium interbody implants with Nanolock technology.
•Continued global growth of commercially available Pipeline Embolization Devices, endovascular treatments for certain wide-necked brain aneurysms.
•Continued global acceptance of the Solitaire X revascularization device for treatment of acute ischemic stroke and our React Catheter and Riptide aspiration system.
•Continued global acceptance and growth of our Pelvic Health therapies, including our InterStim therapy with InterStim X and InterStim II recharge-free neurostimulators and InterStim Micro rechargeable neurostimulator for patients suffering from overactive bladder, (non-obtrusive) urinary retention, and chronic fecal incontinence. The Altaviva
implantable tibial neuromodulation system received U.S. FDA approval in September 2025 for urinary urge incontinence.
•Continued global adoption, growth, and market acceptance of our ENT therapies, including the intraoperative NIM Vital nerve monitoring system, the Propel sinus implants used in the treatment of chronic rhinosinusitis, and global capital equipment sales of the StealthStation ENT surgical navigation system and the U.S. FDA approved Stealth AXiS Surgical System for ENT applications, which received approval in March 2026, followed by CE mark approval in June 2026.
•Continued global acceptance and growth from spinal cord stimulation (SCS) therapy for treating chronic pain and Diabetic Peripheral Neuropathy (DPN) on the Inceptiv closed-loop rechargeable neurostimulator, Intellis rechargeable neurostimulator and Vanta recharge-free neurostimulator.
•Continued global acceptance and growth of our Percept family of deep brain stimulation (DBS) devices with proprietary BrainSense technology for objectifying and personalizing the treatment of Parkinson's Disease, epilepsy, and other movement disorders. BrainSense Adaptive DBS and BrainSense Electrode Identifier received CE Mark in January 2025 and U.S. FDA approval in February 2025.
•Continued market acceptance and growth of the Neuroguard IEP stenting system for carotid stenting procedures through our distribution agreement with Contego Medical.
•Strengthening our Specialty Therapies division as a result of the June 2026 acquisition of Scientia Vascular. The acquisition expands the Specialty Therapies division by treating complex neurovascular conditions. Additionally, strengthening our Neuromodulation division through the SPR Therapeutics July 2026 acquisition. The acquisition aids temporary peripheral nerve stimulation (PNS) technology, enabling earlier intervention for chronic pain sufferers.
•Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of, and commercialize the products within our pipeline, which include the hemorrhagic stroke device, our next-generation spine enabling technologies, and the implantable tibial bladder control stimulator.
Medical Surgical
Medical Surgical's products span the entire continuum of patient care from diagnosis to recovery, with a focus on diseases of the gastrointestinal tract, lungs, pelvic region, obesity, and preventable complications. The products include those for advanced and general surgical products, surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products, hernia mechanical devices, mesh implants, advanced ablation, interventional lung, airway products, and sensors and monitors for pulse oximetry, capnography, level of consciousness and cerebral oximetry. Medical Surgical's net sales for the three months ended July 31, 2026 was $2.3 billion, an increase of 10 percent as compared to the corresponding period in the prior fiscal year, resulting from growth across most businesses.
The graphs below illustrate the percent of Medical Surgical net sales by division for the three months ended July 31, 2026 and July 25, 2025:
Surgical & Endoscopy (SE) net sales for the three months ended July 31, 2026 increased 9 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was primarily due to growth in Surgical, with strength in LigaSure vessel sealing technology, V-Loc barbed sutures, ProGrip self-gripping polyester mesh, Hugo robotic assisted surgery (RAS) system, and Endoscopy.
Acute Care & Monitoring (ACM) net sales for the three months ended July 31, 2026 increased 14 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was primarily due to growth in Nellcor pulse oximetry and McGRATH MAC video laryngoscope, and Microstream Capnography.
In addition to the macroeconomic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Medical Surgical could be affected by the following:
•Acceptance and continued growth of Open-to-MIS (minimally invasive surgery) techniques and tools through our efforts to transition open surgery to MIS. Open-to-MIS initiative focuses on capturing the market opportunity that exists in transitioning open procedures to MIS, whether through traditional MIS, advanced instrumentation, or robotics. Through our approach, in parallel, we also expand our presence and optimize open surgery in current open surgery markets.
•Continued global acceptance and future growth of powered stapling and energy platform.
