What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-02-24 compared with 2025-11-25 · 173 added, 123 removed, 495 unchanged (37% 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 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.

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 23, 2026.

Amounts reported in millions within this quarterly report are computed based on the actual amounts, and therefore, the sum of the components may not equal the total amount reported in millions due to rounding.

Additionally, certain columns and rows within tables may not sum due to rounding.

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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 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:

The following is a summary of net sales and diluted earnings per share for the three months ended January 23, 2026 and January 24, 2025 and operating cash flow for the nine months ended January 23, 2026 and January 24, 2025:

GAAP to Non-GAAP Reconciliations

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

The tables below present our GAAP to Non-GAAP reconciliations for the three months ended January 23, 2026 and January 24, 2025:

Three months ended January 23, 2026

(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 $ 1,404 $ 254 $ 1,143 $ 0.89 18.1 %

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38 5 33 0.03 13.2

Certain litigation charges, net 62 10 52 0.04 16.1

(Gain)/loss on minority investments (4)

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Certain tax adjustments, net — (14) 14 0.01 —

— 29 (29) (0.02) —

Non-GAAP $ 2,125 $ 369 $ 1,750 $ 1.36 17.3 %

Three months ended October 25, 2024

Three 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

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

GAAP $ 1,540 $ 237 $ 1,294 $ 1.01 15.4 %

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28 5 23 0.02 17.9

Certain litigation charges, net 22 5 18 0.01 22.7

(Gain)/loss on minority investments (4)

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(1) The Company recognized $30 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.

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

(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.

Exit of business-related charges primarily relate to the impending separation of the Diabetes business.

For the three months ended January 23, 2026, charges also include 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.

(5) 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

The tables below present our GAAP to Non-GAAP reconciliations for the nine months ended January 23, 2026 and January 24, 2025:

Nine months ended January 23, 2026

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

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Certain tax adjustments, net (6)

— 13 (13) (0.01) —

Non-GAAP $ 6,209 $ 1,066 $ 5,122 $ 3.98 17.2 %

Six months ended October 25, 2024

Nine months ended January 24, 2025

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

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(1) The Company recognized $121 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.

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

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(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.

(6) The charges for the nine months ended January 23, 2026 primarily includes a tax benefit recognized due to a change in interest accrued on uncertain tax positions, offset by amortization of previously established deferred tax assets arising from intercompany intellectual property transactions.

The charges for the nine months ended January 24, 2025 primarily 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:

Six months ended

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

Nine months ended

(in millions) January 23, 2026 January 24, 2025

Net cash provided by operating activities $ 4,757 $ 4,516

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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 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.

Based on current rates as of February 17, 2026, 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.

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Further escalation or expansion of trade barriers could have a material adverse effect on our results of operations.

On February 20, 2026, the U.S.

Supreme Court ruled that President Trump's tariff policies under the International Emergency Economic Powers Act are unconstitutional.

We continue to monitor the situation and the impact to 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 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:

The financial impact of the conflict for the three and nine months ended January 23, 2026, including on accounts receivable and inventory reserves, was not material.

For the three and nine months ended January 23, 2026, 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 nine months ended January 23, 2026, including on accounts receivable and inventory reserves, was not material.

As of January 23, 2026, the Company had 6 facilities and approximately 1,200 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 January 23, 2026 and January 24, 2025:

The table below illustrates net sales by segment and division and market geography for the three and nine months ended January 23, 2026 and January 24, 2025:

Three months ended

Six months ended

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

Nine months ended

(in millions) January 23, 2026 January 24, 2025 % Change January 23, 2026 January 24, 2025 % Change

Cardiac Rhythm & Heart Failure $ 1,856 $ 1,545 20 % $ 5,394 $ 4,659 16 %

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Three months ended Three months ended

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

(in millions) January 23, 2026 January 24, 2025 % Change January 23, 2026 January 24, 2025 % Change

Cardiovascular $ 1,589 $ 1,405 13 % $ 1,868 $ 1,632 15 %

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International

Six months ended Six months ended

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

Nine months ended Nine months ended

(in millions) January 23, 2026 January 24, 2025 % Change January 23, 2026 January 24, 2025 % Change

Cardiovascular $ 4,660 $ 4,242 10 % $ 5,519 $ 4,904 13 %

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(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.

