Medtronic plc
For the period ended Jul 26, 2024. Filed Aug 27, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 26, 2024 · Filed Aug 27, 2024
MDT$102.79+1.0%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-01-26; filed 2024-02-27.
0001613103-24-000011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-07-26; filed 2024-08-27.
0001613103-24-000147
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 220 previous paragraphs and 210 current paragraphs.
123 unchanged; 71 reworded; 15 added; 23 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 12 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
(5)Reflects the recognition of incremental Italian payback accruals resulting from the two July 22, 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015.
Current report
(2)Incremental Italian payback accruals resulting from the two July 22, 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015.
Current report
(2)Includes all other non-U.S. countries and U.S. territories.
Current report
(3)Includes historical operations and ongoing transition agreements from businesses the Company has exited or divested.
Current report
(4)Incremental Italian payback accruals resulting from the two July 22, 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015.
Current report
The increase in net sales for the three months ended July 26, 2024, as compared to the corresponding period in the prior fiscal year, was driven primarily by growth in most businesses, including Diabetes, Neuromodulation, and Cardiac Rhythm & Heart Failure. The increase was partially offset by the $90 million incremental Italian payback accruals resulting from the two July 22, 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015.
Current report
Surgical & Endoscopy (SE) net sales for the three months ended July 26, 2024 were flat, as compared to the corresponding period in the prior fiscal year. The net sales decrease in Advanced Surgical Technologies was offset by growth in Hernia, Wound Management, and Endoscopy.
Current report
For the three months ended July 26, 2024, other operating expense, net was flat compared to the corresponding period in the prior year.
Current report
For the three months ended July 26, 2024, the increase in interest expense, net was primarily driven by the €3.0 billion debt issuance on June 3, 2024 and the higher commercial paper balance during the quarter.
Current report
The Organization for Economic Co-operation and Development (OECD) published Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15% in each jurisdiction in which the group operates. The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax. A number of countries, including Ireland, have enacted legislation to implement the core elements of Pillar Two, which are effective for Medtronic in fiscal year 2025. We will continue to monitor the impacts of further legislation, regulatory guidance, and regulations issued in the countries in which we do business.
Current report
Our effective tax rate for the three months ended July 26, 2024 was 17.4% as compared to 33.4% for the three months ended July 28, 2023. The decrease in the effective tax rate primarily relates to an income tax reserve adjustment made during the three months ended July 28, 2023 associated with the Medtronic Ventor Technologies Ltd court decision and year-over-year changes in operational results by jurisdiction, which were partially offset by the impact of the Pillar Two global minimum tax for the three months ended July 26, 2024.
Current report
Investing Activities The $280 million decrease in cash used was primarily attributable to a increase in net sales and maturities of investments of $446 million partially offset by an increase in net additions to property, plant, and equipment of $166 million.
Current report
On June 3, 2024, Medtronic Inc. issued four tranches of EUR-denominated Senior Notes with an aggregate principal of €3.0 billion, with maturities ranging from fiscal year 2030 to 2054, resulting in cash proceeds of approximately $3.2 billion, net of discounts and issuance costs. In anticipation of the Euro-denominated debt issuance, the Company entered into forward currency exchange rate contracts to manage the exposure to exchange rate movements. These contracts were settled in conjunction with the issuance of the June 2024 Notes.
Current report
ACQUISITIONS AND DISPOSITIONS
Current report
•cybersecurity and privacy incidents;
Removed paragraphs (23)
Previous report
(5)The net tax benefit primarily relates to a change in a Swiss Cantonal tax rate associated with previously established deferred tax assets from intercompany intellectual property transactions and the step up in tax basis for Swiss Cantonal purposes.
Previous report
(1)Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the program, consulting expenses, and asset write-offs.
Previous report
(2)The charges primarily include business combination costs, changes in fair value of contingent consideration, and charges related to the potential separation of the Patient Monitoring and Respiratory Interventions businesses within our Medical Surgical Portfolio.
Previous report
(6)The charges relate to the early redemption of approximately $2.3 billion of debt and were recorded within interest expense, net within the consolidated statements of income.
Previous report
(7)The charge primarily relates to a $764 million reserve adjustment that was a direct result of the U.S. Tax Court opinion, issued on August 18, 2022, on the previously disclosed litigation regarding the allocation of income between Medtronic, Inc. and its wholly owned subsidiary operating in Puerto Rico.
Previous report
(1) Includes revenue from the divested Renal Care Solutions business and Transition Manufacturing Agreements from previously divested businesses.
Previous report
(2)Non-U.S. developed markets include Japan, Australia, New Zealand, Korea, Canada, and the countries within Western Europe.
Previous report
(3)Emerging markets include the countries of the Middle East, Africa, Latin America, Eastern Europe, and the countries of Asia that are not included in the non-U.S. developed markets, as defined above.