•Our ability to execute ongoing strategies addressing the pressures to bariatric surgery procedure volumes in the U.S. from pharmaceuticals, and growth of surgical soft tissue robotics procedures in the U.S.
•Our ability to create markets and drive products and procedures into emerging markets with our high quality and cost-effective surgical products designed for customers in emerging markets.
•Continued acceptance and growth in patient monitoring and airway management. Key products in this area include Microstream Capnography, Nellcor pulse oximetry system with OxiMax technology, Shiley tracheostomy and endotracheal tubes, and McGRATH MAC video laryngoscopes.
•Acceptance of less invasive standards of care in chronic and colorectal, as well as hepatology products, including products that span the care continuum from diagnostics to therapeutics.
•Expanding the use of less invasive treatments and furthering our commitment to improving options for women with abnormal uterine bleeding. Our expanded and strengthened surgical offerings complement our global gynecology business.
•Global adoption of robotic-assisted surgery and the safe and effective use of the Hugo RAS system, including system reliability and acceptability, for urologic, bariatric, gynecologic, hernia, and general surgery procedures. This includes continued integration and adoption of Touch Surgery Enterprise with the first artificial intelligence (AI) powered surgical videos and analytics platform to make it easier to analyze performance, train, and discover new techniques within the robotics platform. The Hugo RAS system is designed to help reduce unwanted variability, improve patient outcomes, and, by extension, lower per procedure cost. LigaSure RAS vessel-sealing technology received CE Mark in July 2025, expanding Hugo RAS system capabilities for gynecologic, general, and urologic procedures. The Hugo RAS system received U.S. FDA clearance for use in urologic surgical procedures in December 2025.
•Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of, and commercialize the products within our pipeline, which includes future indications and instrument expansions for our Hugo RAS system in the U.S. and the adoption of AI in Endoscopy and Digital Surgical Technologies.
Diabetes
Diabetes' products include insulin pumps, continuous glucose monitoring (CGM) systems, and consumables. Diabetes' net sales for the three months ended July 31, 2026 was $843 million, an increase of 17% as compared to the corresponding period in the prior fiscal year. The net sales increase was primarily driven by growth in the U.S. due to the commercial launch of MiniMed Flex with Simplera Sync and continued international growth due to the continued adoption of the MiniMed 780G AID system, including the Simplera Sync and Instinct sensors.
Refer to the Executive Level Overview for other factors that could impact the Diabetes Business.
COSTS AND EXPENSES
The following is a summary of cost of products sold, research and development, and selling, general, and administrative expenses as a percent of net sales for the three months ended July 31, 2026 and July 25, 2025:
Cost of Products Sold Cost of products sold for the three months ended July 31, 2026 was $3.4 billion as compared to $3.0 billion for the corresponding period in the prior fiscal year. Cost of products sold as a percentage of net sales for the three months ended July 31, 2026 was flat as compared to the corresponding period in the prior fiscal year, which was primarily driven by favorable pricing and cost-down initiatives, partially offset by unfavorable mixes. The year-over-year impact of tariffs did not have a material impact when including the benefit of refunds.
Research and Development Expense We remain committed to deliver the best possible experiences for patients, physicians, and caregivers we serve; to create technologies that expand what's possible across the human body to transform lives; to turn data and insights into real action to serve patient needs, improving care; and to expand healthcare access and deliver positive outcomes. Research and development expense for the three months ended July 31, 2026 was $771 million as compared to $726 million for the corresponding period in the prior fiscal year.
Selling, General, and Administrative Expense Our goal is to continue to leverage selling, general, and administrative expense management initiatives. Selling, general, and administrative expense primarily consists of salaries and wages, other administrative costs, such as professional fees and marketing expenses, and certain acquisition and divestiture-related costs. Selling, general, and administrative expense for the three months ended July 31, 2026 was $3.2 billion as compared to $2.8 billion for the corresponding period in the prior fiscal year. The increase in selling, general, and administrative expense was primarily due to increased selling expenses in line with sales growth and new product launches and related commercialization activities.