The increase in net sales for the three and nine months ended January 23, 2026, as compared to the corresponding periods in the prior fiscal year, was driven primarily by growth in most businesses, as further described in the business sections below.

In addition, the net sales increase was driven by impacts of foreign currency fluctuations and, for the nine months ended January 23, 2026, 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 nine months ended January 23, 2026, 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 nine months ended January 24, 2025.

Cardiovascular

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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.

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.

Cardiovascular's net sales for the three and nine months ended January 23, 2026 were $3.5 billion and $10.2 billion, respectively, an increase of 14 percent and 11 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 January 23, 2026 and January 24, 2025:

Cardiac Rhythm & Heart Failure (CRHF) net sales for the three and nine months ended January 23, 2026 increased 20 percent and 16 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

Cardiac Ablation Solutions experienced strong growth in the pulsed field ablation portfolio with partially offsetting declines in cryoablation.

Structural Heart & Aortic (SHA) net sales for the three and nine months ended January 23, 2026 increased 6 percent and 8 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase was driven by Structural Heart and in Cardiac Surgery driven by growth in Penditure LAA exclusion system, Avalus Ultra surgical valve, and VitalFlow ECMO system.

Coronary & Peripheral Vascular (CPV) net sales for the three and nine months ended January 23, 2026 increased 9 percent and 5 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.

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• 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 EV-ICD.

• Continued acceptance and growth of the 3830 lead.

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

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FDA approval in late October 2024.

• Continued acceptance and growth of the self-expanding CoreValve Evolut transcatheter aortic valve replacement platform.

• Continued growth and market acceptance of Affera Sphere-360 pulsed field ablation single-shot catheter.

The catheter received CE Mark in January 2026.

• Continued acceptance and growth of the self-expanding CoreValve Evolut transcatheter aortic valve replacement (TAVR) platform.

This includes Evolut PRO which provides enhanced hemodynamics, reliable delivery, enhanced durability, advanced sealing, and Evolut FX, a system designed to improve the overall procedural experience through enhancements in deliverability, implant visibility, and deployment stability.

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

• Intention to exercise our option to acquire CathWorks, a privately held medical device company focused on advancing the diagnosis and treatment of coronary artery disease.

• Acceptance and growth of IN.PACT 018 drug-coated balloons (DCB).

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

• Market launch of both Liberant mechanical thombectomy system and Omnia Secure, which are forecasted to deliver sustained future growth.

• 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.

• 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 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 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.

Neuroscience’s net sales for the three and nine months ended January 23, 2026 were $2.6 billion and $7.5 billion, respectively, an increase of 4 percent for both periods, as compared to the corresponding periods in the prior fiscal year, resulting from growth in Cranial and Spinal Technologies, Neuromodulation, 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 January 23, 2026 and January 24, 2025:

Cranial & Spinal Technologies (CST) net sales for the three and nine months ended January 23, 2026 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 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.

Specialty Therapies (Specialty) net sales for the three and nine months ended January 23, 2026 increased 2 percent and remained flat, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase was driven by growth in ENT, offset by Pelvic Health and the Pipeline Vantage recall for Neurovascular.

Neuromodulation (NM) net sales for the three and nine months ended January 23, 2026 increased 6 percent and 8 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.

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• 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.

The Stealth AXiS Surgical System was granted approval by the U.S.

FDA in February 2026, integrating established navigation workflows with a modular robotic architecture.

• 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.

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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.

• 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, which include the hemorrhagic stroke intravascular device, our next-generation spine enabling technologies, and the implantable tibial bladder control stimulator.

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 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.

Medical Surgical's net sales for the three and nine months ended January 23, 2026 were $2.2 billion and $6.4 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 across most businesses 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 January 23, 2026 and January 24, 2025:

Surgical & Endoscopy (SE) net sales for the three and nine months ended January 23, 2026 increased 4 percent and 3 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 Surgical, with strength in LigaSure vessel sealing technology, ProGrip self-gripping polyester mesh, Wound Management, Electrosurgery, and Surgical Robotics.

The growth in Surgical was partially off 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 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.

The net sales increase was also driven by growth in Endoscopy driven by Nexpowder endoscopic hemostasis system and Endoflip 300 system.

Acute Care & Monitoring (ACM) net sales for the three and nine months ended January 23, 2026 increased 9 percent and 6 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 Nellcor pulse oximetry and 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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• 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.

