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Item 2. Management’s Discussion and Analysis

2025-11-25 compared with 2025-08-26 · 178 added, 112 removed, 440 unchanged (40% 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 months ended July 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.

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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 net sales, diluted earnings per share, and operating cash flow for the three months ended July 25, 2025 and July 26, 2024:

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:

GAAP to Non-GAAP Reconciliations

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

The tables below present our GAAP to Non-GAAP reconciliations for the three months ended October 24, 2025 and October 25, 2024:

Three months ended October 24, 2025

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

Tax Provision

(Benefit) Net Income Attributable to Medtronic Diluted EPS

Tax Provision (Benefit) Net Income Attributable to Medtronic Diluted EPS

GAAP $ 1,597 $ 215 $ 1,374 $ 1.07 13.5 %

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— 9 (8) (0.01) —

(Gain)/loss on minority investments (4)

24 — 24 0.02 —

Certain tax adjustments, net (5)

— 29 (29) (0.02) —

Non-GAAP $ 2,097 $ 344 $ 1,746 $ 1.36 16.4 %

Three months ended October 25, 2024

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

Tax Provision (Benefit) Net Income Attributable to Medtronic Diluted EPS

GAAP $ 1,559 $ 281 $ 1,270 $ 0.99 18.0 %

Non-GAAP Adjustments:

Amortization of intangible assets 413 75 338 0.26 18.2

Restructuring and associated costs (2)

46 9 37 0.03 19.6

Acquisition and divestiture-related items (3)

(25) 5 (30) (0.02) (20.0)

(Gain)/loss on minority investments (4)

(10) 10 (21) (0.02) (100.0)

Medical device regulations (6)

12 2 10 0.01 16.7

Certain tax adjustments, net — (16) 16 0.01 —

Non-GAAP $ 1,995 $ 366 $ 1,620 $ 1.26 18.3 %

(1) The Company recognized $46 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, 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.

(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) Primarily includes a tax benefit recognized due to a change in estimate of accrued interest on uncertain tax positions, partially offset by amortization of previously established deferred tax assets arising from intercompany intellectual property transactions.

(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.

The tables below present our GAAP to Non-GAAP reconciliations for the six months ended October 24, 2025 and October 25, 2024:

Six months ended October 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 $ 2,898 $ 470 $ 2,414 $ 1.87 16.2 %

Non-GAAP Adjustments:

Amortization of intangible assets (1)

922 172 750 0.58 18.7

Restructuring and associated costs (2)

79 19 61 0.05 24.1

Acquisition and divestiture-related items (3)

58 18 40 0.03 31.0

Certain litigation charges, net 27 6 21 0.02 22.2

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Certain tax adjustments, net (6)

— 13 (13) (0.01) —

Non-GAAP $ 4,084 $ 698 $ 3,372 $ 2.62 17.1 %

Three months ended July 26, 2024

Six months ended October 25, 2024

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

Tax Provision (Benefit) Net Income Attributable to Medtronic Diluted EPS

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

GAAP $ 2,827 $ 500 $ 2,312 $ 1.79 17.7 %

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Certain tax adjustments, net (6)

— (33) 33 0.03 —

Non-GAAP $ 3,921 $ 693 $ 3,213 $ 2.49 17.7 %

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(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.

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.

(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 net benefit for the six months ended October 24, 2025 primarily includes a tax benefit recognized due to a change in estimate of accrued interest on uncertain tax positions, partially offset by amortization of previously established deferred tax assets arising from intercompany intellectual property transactions.

The charges for the six months ended October 25, 2024 includes amortization of previously established deferred tax assets arising from intercompany intellectual property transactions.

(7) 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.

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GAAP measure) and free cash flow are as follows:

Three months ended

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

Six months ended

(in millions) October 24, 2025 October 25, 2024

Net cash provided by operating activities $ 2,013 $ 1,944

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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.

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.

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.

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• 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:

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.

• 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.