The following is a summary of other costs and expenses (income):
| Three months ended | |||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | |||||||||
| Amortization of intangible assets | $ | 412 | $ | 459 | |||||||
| Restructuring charges, net | 72 | 45 | |||||||||
| Certain litigation charges, net | - | 27 | |||||||||
| Other operating expense (income), net | 123 | 70 | |||||||||
| Other non-operating expense (income), net | (190) | (33) | |||||||||
| Interest expense, net | 186 | 176 | |||||||||
Amortization of Intangible Assets Amortization of intangible assets includes the amortization expense of our definite-lived intangible assets, consisting of customer relationships, purchased technology and patents, trademarks, tradenames, and other intangible assets.
The decrease in amortization expense for the three months ended July 31, 2026 is primarily driven by $45 million of accelerated amortization on certain intangible assets within the Cardiovascular Portfolio recognized in the prior year.
Restructuring Charges, Net For the three months ended July 31, 2026 and July 25, 2025, restructuring costs primarily consist of employee termination benefits, facility related and contract termination costs, and asset write-offs.
For additional information about our restructuring activities, refer to Note 5 to the condensed consolidated financial statements.
Certain Litigation Charges, Net We classify specified certain litigation charges and gains related to significant legal matters as certain litigation charges, net in the condensed consolidated statements of income. For additional information, refer to Note 16 to the condensed consolidated financial statements.
Other Operating Expense (Income), Net Other operating expense (income), net primarily includes expenses associated with royalties paid for the in-license of intellectual property from third parties, currency remeasurement and derivative gains and losses, changes in the fair value of contingent consideration, certain acquisition and divestiture-related items, and expenses and income associated with funded research and development arrangements.
For the three months ended July 31, 2026, the change in other operating expense (income), net was largely driven by a reduction in income relating to our research and development funding arrangements, partially offset by the net impact of currency remeasurement and our hedging programs resulting in a net loss of $48 million as compared to a net loss of $62 million for the corresponding period in the prior fiscal year.
For additional information on the research and development funding arrangements, refer to Note 4 to our condensed consolidated financial statements. For additional information on the derivative gains and losses, refer to Note 8 to our condensed consolidated financial statements.
Other Non-Operating Expense (Income), Net Other non-operating expense (income), net includes the non-service component of net periodic pension and postretirement benefit cost, investment gains and losses, and interest income, which includes income on marketable debt securities, our global liquidity structures, and equity and other investments.
The increase in other non-operating expense (income), net was primarily driven by net gains on minority investments of $64 million as compared to net losses of $113 million for the corresponding period in the prior fiscal year, partially offset by a decrease of $17 million of interest income.
Interest Expense, Net Interest expense, net includes interest incurred on our outstanding borrowings, global liquidity structures, amortization of debt issuance costs and debt premiums or discounts, and amortization of amounts excluded from the effectiveness assessment of certain net investment and fair value hedges.
For the three months ended July 31, 2026, the increase in interest expense, net was not material.
INCOME TAXES
| Three months ended | |||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | |||||||||
| Income tax provision | $ | 289 | $ | 255 | |||||||
| Income before income taxes | 1,769 | 1,302 | |||||||||
| Effective tax rate | 16.4 | % | 19.6 | % | |||||||
| Non-GAAP income tax provision | $ | 387 | $ | 354 | |||||||
| Non-GAAP income before income taxes | 2,257 | 1,987 | |||||||||
| Non-GAAP nominal tax rate | 17.2 | % | 17.8 | % | |||||||
| Difference between the effective tax rate and non-GAAP nominal tax rate | 0.8 | % | (1.8) | % | |||||||
The Company's effective tax rate for the three months ended July 31, 2026 was 16.4%, as compared to 19.6% for the three months ended July 25, 2025. The decrease in the effective tax rate for the three months ended July 31, 2026 primarily relates to the release of reserves for uncertain tax positions on prior period intercompany transactions and year-over-year changes in operational results by jurisdiction.
Our non-GAAP nominal tax rate for the three months ended July 31, 2026 was 17.2%, as compared to 17.8% for the three months ended July 25, 2025, respectively. The decrease in our non-GAAP nominal tax rate for the three months ended July 31, 2026 primarily relates to year-over-year changes in operational results by jurisdiction. An increase in our non-GAAP nominal tax rate of 1 percent would result in an additional income tax provision for the three months ended July 31, 2026 of approximately $23 million.
On July 4, 2025, the U.S. Government enacted The One Big Beautiful Bill Act of 2025, which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. The impact for both the three months ended July 31, 2026 and July 25, 2025 was not material, nor does the Company expect the provisions of the Act to materially impact the remainder of fiscal year 2027 or beyond.
