What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-26 compared with 2025-02-25 · 157 added, 228 removed, 395 unchanged (49% of the section changed)

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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 nine months ended January 24, 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.

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Our primary products include those for cardiac rhythm disorders, cardiovascular disease, neurological disorders and diseases, spinal conditions and musculoskeletal trauma, ear, nose, and throat conditions, urological and digestive disorders, advanced and general surgical care, respiratory and monitoring solutions, and diabetes conditions.

The following is a summary of revenue and diluted earnings per share for the three months ended January 24, 2025 and January 26, 2024, and operating cash flow for the nine months ended January 24, 2025 and January 26, 2024:

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:

GAAP to Non-GAAP Reconciliations (1)

The tables below present our GAAP to Non-GAAP reconciliations for the three months ended January 24, 2025 and January 26, 2024:

Three months ended January 24, 2025

The tables below present our GAAP to Non-GAAP reconciliations for the three months ended July 25, 2025 and July 26, 2024:

Three months ended July 25, 2025

(in millions, except per share data) Income Before Income Taxes Income

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Amortization of intangible assets (1)

459 85 374 0.29 18.5

Restructuring and associated costs (2)

5 unchanged sentences

113 7 107 0.08 6.2

Medical device regulations (4)

(39) (8) (30) (0.02) 20.5 %

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Non-GAAP $ 1,987 $ 354 $ 1,626 $ 1.26 17.8 %

Three months ended January 26, 2024

Three months ended July 26, 2024

(in millions, except per share data) Income Before Income Taxes Income

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12 1 11 0.01 8.3

(Gain)/loss on minority investments (3)

24 — 24 0.02 —

Medical device regulations (4)

26 5 21 0.02 19.2

Certain tax adjustments, net (5)

— 92 (92) (0.07) —

Non-GAAP $ 2,055 $ 312 $ 1,728 $ 1.30 15.2 %

(1) Associated costs primarily include salaries and wages for employees supporting the restructuring activities, consulting expenses, and asset write-offs.

(2) The charges primarily include business combination costs, changes in fair value of contingent consideration, and exit of business-related charges.

(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.

(4) The charges represent incremental costs of complying with the new European Union (E.U.) 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 time period.

(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.

The tables below present our GAAP to Non-GAAP reconciliations for the nine months ended January 24, 2025 and January 26, 2024:

Nine months ended January 24, 2025

(in millions, except per share data) Income Before Income Taxes Income

Tax Provision (Benefit) Net Income attributable to Medtronic Diluted EPS Effective Tax Rate

GAAP $ 4,367 $ 737 $ 3,606 $ 2.79 16.9 %

Non-GAAP Adjustments:

Amortization of intangible assets 1,243 227 1,017 0.79 18.3

Restructuring and associated costs (1)

154 30 124 0.10 19.5

Acquisition and divestiture-related items (2)

15 11 3 — 73.3

Certain litigation charges, net 81 13 68 0.05 16.0

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Certain tax adjustments, net — (17) 17 0.01 —

— (49) 49 0.04 —

Non-GAAP $ 1,925 $ 327 $ 1,592 $ 1.23 17.0 %

Nine months ended January 26, 2024

(in millions, except per share data) Income Before Income Taxes Income

Tax Provision (Benefit) Net Income attributable to Medtronic Diluted EPS Effective Tax Rate

GAAP $ 3,982 $ 936 $ 3,022 $ 2.27 23.5 %

Non-GAAP Adjustments:

Amortization of intangible assets 1,274 196 1,078 0.81 15.4

Restructuring and associated costs (1)

237 39 198 0.15 16.5

Acquisition and divestiture-related items (2)

165 16 149 0.11 9.7

Certain litigation charges, net 105 24 81 0.06 22.9

(Gain)/loss on minority investments (3)

113 5 109 0.08 4.4

Medical device regulations (4)

88 18 70 0.05 20.5

Certain tax adjustments, net (7)

— (282) 282 0.21 —

Non-GAAP $ 5,965 $ 954 $ 4,988 $ 3.74 16.0 %

(1) Associated costs primarily include salaries and wages for employees supporting the restructuring activities, consulting expenses, and asset write-offs.

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

(2) The charges primarily relate to employee termination benefits and facility related and contract termination costs.

(3) The charges primarily include business combination costs, changes in fair value of contingent consideration, and exit of business-related charges.

The nine months ended January 24, 2025 also includes gains related to certain business or asset sales.

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.

(4) 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.

(5) Reflects adjustments to the Company's Italian payback accruals resulting from the two July 22, 2024 rulings by the Constitutional Court and the Legislative Decree published by the Italian government on June 30, 2025 for certain prior years since 2015.

(6) The charges represent incremental costs of complying with the new European Union (E.U.) 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 time period.

