Medtronic (MDT) 23 Feb 212021 Q3 Earnings call transcript

Good morning and welcome to Medtronic's fiscal year 2021 third quarter earnings video webcast. I'm Ryan Weispfenning, Vice President and Head of Medtronic Investor Relations.

Before we start the prepared remarks, I'm going to share with you a few details to keep in mind about today's webcast: Joining me today are Geoff Martha, Medtronic Chairman and Chief Executive Officer, and Karen Parkhill, Medtronic Chief Financial Officer. Geoff and Karen will provide comments on the results of our third quarter, which ended on January 29, 2021. After our prepared remarks, we'll take questions from the sell side analysts that cover the company, and today's event should last about an hour. issued and release geographic we statements our morning, divisional and revenue this a containing press financial Earlier summary.

on our well We that also model, earnings This changes which as next into new from our presentation provides presentation InvestorRelations.Medtronic.com. reporting or to as quarter. additional details will press given posted on our our operating an our at future revenue earnings can website effect accessed structure, go performance, release be

make webcast, may materially considered those statement. many and of results today's projected forward-looking we actual statements During statements, be the any forward-looking may from differ in

in Additional share that There undertake which improvement periodic compare information basis, basis, that were individual of growth. reports are unless All an sequential to acquisitions for as total made had to References quarter an are a statement. segment the Unless calendar update actual and otherwise, make cause losses our to quarterly filings differ on organic reported other last basis, SEC, second or results and and on impact made references fiscal we any to quarter company no comparisons gains on significant or revenue year-over-year that forward-looking to a concerning the a factors say are XXXX on on and with and basis. currency. year we in not is all revenue stated. otherwise given do contained are adjusts the could we foreign

at that, get press in attachment all reconciliations to financial found With our non-GAAP earnings let's website or our of release the measures be can started. on Finally, InvestorRelations.Medtronic.com.

both reported in morning to business and an that are on our way late is markets, This happened results in a joining revenue that returning gains for Hello, volumes everyone, reflect on and our of businesses. driving new as increasing earnings. you our products and today. of also December the with improvement the to this impact our its sequential resurgence well We're we share growth, January. in COVID The thank procedure despite number outperforming QX

the if competitors' ventilator In going And include and our even you an customers market when our fact, we year-end when a impressive. outperformed exclude that performance procedure the COVID results for was our January month a impact pushes, consider sales. of we're are our our that We're on preparing hospital up of even increased number seeing having is signs you robust against volumes, also recovery. strong more

equipment The of energy and directly our hospitals – equipment that past our of of capital such equipment. on spending purchases telling use notably this example, type capital – consoles, this as it's procedures, so strong. is For have prioritizing robotics, to tied quarter been are systems navigation

confident market. return for competitors. and flow a COVID year, our as is our long-term. the build this the Through increasing competitive both going positioned model we've recovery supplementing and to also We've not an as driven we're our we're over expect the fourth we're actions and bullish pandemic feel the And of Medtronic, short- bring with taken coming Now quarter, the recovery, ability our stronger quarters, sharpened on strong growth that into that outpace the to and focus. with over that momentum implemented but just from the We and we new pipeline the M&A. we're a head well tuck-in we are by our culture, cadence by new to enhancing past to emerging this I'm operating product we to have we the the

And timing the seeing mask share dynamics. multiple performance. along market a a the an for our of trend going strong company. important improved to across But you're of which Medtronic. couple market on off lead for acknowledge done that of we've of are of that does discussion now the focus gains I underlying as some procedures, earnings become I Now past share, I'm with the quarter, on has the COVID there hope market calls, drivers with our impact

transformation to pipeline we've operating prolific is during customer stronger Our model and And results. moving has improved to driven true pandemic, to serving is business performance. the But key. customers becoming as simply beginning also culture the of a the our drive changes partner, a and made relationships from supplier our

XXX sustained January and total of In our the our approvals US, engine over Japan, XXXX. received consistent growth. additional to flow products regulatory approvals, quarter for is and we've Our of alone, bringing the past in Europe, product new an since XX China

start businesses Group. in the and our we with Vascular gaining share Cardiac where Let's are

we couple for winners the us and in reach and positions growing well to XX% products. to increased indication while of dealing Coronary, leadership risk we're And of the on we through products, financial in TAVR sequentially, the balloons, a expect Cobalt drug-coated cardiovascular share high and successful In US. of one-month despite is continue maintain to above that XX% that expect strength Crome believe DES led do high our labeling strong to future the point including outperform competition. We We Micra market. Rhythm. the but by tender quarter of points DES market and globally. growth the winning our China gained patients. We we're gains we strength Cardiac continues dual-antiplatelet the to of family. well, our of our in growth share China, gained scale we're unit leadless X to strategically the the extremely China in market-leading expanded our In past of points globally, our RDN rollouts our We our one X only IN.PACT up in of drive and on on our impact tender, competitors pull share this being share devices. national stent pacemakers with family another and leverage perform Micra year-over-year estimate the Not US power drug-eluting share with national of therapy the other still bleeding points

adoption fistula continued driven of Medicine. DCB our our by dialysis maintenance seeing strong In fact, publication in the of of Journal AV for England data for patients, New the we're

