Medtronic plc

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 25, 2025. 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 25, 2025. 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 25, 2025. In addition, you should read this discussion along with our consolidated financial statements and related notes thereto at and for the three and six months ended October 24, 2025. 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 net sales, diluted earnings per share, and operating cash flow for the three months ended July 25, 2025 and July 26, 2024:

Current wording

The following is a summary of net sales and diluted earnings per share for the three months ended October 24, 2025 and October 25, 2024 and operating cash flow for the six months ended October 24, 2025 and October 25, 2024:

Previous wording

(1)The Company recognized $45 million of accelerated amortization on certain intangible assets within the Cardiovascular Portfolio.

Current wording

(1)The Company recognized $46 million of accelerated amortization on certain intangible assets within the Cardiovascular Portfolio.

Previous wording

(3)The charges primarily include business combination costs, changes in fair value of contingent consideration, and exit of business-related charges. For the three months ended July 25, 2025, exit of business-related charges primarily relate to the impending separation of the Diabetes business and costs associated with the Company's June 2021 decision to stop the distribution and sale of the Medtronic HVAD System.

Current wording

(3)The charges primarily include business combination costs, changes in fair value of contingent consideration, exit of business-related charges, and gains related to certain business or asset sales. Exit of business-related charges primarily relate to the impending separation of the Diabetes business and costs associated with the Company's June 2021 decision to stop the distribution and sale of the Medtronic HVAD System.

Previous wording

•Recent developments in global trade policy have introduced new uncertainties for our business. The U.S., China, and other jurisdictions have recently imposed or proposed additional tariffs on imported goods. Based on current rates as of August 19, 2025, we estimate the pre-tax net tariff impact to be $185 million in fiscal year 2026, with the majority recognized in the consolidated statements of income in the second half of the fiscal year. The actual amount could vary based on changes in tariff rates, duration of tariffs, scope of tariffs, and potential countermeasures or mitigation actions. The impact of the tariffs on the financial results for the three months ended July 25, 2025 was not material. While we are taking proactive steps to mitigate the effects of these tariffs, the evolving nature of international trade policy continues to present a risk to our cost structure and financial performance. Further escalation or expansion of trade barriers could have a material adverse effect on our results of operations.

Current wording

•Recent developments in global trade policy have introduced new uncertainties for our business. The U.S., China, and other jurisdictions have recently imposed or proposed additional tariffs on imported goods. Based on current rates as of November 18, 2025, we estimate the pre-tax net tariff impact to be $185 million in fiscal year 2026, with the majority recognized in the consolidated statements of income in the second half of the fiscal year. The actual amount could vary based on changes in tariff rates, duration of tariffs, scope of tariffs, and potential countermeasures or mitigation actions. While we are taking proactive steps to mitigate the effects of these tariffs, the evolving nature of international trade policy continues to present a risk to our cost structure and financial performance. Further escalation or expansion of trade barriers could have a material adverse effect on our results of operations.

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 for the three months ended July 25, 2025, including on accounts receivable and inventory reserves, was not material. For the three months ended July 25, 2025, the business of the Company in these countries represented less than 1% of the Company's consolidated revenues and assets.

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 for the three and six months ended October 24, 2025, including on accounts receivable and inventory reserves, was not material. For the three and six months ended October 24, 2025, the business of the Company in these countries represented less than 1% of the Company's consolidated revenues and assets.

Previous wording

•Although the long-term implications of Israel's conflict are difficult to predict at this time, the financial and operational impact of the conflict for the three months ended July 25, 2025, including on accounts receivable and inventory reserves, was not material. As of July 25, 2025, the Company had 6 facilities and approximately 1,300 employees in Israel and the business of the Company represented less than 1% of the Company's consolidated revenues and assets.

Current wording

•Although the long-term implications of Israel's conflict are difficult to predict at this time, the financial and operational impact of the conflict for the three and six months ended October 24, 2025, including on accounts receivable and inventory reserves, was not material. As of October 24, 2025, the Company had 6 facilities and approximately 1,300 employees in Israel and the business of the Company represented less than 1% of the Company's consolidated revenues and assets.