(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.

(6) Primarily relates to amortization of previously established deferred tax assets from intercompany intellectual property transactions.

(7) The net charge primarily relates to an income tax reserve adjustment associated with the June 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.

We consider these costs to be duplicative of previously incurred costs and/or one-time costs.

Free Cash Flow

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GAAP measure) and free cash flow are as follows:

Nine months ended

(in millions) January 24, 2025 January 26, 2024

Three months ended

(in millions) July 25, 2025 July 26, 2024

Net cash provided by operating activities $ 1,088 $ 986

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Refer to the Summary of Cash Flows section for drivers of the change in cash provided by operating activities.

Segment and Division

Certain prior period net sales have 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 net sales have been recast to conform to the new presentation.

The charts below illustrate the percent of net sales by segment for the three months ended January 24, 2025 and January 26, 2024:

The table below illustrates net sales by segment and division for the three and nine months ended January 24, 2025 and January 26, 2024:

Macroeconomic Trends

Looking ahead, a number of macroeconomic and geopolitical factors could negatively impact our business, including without limitation:

• Competitive product launches and pricing pressure, geographic macroeconomic developments including changes in global trade policies and fluctuations in currency exchange rates, general price inflation, changes in interest rates, reimbursement challenges, impacts from changes in the mix of our product offerings, delays in product registration approvals, national and provincial tender pricing for certain products, particularly in China, replacement cycle challenges, and supply chain challenges from time to time.

• 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.

• 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.

• 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.

The charts below illustrate the percent of net sales by segment for the three months ended July 25, 2025 and July 26, 2024:

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:

Three months ended

Nine months ended

(in millions) January 24, 2025 January 26, 2024 % Change January 24, 2025 January 26, 2024 % Change

(in millions) July 25, 2025 July 26, 2024 % Change

Cardiac Rhythm & Heart Failure $ 1,712 $ 1,535 12 %

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Other operating segment (1)

32 53 (41) 106 164 (35)

Other adjustments (2)

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Total net sales $ 8,578 $ 7,915 8 %

(1) Includes the historical operations and ongoing transition agreements from businesses the Company has exited or divested.

(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.

Segment and Market Geography

The charts below illustrate the percent of net sales by market geography for the three months ended January 24, 2025 and January 26, 2024:

The table below includes net sales by market geography for each of our segments for the three and nine months ended January 24, 2025 and January 26, 2024:

International

Three months ended Three months ended

(in millions) January 24, 2025 January 26, 2024 % Change January 24, 2025 January 26, 2024 % Change

Cardiovascular $ 1,405 $ 1,373 2 % $ 1,632 $ 1,556 5 %

Neuroscience 1,689 1,556 9 769 799 (4)

Medical Surgical 893 947 (6) 1,180 1,164 1

Diabetes 236 224 6 457 416 10

Reportable segment net sales 4,223 4,100 3 4,038 3,935 3

Other operating segment (1)

15 20 (26) 17 34 (50)

Total net sales $ 4,237 $ 4,120 3 % $ 4,055 $ 3,968 2 %

International

Nine months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 % Change January 24, 2025 January 26, 2024 % Change

(in millions) July 25, 2025 July 26, 2024 % Change July 25, 2025 July 26, 2024 % Change

Cardiovascular $ 1,479 $ 1,403 6 % $ 1,806 $ 1,604 13 %

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Total net sales $ 4,224 $ 4,082 4 % $ 4,354 $ 3,832 14 %

(1) Includes historical operations and ongoing transition agreements from businesses the Company has exited or divested.

(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.

The increase in net sales for the three and nine months ended January 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, Cardiac Pacing Therapies, TAVR, Diabetes, and Neuromodulation.

The increase in net sales for the nine months ended January 24, 2025, 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.

Looking ahead, a number of macro-economic and geopolitical factors could negatively impact our business, including without limitation:

• Competitive product launches and pricing pressure, geographic macro-economic developments including changes in global trade policies and fluctuations in currency exchange rates, general price inflation, changes in interest rates, reimbursement challenges, impacts from changes in the mix of our product offerings, delays in product registration approvals, replacement cycle challenges, and supply chain challenges from time to time.

• National and provincial tender pricing for certain products, particularly in China.

• 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 2025, including on accounts receivable and inventory reserves, was not material, and for the three and nine months ended January 24, 2025, 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.

• Although the long-term implications of Israel's recent conflicts are difficult to predict at this time, the financial impact of the conflicts in the third quarter of fiscal year 2025, including on accounts receivable and inventory reserves, was not material.

As of January 24, 2025, the Company had 6 facilities and approximately 1,500 employees in Israel.

For the three and nine months ended January 24, 2025, the business of the Company in Israel represented less than 1% of the Company's consolidated revenues and assets.

