Core Viewpoint - Elliott Management believes the company’s growth is inflecting and sees an opportunity to create shareholder value, while also indicating that there are areas for improvement that the company should address [1] Group 1 - Elliott Management is an activist investor, suggesting that they have specific expectations for the company’s performance and strategic direction [1] - The company is being asked to identify where improvements can be made to align with Elliott's vision for enhanced shareholder value [1]

Core Insights - Medtronic announced the results of the Enable Hernia Repair clinical study, the first Investigational Device Exemption (IDE) clinical study for robotic-assisted hernia surgery in the U.S. [1][2] Company Overview - Medtronic plc is a leading global healthcare technology company headquartered in Galway, Ireland, with over 95,000 employees across more than 150 countries [11]. - The company focuses on innovative technologies that address various health conditions, including surgical robotics, and aims to alleviate pain, restore health, and extend life [11]. Clinical Study Findings - The Enable Hernia Repair study included 193 patients undergoing robotic hernia repair, achieving a surgical success rate of 100%, exceeding the pre-specified goal of 85% [8]. - The study met primary safety endpoints, with a surgical site event (SSE) rate of 0.0% for inguinal patients and 2.1% for ventral patients, both significantly lower than the predetermined performance goal of 30% [8]. - The mean length of hospital stay was reported as 4.7 hours for inguinal patients and 6.7 hours for ventral patients [5]. Market Context - Approximately 1.5 million hernia repair surgeries are performed annually in the U.S., making it one of the most common surgeries for adults [4]. - The introduction of the Hugo robotic-assisted surgery system aims to enhance surgical options and improve patient care in hernia repair [6][3]. Future Prospects - Medtronic is currently under review by the FDA for a urology indication, with plans for further expansions into hernia repair and gynecology [9]. - The Hugo RAS system is already clinically used in over 30 countries, indicating a strong international presence [7].

Financial Data and Key Metrics Changes - The company is focused on improving R&D as a percentage of sales, aiming to increase it from 8% to 9-10% without sacrificing EPS [11][12] - The management anticipates high single-digit EPS improvement starting in 2027, driven by margin expansion and operational improvements [38][56] Business Line Data and Key Metrics Changes - The company is seeing strong growth in the CAS segment, with growth accelerating from about 30% to almost 50% from Q4 to Q1, driven by the Avera capital systems [59][60] - The diabetes business is expected to improve with the launch of two new sensors, which are anticipated to enhance market competitiveness [49][50] Market Data and Key Metrics Changes - The U.S. TAVR business showed slight growth above 6% in Q1, while international markets performed stronger [83] - The company is optimistic about the Ardian product, expecting significant market development following a favorable CMS announcement [77][78] Company Strategy and Development Direction - The management emphasizes the need to capitalize on current growth drivers and accelerate M&A activities to enhance the portfolio [6][19] - The company is committed to maintaining a diverse portfolio while focusing on high-growth areas such as cardiac ablation and hypertension [21][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledges past operational challenges but believes they are now in a better position to pursue M&A and drive growth [19][25] - The company is confident in its growth trajectory, particularly in the second half of the year, with several product launches expected to contribute positively [48][88] Other Important Information - The company is addressing gross margin compression through better pricing strategies and operational improvements, with expectations for consistent gross margin improvement over time [28][36] - The management is focused on the upcoming tibial launch, which is anticipated to be a significant growth driver [86][88] Q&A Session Summary Question: What areas does Elliott want to see improvement in? - Management indicated alignment with Elliott's focus on capitalizing on growth drivers and accelerating M&A activities [5][6] Question: Why has the company done less M&A compared to peers? - The management cited operational issues and a focus on strengthening the company's foundation as reasons for the slower pace of M&A [19][25] Question: What is the outlook for the diabetes business? - The management expressed optimism about the diabetes segment, highlighting the upcoming launch of two new sensors as a key growth factor [49][50] Question: How does the company plan to improve gross margins? - The management outlined strategies including better pricing management, cost control, and innovation to drive gross margin improvement [28][36] Question: What is the expected ramp for the Ardian product? - Management is confident in the Ardian product's market potential and is focused on market development following a favorable CMS decision [77][78]

Financial Data and Key Metrics Changes - The company is experiencing a significant moment with transformational innovation, as noted by management, indicating a potential inflection point in growth [5] - Management aims to improve R&D as a percentage of sales from 8% to 9-10% without sacrificing EPS [10] - The company expects to deliver high single-digit EPS improvement starting in 2027, driven by margin improvements and operational efficiencies [40][60] Business Line Data and Key Metrics Changes - The company is focusing on high-growth areas such as cardiac ablation and AFib, with recent acquisitions like Afera contributing to growth [20][22] - The diabetes segment is expected to improve with the launch of two new sensors, which are anticipated to drive growth in the U.S. market [52][54] - CAS growth accelerated from about 30% to almost 50% from Q4 to Q1, with expectations to add an incremental $1 billion in revenue by early 2027 [63] Market Data and Key Metrics Changes - The U.S. TAVR business showed slight growth of above 6% in Q1, while international markets performed stronger [88] - The company is optimistic about the Ardian product line, anticipating significant market development following a favorable CMS announcement [80] Company Strategy and Development Direction - The management is committed to capitalizing on current growth drivers and accelerating margin improvement through M&A and portfolio optimization [6][20] - The company is not considering a wholesale breakup but is open to trimming down the portfolio if it enhances shareholder value [13][17] - The focus remains on innovation and operational improvements to drive differentiated top-line and bottom-line growth [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational foundation of the company, stating that past supply chain and quality issues are now behind them [20] - The company is optimistic about the back half of the year, expecting growth drivers to contribute positively to performance [50] - Management is closely monitoring the competitive landscape and is committed to evaluating the performance of key investments like the Hugo system [45] Other Important Information - The company is experiencing gross margin pressures due to tariffs and product mix but expects improvements as operational efficiencies are realized [31][34] - The management highlighted the importance of pricing strategies and cost management as key drivers for margin improvement [36][39] Q&A Session Summary Question: What areas does Elliott want to see improvement in? - Management indicated alignment with Elliott's focus on capitalizing on growth drivers and accelerating margin improvement through M&A and portfolio management [5][6] Question: Why has the company done less M&A compared to peers? - Management attributed the lower M&A activity to operational issues during COVID but expressed confidence in pursuing more deals moving forward [20][28] Question: How does the company plan to improve gross margins? - Management outlined strategies including better pricing management, cost controls, and innovation to drive gross margin improvements over time [36][39] Question: What is the outlook for the diabetes business? - The diabetes segment is expected to improve significantly with the launch of new sensors and a new durable pump, enhancing competitive positioning [52][54] Question: How does the company view the TAVR business? - Management remains confident in the TAVR franchise, citing recent product improvements and strong data supporting their market position [89]

Core Viewpoint - Medtronic has achieved significant FDA regulatory milestones for its MiniMed™ 780G system, expanding its use to adults with insulin-requiring type 2 diabetes and enabling integration with Abbott's Instinct sensor for type 1 diabetes management [1][4]. Group 1: Regulatory Milestones - The FDA has cleared the SmartGuard™ algorithm as an interoperable automated glycemic controller (iAGC), allowing integration with Abbott's Instinct sensor for type 1 diabetes [1]. - The MiniMed™ 780G system is now approved for use in adults aged 18 and older with insulin-requiring type 2 diabetes, making it the first automated insulin delivery (AID) system with Meal Detection™ technology for this demographic [4][5]. Group 2: Product Features and Benefits - The Instinct sensor, designed by Abbott, is noted as the world's smallest, thinnest, and most discreet integrated continuous glucose monitor (iCGM), with a wear time of up to 15 days [2]. - Clinical trials have shown that the MiniMed™ 780G system can lead to a 0.7% reduction in HbA1c and an increase in Time in Range from 72% to 81% [6]. Group 3: Future Plans and Customer Access - Medtronic and Abbott are finalizing compliance documentation for sensor integration, with ordering for the Instinct sensor expected to begin shortly [3]. - Existing customers will have priority access through the Innovations Program, and pre-orders for the Simplera Sync™ sensor will start later this month [3].