Previous wording

The table below illustrates net sales by segment and division and market geography for the three months ended July 25, 2025 and July 26, 2024:

Current wording

The table below illustrates net sales by segment and division and market geography for the three and six months ended October 24, 2025 and October 25, 2024:

Previous wording

The increase in net sales for the three months ended July 25, 2025, as compared to the corresponding period in the prior fiscal year, was driven primarily by growth in most businesses, including strong growth in Cardiac Ablation Solutions, TAVR, Neuromodulation, Diabetes, and Cardiac Pacing Therapies. In addition, the net sales increase was driven by impacts of foreign currency fluctuations and changes in estimates relating to our Italian payback accrual resulting from the two July 2024 rulings by the Constitutional Court and the Legislative Decree published by the Italian government in June 2025 and formalized into law in August 2025 for certain prior years since 2015. For the three months ended July 25, 2025, the impact of the Italian payback adjustment was an increase to net sales of $39 million as compared to a decrease in net sales of $90 million for the three months ended July 26, 2024.

Current wording

The increase in net sales for the three and six months ended October 24, 2025, as compared to the corresponding periods in the prior fiscal year, was driven primarily by growth in most businesses, including strong growth in Cardiac Ablation Solutions, TAVR, Neuromodulation, Diabetes, Cardiac Surgery, and Cardiac Pacing Therapies. In addition, the net sales increase was driven by impacts of foreign currency fluctuations and, for the six months ended October 24, 2025, changes in estimates relating to our Italian payback accrual resulting from the two July 2024 rulings by the Constitutional Court and the Legislative Decree published by the Italian government in June 2025 and formalized into law in August 2025 for certain prior years since 2015. For the six months ended October 24, 2025, the impact of the Italian payback adjustment was an increase to net sales of $39 million as compared to a decrease in net sales of $90 million for the six months ended October 25, 2024.

Previous wording

Cardiovascular products include pacemakers, insertable cardiac monitors, cardiac resynchronization therapy devices, implantable cardioverter defibrillators, leads and delivery systems, 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, open heart and coronary bypass grafting surgical products, and renal denervation systems for the treatment of hypertension. Cardiovascular also includes Care Management Services and Cath Lab Managed Services

Current wording

Cardiovascular products include pacemakers, insertable cardiac monitors, cardiac resynchronization therapy devices, implantable cardioverter defibrillators, leads and delivery systems, 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, open heart and coronary bypass grafting surgical products, and renal denervation systems for the treatment of hypertension. 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 and six months ended October 24, 2025 were $3.4 billion and $6.7 billion, respectively, an increase of 11 percent and 10 percent, respectively, as compared to the corresponding periods in the prior fiscal year, resulting from growth across most businesses and the impacts of foreign currency fluctuations.

Previous wording

Cardiac Rhythm & Heart Failure (CRHF) net sales for the three months ended July 25, 2025 increased 12 percent as compared to the corresponding period in the prior fiscal year. Cardiac Ablation Solutions experienced strong growth in PulseSelect and Affera Sphere-9 pulsed field ablation with partially offsetting declines in cryoablation. The net sales increase within Cardiac Rhythm Management was driven by growth in Micra leadless pacemakers, Aurora extravascular implantable cardioverter defibrillator (EV-ICD) system, SelectSure 3830 lead, and TYRX.

Current wording

Cardiac Rhythm & Heart Failure (CRHF) net sales for the three and six months ended October 24, 2025 increased 16 percent and 14 percent, respectively, as compared to the corresponding periods in the prior fiscal year. Cardiac Ablation Solutions experienced strong growth in PulseSelect and Affera Sphere-9 pulsed field ablation with partially offsetting declines in cryoablation. Net sales growth was also due to increases within Cardiac Rhythm Management, driven by growth in Micra leadless pacemakers, Aurora extravascular implantable cardioverter defibrillator (EV-ICD) system, SelectSure 3830 lead, and TYRX.