Next, a business share our by driven our energy endostapling good quarter Therapies Minimally to and We Innovations lines. turning year-over-year, of Surgical competitor, had nearly against our point Invasive J&J. primary Group, gained a our product

of in gained quarter, high-acuity the as but products and year-over-year, down business XX%. nearly Respiratory patients. and a driven expected, sequentially, great this sales And ventilator over market. Our Interventions importance in airway were the treating by tripled ventilator And had COVID ventilator was our our share our PBXXX growing

driven gained XX% of also Airways, our growth by laryngoscopes. in We impressive over share in video

starting ventilator next Looking pandemic-related as ahead, should year-over-year anticipate our revenue we and decreases, quarter. normalize demand headwinds

business Monitoring strong, had Patient double-digit Our quarter. growth also a

in outsell believe a Our sequentially. sales, share to modest are we year-over-year, product we of with for stim. oximetry capital driven share estimate launch with nearest and reduce share Gastrointestinal, Colon in from gains, O-arm colorectal large share up for brain continue PC is And double In Access. and unit Technologies, screenings. Restorative sequentially, and partnership a our businesses. our had in NHS had Scientific to in gains we're that equipment quarter our digits, In gain several grew rollouts In backlogs modulation, product by large a while and competitor, Nellcor modulation Group, systems. our business Therapies Neuromodulation, StealthStation point Mazor, lines In the NHS And our Mazor strong We with digits Abbott. Cranial and has sales Spinal in year-over-year, both do across we're share points seeing grew several gains our share of number as spine Renal patient with using was pulse gain our Masimo. recent The stable help the and we Boston Renal in robotics leading near in some nearly gains to system to In Care won imaging our from brain meaningfully we Globus, the Percept sequentially of part record led robotic PillCam share space. navigation England. share we high-single pain records

gains momentum even we're a pain Now given a business year-over-year, expect launch, is nearly gain with to our a differentiation, trend. that when you DBS facing strong share replacement more DTM stim, share impressive is which our In be of technology gaining this from point headwind. we multi-year consider

to share X last Since pain growth device. in Micro good Axonics when over points InterStim DTM accelerated the after XX% leading another in share October, two our past trials over past We've back are stim we the of has couple quarters, but back really this back of of quarters. late at market, specifically indicator the and health, which market sequentially X data win XX points taken our the share health business. Our we differentiation of now quarter. And the only gained quarter share you this surged of point not the Europe release share US our pelvic on of based the we US. in Axonics of quarter, trials of for the gained from rechargeable and look a continue year-over- is In points from year, our XX-month up overall,

solutions our portfolio. of of share, do. believe there work got where holding product EP we've year- share over-year lost businesses So, we where a still businesses J&J's point we there are number In primarily or are sequentially, are broad a some some gaining but to to about we ablation business, and cardiac

been said, we which Boston in response this to LINQ X.X-year to our our points to system, and ablation capabilities, That this due Now share market. approval. diagnostics, in we as enhanced programming just II enter they system we DiamondTemp cardiac to around of outstanding, few customer sequentially performance the In cardiac set, lost received has estimate FDA given turn part Scientific, share a ahead feature remote expect quarters longevity. our

our scale be constrained II, We continue next the but expect LINQ unique ramp to supply quarters. manufacturing to now for few for wafer

competitive coils, year-over-year XX that In this the Stryker the growth share. this our we created sequentially. Terumo share in primarily and neurovascular, entrants, confident our LINQ in differentiation position are aspirations last was innovated And diverters, and held new as market we leadership specifically we of However, device. some up for lost and we a to in pick maintain we in And II share with while bit strong flow strong have expect years. of

later and flow series growth confident back a of get launches turnaround making share. diverters, product we quarter. initial progress impact I'm year, In of coming returned to competition new that that are actually after efforts, neuro in the in calendar our to have taking we this this We so Diabetes, we'll considerable in

not US, and the in successful the which gaining XX market, still with now across we're we're XXXG launches in the growing momentum system available our with four While XXXG, the countries of continents. is

this, all of estimate we picked insulin pump share result several a as up we sequentially. Now durable of points

Next, and calendar with share ON dollar could trial be the denervation most pipeline in We're the deck big also remains of addressable a of our one to to the the full. to events A the likely Starting year, later large our year, squarely in a and calendar number at CVG, expecting growth. are MED this results med-tech catalysts renal long-term given multi-billion accelerating important This aimed pipeline. our these of disrupt TCT this pivotal let's year, conference markets, this hypertension. in number market we're create present at all October. turn product at front and of win on end opportunities

submit this ArcticFront to been line year. indication our breakthrough designation. expecting the planning on solutions later are of of cryoballoon already In year, first this ON approval the half calendar we've cardiac FDA our depending MED therapy for results Now we business, granted for we're calendar device in first ablation our and a trial,

valve continue In our also on field FX our to good year, deliverability We Evolut Structural make later ease-of-use. and Heart, calendar expect to its system next-generation to enhanced with TAVR disruptive this market. pulsed we bringing progress ablation rollout

expanding CE well. is month. has to In The we're We the next the approval really and growth to excited we're disruptive system. device Hugo we're for for on Mazor We for track US investing valve submit of enroll mitral remain Intrepid differentiated the in our IDE In spine And In to first-in-human MITG, heavily opportunities. to RTG, completed with file repair capabilities of very to category some neurosurgery, the be that very our of In which pain share our Medtronic Foundry, big the technology. stim, free milestones we're Half pleased its mitral in this technology. clip Medical, device continue robotic nearing increase our trial our for see transcatheter calendar to we're transcatheter important potential we're our mitral recharge partnership pain recharge expecting system. unique pivotal as This year. This is later launch dramatically opportunity soft-tissue Moon as to procedure to current free stim. robot for Mark a