The charts below illustrate the percent of net sales by segment for the three months ended October 24, 2025 and October 25, 2024:

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:

Three months ended

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

Six months ended

(in millions) October 24, 2025 October 25, 2024 % Change October 24, 2025 October 25, 2024 % Change

Cardiac Rhythm & Heart Failure $ 1,825 $ 1,578 16 % $ 3,538 $ 3,114 14 %

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Other operating segment (1)

Other adjustments (2)

35 37 (6) 68 75 (9)

Other adjustments (2)

— — — 39 (90) NM (3)

Total net sales $ 8,961 $ 8,403 7 % $ 17,539 $ 16,318 8 %

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Three months ended Three months ended

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

(in millions) October 24, 2025 October 25, 2024 % Change October 24, 2025 October 25, 2024 % Change

Cardiovascular $ 1,592 $ 1,434 11 % $ 1,844 $ 1,668 11 %

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22 18 22 13 19 (32)

Other adjustments (2)

Total net sales $ 4,516 $ 4,304 5 % $ 4,445 $ 4,099 8 %

International

Six months ended Six months ended

(in millions) October 24, 2025 October 25, 2024 % Change October 24, 2025 October 25, 2024 % Change

Cardiovascular $ 3,071 $ 2,836 8 % $ 3,650 $ 3,272 12 %

Neuroscience 3,354 3,242 3 1,624 1,526 6

Medical Surgical 1,827 1,825 — 2,427 2,298 6

Diabetes 447 447 — 1,031 886 16

Reportable segment net sales 8,699 8,350 4 8,733 7,983 9

Other operating segment (1)

42 37 14 27 38 (29)

Other adjustments (2)

— — — 39 (90) NM (3)

Total net sales $ 8,741 $ 8,387 4 % $ 8,799 $ 7,931 11 %

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(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.

(3) Not meaningful (NM).

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.

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 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.

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.

The graphs below illustrate the percent of Cardiovascular net sales by division for the three months ended October 24, 2025 and October 25, 2024:

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.

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.

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.

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.

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.

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:

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• 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.

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.

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

• Market acceptance and growth of the Penditure LAA Exclusion System.

The system received CE Mark in October 2025.

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

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

• Market acceptance and growth of the Neuroguard IEP Carotid stenting system.

• 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.

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 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.

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.

The graphs below illustrate the percent of Neuroscience net sales by division for the three months ended October 24, 2025 and October 25, 2024:

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.

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.

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.

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.

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.

• 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.

• 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.

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

• 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.

• Continued acceptance and growth of our ENT therapies, including capital equipment sales of the StealthStation ENT surgical navigation system and intraoperative NIM nerve monitoring system, and the Propel sinus implants used in the treatment of chronic rhinosinusitis.

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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 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.

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.

The graphs below illustrate the percent of Medical Surgical net sales by division for the three months ended October 24, 2025 and October 25, 2024:

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.

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.

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.

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:

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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.

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.

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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 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.

• 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.

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

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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 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.

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:

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.

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 months ended July 25, 2025 was $726 million as compared to $676 million for the corresponding period in the prior fiscal year.

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.

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.

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.

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

Three months ended

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

Three months ended Six months ended

(in millions) October 24, 2025 October 25, 2024 October 24, 2025 October 25, 2024

Amortization of intangible assets $ 463 $ 413 $ 922 $ 827

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Certain litigation charges, net — — 27 81

Other operating expense, net 70 1

Other operating expense (income), net 22 (34) 92 (33)

Other non-operating income, net (92) (173) (125) (330)

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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.

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 the three months and six months ended October 24, 2025, the Company recognized $46 million and $91 million, respectively, of accelerated amortization on certain intangible assets within the Cardiovascular Segment.

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.

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 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.

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.

For the three and six months ended October 24, 2025, the change in other 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.

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 structures.

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 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.

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

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.

Three months ended Six months ended

(in millions) October 24, 2025 October 25, 2024 October 24, 2025 October 25, 2024

Income tax provision $ 215 $ 281 $ 470 $ 500

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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 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.

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.

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.

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.

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.

Our Non-GAAP Nominal Tax Rate for the three and six months ended October 24, 2025 was 16.4% and 17.1%, respectively, as compared to 18.3% and 17.7% for the three and six months ended October 25, 2024, respectively.

The decrease in our Non-GAAP Nominal Tax Rate for both periods was primarily due 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.

An increase in our Non-GAAP Nominal Tax Rate of 1 percent would result in an additional income tax provision for the three and six months ended October 24, 2025 of approximately $21 million and $41 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES

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.

