Medtronic PLC (MDT)

“Look, we're excited about the quarter, and we think Q4 is going to be another robust quarter and that we will sustain our growth at a high level and into the next year.”

“As we expect CRM and ACM to normalize and the tax pressure to carry into Q4, we are maintaining our fiscal '26 EPS guidance in the range of $5.62 to $5.66.”

“On the top line, we're reiterating fiscal '26 organic revenue growth guidance of approximately 5.5%.”

“And then Neurovascular is going to kick up as well.”

“We also have line of sight to a higher level of growth from the contribution of Onex's expanded indication.”

“And so look, we expect a step up in Q4.”

“In terms of our business growth, we do see it sustaining here in Q4, and we haven't provided guidance beyond that.”

“And then we -- our other big growth drivers, particularly Simplicity for hypertension and Altaviva for overactive bladder, we see them beginning to kick in here even in Q4.”

“In totality, we expect these results to deliver gross margin and operating margin leverage ex tariffs in the second half of the fiscal year '26 as we stated last quarter.”

“Our fiscal 2016 operating margin is expected to be roughly flat, excluding tariffs, and down about 50 basis points, including the tariff impact.”

“We expect fiscal '26 adjusted operating profit to grow approximately 5% or 7% excluding tariffs.”

“Including tariffs, we expect fiscal 2016 gross margin decrease of roughly 30 basis points.”

“We anticipate a tariff impact to COGS of approximately $185 million, including $75 million in the fourth quarter.”

“Moving down the P&L, we expect our fiscal '26 gross margin to increase slightly ex tariffs.”

“In the fourth quarter, we expect revenue growth similar to Q3, so around 6% off a stronger Q4 '25 comp.”

“With FDA clearance achieved, we expect to see Stealth AXiS contribute Neurosurgery and CST overall as soon as the fourth quarter.”

“Importantly, we expect that pipeline to begin impacting growth in the fourth quarter.”

“So I think we feel good about the growth continuing here out not just in Q4, but into FY '27.”

“All told, we are committed to our guidance, and we maintain our expectation for high single-digit EPS growth in fiscal year '27.”

“The NeuroGuard carotid stent launch will also contribute as it's being commercialized by both our Neurovascular and Peripheral Vascular businesses.”

“This is an area where we expect improved performance in the coming quarters given the series of new product developments.”

“It'll start to -- the numbers will be more meaningful in FY '27 for us, the actual revenue, the lagging indicators. And again, it will be -- it's very profitable right out of the gate for us.”

“And look, year-over-year, CAS is going to drive gross margin improvement as early as '27.”

“That being said, I think you'll start to see an inflection in the second half of next year.”

“Look, first, it's a little bit less than 2 points of full growth. And again, we'll give you the specific calculations as we close the year, but the way to think of it is that there's going to be growth acceleration, excluding the extra week, right? So it should be upside.”

“Look, first, it's a little bit less than 2 points of full growth.”

“And we've also embedded in the guidance $0.04 to $0.05 of dilution coming from M&A activity.”

“But between the moment we do the IPO and the moment we do the split, you should expect some dilution to the tune of $0.01 to $0.02 per month.”

“And then the Diabetes deal, we fully expect the deal to be accretive.”

“We'll have a little bit of help from the fact that there's 53 weeks in fiscal year '27 as opposed to 52 usually.”

“Well, thanks, Travis, for the question. I'll give it a start and then hand it over to Thierry. I mean, look, on the top line, obviously, as you mentioned, we had a really strong quarter with CAS. We still -- we think that growth is going to continue and become a larger part of the company, obviously.”

“We're making progress on margin expansion, and the negative mix effect from CAS and Diabetes are going to get better.”

“We continue to expect the separation to be complete by the end of calendar year '26.”

“Finally, our MiniMed Fit patch pump remains on track, and we intend to submit it to the U.S. FDA by this fall.”

“First, with our Transradial Catheter, which is on track to launch in the second half of fiscal year '27”

“And just for, you know, clarity, PFA will continue to go off the 71%. It'll accelerate into Q3 and beyond.”

“You know, on the supply that, you know, we are that that's not holding us back. So, supply is in a good spot.”

“Remain on track to submit Flex, our next-generation durable pump, to the U.S. FDA.”

“In TAVR, a little bit of a deceleration in Q3, but then it'll pop back up in Q4.”

“For the second half, we've got, you know, about 90% of that $185 million of tariffs that's gonna show up.”

“So for the rest of the year, it's still gonna be, pretty significant headwind as CAS and diabetes continue to accelerate.”

“On simplicity, I'd say we're gonna see it start to, you know, tick up in the back half of the year. And then ramp, you know, in the quarters following that.”

“However, we do expect Q4 margins to increase year over year and show strong sequential improvement.”

“We're expecting margins to be down a couple of 100 basis points in Q3 as the quarter includes half the annual impact of tariffs.”

“We're flowing through the remainder of the Q2 beat and increasing our fiscal 2026 EPS guidance to a new range of $5.62 to $5.66 versus the prior range of $5.60 to $5.66.”

“Our fiscal 2026 operating margin is expected to be roughly flat ex tariffs and down about 50 basis points including the tariffs impact.”

