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Item 7. Management’s Discussion and Analysis

2026-06-18 compared with 2025-06-20 · 264 added, 233 removed, 369 unchanged (57% of the section changed)

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The discussi on focuses on our financial results for the fiscal year ended April 24, 2026 (fiscal year 2026) and the fiscal year ended April 25, 2025 (fiscal year 2025).

A discussion on our results of operations for fiscal year 2024 as compared to the year ended April 28, 2023 (fiscal year 2023) is included in Part II, Item 7.

A discussion on our results of operations for fiscal year 2025 as compared to the fiscal year ended April 26, 2024 (fiscal year 2024) is included in Part II, Item 7.

"Mana gement's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended April 25, 2025 , filed with the SEC on June 20, 2025, and is i ncorporated by reference into this Form 10-K .

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Financial Statements and Supplementary Data" in this Annual Report on Form 10-K.

Amounts reported in millions within this annual 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.

Amounts reported in millions within this annual 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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In the event there is a non-GAAP adjustment recognized in our operating results, the tax cost or benefit attributable to that item is separately calculated and reported.

Because the effective rate can be significantly impacted by the Non-GAAP Adjustments that take place during the period, we often refer to our tax rate using both the effective rate and the non-GAAP nominal tax rate (Non-GAAP Nominal Tax Rate).

Because the effective rate can be significantly impacted by the non-GAAP adjustments that take place during the period, we often refer to our tax rate using both the effective rate and the non-GAAP nominal tax rate.

The non-GAAP nominal tax rate is calculated as the income tax provision, adjusted for the impact of non-GAAP adjustments, as a percentage of income before income taxes, excluding non-GAAP adjustments.

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Refer to the "GAAP to Non-GAAP Reconciliations," "Income Taxes," and "Free Cash Flow" sections for reconciliations of the non-GAAP financial measures to their most directly comparable financial measures prepared in accordance with U.S.

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EXECUTIVE LEVEL OVERVIEW

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GAAP for fiscal years 2026 and 2025.

Fiscal year ended April 25, 2025

Fiscal Year 2026

(in millions, except per share data) Income Before Income Taxes Income Tax Provision (Benefit) Net Income Attributable to Medtronic Diluted EPS Effective Tax Rate

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131 — 130 0.10 —

Medical device regulations (5)

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

90 20 70 0.05 22.2

Certain tax adjustments, net (6)

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Non-GAAP $ 8,656 $ 1,499 $ 7,120 $ 5.53 17.3 %

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Fiscal year ended April 26, 2024

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Fiscal Year 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

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Amortization of intangible assets (1)

1,807 335 1,471 1.14 18.5

Restructuring and associated costs (2)

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52 10 42 0.03 19.2

90 20 70 0.05 22.2

Certain tax adjustments, net (6)

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Non-GAAP $ 8,533 $ 1,423 $ 7,079 $ 5.49 16.7 %

(1) The Company recognized $151 million of accelerated amortization on certain intangible assets related to product line exits within the Cardiovascular Portfolio.

(2) Associated costs primarily include salaries and wages for employees supporting the restructuring activities, consulting expenses, asset write-offs, and for the fiscal year ended April 25, 2025, contract terminations.

(3) The charges primarily include exit of business-related charges, changes in fair value of contingent consideration, business combination costs, and gains related to certain business or asset sales.

(1) The Company recognized $121 million and $151 million of accelerated amortization on certain intangible assets within the Cardiovascular Portfolio for fiscal years 2026 and 2025, respectively.

(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.

(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) The charges represent incremental costs of complying with the new European Union medical device regulations for previously registered products and primarily include charges for contractors supporting the project and other direct third-party expenses.

We consider these costs to be duplicative of previously incurred costs and/or one-time costs, which are limited to a specific time period.

(6) Reflects the recognition of incremental Italian payback accruals resulting from the two July 22, 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015.

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

(8) The charges predominantly include $439 million of charges related to the February 2024 decision to exit the Company's ventilator product line, which primarily includes long-lived intangible asset impairments and inventory write-downs.

In addition, other charges primarily consist of changes in fair value of contingent consideration and associated costs related to the previously contemplated separation of the Patient Monitoring and Respiratory Interventions businesses.

(9) The net charge primarily relates to an income tax reserve adjustment associated with the June 2023, Israeli Central-Lod District Court decision and the establishment of a valuation allowance against certain net operating losses which were partially offset by a benefit from the change in a Swiss Cantonal tax rate associated with previously established deferred tax assets from intercompany intellectual property transactions and the step up in tax basis for Swiss Cantonal purposes.

(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 charges for fiscal year 2026 primarily relates to the impact of an intercompany sale of intellectual property, the net tax charge as a result of the separation of the Diabetes Business and amortization of previously established deferred tax assets arising from intercompany intellectual property transactions, which were partially offset by a tax benefit recognized due to a change in estimate of accrued interest on uncertain tax positions.

The charges for fiscal year 2025 primarily includes amortization of previously established deferred tax assets 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.

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

Free Cash Flow

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

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Macroeconomic Trends

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• Recent developments in global trade policy have introduced new uncertainties for our business.

During and subsequent to the reporting period, the U.S., China, and other jurisdictions imposed or proposed additional tariffs on imported goods.

Based on current imposed or proposed rates as of May 21, 2025, we estimate the net tariff impact to be $200 million to $350 million in fiscal year 2026, with the majority recognized in the consolidated statements of income in the second half of the fiscal year.

The lower end of the range assumes that the current U.S.