We are currently in a strong financial position, and we believe our balance sheet and liquidity as of October 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.

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

We consider the liquidity necessary to fund our operations, which includes working capital needs, investments in research and development, property, plant, and equipment, and other operating costs.

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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:

Three months ended

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

Six months ended

(in millions) October 24, 2025 October 25, 2024

Cash provided by (used in):

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Net change in cash and cash equivalents $ (936) $ 110

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.

Operating Activities The $69 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 cash paid to suppliers and certain litigation payments.

Investing Activities The $597 million increase in cash used was primarily attributable to an increase in net purchases of investments of $562 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.

Financing Activities There was a $511 million increase in net cash used during the six months ended October 24, 2025, as compared to the corresponding period in the prior fiscal year.

During the six months ended October 24, 2025, the Company issued two tranches of Euro-denominated Senior Notes with an aggregate principal of €1.5 billion, or $1.7 billion.

The Company used the net proceeds to repay in full €1.5 billion, or $1.8 billion, of Senior Notes.

Further, in July 2025, the Company repaid at maturity €1.0 billion, or $1.2 billion, of Senior Notes.

During the six months ended October 25, 2024, the Company issued four tranches of Euro-denominated Senior Notes with an aggregate principal of €3.0 billion, or $3.2 billion, partially offset by net share repurchases of $2.6 billion.

The above changes were partially offset by an increase in short-term borrowings of $1.4 billion as compared to a decrease of $67 million in the prior year.

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

Debt and Capital

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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 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.

Total debt at October 24, 2025 was $29.1 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 the impact of foreign exchange rates on our foreign currency denominated debt.

This was partially offset by repayments of Euro-denominated debt, net of issuances, as discussed below.

In September 2025, Medtronic, Inc.

issued two tranches of Euro-denominated Senior Notes with an aggregate principal of €1.5 billion, with maturities in fiscal year 2031 and 2046, resulting in cash proceeds of approximately $1.7 billion, net of discounts and issuance costs.

The Company used the net proceeds to repay at maturity €500 million of Medtronic Luxco’s 2.625% Senior Notes for $587 million in September 2025 and €1.0 billion of Medtronic Luxco's 0.000% Senior Notes for $1.2 billion in October 2025.

Further, in July 2025, the Company repaid at maturity €1.0 billion, or $1.2 billion, of Senior Notes.

In June 2024, Medtronic, Inc.

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

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.

During the six months ended October 24, 2025, the Company repurchased a total of 5 million shares under this program at an average price of $91.37.

At October 24, 2025, we had approximately $1.7 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 July 25, 2025 included $1.3 billion of cash and cash equivalents and $6.8 billion of current investments.

Our liquidity sources at October 24, 2025 included $1.3 billion of cash and cash equivalents and $7.0 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 July 25, 2025 and April 25, 2025, we had $649 million and no commercial paper outstanding, respectively.

At October 24, 2025 and April 25, 2025, we had $1.4 billion 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 July 25, 2025 and April 25, 2025, no amounts were outstanding under the Credit Facility.

At October 24, 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).

3 unchanged sentences

Agency Rating (1)

July 25, 2025 April 25, 2025

October 24, 2025 April 25, 2025

Standard & Poor's Ratings Services

6 unchanged sentences

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 July 25, 2025 were unchanged as compared to the ratings at April 25, 2025.

S&P and Moody's long-term debt ratings and short-term debt ratings at October 24, 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.

1 unchanged sentence

We believe our off-balance sheet arrangements do not have a material current or anticipated future effect on our consolidated earnings, financial position, and/or cash flows.

Refer to the Debt and Capital section above for changes in debt obligations during the first quarter of fiscal year 2026;

Refer to the Debt and Capital section above for changes in debt obligations during the first two quarters of fiscal year 2026;

there have been no other material changes to our long-term contractual obligations as reported in our most recent Annual Report filed on Form 10-K for the fiscal year ended April 25, 2025.

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

As of October 24, 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 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 following tables present summarized financial information for the six months ended October 24, 2025 and summarized balance sheet information at October 24, 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 three months ended July 25, 2025 was as follows:

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

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

4 unchanged sentences

Net loss attributable to Medtronic (68) (89)

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

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

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

128 unchanged sentences

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