“Taking all of this together, we expect fiscal 2026 adjusted operating profit to grow approximately 5% or 7% excluding tariffs.”

“But will still deliver SG&A leverage on the full year by rigorously managing our G&A line.”

“We'll continue to fund R&D to grow greater than sales with SG&A in light of the outsized demand and building momentum for our enterprise growth drivers, we're capitalizing on every opportunity to accelerate our top line by strategically increasing sales and marketing investment in key programs.”

“We anticipate a tariff impact to COGS of approximately $185 million, including $90 to $95 million in the third quarter.”

“Moving down the P&L, we expect our fiscal 2026 gross margin to be slightly up ex tariffs, with pricing, FX, and COGS efficiency programs more than offsetting the negative impacts of business mix, primarily from cardiac ablation and diabetes.”

“Based on recent rates, we now see an FX tailwind to fiscal 2026 revenue, of $625 to $725 million, including a $150 to $200 million tailwind in the third quarter.”

“The third quarter, we're also expecting approximately 5.5% growth and Q4 will be even stronger.”

“As a result, now expect fiscal 2026 revenue growth of approximately 5.5%. A 50 basis point increase from the prior guidance.”

“We expect the demands our new sensors to accelerate our U.S. growth in the back half of the fiscal year.”

“As that ramp continues, we plan to roll it out more broadly to U.S. consumers later this fiscal year.”

“In the back half of this fiscal year, we expect the FDA to approve Hugo with a urology indication and will start our entrance in The U.S.”

“We expect a slight rebound in Surgical in the back half.”

“In Pelvic Health, we expect growth to accelerate on the Arteviva launch that Geoff outlined.”

“In neurovascular, growth will improve as we anniversary the vast majority of China VBP in January, also expect an increasing growth contribution from the NeuroGard carotid stent launch, which is being sold by both our peripheral vascular and neurovascular businesses.”

“In peripheral vascular, we grew low single digits, and we expect growth to improve as we continue to launch the NeuroGard IEP carotid stent and begin the launch of our Liberant mechanical thrombectomy system.”

“Now we have not incorporated much Simplicity revenue into our back half guidance. But we are sprinting after this opportunity. We have supply. We've ramped up physician training and market development activities. With many hospitals initiating simplicity programs across the country. And now we're increasing our consumer awareness programs. And as a result, we expect our revenue to pick up in the back half of the fiscal year and ramp over the next few quarters and meaningfully contribute to Medtronic for years to come.”

“So we're in the early, we're still in the early parts of this rollout. And we expect revenue acceleration to continue with an even higher CAS growth in Q3.”

“We're positioning ourselves for even greater acceleration in revenue growth in the back half of the year and beyond.”

“We reiterate the incremental $1 billion coming shortly probably in the beginning of in the '27. Fiscal year '27 for us.”

“This is gonna make that business, that pelvic health business, a growth driver for the company. That's what I'll say about that. It's gonna meaningfully improve the growth rate of that business.”

“Look, we're confident that with the growth with what we're doing from our gross margin performance in a sustainable fashion and COGS and pricing, and the leverage on the overhead, we'll have a leveraged P&L on the operating profit line in 2027.”

“Well, look. Let me start by saying, yes. I would be disappointed if we're at year five, wherever you said at $400 million. We think it would go faster than that.”

“And we're measuring that speed of adoption in quarters, not years.”

“We are committed to growing above our WAMGR while also raising the WAMGR of the company over time.”

“We remain on track to double the revenue of this business soon, adding an incremental $1 billion off the $1 billion FY '25 base.”

“And, Rob, you have read some of your stuff in the past that you don't think there's much to do for us on SG&A. There but there's more.”

“There's still, you know, room to go on SG&A as well.”

“Then we'll have a carryover of tariffs going into '27. And we expect foreign exchange, which is the last item there, to be a slight tailwind going into '27.”

“And in the second half of, of twenty-seven, diabetes will be deconsolidated, and then on the CAS side, we'll start seeing the shift between the capital equipment and the catheters, which will make that an accretive business as opposed to being dilutive.”

“Looking ahead to next year, we continue to expect high single-digit EPS growth in fiscal year 2027 driven by accelerating revenue growth, a lesser impact of business mix from cats and diabetes on the gross margin line, and leverage on SG&A while we continue to drive higher investments in R&Ds and sales and marketing.”

“Over time, we expect both of these to improve as we scale our Cast business and separate the diabetes business.”

“We continue to expect the separation to be complete by the end of calendar year '26.”

“And with FIT, our AID patch system, we intend to submit to the U.S. FDA by the fall of next year.”

“And over time, we expect growth to continue to improve as we enter new markets with Hugo.”

“And so really, it's a matter of timing and why I'm actually extremely confident that we'll see growth acceleration in the second half.”

“And we're also going to have an absolute value, significant sequential growth between the first quarter and the second quarter.”

“As a result of the strength of our product pipeline, we're confident that not only will our revenue growth inflect in the near term, but we'll also achieve higher earnings growth over time.”

“We remain confident in our ability to accelerate growth as we move through fiscal '26.”