Previous wording

Structural Heart & Aortic (SHA) net sales for the three months ended July 25, 2025 increased 9 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by continued growth in Structural Heart from Evolut FX+ TAVR system and in Cardiac Surgery driven by growth in Perfusion and Surgical Valves.

Current wording

Structural Heart & Aortic (SHA) net sales for the three and six months ended October 24, 2025 increased 9 percent for both periods, as compared to the corresponding periods in the prior fiscal year. The net sales increase was driven by growth in Structural Heart from Evolut FX+ TAVR system and in Cardiac Surgery driven by Perfusion and Surgical Valves.

Previous wording

Coronary & Peripheral Vascular (CPV) net sales for the three months ended July 25, 2025 increased 5 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by growth in the Symplicity Spyral renal denervation system, guide catheters and balloons, as well as growth in Peripheral Vascular Health from endovenous.

Current wording

Coronary & Peripheral Vascular (CPV) net sales for the three and six months ended October 24, 2025 increased 2 percent and 3 percent, respectively, as compared to the corresponding periods in the prior fiscal year. The net sales increase was driven by growth in the Symplicity Spyral renal denervation system, guide catheters and balloons, as well as growth in Peripheral Vascular Health from endovenous. The net sales increase was partially offset by declines in coronary stents.

Previous wording

•Continued acceptance, adoption, and growth of our innovative portfolio of products in the electrophysiology (EP) segment, including the PulseSelect pulsed field ablation system and the Affera mapping and ablation system with

Current wording

•Continued acceptance, adoption, and growth of our innovative portfolio of products in the electrophysiology (EP) segment, including the PulseSelect pulsed field ablation system and the Affera mapping and ablation system with Sphere-9 catheter. The Affera mapping and ablation system and Sphere-9 catheter received U.S. FDA approval in late October 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.

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. U.S. Centers for Medicare and Medicaid Services (CMS) finalized National Coverage Determination in October 2025.

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 the Contego carotid stent system, Liberant mechanical thrombectomy system, and Affera Sphere-360 pulsed field ablation single-shot catheter.

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 the Liberant mechanical thrombectomy system and Affera Sphere-360 pulsed field ablation single-shot catheter.

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 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 25, 2025 was $2.4 billion, an increase of 4 percent, as compared to the corresponding period in the prior fiscal year, resulting from growth in Neuromodulation, Core Spine, and Neurosurgery, and the impacts of foreign currency fluctuations.

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 and six months ended October 24, 2025 were $2.6 billion and $5.0 billion, respectively, an increase of 5 percent and 4 percent, respectively, as compared to the corresponding periods in the prior fiscal year, resulting from growth in Neuromodulation, Cranial and Spinal Technologies, and ENT, and the impacts of foreign currency fluctuations.

Previous wording

Cranial & Spinal Technologies (CST) net sales for the three months ended July 25, 2025 increased 6 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by the continued adoption of the AiBLE ecosystem of spine implants and enabling technology with growth in Core Spine and Neurosurgery.

Current wording

Cranial & Spinal Technologies (CST) net sales for the three and six months ended October 24, 2025 increased 5 percent for both periods, as compared to the corresponding periods in the prior fiscal year. The net sales increase was driven by the continued adoption of the AiBLE ecosystem of spine implants and enabling technology with growth in Core Spine and Neurosurgery.

Previous wording

Specialty Therapies (Specialty) net sales for the three months ended July 25, 2025 decreased 2 percent as compared to the corresponding period in the prior fiscal year. The net sales decrease was driven by impacts from tender pricing in China and the Pipeline Vantage recall for Neurovascular, partially offset by international growth in ENT for Head & Neck.

Current wording

Specialty Therapies (Specialty) net sales for the three and six months ended October 24, 2025 increased 1 percent and remained flat, respectively, as compared to the corresponding periods in the prior fiscal year. The net sales results were driven by impacts from tender pricing in China and the Pipeline Vantage recall for Neurovascular, offset by growth in ENT.

Previous wording

Neuromodulation (NM) net sales for the three months ended July 25, 2025 increased 10 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by the Inceptiv closed-loop spinal cord stimulator, the continued launch of the Percept RC deep brain neurostimulator, and Interventional.