Core Insights - Medtronic plc will participate in several upcoming investor conferences, showcasing its commitment to engaging with investors and stakeholders [1][2][3][4]. Group 1: Upcoming Conferences - Medtronic will attend the 2025 Wells Fargo Healthcare Conference on September 4, 2025, with CEO Geoff Martha and CFO Thierry Piéton participating [1]. - The company will also be present at the Morgan Stanley 23rd Annual Global Healthcare Conference on September 8, 2025, featuring CFO Thierry Piéton [2]. - On September 10, 2025, Medtronic will participate in the 2025 Deutsche Bank Healthcare Summit, with Greg Smith, EVP of enterprise operations, addressing questions [3]. - The BofA Global Research Global Healthcare Conference is scheduled for September 24, 2025, where CFO Thierry Piéton will again represent the company [4]. Group 2: Company Overview - Medtronic, headquartered in Galway, Ireland, is a leading global healthcare technology company focused on addressing significant health challenges [5]. - The company employs over 95,000 individuals across more than 150 countries and offers solutions for 70 health conditions, including cardiac devices and surgical robotics [5]. - Medtronic's mission is to alleviate pain, restore health, and extend life, emphasizing its commitment to innovative healthcare solutions [5].

Core Viewpoint - Medtronic (MDT.US) has been upgraded from BB to BBB in MSCI ESG ratings as of August 27, 2025 [1] Group 1 - The upgrade reflects an improvement in Medtronic's environmental, social, and governance practices [1]

PART I — FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Medtronic's unaudited consolidated financial statements, covering income, balance sheets, equity, and cash flows, are presented with detailed accounting notes [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) **Consolidated Statements of Income (Three months ended):** | Metric (in millions) | July 25, 2025 | July 26, 2024 | | :------------------- | :------------ | :------------ | | Net sales | $8,578 | $7,915 | | Operating profit | $1,445 | $1,278 | | Income before income taxes | $1,302 | $1,268 | | Net income | $1,047 | $1,049 | | Net income attributable to Medtronic | $1,040 | $1,042 | | Basic earnings per share | $0.81 | $0.81 | | Diluted earnings per share | $0.81 | $0.80 | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) **Consolidated Statements of Comprehensive Income (Three months ended):** | Metric (in millions) | July 25, 2025 | July 26, 2024 | | :------------------- | :------------ | :------------ | | Net income | $1,047 | $1,049 | | Other comprehensive loss | $(318) | $(92) | | Comprehensive income attributable to Medtronic | $720 | $950 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) **Consolidated Balance Sheets (as of):** | Metric (in millions) | July 25, 2025 | April 25, 2025 | | :------------------- | :------------ | :------------- | | Total current assets | $23,223 | $23,814 | | Total assets | $90,972 | $91,680 | | Total current liabilities | $11,530 | $12,879 | | Total liabilities | $42,839 | $43,424 | | Total equity | $48,133 | $48,256 | [Consolidated Statements of Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Equity) **Consolidated Statements of Equity (Three months ended July 25, 2025, in millions):** | Metric | April 25, 2025 | Net Income | Other Comprehensive (Loss) Income | Dividends | Issuance of Shares | Repurchase of Shares | Stock-based Compensation | July 25, 2025 | | :------------------- | :------------- | :--------- | :-------------------------------- | :-------- | :----------------- | :------------------- | :----------------------- | :------------ | | Total Shareholders' Equity | $48,024 | $1,040 | $(319) | $(910) | $93 | $(120) | $86 | $47,893 | **Consolidated Statements of Equity (Three months ended July 26, 2024, in millions):** | Metric | April 26, 2024 | Net Income | Other Comprehensive Loss | Dividends | Issuance of Shares | Repurchase of Shares | Stock-based Compensation | July 26, 2024 | | :------------------- | :------------- | :--------- | :----------------------- | :-------- | :----------------- | :------------------- | :----------------------- | :------------ | | Total Shareholders' Equity | $50,214 | $1,042 | $(92) | $(898) | $87 | $(2,489) | $83 | $47,947 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) **Consolidated Statements of Cash Flows (Three months ended):** | Activity (in millions) | July 25, 2025 | July 26, 2024 | | :--------------------- | :------------ | :------------ | | Net cash provided by operating activities | $1,088 | $986 | | Net cash used in investing activities | $(719) | $(259) | | Net cash used in financing activities | $(1,381) | $(731) | | Net change in cash and cash equivalents | $(945) | $27 | | Cash and cash equivalents at end of period | $1,273 | $1,311 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. Basis of Presentation](index=9&type=section&id=1.%20Basis%20of%20Presentation) - The financial statements are prepared in accordance with U.S. GAAP for interim financial information and include all necessary adjustments for fair statement, with interim operating results not necessarily indicative of full fiscal year results[18](index=18&type=chunk)[19](index=19&type=chunk) - Medtronic announced its intent to separate the Diabetes business into a new independent, publicly traded company, expected to be completed within 18 months of the May 2025 announcement[22](index=22&type=chunk) [2. New Accounting Pronouncements](index=9&type=section&id=2.%20New%20Accounting%20Pronouncements) - No newly adopted accounting pronouncements materially impacted the consolidated financial statements for the three months ended July 25, 2025[23](index=23&type=chunk) - The Company will adopt ASU 2023-09 (Improvements to Income Tax Disclosures) in Q4 FY2026 and ASU 2024-03 (Disaggregation of Income Statement Expenses) in Q4 FY2028 for annual reports, with interim periods starting in FY2029, and evaluation of potential effects is ongoing[24](index=24&type=chunk)[25](index=25&type=chunk) [3. Revenue](index=10&type=section&id=3.%20Revenue) - Medtronic's revenues are primarily derived from device-based medical therapies and services across various medical conditions, with primary customers including healthcare systems, clinics, and distributors[26](index=26&type=chunk) **Net Sales by Segment and Geography (Three months ended):** | Segment (in millions) | July 25, 2025 | July 26, 2024 | % Change | | :-------------------- | :------------ | :------------ | :------- | | Cardiovascular | $3,285 | $3,007 | 9% | | Neuroscience | $2,416 | $2,317 | 4% | | Medical Surgical | $2,083 | $1,996 | 4% | | Diabetes | $721 | $647 | 12% | | **Total Net Sales** | **$8,578** | **$7,915** | **8%** | | Geography (in millions) | July 25, 2025 | July 26, 2024 | % Change | | :---------------------- | :------------ | :------------ | :------- | | U.S. | $4,224 | $4,082 | 4% | | International | $4,354 | $3,832 | 14% | | **Total Net Sales** | **$8,578** | **$7,915** | **8%** | - The Company decreased its accrual for the Italian payback by **$39 million** in Q1 FY2026, increasing net sales, which contrasts with a **$90 million** increase in accruals (reduction to net sales) in Q1 FY2025 due to Constitutional Court rulings[30](index=30&type=chunk) **Deferred Revenue and Remaining Performance Obligations (in millions):** | Metric | July 25, 2025 | April 25, 2025 | | :----- | :------------ | :------------- | | Deferred revenue | $442 | $446 | | Revenue recognized from prior deferred revenue (Q1) | $135 | $108 (Q1 FY25) | | Estimated revenue from unsatisfied performance obligations (original duration ≥ 1 year) | ~$0.4 billion | N/A | [4. Acquisitions, Dispositions, and Funded Research and Development Arrangements](index=11&type=section&id=4.%20Acquisitions%2C%20Dispositions%2C%20and%20Funded%20Research%20and%20Development%20Arrangements) - No acquisitions accounted for as business combinations occurred during the three months ended July 25, 2025[33](index=33&type=chunk) - Medtronic recognized **$36 million** in income from funded R&D arrangements with Blackstone during the three months ended July 25, 2025, and is eligible to receive an additional **$355 million**[35](index=35&type=chunk) [5. Restructuring Charges](index=11&type=section&id=5.%20Restructuring%20Charges) **Restructuring, Associated, and Other Costs (Three months ended, in millions):** | Metric | July 25, 2025 | July 26, 2024 | | :----- | :------------ | :------------ | | Total costs | $67 | $62 | | Classified as: | | | | Cost of products sold | $16 | $9 | | Selling, general, and administrative expenses | $5 | $5 | | Restructuring charges, net | $45 | $47 | **Restructuring Accrual Activity (Three months ended July 25, 2025, in millions):** | Metric | Employee Termination Benefits | Associated and Other Costs | Total | | :----- | :---------------------------- | :------------------------- | :---- | | April 25, 2025 | $132 | $18 | $150 | | Charges | $52 | $21 | $73 | | Cash payments | $(70) | $(25) | $(95) | | July 25, 2025 | $107 | $12 | $119 | [6. Financial Instruments](index=14&type=section&id=6.%20Financial%20Instruments) **Available-for-Sale Debt Securities Fair Value (in millions):** | Category | July 25, 2025 Fair Value | April 25, 2025 Fair Value | | :------- | :----------------------- | :------------------------ | | Level 1 | $469 | $410 | | Level 2 | $6,357 | $6,308 | | Level 3 | $34 | $33 | | **Total** | **$6,860** | **$6,752** | - Proceeds from sales of available-for-sale debt securities were **$2.0 billion** for the three months ended July 25, 2025, and **$2.2 billion** for the corresponding period in the prior fiscal year[41](index=41&type=chunk) **Equity and Other Investments (in millions):** | Category | July 25, 2025 | April 25, 2025 | | :------- | :------------ | :------------- | | Marketable equity securities | $20 | $17 | | Investments with fair value option | $50 | $140 | | Investments without readily determinable fair values | $697 | $705 | | Equity method and other investments | $83 | $89 | | **Total** | **$850** | **$951** | - The Company recognized a **$90 million loss** on its 50% non-controlling equity interest in Mozarc Medical for the three months ended July 25, 2025, primarily due to historical financial results and future cash flow projections[46](index=46&type=chunk)[47](index=47&type=chunk) [7. Financing Arrangements](index=16&type=section&id=7.%20Financing%20Arrangements) - Commercial paper outstanding at July 25, 2025, was **$649 million**, with a weighted average original maturity of 13 days and an interest rate of **4.43%**, with no commercial paper outstanding at April 25, 2025[48](index=48&type=chunk) - Medtronic maintains a **$3.5 billion** five-year unsecured revolving credit facility, with no amounts outstanding at July 25, 2025, or April 25, 2025[49](index=49&type=chunk) **Debt Obligations (in millions):** | Category | July 25, 2025 | April 25, 2025 | | :------- | :------------ | :------------- | | Current debt obligations | $2,430 | $2,874 | | Long-term debt | $26,179 | $25,642 | | **Total Debt** | **$28,609** | **$28,516** | - Interest expense, net, was **$217 million** for both the three months ended July 25, 2025, and July 26, 2024[51](index=51&type=chunk) [8. Derivatives and Currency Exchange Risk Management](index=18&type=section&id=8.%20Derivatives%20and%20Currency%20Exchange%20Risk%20Management) - Medtronic uses derivative instruments and foreign currency denominated debt to manage currency exchange rate and interest rate risks, not for speculative purposes[55](index=55&type=chunk) - The Company had **$276 million** in after-tax unrealized losses associated with cash flow hedging instruments recorded in AOCI at July 25, 2025, expecting **$154 million** of these losses to be recognized in income over the next 12 months[60](index=60&type=chunk) **Contractual Amounts of Outstanding Instruments (in billions):** | Instrument Type | Designation | July 25, 2025 | April 25, 2025 | | :-------------- | :---------- | :------------ | :------------- | | Currency exchange rate contracts | Cash flow hedge | $10.4 | $10.6 | | Currency exchange rate contracts | Net investment hedge | $6.6 | $8.0 | | Foreign currency-denominated debt | Net investment hedge | $21.1 | $20.6 | | Currency exchange rate contracts | Undesignated | $4.2 | $3.9 | **Fair Value of Derivative Instruments (in millions):** | Category | July 25, 2025 Assets | July 25, 2025 Liabilities | April 25, 2025 Assets | April 25, 2025 Liabilities | | :------- | :------------------- | :------------------------ | :-------------------- | :------------------------- | | Designated as hedging instruments | $293 | $516 | $326 | $396 | | Not designated as hedging instruments | $43 | $7 | $7 | $21 | | **Total Derivatives** | **$335** | **$523** | **$334** | **$417** | [9. Inventories](index=22&type=section&id=9.%20Inventories) **Inventory Balances (in millions):** | Category | July 25, 2025 | April 25, 2025 | | :------- | :------------ | :------------- | | Finished goods | $4,022 | $3,779 | | Work-in-process | $792 | $744 | | Raw materials | $1,072 | $953 | | **Total** | **$5,886** | **$5,476** | [10. Goodwill and Other Intangible Assets](index=22&type=section&id=10.