“So we said 3 months ago, we thought we'd complete the separation within 18 months. It's 3 months later, now it feels like 15 months.”

“Digital ecosystem, which grew significantly last year, both in LAP and robotics, including in competitive systems and is poised to more than double again this year.”

“And then in parallel to that, the Abbot-based sensor, Instinct, we expect to launch in the coming months, so not too far behind Simplera.”

“To give you a sense of how we're ramping up production, we're going to be producing double what we made in Q1 and in the second half double what we're making in the first half.”

“FX is now a flat to 1% benefit to fiscal '26 EPS.”

“Given our Q1 results, we're raising our underlying fiscal 2026 EPS growth expectation, which excludes the impact of tariffs to 4.5% versus the prior 4%.”

“Accordingly, there's no change in our expectation for fiscal 2026 operating profit to grow materially faster than revenue.”

“As a result, tariffs are now expected to be approximately $185 million for fiscal 2026.”

“In Q2, FX is currently $50 million to $100 million tailwind based on the recent rates.”

“As Geoff covered earlier, we're expecting revenue growth to accelerate in the back half of the fiscal year.”

“On the top line, we continue to expect fiscal year 2026 organic revenue growth of approximately 5%.”

“We intend to submit our next-generation durable pump, the MiniMed Flex, to the U.S. FDA by the end of the fiscal year.”

“We continue to expect our Surgical growth to improve over time, starting in the back half of the fiscal year as we begin to expand the launch of Hugo.”

“CMS now expects to finalize the NCD on or before October 8, and we expect procedures to ramp following that.”

“We expect all of this to drive continued strength in our TAVR franchise in the quarters ahead.”

“We're expecting to start the pivotal trial for Sphere-360 this calendar year.”

“We expect to continue to win share in this $11 billion space that is now growing over 25%.”

“And when you combine these improved sensors with our MiniMed 780G and its exclusive meal detection technology, we expect to see a positive inflection in our installed base and revenue growth.”

“And in Diabetes, we expect performance to accelerate as we launch 2 new sensors, Simplera Sync this fall and the Abbott-based sensor, which we're calling Instinct in the coming months.”

“Now in Surgical, we have the U.S. launch for Hugo in the back half of the fiscal year, which we expect to be accretive to growth.”

“In Neurovascular, we expect growth to accelerate each quarter as we go through the remainder of the fiscal year and as we lap China VBP and product recall comps.”

“First, we expect our Pelvic Health business to be a key driver for this segment in fiscal '26 and beyond.”

“We're expecting the final national coverage from CMS on or before October 8, and we expect the U.S. launch of our Symplicity procedure for hypertension to ramp after that.”

“In Q2, we expect our CAS business to grow even faster than the nearly 50% growth we posted this past quarter.”

“I think getting it in fiscal '26 -- and it's off -- just to be clear, it's another $1 billion on top of our FY '25 base, right? So that's what we're anchored on. Sticking to that. I said near term. So near term, it could be for FY '26. I think it will go into FY '27, but it won't be far.”

“When I said that, we're sticking to that. Nothing's changed.”

“Over time, we expect both of these to improve as we scale our CAS business and separate the Diabetes business.”

“Upon separation, we continue to expect approximately 50 basis points of gross margin improvement and 100 basis points of operating margin improvement.”

“Our preferred path continues to be a 2 step, IPO and split, which we expect to have fully completed within 15 months from now.”

“It will also allow Medtronic to grow revenue and earnings faster without Diabetes than we do with it today.”

“We continue to expect the separation to be immediately EPS accretive even with conservative valuations and this portfolio move will be a value-creating separation for Medtronic shareholders.”

“And we continue to have near-term line of sight to adding an incremental $1 billion in revenue off of our fiscal '25 base.”

“As I mentioned last quarter, we're expecting high single-digit EPS growth in fiscal year '27, driven by accelerating revenue growth, improved business mix from CAS and Diabetes as well as the other financial benefit of the Diabetes separation.”

“We see growth from our big three portfolios to be mid-single and then some.”

“And as for Hugo, procedures and utilization are growing, and the cadence of key milestones is accelerating.”

“Now, taken all together, we'll be in a great position to continue delivering mid-single-digit or higher organic revenue growth as well as accelerating our earnings leverage.”

“The business reached $1 billion in revenue in FY '25, and we have near-term line of sight to doubling that as we continue to enter new accounts globally with Affera and with PulseSelect.”

“Yes, so first of all, on CAS, cryo will become less and less part of the mix, but I think that rate of decline will slow and then that will really aid in the growth of that business going forward.”

“So, thanks for the question. So, first of all, thanks for acknowledging the op profit growth. We did, like I said, 8% in Q4 and the guidance for next year is 7%. And if you take out the diabetes, that's -- that would go 8%.”

“we're ready to launch soon after we receive clearance on that.”

“we expect to ramp our volume at least five times what we did last year.”

“What we're seeing in Q4 and what we'll see for a part of '26 is really two things that are offsetting each other. We do have a negative impact coming from mix, and that's about 80 basis points.”

“And then the pressure on diabetes, I think it's primarily driven by the rollout of Simplera... to the tune of about 60 basis points at the GM level, which will translate into the earnings. And again, that will get better as the manufacturing ramps up.”

