Financial Data and Key Metrics Changes - The company reported Q4 revenue of $8.9 billion, representing a 5.4% organic growth year-over-year, with adjusted EPS of $1.62, up 11% [46][50]. - For the full fiscal year 2025, revenue grew 5% organically, and EPS increased by 6% or 10% on a constant currency basis [50][56]. - The adjusted gross margin was 65.1%, down 70 basis points year-over-year, while the adjusted operating margin increased by 90 basis points to 27.8% [47][49]. Business Line Data and Key Metrics Changes - The cardiovascular portfolio grew 8%, with nearly 30% growth in cardiac ablation solutions [4][5]. - Neuromodulation and diabetes segments delivered double-digit growth, while cranial and spinal technologies saw high single-digit growth in the U.S. [5][24]. - The diabetes business grew 12%, marking the sixth consecutive quarter of double-digit growth [24][27]. Market Data and Key Metrics Changes - U.S. revenue growth was 5%, the strongest quarterly growth in 15 quarters, with Japan growing high single digits and Western Europe and emerging markets growing mid-single digits [46][47]. - The company noted strong growth in India, Southeast Asia, and Eastern Europe [47]. Company Strategy and Development Direction - The company announced plans to separate its diabetes business into a standalone public company, which is expected to enhance focus on high-margin growth markets [28][29]. - The strategy aims to increase investments in core businesses with higher margins, allowing for improved capital allocation and growth potential [30][41]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying fundamentals of the business, indicating that growth drivers are gaining momentum [58][60]. - The company expects to continue delivering mid-single-digit organic revenue growth and return to high single-digit EPS growth in fiscal year 2027 following the diabetes separation [56][59]. Other Important Information - The company plans to increase R&D investments for the first time in four years, aiming to grow R&D faster than revenue [52][54]. - The adjusted tax rate is expected to rise from 16.7% to about 18% due to changes in tax regulations [54][91]. Q&A Session Summary Question: Guidance philosophy with the new CFO - Management is optimistic about growth drivers, with markets growing 7% even without diabetes, and expects strong positions in key markets [86][87]. Question: Clarification on EPS growth expectations - EPS growth is expected to be high single digits in fiscal year 2027, even without the benefits from the diabetes separation, as growth drivers remain strong [98][99]. Question: Impact of tariffs and diabetes business on margins - The impact of tariffs is estimated to be between $200 million to $350 million, affecting gross margins, while the rollout of new diabetes products is expected to pressure margins initially [105][106].

Financial Data and Key Metrics Changes - The company reported Q3 revenue of $8.3 billion, representing a 4.1% organic growth year-over-year [31] - Adjusted EPS was $1.39, up 6.9%, exceeding consensus by three cents [31][32] - Adjusted gross margin improved to 66.6%, up 50 basis points year-over-year, while adjusted operating margin was 26.2%, up 100 basis points [32][33] Business Line Data and Key Metrics Changes - The cardiovascular portfolio grew mid single digits overall, with cardiac ablation solutions growing 22% [9][10] - Structural heart business grew high single digits, driven by the Evolut FX plus TAVR system [13] - Cardiac pacing therapies grew 9%, supported by the leadless pacemaker franchise [14] - The diabetes segment achieved 10% growth, marking the fifth consecutive quarter of double-digit growth [28] Market Data and Key Metrics Changes - International markets grew 5%, with high single-digit growth in Japan and emerging markets showing high teens growth in India [32] - The U.S. market saw a change in distributor buying patterns impacting surgical performance, but overall purchasing remained stable [23][24] Company Strategy and Development Direction - The company is focusing on innovation in key growth areas such as renal denervation and expanding its PFA portfolio [8][12] - There is a commitment to maintaining disciplined pricing and controlling SG&A growth to enhance margins while investing in growth drivers [66][68] - The company is actively evaluating tuck-in acquisitions to enhance growth and margin profiles [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, expecting revenue and EPS growth to accelerate in Q4 [9][35] - The company is optimistic about the impact of new technologies and market expansions, particularly in hypertension and diabetes [16][28] - Management acknowledged temporary distributor dynamics affecting surgical performance but expects resolution in the upcoming quarters [23][90] Other Important Information - The company is preparing for significant product launches and regulatory submissions, including for the HUGO robotic platform and renal denervation procedures [25][29] - Management highlighted the importance of maintaining a diversified portfolio to manage risks and drive earnings [39] Q&A Session Summary Question: Guidance for fiscal 2026 - Management reiterated guidance for FY 2025 organic revenue growth of 4.75% to 5% and high single-digit EPS growth in the back half of the year [46][47] Question: Drivers of AF Solutions growth - Management highlighted strong demand for PFA technology and improved supply capabilities, indicating confidence in reaching a $2 billion revenue target [54][55] Question: Balancing investment and margin expansion - Management emphasized the ability to invest in growth drivers while maintaining margin improvement through disciplined pricing and operational efficiencies [66][68] Question: Confidence in U.S. Surgical business recovery - Management noted that distributor inventory adjustments were temporary and expected to normalize, with confidence in returning to growth aligned with corporate averages [92][93] Question: Peripheral vascular business decline - Management attributed the decline to specific market dynamics in China and expressed confidence in overcoming these challenges [100] Question: International renal denervation opportunities - Management discussed the importance of country-specific reimbursement efforts and the potential for global market expansion following U.S. coverage developments [108][109]