(1) Includes operations and ongoing transition agreements from businesses the Company has exited or divested.

(2) Reflects adjustments to the Company's Italian payback accruals as further described below.

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.

Cardiovascular

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 nine months ended January 24, 2025 were $3.0 billion and $9.1 billion, an increase of 4 percent and 5 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase was primarily due to strong performance of Cardiac Ablation Solutions, Structural Heart, Cardiac Pacing Therapies, and Cardiac Surgery.

The graphs below illustrate the percent of Cardiovascular net sales by division for the three months ended January 24, 2025 and January 26, 2024:

Cardiac Rhythm & Heart Failure (CRHF) net sales for the three and nine months ended January 24, 2025 increased 5 percent and 6 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase was driven by growth in Micra transcatheter pacing systems, Aurora extravascular implantable cardioverter defibrillator (EV-ICD) system, and TYRX.

Cardiac Ablation Solutions experienced strong growth in PulseSelect and Sphere-9 pulsed field ablation with partially offsetting declines in cryoablation.

Structural Heart & Aortic (SHA) net sales for the three and nine months ended January 24, 2025 increased 4 percent and 5 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase was driven by continued growth in Structural Heart from adoption of Evolut FX+ TAVR system and in Cardiac Surgery driven by growth in Perfusion and Surgical Valves.

Coronary & Peripheral Vascular (CPV) net sales for the three and nine months ended January 24, 2025 were flat and increased 3 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

Net sales were impacted by growth in Coronary led by guide catheters and balloons, partially offset by impacts from tender pricing in China in Peripheral Vascular Health.

In addition to the macro-economic and geopolitical factors described in the Executive Level Overview, looking ahead, we expect Cardiovascular could be affected by the following:

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 25, 2025 was $3.3 billion, an increase of 9 percent, as compared to the corresponding period in the prior fiscal year, resulting from growth across most businesses and the impacts of foreign currency fluctuations.

The graphs below illustrate the percent of Cardiovascular net sales by division for the three months ended July 25, 2025 and July 26, 2024:

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.

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.

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.

In addition to the macroeconomic and geopolitical factors described in the Executive Level Overview, looking ahead, we expect Cardiovascular could be affected by the following:

• Continued global penetration of our Micra transcatheter pacing portfolio.

• Continued acceptance and growth from the Azure XT and Azure S SureScan pacing systems and the 3830 lead.

• Global adoption of Aurora Extravascular ICD.

• Global adoption of Aurora EV-ICD.

• Growth of the Cobalt and Crome portfolio of ICDs and CRT-Ds.

• Growth of the CRT-P quadripolar pacing system.

• Continued growth, adoption, and utilization of the TYRX Envelope for implantable devices.

• Continued growth and utilization of the TYRX Envelope for implantable devices.

• Continued use and acceptance of Reveal LINQ and expansion of the LINQ II cardiac monitor.

• 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.

Sphere-9 catheter.

The Affera mapping and ablation system and Sphere-9 catheter received U.S.

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• Market acceptance and reimbursement for the Symplicity Spyral renal denervation system, also known as the Symplicity blood pressure procedure, for the treatment of hypertension.

• Continued acceptance and growth of the Onyx Frontier DES platform.

• Continued acceptance and growth of the Onyx Frontier drug-eluting stent (DES) platform.

Onyx Frontier is a DES that introduces an enhanced delivery system and is used for complex percutaneous coronary intervention (PCI).

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IN.PACT 018 adds to the existing IN.PACT Admiral DCB portfolio and is used to treat femoropopliteal disease.

• 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.

• 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.

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.

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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 24, 2025 were $2.5 billion and $7.2 billion, 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 due to growth in Neuromodulation, Spine and Biologics, and Neurosurgery.

The graphs below illustrate the percent of Neuroscience net sales by division for the three months ended January 24, 2025 and January 26, 2024:

Cranial & Spinal Technologies (CST) net sales for the three and nine months ended January 24, 2025 increased 4 percent and 5 percent, respectively, 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, Biologics, and Neurosurgery.

Specialty Therapies (Specialty) net sales for the three and nine months ended January 24, 2025 increased 1 percent and 3 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase was driven by growth on continued adoption of the Interstim X system, and ENT.

Hemorrhagic stroke products also contributed to the net sales increase for the nine months ended January 24, 2025.

Neuromodulation (NM) net sales for the three and nine months ended January 24, 2025 increased 12 percent and 11 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase was driven by the continued launch of both the Inceptiv spinal cord stimulator in the U.S.

and the Percept RC deep brain neurostimulator.

In addition to the macro-economic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Neuroscience could be affected by the following:

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.