to our it to to device ECAPS a disruptive expect also year. this technology our and we later very submit stim be to bring directional pain could year, close We of expect advantages calendar gap. in lead ECAPS Intellis market and brain the platform. FDA SenSight modulation, combined the with DTM all competitive In intend calendar will our we our which to a launch this device key later therapy

launches which deep now with DBS. our In in not additional there. earlier, diverter our stopping the I In closed that far when brain products loop, technology studying plan SenSight our to calendar our fact, trial, five to have that flow stimulation year. system be you launch we're extend ahead we this is adaptive PC mentioned in further will pivotal leadership combine we of We're position competition. Percept the device, addition ADAPT-PD neurovascular, will And our enrolling

we the responsible with them resources branch multiple an well for submissions. that's dependent going review has Now focused reviews be pump COVID and to now these to submissions. that and FDA's pediatric of into Diabetes In stroke we're provide timing, the of sensor disclosed reasons, to bringing insulin the Diabetes, efficient submitted their market. on have the on simultaneously the means we about adult Zeus launches FDA the to we're haven't the the but as XXXG innovation diagnostic product bandwidth, our excited the FDA details competitive for Approval

then Regarding once our our manufacturing summer. which before our to easier Karen outlook. back remarks I'll FDA we've you size half and now of completed come to disposable, with this a over our concluding our I'm third intend and current discussion we we and the quarter And going have take financials you. module Synergy is apply, to submit Q&A. of sensor, Karen, some trial our sensor, to to to pivotal go complete the it through

you. Thank

X% XX%. Our revenue declined EPS declined third quarter adjusted organic and

we're and on products mentioned, way of well execution. as new and Geoff sequentially to by increased our revenue grew the As X% our adjusted strength growth, on our EPS to returning XX%

performance were through quarter While part in the of our temporary. we across the resurgence COVID higher as that to than daily sales worth the December. businesses, several It's third average did impact this impact noting of quarter tracking view latter continue second our the

quarter. by we geographies spine, COVID many and many vascular the our starting period in a volumes resurgence, saw through the were the However, impacted down, holiday driven cardiac of and continuing in step businesses. innovations, our and Procedure end of specifically surgical light the and

equipment turn despite a As soon. the strong of our and were procedures, Geoff in capital sales point to slowdown mentioned,

headwind was on our EPS, than of to our came expectations. to on EPS, While greater-than-expected line quarter November and with revenue we with $X.XX third Street ahead beat more operating a $X.XX tailwind was margins expectations, revenues, a an $X.XX consensus which in tax. was in on FX, better $X.XX

our in our sequential basis margin operating XXX We our points margins, margin. points continued on basis adjusted XXX and on gross improvement see to strong

in improvement expense returns part margin lower operating the quarter. in we came certain taxes our on expected, than Down faster Our by SG&A. was expected, the tax years' than prior as driven owed rate finalized we during P&L, in controls

the year, since consideration of total X portfolio privately-held Neurovascular, of a tuck-ins on with investing we approximately to Turning both recently investments We through position access $X.X now long-term the beginning strong RIST acquisitions to another our inorganically and radial tuck-in minority billion. last our acquisition of announced from is focused and our calendar and cash and artery have remain growth. combined sheet, balance organically drive

to returns investments create continue these strong acceleration for shareholders. expect with revenue to supplement fuel our these growth returns we dividend. growing and a And and We strong

an XX yield having are dividend and places companies. of in S&P S&P top healthcare Dividend for We all quintile the us Aristocrat, increased our our XXX years, X% of

outlook. our Now, turning to

COVID ongoing the resurgence the our to expect from diminish, impact predict. effect remains challenging the to businesses we While from pandemic to the

sense guidance. trends want the will to you do not to of our continue ahead. our we So, give I That provide typical said,

a ICU and different COVID procedure a be quarter, March. as Said volumes. be decrease, of that couple throughout to lag we return hospitals continued our the way, But to to the February. improve, to We see not as we hospitalizations and expect capacity normal the exit expect increases, average sales first weeks only but to March month, February than of daily than more in steadily we in stronger April stronger

reasonable our at it's revenues expectations Within organic a on reflecting And follow would group, XX%, with in by look RTG quarter and think the Diabetes around we we ventilator growth be comparison. down recovery between and if be high-single As around organic fourth organic EPS. expectations. about and today, we XX% tough comfortable case, XX%, consensus this, In CVG MITG trends revenue to continued where around digits. and ramp in growth the range Street from XX%, Street growth the are that in a sit would XX%, and year-over-year revenues

On to X both and on point around pipeline operating we points on revenue gross expect to X.X do expect product would points continue margin points and leverage a operating improvement the we as X.X margin, to Therefore, sequential improvement improves. invest on P&L, our sequential X we in basis. while launches, our

constant, hold Regarding currency, would tailwind roughly be assuming $XXX to the recent rates revenue million.

headwind. we presentation to excited month refer you, the our Back growth reporting, became bottom on impact, the have going forward. slides minor operating you It line, on our approximate have in however, to by I'd details on drive acceleration. an minimal will to can to earnings our and for am will Geoff. culture changes and effective I external like new impact and ability our you reminding earlier our On model this it $X.XX the end expect the that by