(30%) and China (10%) tariffs persist, while the higher end of the range assumes tariffs revert to higher rates (U.S.

145%, China 125%) after the 90-day pause.

The U.S., China, and other jurisdictions have recently imposed or proposed additional tariffs on imported goods.

Based on current rates as of June 3, 2026, we estimate the pre-tax net tariff impact to be $250 million in fiscal year 2027, excluding any considerations of government refunds.

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 fiscal year 2025 were not material.

While we are taking proactive steps to mitigate the effects of these tariffs, the evolving nature of international trade policy continues to present a risk to our cost structure and financial performance.

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

On February 20, 2026, the U.S.

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

As a result of this ruling, the U.S.

Court of International Trade issued an order directing the U.S.

Customs and Border Protection ("CBP") agency to begin formalizing a process for refunds.

On April 20, 2026, the CBP launched an online portal that can be used to submit IEEPA tariff refund requests.

All requests will be reviewed by the CBP to determine validity prior to the issuance of refunds.

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.

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For fiscal year 2026, the business of the Company in Israel represented less than 1% of the Company's consolidated revenues and assets.

Starting in the first quarter of fiscal year 2025, the Company combined the non-U.S.

developed markets and the emerging markets into an international market geography.

• Ongoing conflict in the Middle East may continue to disrupt global supply chains and contribute to higher energy, fuel, and transportation costs.

Continued instability in the region may further increase costs and create operational challenges.

• The planned exit of certain businesses, including our Diabetes Business, may involve separation activities, costs, and risks associated with transitioning operations, arrangements, and infrastructure.

The timing and execution of these activities, as well as any related disposition steps, could affect our future results and financial condition.

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Starting in the fourth quarter of fiscal year 2026, the Diabetes Business is no longer considered a reportable segment.

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

The charts below illustrate the percent of net sales by segment for fiscal years 2025 and 2024:

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The charts below illustrate the percent of net sales by business for fiscal years 2026 and 2025:

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The table below includes net sales by segment and division and market geography for fiscal years 2026 and 2025:

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Medical Surgical 8,815 8,407 5

Diabetes 2,755 2,488 11

Reportable segment net sales 33,079 30,734 8

Diabetes 3,112 2,755 13

Other operating segment (1)

Other adjustments (2)

39 (90) NM (3)

Total net sales $ 36,364 $ 33,537 8 %

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Medical Surgical 3,778 3,664 3 5,037 4,744 6

Diabetes 923 852 8 1,832 1,636 12

Reportable segment net sales 17,088 16,181 6 15,991 14,553 10

Diabetes 934 923 1 2,178 1,832 19

Other operating segment (1)

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Other adjustments (2)

— — — (90) — 100

— — — 39 (90) NM (3)

Total net sales $ 18,103 $ 17,171 5 % $ 18,261 $ 16,365 12 %

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

(2) Incremental Italian payback accruals resulting from the two July 22, 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015.

The increase in net sales for fiscal year 2025 was driven by growth in most businesses, including strong growth in Cardiac Ablation Solutions, Cardiac Pacing Therapies, TAVR, Diabetes, Neuromodulation, Spine, and Advanced Energy.

The net sales increase was partially offset by declines in Stapling and a $90 million incremental Italian payback accrual resulting from the two July 22, 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015.

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

(3) Not meaningful (NM)

The increase in net sales for fiscal year 2026 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 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 fiscal year 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 in fiscal year 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 fiscal year 2025 were $12.5 billion, an increase of 5 percent as compared to fiscal year 2024.

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

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Cardiovascular's net sales for fiscal year 2026 were $14.0 billion, an increase

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of 12 percent as compared to fiscal year 2025.

The net sales increase was primarily due to growth across most businesses and the impacts of foreign currency fluctuations.

The charts below illustrate the percent of Cardiovascular net sales by division for fiscal years 2026 and 2025:

Cardiac Rhythm & Heart Failure (CRHF) net sales increased 17 percent in fiscal year 2026 as compared to fiscal year 2025.

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

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

Cardiac Ablation Solutions experienced strong growth in the pulsed ablation portfolio 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, and SelectSecure 3830 lead.

Structural Heart & Aortic (SHA) net sales increased 7 percent in fiscal year 2026 as compared to fiscal year 2025.

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

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 increased 5 percent in fiscal year 2026 as compared to fiscal year 2025.

The net sales increase was driven by growth in Coronary and Renal Denervation led by guide catheters, balloons, and the Symplicity Spyral renal denervation system, partially offset by a decline in stents and impacts from tender pricing in China in Peripheral Vascular Health.

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

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:

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

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

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

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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.

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

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visibility, and deployment stability.

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

The catheter received CE Mark in January 2026.

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

The Evolut FX+ TAVR system maintains the valve performance benefits of the legacy Evolut TAVR platform and is designed to facilitate coronary access.

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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.

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

• Strengthening our position in the Coronary & Peripheral Vascular division as a result of the April 2026 acquisition of CathWorks Ltd.

The acquisition expands the CPV division by aiming to transform how coronary artery disease is diagnosed and treated.

• 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.

• 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.

• Market growth of Liberant mechanical thrombectomy system.

• Market acceptance and growth of OmniaSecure defibrillation lead.

OmniaSecure received CE Mark in March 2026.

• 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 VT indication expansion for Sphere 9 and commercialization of 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.

Neuroscience's products also focus on therapies to treat the diseases of the vasculature in and around the brain, including coils, neurovascular stents, and flow diversion products, as well as products to treat ear, nose, and throat (ENT), and the treatment of overactive bladder and urinary retention.