%20Goodwill%20and%20Other%20Intangible%20Assets) **Goodwill by Segment (in millions):** | Segment | April 25, 2025 | Currency Translation | July 25, 2025 | | :------ | :------------- | :------------------- | :------------ | | Cardiovascular | $8,017 | $28 | $8,045 | | Neuroscience | $11,716 | $38 | $11,754 | | Medical Surgical | $19,748 | $203 | $19,952 | | Diabetes | $2,255 | $0 | $2,255 | | **Total** | **$41,737** | **$269** | **$42,007** | - No goodwill impairment was recognized during the three months ended July 25, 2025, and July 26, 2024[76](index=76&type=chunk) **Intangible Assets (in millions):** | Category | July 25, 2025 Gross Carrying Amount | July 25, 2025 Accumulated Amortization | April 25, 2025 Gross Carrying Amount | April 25, 2025 Accumulated Amortization | | :------- | :---------------------------------- | :------------------------------------- | :----------------------------------- | :-------------------------------------- | | Definite-lived | $28,954 | $(18,021) | $28,925 | $(17,547) | | Indefinite-lived (IPR&D) | $290 | $0 | $289 | $0 | - Intangible asset amortization expense was **$459 million** for the three months ended July 25, 2025, including **$45 million** of accelerated amortization in the Cardiovascular Portfolio, compared to **$414 million** in the prior year[78](index=78&type=chunk) [11. Income Taxes](index=23&type=section&id=11.%20Income%20Taxes) - The U.S. Government enacted The One Big Beautiful Bill Act of 2025, effective for Medtronic in fiscal year 2026, with no significant impact for the three months ended July 25, 2025[79](index=79&type=chunk) - The Company's effective tax rate increased to **19.6%** for the three months ended July 25, 2025, from **17.4%** in the prior year, primarily due to the Pillar Two global minimum tax impact and changes in operational results by jurisdiction[81](index=81&type=chunk) - Gross unrecognized tax benefits remained at **$2.9 billion** at July 25, 2025, with approximately **$2.7 billion** impacting the effective tax rate if recognized[82](index=82&type=chunk) [12. Earnings Per Share](index=24&type=section&id=12.%20Earnings%20Per%20Share) **Earnings Per Share (Three months ended):** | Metric (in millions, except per share data) | July 25, 2025 | July 26, 2024 | | :---------------------------------------- | :------------ | :------------ | | Net income attributable to ordinary shareholders | $1,040 | $1,042 | | Basic weighted average shares outstanding | 1,281.6 | 1,293.3 | | Diluted weighted average shares outstanding | 1,287.1 | 1,296.5 | | Basic earnings per share | $0.81 | $0.81 | | Diluted earnings per share | $0.81 | $0.80 | - Approximately **24 million** and **27 million** ordinary shares were excluded from diluted EPS calculations for the three months ended July 25, 2025, and July 26, 2024, respectively, as their effect would have been anti-dilutive[86](index=86&type=chunk) [13. Stock-Based Compensation](index=25&type=section&id=13.%20Stock-Based%20Compensation) **Stock-Based Compensation Expense (Three months ended, in millions):** | Component | July 25, 2025 | July 26, 2024 | | :-------- | :------------ | :------------ | | Stock options | $10 | $13 | | Restricted stock | $49 | $43 | | Performance share units | $16 | $15 | | Employee stock purchase plan | $11 | $12 | | **Total stock-based compensation expense** | **$86** | **$83** | | Classification | July 25, 2025 | July 26, 2024 | | :------------- | :------------ | :------------ | | Cost of products sold | $10 | $9 | | Research and development expense | $11 | $10 | | Selling, general, and administrative expense | $65 | $64 | [14. Retirement Benefit Plans](index=25&type=section&id=14.%20Retirement%20Benefit%20Plans) **Net Periodic Benefit (Credit) Cost for Defined Benefit Pension Plans (Three months ended, in millions):** | Component | U.S. (July 25, 2025) | U.S. (July 26, 2024) | Non-U.S. (July 25, 2025) | Non-U.S. (July 26, 2024) | | :-------- | :------------------- | :------------------- | :----------------------- | :----------------------- | | Service cost | $12 | $13 | $11 | $11 | | Interest cost | $42 | $43 | $12 | $13 | | Expected return on plan assets | $(64) | $(66) | $(18) | $(17) | | Amortization of prior service cost | $(1) | $(1) | $0 | $0 | | Amortization of net actuarial loss | $5 | $4 | $1 | $0 | | **Net periodic benefit (credit) cost** | **$(6)** | **$(7)** | **$6** | **$7** | [15. Accumulated Other Comprehensive Loss](index=26&type=section&id=15.%20Accumulated%20Other%20Comprehensive%20Loss) **Changes in Accumulated Other Comprehensive Loss (AOCI), Net of Tax (in millions):** | Component | April 25, 2025 | Other Comprehensive Income (Loss) before Reclassifications | Reclassifications | July 25, 2025 | | :-------- | :------------- | :--------------------------------------------------------- | :---------------- | :------------ | | Unrealized (Loss) Gain on Investment Securities | $(63) | $18 | $1 | $(44) | | Cumulative Translation Adjustments | $(2,835) | $348 | $0 | $(2,487) | | Net Investment Hedges | $(597) | $(559) | $0 | $(1,156) | | Net Change in Retirement Obligations | $(640) | $(1) | $2 | $(641) | | Unrealized (Loss) Gain on Cash Flow Hedges | $(149) | $(134) | $5 | $(276) | | **Total Accumulated Other Comprehensive (Loss) Income** | **$(4,284)** | **$(327)** | **$8** | **$(4,604)** | [16. Commitments and Contingencies](index=27&type=section&id=16.%20Commitments%20and%20Contingencies) - Medtronic is involved in various legal actions, including product liability, intellectual property, commercial disputes, and governmental proceedings, recognizing **$27 million** in certain litigation charges for the three months ended July 25, 2025, compared to **$81 million** in the prior year[93](index=93&type=chunk)[94](index=94&type=chunk) - Accrued litigation was approximately **$0.2 billion** at July 25, 2025, down from **$0.4 billion** at April 25, 2025[94](index=94&type=chunk) - The U.S. Court of Appeals for the Federal Circuit ruled in favor of Medtronic on July 18, 2025, reversing a lower court verdict and ruling that Medtronic did not infringe the Colibri patent[95](index=95&type=chunk) - The Company decreased its Italian payback liability by **$39 million** in Q1 FY2026 due to a legislative decree, following a **$90 million** increase in Q1 FY2025[106](index=106&type=chunk) - The IRS audit report for fiscal years 2005 and 2006 regarding income allocation with its Puerto Rico subsidiary is still ongoing, with oral arguments for the appeal occurring in May 2025[109](index=109&type=chunk) [17. Segment and Geographic Information](index=30&type=section&id=17.