The Organization for Economic Co-operation and Development (OECD) published Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15% in each jurisdiction in which the group operates. The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax. A number of countries, including Ireland, have enacted legislation to implement the core elements of Pillar Two, which were effective for Medtronic in fiscal year 2025.
LIQUIDITY AND CAPITAL RESOURCES
We are currently in a strong financial position, and we believe our balance sheet and liquidity as of July 31, 2026, provide us with flexibility. We believe our cash, cash equivalents, and current investments, with our credit facility and related commercial paper programs, will satisfy our foreseeable operating needs.
Our liquidity and capital structures are evaluated regularly within the context of our annual operating and strategic planning processes. We consider the liquidity necessary to fund our operations, which includes working capital needs, investments in research and development, property, plant, and equipment, and other operating costs. We also consider capital allocation alternatives that balance returning value to shareholders through dividends and share repurchases, satisfying maturing debt, and acquiring businesses and technology.
Summary of Cash Flows
The following is a summary of cash provided by (used in) operating, investing, and financing activities, the effect of exchange rate changes on cash and cash equivalents, and the net change in cash and cash equivalents:
| Three months ended | |||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | |||||||||
| Cash provided by (used in): | |||||||||||
| Operating activities | $ | 1,793 | $ | 1,088 | |||||||
| Investing activities | (1,619) | (719) | |||||||||
| Financing activities | (343) | (1,381) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (89) | 67 | |||||||||
| Net change in cash and cash equivalents | $ | (258) | $ | (945) | |||||||
Operating Activities During the three months ended July 31, 2026, there was an increase of $705 million in net cash provided by operating activities as compared to the corresponding period in the prior fiscal year. The increase was primarily driven by an increase in cash collected from customers due to an increase in sales and decrease in cash paid for taxes and certain litigation payments, partially offset by an increase in cash paid to suppliers and other vendors.
Investing Activities During the three months ended July 31, 2026, there was an increase of $900 million in cash used in investing activities as compared to the corresponding period in the prior fiscal year. The increase was primarily driven by an increase in acquisitions of $1.2 billion, partially offset by net sales of investments of $109 million. The remaining change primarily relates to derivatives activity.
Financing Activities During the three months ended July 31, 2026, there was a decrease of $1.0 billion in net cash used in financing activities as compared to the corresponding period in the prior fiscal year.
The decrease was driven by a $1.3 billion change in debt year-over-year, with $812 million of cash inflows in fiscal year 2027 as compared to cash outflows of $513 million in fiscal year 2026. During the three months ended July 31, 2026, the Company had an increase of short-term borrowings of $812 million as compared to $649 million increase during the three months ended July 25, 2025. During the three months ended July 25, 2025, the Company also repaid at maturity €1.0 billion of Medtronic Luxco Senior Notes for $1.2 billion total consideration.
Partially offsetting the decrease in net cash used was an increase of $219 million in net share repurchases for the three months ended July 31, 2026. The remaining change primarily relates to derivative activity.
For additional information on financing arrangements, refer to Note 7 to the condensed consolidated financial statements.
Debt and Capital
Our capital structure consists of equity and interest-bearing debt. We primarily utilize unsecured senior debt obligations to meet our financing needs and, to a lesser extent, bank borrowings. From time to time, we may repurchase our outstanding debt obligations in the open market or through privately negotiated transactions.
Total debt at July 31, 2026 was $28.2 billion as compared to $28.0 billion at April 24, 2026. The increase in total debt was primarily driven by the increase in short-term borrowings, partially offset by the impact of foreign exchange rates on our foreign currency denominated debt.
We repurchase our ordinary shares on occasion as part of our focus on returning value to our shareholders. In March 2024, the Company's Board of Directors authorized the repurchase of $5.0 billion of the Company's ordinary shares. There is no specific time period associated with these repurchase authorizations. During the three months ended July 31, 2026, the Company repurchased a total of 3 million shares under this program at an average price of $81.56. At July 31, 2026, we had approximately $1.0 billion remaining under the share repurchase program authorized by our Board of Directors.
For more information on credit arrangements, refer to Note 7 to the condensed consolidated financial statements and Note 6 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 24, 2026.
Liquidity
Our liquidity sources at July 31, 2026 included $1.7 billion of cash and cash equivalents and $7.1 billion of current investments. Additionally, we maintain commercial paper programs and a Credit Facility.