Neuroscience's products also focus on therapies to treat the diseases of the vasculature in and around the brain, including coils, neurovascular stents, and flow diversion products, as well as products to treat the ear, nose, and throat (ENT), and the treatment of overactive bladder and urinary retention.

Neuroscience also manufactures products related to implantable neurostimulation therapies and drug delivery systems for the treatment of chronic pain, movement disorders, and epilepsy.

Neuroscience’s net sales for fiscal year 2025 were $9.8 billion, an increase of 5 percent as compared to fiscal year 2024.

The net sales increase was primarily due to growth in Neuromodulation, Spine and Biologics, and Neurosurgery.

Neuroscience’s net sales for fiscal year 2026 were $10.3 billion, an increase of 4 percent as compared to fiscal year 2025, resulting from growth in Cranial and Spinal Technologies, Neuromodulation, ENT, and the impacts of foreign currency fluctuations.

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The charts below illustrate the percent of Neuroscience net sales by division for fiscal years 2026 and 2025:

Cranial & Spinal Technologies (CST) net sales for fiscal year 2026 increased 5 percent as compared to fiscal year 2025.

The net sales increase was driven by the continued adoption of the AiBLE ecosystem of spine implants and enabling technology with growth in Core Spine, Biologics, and Neurosurgery.

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 fiscal year 2026 increased 2 percent as compared to fiscal year 2025.

The net sales increase was driven by growth on continued adoption of the Interstim X system and ENT, partially offset by impacts from tender pricing in China in Neurovascular.

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

Neuromodulation (NM) net sales for fiscal year 2026 increased 7 percent as compared to fiscal year 2025.

The net sales increase was driven by growth in Pain Stimulation due to the continued launch of the Inceptiv closed-loop spinal cord stimulator, Brain Modulation driven by the Percept RC deep brain neurostimulator, and Interventional.

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

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

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

• Continued growth of commercially available Pipeline Embolization Devices, endovascular treatments for large or giant 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 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.

• 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.

• Continued acceptance and growth from spinal cord stimulation (SCS) therapy for treating chronic pain and Diabetic Peripheral Neuropathy (DPN) on the Inceptiv closed-loop rechargeable neurostimulator, Intellis rechargeable neurostimulator and Vanta recharge-free neurostimulator.

The Inceptiv closed-loop rechargeable SCS received U.S.

FDA approval in April 2024.

• Continued acceptance and growth of our Percept family of deep brain stimulation (DBS) devices with proprietary BrainSense technology for objectifying and personalizing the treatment of Parkinson's Disease, epilepsy, and other movement disorders.

In August 2024, the U.S.

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

The net sales increase was driven by the Inceptiv closed-loop spinal cord stimulator, the Percept RC neurostimulator with BrainSense technology, 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 global adoption, growth, and market acceptance of 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 received U.S.

FDA approval for spinal procedures in February 2026, followed by expanded approval for cranial and ENT applications in March 2026.

The system received CE mark approval for spinal and cranial procedures in April 2026, and for ENT procedures in June 2026.

The system incorporates 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 & PL40, CD Horizon ModuLeX and Voyager Systems, and our Infinity OCT System, as well as continued growth from Titan spine titanium interbody implants with Nanolock technology.

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

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

• Continued global 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 urinary urge incontinence.

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

FDA approved Stealth AXiS Surgical System for ENT applications, which received approval in March 2026, followed by CE mark approval in June 2026.

• Continued global acceptance and growth from spinal cord stimulation (SCS) therapy for treating chronic pain and Diabetic Peripheral Neuropathy (DPN) on the Inceptiv closed-loop rechargeable neurostimulator, Intellis rechargeable neurostimulator and Vanta recharge-free neurostimulator.

• Continued global acceptance and growth of our Percept family of deep brain stimulation (DBS) devices with proprietary BrainSense technology for objectifying and personalizing the treatment of Parkinson's Disease, epilepsy, and other movement disorders.

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

FDA approval in February 2025.

• Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of, and commercialize the products within our pipeline, which include the hemorrhagic stroke intravascular device, our next-generation spine enabling technologies, and the percutaneous tibial neuromodulation system.

• Continued market acceptance and growth of the Neuroguard IEP carotid stenting system.

• The acquisition of Scientia Vascular and pending acquisition of SPR Therapeutics, which will expand the Neuroscience Portfolio.

Refer to Acquisitions and Dispositions for additional information.

• 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 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 fiscal year 2025 were $8.4 billion, flat as compared to fiscal year 2024, with performance outlined below.

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Medical Surgical’s net sales for fiscal year 2026 were $8.8 billion, an increase of 5 percent as compared to fiscal year 2025, resulting from growth across most businesses and the impacts of foreign currency fluctuations.

The charts below illustrate the percent of Medical Surgical net sales by division for fiscal years 2026 and 2025:

Surgical & Endoscopy (SE) net sales for fiscal year 2025 were flat as compared to fiscal year 2024.

Net sales were impacted by declines in Stapling, due to U.S.

bariatric segment declines and continued shifts to robotic surgery, and Endoscopy.

Partially offsetting these declines was strong growth in Advanced Energy, due to continued adoption of LigaSure vessel sealing technology.

Acute Care & Monitoring (ACM) net sales for fiscal year 2025 were flat as compared to fiscal year 2024.

Net sales were impacted by growth of the BIS Advance monitoring system offset by declines in Medtronic Care Management Services.