“So, our tax rate should go from about 16.7% this year to about 18% next year.”

“our R&D spend should be increasing around $200 million next year, which is about 7% versus the 5% growth rate.”

“So we've got a construction that has operating profit that's growing around 7%.”

“and we'll start to have more of a meaningful impact on med-surg next year.”

“and Ardian will start ramping through '26.”

“From a quarterly breakout, we would expect minimal impact in Q1 as I mentioned earlier, and then approximately 10% in the second quarter, and approximately 30% and 60% in Q3 and Q4, respectively.”

“Below the op profit line, we are expecting increases in both interest and tax expense, which combined results in a 300 basis point impact on EPS growth.”

“The net of this will be an operating profit line that grows materially faster than revenue.”

“On the flip side, we do expect to drive significant leverage with G&A expenses.”

“For the first time in four years, we are planning to grow R&D faster than revenue.”

“In fiscal year ’26, we will significantly increase investment in our growth drivers to maximize future growth.”

“We will also accelerate our COGS efficiency programs to significantly outpace inflation.”

“Like we saw in the fourth quarter, we expect continued mix headwinds within gross margin from CAS and Diabetes, with an increasing impact from Diabetes as we are early in the manufacturing ramp of the Simplera sensor.”

“We expect organic revenue growth of approximately 5% in fiscal year ’26, including 4.5% to 5% growth in Q1.”

“We don’t expect any change to our dividend policy.”

“And looking ahead, we expect to submit for our 8-Series next-generation pump, the MiniMed Flex by the end of the fiscal year.”

“Now, we expect our Surgical growth to improve over time as we expand and launch our Hugo soft tissue robotic platform.”

“And combined with the investments we're prioritizing to even further enhance the AiBLE ecosystem, we expect our strength in CST to continue.”

“So we expect Simplicity revenue to meaningfully ramp when it's covered.”

“So, we're comfortable we could still achieve the mid-single-digit growth even after the diabetes separation.”

“Look, as Geoff mentioned, the growth is not a one-off thing in '25 or in Q4 '25. It's going to carry into '26. And some of the new products that are carrying this are going to carry us well into '27.”

“And as Thierry pointed out, we’ll be back to high single-digit EPS growth in ’27.”

“we believe and the economists that we're talking to, which is quite a many is that FX is going to be a tailwind for us for the next couple of years.”

“FX, we're assuming that it's flat.”

“Now, back to '27. As I said, we're looking at a growth rate that should continue to be positive with all the momentum that Geoff mentioned.”

“So this will be immediately accretive to our EPS and help strengthen the construction to get back to high single-digit growth into '27.”

“We'll continue to drive the cost-out initiatives, as I mentioned earlier, FX should start turning into a small headwind towards the end of '26 and into 27.”

“As we look beyond next year to fiscal year ’27, we expect to return to high single-digit EPS growth upon the Diabetes separation, driven by several factors, including strong revenue growth, and further underpinned by FX tailwind at recent rates, and the margin and share retirement benefits of the separation.”

“Given the share retirement, this separation is expected to be immediately accretive to Medtronic EPS upon completion.”

“So, upon full separation, we’re expecting our adjusted gross and operating margins to improve by approximately 50 and 100 basis points, respectively.”

“We’re targeting completion of the entire separation within 18 months, and taking this preferred path should result in a tax-free impact to Medtronic shareholders for US federal income tax purposes.”

“So, I'd say it's more near-term. The next couple of -- maybe, I don't know if it will exactly happen in the fiscal year, but we're in that ballpark and really excited about it.”

“So you have all that in this base business that we don't see changing going forward, that mid-single-digit growth that we've seen over the last 10 quarters.”

“We take all of these things together and you can see that it comes together and really drives the progress and optimism that we see as we're preparing to enter the U.S. market in FY ‘26.”

“I will say our second-half gross margins will be up, both on a constant currency and an AFX basis.”

“We are aggressively expanding both capacity within the factory and within the field.”

“And as we look into the future, you know, we think that this we're still committed to that to that LRP that you outlined.”

“We're reiterating our full-year revenue and EPS guidance today and both our revenue and EPS growth will accelerate in the fourth quarter.”

“Hugo will be a growth driver for our surgical business and fiscal ‘26 and a meaningful growth driver for Medtronic in the mid-term.”

“In the U.S., we are on track to submit for FDA approval for Hugo with urology indications by the end of next month.”

“And upon coverage, this will be an immediate growth driver and will become a significant source of growth for the company.”

“And then as you enter into Q, you know, FY ‘26, you pick up the Ardian piece as well and CAS keeps going.”

“And now you add the contributions from CAS and RTN on top of that, that you, you know, you'll accelerate in Q4.”

“And then the guidance that we've given, you know, implies both the top and bottom line acceleration in Q4, even though we still have this distributor issue in Q4.”

“That's their own goals. And but as they get down to very specific inventory levels, that's when and then they'll be getting back to that normal trajectory. And like I said, that will happen as we enter Q1.”

“However, we do expect these dynamics to resolve as we enter Q1, when these distributors reach their target inventory levels.”