The graphs below illustrate the percent of Neuroscience net sales by division for the three months ended July 25, 2025 and July 26, 2024:

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.

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.

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.

In addition to the macroeconomic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Neuroscience could be affected by the following:

• Continued adoption and growth of our integrated solutions through the AiBLE offering, which integrates spinal implants with enabling technologies (StealthStation, O-arm Imaging Systems, and Midas), Mazor robotics, and UNiD Adaptive Spine Intelligence AI-driven technology for surgical planning and personalized spinal implants.

• 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.

• Continued growth of Pipeline Embolization Devices, endovascular treatments for large or giant wide-necked brain aneurysms.

• Continued growth of commercially available Pipeline Embolization Devices, endovascular treatments for certain wide-necked brain aneurysms.

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

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FDA approved Asleep DBS surgery for people with Parkinson's and people with essential tremor.

In January 2025, BrainSense Adaptive DBS and BrainSense Electrode Identifier received CE Mark approval in the E.U.

and United Kingdom.

• 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.

BrainSense Adaptive DBS and BrainSense Electrode Identifier received CE Mark in January 2025 and U.S.

FDA approval in February 2025.

• 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 the hemorrhagic stroke intravascular device, our next-generation spine enabling technologies, the tibial bladder control stimulator, and the percutaneous tibial neuromodulation system.

Medical Surgical

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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 nine months ended January 24, 2025 were $2.1 billion and $6.2 billion, a decrease of 2 percent and flat, respectively, as compared to the corresponding periods in the prior fiscal year, resulting from declines across most businesses as outlined below.

The graphs below illustrate the percent of Medical Surgical net sales by division for the three months ended January 24, 2025 and January 26, 2024:

Surgical & Endoscopy (SE) net sales for the three and nine months ended January 24, 2025 decreased 1 percent and flat, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales for both periods were impacted by declines in Stapling and General Surgical Technologies, primarily driven by ongoing stapling product pressures and changes in U.S.

distributor buying patterns.

Partially offsetting these declines was growth in Advanced Energy on continued adoption of LigaSure vessel sealing technology.

Acute Care & Monitoring (ACM) net sales for the three and nine months ended January 24, 2025 decreased 4 percent and 1 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales decrease for the three and nine months ended January 24, 2025 were driven by declines in Nellcor pulse oximetry as a result of year over year declines in U.S.

respiratory related hospitalizations in the quarter and Airways with partially offset growth in Bispectral Index monitoring system.

In addition to the macro-economic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Medical Surgical could be affected by the following:

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.

The graphs below illustrate the percent of Medical Surgical net sales by division for the three months ended July 25, 2025 and July 26, 2024:

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.

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.

In addition to the macroeconomic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Medical Surgical could be affected by the following:

• Acceptance and continued growth of Open-to-MIS (minimally invasive surgery) techniques and tools through our efforts to transition open surgery to MIS.

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Our expanded and strengthened surgical offerings complement our global gynecology business.

• Global adoption of robotic-assisted surgery and installations of Hugo robotic assisted surgery (RAS) system for urologic, bariatric, gynecologic, hernia, and general surgery procedures.

• Global adoption of robotic-assisted surgery and the safe and effective use of the Hugo robotic assisted surgery (RAS) system, including system reliability and acceptability, for urologic, bariatric, gynecologic, hernia, and general surgery procedures.

This includes continued integration and adoption of Touch Surgery Enterprise with the first artificial intelligence powered surgical videos and analytics platform to make it easier to train and discover new techniques within the robotics platform.

The Hugo RAS system, which received CE Mark in October 2021, as well as secured additional regulatory approvals outside the U.S., is designed to help reduce unwanted variability, improve patient outcomes, and, by extension, lower per procedure cost.

• 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.

LigaSure RAS vessel-sealing technology received CE Mark in July 2025, expanding Hugo RAS system capabilities for gynecologic, general, and urologic procedures.

• 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 and Digital Surgical Technologies, Signia powered stapling devices, and our next-gen Ligasure and Sonicision vessel sealing devices.

Diabetes' products include insulin pumps, continuous glucose monitoring (CGM) systems, and consumables.

Diabetes' net sales for the three and nine months ended January 24, 2025 were $694 million and $2.0 billion, an increase of 8 percent and 11 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 U.S growth as a result of the continued adoption of the MiniMed 780G automated insulated delivery (AID) system, and strong international growth in CGM systems from increased attachment rates and adoption of Simplera Sync.

In addition to the macro-economic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Diabetes could be affected by the following:

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.

In addition to the macroeconomic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Diabetes could be affected by the following:

• The pending separation of the Diabetes business from the Company.

In May 2025, the Company announced its intent to separate the Diabetes Operating Unit into a new standalone company, and its expectation to complete the separation within 18 months from the announcement date.