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

Surgical & Endoscopy (SE) net sales for fiscal year 2026 increased 4 percent as compared to fiscal year 2025.

The net sales increase was primarily due to growth in Surgical, with strength in LigaSure vessel-sealing technology, ProGrip self-gripping polyester mesh, V-Loc

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barbed sutures, Electrosurgery, and Surgical Robotics.

The growth in Surgical was partially offset by Advanced Stapling due to shifts to robotic surgery and bariatric procedure declines.

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 fiscal year 2026 increased 7 percent as compared to fiscal year 2025.

The net sales increase was primarily due to growth in Nellcor pulse oximetry, McGRATH MAC video laryngoscope, and BIS and INVOS advanced monitoring sensors.

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

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

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• 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.

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

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

• Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of, and commercialize the products within our pipeline, which include our Hugo RAS system in the U.S., the adoption of AI in Endoscopy 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.

This includes continued integration and adoption of Touch Surgery Enterprise with the first artificial intelligence (AI) 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 includes general surgery and gynecology indications for 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 primarily include insulin pumps, continuous glucose monitoring (CGM) systems, and consumables.

Diabetes' net sales for fiscal year 2026 were $3.1 billion, an increase of 13 percent as compared to fiscal year 2025.

The increase in net sales was primarily driven by strong U.S growth as a result of the continued adoption of the MiniMed 780G automated insulated delivery (AID) system, and strong international growth in CGM systems from increased attachment rates and adoption of Simplera Sync.

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

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

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

• Continued acceptance and growth for the MiniMed 780G insulin pump system, which is powered by SmartGuard technology and features the added benefits of meal detection technology that automatically adjusts and corrects sugar levels every five minutes.

The global adoption of our AID systems has resulted in strong sensor attachment rates.

The MiniMed 780G insulin pump system with the Guardian 4 Sensor is available in the U.S., and the MiniMed 780G insulin pump system with Simplera Sync received U.S.

FDA approval in April 2025 and CE Mark in early January 2024.

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

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

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

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

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

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

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

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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, Extended Infusion Sets, and the impacts of foreign currency fluctuations.

Refer to the Executive Level Overview for other factors that could impact the Diabetes Business.

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COSTS AND EXPENSES

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Cost of Products Sold Cost of products sold for fiscal year 2026 was $12.7 billion as compared to $11.6 billion for fiscal year 2025.

Cost of products sold as a percentage of net sales was flat as compared to the prior fiscal year.

Cost of products sold increased primarily driven by increases in net sales and unfavorable currency impact partially offset by lower costs for quality remediation and excess and obsolete inventory charges.

Fiscal year 2024 included $70 million of inventory write-downs associated with our February 2024 decision to exit our ventilator product line.

For additional information about the ventilator inventory write-down, refer to Note 3 of the consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" in this Annual Report on Form 10-K.

Cost of products sold as a percentage of net sales increased as compared to the prior fiscal year.

The increase in cost of products sold as a percentage of net sales was primarily due to $185 million of increased tariffs and duties on imported goods and $84 million of asset write offs.

The increase in costs of products sold as a percentage of net sales was partially offset by net favorable impact of currency on net sales and cost of products sold in addition to changes in the Italian payback accruals impacting net sales.

For additional information about the asset write offs, refer to Note 4 to our consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.

Looking ahead, we anticipate incurring additional costs related to current imposed and proposed tariffs.

Refer to the Executive Level Overview section for further information.

For additional information on tariffs and duties, refer to the Executive Level Overview.

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 fiscal years 2025 and 2024 was $2.7 billion.

Research and development expense for fiscal year 2026 was $2.9 billion as compared to $2.7 billion for fiscal year 2025.

Selling, General, and Administrative Expense Our goal is to continue to leverage selling, general, and administrative expense management initiatives.

Selling, general, and administrative expense primarily consists of salaries and wages, other administrative costs, such as professional fees and marketing expenses, certain acquisition and divestiture-related costs, and restructuring associated expenses.

Selling, general, and administrative expense 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 fiscal year 2026 was $11.8 billion as compared to $10.8 billion for fiscal year 2025.

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

The increase in selling, general, and administrative expense was primarily due to selling expenses in line with sales growth, new product launches and related commercialization activities, and increased expenses to support the impending separation of the Diabetes Business.

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

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Certain litigation charges, net 113 317

Other operating (income) expense, net (23) 464

Other non-operating income, net (402) (412)

Other operating expense (income), net 386 (23)

Other non-operating expense (income), net (384) (402)

Interest expense, net 715 729

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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.

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Amortization of intangible assets for fiscal year 2025 includes $151 million of accelerated amortization on certain intangible assets related to product line exits within the Cardiovascular Portfolio.

Restructuring Charges, Net In fiscal years 2025 and 2024, restructuring costs primarily related to cost reduction initiatives, which predominantly included employee termination benefits, facility consolidations, and asset write-downs, and specifically for fiscal year 2025, contract terminations.

For additional information about our restructuring programs, refer to Note 4 of the consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" in this Annual Report on Form 10-K.

During fiscal years 2026 and 2025, the Company recognized $121 million and $151 million, respectively, of accelerated amortization on certain intangible assets within the Cardiovascular Segment.

Restructuring Charges, Net In fiscal years 2026 and 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 programs, refer to Note 4 to our consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.

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 18 of the consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

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

For fiscal year 2025, the change in other operating (income) expense, net was largely driven by a decrease in acquisition and divestiture-related expenses as well as insignificant gains from certain business or asset sales in the Cardiovascular and Neuroscience Portfolios during fiscal year 2025.