Current wording

Neuromodulation (NM) net sales for the three and six months ended October 24, 2025 increased 8 percent and 9 percent, respectively, as compared to the corresponding periods in the prior fiscal year. The net sales increase was driven by the Inceptiv closed-loop spinal cord stimulator, the Percept RC deep brain neurostimulator, and Interventional.

Previous wording

•Market acceptance and continued global adoption of innovative new spine products and procedural solutions within our CST operating unit, such as Catalyft PL, ModuLeX, CD Horizon Voyager System, and our Infinity OCT System, as well as continued growth from Titan spine titanium interbody implants with Nanolock technology.

Current wording

•Market acceptance and continued global adoption of innovative spine products and procedural solutions within our CST operating unit, such as Catalyft PL, ModuLeX, CD Horizon Voyager System, and our Infinity OCT System, as well as continued growth from Titan spine titanium interbody implants with Nanolock technology.

Previous wording

•Continued acceptance and growth of the Solitaire X revascularization device for treatment of acute ischemic stroke and our React Catheter and Riptide aspiration system.

Current wording

•Continued acceptance of the Solitaire X revascularization device for treatment of acute ischemic stroke and our React Catheter and Riptide aspiration system.

Previous 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.

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. The Altaviva implantable tibial neuromodulation system received U.S. FDA approval in September 2025 for urge urinary incontinence.

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, 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 25, 2025 was $2.1 billion, an increase of 4 percent, as compared to the corresponding period in the prior fiscal year, resulting from growth in Advanced Energy, General Surgical Technologies, Acute Care & Monitoring, Endoscopy, and the impacts of foreign currency fluctuations.

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 and six months ended October 24, 2025 were $2.2 billion and $4.3 billion, respectively, an increase of 2 percent and 3 percent, respectively, as compared to the corresponding periods in the prior fiscal year, resulting from growth in Advanced Energy, Acute Care & Monitoring, Endoscopy, and the impacts of foreign currency fluctuations.

Previous wording

Surgical & Endoscopy (SE) net sales for the three months ended July 25, 2025 increased 4 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was primarily due to continued adoption of the LigaSure vessel sealing technology in addition to growth in ProGrip self-gripping polyester mesh, Electrosurgery, and Esophageal. The net sales increase was partially offset by Advanced Stapling due to pressures on the U.S. bariatric segment and continued shifts to robotic surgery.

Current wording

Surgical & Endoscopy (SE) net sales for the three and six months ended October 24, 2025 increased 2 percent and 3 percent, respectively as compared to the corresponding periods in the prior fiscal year. The net sales increase was primarily due to growth in LigaSure vessel sealing technology, ProGrip self-gripping polyester mesh, Electrosurgery, and Esophageal. The net sales increase was also driven by international growth in Surgical Robotics partially offset by Advanced Stapling due to pressures on the U.S. bariatric segment and continued shifts to robotic surgery.

Previous wording

Acute Care & Monitoring (ACM) net sales for the three months ended July 25, 2025 increased 4 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was primarily due to growth in Nellcor pulse oximetry.

Current wording

Acute Care & Monitoring (ACM) net sales for the three and six months ended October 24, 2025 increased 3 percent and 4 percent, respectively, as compared to the corresponding periods in the prior fiscal year. The net sales increase was primarily due to growth in Nellcor pulse oximetry and Airways from growth of the McGRATH MAC video laryngoscope.

Previous wording

Diabetes' products include insulin pumps, continuous glucose monitoring (CGM) systems, and consumables. Diabetes' net sales for the three months ended July 25, 2025 was $721 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 international growth due to the continued adoption of the MiniMed 780G AID system, including the Simplera Sync and Guardian 4 CGM sensors and Extended Infusion Sets, and the impacts of foreign currency fluctuations.