Our investments primarily include available-for-sale debt securities, including U.S. and non-U.S. government and agency securities, corporate debt securities, mortgage-backed securities, and other asset-backed securities. Refer to Note 6 to the condensed consolidated financial statements for additional information regarding fair value measurements.
We maintain multicurrency commercial paper programs for short-term financing, which allow us to issue unsecured commercial paper notes on a private placement basis up to a maximum aggregate amount outstanding at any time of $3.5 billion. At July 31, 2026 and April 24, 2026, we had $450 million and no commercial paper outstanding, respectively. The issuance of commercial paper reduces the amount of credit available under our existing line of credit, as explained below.
We also have a $3.5 billion five-year syndicated credit facility (Credit Facility), which expires in December 2030. At each anniversary date of the Credit Facility we can request a one-year extension of the maturity date. The Credit Facility provides backup funding for the commercial paper programs and may also be used for general corporate purposes. The Credit Facility provides us with the ability to increase our borrowing capacity by an additional $1.0 billion at any time during the term of the agreement. At July 31, 2026 and April 24, 2026, no amounts were outstanding under the Credit Facility.
Interest rates on advances of our Credit Facility are determined by a pricing matrix based on our long-term debt ratings assigned by Standard & Poor's Ratings Services (S&P) and Moody's Investors Service (Moody's). Facility fees are payable on the Credit Facility and are determined in the same manner as the interest rates. We are in compliance with all covenants related to the Credit Facility.
The following table is a summary of our S&P and Moody's long-term debt ratings and short-term debt ratings:
|
Agency Rating(1)
|
||||||||||||||
| July 31, 2026 | April 24, 2026 | |||||||||||||
| Standard & Poor's Ratings Services | ||||||||||||||
| Long-term debt | A | A | ||||||||||||
| Short-term debt | A-1 | A-1 | ||||||||||||
| Moody's Investors Service | ||||||||||||||
| Long-term debt | A3 | A3 | ||||||||||||
| Short-term debt | P-2 | P-2 | ||||||||||||
(1)Agency ratings are subject to change, and there may be no assurance that an agency will continue to provide ratings and/or maintain its current ratings. A security rating is not a recommendation to buy, sell or hold securities, and may be subject to revision or withdrawal at any time by the rating agency, and each rating should be evaluated independently of any other rating.
S&P and Moody's long-term debt ratings and short-term debt ratings at July 31, 2026 were unchanged as compared to the ratings at April 24, 2026. We do not expect the S&P and Moody's ratings to have a significant impact on our liquidity or future flexibility to access additional liquidity given our balance sheet, Credit Facility, and related commercial paper programs.
Contractual Obligations and Cash Requirements
We have future contractual obligations and other minimum commercial commitments that are entered into in the normal course of business. We believe our off-balance sheet arrangements do not have a material current or anticipated future effect on our consolidated earnings, financial position, and/or cash flows. Refer to the Debt and Capital section above for changes in debt obligations, Note 16 for updates to guarantees and other commitments and contingencies, and Note 4 for updates to research and development funding arrangement obligations. There have been no other material changes to our long-term contractual obligations as reported in our most recent Annual Report filed on Form 10-K for the fiscal year ended April 24, 2026.
ACQUISITIONS AND DISPOSITIONS
Information regarding acquisitions and disposition activity is included in Note 4 to the condensed consolidated financial statements.
MiniMed Separation
In May 2025, the Company announced its intent to separate the Diabetes Business, with the intention to create a new independent, publicly traded company, MiniMed Group, Inc. On March 9, 2026, MiniMed completed an initial public offering. Due to the Company retaining a controlling financial interest, the condensed consolidated financial statements reflect the financial results of MiniMed. The Company plans to complete the separation of its Diabetes Business within this fiscal year.
Scientia Vascular Acquisition
On June 12, 2026, the Company closed on the acquisition of all outstanding shares of Scientia Vascular (Scientia) (a privately held company), for $681 million of total consideration transferred, including $123 million of contingent consideration. The acquisition will expand the Specialty Therapies division within the Neuroscience Portfolio through Scientia's differentiated access products used to treat complex neurovascular conditions.