Thank Okay. Karen. you,

and And to put the of Now our we're we We're pipeline, we're accelerating execution our continuing our strong exciting greater and decisiveness, coming decentralized and businesses. We're board us positioning strengths the executing and long-term units. our empowering leveraging markets areas our ahead up, core delayered we're model. want our commitment development. execute us. number points at this and competitiveness, continued accomplish employees launches. an to and we because in while for thank importantly, number increasing and to back, wrap to able visibility organization. on our manufacturing to We're the And enhance of giving operating speed, our same organization, culture, our our time hard product all company in are Medtronic XX increasing operating and growth, of all markets as end talented have organization. to of technology into our across end record invest share continue winning We've the a quarter, in of opportunities new another our with the enterprise great of of on We're the for success I work the Mission. like their

to that, let's move Q&A. now with So,

Francesca from first the from Morgan question Lewis Stanley. David I'm [Operator Instructions]. team. IR We'll the from DeMartino take Medtronic

two me. for Just I'll start with financial.

I gave Karen, So, you all the detail appreciate us.

get forward have be the not going a relative about February want about fiscal full Sean. I on? And about that January. March to then, is you but talked the that turn? improve year, XXXX here. your couple to you follow-up have talked bounce year bit this know to for in call time or there anything for about full out quick February. Just of than should And you Yet, begin beginning some at clarifications we peers Street February Have One, a models seen we're to a focused I better guidance – anything

rate week, really it's seen February the our sales so by to at far, not we United due look in but weather if average we a States. that do believe tough daily have turnaround, In yet we the

FY of that again, better think and focused And XXXX, already than turnaround March. February early. it so, think still much about hospitals. it's And being procedures on April much than March we better do we're we're see in believe We If we that will seeing soon. terms and we very

while planning And is that We are we're premature still the to some give given in our still on guidance XXXX, still FY in period. I'd our love planning period. COVID uncertain it's the fact and

in models here about follow-up wonder had my probably the Sean, guidance XXXG. to standout business, Street Diabetes XXXG you're The what historically quarter as quarter. most doesn't seem Sean. for exclusively would as just in obviously, if seeing we seen Just for was I to here given expect, what this versus talk I relative strong Diabetes you quarter. momentum with this next the could the

So, so they're launch make about just versus Synergy other timeline? sense each anything update So, of kind in of if general a think those Diabetes helpful. filing sense to strategy? any on top and to it much. would of there independently be of there of relative to products Zeus is from very Does a terms just sort right Thanks going

XXXG, people is mode with longer. say about lot I'd what getting that are a auto in really stay to enjoying

better to leads control. that So, glycemic

for tenfold With glycemic interrupted we in really it's from take – a postmarket And about sleep the And people getting promoter level realm kind in early night what score as the up They're able on experienced through like control. in more they're importantly, saw over sugar we half. the measure cut sugars. things good blood That's blood reports, to net not down of well. to product but the with control, are XXXG. XXs

course, the validation already November. about to extended will manufacturing CGM And that that well. filed pump it, being the pipeline, upon the the very, completion the not infusion XXXG, in in regard with upgradeable set. a filed Synergy so we've just was And the more also as the improvement. a able see to coupled but So, which sensor to function new in to is on and I to pipeline asked the big And the to seeing the better of your reliable. experience XXXG, transmitter has With phone also used way to Synergy, numbers be than that suits think we connects connect better of we're summertime. very filed led seems the wear you in it's XXXG, the that

be difference So want need we're enough going probably to in we'll sort But to to products where by they separated out. have We to both the market. will that make a don't will for it. time where launch pump of think Synergy as launch Zeus have as to I proceed standalone if we units. need both going period we're integration But to well don't a

The from BofA at Bob next question comes Securities. Hopkins

Two quick things.

First to on on David's one, just follow-up XXXX. question

assume you Karen, Street anything an If of COVID, fourth consensus and third that just or if there realize scenario? you in no but sticks that's uncertainty, I to the wave happen, you assume that is that out doesn't about

say, would you expect strong it from very early depressed the of is next a base year. growth Bob, planning that. Street expecting tell is I off but to And our process, can

harder still for that planning in beyond we're give process. when So, guidance to me our

was on you simply that that For worse could want that to during Sean comment you. your wondering was than thought. expectations. versus division I just what than the momentum of COVID? side if expected How the you And one you that sort was I the on on or turned for quarter? little because that I the originally And division CVG, relative of understand surprised to the bit Geoff in question Thank that broadly. ask around other things quarter in was a weaker much

hospital is We the concentrated clusters care of It's saw of more had in But had that where, I'd just let's say we little where say things generally, weather volume. for, that say, for the quarter a slow due the few bit, a down back. elective COVID. tertiary to as got both when you're because I'd were TYRX, shutting cardiac direction. like, come still more moving parts here right the back they headwinds, holidays mostly had And COVID, good, exception we cities some of timeframe, more in into or TAVR all, Micra, And but you on portfolio, were of January. First described. the also kind surgery Karen was impact the has replacement quarter, its the procedures, coming the in February setting moving an CRM of also, things of affected out down in by the a coming tachy, were which with and CVG of we DCB really

As think did coronary, but of slower while the next was million I it due to forward going hoped China we recur a gained have we $XX in than pick it's go headwind little had is we a quarter which momentum we quarter. as And we up annualizes. said, every DES going to share, TAVI course, the quarter-on-quarter, until to into tender,

The next Robbie Morgan. J.P. question comes Marcus at from

Congrats Karen. on Maybe Probably upfront. ask them on quarter. just two questions. I'll a good for One both margins.

back? OpEx You of coming don't did great How been XXXX? quarter. are much which spending How about you can we typically fiscal that's see? sequentially, into control COVID, see. in is the SG&A come down Thanks. was leverage thinking going out we How much cash we second, to conversion to forward? held on, trends you into flow look encouraging. pretty And then place cash could put about if going procedures touch think back free flow be free versus should once continue needs How

not continue. for QX. helped would in control expect our We improvement that drive improvement. has quarter, Obviously, to drive did see good, And And too. sequential That both that we only operating growth SG&A. talk It's margin we revenue margin particularly margins gross helped in fact and sequential the we this about expect continued it expense the thing.

we would ahead, margins. mind quarter highest just operating think be in fourth I our As our margins to tend that keep

from very again, we have have the free to profit year expense year, for the seen better-than-expected I collections encouraging receivable with of cash extrapolate pandemic. year. good in full those necessarily things better-than-expected to continued the flow And with do, on despite control. yes, But So, on next on free expect we terms both beginning the wouldn't along of accounts cash flow,

pandemic, flow, free cash particularly least cash annual So, And for XX% because conversion conversion. places. that are we that metric momentum and And seen XX% year flows our that going full good I can to be being just under the the that while above more cash we've we would of free XX% the above say got forward. may be an rate at rate both you've because is conversion in committed be lumpy. year-to-date, flow of clearly COVID

comes The Biegelsen Larry at next from Fargo. Wells question

for at XXXX. it. about going XXX questions on you're fiscal the you in how growth It I for one Any surgical Karen. Karen. talk on system? J&J to XXXX? filing this it's I fiscal Bob, for One to track. points get on the we're basis points of the I'll basis reaction contribution Bob, ask And to Can a of seems know robot, lot Karen, feeling the about my lot XXX on seems like point. question a apologize to like

my about by growth to about XXXX. there week ventilator math, about fiscal X% Valiant X%? – reason growth sales, have guidance implies be Is the why of about like in shouldn't you underlying any we headwinds XXXX QX. Or underlying in ventilator there's thinking recall So, extra X% the your and

does Thanks margins questions, make year be X% with about for You're the that in the then, at XXXX this in challenging? taking exiting XX%. underlying why So, there XXXX? reason is guys. any And won't line

first, Larry. go I'll

XXXX, really feel feedback XXXX positive. I've portfolio on expand We less forward. our right, in going to digital is which system contributions, about XX lot bps. FY to expect the XXXX bps gave talked and a will and and that XXX XXX I which ecosystem, building Larry, and competitive around than to XXX [indiscernible] has continue the approach revenue bps marketplace you We was in XXX our talked the about same our hit bps I've been bps in confident Look, to out those to Hartford, then really you in

as I as And really ago, we're open where his you'd system, the going platform, anticipate, mentioned we're important comment the got, few we're surgical Larry, I'm minutes told we've And feel But on instrumentation. coming great about in to track, course, modularity to a our think not milestones I So, we excited on you. of ability really really of say, counsel, comments J&J we've upgrade, feedback the got about some other leverage our what to just up. with Geoff Larry, than the at.

about talked we're those about feel we hit in our of excited to here March. So, and great competitiveness we the milestones system

hand to that, with back So I'll it Karen.

that questions questions. and XXXX I guys are Larry, those appreciate on getting you recognize the FY

And to color. But we're so, phase. planning really really this to would in more able love – I give a you lot I be

very base. for of about and accelerating the growth strong about And very you into pipeline a launches and our I've ahead. future. than We're given. to Expect more depressed talked excited so, being strong growth it's me our off revenue we've difficult give And

quarter you we'll we're call. can FY in have the But So when on XXXX. if until give to guidance our the pandemic going clears just wait to color fourth or official we meantime,

any are emphasize, it's about just for early FY guidance. we Look, us XXXX. to specific But to give too bullish

Kumar next The Evercore question comes from Vijay at ISI.

Synergy. I to guess, has do back I on, you of Zeus subject market based confident And how growth with getting I'm now launch gone more to the in on Europe, Congrats on product that's just plus curious questions. Maybe the at Zeus. XXX look feel guess, you XXX the two first have the Diabetes. one on here [indiscernible]. I but timelines FDA, on

is data? complete? trial the have said seen [indiscernible]? Have you you Do product the you think the You

device competitive. XXX, yes, is the very

with we into do marketplace. get it I when the think we'll well

regard experience well data, continued an the that. for of course, sensor be presentation. will the be improve. the an we with pipeline filing as With to to the what Synergy hopefully, for to Now, data, need has ADA abstract as we working that we have Zeus And

data the if see becomes that you'll available abstract gets it So, accepted. when

we reimbursement. the breakthrough pathway I'm should how here. be One, RDN. I revenue guess, you the on thinking on [indiscernible] device I'm have now designation, curious, new the about that for adoption a a has ramp curious

That studied about far, years of population that look change, the so a survives third the course, the study. I population. was population it at the we If us administration would trial Medicare reimbursement of within that's of give that if in four

state, to at So, payers, that would world be work. level all repeated that do and the fight, that's means that country that of work has within state payer. But where work the for approvals. regulatory done reimbursement. that be beginning of We're needs the have to a we around the commercial street to the bigger by going to payer be course, And rest be by already

the $X that with And to mark can remind a we we that availability you, curve. is think of part just So, just get billion adoption that penetration. X% of critical to reimbursement

will and be of So, reimbursement it's speed for important huge the us opportunity ramp. a for that