In fiscal year 2024, acquisition and divestiture-related expenses included $369 million of charges related to the Company's decision to exit the ventilator product line, which primarily included intangible asset impairments of $295 million and other charges for contract cancellation costs and severance.

In addition, the change in fair value of contingent consideration for fiscal year 2025 was $42 million of expense as compared to $156 million of expense for fiscal year 2024.

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

The currency impact for fiscal year 2025 was a net loss of $3 million as compared to a net gain of $68 million in fiscal year 2024.

Additional information on the charges associated with the ventilator product line exit is described in Note 3 of the consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" in this Annual Report on Form 10-K.

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 $511 million and $597 million for fiscal year 2025 and 2024, respectively.

Income from the non-service component of net periodic pension and postretirement benefit cost was $107 million and $124 million for fiscal year 2025 and 2024, respectively.

Net losses on minority investments were $213 million and $308 million for fiscal year 2025 and 2024, respectively.

For additional information, refer to Note 18 to our consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

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 expenses and income associated with funded research and development arrangements.

For fiscal year 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 $238 million in fiscal year 2026 as compared to a net loss of $3 million in fiscal year 2025.

Additionally, the change was driven by a $157 million charge related to a future minimum royalty payment obligation under one of the research and development funding arrangements during fiscal year 2026.

For additional information on the research and development funding arrangements, refer to Note 3 to our consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Other Non-Operating Expense (Income), Net Other non-operating expense (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.

The decrease in other non-operating expense (income), net was primarily driven by a decrease of $93 million of interest income partially offset by decreased losses on minority investments.

Net losses on minority investments were $131 million and $213 million for fiscal years 2026 and 2025, respectively.

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.

The increase in interest expense, net was primarily driven by the €3.0 billion debt issuance in June 2024, partially offset by lower borrowing balances in our global liquidity structures.

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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.

(in millions) 2026 2025

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Difference between the effective tax rate and non-GAAP nominal tax rate (3.9) % 0.1 %

On July 4, 2025, the U.S.

Government enacted The One Big Beautiful Bill Act of 2025, which includes, among other provisions, changes to the U.S.

corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act.

The provisions of the Act, including immediate expensing

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of qualifying research and development costs, that were effective for fiscal year 2026 did not materially impact the Company's fiscal year 2026 effective tax rate.

The Company does not expect the provisions of the Act to materially impact fiscal years 2027 and beyond.

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 Model Rules, which were effective for Medtronic in fiscal year 2025.

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

Kfar Saba Assessing Office in June 2023.

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

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

Our effective tax rate for fiscal year 2026 was 21.2 percent, as compared to 16.6 percent in fiscal year 2025.

The decrease in our effective tax rate was primarily attributable to the establishment of a valuation allowance on certain net operating losses and an income tax reserve adjustment made in fiscal year 2024 associated with the Ventor court decision noted above, which was partially offset by the Swiss Cantonal tax rate change on previously recorded deferred tax assets in fiscal year 2024 and the implementation of the Pillar Two Model Rules noted above in fiscal year 2025.

The increase in our effective tax rate was primarily attributable to the increase in certain tax adjustments discussed below, an increase in the Pillar Two Global Minimum Tax, and year-over-year changes in operational results by jurisdiction, partially offset by the net operational tax benefits mentioned below;

all of which occurred in fiscal year 2026.

Our non-GAAP nominal tax rate for fiscal year 2026 was 17.3 percent, as compared to 16.7 percent in fiscal year 2025.

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

During fiscal years 2025 and 2024, operational tax costs were not significant.

The increase in our non-GAAP nominal tax rate was primarily due to an increase in the Pillar Two Global Minimum Tax, and year-over-year changes in operational results by jurisdiction inclusive of the net operational tax benefits discussed below.

During fiscal year 2026, we recognized $148 million of net operational tax benefits.

The net operational tax benefits primarily included a $122 million benefit associated with prior year tax resolutions and statute lapses, finalization of certain tax returns, and a change in estimate of accrued interest on uncertain tax positions and a $32 million benefit associated with a change in the realizability of certain deferred tax assets.

During fiscal year 2025, operational tax costs were immaterial.

An increase in our non-GAAP nominal tax rate of one percent would result in an additional income tax provision for fiscal years 2026 and 2025 of approximately $87 million and $85 million, respectively.

Certain Tax Adjustments

During fiscal year 2025, the cost from certain tax adjustments of $62 million, recognized in income tax provision in the consolidated statements of income, included amortization of the previously established deferred tax assets from intercompany intellectual property transactions.

During fiscal year 2026, the net cost from certain tax adjustments of $260 million, recognized in income tax provision in the consolidated statements of income included the following:

• A cost of $187 million associated with a reserve adjustment related to the Israeli Central-Lod District Court decision with respect to a deemed taxable transfer of intellectual property.

• A cost of $124 million related to a change in valuation allowance on previously recorded net operating losses.

• A benefit of $95 million related to a Swiss Cantonal tax rate change on previously recorded deferred tax assets.

• A net cost of $150 million associated with the intercompany sale of intellectual property and the establishment of a deferred tax asset.

• A net cost of $70 million associated with the separation of the Diabetes Business.

• A cost of $66 million associated with the amortization of the previously established deferred tax assets from intercompany intellectual property transactions.

• A cost of $33 million associated with a change in the Company’s permanent reinvestment assertion on certain historical earnings.