Current wording

Diabetes' products include insulin pumps, continuous glucose monitoring (CGM) systems, and consumables. Diabetes' net sales for the three and six months ended October 24, 2025 were $757 million and $1.5 billion, respectively, an increase of 10 percent and 11 percent, respectively, as compared to the corresponding periods in the prior fiscal year. The increase in net sales was primarily driven by strong international growth due to the continued adoption of the MiniMed 780G AID system, including the Simplera Sync and Guardian 4 CGM sensors and Extended Infusion Sets, and the impacts of foreign currency fluctuations.

Previous wording

•Continued acceptance and growth for the MiniMed 780G insulin pump system, which is powered by SmartGuard technology and features the added benefits of meal detection technology that automatically adjusts and corrects sugar levels every five minutes. The global adoption of our AID systems has resulted in strong sensor attachment rates. The MiniMed 780G insulin pump system with the Guardian 4 Sensor is available in the U.S., and the MiniMed 780G insulin pump system with Simplera Sync received U.S. FDA approval in April 2025 and CE Mark in early January 2024. The MiniMed 780G insulin pump system received CE Mark in July 2025 for expanded indications in children as young as two, during pregnancy and for type 2 diabetes.

Current wording

•Continued acceptance and growth for the MiniMed 780G insulin pump system, available with Simplera Sync, Guardian 4 CGM sensor, and the Abbott Instinct sensor, which received U.S. FDA approval for use with the SmartGuard dosing algorithm in September 2025. The MiniMed 780G insulin pump system received FDA approval for use in adults 18+ with insulin-requiring type 2 diabetes and CE Mark for expanded indications for use by children as young as two, during pregnancy, as well as type 2 insulin-requiring diabetes in 2025.

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 months ended July 25, 2025 and July 26, 2024:

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 and six months ended October 24, 2025 and October 25, 2024:

Previous wording

Cost of Products Sold Cost of products sold for the three months ended July 25, 2025 was $3.0 billion as compared to $2.8 billion for the corresponding period in the prior fiscal year. The slight increase in cost of products sold as a percentage of net sales was primarily due to changes in product mix, partially offset by changes in the Italian payback accruals impacting net sales.

Current wording

Cost of Products Sold Cost of products sold for the three and six months ended October 24, 2025 was $3.1 billion and $6.1 billion, respectively, as compared to $2.9 billion and $5.7 billion, respectively, for the corresponding periods in the prior fiscal year. The decrease in cost of products sold as a percentage of net sales for the three and six months ended October 24, 2025 was primarily due to favorable currency impact on cost of products sold and net sales in addition to changes in the Italian payback accruals impacting net sales for the six months ended October 24, 2025 and October 25, 2024, partially offset by increased duties from tariffs on imported goods.

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 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 25, 2025 was $726 million as compared to $676 million for the corresponding period 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 and six months ended October 24, 2025 was $754 million and $1.5 billion, respectively, as compared to $697 million and $1.4 billion, respectively, for the corresponding periods in the prior fiscal year.

Previous wording

Selling, General, and Administrative Expense Our goal is to continue to leverage selling, general, and administrative expense management initiatives. Selling, general, and administrative expense primarily consists of salaries and wages, other administrative costs, such as professional fees and marketing expenses, and certain acquisition and divestiture-related costs. Selling, general, and administrative expense for the three months ended July 25, 2025 was $2.8 billion as compared to $2.7 billion for the corresponding period in the prior fiscal year. The increase in selling, general, and administrative expense was primarily due to new product launches and commercialization activities.

Current wording

Selling, General, and Administrative Expense Our goal is to continue to leverage selling, general, and administrative expense management initiatives. Selling, general, and administrative expense primarily consists of salaries and wages, other administrative costs, such as professional fees and marketing expenses, and certain acquisition and divestiture-related costs. Selling, general, and administrative expense for the three and six months ended October 24, 2025 was $3.0 billion and $5.8 billion, respectively, as compared to $2.8 billion and $5.4 billion, respectively, for the corresponding periods in the prior fiscal year. The increase in selling, general, and administrative expense was primarily due to increased selling expenses in line with sales growth, new product launches and related commercialization activities, increased incentive performance in the current year, and increased expenses to support the impending separation of the Diabetes Operating Unit.