Chickering The Bank. next is Pito at Deutsche question from

Robbie's margins. question you on on operating question follow-up for Karen, a

strong the how You couldn't – on to to grow there color why able talked organic fourth SG&A. us be with the that by Can tailwinds about were in you quarter versus sequentially a very begin revenues give guidance negative margins you gave points despite gross us. XXX normalize, And basis revenue more as growth?

impacted and On other that and clearly come things play. price into those gross like tariffs by can margins, are mix

sequential had we've So, improvement.

it improvement talked SG&A because We the and to that see we expect about. mostly far greater particular, you in expect can in as continued efficiencies driving the you are where operating up is margin showing line, expense on so And continue. we sequential

strength what capital it/lose the I what of capital capital walk highlighted Amid it, the and you in Then, about seeing the you're budgeted and calendar you're release and from the seeing February they in on by spend year, sort have you or through and in field January script, XXXX? the you for of of O-arm. you're utilize us hearing through markets can press the think talk end did whatever your Mazor markets the hospital

this margin in the obviously be, think, we outpatient back is the The we profit we've mind that enhances our Brett, But directly procedures that's to years, capital hospital this for I coming that capital if sell that to CEOs consistent had that outcomes. want in procedure the to, equipment signal add tend that. it proposition over two conversations last one, And in I a know, tied volumes which months. it and coming United expect and to in And the in the obviously with weeks. don't directly to you a with right? equipment, sell value tied tying procedures, we is to we're particular, high invested the Elective to States, in hospitals. we've over equipment that is, step the patient the how over

Yeah, really the same, Geoff.

turn in we've seen their markets preparing upgrading And existing but And yet the seen are and strong. of navigation that hospital haven't the the the the January fleets really procedures and then strong and then after for imaging. capital CEOs robotics others resurgence, quarter. We then remain

through that the think some cases for research here we portends commences. get this time well we So, in period future and as

at The is Piper from O'Brien next question Jaffray. Matt

I another AV, Sean, had just guess, things, side Micra and getting side things. for on VR starters, tougher just again, quarter, curious where great comp product between AV you're two penetrating the you in side, are on on I'm to of much the those especially have go of And terms how of adoption what room indications? we terms in there? of indication seeing the that at in and do

the driving it's market the get that to the VR US. we in except for take to have well Yeah, version. VR is chamber the the I'll But there, with the US, the back you in in for we And most can And just VR. within where as outside phenomenon that's deeper as little a China, only is And more. Japan. bit see AV growth part, starting introduce specifics. that's have single general, We off, only the penetrating to we a see

next year the coming of third So, have quarter Japan. for we in AV the

be product driver and Micra atrial that touched we go. we that's headroom version for future to have to grow. is big which maybe to the the the Micra And for us a there's while that growth a But continue think of we to market, other yet haven't penetration. of going course, So, market block

put to on question spot how you in guess, for Geoff, given been you've you. that just I seat. short the there, Sorry

on could and of I'm because which the list negatively COVID, we fiscal these could products in against guard impacted just that long curious this slow great XXXX new potentially product because how there's just just new side, get of that? how of hospitals' inability to of Just that down new introducing, is as you see. you're products been potentially to kind into a adopt how be of you some and environment, new technology

procedures Actually, all But a overhang launching talking even where headwind obviously, we're what conditions, market despite has COVID? for us and in it adoption. without Sean It – adoption. in grew seen we new been seeing the about Absolutely. products, total. impacted elective be COVID is, was Would has But of just backdrop Micra. the we're again. these are still seeing better we've

Another or our US RTG at our or our quarter our neuroscience in our DTM the in pain, it that technology new something like be PC, or products health in XX% or neuromodulation great deep brain in whether in globally pelvic new neurostimulator, product. XX% space, and in Percept the stimulation, deep pain the in

a get getting be are products adopted. but non-COVID And disproportionate seeing those versus the we of yeah, in it better All share environment, competition. would are

We it. warrants price where are we improvement seeing some that technology have differentiated

COVID would to but here, maybe not hospitals So, they us be at for hasn't it forward really I'm the but the looking adopting, from stopped adopting technology. otherwise have, behind scale

Weunsch The next at question Joanne is Citi. from

the headwind of pieces. then, annualize? we'll Is a reliefs, headwind? remind Two Valiant headwinds quantify a there the One, the are can year. us tenders you China and way next to and when couple ventilator And call it, there

Naviant the going year. going we year, Captivia our million prior We product, headwind. product then, $XX be impacted roughly look headwind. the expect from I ramping think meant throughout we're if introducing forward you that up focused do to that into and revenue be next by our QX to And the on

So, we from the expect offset Naviant. help that headwind to

about $XX less higher the question, to that product we per So, bit a little quarter million of And a was. of and the the $XX then, the the expect a as at out fiscal bit you we're beginning million in and year need what to end XXXX, year. little I had remember toward rolling second

the quantifying when ventilator annualize. China part of tenders And headwind. was It the

a terms of tender national of anniversary next along balloon – about to That the next of the quarter multi-provincial then the where headwinds, in to offsetting the that next going we're will start can. mind, And as China quarter third in expect continue we tender year. fully the ventilator part tender, DES in anniversary growth of impact we ventilators, $XX year got second and we on we year. along Medtronic. obviously, quarter. to keep China a in to we've with us and expect sequentially, million On small is the tenders be And seeing certain expected. into But we're we recognize down ventilator focused come And

Cowen. from Next question is Josh at Jennings

degenerative any to solution. being focus a Mike to pipeline. be therapy in any Medtronic that technology. the a there can departure, it's just Half the proven regurgitation any in town expectations been only the hasn't outside to I the internal Half edge to there are and Coyle's internally? could Intrepid an edge and And completed? [ph] place. edge to is – on enrollment Heart that you wanted investment I pursue repair pursued enrollment ask that then different which to any then Moon new of know pursue But and LAAO, And franchise when COAB for we've game data, pace thoughts edge plans the surprised wanted lastly, share, of about pursue building also, nicely? Moon Are functional Structural But and internal now. is market, Moon mitral Half repair plans any there updates post or to right strategy

that basically off valve, of leave which case I'll open idea valve, leak. is Josh, of standalone continues fix like leave kind you're And clip surgical a eliminate reason because behind but the where in anymore. the technology. to and stenotic MR replacing replacing trade completely, the a or Half you of for start a to fix you leaflet, that cut edge you options the of that surgery leave on you're with Moon, in as And the bring the which a I partially to basically valve, back the another, can – of from future right? That's you disease also those edges valve You one a done guess and isn't repair. together leak procedure that sort edge based for you

Intrepid creates sense more for of repair us up more regards solution for that and It's lot. a make options picked in that sense limitations. couple MR. job players did to go So, design. really the and it has endpoint some a in to we and that a With It does pursue already better makes trial trial, the Bayesian to something change has doesn't it residual eliminating

some did pick be will on enrollment Enrollment So, road. the interim dependent looks up. down the

then, center brings really that individual me-too a not have continuing guess some technology continue along. there are that on to differentiated it's have challenges something you but to hotspots Unless in. first kind appendage, of like products at more We the it's the the one. I last level, COVID And going atrial just to left where we're question party, the pursue

the have has a difference obviously space, some to matters it brings that a in but clinicians. We interest to be that and the really patient and technology

The next question from Matt Taylor at UBS.

I up wanted you you through commentary you for? the for hospitals on think investment gearing to system? will And more are trends thoughts those that that gearing and do go snapback what XXXX? on lead Is as offer the we in think investment capital that's you to going back helpful. you about color that calendar any be to hospitals demand whether there's elevated in go productive this Any pent up in utilization made the up think procedures. to levels Could of

but over what spring back world, can recovery. all fairly I in COVID to we especially of – initial the quick was the in there US, the in the fairly a XXXX. back hit a Look, go After experienced timeframe, wave

So, that hit people that, worked COVID, the faster this through backlog, we of latest I feel us that seven much six, this timeframe. wave, had latest really to than in month think spike call late anticipated. And of that over prior majority December, right? we

something so, here. we expect And would similar

And or built expect to new So, the next months to through so. six that backlog up. work a able over be we has

to how thoughts recovery any I presentation here? of periods number Is trends emerging across offer most was on nice developed you pretty your you slide on terms the going of there see of in was in a next the gave by couple of in them. be the geographies and over versus follow-up, different hoping you a by it mind? the a performance Could As good recovery – similar

China's pretty all, with China. start of First much to normal. back I'll

we really the out China expect the don't back China you in of change. and impact if strong a us, quarter For had tender, that to

us of about don't I'll not Europe, see back earlier, the look fast kind So, move Then recovery. that. we the come wave. And little normal. we see And recovery. But to And States And over I the think, had a then Asia-Pacific delayed, other move parts growth. quick, started And the I China's going and the to is the they'll terms behind indicated to by It Karen over as worst think United to go talked saw we of to we I procedural do with It's to by steadily recovery. a the expect second week. of And think they United to robust the fairly will a last at if was that's I of going to of we some going here spike. think just then, weather fairly, just as think are I continue quite couple recovery think trail it's like America, – fairly first States you and in to improve. Latin back months.

will I'd the months. And recovery And couple one. think the way Europe and of that's So, watching the Europe trail it up. by really the US like US sum a we said, we're I

from Miksic Suisse. is Credit next The question at Matt

about, expect product mid-single-digit that think is where could I've had on kind to you've questions maybe to follow-up where business we whatever the have into that if some larger maybe some those of growth one as get call major to launches and we of be you XXXX. follow-up. about talked but the I for lines it or And you And you're sort out had of of momentum one bowls as pipeline, to continued key XXXX. on land strong of of big drivers, lines the tent XXXX the should the you've some very the on, obviously, or going got

we're with strong the a little the think harder I that's all durability physician cardiac share get SenSight DTM sensing a Micra, market. I and Percepta us a DBS, the see community the excited with and trial a comps new the we've been bringing year. gain growth acquisition DBS the DBS. And our Intellis DBS loop lot following there is enhance our leads to ECAPS multi-year of RTG, in which with continued for got In new know because sits we're pain, and launching into Stimgenics growth our rhythm that therapies up to top new the closed us think we're of idea platform, neuromodulation-related the provide neuroscience and product but got adaptive launch clinical a on about momentum. and of I In going from

a a lot little of in of points the of business, already got the Bob we've in momentum And well. So, there the we've articulated you got momentum pelvic MITG our there. And soft there you've of as the or course, impact robot course, for then, so. overactive or XXX neuromodulation overactive commentary, health heard level at basis tissue launching, bladder, got

well. cardiology, big ones. those are a In as got some going on So, we've lot

I drivers growth in got Our for think, don't did cryo product in the us. on for know, line out business also is with line, atrial bit I first fibrillation Sean, our anything DiamondTemp quite are launch I a one there? indication you've cardiology. going another exciting, And leave our

that device coming from mentioned I a got a longer lot, are failure in the of great you've headwinds then, And be to venous The ones [indiscernible] course, is us. PFA moves continue the good. a within market, to expands No, as And away also its we disruptive tachy TAVR so the coming. course, driver it availability there. The stenting, what in replacement and growth horizon. Geoff. little that a got have got it driver. linked we've go which the year, into we've And technology ablation is term will for heart of growth [indiscernible] franchises is

message focused investment managing long just is, not And on the world, morale despite some the the changes the we of full we but products in XXXX term really the we're And launching know high, and on keeping our pipeline, I short that and despite balancing the or are is going beyond, the think whether of within made. the it's this pipeline FY the pipeline. business, here really Medtronic it's making because things in I here. all the in the

keep so, the something company that that on focused going we're we're across to that. going And is hyper

digital et And leveraging it of digital all around and and just the the the and of been year follow-up the we've one the sort last talked support obviously, stories cetera. I pandemic, sales had, over interaction, about patient technology, has of

way we a digital what like initiatives So, with both little there's stroke, wondering if how should talk noting, and you bit could about but Viz.ai if also done any additional the think P&L, in worth XXXX? that about the – you've where be I XXXX leaning in early productivity world of on you of you'll in a operations and were the than XXXX and more, XXXX in suppose,

how the two customers offerings you is are call our mentioned Viz.ai, which stroke market. And I'll digital categories, There impacting, and it, is helping expand our to patients.

that's really rhythm patient remote example. programming, management, there's our is with big there's in Medtronic I talked share. up. drive and our we've highlight But and remote wrong, about is one That's differentiate business. picking them think I'll device management, there's and partnership remote business, a implantable Correct it Our even has that Sean, one helped me cardiac if I'm good capabilities remote another a

a done make they the capabilities, into out. they some now slow. to implanted – uptake pretty changes. pipeline, COVID, representative COVID, Some digits to be single patients it device, when those MRI hospital low to are of an prior example, needed to or A with have of during was some MRI, launched remotely then, hospital now was remote more the Medtronic was but the an we're timing COVID. And we additional to worked like, back cardiac that for is the used but have this intervention. That before actually XX% the and go going things field go up of and patient – seeing programming technology manual to meet there to more With our and

that's providing, in just a case, efficiencies. this patient one workflows lot but So, on digital changing of better the how is and example of uptake – outcomes,

believe company. piece also we the seeing provide will how provide and like, We do, digital we're our learned can it medical So, for to education productivity take off we've remotely. –

all data this. And we're But there's Now, how when some Obviously, get scientific board physicians, on are we meet couldn't remotely. our med you now wall with point, these exchange ed physicians, And to some experience. figured how that digital want you a to of and that. at now rescue like the out and remotely. remotely. haven't backs with the amazed into do against do lab train cadaver high were and physicians to ability quality things – can't to at and they came the provided There's

So, us. I think that which two, of a thing, one, is will, up provide technology, new for but, adoption good speed efficiencies

Our comes Leerink. final Antalffy SVB at question Danielle from

how one of that's question. around thinking capital tuck-in type And I you've M&A. just deals. and the about about I have you're appreciate talked more deployment that

it, sort successful of the very pretty years? there, be one potentially over being where Thanks scale two are just from the digging a most much. from a Medtronic perspective distribution But thinking and/or should active call I whitespaces been guess to technology areas this or next, about bit active. that you we you need a that you perspective technology You've so little deeper, see geographic feel where do like

but M&A, them call deals, stage, at at tuck-in size, to It that's these getting relatively early bite in most us. be something we're before the where companies I'll smaller Look, cases working commercialization. for seems

more them do We sense. these. at values of add can and we So, make value that more we're getting

growth risk the these getting to markets buying we're and deals. I continue. come of volume whether And these technology. to around the then, expect tuck-ins, adding good it And or returns to rather, and I existing the of growth of most organic therapies augment we're strategy We're extension them. And across our most technology it kind existing spreading look that, as our And of we're around our an care world. of be the of And that work these. think then here. will at clinical would on number because I making standard additional not really, So, buying a these of science,

share So, of to it. the that's going be lion's

little is at to company for growth. looking better is our looking And to think to portfolio help larger. kind that – where We position new something the the signaled when outside truly terms optimize we whitespace, always and of a In this the markets whitespace, of this we're we're haven't outside at of if start be something to the tend portfolio, move tuck-ins. but the we of at, it's the is our really tuck-in these move always right focus looking you

closing Geoff, please go ahead remarks. with your

everybody I anticipate May We thanks, XXXX a on earnings there's get in know and ahead questions interest and that for us Look, you QX Medtronic. fiscal quarterly we'll our that on join XX XXXX. where on look you'll webcast, again in really the at call. update lot of QX your in the we'll and progress continued our support our questions to appreciate we so holding today, which on great hope

So, in tuning the have a stay please on And vaccine day. safe. And today. thanks healthy for and way. great The is you. Thank