• 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 CE Mark in early January 2024.

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.

• Market acceptance and growth of our sensor Simplera, which received U.S FDA approval in August 2024 and CE Mark in September 2023.

• Continued acceptance and growth of the Guardian Connect CGM system, which displays glucose information directly to a smartphone to provide patients access to their glucose levels seamlessly and discretely.

The Guardian Connect CGM system is available on both Apple iOS and Android devices.

• Market acceptance and growth of our sensor Simplera, which received U.S FDA approval in August 2024 and CE Mark in September 2023.

• Market acceptance and growth of our InPen smart pen system, which allows users to have their Medtronic CGM readings in real-time alongside insulin dose information, all in one view.

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• Changes in medical reimbursement policies and programs, along with additional payor coverage on insulin pumps.

• 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 Minimed 780G insulin pump system with Simplera Sync in the U.S., the products resulting from our partnership with Abbott to expand CGM options for people living with diabetes, as well as expanded labeling in Type 2 diabetes, fast acting insulins, and pregnancy warning removal.

• Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval, manufacture and commercialize the products within our pipeline, including our partnership with Abbott to expand CGM options for people living with diabetes, our next generation insulin delivery options, as well as expanded labeling in Type 2 diabetes, and fast acting insulins.

COSTS AND EXPENSES

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 24, 2025 and January 26, 2024:

Cost of Products Sold Cost of products sold for the three and nine months ended January 24, 2025 was $2.8 billion and $8.5 billion, respectively, as compared to $2.8 billion and $8.2 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 months ended January 24, 2025 was primarily due to favorable currency impact and lower costs for quality remediation and excess and obsolete inventory charges.

Cost of products sold as a percentage of net sales for the nine months ended January 24, 2025 was primarily flat as compared to the corresponding period in the prior fiscal year.

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:

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.

Research and Development Expense We remain committed to deliver the best possible experiences for patients, physicians, and caregivers we serve;

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and to expand healthcare access and deliver positive outcomes.

Research and development expense for the three and nine months ended January 24, 2025 was $675 million and $2.0 billion, respectively, as compared to $695 million and $2.1 billion, respectively, for the corresponding periods in the prior fiscal year.

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.

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, certain acquisition and divestiture-related costs, and restructuring associated expenses.

Selling, general, and administrative expense for the three and nine months ended January 24, 2025 was $2.7 billion and $8.1 billion, respectively, as compared to $2.7 billion and $8.0 billion, respectively, for the corresponding periods in the prior fiscal year.

The increase in selling, general, and administrative expense for both periods is primarily due to new product launches and commercialization activities.

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.

The following is a summary of other costs and expenses (income):

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Three months ended

(in millions) July 25, 2025 July 26, 2024

Amortization of intangible assets $ 459 $ 414

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Certain litigation charges, net 27 81

Other operating (income) expense, net (5) 17 (38) (13)

Other operating expense, net 70 1

Other non-operating income, net (33) (157)

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Amortization of Intangible Assets Amortization of intangible assets includes the amortization expense of our definite-lived intangible assets, consisting of customer relationships, purchased technology and patents, trademarks, tradenames, and other intangible assets.

Restructuring Charges, Net For the three and nine months ended January 24, 2025 and January 26, 2024, restructuring costs primarily related to employee termination benefits and facility consolidations to support cost reduction initiatives.

For the three months ended July 25, 2025, the Company recognized $45 million of accelerated amortization on certain intangible assets within the Cardiovascular Segment.

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.

For additional information about our restructuring activities, refer to Note 5 to the current period's consolidated financial statements.

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For additional information, refer to Note 16 in the current period's consolidated financial statements.

Other Operating (Income) Expense, Net Other operating (income) 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.

For the three months ended January 24, 2025, the change in other operating (income) expense, net was largely driven by the net impact of currency remeasurement and our hedging programs resulting in a net gain of $12 million for the three months ended January 24, 2025 as compared to a net loss of $12 million in the corresponding period in the prior fiscal year.

For the nine months ended January 24, 2025, the change in other operating (income) expense, net was largely driven by insignificant gains from certain business or asset sales in the Cardiovascular and Neuroscience Portfolio.

In addition, the change in fair value of contingent consideration for the nine months ended January 24, 2025 was $5 million of income as compared to $59 million of expense in the corresponding period in the prior fiscal year.

The change in other operating (income) expense, net was partially offset by increased acquisition and divestiture-related charges and the net impact of currency remeasurement and our hedging programs.

The currency impact for the nine months ended January 24, 2025 was a net loss of $32 million as compared to a net gain of $16 million in the corresponding period in the prior fiscal year.

