Medtronic(MDT)2025-05-21 13:00Financial Data and Key Metrics Changes - The company reported Q4 revenue 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 350 million, affecting gross margins, while the rollout of new diabetes products is expected to pressure margins initially [105][106].