SPR Therapeutics, Inc. Acquisition
On July 16, 2026, the Company closed on the acquisition of all outstanding equity of SPR Therapeutics, Inc., a privately held medical technology company, for $654 million of total consideration transferred. The acquisition enhances the Neuromodulation division within the Neuroscience Portfolio with temporary peripheral nerve stimulation (PNS) technology, enabling earlier intervention for chronic pain sufferers.
CRITICAL ACCOUNTING ESTIMATES
We have used various accounting policies to prepare the condensed consolidated financial statements in accordance with U.S. GAAP. Our significant accounting policies are disclosed in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 24, 2026.
The preparation of the condensed consolidated financial statements, in conformity with U.S. GAAP, requires us to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates reflect our best judgment about economic and market conditions and the potential effects on the valuation and/or carrying value of assets and liabilities based upon relevant information available. We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Our critical accounting estimates are more fully described in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended April 24, 2026.
Valuation of Intangible Assets and Goodwill When we acquire a business, the assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. Goodwill is the excess of the purchase price over the estimated fair value of identified net assets of acquired businesses. Intangible assets primarily include patents, trademarks, tradenames, customer relationships, purchased technology, and in-process research and development.
Determining the fair value of intangible assets acquired as part of a business combination requires us to make significant estimates. These estimates include the amount and timing of projected future cash flows of each project or technology, the discount rate used to discount those cash flows to present value, and the assessment of the asset's life cycle. The estimates could be impacted by legal, technical, regulatory, economic, and competitive risks.
Goodwill and indefinite lived intangible assets are tested for impairment annually in the third quarter of the fiscal year and whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired. Intangible assets with a definite life are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group, which includes intangible assets, may not be recoverable. If goodwill or intangible assets are determined to be impaired, they are written down to their estimated fair value.
We have four goodwill reporting units with goodwill assigned to them. The test for impairment of goodwill requires us to make several estimates related to projected future cash flows to determine the fair value of the goodwill reporting units. We estimated the fair value of these reporting units using the income and the market approaches, weighted 50 percent each. Fair value under the income approach was determined by discounting to present value the estimated future cash flows of the reporting unit. Fair value under the market approach utilized revenue and earnings multiples using comparable public company information, which uses valuation indicators determined from other businesses that are similar to our reporting unit. We use estimates that are consistent with the highest and best use of the assets based on a market participant's view of the assets being evaluated.
The most critical assumptions used in the calculation of the fair value of each reporting unit are the projected revenue, projected earnings, projected future cash flows, and discount rate. Our forecast of future cash flows is based on estimates of projected revenue and projected earnings, based primarily on pricing, raw material costs, market share, industry outlook, general economic conditions and strategic actions to improve our earnings. The fair value of the reporting unit's goodwill is sensitive to differences between estimated and actual cash flows, including changes in the projected revenue, projected earnings, and discount rate used to evaluate the fair value of the reporting unit.
As part of our annual impairment analysis in the third quarter of fiscal year 2026, we completed a quantitative impairment analysis of all of our reporting units to determine if their fair value was less than their carrying amount. Based on the quantitative test, the Medical Surgical reporting unit had an estimated fair value that exceeded its carrying value, including goodwill, by approximately 12%. As of July 31, 2026,
$19.7 billion of goodwill was allocated to the Medical Surgical reporting unit. The remaining reporting units' fair values materially exceeded their carrying values.
The following table highlights the sensitivities of the most critical assumptions used in the goodwill impairment test as of the date of our annual testing:
| Assumption: | ||||||||
| Approximate % by which the fair value exceeds the carrying value based on annual impairment test | 12% - 335% | |||||||
| Approximate % by which the fair value exceeds the carrying value if the discount rate was to increase 1% | 3% - 307% | |||||||
| Approximate % by which the fair value exceeds the carrying value if the future cash flows in the income approach and revenue and earnings in the market approach were to decrease by 5% | 7% - 313% | |||||||
Although we believe our estimate of fair value is reasonable, actual results may differ from our estimates due to a number of factors including, among others, changes in competitive conditions, timing of regulatory approval, results of clinical trials, changes in worldwide economic conditions, and fluctuations in currency exchange rates.
NEW ACCOUNTING PRONOUNCEMENTS
Information regarding new accounting pronouncements is included in Note 2 to the condensed consolidated financial statements.
SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
Medtronic plc and Medtronic Global Holdings S.C.A. (Medtronic Luxco), a wholly-owned subsidiary guarantor, each have provided full and unconditional guarantees of the obligations of Medtronic, Inc., a wholly-owned subsidiary issuer, under the Senior Notes (Medtronic Senior Notes) and full and unconditional guarantees of the obligations of Covidien International Finance S.A. (CIFSA), a wholly-owned subsidiary issuer, under the Senior Notes (CIFSA Senior Notes). The guarantees of the CIFSA Senior Notes are in addition to the guarantees of the CIFSA Senior Notes by Covidien Ltd. and Covidien Group Holdings Ltd., both of which are wholly-owned subsidiary guarantors of the CIFSA Senior Notes. Medtronic plc and Medtronic, Inc. each have provided a full and unconditional guarantee of the obligations of Medtronic Luxco under the Senior Notes (Medtronic Luxco Senior Notes). The following is a summary of these guarantees:
Guarantees of Medtronic Senior Notes
•Parent Company Guarantor - Medtronic plc
•Subsidiary Issuer - Medtronic, Inc.
•Subsidiary Guarantor - Medtronic Luxco
Guarantees of Medtronic Luxco Senior Notes
•Parent Company Guarantor - Medtronic plc
•Subsidiary Issuer - Medtronic Luxco
•Subsidiary Guarantor - Medtronic, Inc.
Guarantees of CIFSA Senior Notes
•Parent Company Guarantor - Medtronic plc
•Subsidiary Issuer - CIFSA
•Subsidiary Guarantors - Medtronic Luxco, Covidien Ltd., and Covidien Group Holdings Ltd. (CIFSA Subsidiary Guarantors)
The following tables present summarized financial information for the three months ended July 31, 2026 and summarized balance sheet information at July 31, 2026 and April 24, 2026 for the obligor groups of Medtronic and Medtronic Luxco Senior Notes, and CIFSA Senior Notes. The obligor group consists of the parent company guarantor, subsidiary issuer, and subsidiary guarantors for the applicable senior notes. The summarized financial information is presented after elimination of (i) intercompany transactions and balances among the guarantors and issuers and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor or issuer.
The summarized results of operations information for the three months ended July 31, 2026 was as follows:
| (in millions) |
Medtronic & Medtronic Luxco Senior Notes(1)
|
CIFSA Senior Notes(2)
|
|||||||||
| Net sales | $ | 946 | $ | - | |||||||
| Operating profit (loss) | (79) | (32) | |||||||||
| Income (loss) before income taxes | (158) | (105) | |||||||||
| Net loss attributable to Medtronic | (188) | (132) | |||||||||
The summarized balance sheet information at July 31, 2026 was as follows:
| (in millions) |
Medtronic & Medtronic Luxco Senior Notes(1)
|
CIFSA Senior Notes(2)
|
|||||||||
|
Total current assets(3)
|
$ | 21,243 | $ | 4,805 | |||||||
|
Total noncurrent assets(4)
|
13,881 | 6,778 | |||||||||
|
Total current liabilities(5)
|
28,124 | 17,318 | |||||||||
|
Total noncurrent liabilities(6)
|
35,350 | 23,671 | |||||||||
| Noncontrolling interests | 618 | 618 | |||||||||
(1)The Medtronic Senior Notes and Medtronic Luxco Senior Notes obligor group consists of the following entities: Medtronic plc, Medtronic Luxco, and Medtronic, Inc. Refer to the guarantee summary above for further details.
(2)The CIFSA Senior Notes obligor group consists of the following entities: Medtronic plc, Medtronic Luxco, CIFSA, and CIFSA Subsidiary Guarantors. Refer to the guarantee summary above for further details.
(3)Includes receivables due from non-guarantor subsidiaries of $17.6 billion and $1.9 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.
(4)Includes loans receivable due from non-guarantor subsidiaries of $6.6 billion and $6.4 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.
(5)Includes payables due to non-guarantor subsidiaries of $23.3 billion and $14.3 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.
(6)Includes loans payable due to non-guarantor subsidiaries of $7.9 billion and $7.7 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.