Previous report
(4)Includes revenue from the divested Renal Care Solutions business and Transition Manufacturing Agreements from previously divested businesses.
Previous report
The increase in net sales for the three and nine months ended January 26, 2024, as compared to the corresponding period in the prior fiscal year, was driven primarily by growth in most businesses, including Diabetes, Cardiac Surgery, Core Spine, Structural Heart and Cardiac Pacing, as well as strength in international markets.
Previous report
•Continued acceptance and growth of Intersect ENT products used in the treatment of chronic rhinosinusitis.
Previous report
Surgical & Endoscopy (SE) net sales for the three and nine months ended January 26, 2024 increased 5 percent and 6 percent, respectively, as compared to the corresponding periods in the prior fiscal year. The increase for both periods was predominantly attributable to growth in Advanced Surgical Technologies, primarily driven by supply expansion, as well as continued growth in Wound Management, Electrosurgery, and Endoscopy. The increase for the nine months ended January 26, 2024 was also driven by growth in GI Genius and EndoFlip.
Previous report
•Our recent decision to exit our ventilator product line and retain and combine the remaining PMRI businesses into one business unit called Acute Care and Monitoring (ACM). For the nine months ended January 26, 2024, ventilator product line revenue was $111 million. The Company expects to record an estimated pre-tax charge of $350 million to $425 million, the majority of which is expected to be recorded in the quarter ending April 26, 2024, primarily related to non-cash impairment of long-lived intangible assets. The Company will continue to honor existing ventilator contracts to serve the needs of its customers and their patients.
Previous report
For the three and nine months ended January 26, 2024, the decrease in other operating expense (income), net was driven by the net currency impact of remeasurement expense and our hedging programs, which resulted in a net loss of $12 million and net gain of $16 million, respectively, as compared to a net gain of $132 million and $351 million, respectively, in the corresponding periods in the prior year. The decrease was partially offset by a decrease of $22 million and $67 million in Puerto Rico Excise Taxes for the three and nine months ended January 26, 2024. As a result of newly enacted tax legislation in Puerto Rico, the Company is no longer subject to Puerto Rico Excise Tax, but is now subject to a higher withholding tax, which is recorded in income tax provision in the consolidated statements of income.
Previous report
For the nine months ended January 26, 2024, the decrease in other operating expense (income), net was also driven by a decrease in acquisition and divestiture-related expenses, which was primarily attributable to non-cash pre-tax charges of $81 million, primarily related to goodwill, recorded in the prior year as a result of the April 1, 2023 sale of half of the Company's RCS business.
Previous report
For the three and nine months ended January 26, 2024, the increase in interest expense, net was primarily driven by increased interest rates on our global liquidity structures, the impact of higher coupons on Senior Notes issued in the second quarter of fiscal year 2023, and the higher outstanding commercial paper balance. Partially offsetting the increase for the three and nine months was $49 million and $148 million, respectively, in after-tax gains representing amounts excluded from the effectiveness assessment of certain net investment hedges, compared to $26 million and $74 million, respectively, for the corresponding periods in the prior year. Also partially offsetting the increase in interest expense, net was the $53 million charge incurred as a result of the early redemption of approximately $2.3 billion of senior notes during the nine months ended January 27, 2023.
Previous report
Our effective tax rate for the three and nine months ended January 26, 2024 was 9.2% and 23.5%, respectively, as compared to 10.6% and 31.9% for the three and nine months ended January 27, 2023, respectively. The decrease in our effective tax rate for the three months ended January 26, 2024 primarily relates to a Swiss Cantonal tax rate change on previously recorded deferred tax assets, which was partially offset by an increase in Puerto Rico withholding tax rates and finalization of certain tax returns and statute of limitation lapses for the quarter ended January 27, 2023. The decrease in the effective tax rate for the nine months ended January 26, 2024 was attributable to the previously highlighted items and the $764 million income tax charge recorded during the nine months ended January 27, 2023 related to the U.S. Tax Court decision, partially offset by the Ventor court decision noted above and the establishment of a valuation allowance against certain net operating losses.
Previous report
Investing Activities The $1.3 billion decrease in cash used was primarily attributable to a decrease in cash paid for acquisitions of $1.8 billion, partially offset by an increase in net purchases of investments of $195 million, as compared to the corresponding period in the prior fiscal year.
Previous report
In May 2022, we entered into a term loan agreement (Fiscal 2023 Loan Agreement) with Mizuho Bank, Ltd. for an aggregate principal amount of up to ¥300 billion with a term of 364 days. In May and June 2022, Medtronic Global Holdings S.C.A. (Medtronic Luxco) borrowed an aggregate of ¥297 billion, or approximately $2.3 billion, of the term loan, under the Fiscal 2023 Loan Agreement. The Company used the net proceeds of the borrowings to fund the early redemption of $1.9 billion of Medtronic Inc. Senior Notes for $1.9 billion of total consideration, and $368 million of Medtronic Luxco Senior Notes for $376 million of total consideration. The Company recognized a total loss on debt extinguishment of $53 million within interest expense, net in the consolidated statements of income in the quarter ended July 29, 2022, which primarily included cash premiums and accelerated amortization of deferred financing costs and debt discounts and premiums. During the fourth quarter of fiscal year 2023, the Company repaid the term loan in full, including interest.