%20Segment%20and%20Geographic%20Information) - Medtronic operates four reportable segments: Cardiovascular Portfolio, Neuroscience Portfolio, Medical Surgical Portfolio, and Diabetes Operating Unit, with performance evaluated based on net sales and segment operating profit[115](index=115&type=chunk)[116](index=116&type=chunk) - Segment operating profit now includes allocations of certain corporate expenses, stock-based compensation, and centralized distribution expenses, with prior period information recast for comparability[117](index=117&type=chunk) **Reportable Segment Operating Profit (Three months ended July 25, 2025, in millions):** | Segment | Net Sales | Cost of Products Sold | R&D Expense | SG&A Expense | Other Segment Items | Operating Profit | | :------ | :-------- | :-------------------- | :---------- | :----------- | :------------------ | :--------------- | | Cardiovascular | $3,285 | $1,132 | $280 | $1,060 | $(15) | $828 | | Neuroscience | $2,416 | $721 | $157 | $831 | $2 | $705 | | Medical Surgical | $2,083 | $814 | $169 | $605 | $1 | $494 | | Diabetes | $721 | $304 | $120 | $274 | $(3) | $26 | | **Total Reportable Segments** | **$8,506** | **$2,972** | **$725** | **$2,771** | **$(15)** | **$2,053** | **Total Assets by Segment (in millions):** | Segment | July 25, 2025 | April 25, 2025 | | :------ | :------------ | :------------- | | Cardiovascular | $16,573 | $16,548 | | Neuroscience | $18,433 | $18,476 | | Medical Surgical | $33,326 | $33,317 | | Diabetes | $4,209 | $4,136 | | **Total Reportable Segments** | **$72,542** | **$72,476** | **Net Sales by Geography (Three months ended, in millions):** | Country | July 25, 2025 | July 26, 2024 | | :------ | :------------ | :------------ | | Ireland | $33 | $30 | | United States | $4,224 | $4,082 | | Rest of world | $4,321 | $3,803 | | **Total** | **$8,578** | **$7,915** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Medtronic's financial condition and operational results, covering key metrics, trends, segment performance, and liquidity [Understanding Our Financial Information](index=34&type=section&id=Understanding%20Our%20Financial%20Information) - The discussion includes non-GAAP financial measures to supplement U.S. GAAP, providing insights into underlying operational performance and trends, excluding certain charges or benefits that may not recur[129](index=129&type=chunk)[130](index=130&type=chunk) - Free cash flow is a non-GAAP measure calculated by subtracting property, plant, and equipment additions from operating cash flows[132](index=132&type=chunk) [Executive Level Overview](index=35&type=section&id=Executive%20Level%20Overview) - Medtronic is a leading global healthcare technology company focused on alleviating pain, restoring health, and extending life through products for cardiac rhythm disorders, cardiovascular disease, neurological disorders, spinal conditions, and diabetes[133](index=133&type=chunk) **Key Financial Summary (Three months ended):** | Metric | July 25, 2025 | July 26, 2024 | | :----- | :------------ | :------------ | | Net sales | $8,578 million | $7,915 million | | Diluted earnings per share | $0.81 | $0.80 | | Operating cash flow | $1,088 million | $986 million | [GAAP to Non-GAAP Reconciliations](index=36&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) **GAAP to Non-GAAP Reconciliation (Three months ended July 25, 2025, in millions, except per share data):** | Metric | GAAP | Non-GAAP Adjustments | Non-GAAP | | :----- | :--- | :------------------- | :------- | | Income Before Income Taxes | $1,302 | $685 | $1,987 | | Income Tax Provision (Benefit) | $255 | $99 | $354 | | Net Income Attributable to Medtronic | $1,040 | $586 | $1,626 | | Diluted EPS | $0.81 | $0.45 | $1.26 | | Effective Tax Rate | 19.6% | | 17.8% | **GAAP to Non-GAAP Reconciliation (Three months ended July 26, 2024, in millions, except per share data):** | Metric | GAAP | Non-GAAP Adjustments | Non-GAAP | | :----- | :--- | :------------------- | :------- | | Income Before Income Taxes | $1,268 | $657 | $1,925 | | Income Tax Provision (Benefit) | $220 | $107 | $327 | | Net Income Attributable to Medtronic | $1,042 | $550 | $1,592 | | Diluted EPS | $0.80 | $0.43 | $1.23 | | Effective Tax Rate | 17.4% | | 17.0% | [Free Cash Flow](index=37&type=section&id=Free%20Cash%20Flow) **Free Cash Flow (Three months ended, in millions):** | Metric | July 25, 2025 | July 26, 2024 | | :----- | :------------ | :------------ | | Net cash provided by operating activities | $1,088 | $986 | | Additions to property, plant, and equipment | $(504) | $(520) | | **Free cash flow** | **$584** | **$466** | - Free cash flow increased by **$118 million**, from **$466 million** in the prior year to **$584 million**, primarily driven by increased operating cash flows[141](index=141&type=chunk) [Macroeconomic Trends](index=37&type=section&id=Macroeconomic%20Trends) - Macroeconomic and geopolitical factors, including competitive product launches, pricing pressure, currency fluctuations, inflation, interest rate changes, and supply chain challenges, could negatively impact Medtronic's business[142](index=142&type=chunk) - The estimated pre-tax net tariff impact for fiscal year 2026 is **$185 million**, with the majority expected in the second half of the fiscal year, due to global trade policy developments[142](index=142&type=chunk) - The financial and operational impact of the Russia-Ukraine and Israel conflicts was not material for the three months ended July 25, 2025, representing less than **1%** of consolidated revenues and assets[142](index=142&type=chunk) [Net Sales](index=38&type=section&id=NET%20SALES) **Total Net Sales (Three months ended, in millions):** | Metric | July 25, 2025 | July 26, 2024 | % Change | | :----- | :------------ | :------------ | :------- | | Total net sales | $8,578 | $7,915 | 8% | - The **8% increase** in net sales was driven by growth in most businesses, particularly Cardiac Ablation Solutions, TAVR, Neuromodulation, Diabetes, and Cardiac Pacing Therapies, along with foreign currency fluctuations and a **$39 million** positive adjustment from Italian payback accruals[146](index=146&type=chunk) [Cardiovascular](index=39&type=section&id=Cardiovascular) - Cardiovascular net sales increased **9% to $3.3 billion**, driven by growth across most businesses and foreign currency fluctuations[147](index=147&type=chunk)[148](index=148&type=chunk) - Cardiac Rhythm & Heart Failure (CRHF) net sales increased **12%**, with strong growth in Cardiac Ablation Solutions (PulseSelect, Affera Sphere-9) and Cardiac Rhythm Management (Micra leadless pacemakers, Aurora EV-ICD)[150](index=150&type=chunk) - Structural Heart & Aortic (SHA) net sales increased **9%**, driven by Evolut FX+ TAVR system and growth in Perfusion and Surgical Valves[151](index=151&type=chunk) - Coronary & Peripheral Vascular (CPV) net sales increased **5%**, with growth in Symplicity Spyral renal denervation system, guide catheters, balloons, and endovenous products[152](index=152&type=chunk) [Neuroscience](index=41&type=section&id=Neuroscience) - Neuroscience net sales increased **4% to $2.4 billion**, driven by growth in Neuromodulation, Core Spine, and Neurosurgery, along with foreign currency fluctuations[155](index=155&type=chunk) - Cranial & Spinal Technologies (CST) net sales increased **6%** due to continued adoption of the AiBLE ecosystem of spine implants and enabling technology[159](index=159&type=chunk) - Specialty Therapies net sales decreased **2%** due to tender pricing in China and the Pipeline Vantage recall for Neurovascular, partially offset by international growth in ENT[160](index=160&type=chunk) - Neuromodulation (NM) net sales increased **10%**, driven by the Inceptiv closed-loop spinal cord stimulator, Percept RC deep brain neurostimulator, and Interventional products[161](index=161&type=chunk) [Medical Surgical](index=42&type=section&id=Medical%20Surgical) - Medical Surgical net sales increased **4% to $2.1 billion**, driven by growth in Advanced Energy, General Surgical Technologies, Acute Care & Monitoring, and Endoscopy, along with foreign currency fluctuations[162](index=162&type=chunk) - Surgical & Endoscopy (SE) net sales increased **4%** due to adoption of LigaSure vessel sealing technology, ProGrip mesh, Electrosurgery, and Esophageal products, partially offset by pressures on U.S. bariatric segment and shifts to robotic surgery[166](index=166&type=chunk) - Acute Care & Monitoring (ACM) net sales increased **4%**, primarily due to growth in Nellcor pulse oximetry[167](index=167&type=chunk) - The Hugo RAS system received CE Mark for LigaSure RAS vessel-sealing technology in July 2025, expanding its capabilities for gynecologic, general, and urologic procedures[168](index=168&type=chunk) [Diabetes](index=44&type=section&id=Diabetes) - Diabetes net sales increased **12% to $721 million**, driven by strong international growth from the MiniMed 780G AID system, including Simplera Sync and Guardian 4 CGM sensors, and foreign currency fluctuations[170](index=170&type=chunk) - The Company announced its intent to separate the Diabetes Operating Unit into a new standalone company, expected within 18 months of the May 2025 announcement[171](index=171&type=chunk) - The MiniMed 780G insulin pump system with Simplera Sync received U.S. FDA approval in April 2025 and CE Mark in early January 2024, while the Simplera sensor received U.S FDA approval in August 2024 and CE Mark in September 2023[171](index=171&type=chunk) [Costs and Expenses](index=45&type=section&id=COSTS%20AND%20EXPENSES) **Summary of Costs and Expenses (as % of Net Sales, Three months ended):** | Metric | July 25, 2025 | July 26, 2024 | | :----- | :------------ | :------------ | | Cost of products sold, excluding amortization of intangible assets | 35.0% | 34.9% | | Research and development expense | 8.5% | 8.5% | | Selling, general, and administrative expense | 32.7% | 33.5% | [Cost of Products Sold](index=45&type=section&id=Cost%20of%20Products%20Sold) - Cost of products sold increased to **$3.0 billion** from **$2.8 billion**, with a slight increase as a percentage of net sales due to changes in product mix, partially offset by Italian payback accrual adjustments[174](index=174&type=chunk) [Research and Development Expense](index=45&type=section&id=Research%20and%20Development%20Expense) - Research and development expense increased to **$726 million** from **$676 million**, reflecting continued commitment to innovation[175](index=175&type=chunk) [Selling, General, and Administrative Expense](index=45&type=section&id=Selling%2C%20General%2C%20and%20Administrative%20Expense) - Selling, general, and administrative expense increased to **$2.8 billion** from **$2.7 billion**, primarily due to new product launches and commercialization activities[176](index=176&type=chunk) [Other Costs and Expenses (Income)](index=45&type=section&id=Other%20Costs%20and%20Expenses%20(Income)) **Other Costs and Expenses (Income) (Three months ended, in millions):** | Metric | July 25, 2025 | July 26, 2024 | | :----- | :------------ | :------------ | | Amortization of intangible assets | $459 | $414 | | Restructuring charges, net | $45 | $47 | | Certain litigation charges, net | $27 | $81 | | Other operating expense, net | $70 | $1 | | Other non-operating income, net | $(33) | $(157) | | Interest expense, net | $176 | $167 | - Other operating expense, net, increased significantly to **$70 million** from **$1 million**, largely due to a net loss of **$62 million** from currency remeasurement and hedging programs, compared to a **$6 million** net loss in the prior year[182](index=182&type=chunk) - Other non-operating income, net, decreased from **$(157) million** to **$(33) million**, primarily due to net losses on minority investments of **$113 million** in the current period, compared to net gains of **$17 million** in the prior year[183](index=183&type=chunk)[184](index=184&type=chunk) [Income Taxes](index=46&type=section&id=INCOME%20TAXES) **Income Tax Summary (Three months ended):** | Metric | July 25, 2025 | July 26, 2024 | | :----- | :------------ | :------------ | | Income tax provision | $255 | $220 | | Income before income taxes | $1,302 | $1,268 | | Effective tax rate | 19.6% | 17.4% | | Non-GAAP income tax provision | $354 | $327 | | Non-GAAP income before income taxes | $1,987 | $1,925 | | Non-GAAP Nominal Tax Rate | 17.8% | 17.0% | - The effective tax rate increased to **19.6%** from **17.4%**, and the Non-GAAP Nominal Tax Rate increased to **17.8%** from **17.0%**, primarily due to the impact of the Pillar Two global minimum tax and year-over-year changes in operational results by jurisdiction[188](index=188&type=chunk)[189](index=189&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) - Medtronic is in a strong financial position, with sufficient cash, cash equivalents, current investments, and credit facilities to meet foreseeable operating needs[190](index=190&type=chunk) [Summary of Cash Flows](index=47&type=section&id=Summary%20of%20Cash%20Flows) **Summary of Cash Flows (Three months ended, in millions):** | Activity | July 25, 2025 | July 26, 2024 | | :------- | :------------ | :------------ | | Operating activities | $1,088 | $986 | | Investing activities | $(719) | $(259) | | Financing activities | $(1,381) | $(731) | | Effect of exchange rate changes on cash and cash equivalents | $67 | $31 | | Net change in cash and cash equivalents | $(945) | $27 | - Operating cash flow increased by **$102 million**, primarily due to increased cash collected from customers, partially offset by higher litigation payments and cash paid to suppliers[192](index=192&type=chunk) - Cash used in investing activities increased by **$460 million**, mainly due to a **$368 million** increase in net purchases of investments[193](index=193&type=chunk) - Net cash used in financing activities increased by **$650 million**, driven by the repayment of **€1.0 billion** of Senior Notes (**$1.2 billion**) and a **$2.4 billion** decrease in net share repurchases, partially offset by an increase in current debt obligations[194](index=194&type=chunk) [Debt and Capital](index=47&type=section&id=Debt%20and%20Capital) - Total debt increased slightly to **$28.6 billion** at July 25, 2025, from **$28.5 billion** at April 25, 2025, due to increased commercial paper and foreign exchange impacts, partially offset by Senior Notes repayment[196](index=196&type=chunk) - In June 2024, Medtronic Inc. issued **€3.0 billion** (**$3.2 billion**) in Euro-denominated Senior Notes with maturities ranging from fiscal year 2030 to 2054[197](index=197&type=chunk) - The Board authorized a **$5.0 billion** share repurchase program in March 2024, with approximately **$2.0 billion** remaining under this program as of July 25, 2025, and **1 million shares** repurchased for **$86.22** average price during the quarter[198](index=198&type=chunk) [Liquidity](index=48&type=section&id=Liquidity) - Liquidity sources at July 25, 2025, included **$1.3 billion** in cash and cash equivalents and **$6.8 billion** in current investments[200](index=200&type=chunk) - Medtronic has commercial paper programs with a maximum aggregate outstanding amount of **$3.5 billion**, with **$649 million** outstanding at July 25, 2025[202](index=202&type=chunk) - A **$3.5 billion** five-year syndicated credit facility, expiring in December 2029, provides backup funding for commercial paper and general corporate purposes, with no amounts outstanding at July 25, 2025[203](index=203&type=chunk) **Agency Debt Ratings (as of):** | Agency | July 25, 2025 | April 25, 2025 | | :----- | :------------ | :------------- | | Standard & Poor's (Long-term) | A | A | | Standard & Poor's (Short-term) | A-1 | A-1 | | Moody's (Long-term) | A3 | A3 | | Moody's (Short-term) | P-2 | P-2 | [Acquisitions and Dispositions](index=49&type=section&id=Acquisitions%20and%20Dispositions) - In May 2025, Medtronic announced its intent to separate the Diabetes business into a new independent, publicly traded company, with completion expected within 18 months[207](index=207&type=chunk) [Goodwill](index=49&type=section&id=Goodwill) - Goodwill increased to **$42,007 million** at July 25, 2025, from **$41,737 million** at April 25, 2025, primarily due to currency translation adjustments[76](index=76&type=chunk) [Critical Accounting Estimates](index=49&type=section&id=Critical%20Accounting%20Estimates) - No material changes to critical accounting estimates were reported as of July 25, 2025[211](index=211&type=chunk) [New Accounting Pronouncements](index=49&type=section&id=New%20Accounting%20Pronouncements) - No newly adopted accounting pronouncements materially impacted the consolidated financial statements for the three months ended July 25, 2025, and the Company is evaluating the impact of ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Disaggregation of Income Statement Expenses) for future adoption[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[212](index=212&type=chunk) [Supplemental Guarantor Financial Information](index=49&type=section&id=Supplemental%20Guarantor%20Financial%20Information) - Medtronic plc, Medtronic Luxco, and Medtronic, Inc. provide full and unconditional guarantees for various Senior Notes, including Medtronic Senior Notes and Medtronic Luxco Senior Notes, while Medtronic plc, Medtronic Luxco, CIFSA, and CIFSA Subsidiary Guarantors guarantee CIFSA Senior Notes[213](index=213&type=chunk)[215](index=215&type=chunk) **Summarized Results of Operations (Three months ended July 25, 2025, in millions):** | Metric | Medtronic & Medtronic Luxco Senior Notes Obligor Group | CIFSA Senior Notes Obligor Group | | :----- | :----------------------------------------------------- | :------------------------------- | | Net sales | $750 | $0 | | Operating profit (loss) | $93 | $(29) | | Loss before income taxes | $(20) | $(24) | | Net loss attributable to Medtronic | $(37) | $(20) | **Summarized Balance Sheet Information (July 25, 2025, in millions):** | Metric | Medtronic & Medtronic Luxco Senior Notes Obligor Group | CIFSA Senior Notes Obligor Group | | :----- | :----------------------------------------------------- | :------------------------------- | | Total current assets | $18,786 | $4,330 | | Total noncurrent assets | $14,839 | $8,307 | | Total current liabilities | $25,969 | $10,138 | | Total noncurrent liabilities | $38,361 | $26,033 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Medtronic's market risk exposure, including currency and interest rate fluctuations, and management strategies are detailed [Currency Exchange Rate Risk](index=52&type=section&id=Currency%20Exchange%20Rate%20Risk) - Medtronic is exposed to currency exchange rate changes, which can cause fluctuations in earnings and cash flows, particularly for unhedged exposures in emerging markets[228](index=228&type=chunk) - The gross notional amount of all currency exchange rate derivative instruments outstanding was **$21.2 billion** at July 25, 2025, in a net unrealized loss position of **$214 million**[228](index=228&type=chunk) - A hypothetical **10%** strengthening/weakening of the U.S. dollar would result in an approximate **$1.6 billion** increase/decrease in the fair value of these derivative contracts[229](index=229&type=chunk) [Interest Rate Risk](index=52&type=section&id=Interest%20Rate%20Risk) - Medtronic is subject to interest rate risk on its short-term investments and borrowings, with its debt portfolio primarily consisting of fixed-rate debt denominated in U.S. dollars and Euros[230](index=230&type=chunk) - A hypothetical **50 basis point** change in interest rates would result in an approximate **$82 million** change in the fair value of interest rate-sensitive financial instruments at July 25, 2025[231](index=231&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms effective disclosure controls and procedures, noting changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=53&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective as of July 25, 2025[234](index=234&type=chunk) [Changes in Internal Control Over Financial Reporting](index=53&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - During the three months ended July 25, 2025, Medtronic implemented a new financial close and consolidation system, updating controls accordingly, with no other material changes to internal control over financial reporting occurring[235](index=235&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) Note 16 details legal proceedings and loss contingencies, with a $1 million disclosure threshold for environmental law matters - Medtronic has adopted a **$1 million** disclosure threshold for environmental law proceedings where a governmental authority is a party[236](index=236&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Medtronic's Q1 FY2026 share repurchase activities, including shares purchased and remaining authorization, are detailed [Issuer Purchases of Equity Securities](index=53&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) **Issuer Purchases of Equity Securities (First Quarter Fiscal Year 2026):** | Fiscal Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as a Part of Publicly Announced Program | Maximum Approximate Dollar Value of Shares that may yet be Purchased Under the Program | | :------------ | :------------------------------- | :--------------------------- | :--------------------------------------------------------------------- | :--------------------------------------------------------------------- | | 4/26/2025-5/23/2025 | 479,600 | $84.23 | 479,600 | $2,087,333,109 | | 5/24/2025-6/27/2025 | 534,800 | $85.70 | 534,800 | $2,041,501,300 | | 6/28/2025-7/25/2025 | 379,500 | $89.49 | 379,500 | $2,007,540,460 | | **Total** | **1,393,900** | **$86.22** | **1,393,900** | **$2,007,540,460** | - The Company's Board of Directors authorized a **$5.0 billion** share repurchase program in March 2024, with no specific time period, and approximately **$2.0 billion** remained under this authorization as of July 25, 2025[237](index=237&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) Exchange Act disclosures cover regulatory activities with Russia's FSB and Rule 10b5-1 trading arrangements [Exchange Act Section 3(r) Disclosure](index=53&type=section&id=Exchange%20Act%20Section%203%28r%29%20Disclosure) - Medtronic engaged in regulatory activities involving Russia's FSB for medical device imports with encryption functionality, as required by local law and expressly authorized by the U.S. Government under applicable economic sanctions regulations[238](index=238&type=chunk)[239](index=239&type=chunk) - These activities did not directly result in any revenues or profits for Medtronic[239](index=239&type=chunk) [Rule 10b5-1 Director and Officer Trading Arrangements](index=53&type=section&id=Rule%2010b5-1%20Director%20and%20Officer%20Trading%20Arrangements) - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended July 25, 2025[240](index=240&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL documents - Exhibits include certifications from the CEO and CFO (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[241](index=241&type=chunk) [Signature](index=55&type=section&id=Signature) This section contains the signature of Denise L. Blomquist, certifying the report filing on behalf of Medtronic plc - The report was signed by Denise L. Blomquist, Vice President, Global Controller and Chief Accounting Officer, on August 26, 2025[242](index=242&type=chunk) [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=51&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This cautionary note highlights that forward-looking statements in the Form 10-Q are subject to known and unknown risks and uncertainties - All statements other than historical facts in the report are forward-looking and subject to known and unknown risks and uncertainties[225](index=225&type=chunk) - Key risks include competition, regulatory delays, supply interruption, failure of acquisitions/divestitures, adverse regulatory action, litigation, quality problems, healthcare policy changes, public health crises, cybersecurity incidents, international operations (including armed conflicts), and macroeconomic factors like currency fluctuations and inflation[226](index=226&type=chunk) - The Company intends to take advantage of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 for its forward-looking statements[227](index=227&type=chunk)

Group 1: Zacks Premium Overview - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1] - The service aims to help investors become more confident and informed in their investment decisions [1] Group 2: Zacks Style Scores - Zacks Style Scores are complementary indicators that rate stocks based on value, growth, and momentum methodologies, assisting investors in selecting stocks likely to outperform the market in the next 30 days [2] - Each stock receives a rating from A to F, with A indicating the highest potential for outperformance [3] Group 3: Value Score - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Group 4: Growth Score - The Growth Score evaluates a company's financial health and future outlook by analyzing projected and historical earnings, sales, and cash flow [4] Group 5: Momentum Score - The Momentum Score is designed for traders who capitalize on price trends, utilizing factors like one-week price changes and monthly earnings estimate changes [5] Group 6: VGM Score - The VGM Score combines Value, Growth, and Momentum Scores, providing a comprehensive indicator for stock selection alongside the Zacks Rank [6] Group 7: Zacks Rank and Performance - The Zacks Rank is a proprietary model that uses earnings estimate revisions to identify stocks, with 1 (Strong Buy) stocks achieving an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [7] - There can be over 800 top-rated stocks available, making it essential for investors to utilize Style Scores for better selection [8] Group 8: Stock Example - Medtronic (MDT) - Medtronic, Inc. is currently rated 3 (Hold) on the Zacks Rank with a VGM Score of B, following its acquisition of Covidien for $49.9 billion in 2015 [11] - MDT has a Momentum Style Score of A, with a recent share price increase of 0.1% over the past four weeks, and 11 analysts have revised earnings estimates higher for fiscal 2026 [12]

Core Viewpoint - The article highlights three healthcare stocks—Johnson & Johnson, Medtronic, and Omega Healthcare Investors—as attractive options for dividend-focused investors, emphasizing their strong dividend yields and resilience in the market [2][15]. Group 1: Johnson & Johnson - Johnson & Johnson is recognized as a Dividend King, having increased its dividend for over 50 consecutive years, with a current yield of 2.9%, significantly higher than the broader market's 1.2% and the healthcare sector's average of 1.8% [4][5]. - The company is a leader in pharmaceuticals and medical devices, with a strong global presence and robust R&D capabilities, which positions it well for future growth despite some near-term litigation concerns [5][6]. - A $500 investment would allow the purchase of approximately two shares, while $5,000 would enable the acquisition of 27 shares [6]. Group 2: Medtronic - Medtronic is approaching Dividend King status with 48 years of dividend increases and a current yield of 3%, which is attractive compared to market averages [8][9]. - The company is diversified across various medical device sectors, but has faced challenges with new product introductions and rising costs affecting profitability; however, new cardiac ablation products have shown nearly 50% revenue growth year-over-year in Q2 of fiscal 2026 [10][11]. - A $500 investment would yield around five shares, while $5,000 would allow for the purchase of 55 shares, providing an opportunity to invest early in a business upturn [11]. Group 3: Omega Healthcare Investors - Omega Healthcare is a REIT focused on senior housing, which faced challenges during the pandemic but maintained its dividend, currently yielding an ultra-high 6.4% [12][13]. - The company has seen a recovery in its core business, with funds from operations rising nearly 8% year-over-year in Q2 of 2025, and is making significant new investments [13][14]. - An investment of $500 would allow for the purchase of approximately 11 shares, while $5,000 would enable the acquisition of 119 shares, indicating strong future potential driven by demographic trends [14]. Group 4: Overall Investment Thesis - Johnson & Johnson, Medtronic, and Omega Healthcare have demonstrated resilience and a commitment to dividends, making them suitable candidates for investors looking to allocate $500 or $5,000 into dividend stocks [15].