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 analyze performance, train, and discover new techniques within the robotics platform.

The Hugo RAS system is designed to help reduce unwanted variability, improve patient outcomes, and, by extension, lower per procedure cost.

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

The Hugo RAS system received U.S.

FDA clearance for use in urologic surgical procedures in December 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 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 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.

Diabetes' net sales for the three and nine months ended January 23, 2026 were $796 million and $2.3 billion, respectively, an increase of 15 percent and 12 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase for both periods 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.

The net sales increase for the three months ended January 23, 2026, was also driven by growth in the U.S.

due to adoption of the Simplera Sync and Abbott Instinct sensors.

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.

In May 2025, the Company announced its intent to separate the Diabetes business, with the intention to create a new independent, publicly traded company, MiniMed Group, Inc.

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

• 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.

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• 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.

In January 2026, the MiniMed Go app received U.S.

FDA clearance for individuals with insulin-requiring type 1 and type 2 diabetes aged 7 years and older, as well as for children ages 2 to 6 years under the supervision of an adult caregiver.

The MiniMed Go Smart Multiple Daily Injection (MDI) system integrates InPen with the Abbott Instinct and Simplera sensors, connected through the MiniMed Go app, to deliver real-time, personalized insights and actionable guidance.

• Continued pump, CGM, and consumable competition in an expanding global market.

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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 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.

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 23, 2026 and January 24, 2025:

Cost of Products Sold Cost of products sold for the three and nine months ended January 23, 2026 was $3.3 billion and $9.3 billion, respectively, as compared to $2.8 billion and $8.5 billion, respectively, for the corresponding periods in the prior fiscal year.

The increase in cost of products sold as a percentage of net sales for the three and nine months ended January 23, 2026 was primarily due to approximately $90 million and $110 million, respectively, of increased duties from tariffs on imported goods, $84 million of asset write offs, and unfavorable currency impact on costs of products sold.

The increase in costs of products sold as a percentage of net sales was partially offset by impacts to net sales with favorable currency impact in addition to changes in the Italian payback accruals impacting net sales for the nine months ended January 23, 2026 and January 24, 2025.

For additional information about the asset write offs, refer to Note 5 in the consolidated financial statements.

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 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.

Research and development expense for the three and nine months ended January 23, 2026 was $722 million and $2.2 billion, respectively, as compared to $675 million and $2.0 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 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.

Selling, general, and administrative expense for the three and nine months ended January 23, 2026 was $3.0 billion and $8.7 billion, respectively, as compared to $2.7 billion and $8.1 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 Six months ended

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

Three months ended Nine months ended

(in millions) January 23, 2026 January 24, 2025 January 23, 2026 January 24, 2025

Amortization of intangible assets $ 441 $ 416 $ 1,364 $ 1,243

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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 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.

For the three and nine months ended January 23, 2026, the Company recognized $30 million and $121 million, respectively, of accelerated amortization on certain intangible assets within the Cardiovascular Segment.

Restructuring Charges, Net For the three and nine months ended January 23, 2026 and January 24, 2025, restructuring costs primarily consist of employee termination benefits, facility related and contract termination costs, and asset write-offs.

For additional information about our restructuring activities, refer to Note 5 in the consolidated financial statements.

Certain Litigation Charges, Net We classify specified certain litigation charges and gains related to significant legal matters as certain litigation charges, net in the consolidated statements of income.

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

For additional information, refer to Note 16 in the consolidated financial statements.

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 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.

For the three and nine months ended January 23, 2026, 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 $41 million and $173 million, respectively, as compared to a net gain of $12 million and a net loss of $32 million, respectively, in the corresponding periods in the prior fiscal year.

Interest income for the three and nine months ended January 23, 2026 was $102 million and $310 million, respectively, as compared to $114 million and $364 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.

For the three and nine months ended January 23, 2026, net losses on minority investments were $8 million and $145 million, respectively, as compared to $68 million and $41 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 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

For the three months ended January 23, 2026, the change in interest expense, net was not material.

For the nine months ended January 23, 2026, the decrease in interest expense, net was primarily driven by changes in our global liquidity structure partially offset by increased expense associated with higher coupon rates on the senior notes issued in the second quarter of fiscal year 2026.