Other Non-Operating Income, Net Other non-operating income, net includes the non-service component of net periodic pension and postretirement benefit cost, investment gains and losses, and interest income, which includes income on marketable debt securities and our global liquidity structure.

For the three months and nine months ended January 24, 2025, the decrease in other non-operating income, net was primarily attributable to changes in interest income and net losses on minority investments.

Interest income was $114 million and $364 million for the three and nine months ended January 24, 2025, respectively, as compared to $170 million and $429 million for the three and nine months ended January 26, 2024, respectively.

Net losses on minority investments were $68 million and $41 million for the three and nine months ended January 24, 2025, respectively, as compared to $24 million and $113 million for the three and nine months ended January 26, 2024, respectively.

Interest Expense, Net Interest expense, net includes interest incurred on our outstanding borrowings, global liquidity structure, amortization of debt issuance costs and debt premiums or discounts, and amortization of amounts excluded from the effectiveness assessment of certain net investment and fair value hedges.

For the three months ended January 24, 2025, the decrease in interest expense, net was primarily driven by lower interest on the balances in our global liquidity structures, partially offset by the €3.0 billion debt issuance on June 3, 2024.

For the nine months ended January 24, 2025, the increase in interest expense, net was primarily driven by the aforementioned debt issuance.

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

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.

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.

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.

Interest Expense, Net Interest expense, net includes interest incurred on our outstanding borrowings, global liquidity structures, amortization of debt issuance costs and debt premiums or discounts, and amortization of amounts excluded from the effectiveness assessment of certain net investment and fair value hedges.

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

Three months ended

(in millions) July 25, 2025 July 26, 2024

Income tax provision $ 255 $ 220

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Difference between the effective tax rate and Non-GAAP Nominal Tax Rate (1.8) % (0.4) %

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.

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.

The Israeli Central-Lod District Court issued its decision in Medtronic Ventor Technologies Ltd (Ventor) v.

Kfar Saba Assessing Office on June 1, 2023.

The court determined that there was a deemed taxable transfer of intellectual property.

As a result, the Company recorded a $187 million income tax charge during the first quarter of fiscal year 2024 and has filed an appeal with the Supreme Court of Israel.

Our effective tax rate for the three and nine months ended January 24, 2025 was 15.4% and 16.9%, respectively, as compared to 9.2% and 23.5% for the three and nine months ended January 26, 2024, respectively.

The increase in the effective tax rate for the three months ended January 24, 2025 primarily relates to a Swiss Cantonal tax rate change on previously recorded deferred tax assets during the three months ended January 26, 2024, and the implementation of the Pillar Two global minimum tax.

The decrease in the effective tax rate for the nine months ended January 24, 2025 was primarily attributable to the establishment of a valuation allowance on certain net operating losses and an income tax reserve adjustment made during the nine months ended January 26, 2024 associated with the Ventor court decision noted above, which was partially offset by the Swiss Cantonal tax rate change on previously recorded deferred tax assets and the implementation of the Pillar Two global minimum tax noted above.

Our Non-GAAP Nominal Tax Rate for the three and nine months ended January 24, 2025 was 15.7% and 17.0%, respectively, as compared to 15.2% and 16.0% for the three and nine months ended January 26, 2024, respectively.

The change in our Non-GAAP Nominal Tax Rate was primarily due to the implementation of the Pillar Two global minimum tax and year-over-year changes in operational results by jurisdiction.

An increase in our Non-GAAP Nominal Tax Rate of 1 percent would result in an additional income tax provision for the three and nine months ended January 24, 2025 of approximately $21 million and $61 million, respectively.

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.

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.

Our Non-GAAP Nominal Tax Rate for the three months ended July 25, 2025 was 17.8% as compared to 17.0% for the three months ended July 26, 2024.

The increase in our Non-GAAP Nominal Tax Rate was primarily due to the impact of the Pillar Two global minimum tax.

An increase in our Non-GAAP Nominal Tax Rate of 1 percent would result in an additional income tax provision for the three months ended July 25, 2025 of approximately $20 million.

LIQUIDITY AND CAPITAL RESOURCES

We are currently in a strong financial position, and we believe our balance sheet and liquidity as of January 24, 2025 provide us with flexibility, and our cash, cash equivalents, and current investments, along with our credit facility and related commercial paper programs will satisfy our foreseeable operating needs.

We are currently in a strong financial position, and we believe our balance sheet and liquidity as of July 25, 2025 provide us with flexibility, and our cash, cash equivalents, and current investments, along with our credit facility and related commercial paper programs will satisfy our foreseeable operating needs.

Our liquidity and capital structure are evaluated regularly within the context of our annual operating and strategic planning processes.