Previous wording

Restructuring Charges, Net For the three months ended July 25, 2025 and July 26, 2024, restructuring costs primarily consist of employee termination benefits and facility related and contract termination costs.

Current wording

Restructuring Charges, Net For the three and six months ended October 24, 2025 and October 25, 2024, restructuring costs primarily consist of employee termination benefits.

Previous wording

Other Operating Expense, Net Other operating expense, net primarily includes expenses associated with royalties paid for the in-license of intellectual property from third parties, currency remeasurement and derivative gains and losses, changes in the fair value of contingent consideration, certain acquisition and divestiture-related items, and income from funded research and development arrangements.

Current wording

Other Operating Expense (Income), Net Other operating expense (income), net primarily includes expenses associated with royalties paid for the in-license of intellectual property from third parties, currency remeasurement and derivative gains and losses, changes in the fair value of contingent consideration, certain acquisition and divestiture-related items, and income from funded research and development arrangements.

Previous wording

For the three months ended July 25, 2025, the increase in other operating expense, net was largely driven by the net impact of currency remeasurement and our hedging programs resulting in a net loss of $62 million as compared to a net loss of $6 million in the corresponding period in the prior fiscal year.

Current wording

For the three and six months ended October 24, 2025, the change inother operating expense (income), net was largely driven by the net impact of currency remeasurement and our hedging programs resulting in a net loss of $69 million and $132 million, respectively, as compared to a net loss of $39 million and $44 million, respectively, in the corresponding periods in the prior fiscal year.

Previous wording

Interest income was $120 million and $112 million for the three months ended July 25, 2025 and July 26, 2024, respectively. For the three months ended July 25, 2025, net losses on minority investments were $113 million as compared to net gains of $17 million for the corresponding period in the prior fiscal year.

Current wording

Interest income for the three and six months ended October 24, 2025 was $89 million and $208 million, respectively, as compared to $137 million and $249 million, respectively, for the corresponding periods in the prior fiscal year. The decrease in interest income was primarily driven by changes in our global liquidity structures. For the three and six months ended October 24, 2025, net losses on minority investments were $24 million and $137 million, respectively, as compared to net gains of $10 million and $27 million, respectively, for the corresponding periods in the prior fiscal year.

Previous wording

For the three months ended July 25, 2025, the increase in interest expense, net was not significant.

Current wording

For the three and six months ended October 24, 2025, the decrease in interest expense, net was largely driven by changes in our global liquidity structures.

Previous wording

On July 4, 2025, the U.S. Government enacted The One Big Beautiful Bill Act of 2025, which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. Certain provisions are effective for the Company beginning fiscal year 2026. The impact for the three months ended July 25, 2025 was not significant, and impacts to fiscal year 2026 and beyond are not expected to be significant.

Current wording

On July 4, 2025, the U.S. Government enacted The One Big Beautiful Bill Act of 2025, which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. Certain provisions are effective for the Company beginning fiscal year 2026. The impact for the three and six months ended October 24, 2025 was not significant, and impacts to fiscal year 2026 and beyond are not expected to be significant.

Previous wording

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 were effective for Medtronic in fiscal year 2025.

Current wording

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 were effective for the Company in fiscal year 2025.

Previous wording

Our effective tax rate for the three months ended July 25, 2025 was 19.6% as compared to 17.4% for the three months ended July 26, 2024. The increase in the effective tax rate primarily relates to an increase in the Pillar Two global minimum tax impact and year-over-year changes in operational results by jurisdiction.

Current wording

Our effective tax rate for the three and six months ended October 24, 2025 was 13.5% and 16.2%, respectively, as compared to 18.0% and 17.7% for the three and six months ended October 25, 2024, respectively. The decrease in the effective tax rate for both periods primarily relates to a tax benefit recognized during the three months ended October 24, 2025 related to a change in estimate of accrued interest on uncertain tax positions partially offset by an increase in the Pillar Two global minimum tax impact and year-over-year changes in operational results by jurisdiction.