“So, you know, as Gary pointed out in the commentary, we reiterated our guidance for this fiscal year of 47.5% to 5% organic revenue growth and high-single-digit realized EPS growth in the back half of the year.”

“And at the same time, our earnings power is now kicking in with high-single-digit EPS growth this quarter and next.”

“In Q4, we expect our restored earnings power and strong operating margin expansion to continue, resulting in high-single-digit adjusted EPS growth in the back half of our fiscal year, consistent to the commitment that we have been sharing all year.”

“Based on recent rates, our EPS guide factors in a five-point impact from foreign currency, and we will have a significantly smaller impact than that in fiscal ‘26.”

“On the bottom line, we continue to expect fiscal ‘25 non-GAAP diluted EPS in the range of $5.44 to $5.50 and are comfortable with current full-year street consensus.”

“Based on recent rates, FX would have an impact to fiscal ‘25 in the range of $275 million to $325 million, including $125 million to $175 million in the fourth quarter.”

“For Q4, given the strong trajectory of our growth drivers and expected acceleration in the cardiovascular portfolio, we're comfortable with current street organic revenue growth consensus and expect to deliver our 10th quarter in a row of mid-single-digit revenue growth.”

“On the top line, we continue to expect FY ‘25 organic revenue growth to be in the range of 4.75 to 5%.”

“We expect to file this with the FDA here in the first-half of the calendar year.”

“This quarter we experienced a change in U.S. distributor buying patterns, which had a couple of hundred basis point impact on our surgical performance. We expect this to resolve as we start fiscal ‘26.”

“We expect this launch to drive continued, above-market growth for our brain mod business in the quarters ahead.”

“And as these dynamics continue to play out and we continue to expand our innovation lead, we expect our CST business to deliver sustained above market growth.”

“For Q4, we expect CAS to accelerate its growth rate and deliver another strong double-digit growth quarter.”

“And as we look ahead to our fiscal fourth quarter, we expect our revenue and EPS growth to accelerate as we build on momentum in important growth markets and continue to drive earnings leverage.”

“And tibial is another one that I think we're one of the only ones talking about it and for overactive bladder. This is -- we think this will double the size of that business over the next couple of years once we launch it.”

“That gives us the confidence in the strong double-digit growth in Q3.”

“On the bottom-line, we're raising our fiscal '25 non-GAAP diluted EPS guidance to a new range of $5.44 to $5.50, an increase from the prior range of $542 to $5.50.”

“And we translated that 5% organic top line growth into 8% EPS growth on a constant currency basis and we remain on track to deliver high single-digit EPS growth on a reported basis in the back half of the fiscal year.”

“we'll be pursuing that technology into other world markets, including Japan within the year.”

“Tax is up a little bit. We're navigating Pillar 2. But all-in-all, EPS up $0.01 at the midpoint, and we're pleased we've taken our guidance up today.”

“On Type 2, we finished enrollment. We expect to submit to FDA with expanded indication in the first half of next calendar year.”

“So we now have -- we expect PulseSelect to continue to ramp.”

“for 2025, we're expecting gross margins to be flat on a constant currency with foreign exchange driving about 0.5 point of headwind.”

“You mentioned the foreign exchange. That will be a five-point headwind in line with what we've talked about before.”

“Gross margins will be up sequentially in both Q3 and Q4, and that will deliver our guidance.”

“Full year, we expect operating margins to be 25.7%, up year-over-year by 10 basis points.”

“We continue to expect to report high single-digit adjusted EPS growth in the back half of our fiscal year in line with our long-term commitment to deliver durable mid-single-digit organic revenue growth with EPS leverage.”

“The fiscal year 2025 guidance range continues to include an unfavorable 5% impact from foreign currency including an unfavorable 1% impact in Q3.”

“We also continue to expect our full year operating margins to expand as we balance driving efficiencies with investing behind our product launches and in our long-term pipeline.”

“Moving down the P&L, we expect our third and fourth quarter gross margins to improve sequentially as currency becomes much less of an impact.”

“Overall, we continue to expect Surgical to return to more normalized growth starting next quarter as these comparisons ease.”

“We expect CST to continue to deliver sustained above-market growth with AiBLE and its differentiated best-in-class solutions, attracting not only spine surgeons around the world, but also the best sales reps and distributors who continue to leave the competition to join our winning team.”

“With this combination of FX+, low-risk data and now SMART data, we expect to continue to grow at or above market in the quarters ahead.”

“And within this year, we'll also obtain approvals in other geographies, which will keep the momentum going.”

“And we expect to do this while maintaining the same revenue per patient and being neutral to diabetes gross margin.”

“But we do expect to realize the benefits in future years where FX will show up for us this year, will be a little bit different.”

“And we expect to see that happen pretty soon.”

“And of course, the data momentum that we have, the low-risk data versus surgery. I think that's been very compelling, and we're going to read out 5-year on that data in the coming year here as well.”

“As we think about the leverage first half, second half, the underlying leverage we are driving is pretty similar on a constant currency basis with high single digit every quarter.”

“Diabetes should continue to have growth well above the company average.”