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• A benefit of $51 million related to a change in estimate of accrued interest on uncertain tax positions.

• A cost of $25 million primarily related to the write off of certain deferred tax assets on previous transactions.

During fiscal year 2025, the net cost from certain tax adjustments of $62 million, recognized in income tax provision in the consolidated statements of income, included amortization of the previously established deferred tax assets from intercompany intellectual property transactions.

Certain tax adjustments will affect the comparability of our operating results between periods.

Therefore, we consider these non-GAAP adjustments.

Refer to the "Executive Level Overview" section of this Management's Discussion and Analysis for further discussion of these adjustments.

Refer to the Executive Level Overview for further discussion of these adjustments.

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LIQUIDITY AND CAPITAL RESOURCES

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Net change in cash and cash equivalents $ (269) $ 934

Operating Activities The $257 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 vendors, annual incentive payouts, and cash paid for taxes.

Investing Activities The $429 million decrease in net cash used was primarily attributable to an increase in net sales and maturities of investments of $576 million and decrease in cash paid for acquisitions of $113 million, partially offset by an increase in net additions to property, plant, and equipment of $272 million.

For more information on the acquisitions, refer to Note 3 of the consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

Financing Activities There was an $89 million decrease in net cash used compared to the prior fiscal year.

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

Additionally, in June 2024, Medtronic Inc.

issued four tranches of EUR-denominated Senior Notes with an aggregate principal of €3.0 billion, or $3.2 billion, which was partially offset by an $873 million increase in net share repurchases during fiscal year 2025.

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

Operating Activities There was a $286 million increase in net cash provided, as compared to 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, including duties from tariffs, and other vendors, cash paid for taxes, and certain litigation payments.

Investing Activities There was a $997 million increase in net cash used, as compared to the prior fiscal year, primarily attributable to an increase in net purchases of investments of $889 million and an increase in cash paid for acquisitions of $308 million.

The remaining change primarily relates to derivatives activity and intangible asset acquisitions.

Financing Activities There was a $390 million increase in net cash used compared to the prior fiscal year.

The increase was driven by a $3.3 billion change in debt year-over-year, with $1.2 billion outflow in fiscal year 2026 as compared to an inflow of $2.1 billion in fiscal year 2025.

In fiscal year 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.

Additionally, the Company repaid €1.0 billion, or $1.2 billion, of Senior Notes.

In fiscal year 2025, the Company issued four tranches of Euro-denominated Senior Notes with an aggregate principal of €3.0 billion, or $3.2 billion, which was partially offset by repayments of commercial paper of $1.1 billion.

Partially offsetting the increase in net cash used was $538 million of proceeds from the MiniMed Group, Inc.

(MiniMed) initial public offering (the IPO) in fiscal year 2026, and $2.2 billion of fewer net share repurchase in fiscal year 2026 as compared to fiscal year 2025.

The remaining change primarily relates to derivative and dividend activity.

For additional information on short-term borrowings and Senior Notes issued and repaid, refer to Debt and Capital below.

Debt and Capital

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Total debt at April 24, 2026 was $28.0 billion as compared to $28.5 billion at April 25, 2025.

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

In June 2024, Medtronic Inc.

issued four tranches of EUR-denominated Senior Notes with an aggregate principal of €3.0 billion, with maturities ranging from fiscal year 2030 to 2054, resulting in cash proceeds of approximately $3.2 billion, net of discounts and issuance costs.

In anticipation of the Euro-denominated debt issuance, the Company entered into forward currency exchange rate contracts to manage the exposure to exchange rate movements.

These contracts were settled in conjunction with the issuance of the June 2024 Notes.

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

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 years 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

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€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.

We repurchase our ordinary shares on occasion as part of our focus on returning value to our shareholders.

In March 2019, the Company's Board of Directors authorized $6.0 billion for repurchase of the Company's ordinary shares.

In March 2024, the Company's Board of Directors authorized an additional $5.0 billion for repurchase of the Company's ordinary shares.

In March 2024, the Company's Board of Directors authorized the repurchase of $5.0 billion of the Company's ordinary shares.

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

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At April 24, 2026, we had approximately $1.2 billion remaining under the share repurchase program authorized by our Board of Directors.

For more information on credit arrangements, refer to Note 6 of the consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

For additional information on credit arrangements, refer to Note 6 to our consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Our liquidity sources at April 24, 2026 included $1.9 billion of cash and cash equivalents and $7.3 billion of current investments.

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

Refer to Note 5 to the consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" in this Annual Report on Form 10-K for additional information regarding fair value measurements.

Refer to Note 5 to our consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" of this Annual Report on Form 10-K 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 April 25, 2025 and April 26, 2024, we had no and $1.1 billion of commercial paper outstanding, respectively.

At April 24, 2026 and April 25, 2025, we had no commercial paper outstanding.

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

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

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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, some of which are recorded in our consolidated balance sheet.

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.

Presented below is a summary of our off-balance sheet contractual obligations and other minimum commercial commitments at April 25, 2025, as well as long-term contractual obligations reflected in the balance sheet at April 25, 2025.

Maturity by Fiscal Year

(in millions) Total 2026 2027 2028 2029 2030 Thereafter

Contractual obligations related to off-balance sheet arrangements:

Commitments to fund minority investments, milestone payments, and royalty obligations (1)

$ 163 $ 88 $ 38 $ 34 $ 4 $ — $ —

Interest payments (2)

8,538 639 622 602 616 578 5,481

1,605 486 364 277 210 178 89

Contractual obligations reflected in the balance sheet (4) :

Debt obligations (5)

$ 28,691 $ 2,874 $ 1,721 $ 1,006 $ 2,290 $ 977 $ 19,824

Operating leases 1,294 218 199 155 119 100 503

Contingent consideration (6)

81 31 36 12 2 — —

Tax obligations (7)

550 550 — — — — —

(1) Includes commitments related to the funding of minority investments, estimated milestone payments, and royalty obligations.

While it is not certain if and/or when payments will be made, the maturity dates included in the table reflect our best estimates.

(2) Includes the contractual interest payments on our outstanding debt and excludes the impacts of debt premium and discount amortization.

See Note 6 to the consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for additional information on our debt agreements.

(3) Includes inventory purchase commitments, research and development, and other arrangements that are legally binding and specify minimum purchase quantities or spending amounts.

These purchase commitments do not exceed our projected requirements and are in the normal course of business.

Excludes open purchase orders with a remaining term of less than one year.

(4) Excludes defined benefit plan obligations, guarantee obligations, uncertain tax positions, non-current tax liabilities, and litigation settlements for which we cannot make a reliable estimate of the period of cash settlement.

For further information, see Notes 13, 15, and 18 to the consolidated financial statements in “Item 8.

Information regarding our obligations under contingent consideration, debt,

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lease arrangements, and legal matters are provided in Notes 3, 6, 16, and 18, respectively, to the consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

(5) Includes the current and non-current portion of our contractual maturities of debt, excluding deferred financing costs and debt discounts, net.

See Note 6 to the consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for additional information on our debt agreements.

(6) Includes the fair value of our current and non-current portions of contingent consideration.

While it is not certain if and/or when payments will be made, the maturity dates included in this table reflect our best estimates.

(7) Represents the tax obligations associated with the transition tax that resulted from U.S.

The transition tax will be paid over an eight-year period and will not accrue interest.

In the normal course of business, we periodically enter into agreements that require us to indemnify customers or suppliers for specific risks, such as claims for injury or property damage arising as a result of our products or the negligence of our personnel or claims alleging that our products infringe third-party patents or other intellectual property.

Our maximum exposure under these indemnification provisions is unable to be estimated, and we have not accrued any liabilities within our consolidated financial statements or included any indemnification provisions in the table above.

Historically, we have not experienced significant losses on these types of indemnification agreements.

In the normal course of business, we periodically enter into off-balance sheet arrangements.

Certain commitments and contingencies arise and are not recorded in the consolidated balance sheets in accordance with U.S.

We have inventory purchase commitments, research and development, and other arrangements that are legally binding and specify minimum purchase quantities or spending amounts.

These purchase commitments do not exceed our projected requirements and are in the normal course of business.

At April 24, 2026, excluding open purchase orders with a remaining term of less than one year, we estimate that these future purchase commitments will be $0.5 billion and $1.1 billion in the short-term and long-term, respectively.

We have commitments related to the funding of minority investments, estimated milestone payments, and royalty obligations.

It is not certain if and/or when payments will be made.

The timing and amount of payments under these agreements are uncertain, as obligations generally become due only upon the achievement of specified development, regulatory, commercialization, or sales-based milestones.

Such events may occur over several years or may never occur at all.

Because the occurrence and timing of these triggering events are inherently uncertain, the related payment amounts and timing cannot be reasonably estimated.

We have contractual interest payments on our outstanding debt.

Contractual interest payments on our outstanding debt, excluding the impacts of debt premium and discount amortization, required on our short-term and long-term debt outstanding at April 24, 2026, are projected to be $0.7 billion and $7.9 billion, respectively.

We periodically enter into agreements that require us to indemnify customers or suppliers for specific risks, such as claims for injury or property damage arising as a result of our products or the negligence of our personnel or claims alleging that our products infringe third-party patents or other intellectual property.

Our maximum exposure under these indemnification provisions is unable to be estimated, and we have not accrued any liabilities within our consolidated financial statements.

Historically, we have not experienced material losses on these types of indemnification agreements.

Note 18 to the consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" in this Annual Report on Form 10-K provides information regarding amounts we have accrued related to legal matters.

In accordance with U.S.

GAAP, we record a liability in our consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated.

Actual settlements may be different than estimated and could have a material effect on our consolidated earnings, financial position, and/or cash flows.

Financial Statements and Supplementary Data" in this Annual Report on Form 10-K provides information regarding other arrangements we enter into, which include standby letters of credit agreements, bank guarantees, and surety or other bonds with financial institutions to support various performance and other obligations, as well as ongoing tax matters.

We record tax liabilities in our consolidated financial statements for amounts that we expect to repatriate from subsidiaries (to the extent the repatriation would be subject to tax);

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In addition, we continue to evaluate our legal entity structure supporting our business operations, and to the extent such evaluation results in a change to our overall business structure, we may be required to accrue for additional tax obligations.

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Refer to Note 13 to our consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information.

Additionally, we have entered into various arrangements with affiliates of Blackstone Life Sciences Advisors L.L.C.

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Payments under these agreements generally become due and payable only upon the achievement of certain development, regulatory and/or commercialization milestones or relevant product sales, which may span several years and which may never occur.

These contractual obligations are not included within the table above.

Refer to Note 3 to the consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" in this Annual Report on Form 10-K for additional information.

Refer to Note 3 to our consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information.

Beyond the contractual obligations and other minimum commercial commitments outlined above, we have recurring cash requirements arising from the normal operation of our business that include capital expenditures, research and developments costs, and other operational costs.

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Financial Statements and Supplementary Data" within this Annual Report on Form 10-K.

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

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

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MiniMed Separation

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.

On March 9, 2026, MiniMed completed an initial public offering.

As of closing of the IPO, the Company owns 252,813,348 shares of MiniMed Common Stock, or approximately 90.03% of the total outstanding shares of MiniMed Common Stock.

Due to the Company retaining a controlling financial interest, the consolidated financial statements reflect the financial results of MiniMed.

See Note 20 to the consolidated financial statements for additional details.

The Company plans to complete the separation of its Diabetes Business within the next fiscal year.

CathWorks Ltd.

On April 20, 2026, the Company acquired all the remaining outstanding shares of CathWorks Ltd.

(CathWorks), a privately held medical device company, for $525 million of consideration transferred, including $115 million of contingent consideration.

The acquisition expands the Coronary & Peripheral Vascular division within the Cardiovascular portfolio by aiming to transform how coronary artery disease is diagnosed and treated.

Scientia Vascular Acquisition

On June 12, 2026, the Company closed on the acquisition of all outstanding shares of Scientia Vascular (Scientia) (a privately held company).

As the Company closed on this acquisition subsequent to April 24, 2026, this acquisition is considered a subsequent event.

The acquisition will expand the Neuroscience portfolio through Scientia’s differentiated access products used to treat complex neurovascular conditions.

The Company anticipates total consideration to be comprised of approximately $550 million up-front, subject to customary closing adjustments, and certain revenue and regulatory-based contingent consideration payments up to $375 million.

SPR Therapeutics, Inc.

Pending Acquisition

On May 20, 2026, the Company announced its intent to acquire all outstanding equity of SPR Therapeutics, Inc., a privately held medical technology company.

The acquisition enhances the Neuromodulation division within the Neuroscience portfolio with temporary peripheral nerve stimulation (PNS) technology, enabling earlier intervention for chronic pain sufferers.

We expect consideration for the business to be approximately $650 million subject to customary closing adjustments.

The acquisition is expected to close in the first half of fiscal year 2027, subject to regulatory approvals and satisfaction of other closing conditions.

CRITICAL ACCOUNTING ESTIMATES

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A provision for outstanding chargebacks is recorded when we recognize revenue from our sale to the distributor and requires estimates for the distributor chargeback rate, expected sell-through levels by the distributors to contracted customers, as well as estimated distributor inventory levels.

At April 25, 2025 and April 26, 2024, there were $1.7 billion and $1.6 billion of rebates and chargebacks recorded in the consolidated balance sheets, respectively.

During fiscal year 2025, adjustments to rebate and chargebacks recorded in prior periods were not material.

At April 24, 2026 and April 25, 2025, there were $1.9 billion and $2.0 billion of rebates, chargebacks, and other adjustments recorded in the consolidated balance sheets, respectively.

During fiscal years 2026 and 2025, adjustments to rebates, chargebacks, and other adjustments recorded in prior periods were not material.

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Litigation Contingencies We are involved in a number of legal actions from time to time involving product liability, employment, intellectual property and commercial disputes, shareholder-related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations.

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Estimating probable losses from our litigation and governmental proceedings is inherently difficult, particularly when the matters are in early procedural stages, with incomplete scientific facts or legal discovery, involve unsubstantiated or indeterminate claims for damages, potentially involve penalties, fines, or punitive damages, or could result in a change in business practice.

We base our judgments on the best information

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available at the time.

We base our judgments on the best information available at the time.

Our estimates related to our legal and product liability accruals may change as additional information becomes available to us, including information related to the nature or existence of claims against us, trial court or appellate proceedings, and mediation, arbitration or settlement proceedings.

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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.

We assess the impairment of goodwill at the reporting unit level annually as of the first day of the third quarter and whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired.

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.

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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%.

The remaining reporting units' fair values

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materially exceeded their carrying values.

As of April 24, 2026, $20.0 billion of goodwill was allocated to the Medical Surgical reporting unit.

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:

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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.

Subsequent to IPO, MiniMed's stock price experienced a decline.

As of the date of this filing, after evaluating macroeconomic conditions, MiniMed's market capitalization and current and future results of operations, the estimated fair value of MiniMed exceeds the carrying value and, therefore, did not have any impairment.

There is a risk of future impairment charges if there is a decline in the fair value of MiniMed, an adverse change in valuation assumptions, or other macroeconomic factors that may exist.

If future goodwill impairment charges occur, they could have a material adverse effect on our financial condition and results of operations.

NEW ACCOUNTING PRONOUNCEMENTS

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Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

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SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

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(CIFSA Subsidiary Guarantors)

The following tables present summarized financial information for the fiscal year ended 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 fiscal year 2026 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 fiscal year ended April 25, 2025 was as follows:

The summarized results of operations information for fiscal year 2026 were as follows:

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

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Net sales $ 3,716 $ —

Operating loss (43) (57)

Operating profit (loss) 107 (219)

Loss before income taxes (429) (415)

Net loss attributable to Medtronic (468) (432)

The summarized balance sheet information for the fiscal year ended April 25, 2025 was as follows:

The summarized balance sheet information for fiscal year 2026 was as follows:

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

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Total current liabilities (5)

26,263 16,216

Total noncurrent liabilities (6)

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(6) Includes loans payable due to non-guarantor subsidiaries of $8.5 billion and $7.7 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

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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-K

Item 7. Management’s Discussion and Analysis