Medtronic(MDT) - 2026 Q3 - Quarterly Results

Financial Performance - Medtronic reported Q3 FY26 revenue of $9.017 billion, an increase of 8.7% as reported and 6.0% organic, exceeding guidance by 50 basis points[2]. - GAAP diluted EPS for Q3 was $0.89, while non-GAAP diluted EPS was $1.36, three cents above the midpoint of guidance[2][8]. - The company reiterated its FY26 organic revenue growth guidance of approximately 5.5% and non-GAAP EPS guidance of $5.62 to $5.66[9]. - Net income attributable to Medtronic for the three months ended January 23, 2026, was $1,143 million, compared to $1,294 million in the same period in 2025, reflecting a decrease of 11.7%[39]. - Basic earnings per share for the three months ended January 23, 2026, were $0.89, down from $1.01 in the prior year[42]. - Non-GAAP net income attributable to Medtronic for the nine months ended January 23, 2026, was $5,122 million, compared to $4,999 million in the same period of 2025[49]. - The company reported net income of $3,578 million for the nine months ended January 23, 2026, compared to $3,630 million for the same period in the previous year[66]. Revenue Breakdown - The Cardiovascular portfolio generated $3.457 billion in revenue, reflecting a 13.8% increase as reported and 10.6% organic growth[4]. - Diabetes revenue increased by 8.3%, with double-digit growth in international markets contributing significantly[5][11]. - The Neuroscience portfolio revenue reached $2.558 billion, marking a 4.1% increase reported and 2.5% organic growth[11]. - U.S. revenue for the third quarter of FY26 was $4,493 million, representing a 6.0% growth compared to $4,237 million in FY25[30]. - International revenue for FY26 Q3 was $4,524 million, an 11.6% increase from $4,055 million in FY25 Q3[34]. - Total reportable segments for the year-to-date in FY26 reached $13,234 million, a 11.2% increase from $11,986 million in FY25[34]. Segment Performance - Cardiac Ablation Solutions revenue surged 80%, with a remarkable 137% growth in the U.S., driven by the pulsed field ablation portfolio[2][4]. - Cardiovascular segment reported $1,589 million in revenue for FY26 Q3, a 13.1% increase from $1,405 million in FY25 Q3[30]. - Cardiac Rhythm & Heart Failure segment grew by 23.0% to $953 million in FY26 Q3, up from $775 million in FY25 Q3[30]. - The Neuroscience segment reported a revenue of $1,709 million in FY26 Q3, a slight increase of 1.2% from $1,689 million in FY25 Q3[30]. - Specialty Therapies segment revenue decreased by 4.0% to $402 million in FY26 Q3 compared to $419 million in FY25 Q3[30]. Expenses and Profitability - Gross margin for the three months ended January 23, 2026, was 63.8%, down from 66.5% in the prior year[42]. - Operating profit for the nine months ended January 23, 2026, was $4,594 million, representing a 1.7% increase from $4,519 million in the same period of 2025[49]. - Non-GAAP operating profit for the three months ended January 23, 2026, was $2,177 million, with an operating profit margin of 24.1%[42]. - Research and development expenses for the three months ended January 23, 2026, were $722 million, an increase from $675 million in the same period of 2025[39]. - The effective tax rate for the three months ended January 23, 2026, was 18.1%, compared to 15.4% in the prior year[42]. Cash Flow and Investments - For the nine months ended January 23, 2026, net cash provided by operating activities was $4,757 million, compared to $4,516 million for the same period in the previous year[62]. - Free cash flow for the nine months ended January 23, 2026, was $3,341 million, up from $3,116 million in the prior year[62]. - The company incurred $1,416 million in additions to property, plant, and equipment for the nine months ended January 23, 2026[66]. - The company reported a net cash used in investing activities of $2,017 million for the nine months ended January 23, 2026[66]. - The company’s total liabilities decreased by $1,072 million, resulting in cash and cash equivalents at the end of the period of $1,147 million[66]. - The company’s dividends to shareholders for the nine months ended January 23, 2026, were $2,731 million, compared to $2,692 million in the previous year[66]. Strategic Developments - Medtronic secured U.S. FDA clearance for the Hugo™ robotic-assisted surgery system and the Stealth AXiS™ Surgical System for spinal procedures[5]. - Medtronic executed two key M&A transactions in the quarter, acquiring CathWorks and Anteris, enhancing its market position[5][12]. - The company experienced a foreign exchange benefit of $242 million across its segments, positively impacting overall revenue[6]. - The company recognized $30 million of accelerated amortization on certain intangible assets within the Cardiovascular Portfolio[43]. - The company recognized $121 million of accelerated amortization on certain intangible assets within the Cardiovascular Portfolio[50]. - The company adjusted $656 million in revenue for the nine months ended January 23, 2026, including $512 million from favorable currency impacts[28]. - The total revenue adjustments for the three months ended January 23, 2026, amounted to $275 million, including $242 million from favorable currency impacts[28].