“And as I look at our pipeline, I expect this momentum to continue, as we invest heavily in future growth opportunities like hypertension and surgical robotics.”

“We expect our EPS growth to accelerate in the back half as the impact from currency lessons, exiting the year with high single-digit growth.”

“The fiscal year '25 guidance range continues to include an unfavorable 5% impact from foreign currency, including an 8% impact in Q2.”

“And based on recent rates, currency becomes much less of an impact to our margins and bottom-line after the second quarter.”

“Moving down the P&L, we continue to expect our operating margins to expand this year, as we drive efficiencies while also investing behind our product launches and in our long-term pipeline.”

“With this combination of FX plus, our superior four-year low-risk data and SMART data, we expect to continue to grow at or above the market in the quarters ahead.”

“As we launch and scale Sphere-9 and our fair mapping system, we expect our cash growth will accelerate even further over time, as we reach and then exceed market growth in this large and fast growing $9 billion cardiac ablation space.”

“We expect Sphere-9 will allow us to capture more revenue per procedure, as it will take the place of other competitors mapping and RF catheters.”

“As a result, we expect PulseSelect to meaningfully accelerate our overall CAS growth rate through this fiscal year, including a strong acceleration in Q2.”

“We expect their contribution to our overall growth to increase in the coming quarters, as we continue to launch new technology.”

“And we're tracking to delivering high single-digit EPS growth on a reported basis as we exit the fiscal year.”

“So yes, I think that we've got the opportunity to grow faster than the market within this fiscal year, depending on the launch timing.”

“But we are not banking on CRM growing 8% every quarter.”

“We see that as durable for several, several quarters here.”

“We think we've laid this out the right way and got the programs lined up against it and have been working on it for some time. And we'll see those benefits accrue over the next couple of years.”

“And to our shareholders, we remain committed to returning a minimum of 50% of our free cash flow.”

“So we anticipate that what we're seeing in the OUS markets will also happen in the US.”

“We're also changing guidelines in Europe. We expect that to happen late this summer, which will help with adoption there.”

“We expect the contribution to begin this year, as Geoff said, at the outset, paying down timing.”

“Yes. I would just say on VBP, that can affect the quarter at an OU level, but we don't necessarily expect it to affect total Medtronic.”

“But we see in any given quarter, mid-single to high-single to double.”

“And on tax, we expect tax to be a bit of a headwind given global tax reform... we expect it to be about one point higher than we had this past fiscal year.”

“So beyond FY'25 we're focused on maintaining this mid-single-digit revenue growth and continuing to drive leverage down the P&L to deliver that high-single-digit EPS growth.”

“And as our currency headwinds abate, we've said we expect high-single-digit actual or reported EPS in the back half of the year.”

“Importantly, at current rates, the impact from currency lessens through the year, so we expect to be ending the year with high-single-digit EPS growth on a reported basis, in line with our longer-term objective.”

“This includes an unfavorable 5% impact from foreign currency for the full year, with an unfavorable 6% impact in the first quarter, based on recent rates.”

“Down the P&L, we expect expansion in our operating margin as we drive efficiencies in our overhead spend.”

“By segment, we'd expect our three portfolios to be roughly aligned with the corporate average and Diabetes to grow above the corporate average.”

“Our product launches will be ramping through the year, so we expect revenue growth to accelerate through the quarters as well.”

“Looking ahead to fiscal '25, we expect to continue to drive a year-over-year increase in both free cash flow and our conversion rate.”

“We've also been working very closely with both CMS and private payers in the United States, and expect to make significant progress on coverage and payment here in fiscal '25.”

“You've seen us execute a steady drumbeat of submissions, product approvals and expanded indications, and this is a cadence we expect to continue.”

“So when you consider our four-year low-risk data, our SMART data and our new FX+ valve, we expect this combination to drive our TAVR growth at or above the market, especially as the FX+ launch ramps in our second fiscal quarter.”

“And over time, we expect our CAS business will reach market growth and then win share.”

“Given all these advantages will now be carried in the bags of our very large SCS salesforce, we expect Pain Stim to grow above market in the coming quarters.”

“Now as more implanters complete their training, we expect EV-ICD sales to ramp and become a significant driver of CRM growth, taking share from the competitor's S-ICD system.”

“Yeah, thanks, Geoff. And Matt the trajectory is obviously going to be upward for both the EV-ICD as well as the CAS business in total.”

“The other you asked about is cost goods sold productivity, and the answer, the short answer to your question is, yes, we do think it's sustainable, we've got lots of opportunity here.”

“So, I think we're going to see a return to growth and into next year we really feel the full force of those launches.”

“And regarding the portfolio management decisions we announced today, while the Street's FY'25 numbers didn't yet reflect the potential separation, with today's decision we're able to increase investment in innovation-driven growth without near-term earnings dilution or an ongoing impact to cash-flow, all with a focus on optimizing long-term shareholder value.”

“We expect our advantages will not only displace the competitor's device, we will expand the population far beyond the existing segment and be a strong growth driver for CRM.”

“So that's the cadence that you should expect. And as Geoff mentioned in his opening comments, we have next-generation products that we discussed at ADA last year that we continue to make progress on and aggressively moving to get next-generation tethered pumps and patch pumps out to the market.”

“So as I said I think it's the same story for both of those technologies, where you push growth now but into next year will the full impact of these innovations.”

“On hypertension, this one we believe will start to show some profits here.”

“So the pricing has increased, I'd say, for the company overall, 200 basis points or so relative to the past, and I think we're going to keep pushing for even more.”

“And that's what we expect to continue into FY'25, you know, we've been working through our planning process, and we expect to wrap that up in advance of our Q4 earnings call.”

“Down the P&L inflation, currency and tax are currently headwinds to earnings growth. And we expect to continue to increase our investments in R&D.”

“You've seen us deliver durable revenue growth for several quarters, and we expect that to continue.”

“And regarding currency based on recent rates, we're seeing an unfavorable impact of 7% on full year EPS, including an unfavorable 5% impact in the fourth quarter.”

“On the bottom line with the beat in the third quarter, we're raising our full year EPS guidance by $0.04 at the midpoint to a new range of $5.19 to $5.21.”

“Regarding currency based on recent rates, we would see a full-year revenue impact in the range of an unfavorable $15 million to a favorable $35 million, including an unfavorable impact of $70 million to $120 million in the fourth quarter.”

“For the fourth quarter, we're expecting organic revenue growth to be in the range of 4% to 4.5%.”

“In the US, we grew 2%, we have several new product approvals that are at the earliest stages of their launches and expect those launches to positively impact our US growth over the next couple of quarters and beyond.”

“In the US our EXPAND URO pivotal trial continues to enrol and we expect to have first enrollment in our hernia trial very soon.”

“We expect our growth profile to improve over time. First, moving towards market growth and then winning share as we bring our rich pipeline of innovation to patients you need this technology.”

“We expect to see the results at a medical meeting in the first half of this calendar year.”

“We do expect to improve from here as we roll-out the recently approved next-generation Nitron CryoConsole and PulseSelect, the only PFA catheter FDA-approved for both paroxysmal and persistent AF.”

“And as the intensive insulin management space moves to using smart dosing through either AID or Smart MDI, we expect an acceleration in the growth contribution from our diabetes business.”

“Our established market leader and synergistic businesses grew mid-single-digits, while our highest growth businesses posted high-single-digit growth and we expect their contribution to our overall growth to further accelerate in the quarters ahead.”

“So it's much less of a drag, and we hope to, in the next couple of quarters, the medium-term, this to generate not just revenue, but income, it's a highly profitable product line for us with high gross margins and it will be a positive to our overall mix.”

“Global tax reform is likely to be a headwind, but as always, we're focused on driving offsets, where we can.”

“Now we still believe this impact will be temporary as more patients become eligible for surgery, and as patients seek a more permanent treatment to weightloss.”

“When we look at the first few weeks of this quarter and how that's been trending, it's been trending well. We're tracking to the expectations that we set in our guidance at this stage.”

“And so we're confident in this growth acceleration, and we're confident that, that's going to continue beyond the back half of next year.”

“Based on the changes we've made, including our operating model, incentives, and capital allocation, we've positioned the company to deliver sustainable mid-single-digit growth on the top line.”

“And we look ahead to the back half of our fiscal year, those launches, combined with several recent regulatory approvals, give us confidence in our ability to continue delivering dependable growth.”

“As you know, the ramp is going to be highly gated by reimbursement, and we've been working that in parallel with the regulatory approval all along.”

“And then and on the bariatric piece, that as we mentioned, it's a small part of our revenue, low-single-digits, and the rate of decline has stabilized there, and I think we see that, that coming back here in the coming year even.”

“You're seeing in our results that many of the challenges that have held back our growth have largely been mitigated, whether that's diabetes, China, or the issues in our supply chain. And we've established a track record of delivering durable mid-single-digit revenue growth, which we expect to continue in the back half of the fiscal year.”

“For these reasons, we believe the current headwinds on U.S. bariatric procedures will stabilize over the next several quarters and return to growth by calendar year 2025.”

“For the third quarter, we expect EPS of $1.25 to $1.27 and on foreign currency, based on recent rates, we're seeing an unfavorable impact of 6% on full-year EPS, including an unfavorable 5% impact in the third quarter.”

“While we expect FX and tax to be a few pennies more unfavorable in the second-half, we are pleased with the momentum we have demonstrated and our pipeline from here.”

“In diabetes, we're projecting the U.S. to return to growth in the second-half of the year on the continued adoption of 780G and the associated CGM and consumable sales.”

“On a comp-adjusted basis, our third quarter guidance represents acceleration from the second quarter, and we expect this trend to continue into the fourth quarter, as we're ramping a number of recent product launches in the back half of the year.”

“We've been driving this turnaround, and as we look ahead, we expect diabetes to drive even more meaningful growth for us.”

“So as we look ahead, we expect the combination of this data, coupled with the global rollout of Evolut FX to drive our TAVR growth above market.”

“And in the U.S., the FDA is reviewing our PulseSelect submission, and we expect to be one of the first companies with a PFA catheter in the U.S. market.”

“That being said, we've done a lot of work, and outside of the near-term temporary impact on bariatric surgery market we don't see these drugs impacting our growth outlook, even in the long-term.”

“We do expect growth in our Type II business going forward, but Type II pump penetration rates are so low that even using aggressive GLP-1 modeling assumptions, we don't see any meaningful change in our diabetes growth outlook through 2030.”

“Now, over the coming years, we expect this business to be a very meaningful growth driver for Medtronic.”

“But we do believe that this pricing muscle that we've built is going to be lasting.”

“Let's say, an approval in the second half of fiscal year '24 is certainly in order with that kind of timing.”

“Overall, we're seeing that the growth here in Hugo is contributing to the growth we've seen now in the Surgical business across the last couple of quarters, and it will become a more and more important part of our business as we move forward.”

“We also have some timing on FX. It was a little bit better than we expected down the P&L in the first quarter, and we expect to give some of that back as we look at the currency impact going forward.”

“At this point -- when we gave our guidance back in May, we said we expected it to be around 65.25%. And at this point, we're expecting it to be about 65.50%.”

“That will all help gross margin. And as you get down the P&L, we're really focused on getting leverage from SG&A and excited about stabilizing and then improving the margins over time.”

“we expect that we would close out the EOFlow acquisition at the end of at the end of this calendar year.”

“And over time, we're focused on stabilizing and improving our margins.”

“and some of the FX improvement that we saw this quarter, we expect to -- FX to impact us a little bit more in the back half of the year.”

“Clearly, we're focused on driving margin expansion and ultimately on the gross margin getting back to pre-COVID levels over time.”

“And as we -- as we get out of FY '24, again, we expect a tick up in this growth.”

“As we kind of lap this -- these last couple of VBP areas in FY '24, we expect this revenue to get back to historical high single-digit, low double-digit growth for us.”

“And as we noted in our 10-K, we now expect to complete the separation in the first half of next fiscal year, if not sooner, as we've been evaluating different types of transactions to maximize shareholder value.”

“And with our pipeline, we have several important growth catalysts that we expect to come to market over the coming quarters.”

“We're making progress in countering the impacts that inflation and currency are having on our margins. And we expect this to lead to stabilization and then improvement over time.”

“The guidance range continues to include an unfavorable 6% impact from foreign currency based on recent rates.”

“And we do expect some of the delayed impact from the provincial VBPs that benefited us in the first quarter to come later in the year.”

“As we have said before, we expect inflation and currency pressures this fiscal year.”

“While the impact of currency is fluid, based on recent rates, foreign currency would have a neutral impact on full year revenue, including a favorable impact of $85 million to $135 million in the second quarter.”

“We filed for approval with US FDA and expect to be one of the first companies with a PFA catheter in the US market.”

“And we expect them to become a larger part of our revenue mix and be large contributors to our durable growth in the future.”

“We're preparing to launch the Aurora EV-ICD later this year.”

“And Anthony, on your question on the annual guidance and anything of note on 780G, we expect diabetes to return to good growth in this fiscal year.”

“We exited the quarter really strong, we track some they called implant rates just or in the note case we supported, and we're seeing really good recovery trends, which we think will continue through the year.”

“We completed enrollment for ferrous persistent (ph) trial in December. So we expect that, that one-year endpoint will be reached mid of this fiscal year.”

“But over time, we expect our gross margin to stabilize and then improve.”

“We got -- we have puts and takes, as we always do on the year, but there are no new issues from a growth perspective in FY '24.”

“On a constant currency basis, our EPS guidance implies low-single digit growth this year.”

“In fact, when we exclude the separation of our Renal Care business, we expect R&D to grow above revenue as we've signaled for a while now.”

“By segment, there are puts and takes on each one, but they are all roughly aligned to the corporate average for both the first quarter and the year, with the exception of diabetes, which we expect will start the year growing below the corporate average, and ramp through the year with the U.S. launch of 780G.”

“We expect our U.S. Diabetes growth to ramp over time as our existing customers come up for renewal and as consumers switch to Medtronic.”

“And given the low penetration of robotic surgery and our strong position as a global leader in the surgical space, we expect to deliver meaningful growth over the coming years.”

“We're preparing to launch our Aurora Extravascular ICD later this year.”

“We have said that we are focused on driving a significant cost reduction to help partially offset the impacts that we have got from the various headwinds and the investment that we need to make.”

“And then Q4 typically is our highest margin quarter. So, we are focused on that step-up and it's typical for us.”

“On Q4 margins, that will be – revenue growth obviously helps. So, we will start there. But we also will be driving cost reduction starting last quarter and even more into the fourth quarter, that will help as well.”

“And we have said that we think that we are going to drive R&D growth, at least in line with revenue and when we have important investments to make in some areas that may grow even more than revenue.”

“We also said that inflation impacts are about a mid-single digit impact for us next fiscal year.”

“In terms of the impact on total Medtronic earnings power, the separations are going to have minimal impact.”

“And we expect to see a similar trajectory when 780G is available in the U.S. market.”

“We do expect to close that joint venture with DaVita in the fourth quarter.”

“That’s going to be driven by continued consistency of supply, which we expect, which has already improved across the portfolio and will continue to improve.”