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The following is a summary of cash provided by (used in) operating, investing, and financing activities, the effect of exchange rate changes on cash and cash equivalents, and the net change in cash and cash equivalents:

Nine months ended

(in millions) January 24, 2025 January 26, 2024

Three months ended

(in millions) July 25, 2025 July 26, 2024

Cash provided by (used in):

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Net change in cash and cash equivalents $ (945) $ 27

Operating Activities The $506 million increase in net cash provided was primarily driven by an increase in cash collected from customers due to an increase in sales and a decrease in cash paid to vendors, which was partially offset by an increase in cash paid for taxes and increased annual incentive payouts.

Investing Activities The $223 million decrease in cash used was primarily attributable to an increase in net sales and maturities of investments of $442 million partially offset by an increase in net additions to property, plant, and equipment of $239 million.

Financing Activities There was a $927 million increase in net cash used during the nine months ended January 24, 2025, as compared to the corresponding period in the prior fiscal year.

In the current period, there was a decrease in total short-term borrowings of $1.1 billion, as compared to an increase of $1.0 billion in the prior year.

Additionally, on June 3, 2024, Medtronic Inc.

issued four tranches of EUR-denominated Senior Notes with an aggregate principal of €3.0 billion, or $3.2 billion, which was partially offset by a $2.3 billion increase in net share repurchases during the nine months ended January 24, 2025, as compared to the corresponding period in the prior fiscal year.

Operating Activities The $102 million increase in net cash provided was primarily driven by an increase in cash collected from customers due to an increase in sales, partially offset by an increase in certain litigation payments and cash paid to suppliers.

Investing Activities The $460 million increase in cash used was primarily attributable to an increase in net purchases of investments of $368 million.

Financing Activities There was a $650 million increase in net cash used during the three months ended July 25, 2025 as compared to the corresponding period in the prior fiscal year.

In July 2025, the Company repaid at maturity €1.0 billion of Medtronic Luxco Senior Notes for $1.2 billion of total consideration.

The repayment was partially offset by an increase in current debt obligations of $649 million as compared to a decrease of $624 million in the prior year.

In the corresponding period in the prior fiscal year, Medtronic Inc.

issued four tranches of Euro-denominated Senior Notes with an aggregate principal of €3.0 billion, or $3.2 billion.

Additionally, there was a $2.4 billion decrease in net share repurchases during the three months ended July 25, 2025 as compared to the corresponding period in the prior fiscal year.

For more information on Senior Notes issued, refer to the Debt and Capital section below.

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From time to time, we may repurchase our outstanding debt obligations in the open market or through privately negotiated transactions.

Total debt at January 24, 2025 was $26.6 billion as compared to $25.0 billion at April 26, 2024.

The increase in total debt was primarily driven by issuance of Euro-denominated Senior Notes and fluctuations in exchange rates.

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.

Total debt at July 25, 2025 was $28.6 billion as compared to $28.5 billion at April 25, 2025.

The increase in total debt was primarily driven by the increase in commercial paper outstanding and impact of foreign exchange rates on our foreign currency denominated debt, partially offset by the repayment of Euro-denominated Senior Notes discussed in the Financing Activities section above.

In June 2024, Medtronic Inc.

issued four tranches of Euro-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.

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There is no specific time period associated with these repurchase authorizations.

During the nine months ended January 24, 2025, the Company repurchased a total of 35 million shares under this program at an average price of $82.75.

At January 24, 2025, we had approximately $2.4 billion remaining under the share repurchase program authorized by our Board of Directors.

During the three months ended July 25, 2025, the Company repurchased a total of 1 million shares under this program at an average price of $86.22.

At July 25, 2025, we had approximately $2.0 billion remaining under the share repurchase program authorized by our Board of Directors.

For more information on credit arrangements, refer to Note 7 to the current period's consolidated financial statements and Note 6 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 25, 2025.

Our liquidity sources at January 24, 2025 included $1.2 billion of cash and cash equivalents and $6.7 billion of current investments.

Our liquidity sources at July 25, 2025 included $1.3 billion of cash and cash equivalents and $6.8 billion of current investments.

Additionally, we maintain commercial paper programs and a Credit Facility.

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We maintain multicurrency commercial paper programs for short-term financing, which allow us to issue unsecured commercial paper notes on a private placement basis up to a maximum aggregate amount outstanding at any time of $3.5 billion.

At January 24, 2025 and April 26, 2024, we had no and $1.1 billion commercial paper outstanding, respectively.

At July 25, 2025 and April 25, 2025, we had $649 million and no commercial paper outstanding, respectively.

The issuance of commercial paper reduces the amount of credit available under our existing line of credit, as explained below.

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The Credit Facility provides us with the ability to increase our borrowing capacity by an additional $1.0 billion at any time during the term of the agreement.

At January 24, 2025 and April 26, 2024, no amounts were outstanding under the Credit Facility.