Previous report
In September 2022, we issued four tranches of Euro-denominated Senior Notes with an aggregate principal of €3.5 billion, with maturities ranging from fiscal year 2026 to 2035, resulting in cash proceeds of approximately $3.4 billion, net of discounts and issuance costs. The Company used the net proceeds to repay at maturity €750 million of 0.000% Medtronic Luxco Senior Notes for $772 million of total consideration in December 2022 and €1.5 billion of 0.375% Medtronic Luxco Senior Notes and €1.25 billion of 0.000% Medtronic Luxco Senior Notes for $2.9 billion of total consideration in March 2023.
Previous report
In March 2023, Medtronic Luxco issued two tranches of USD-denominated Senior Notes with an aggregate principal of $2.0 billion, with maturities ranging from 2028 to 2033, resulting in cash proceeds of approximately $2.0 billion, net of discounts and issuance costs. The Company used the net proceeds supplemented by additional cash to repay the ¥297 billion Fiscal 2023 Loan Agreement discussed above for $2.3 billion of total consideration.
Previous report
ACQUISITIONS
Previous report
•cybersecurity incidents;
Reworded paragraphs (71)
Previous wording
The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of Medtronic plc and its subsidiaries (Medtronic plc, Medtronic, or the Company, or we, us, or our). For a full understanding of financial condition and results of operations, you should read this discussion along with Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended April 28, 2023. In addition, you should read this discussion along with our consolidated financial statements and related notes thereto at and for the three and nine months ended January 26, 2024. Amounts reported in millions within this quarterly report are computed based on the amounts in thousands, and therefore, the sum of the components may not equal the total amount reported in millions due to rounding. Additionally, certain columns and rows within tables may not sum due to rounding.
Current wording
The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of Medtronic plc and its subsidiaries (Medtronic plc, Medtronic, or the Company, or we, us, or our). For a full understanding of financial condition and results of operations, you should read this discussion along with Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended April 26, 2024. In addition, you should read this discussion along with our consolidated financial statements and related notes thereto at and for the three months ended July 26, 2024. Amounts reported in millions within this quarterly report are computed based on the amounts in thousands, and therefore, the sum of the components may not equal the total amount reported in millions due to rounding. Additionally, certain columns and rows within tables may not sum due to rounding.
Previous wording
The following is a summary of revenue and diluted earnings per share for the three months ended January 26, 2024 and January 27, 2023, and operating cash flow for the nine months ended January 26, 2024 and January 27, 2023:
Current wording
The following is a summary of revenue, diluted earnings per share, and operating cash flow for the three months ended July 26, 2024 and July 28, 2023:
Previous wording
(1)Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the program, consulting expenses, and asset write-offs.
Current wording
(1)Associated and other costs primarily include salaries and wages for employees supporting the restructuring activities, consulting expenses, and asset write-offs.
Previous wording
(2)The charges primarily include business combination costs, changes in fair value of contingent consideration, and charges related to the potential separation of the Patient Monitoring and Respiratory Interventions businesses within our Medical Surgical Portfolio.
Current wording
(2)The charges primarily include business combination costs, changes in fair value of contingent consideration, and exit of business related charges.
Previous wording
(5)The net charge primarily relates to an income tax reserve adjustment associated with the June 1, 2023, Israeli Central-Lod District Court decision and the establishment of a valuation allowance against certain net operating losses which were partially offset by a benefit from the change in a Swiss Cantonal tax rate associated with previously established deferred tax assets from intercompany intellectual property transactions and the step up in tax basis for Swiss Cantonal purposes.
Current wording
(6)The charge relates to an income tax reserve adjustment associated with the June 2023 Israeli Central-Lod District Court decision in Medtronic Ventor Technologies Ltd v. Kfar Saba Assessing Office and amortization of previously established deferred tax assets from intercompany intellectual property transactions.
Previous wording
Prior period revenue has been recast to reflect the new reporting structure, which primarily includes allocating certain prior Medical Surgical businesses to the Other line. Refer to Note 17 to the consolidated financial statements for additional information regarding the Company's new reporting structure. The charts below illustrate the percent of net sales by segment for the three months ended January 26, 2024 and January 27, 2023:
Current wording
Certain prior period revenue has been recast to reflect the new reporting structure in the fourth quarter of fiscal year 2024. Refer to Note 17 to the consolidated financial statements for additional information regarding the Company's reporting structure. In addition, starting in the first quarter of fiscal year 2025, the Company combined the non-U.S. developed markets and the emerging markets into an international market geography. Prior period revenue has been recast to conform to the new presentation. The charts below illustrate the percent of net sales by segment for the three months ended July 26, 2024 and July 28, 2023:
Previous wording
The table below illustrates net sales by segment and division for the three and nine months ended January 26, 2024 and January 27, 2023:
Current wording
The table below illustrates net sales by segment and division for the three months ended July 26, 2024 and July 28, 2023:
Previous wording
The table below includes net sales by market geography for each of our segments for the three and nine months ended January 26, 2024 and January 27, 2023:
Current wording
The table below includes net sales by market geography for each of our segments for the three months ended July 26, 2024 and July 28, 2023:
Previous wording
•The sanctions and other measures being imposed in response to the Russia-Ukraine conflict are having, and could continue to have impacts on revenue and supply chain. The financial impact of the conflict in the third quarter of fiscal year 2024, including on accounts receivable and inventory reserves, was not material, and for the three and nine months ended January 26, 2024, the business of the Company in these countries represented less than 1% of the Company's consolidated revenues and assets. Although the implications of this conflict are difficult to predict at this time, the ongoing conflict may increase pressure on the global economy and supply chains, resulting in increased future volatility risk for our business operations and performance.
Current wording
•The sanctions and other measures being imposed in response to the Russia-Ukraine conflict are having, and could continue to have impacts on revenue and supply chain. The financial impact of the conflict in the first quarter of fiscal year 2025, including on accounts receivable and inventory reserves, was not material, and for the three months ended July 26, 2024, the business of the Company in these countries represented less than 1% of the Company's consolidated revenues and assets. Although the implications of this conflict are difficult to predict at this time, the ongoing conflict may increase pressure on the global economy and supply chains, resulting in increased future volatility risk for our business operations and performance.
Previous wording
•Although the long-term implications of Israel's recent conflict are difficult to predict at this time, the financial impact of the conflict in the third quarter of fiscal year 2024, including on accounts receivable and inventory reserves, was not material. For the three and nine months ended January 26, 2024, the business of the Company in Israel represented less than 1% of the Company's consolidated revenues and assets.
Current wording
•Although the long-term implications of Israel's recent conflict are difficult to predict at this time, the financial impact of the conflict in the first quarter of fiscal year 2025, including on accounts receivable and inventory reserves, was not material. For the three months ended July 26, 2024, the Company had 6 facilities and approximately 1,500 employees in Israel. For the three months ended July 26, 2024, the business of the Company in Israel represented less than 1% of the Company's consolidated revenues and assets.
Previous wording
Cardiovascular products include pacemakers, insertable cardiac monitors, cardiac resynchronization therapy devices, implantable cardioverter defibrillators (ICD), leads and delivery systems, electrophysiology catheters, products for the treatment of atrial fibrillation, information systems for the management of patients with Cardiac Rhythm & Heart Failure devices, products designed to reduce surgical site infections, coronary and peripheral stents and related delivery systems, balloons and related delivery systems, products for the treatment of hypertension, endovascular stent graft systems, heart valve replacement technologies, cardiac tissue ablation systems, and open heart and coronary bypass grafting surgical products. Cardiovascular also includes Cath Lab Managed Services (CLMS) within the Cardiac Rhythm & Heart Failure division. Cardiovascular's net sales for the three and nine months ended January 26, 2024 were $2.9 billion and $8.7 billion, respectively, an increase of 6 percent for both periods as compared to the corresponding periods in the prior fiscal year. The net sales increase for both periods was primarily due to strong performance of Micra, TAVR, and Perfusion.
Current wording
Cardiovascular products include pacemakers, insertable cardiac monitors, cardiac resynchronization therapy devices, implantable cardioverter defibrillators, leads and delivery systems, electrophysiology catheters, products for the treatment of atrial fibrillation, information systems for the management of patients with Cardiac Rhythm & Heart Failure devices, products designed to reduce surgical site infections, coronary and peripheral stents and related delivery systems, balloons and related delivery systems, endovascular stent graft systems, heart valve replacement technologies, cardiac tissue ablation systems, and open heart and coronary bypass grafting surgical products. Cardiovascular also includes Care Management Services and Cath Lab Managed Services (CLMS) within the Cardiac Rhythm & Heart Failure division. Cardiovascular's net sales for the three months ended July 26, 2024 was $3.0 billion, an increase of 6 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was primarily due to strong performance of Pulsed Field Ablation, High Power, TAVR, Cardiac Surgery, and Coronary.
Previous wording
Cardiac Rhythm & Heart Failure (CRHF) net sales for the three and nine months ended January 26, 2024 increased 4 percent and 5 percent, respectively, as compared to the corresponding periods in the prior fiscal year. The net sales increase for both periods was driven by continued adoption of Micra, including the U.S. launch of Micra AV2 and Micra VR2, and international growth of Arctic Front cryoablation catheters.
Current wording
Cardiac Rhythm & Heart Failure (CRHF) net sales for the three months ended July 26, 2024 increased 6 percent, as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by continued adoption of Micra AV2 and Micra VR2, PulseSelect Pulsed Field Ablation, and the Aurora extravascular implantable cardioverter defibrillator (EV-ICD) system.
Previous wording
Structural Heart & Aortic (SHA) net sales for the three and nine months ended January 26, 2024 increased 11 percent and 10 percent, respectively, as compared to the corresponding periods in the prior fiscal year. The net sales increase was driven by growth in TAVR, including strong growth in Western Europe and Japan from adoption of Evolut FX TAVR system, and in Cardiac Surgery driven by growth in Perfusion particularly in the U.S.
Current wording
Structural Heart & Aortic (SHA) net sales for the three months ended July 26, 2024 increased 5 percent, as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by growth in TAVR, including strong growth internationally from adoption of Evolut FX TAVR system, and in Cardiac Surgery driven by growth in Perfusion, particularly in the U.S., and Surgical Valves.
Previous wording
Coronary & Peripheral Vascular (CPV) net sales for the three and nine months ended January 26, 2024 increased 6 percent and 4 percent, respectively, as compared to the corresponding periods in the prior fiscal year. The increase in net sales was driven by growth in guide catheters, balloons, and drug-eluting stents, as well as growth in our Vascular Embolization products.
Current wording
Coronary & Peripheral Vascular (CPV) net sales for the three months ended July 26, 2024 increased 5 percent, as compared to the corresponding period in the prior fiscal year. The increase in net sales was driven by growth in guide catheters, balloons, and drug-eluting stents, as well as growth in our Vascular Embolization products.
Previous wording
•Continued growth of our Micra transcatheter pacing system including the U.S. launch of Micra AV2 and Micra VR2 in the first quarter of fiscal year 2024, and increasing global penetration. Micra AV2 and Micra VR2 received CE Mark in January 2024.
Current wording
•Continued global penetration of our Micra transcatheter pacing portfolio.
Previous wording
•Continued acceptance and growth from the Azure XT and Azure S SureScan pacing systems and the 3830 lead. Azure pacemakers feature Medtronic-exclusive BlueSync technology, which enables automatic, secure wireless remote monitoring with increased device longevity. The 3830 lead, previously labeled for His-bundle pacing, has now been expanded to include left bundle branch area pacing effectively covering all current forms of conduction system pacing.
Current wording
•Continued acceptance and growth from the Azure XT and Azure S SureScan pacing systems and the 3830 lead.
Previous wording
•Continued acceptance and expansion of the LINQ II cardiac monitor with AccuRhythm AI algorithms.
Current wording
•Continued use and acceptance of Reveal LINQ and expansion of the LINQ II cardiac monitor.
Previous wording
•Continued acceptance, adoption, and growth of our innovative portfolio of products in the electrophysiology (EP) segment, including the Arctic Front cryoablation system, PulseSelect pulse field ablation (PFA), and Affera mapping and ablation system. The PulseSelect PFA system was approved by the U.S. FDA in December 2023, and is the first PFA technology to receive U.S. FDA approval.
Current wording
•Continued acceptance, adoption, and growth of our innovative portfolio of products in the electrophysiology (EP) segment, including the Arctic Front cryoablation system, PulseSelect PFA, and Affera mapping and ablation system.
Previous wording
•Continued acceptance and growth of the self-expanding CoreValve Evolut transcatheter aortic valve replacement platform. This includes Evolut PRO which provides enhanced hemodynamics, reliable delivery, enhanced durability, advanced sealing, and Evolut FX, a system designed to improve the overall procedural experience through enhancements in deliverability, implant visibility, and deployment stability.
Current wording
•Continued acceptance and growth of the self-expanding CoreValve Evolut transcatheter aortic valve replacement platform. This includes Evolut PRO which provides enhanced hemodynamics, reliable delivery, enhanced durability, advanced sealing, and Evolut FX, a system designed to improve the overall procedural experience through enhancements in deliverability, implant visibility, and deployment stability. The Evolut FX+ TAVR system maintains the valve performance benefits of the legacy Evolut TAVR platform and is designed to facilitate coronary access. The system was approved by the U.S. FDA in March 2024.
Previous wording
•Market acceptance and reimbursement for the Symplicity Spyral renal denervation system, also known as the Symplicity blood pressure procedure, for the treatment of hypertension. The Symplicity blood pressure procedure was approved by the U.S. FDA in November 2023.
Current wording
•Market acceptance and reimbursement for the Symplicity Spyral renal denervation system, also known as the Symplicity blood pressure procedure, for the treatment of hypertension.
Previous wording
•Continued acceptance and growth of the Onyx Frontier DES platform. Onyx Frontier is a drug-eluding stent (DES) that introduces an enhanced delivery system and is used for complex percutaneous coronary intervention (PCI).
Current wording
•Continued acceptance and growth of the Onyx Frontier DES platform. Onyx Frontier is a DES that introduces an enhanced delivery system and is used for complex percutaneous coronary intervention (PCI).
Previous wording
Neuroscience's products include various spinal implants, bone graft substitutes, biologic products, image-guided surgery and intra-operative imaging systems, robotic guidance systems used in the robot-assisted spine procedures, and systems that incorporate advanced energy surgical instruments. Neuroscience's products also focus on therapies to treat the diseases of the vasculature in and around the brain, including coils, neurovascular stents, and flow diversion products, as well as products to treat ear, nose, and throat (ENT), and the treatment of overactive bladder, urinary retention, and fecal incontinence. Neuroscience also manufactures products related to implantable neurostimulation therapies and drug delivery systems for the treatment of chronic pain, movement disorders, and epilepsy. Neuroscience’s net sales for the three and nine months ended January 26, 2024 were $2.4 billion and $6.9 billion, respectively, an increase of 5 percent for both periods, compared to the corresponding periods in the prior fiscal year. The net sales increase for both periods was primarily due to growth in Spine & Biologics. For the nine months ended January 26, 2024, the increase was also driven by growth in ENT.
Current wording
Neuroscience's products include various spinal implants, bone graft substitutes, biologic products, image-guided surgery and intra-operative imaging systems, robotic guidance systems used in the robot-assisted spine procedures, and systems that incorporate advanced energy surgical instruments. Neuroscience's products also focus on therapies to treat the diseases of the vasculature in and around the brain, including coils, neurovascular stents, and flow diversion products, as well as products to treat ear, nose, and throat (ENT), and the treatment of overactive bladder and urinary retention. Neuroscience also manufactures products related to implantable neurostimulation therapies and drug delivery systems for the treatment of chronic pain, movement disorders, and epilepsy. Neuroscience’s net sales for the three months ended July 26, 2024 was $2.3 billion, an increase of 4 percent compared to the corresponding period in the prior fiscal year. The net sales increase was primarily due to growth in Neuromodulation, Spine and Biologics, and Hemorrhagic Stroke.
Previous wording
Cranial and Spinal Technologies (CST) net sales for the three and nine months ended January 26, 2024 increased 7 percent for both periods, as compared to the corresponding periods in the prior fiscal year. The growth for both periods was driven by increased sales of Core Spine products driven by AiBLE spinal ecosystem pull-through. The net sales increase was also attributable to strong growth of StealthStation Navigation and increased sales of Biologics products.
Current wording
Cranial & Spinal Technologies (CST) net sales for the three months ended July 26, 2024 increased 4 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by increased sales of Core Spine and Biologics products driven by AiBLE spinal ecosystem pull-through.
Previous wording
Specialty Therapies (Specialty) net sales for the three and nine months ended January 26, 2024 increased 4 percent for both periods, as compared to the corresponding periods in the prior fiscal year. The increase for both periods was driven by growth in ENT and hemorrhagic stroke flow diversion products.
Current wording
Specialty Therapies (Specialty) net sales for the three months ended July 26, 2024 increased 3 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by hemorrhagic stroke products, growth on continued adoption of the Interstim X system, and ENT.
Previous wording
Neuromodulation (NM) net sales for the three and nine months ended January 26, 2024 increased 1 percent and 2 percent, respectively, as compared to the corresponding periods in the prior fiscal year. The net sales increase for both periods was driven by growth within Brain Modulation, including growth from the Western European launch of the Percept RC neurostimulator, as well as Pain Stim growth in the U.S.
Current wording
Neuromodulation (NM) net sales for the three months ended July 26, 2024 increased 9 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by growth within Brain Modulation, driven by the continued launch of the Percept RC deep brain neurostimulator, as well as growth in Pain Stim driven by the U.S. launch of the Inceptiv spinal cord stimulator and continued adoption in Western Europe.
Previous wording
•Continued acceptance and growth of our Pelvic Health and ENT therapies, including our InterStim therapy with InterStim X and InterStim II recharge-free neurostimulators and InterStim Micro rechargeable neurostimulator for patients suffering from overactive bladder, (non-obtrusive) urinary retention, and chronic fecal incontinence, and capital equipment sales of the Stealth Station ENT surgical navigation system and intraoperative NIM nerve monitoring system.
Current wording
•Continued acceptance and growth of our Pelvic Health therapies, including our InterStim therapy with InterStim X and InterStim II recharge-free neurostimulators and InterStim Micro rechargeable neurostimulator for patients suffering from overactive bladder, (non-obtrusive) urinary retention, and chronic fecal incontinence.
Previous wording
•Market acceptance and growth from SCS therapy for treating chronic pain and Diabetic Peripheral Neuropathy (DPN) on the Intellis rechargeable neurostimulator and Vanta recharge-free neurostimulator.
Current wording
•Continued acceptance and growth from spinal cord stimulation (SCS) therapy for treating chronic pain and Diabetic Peripheral Neuropathy (DPN) on the Inceptiv closed-loop rechargeable neurostimulator, Intellis rechargeable neurostimulator and Vanta recharge-free neurostimulator. The Inceptiv closed-loop rechargeable SCS received U.S. FDA approval in April 2024.
Previous wording
•Continued acceptance and growth of our Percept family of DBS devices with proprietary BrainSense technology for objectifying and personalizing the treatment of Parkinson's Disease, epilepsy, and other movement disorders.
Current wording
•Continued acceptance and growth of our Percept family of deep brain stimulation (DBS) devices with proprietary BrainSense technology for objectifying and personalizing the treatment of Parkinson's Disease, epilepsy, and other movement disorders.
Previous wording
•Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, which include our closed-loop Percept devices with adaptive DBS (aDBS) and Inceptiv Neurostimulator, as well as our hemorrhagic stroke intravascular device, and our next-generation spine enabling technologies.
Current wording
•Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, which include hemorrhagic stroke intravascular device and our next-generation spine enabling technologies.
Previous wording
Medical Surgical’s products span the entire continuum of patient care from diagnosis to recovery, with a focus on diseases of the gastrointestinal tract, lungs, pelvic region, obesity, and preventable complications. The products include those for advanced and general surgical products, surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products, hernia mechanical devices, mesh implants, advanced ablation, interventional lung, ventilators, airway products, and sensors and monitors for pulse oximetry, capnography, level of consciousness and cerebral oximetry. Medical Surgical's net sales for the three and nine months ended January 26, 2024 were $2.1 billion and $6.3 billion, respectively, an increase of 4 percent and 5 percent, respectively, as compared to the corresponding periods in the prior fiscal year. The net sales increase for both periods was primarily driven by growth in Advanced Surgical Technologies and General Surgical Technologies.
Current wording
Medical Surgical’s products span the entire continuum of patient care from diagnosis to recovery, with a focus on diseases of the gastrointestinal tract, lungs, pelvic region, obesity, and preventable complications. The products include those for advanced and general surgical products, surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products, hernia mechanical devices, mesh implants, advanced ablation, interventional lung, airway products, and sensors and monitors for pulse oximetry, capnography, level of consciousness and cerebral oximetry. Medical Surgical's net sales for the three months ended July 26, 2024 were $2.0 billion, flat, as compared to the corresponding period in the prior fiscal year. The net sales increases in Hernia, Wound Management, Endoscopy and Perioperative Complications, was offset by the net sales declines in Advanced Surgical Technologies and Respiratory Compromise.
Previous wording
Patient Monitoring & Respiratory Interventions (PMRI) net sales for the three and nine months ended January 26, 2024 increased 2 percent and 3 percent, respectively, as compared to the corresponding periods in the prior fiscal year. The net sales increase for both periods was largely due to growth in Nellcor pulse oximetry monitors and airways, partially offset by declines in ventilator sales.
Current wording
Acute Care & Monitoring (ACM) net sales for the three months ended July 26, 2024 decreased 2 percent as compared to the corresponding period in the prior fiscal year. The net sales decrease was largely due to declines in Respiratory Compromise and airways, partially offset by growth in Perioperative Complications.
Previous wording
•Our ability to execute ongoing strategies addressing the competitive pressure of reprocessing vessel sealing disposables, near term pressures to bariatric surgery procedure volumes in the U.S. from pharmaceuticals, and growth of our surgical soft tissue robotics procedures in the U.S.
Current wording
•Our ability to execute ongoing strategies addressing the near-term pressures to bariatric surgery procedure volumes in the U.S. from pharmaceuticals, and growth of surgical soft tissue robotics procedures in the U.S.
Previous wording
•Our ability to create markets and drive products and procedures into emerging markets with our high quality and cost-effective surgical products designed for customers in emerging markets. An example is our ValleyLab LS10 single channel vessel sealing generator, which is compatible with our line of LigaSure instruments and designed for simplified use and affordability.
Current wording
•Our ability to create markets and drive products and procedures into emerging markets with our high quality and cost-effective surgical products designed for customers in emerging markets.
Previous wording
•Continued acceptance and growth in patient monitoring and airway management. Key products in this area include Microstream Capnography, Nellcor pulse oximetry system with OxiMax technology, Shiley tracheostomy and endotracheal tubes, McGRATH MAC video laryngoscopes.
Current wording
•Continued acceptance and growth in patient monitoring and airway management. Key products in this area include Microstream Capnography, Nellcor pulse oximetry system with OxiMax technology, Shiley tracheostomy and endotracheal tubes, and McGRATH MAC video laryngoscopes.
Previous wording
•Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, which include our Hugo RAS system in the U.S., Signia powered stapling devices, and our next-gen Ligasure and Sonicision vessel sealing devices.
Current wording
•Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, which include our Hugo RAS system in the U.S., the adoption of AI in Endoscopy, Signia powered stapling devices, and our next-gen Ligasure and Sonicision vessel sealing devices.
Previous wording
Diabetes' products include insulin pumps, continuous glucose monitoring (CGM) systems, and consumables. Diabetes' net sales for the three and nine months ended January 26, 2024 were $640 million and $1.8 billion, respectively, an increase of 12 percent and 10 percent, respectively, as compared to the corresponding periods in the prior fiscal year. The increase in net sales for both periods was primarily driven by strong international growth as a result of the continued international expansion of the MiniMed 780G insulin pump system and integrated CGM. The launch of the MiniMed 780G insulin pump system in the U.S., during the first quarter of fiscal year 2024, also contributed to the growth for the three and nine months ended January 26, 2024.
Current wording
Diabetes' products include insulin pumps, continuous glucose monitoring (CGM) systems, and consumables. Diabetes' net sales for the three months ended July 26, 2024 were $647 million an increase of 12 percent as compared to the corresponding period in the prior fiscal year. The increase in net sales was primarily driven by strong U.S growth as a result of the continued adoption of the MiniMed 780G insulin pump system, and strong international growth in CGM systems from increased attachment rates, and adoption of Simplera Sync.
Previous wording
•Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, including our next-generation sensor Simplera, which has been submitted for approval to the U.S. FDA and received CE Mark in September 2023.
Current wording
•Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, including our next-generation sensor Simplera, which received U.S. FDA approval in early August 2024 and CE Mark in September 2023, and the products resulting from our partnership with Abbott to expand CGM options for people living with diabetes.
Previous wording
The following is a summary of cost of products sold, research and development, and selling, general, and administrative expenses as a percent of net sales for the three and nine months ended January 26, 2024 and January 27, 2023:
Current wording
The following is a summary of cost of products sold, research and development, and selling, general, and administrative expenses as a percent of net sales for the three months ended July 26, 2024 and July 28, 2023:
Previous wording
Cost of Products Sold Cost of products sold for the three and nine months ended January 26, 2024 was $2.8 billion and $8.2 billion, respectively, as compared to $2.7 billion and $7.7 billion, respectively, for the corresponding periods in the prior fiscal year. The decrease in cost products sold as a percentage of net sales for the three months ended January 26, 2024 was primarily due to reduced freight costs, volume improvements, and stabilizing of raw material costs. The increase in cost products sold as a percentage of net sales for the nine months ended January 26, 2024 was primarily attributable to increased labor and direct material manufacturing costs, predominantly due to inflationary pressures and supply constraints from time to time.
Current wording
Cost of Products Sold Cost of products sold for the three months ended July 26, 2024 was $2.8 billion, as compared to $2.6 billion for the corresponding period in the prior fiscal year. The increase in cost products sold as a percentage of net sales for the three months ended July 26, 2024 was primarily due to unfavorable currency impact.
Previous wording
Research and Development Expense We remain committed to deliver the best possible experiences for patients, physicians, and caregivers we serve; to create technologies that expand what’s possible across the entire human body to transform lives; to turn data and insights into real action to serve patient needs improving care; and to expand healthcare access and deliver positive outcomes. Research and development expense for the three and nine months ended January 26, 2024 was $695 million and $2.1 billion, respectively, as compared to $688 million and $2.1 billion, respectively, for the corresponding periods in the prior fiscal year.
Current wording
Research and Development Expense We remain committed to deliver the best possible experiences for patients, physicians, and caregivers we serve; to create technologies that expand what’s possible across the human body to transform lives; to turn data and insights into real action to serve patient needs, improving care; and to expand healthcare access and deliver positive outcomes. Research and development expense for the three months ended July 26, 2024 was $676 million, as compared to $668 million for the corresponding period in the prior fiscal year.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•Continued acceptance and growth of our ENT therapies, including capital equipment sales of the StealthStation ENT surgical navigation system and intraoperative NIM nerve monitoring system, and the Propel sinus implants used in the treatment of chronic rhinosinusitis.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
The tables below present our GAAP to Non-GAAP reconciliations for the nine months ended January 26, 2024 and January 27, 2023:
Previous report — wording carried elsewhere
(3)We exclude unrealized and realized gains and losses on our minority investments as we do not believe that these components of income or expense have a direct correlation to our ongoing or future business operations.
Previous report — wording carried elsewhere
(4)The charges represent incremental costs of complying with the new European Union medical device regulations for previously registered products and primarily include charges for contractors supporting the project and other direct third-party expenses. We consider these costs to be duplicative of previously incurred costs and/or one-time costs, which are limited to a specific period.