The summarized balance sheet information at April 24, 2026 was as follows:
| (in millions) |
Medtronic & Medtronic Luxco Senior Notes(1)
|
CIFSA Senior Notes(2)
|
|||||||||
|
Total current assets(3)
|
$ | 21,798 | $ | 4,640 | |||||||
|
Total noncurrent assets(4)
|
14,224 | 6,953 | |||||||||
|
Total current liabilities(5)
|
26,263 | 16,216 | |||||||||
|
Total noncurrent liabilities(6)
|
36,302 | 24,110 | |||||||||
| Noncontrolling interests | 609 | 609 | |||||||||
(1)The Medtronic Senior Notes and Medtronic Luxco Senior Notes obligor group consists of the following entities: Medtronic plc, Medtronic Luxco, and Medtronic, Inc. Refer to the guarantee summary above for further details.
(2)The CIFSA Senior Notes obligor group consists of the following entities: Medtronic plc, Medtronic Luxco, CIFSA, and CIFSA Subsidiary Guarantors. Refer to the guarantee summary above for further details.
(3)Includes receivables due from non-guarantor subsidiaries of $17.9 billion and $1.5 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.
(4)Includes loans receivable due from non-guarantor subsidiaries of $6.8 billion and $6.7 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.
(5)Includes payables due to non-guarantor subsidiaries of $21.9 billion and $14.1 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.
(6)Includes loans payable due to non-guarantor subsidiaries of $8.5 billion and $7.7 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, and other written reports of Medtronic plc, organized under the laws of Ireland (together with its consolidated subsidiaries, Medtronic, the Company, or we, us, or our), and oral statements made by or on behalf of the Company from time to time, may include "forward-looking" statements. In some cases, such statements may be identified by the use of terminology such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "looking ahead," "may," "plan," "possible," "potential," "project," "should," "will," and similar words or expressions. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans, objectives of management for future operations and current expectations or forecasts of future results, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Our forward-looking statements, including those in this Quarterly Report, may include statements related to: our growth and growth strategies; our ability to drive long-term shareholder value; developments in the markets for our products, therapies and services and continued or future acceptance of such products, therapies and services; financial results and financial condition; product development, launches, and performance; integration of new technologies, such as artificial intelligence (AI) and data analytics; research and development strategy and the expected timing of research studies; United States (U.S.) Food and Drug Administration (U.S. FDA) and non-U.S. regulatory approvals; competitive strengths and market positioning, including changes in market share and demand; the potential or anticipated direct or indirect impact of public health crises, geopolitical conflicts, general economic conditions, or changing governmental executive actions and regulations (including relating to global trade policies, tariffs, enforcement priorities and compliance requirements) on our business, results of operations and/or financial condition; restructuring and cost-saving initiatives; intellectual property rights; litigation and tax matters; governmental proceedings and investigations; mergers, acquisitions, and divestitures, including integration and separation activities; accounting estimates; financing activities; ongoing contractual obligations; working capital adequacy; accounts receivable exposure; the value of our investments; our effective tax rate; our expected returns to shareholders; human capital management; reimbursement, pricing pressures, and changes in standards of care; and sales efforts.
We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, results of operations, financial condition, and/or cash flows. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in the "Risk Factors" section and elsewhere in our Annual Report on Form 10-K. Because forward-looking statements are inherently subject to risks and uncertainties, known and unknown, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. Risks and uncertainties include those discussed in the section entitled "Government Regulation" within "Item 1. Business" and those discussed in "Item 1A. Risk Factors" in our Annual Report on Form 10-K, as well as those related to:
•competition in the medical device industry,
•rapid technological change,
•regulatory approval delays or denials,
•reduction or interruption in our supply chain or manufacturing operations,
•failure to complete or achieve the intended benefits of acquisitions or divestitures,
•adverse regulatory action,
•laws and governmental regulations,
•litigation, claims, and investigations,
•intellectual property protection and enforcement,
•quality problems,
•healthcare policy changes,
•public health crises,
•cybersecurity and data privacy incidents,
•international operations, including the impact of armed conflicts,
•insurance coverage and self-insurance adequacy,
•tax law changes and tax disputes,
•pricing pressure and reimbursement challenges,
•liquidity shortfalls,
•fluctuations in currency exchange rates and macroeconomic volatility,
•inflation, or
•disruption of our current plans and operations.
Consequently, no forward-looking statement may be guaranteed, and actual results may vary materially from those projected in the forward-looking statements. We intend to take advantage of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding our forward-looking statements. Except as required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Medtronic plc published this content on September 03, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on September 03, 2026 at 20:19 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]