Three months ended Nine months ended

(in millions) January 23, 2026 January 24, 2025 January 23, 2026 January 24, 2025

Income tax provision $ 254 $ 237 $ 724 $ 737

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Certain provisions are effective for the Company beginning fiscal year 2026.

The impact for the three and six months ended October 24, 2025 was not significant, and impacts to fiscal year 2026 and beyond are not expected to be significant.

The impact for the three and nine months ended January 23, 2026 was not material, and impacts to fiscal year 2026 and beyond are not expected to be material.

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.

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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.

Our effective tax rate for the three and nine months ended January 23, 2026 was 18.1% and 16.8%, respectively, as compared to 15.4% and 16.9% for the three and nine months ended January 24, 2025, respectively.

The increase in the effective tax rate for the three months ended January 23, 2026 primarily relates to an increase in the Pillar Two global minimum tax impact and year-over-year changes in operational results by jurisdiction.

The decrease in the effective tax rate for the nine months ended January 23, 2026 primarily relates to a tax benefit recognized during the period 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 nine months ended January 23, 2026 was 17.3% and 17.2%, respectively, as compared to 15.7% and 17.0% for the three and nine months ended January 24, 2025, respectively.

The increase in our Non-GAAP Nominal Tax Rate for the three months ended January 23, 2026 was primarily due to an increase in the Pillar Two global minimum tax impact and year-over-year changes in operational results.

In addition to the items discussed in the current quarter, the increase in our Non-GAAP Nominal Tax Rate for the nine months ended January 23, 2026 was partially offset by a tax benefit recognized during the period related to a change in estimate of accrued interest on uncertain tax positions.

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 23, 2026 of approximately $21 million and $62 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES

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.

We are currently in a strong financial position, and we believe our balance sheet and liquidity as of January 23, 2026, 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.

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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:

Six months ended

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

Nine months ended

(in millions) January 23, 2026 January 24, 2025

Cash provided by (used in):

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Net change in cash and cash equivalents $ (1,072) $ (44)

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 $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.

Operating Activities During the nine months ended January 23, 2026, there was a $241 million increase in net cash provided, as compared to the corresponding period in the prior fiscal year, 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, cash paid for taxes, and certain litigation payments.

Investing Activities During the nine months ended January 23, 2026, there was a $570 million increase in cash used, as compared to the corresponding period in the prior fiscal year, primarily attributable to an increase in net purchases of investments of $753 million, partially offset by a decrease in acquisitions of $98 million.

Financing Activities There was a $845 million increase in net cash used during the nine months ended January 23, 2026, as compared to the corresponding period in the prior fiscal year.

During the nine months ended January 23, 2026, 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.

During the nine 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 $173 million as compared to a decrease of $1.1 billion in the prior year.

For more information on commercial paper and Senior Notes issued and repaid, 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 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.

Total debt at January 23, 2026 was $28.1 billion as compared to $28.5 billion at April 25, 2025.

The decrease in total debt was primarily driven by repayments of Euro-denominated debt, net of issuances, as discussed below, partially offset by the impact of foreign exchange rates on our foreign currency denominated debt.

In September 2025, Medtronic, Inc.

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

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 October 24, 2025 included $1.3 billion of cash and cash equivalents and $7.0 billion of current investments.

During the nine months ended January 23, 2026, the Company repurchased a total of 6 million shares under this program at an average price of $91.58.

At January 23, 2026, we had approximately $1.6 billion remaining under the share repurchase program authorized by our Board of Directors.

For more information on credit arrangements, refer to Note 7 in the 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 23, 2026 included $1.1 billion of cash and cash equivalents and $7.2 billion of current investments.

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

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government and agency securities, corporate debt securities, mortgage-backed securities, and other asset-backed securities.

Refer to Note 6 to the current period's consolidated financial statements for additional information regarding fair value measurements.

Refer to Note 6 in the consolidated financial statements for additional information regarding fair value measurements.

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 October 24, 2025 and April 25, 2025, we had $1.4 billion and no commercial paper outstanding, respectively.

At January 23, 2026 and April 25, 2025, we had $140 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 October 24, 2025 and April 25, 2025, no amounts were outstanding under the Credit Facility.

At January 23, 2026 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)

October 24, 2025 April 25, 2025

January 23, 2026 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 October 24, 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 January 23, 2026 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.

Contractual Obligations and Cash Requirements

We have future contractual obligations and other minimum commercial commitments that are entered into in the normal course of business.

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 two quarters of fiscal year 2026;

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

The Company plans to post a surety bond in the amount directed by the court once final judgment has been entered on the Applied Medical case.

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.

ACQUISITIONS AND DISPOSITIONS

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.

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

In May 2025, the Company announced its intent to separate the Diabetes business, with the intention to create a new independent, publicly traded company, MiniMed Group, Inc.

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 October 24, 2025, there were no material changes to our critical accounting estimates.

Our critical accounting estimates are more fully described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended April 25, 2025.

Valuation of Intangible Assets and Goodwill When we acquire a business, the assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date.

Goodwill is the excess of the purchase price over the estimated fair value of identified net assets of acquired businesses.

Intangible assets primarily include patents, trademarks, tradenames, customer relationships, purchased technology, and in-process research and development.

Determining the fair value of intangible assets acquired as part of a business combination requires us to make significant estimates.

These estimates include the amount and timing of projected future cash flows of each project or technology, the discount rate used to discount those cash flows to present value, and the assessment of the asset’s life cycle.

The estimates could be impacted by legal, technical, regulatory, economic, and competitive risks.

Goodwill and indefinite lived intangible assets are tested 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.

Intangible assets with a definite life are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group, which includes intangible assets, may not be recoverable.

If goodwill or intangible assets are determined to be impaired, they are written down to their estimated fair value.

We have four goodwill reporting units with goodwill assigned to them.

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

We estimated the fair value of these reporting units using the income and the market approaches, weighted 50 percent each.

Fair value under the income approach was determined by discounting to present value the estimated future cash flows of the reporting unit.

Fair value under the market approach utilized revenue and earnings multiples using comparable public company information, which uses valuation indicators determined from other businesses that are similar to our reporting unit.

We use estimates that are consistent with the highest and best use of the assets based on a market participant's view of the assets being evaluated.

The most critical assumptions used in the calculation of the fair value of each reporting unit are the projected revenue, projected earnings, projected future cash flows, and discount rate.

Our forecast of future cash flows is based on estimates of projected revenue and projected earnings, based primarily on pricing, raw material costs, market share, industry outlook, general economic conditions and strategic actions to improve our earnings.

The fair value of the reporting unit’s goodwill is sensitive to differences between estimated and actual cash flows, including changes in the projected revenue, projected earnings, and discount rate used to evaluate the fair value of the reporting unit.

As part of our annual impairment analysis in the third quarter, we completed a quantitative impairment analysis of all of our reporting units to determine if their fair value was less than their carrying amount.

Based on the quantitative test, the Medical Surgical reporting unit had an estimated fair value that exceeded its carrying value, including goodwill, by approximately 12%.

As of January 23, 2026, $19.8 billion of goodwill was allocated to the Medical Surgical reporting unit.

The remaining reporting units' fair values materially exceeded their carrying values.

The following table highlights the sensitivities of the most critical assumptions used in the goodwill impairment test as of the date of our annual testing:

Approximate % by which the fair value exceeds the carrying value based on annual impairment test 12% - 335%

Approximate % by which the fair value exceeds the carrying value if the discount rate was to increase 1% 3% - 307%

Approximate % by which the fair value exceeds the carrying value if the future cash flows in the income approach and revenue and earnings in the market approach were to decrease by 5% 7% - 313%

Although we believe our estimate of fair value is reasonable, actual results may differ from our estimates due to a number of factors including, among others, changes in competitive conditions, timing of regulatory approval, results of clinical trials, changes in worldwide economic conditions, and fluctuations in currency exchange rates.

NEW ACCOUNTING PRONOUNCEMENTS

Information regarding new accounting pronouncements is included in Note 2 to the current period's consolidated financial statements.

Information regarding new accounting pronouncements is included in Note 2 in the current period's consolidated financial statements.

SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

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(CIFSA Subsidiary Guarantors)

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 following tables present summarized financial information for the nine months ended January 23, 2026 and summarized balance sheet information at January 23, 2026 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 six months ended October 24, 2025 was as follows:

The summarized results of operations information for the nine months ended January 23, 2026 was as follows:

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

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Operating profit (loss) 490 (16)

Loss before income taxes (69) (47)

Income (loss) before income taxes 50 (147)

Net loss attributable to Medtronic (30) (202)

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

The summarized balance sheet information at January 23, 2026 was as follows:

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

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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