At July 25, 2025 and April 25, 2025, no amounts were outstanding under the Credit Facility.

Interest rates on advances of our Credit Facility are determined by a pricing matrix based on our long-term debt ratings assigned by Standard & Poor's Ratings Services (S&P) and Moody's Investors Service (Moody’s).

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Agency Rating (1)

January 24, 2025 April 26, 2024

July 25, 2025 April 25, 2025

Standard & Poor's Ratings Services

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A security rating is not a recommendation to buy, sell or hold securities, and may be subject to revision or withdrawal at any time by the rating agency, and each rating should be evaluated independently of any other rating.

S&P and Moody's long-term debt ratings and short-term debt ratings at January 24, 2025 were unchanged as compared to the ratings at April 26, 2024.

S&P and Moody's long-term debt ratings and short-term debt ratings at July 25, 2025 were unchanged as compared to the ratings at April 25, 2025.

We do not expect the S&P and Moody's ratings to have a significant impact on our liquidity or future flexibility to access additional liquidity given our balance sheet, Credit Facility, and related commercial paper programs.

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ACQUISITIONS AND DISPOSITIONS

Information regarding acquisitions and dispositions activity is included in Note 4 to the current period's consolidated financial statements.

We assess goodwill and indefinite-lived intangible assets for impairment annually in the third quarter of the fiscal year and whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired.

There were no impairments of goodwill in the current period as a result of the annual impairment test.

The Company calculates the excess of each reporting unit's fair value over its carrying amount, including goodwill, utilizing a discounted cash flow analysis and revenue and earnings multiples using comparable public company information.

The test for impairment of goodwill requires the Company to make several estimates related to projected future cash flows and appropriate multiples to determine the fair value of the goodwill reporting units.

Significant assumptions used in the reporting unit fair value measurements include forecasted cash flows, including revenue and expense growth rates, discount rates, and revenue and earnings multiples.

An impairment loss is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit.

Definite-lived intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset (asset group) may not be recoverable.

There were no impairments of intangible assets in the current period.

Further adverse changes to macroeconomic conditions or significant changes to our current and future expected financial performance could lead to goodwill or intangible asset impairment charges in future periods, and such charges could be material to our results of operations.

Information regarding acquisitions and disposition activity is included in Note 4 to the current period's consolidated financial statements.

In May 2025, we announced our intent to separate the Diabetes business, with the intention to create a new independent, publicly traded company.

The separation is expected to be completed within 18 months of the initial announcement.

Information regarding goodwill is included in Note 10 to the current period's consolidated financial statements.

CRITICAL ACCOUNTING ESTIMATES

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We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

As of January 24, 2025, there were no material changes to our critical accounting estimates.

As of July 25, 2025, there were no material changes to our critical accounting estimates.

NEW ACCOUNTING PRONOUNCEMENTS

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(CIFSA Subsidiary Guarantors)

The following tables present summarized financial information for the nine months ended January 24, 2025 and summarized balance sheet information at January 24, 2025 and April 26, 2024 for the obligor groups of Medtronic and Medtronic Luxco Senior Notes, and CIFSA Senior Notes.

The following tables present summarized financial information for the three months ended July 25, 2025 and summarized balance sheet information at July 25, 2025 and April 25, 2025 for the obligor groups of Medtronic and Medtronic Luxco Senior Notes, and CIFSA Senior Notes.

The obligor group consists of the parent company guarantor, subsidiary issuer, and subsidiary guarantors for the applicable senior notes.

The summarized financial information is presented after elimination of (i) intercompany transactions and balances among the guarantors and issuers and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor or issuer.

The summarized results of operations information for the nine months ended January 24, 2025 was as follows:

The summarized results of operations information for the three months ended July 25, 2025 was as follows:

(in millions) Medtronic & Medtronic Luxco Senior Notes (1)

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Net sales $ 750 $ —

Operating profit 209 110

(Loss) income before income taxes (343) 139

Net (loss) income attributable to Medtronic (282) 134

The summarized balance sheet information at January 24, 2025 was as follows:

Operating profit (loss) 93 (29)

Loss before income taxes (20) (24)

Net loss attributable to Medtronic (37) (20)

The summarized balance sheet information at July 25, 2025 was as follows:

(in millions) Medtronic & Medtronic Luxco Senior Notes (1)

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Total current liabilities (5)

25,969 10,138

Total noncurrent liabilities (6)

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Total noncurrent assets (4)

11,548 19,246

Total current liabilities (5)

25,228 43,416

Total noncurrent liabilities (6)

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• delays in regulatory approvals,

• public health crises,

• reduction or interruption in our supply,

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• healthcare policy changes,

• public health crises,

• cybersecurity and privacy incidents,

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis