MiniMed Group, Inc. 10-Q

Item 1. Financial Statements MINIMED GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended (in millions, except per share data) July 31, 2026 July 25, 2025 Net sales $ 843 $ 723 Cost of products sold 378 314 Gross profit 465 409 Operating expenses: Research and development expense 115 125 Selling, general, and administrative expense 312 283 Certain litigation charges, net ( 2 ) 17 Other operating expense (income), net 36 ( 2 ) Operating income (expense) 5 ( 13 ) Other non-operating expense (income), net — — Income (loss) before income taxes 4 ( 13 ) Income tax provision 4 3 Net income (loss) — ( 16 ) Net income attributable to noncontrolling interests — ( 3 ) Net income (loss) attributable to the Company $ — $ ( 19 ) Earnings (loss) per share: Basic and diluted $ 0.00 $ ( 0.08 ) Weighted-average shares outstanding Basic and diluted 281.0 252.8 The accompanying notes are an integral part of these condensed consolidated financial statements . 1 MINIMED GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) Three Months Ended (in millions) July 31, 2026 July 25, 2025 Net income (loss) $ — $ ( 16 ) Other comprehensive income (loss): Translation adjustment ( 2 ) 11 Comprehensive loss: $ ( 2 ) $ ( 5 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 2 MINIMED GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) July 31, 2026 April 24, 2026 ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 207 $ 298 Accounts receivable, less allowance for credit losses of $ 28 and $ 26 , respectively 180 200 Due from Medtronic 602 455 Inventories 356 341 Other current assets 72 54 Total current assets 1,417 1,348 Property, plant, and equipment, net 736 711 Goodwill 2,255 2,256 Other intangible assets, net 100 107 Tax assets 58 61 Other assets 152 147 Total assets $ 4,718 $ 4,630 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 251 $ 163 Due to Medtronic 178 137 Accrued compensation 126 163 Accrued rebates 42 45 Other accrued expenses 185 194 Total current liabilities 782 702 Other liabilities 316 317 Total liabilities 1,098 1,019 Commitments and contingencies (Note 12) Stockholders’ equity: Common stock, par value $ 0.01 , 1,000,000,000 shares authorized, 281,205,548 and 280,819,988 shares issued and outstanding, at July 31, 2026 and April 24, 2026, respectively 3 3 Preferred stock, par value $ 0.01 , 100,000,000 shares authorized, none issued and outstanding — — Additional paid-in capital 3,747 3,736 Accumulated deficit ( 116 ) ( 116 ) Accumulated other comprehensive income ( 14 ) ( 12 ) Total stockholders’ equity 3,620 3,611 Total liabilities and stockholders’ equity $ 4,718 $ 4,630 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 MINIMED GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity ($ in millions) (shares in thousands) Shares Par Value April 24, 2026 280,820 $ 3 $ 3,736 $ ( 116 ) $ ( 12 ) $ 3,611 Net income (loss) — — — — — — Foreign exchange translation adjustment — — — — ( 2 ) ( 2 ) Issuance of shares under stock purchase and award plan 180 — 2 — — 2 Stock-based compensation — — 10 — — 10 Vesting of restricted stock units, net of shares withheld for taxes 206 — ( 2 ) — — ( 2 ) July 31, 2026 281,206 $ 3 $ 3,747 $ ( 116 ) $ ( 14 ) $ 3,620 Parent Company Investment Accumulated Other Comprehensive Income Total Parent Company Equity (in millions) April 25, 2025 $ 3,328 $ 3 $ 3,330 Net loss ( 16 ) — ( 16 ) Net transfers from Parent 212 — 212 Other comprehensive income — 11 11 July 25, 2025 $ 3,524 $ 13 $ 3,537 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 MINIMED GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended (in millions) July 31, 2026 July 25, 2025 Operating Activities: Net income (loss) $ — $ ( 16 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 41 39 Provision for credit losses 6 3 Deferred income taxes 2 — Stock-based compensation 10 9 Postretirement benefit plan expense — 2 Other, net 1 11 Change in operating assets and liabilities: Accounts receivable, net 13 ( 5 ) Due from related parties ( 161 ) — Inventories ( 15 ) ( 30 ) Accounts payable and accrued liabilities 25 ( 171 ) Due to related parties 53 — Other operating assets and liabilities ( 25 ) 18 Net cash used in operating activities ( 49 ) ( 141 ) Investing Activities: Additions to property, plant, and equipment ( 41 ) ( 53 ) Other investing activities, net — ( 10 ) Net cash used in investing activities ( 41 ) ( 63 ) Financing Activities: Net transfers from Parent — 202 Net cash provided by financing activities — 202 Effect of exchange rate changes on cash and cash equivalents ( 1 ) — Net change in cash and cash equivalents ( 91 ) ( 2 ) Cash and cash equivalents at beginning of period 298 11 Cash and cash equivalents at end of period $ 207 $ 9 Supplemental Cash Flow Information Capitalized costs in accounts payable and accrued liabilities 42 25 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 MINIMED GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1. Description of the Business and Basis of Presentation MiniMed Group, Inc. (“MiniMed” or the “Company”) is a medical technology company focused on the development, manufacture, and commercialization of insulin pumps, continuous glucose monitoring (“CGM”) systems, related consumables, smart pens, and digital health solutions for the management of Type 1 and Type 2 diabetes. Basis of Presentation The Company has prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal and recurring adjustments, necessary for a fair statement of the Company's financial position, results of operations, and cash flows for the interim periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 24, 2026, filed with the Securities and Exchange Commission (“SEC”). The financial results for the interim periods presented are not necessarily indicative of the results to be expected for the full fiscal year or any other future period. Figures within the condensed consolidated financial statements are rounded, and certain totals may not sum precisely. Effective March 9, 2026, upon the closing of the Company’s initial public offering (“IPO”) and separation from Medtronic plc (“Medtronic” or “Parent”), the Company’s financial statements are presented on a consolidated basis. For periods prior to March 9, 2026, the Company operated as the diabetes business of Medtronic and did not exist as a separate, stand‑alone legal entity. Accordingly, financial data for periods prior to the IPO are presented on a carve-out basis derived from the historical financial statements and accounting records of Medtronic, reflecting the historical financial position, results of operations, and cash flows as historically managed within Medtronic. The Company continues to engage in transactions with Medtronic and certain of its affiliates, including pursuant to transition and other commercial arrangements entered into in connection with the Company's separation from Medtronic (the “Separation”). Amounts due to and from Medtronic, as well as expenses incurred under these arrangements, are presented within the accompanying condensed consolidated financial statements. See Note 14, “Related Party Transactions,” for additional information. Note 2. Summary of Significant Accounting Policies Except as described below for derivatives, there have been no material changes to the Company’s significant accounting policies, during the three months ended July 31, 2026, as compared to those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended April 24, 2026. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates are used when accounting for items such as income taxes, contingencies, goodwill and intangible assets, equity investments, rebates, and liability valuations. Actual results may or may not differ from those estimates. Derivatives The Company uses derivative financial instruments to mitigate exposures to changes in foreign currency exchange rates. The duration of these contracts is generally less than 12 months. Derivative instruments are used solely for risk management purposes and are not entered into for trading or speculative purposes. The Company's foreign currency forward contracts are primarily used to economically hedge monetary assets and liabilities denominated in currencies other than the functional currency of the respective entity. The Company may designate certain derivative instruments as accounting hedges under ASC 815 when specific hedge accounting criteria are met. During the quarter ended July 31, 2026, none of the derivative instruments were designated hedges under ASC 815. Derivative instruments that are not designated as accounting hedges are intended to offset transaction gains and losses associated with the remeasurement of certain assets and liabilities denominated in currencies other than their functional currencies. 6 All derivative instruments are recognized as either assets or liabilities on the consolidated balance sheets and measured at fair value at each reporting date. Changes in the fair value of derivative instruments that are not designated under ASC 815 are recognized in earnings in the period in which they occur. Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares that were outstanding for the period, without consideration for common share equivalents. Diluted net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of dilutive common share equivalents outstanding for the period determined using the treasury-stock method. Dilutive common share equivalents are comprised of potential ESPP shares, unvested RSUs and PSUs, and stock options outstanding under our stock-based compensation plans. Adjustments to the denominator are required to reflect the related dilutive shares. For the period presented, there was no difference in the number of shares used to calculate basic and diluted shares outstanding as all potentially dilutive securities were anti-dilutive. The following table sets forth potentially dilutive securities that were excluded from the diluted earnings per share calculation because the effect would be anti-dilutive, or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period. There were no equity awards and no dilutive equity instruments of the Company outstanding prior to the IPO. Three Months Ended (in thousands of common stock equivalent shares) July 31, 2026 RSUs 5,419 PSUs 293 ESPP 62 Total 5,774 Recently Adopted Accounting Standards For the three months ended July 31, 2026, there were no newly adopted accounting pronouncements that materially impacted the Company’s condensed consolidated financial statements. Accounting Pronouncements Issued and Not Yet Adopted The Company considers the applicability and impact of all accounting standards updates issued by the Financial Accounting Standards Board (“FASB”). There have been no material updates to the accounting pronouncements previously disclosed in the Annual Report on Form 10-K for the fiscal year ended April 24, 2026, and the Company does not expect any other recently issued accounting pronouncements to have a material impact on its condensed consolidated financial statements. For a discussion of accounting pronouncements issued but not yet adopted, refer to Note 2. “Summary of Significant Accounting Policies,” to the consolidated financial statements included in the Company's most recently filed Annual Report on Form 10-K. Note 3. Revenue The Company's revenues are principally derived from the sale of reusable and single-use products which together comprise automated insulin delivery (AID) systems and smart multiple daily injection (MDI) systems for diabetes management to individuals, distributors, healthcare providers, and other institutions globally. The table below includes net sales by geography for the three months ended July 31, 2026 and July 25, 2025: Three Months Ended (in millions) July 31, 2026 July 25, 2025 U.S. (1) $ 240 $ 212 International (2) 603 511 Total $ 843 $ 723 (1) U.S. includes the United States and U.S. territories. (2) International includes all other non-U.S. countries. 7 The table below includes net sales by product category for the three months ended July 31, 2026 and July 25, 2025: Three Months Ended (in millions) July 31, 2026 July 25, 2025 Pumps $ 144 $ 119 Consumables 261 229 CGM 431 360 Other (1) 7 15 Total $ 843 $ 723 (1) Primarily includes revenue generated from the sale of smart insulin pens and services. Amounts in this line also reflect adjustments to the Company's Italian payback accruals resulting from two rulings in 2024 by the Constitutional Court of Italy and the Legislative Decree published by the Italian government in 2025. Refer to Note 12, Commitments and Contingencies, for more information. At July 31, 2026, $ 42 million of rebates and other adjustments were classified as accrued rebates in the condensed consolidated balance sheets. At April 24, 2026, $ 45 million of rebates and other adjustments were classified as accrued rebates and $ 2 million of rebates and other adjustments were classified as other liabilities in the consolidated balance sheets. There was $ 5 million and $ 6 million of return reserves classified as other accrued expenses in the consolidated balance sheets at July 31, 2026 and April 24, 2026, respectively. During the three months ended July 25, 2025, the Company decreased its accrual for the Italian payback by $ 7 million resulting from the June 30, 2025 legislative decree published by the Italian government and formalized into law in August 2025 confirming a reduction of the amounts due for years 2015 to 2018. The changes in estimates related to the Italian payback accruals were recognized as adjustments to net sales in the condensed consolidated statements of operations. During the three months ended July 31, 2026, there were no revenue adjustments pertaining to the Italian payback accrual. Refer to Note 12. “Commitments and Contingencies,” for additional information. Other adjustments to variable consideration for the three months ended July 31, 2026 and July 25, 2025 were not material. Deferred Revenue and Remaining Performance Obligations Deferred revenue was $ 19 million at both July 31, 2026 and April 24, 2026. At July 31, 2026 and April 24, 2026, $ 14 million and $ 15 million were included in other accrued expenses , respectively, and $ 5 million and $ 4 million were included in other liabilities, respectively in the consolidated balance sheets. During the three months ended July 31, 2026, the Company recognized $ 7 million of revenue that was included in deferred revenue as of April 24, 2026. During the three months ended July 25, 2025, the Company recognized $ 4 million of revenue that was included in deferred revenue as of April 25, 2025. Remaining performance obligations include goods and services that have not yet been delivered or provided under existing, noncancellable contracts with minimum purchase commitments. At July 31, 2026, the estimated revenue expected to be recognized in future periods related to unsatisfied performance obligations for executed contracts with an original duration of one year or more was approximately $ 46 million. The Company expects to recognize revenue on the majority of these remaining performance obligations over the next three years . Note 4. Restructuring The Company incurred certain restructuring charges during the three months ended July 31, 2026 and July 25, 2025 for individually immaterial restructuring activities. The restructuring, associated, and other costs for these activities primarily related to employee termination benefits provided to employees who had been involuntarily terminated. The following table presents the classification of these restructuring, associated, and other costs in the condensed consolidated statements of operations for the restructuring activities for the three months ended July 31, 2026 and July 25, 2025: Three Months Ended (in millions) July 31, 2026 July 25, 2025 Cost of products sold $ — $ — Selling, general, and administrative expenses — — Other operating expense (income), net 2 2 Total $ 2 3 8 For reported periods prior to the Separation, the Company’s financial statements included certain corporate allocations from Medtronic, including allocations for restructuring costs. Allocations of corporate restructuring activities for the three months ended July 25, 2025 are included within Note 14. “Related Party Transactions.” As of July 31, 2026 and April 24, 2026, the restructuring liabilities recognized primarily in other accrued expenses were $ 22 million and $ 36 million, respectively. The following table provides a reconciliation of the beginning and ending restructuring liability balances. (in millions) Total April 24, 2026 $ 36 Charges 2 Cash payments ( 16 ) July 31, 2026 $ 22 9 Note 5. Composition of Certain Financial Statement Items Inventories Inventories consisted of the following at July 31, 2026 and April 24, 2026: (in millions) July 31, 2026 April 24, 2026 Raw materials $ 128 $ 128 Work in process 35 34 Finished goods 193 179 Total $ 356 $ 341 Goodwill As of July 31, 2026 and April 24, 2026, the carrying amount of goodwill was $ 2.3 billion in each period. The Company did not engage in any business combinations or other transactions that would affect the carrying amount of goodwill. The Company did not recognize any goodwill impairment charges during the three months ended July 31, 2026 and July 25, 2025. Intangible Assets The following table presents the gross carrying amount and accumulated amortization of intangible assets: (in millions) July 31, 2026 April 24, 2026 Intangible Assets Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Purchased technology and patents $ 245 $ ( 153 ) $ 245 $ ( 147 ) Customer-related 70 ( 63 ) 70 ( 63 ) Trademarks, tradenames and other 5 ( 4 ) 5 ( 3 ) Total $ 321 $ ( 221 ) $ 321 $ ( 214 ) The Company did not recognize any definite-lived intangible asset impairment charges during the three months ended July 31, 2026 and July 25, 2025. Amortization Expense The following table presents the intangible asset amortization expense classification for the three months ended July 31, 2026 and July 25, 2025: Three Months Ended (in millions) July 31, 2026 July 25, 2025 Cost of products sold $ 6 $ 6 Selling, general, and administrative expense 1 1 Total amortization expense $ 6 $ 7 10 Other Accrued Expenses Other accrued expenses included in the consolidated balance sheets were as follows: (in millions) July 31, 2026 April 24, 2026 Contract termination accrual $ 8 $ 24 Accrued income taxes 34 38 Accrued litigation charges 22 24 Accrued warranties 18 17 Deferred income 14 15 Operating lease obligations 9 8 Right of return 5 6 Other accrued expenses (1) 76 61 Total $ 185 $ 194 (1) Other accrued expenses includes general accrued expenses as well as accruals related to restructuring, product remediation, clinical trials, and consultant fees. Product Warranties The following table provides a reconciliation of the changes in product warranty liabilities for the three months ended July 31, 2026 and July 25, 2025: Three Months Ended (in millions) July 31, 2026 July 25, 2025 Balance at the beginning of the period $ 63 $ 57 Provisions for warranties issued during the period 11 13 Settlements made during the period ( 11 ) ( 13 ) Adjustment of prior estimates 5 — Balance at end of the period $ 68 $ 58 As of July 31, 2026 and April 24, 2026, total product warranty reserves were included in the following consolidated balance sheet accounts: (in millions) July 31, 2026 April 24, 2026 Other accrued expenses $ 18 $ 17 Other liabilities 50 47 Total warranty reserves $ 68 $ 63 11 Note 6. Financial Instruments Equity Investments The Company holds equity investments without readily determinable fair values and investments accounted for under the equity method. Equity investments that do not have readily determinable fair values are included within Level 3 of the fair value hierarchy, as they are measured using the measurement alternative at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. The Company uses the equity method to account for investments in companies if it owns more than 20% of the investee company’s outstanding equity or the investment provides the Company with the ability to exercise significant influence but not control over the operating and financial policies of the investee. The Company assesses whether it has significant influence by considering various factors, including the nature and magnitude of the investment, voting rights held, and participation in the governance of the investee, if any. The Company may also consider additional relevant factors, such as the presence of other business relationships. The following table summarizes the Company's equity and other investments at July 31, 2026 and April 24, 2026, which are classified as other assets in the consolidated balance sheets: (in millions) July 31, 2026 April 24, 2026 Investments without readily determinable fair values $ 73 $ 73 Equity method investments 2 2 Total equity investments $ 75 $ 75 During the three months ended July 31, 2026 and July 25, 2025, the company did not recognize any sales or impairments related to the Company’s portfolio of equity and other investments. Non-Designated Hedging Contracts During the quarter ended July 31, 2026, the Company entered into foreign currency forward contracts that were not designated as hedging instruments to offset the remeasurement gains and losses on foreign currency-denominated monetary assets and liabilities. These contracts were classified within Level 2 of the fair value hierarchy. The related fair values of these contracts were recorded to other current assets and other accrued expenses on the condensed consolidated balance sheet as of July 31, 2026, and were not material. The aggregate notional amount of these contracts was $ 499 million as of July 31, 2026. The net effect of gains and losses on the non-designated derivative instruments were recorded to other operating expense (income), net on the condensed consolidated statement of operations for the three months ended July 31, 2026 and were not material. The Company did not have any hedging activity during the prior year period presented. Note 7. Debt Supplier Financing Arrangements The Company participates in a supplier financing program that provides participating suppliers the ability to finance payment obligations from the Company with a third-party financial institution in order to receive earlier payment. The Company’s standard payment term is 90 days. The Company’s outstanding payables to its suppliers, including amounts due and payment terms, are not affected by a supplier’s participation in the program. At July 31, 2026 and April 24, 2026, the Company had $ 10 million and $ 15 million, respectively, of outstanding payables associated with the supplier financing program recorded in Accounts payable in the condensed consolidated balance sheets. Revolving Credit Facility During fiscal 2026, the Company entered into a credit agreement that provides for a five‑year senior secured revolving credit facility (the “Revolving Credit Facility”) with an aggregate available principal amount of up to $ 500 million. The Revolving Credit Facility became available upon the completion of the Company’s IPO on March 9, 2026, and matures in March 2031. The Revolving Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default. As of July 31, 2026, no amounts were outstanding under the Revolving Credit Facility, and the Company was in compliance with all applicable covenants. 12 Note 8. Income Taxes For the three months ended July 31, 2026, the Company recognized income tax expense of $ 4 million on a pre-tax income of $ 4 million. For the three months ended July 25, 2025, the Company recognized income tax expense of $ 3 million on a pre-tax loss of $ 13 million. The Company's effective tax rate for the three months ended July 31, 2026 was 96.7 % as compared to negative 27.8 % for the three months ended July 25, 2025, respectively. The increase in the effective tax rate for the three months ended July 31, 2026 primarily relates to year-over-year changes in operational results by jurisdiction and the impact of valuation allowances in certain jurisdictions. The Company’s effective tax rate for the three months ended July 31, 2026 was higher than the U.S. federal statutory rate primarily due to the mix of pre-tax income and losses earned across jurisdictions and the impact of valuation allowances in certain jurisdictions. In addition, pursuant to U.S. GAAP interim reporting guidance, certain losses were required to be excluded from the tax rate calculation. These factors increased the Company’s effective tax rate for the quarter. The Company’s effective tax rate for the three months ended July 25, 2025 was lower than the U.S. federal statutory rate primarily due to one-time restructuring charges that generated tax benefits, partially offset by the impact of valuation allowances in certain jurisdictions. Note 9. Stock-based Compensation The following table presents the expense classification of stock-based compensation expense recognized by the Company for stock options, restricted stock units, performance share units, and employee stock purchase plans for the three months ended July 31, 2026 and July 25, 2025: Three Months Ended (in millions) July 31, 2026 July 25, 2025 Stock options $ — $ 1 Restricted stock units 9 5 Performance share units — 2 Employee stock purchase plan 1 1 Total stock-based compensation expense $ 10 $ 9 Cost of products sold $ 1 $ 1 Research and development expense 4 2 Selling, general, and administrative expense 5 6 Total stock-based compensation expense 10 9 During the three months ended July 31, 2026, there was no stock-based compensation expense related to allocations of expense from Medtronic. During the three months ended July 25, 2025, the Company recognized $ 6 million of stock-based compensation expense related to direct Company employees, and $ 3 million of stock compensation expense related to allocations of Medtronic’s corporate and shared employee stock-based compensation expenses. During the three months ended July 31, 2026, the Company granted restricted stock units and performance share units (“PSU”) to employees under the Company's existing equity incentive plans. The aggregate grant date fair value of RSUs granted during the period was $ 46 million. The PSUs granted included an embedded market condition and the related grant date fair value was calculated based on a Monte Carlo methodology. The awards vest upon the Company’s actual performance relative to certain predefined metrics and subject to the awardee’s continued service through the measurement date of April 27, 2029. The aggregate grant-date fair value of PSUs granted during the period was approximately $ 16 million. As of July 31, 2026, the total unamortized stock-based compensation expense of approximately $ 118 million will be recognized over the remaining weighted average vesting term of approximately 1.4 years. 13 Employee Stock Purchase Plan During the three months ended July 31, 2026, employees purchased shares under the Employee Stock Purchase Plan (“ESPP”), and a new six-month offering period commenced on July 1, 2026. The fair value of the purchase rights granted during the quarter was determined using the Black-Scholes option-pricing model. The assumptions used in the Black-Scholes option pricing model for the ESPP were as follows: Three Months Ended July 31, 2026 Assumptions used: Expected life (years) 0.5 Risk-free interest rate 3.96 % Volatility 33.68 % Dividend yield — % Note 10. Leases The Company leases office, manufacturing, and research facilities and warehouses, as well as transportation and other equipment. The Company determines whether a contract is a lease or contains a lease at inception date. The right-of-use assets, lease liabilities, lease costs, cash flows, and lease maturities associated with finance leases were not material to the condensed consolidated financial statements at July 31, 2026 and April 24, 2026. The following table summarizes the balance sheet classification of the Company's operating leases, including the amounts of the right-of-use assets and lease liabilities at July 31, 2026 and April 24, 2026: (in millions) Balance Sheet Classification July 31, 2026 April 24, 2026 Right-of-use assets Other assets $ 57 $ 52 Current liability Other accrued expenses $ 9 $ 8 Non-current liability Other liabilities $ 50 $ 45 Note 11. Research and Development Funding Arrangements The Company has entered into certain research and development funding arrangements with affiliates of Blackstone Life Sciences Advisors L.L.C. (“Blackstone”). Additional information regarding these arrangements is included in the Company's Annual Report on Form 10-K for the fiscal year ended April 24, 2026. During fiscal year 2026, the MiniMed Flex insulin pump received regulatory approval, and commercial launch followed soon thereafter. As a result, the Company recognized a one-time charge of $ 157 million during the fourth quarter of fiscal 2026 related to future minimum royalty payment obligations to Blackstone. As of July 31, 2026, the carrying amount of the obligation associated with this Blackstone royalty arrangement was $ 157 million, with $ 16 million included in other accrued expenses and $ 141 million included within other liabilities on the condensed consolidated balance sheets. No payments were made under this obligation during the three months ended July 31, 2026. There were no material changes to the Company's Blackstone arrangements during the three months ended July 31, 2026. 14 Note 12. Commitments and Contingencies Legal Matters The Company and its affiliates 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, including those described below. With respect to governmental proceedings and investigations, like other companies in our industry, the Company is subject to extensive regulation by national, state, and local governmental agencies in the U.S. and in other jurisdictions in which the Company and its affiliates operate. As a result, interaction with governmental agencies is ongoing. The Company’s standard practice is to cooperate with regulators and investigators in responding to inquiries. With respect to intellectual property disputes, the Company is involved in or at risk for litigation relating to patents, trademarks, copyrights, trade secrets, and other intellectual property (“IP”) rights, and licenses, acquisitions or other agreements relating to such rights. This litigation includes, but is not limited to, alleged infringement, misappropriation, or other violation of IP rights, or breach of obligations related to IP rights, or other claims asserted by competitors, individuals, or, consistent with a growing trend across technology-intensive industries, other entities created specifically to fund IP litigation. With respect to commercial disputes, antitrust and competition issues have gained increased prominence, enforcement and private litigation have increased globally, and the Company is involved in or at risk for antitrust litigation, investigations or enforcement actions regarding a range of commercial activities, including challenges to mergers and acquisition transactions, joint ventures, co-development or co-marketing arrangements, contracting practices, distribution agreements and employment agreements. The outcomes of legal actions are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, the enforcement agencies or private claimants seek significant monetary damages and/or royalty payments, as well as other civil or criminal remedies (including injunctions barring or restricting the sale of products that are the subject of the proceeding, placing restrictions on competitive strategies or practices, or unwinding consummated transactions), any or all of which could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows. The Company records a liability in the condensed consolidated financial statements on an undiscounted basis for loss contingencies related to legal actions when a loss is known or considered probable and the amount may be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a material loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed. When determining the estimated loss or range of loss, significant judgment is required. Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, 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. The Company classifies certain specified litigation charges and gains related to significant legal matters as certain litigation charges, net in the condensed consolidated statements of operations. During the three months ended July 31, 2026, and July 25, 2025, the Company recognized a reversal of a previously accrued litigation charges of $ 2 million and a charge of $ 17 million, respectively. Accrued liabilities for certain litigation charges at July 31, 2026 and April 24, 2026 were $ 22 million and $ 24 million, respectively. For the period ended April 24, 2026, the accrued litigation charges were offset by a $ 6 million receivable from a favorable judgment in a particular legal matter. The ultimate cost to the Company with respect to accrued litigation could be materially different than the amount of the current estimates and accruals and could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows. The Company includes accrued litigation in other accrued expenses , other liabilities and gains related to significant legal matters in other current assets on the consolidated balance sheets. While it is not possible to predict the outcome of the legal matters discussed below with certainty, the Company believes it is possible that the costs associated with these matters could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows, even in respect of those matters for which the Company believes that a potential loss is not currently probable. 15 Diabetes Pump Retainer Ring Litigation Starting in fiscal year 2021, plaintiffs began filing lawsuits against the Company in U.S. state and federal courts seeking damages for alleged personal injuries, including deaths, caused by the Company’s Series 600 insulin pumps with allegedly defective clear retainer rings that were subject to field corrective actions in 2019 and 2021: in 2019, Medtronic issued an “urgent field safety notification” directing patients to inspect the clear retainer rings on affected Series 600 insulin pumps and, in certain circumstances, offered replacement insulin pumps (which was classified as a recall by the U.S. Food and Drug Administration (“FDA”) in 2020); in 2021, Medtronic expanded the recall to remove the Series 600 insulin pumps with clear retainer rings from the market. Plaintiffs have alleged that, due to a defective retainer ring, the insulin reservoir in their insulin pump could not be locked into place, causing over- or under-delivery of insulin allegedly resulting in hypoglycemia or hyperglycemia. As of August 2026, there were 28 lawsuits filed on behalf of 109 individuals in the U.S.: 26 coordinated in California State Court, Los Angeles County; one in U.S. District Court of the Western District of Washington, and one in U.S. District Court for the Western District of New York. One of the lawsuits in California State Court, Los Angeles County began a multi-plaintiff trial on May 11, 2026, which resulted in a verdict on June 17, 2026. The jury did not award any damages as to three plaintiffs, two of whom were pump users and one of whom was a loss of consortium plaintiff. As to the remaining plaintiff, a pump user, the jury found liability on certain claims and awarded damages of approximately $ 253,000 , which were reduced by approximately one-third based on findings of proportionate responsibility. The court entered judgment on the verdict in August 2026. The parties may pursue post-trial motions, and any appeal would be subject to the outcome of those proceedings. The Company cannot predict the timing, outcome, or ultimate impact of these proceedings at this time. In addition, in 2021 a purported class action lawsuit in Canada was filed against the Company in Ontario Superior Court that remains in early stages, with claims similar to those in the pending U.S. lawsuits. Plaintiffs’ firms have also notified the Company that they may file additional lawsuits in the U.S. on behalf of approximately two thousand additional claimants, with claims similar to those in the pending U.S. lawsuits. Many of these potential claims are currently subject to tolling arrangements. The Company is also aware of inquiries made by certain state attorneys general regarding its Series 600 insulin pumps, including information relating to the field corrective actions in 2019 and 2021. As of July 31, 2026, and April 24, 2026, the Company had accrued $ 20 million and $ 22 million, respectively, in certain litigation charges in connection with certain pending and threatened claims and lawsuits, a portion of which relates to certain claimants who may become subject to a master settlement agreement. It is possible that the amount of the Company’s ultimate liability could materially differ from the amount currently accrued. The Company is currently unable to estimate a reasonably possible loss or range of loss in excess of the amounts accrued. EOFlow International Arbitration In 2023, affiliates of the Company entered into agreements (the “Acquisition Agreements”) to acquire EOFlow Co., Ltd. (“EOFlow”), a Korean company that had developed and commercialized insulin patch pump technology abroad. In mid-to-late 2023, it became apparent that EOFlow would be unable to meet multiple contractual obligations and closing conditions under the Acquisition Agreement. The Acquisition Agreements were terminated in late 2023. In mid-2024, EOFlow filed an arbitral claim against Medtronic before the Singapore International Arbitration Centre, asserting it is entitled to a $ 26 million break-up fee under the Acquisition Agreements and related letter agreements. The affiliates of the Company have asserted an arbitral counterclaim for EOFlow’s breaches of contractual representations and warranties in the Acquisition Agreements. On March 10, 2026, the Tribunal dismissed EOFlow’s claims against Medtronic without prejudice. The Company has not recorded an expense in connection with this matter because the Company believes any potential loss is not currently probable. Witkin False Claims Act Matter In May 2011, a former sales representative filed a qui tam lawsuit against the Company in the U.S. District Court for the District of Massachusetts alleging violations of the False Claims Act in connection with sales of certain insulin pump products in the period from 2007 to 2014 and wrongful termination. The U.S. Department of Justice declined to intervene. The matter is currently proceeding with the nationwide phase of discovery after a several month stay while the Court evaluated the applicability of new precedent from the First Circuit Court of Appeals. The Company has not recorded an expense in connection with this matter because the Company believes any potential loss is not currently probable and reasonably estimable. Additionally, the Company is unable to reasonably estimate the range of loss, if any, that may result from this matter. 16 Italian Payback Litigation In 2015, “payback” legislation was enacted in Italy requiring companies selling medical devices to make payments to the Italian state if Italy’s medical device expenditures exceed annual regional maximum ceilings. The payment amounts are calculated based upon the amount by which the regional ceilings were exceeded for any given year. There has been significant scrutiny on the legality and enforceability of the payback law since its inception, and litigation challenging the law has been proceeding through the Italian Courts. Since the law was enacted, the Company had recognized an estimate for the amount of variable consideration. In 2025, two rulings by the Constitutional Court of Italy found that the medical device payback law was constitutional. In June 2025, the Italian government published a legislative decree confirming a reduction of the amounts due for years 2015 to 2018. As a result, the Company decreased its liability pertaining to these years by $ 7 million during the three months ended July 25, 2025 and recorded a corresponding increase to net sales in the condensed consolidated statements of operations. No such adjustments were recorded during the three months ended July 31, 2026. While developments related to this matter continue, obligations associated with this matter were not retained by the Company following the Separation. Guarantees In the normal course of business, the Company and/or its affiliates periodically enter into agreements that require one or more of the Company and/or its affiliates to indemnify customers or suppliers for specific risks, such as claims for injury or property damage arising as a result of the Company or its affiliates’ products, the negligence of the Company's personnel, or claims alleging that the Company's products infringe on third-party patents or other intellectual property. The Company also offers warranties on various products. The Company’s maximum exposure under these guarantees is unable to be estimated. Historically, the Company has not experienced significant losses on these types of guarantees. Periodically, the Company will utilize a financial institution to issue a guarantee on behalf of the Company to support commercial commitments. Under the terms of these arrangements, the issuing financial institution guarantees our performance or payment to a beneficiary. As of July 31, 2026, and April 24, 2026, the aggregate amount outstanding for these guarantees was not material to the condensed consolidated financial statements. Purchase Obligations The Company has agreements with suppliers and other parties to purchase inventory, other goods and services and long-lived assets. Product inventory obligations consist primarily of purchase order commitments for raw materials used in the production of insulin pumps cartridges and sensors, and finished goods infusion sets. Cancellation of outstanding purchase orders is generally allowed under the standard terms of our purchase order agreements, but may require payment of costs incurred through the date of cancellation. As of July 31, 2026, obligations under our purchase agreements were not material. Note 13. Segment Information The Company derives its revenue primarily from the sale of products focused on diabetes management, including insulin pumps, continuous glucose monitoring systems and sensors, and smart insulin pens. The Company manages its business activities on a consolidated basis and operates as one operating and reportable segment. Disaggregated revenue by geographic region and product type is presented in Note 3. “Revenue.” The Company’s chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer. The CODM makes decisions about resource allocation, assesses performance of the business, and monitors budget versus actual results using net income (loss). Income or loss from operations is also considered when monitoring budget versus actual results. Significant expenses include cost of products sold, research and development expenses, selling, general and administrative expenses, and certain litigation charges, which are each separately presented on the Company’s condensed consolidated statements of operations. Other segment items include other operating expense (income), net, non-operating expense (income),net, and income tax provision, which are consistent with those items presented on the Company’s condensed consolidated statements of operations. The Company’s CODM is provided with segment assets information on a consolidated basis for the evaluation of Company performance. Total segment assets were consistent with total assets reported in the Company’s consolidated balance sheets for the periods ended July 31, 2026 and April 24, 2026. 17 Note 14. Related Party Transactions Separation from Medtronic and Related Transactions The Company completed its separation from Medtronic on March 9, 2026 in connection with its IPO. The Company continues to engage in transactions with Medtronic under various separation-related agreements, including transition services, manufacturing and supply, tax, employee matters and intellectual property agreements as disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended April 24, 2026. Consideration and costs for the transition services are determined using several billing methodologies as described in the agreements, including customary billing, pass-through billing, percent of sales billing or fixed fee billing. Costs for transition services provided by Medtronic, including a mark-up on those services, are recorded within the consolidated statements of operations based on the nature of the services. Consideration for transition services provided to Medtronic are recorded within the consolidated statements of operations based on the nature of the services and as an offset to expenses incurred to provide the services. During the three months ended July 31, 2026, the Company recognized $ 1 million of consideration for services provided to Medtronic and recognized costs of $ 95 million for services provided by Medtronic pursuant to the transitional arrangements between the parties. Total amounts due from Medtronic of $ 602 million as of July 31, 2026 primarily consisted of receivables for revenue remittances from international entities. Amounts due to Medtronic of $ 178 million as of July 31, 2026 primarily consisted of payables for pass-through costs for third-party expenses. Allocation of General Corporate Expenses During periods presented prior to the Company’s IPO, the Company’s operations were integrated with Medtronic and its affiliates, and the Company received services including, but not limited to finance and accounting, legal, information technology, employee benefits and incentives, and stock-based compensation. These condensed consolidated financial statements reflect charges for these services. When specific identification was not practicable, a proportional cost allocation method was utilized, depending on the nature of the services received. The major components of Medtronic corporate and shared expenses for periods prior to the Separation were as follows: Three Months Ended (in millions) July 25, 2025 Cost of products sold $ 11 Research and development expense 8 Selling, general, and administrative expenses 66 Other operating expense (income), net 2 Total $ 87 Net Transfers from Parent Net transfers from Parent are included within Net investment from Parent in the condensed consolidated statements of equity and within financing activities in the condensed consolidated statements of cash flows and represent the net effect of transactions between the Company and Medtronic for periods prior to the Separation. The reconciliation of net transfers from parent between the condensed consolidated statements of equity and the condensed consolidated statements of cash flows were as follows: Three Months Ended (in millions) July 25, 2025 Net transfers from Parent per the Condensed Consolidated Statements of Equity $ 212 Stock-based compensation expense ( 9 ) Multi-employer pension expense ( 2 ) Other, net 1 Net transfers from Parent per the Condensed Consolidated Statements of Cash Flows $ 202 18