Medtronic (MDT) 23 Nov 212022 Q2 Earnings call transcript

Good morning, and welcome to Medtronic's Fiscal Year 2022 Second Quarter Earnings Video Webcast. I'm Ryan Weispfenning, Vice President and Head of Medtronic Investor Relations.

Before we start the prepared remarks, I'll share a few details about today's webcast.

Joining me 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 second quarter, which ended on October 29, 2021, and our outlook for the remainder of the fiscal year. our questions VPs that from company. remarks, and join cover prepared take we'll the our portfolio will executive us the After sell-side analysts event hour. Today's about last should an we revenue summaries. our morning, Earlier release a divisional geographic and containing this and financial issued statements press

presentation an release The or website investorrelations.medtronic.com. be also on our posted additional on our presentation our earnings We accessed provides in that details performance. can press earnings at

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

factors Unless made to do make we concerning reports say on are comparisons we are with in year-over-year information and that is periodic statement. and SEC, not Additional otherwise, and an could all undertake cause results our revenue a we basis. comparisons the on differ to actual other update organic basis that filings forward-looking contained any

With be as financial during on reported can any and calendar investorrelations.medtronic.com. EPS into third gains or guidance unless revenue for would calendar or acquisitions last at as the that company revenue refer to quarter that, non-GAAP in third an currency measures impact be all the on Reconciliations segment changes head there in as-reported adjust or press to and to the all XXXX to our quarter the started. or in of quarter not And studio of adjustments foreign the made total individual include XXXX, no only quarterly were X quarter a non-GAAP to divestitures significant revenue website earnings get Second comparisons let's sequential compared share charges of had fiscal otherwise stated. made organic our quarters our finally, 'XX, does basis fiscal References growth. year. of references gains share release on to that found first revenue and losses are compared the earnings or

revenue around joining us in by underlying reported growth. today. despite particularly expected affected and we markets quarterly where volumes market TAVR. were for in results, which lighter thank procedures our U.S., experienced or used are the deferrable, system health the shortages challenging growth. those deferrable like and technology everyone, that is product impacted a bed which the ICU Obviously, Procedure procedures QX markets our resurgence in execution and staffing COVID-XX we require strong Spine This than like you were Yet stronger Hello, new morning, our more launches solid care end reflects our business earnings pacing, capacity backdrop, markets in less where like growth.

up market levels stronger. is of most we to performance, U.S. and We international headwind, versus including growth headwinds, on the revenue market revenue And mid-teens decline growth growth and our our 'XX. cap the competitors. than the markets. in our at emerging much of slightly many were market was in share. While pipeline, what managing markets win was control QX fiscal outside And you of our focused sequential X% U.S., tech new products advance emerging look large X% delivered med a our these in pre-pandemic In was when our better X% launch our executed midst

best headwinds recovery health The Medtronic happens, is will predict, care. one health underlying that companies of the business While is our and strong, getting is stronger. pace the pandemic positioned recover. markets as of from the And hard our in it's to of

growth. we sheet expanding and balance We technology, accelerate leading a remain new expansive an of sustain have revitalized our top to model and talent. roster proven and with of mindset, an Coupled robust operating pipeline poised competitive

in of metric calendar that their let's performance. competition. annual system we by the momentum our As is our share Cobalt and And performances business, extended surgical In And evaluated Rhythm and businesses. launching I've Innovations, market winning we family against Year-over-year the ecosystem differentiated Tri-Staple powered outperformed market category share envelopes. antibacterial at in performing, dynamics, performance share Surgical largest share deep Technologies, talk Cranial value stapling in technology in cash competition continues market winning over Cardiac we're now, overall to growth, free preoperative In along powered businesses an share competitiveness. strong our is and instruments, teams the devices continued. our software, and the point and the comparable and enhance done implants keep quarters, strength adding sort of spine avoid we're systems flow. of the to with confidence of of high-power imaging, to market our which Micra confusion care majority our it Crome plans, our share right profit is that new start increased transforming surgery. in businesses and great robotic Signia stapling that our incentive spine leadership, Management us about & are with Spinal refer sutures. when X planning in directly with of adoption. TYRX And to our Share And our X driven gives important revenue and innovation prior we any year-over-year, are how endo pacemakers, our of see In navigation in share, look by and a our this exactly to revenue we'll about share third quarter driven

Our the Globus this starting expandable new Catalyft implants with specifically quarter attract competition, at directly to our also past go users. interbodies

and increased broad in are have their our array launching businesses products X to markets. winning In largest, end new competitiveness, share their of a our other addition

despite Stim sequential and Nellcor lines, Respiratory to share up company has Intellis and due capabilities. with takes in In slowdown share. strong our to BrainSense Since as DBS of system. DTM this oximetry a quarter, share. continue with paired example, we executing Monitoring, In we to in winning our earlier the new continue ahead to with our in and points launch we're monitors. we SenSight pulse of we're competition ventilation DBS, surged picked of quickly market, with in Pain Patient the in the to technology be ability for compete what share our resurgence. Percept winning our to launching COVID our neurostimulator with including premium So gaining Pain in share we only In And very in spikes implant X our it won from with points across launch demand on sensing U.S. Sensing had lead, of technology Neuromodulation, respond we Vanta We're redefined over sensors the recharge-free our we X Interventions, in share new the the Stim, DBS. fiscal product SenSight year, directional and products.

have leadership. upon competitors we Our And as our don't long of a we're result, build expecting it. category a gains as share runway

and winning investments win of the businesses focused novel efforts only are share the pumps, also the insulin we market new a around businesses Advance while Cardiac as XXXG cryoablation grow to AF. infusion our building And set market. majority customer have of drive the reverse with a we RF share Solutions, for on but we're Now, heard treatment to Arctic the few In System In indications adoption X. Ablation we our new and with drive DiamondTemp feedback Guardian we focusing awareness these our quarter, expand AI U.S. In and and flat declines, not expand expect lost to algorithms and expect share, to our again are Diabetes, our fingerstick-free and share, Pro as rollout we've detection the the improving Sensor Ablation share and on growth. to that first-line U.S., this Front our investing Cardiac do pleased launch we outside the results we're we're in we as remain extended supply of with we're while paroxysmal above positive our losing products. and turn we momentum or Diagnostics,

We're largest accelerate new dollar the with market. billion R&D year, turn targeted that products a pipeline. of to our technologies fiscal months. over in over spend We've profile already the in products and we let's of I've markets, the investing the is development. strong continue and this new $X.X of our XXX We're pipeline China the XX%, over last launched heavily to increase increase to existing in expecting same create this the flow time, product Europe, growth Medtronic. ones of in which Japan Western are the XX investments history. talked is our having an new these in advance disrupt about U.S., Next, in At impact

procedure our Let's hypertension. for denervation Simplicity start with renal

patients of in confident MED our While the opportunity. early, and we millions to serve our multibillion-dollar make remain weren't ON ability study able our program up this to end we who

reached sham-controlled pivotal to study MED statistical benefit Simplicity As including remains significance, MED significant previous analysis. our ON a all statistically final reminder, And at detect X the relevant and a clinically OFF the the studies powered study.

that ON then for about have start the FDA and their at the want and preference think of the approval. patient to patients lead. let's will we we'll that the submit procedure to we with options, expect a believe complete demand year, indicated that we blood TCT. confirmed will MED presented month massive the We Simplicity calendar like to in this hypertension earlier We to they as high, who treat opportunity second next follow-up this renal be U.S. half pressure be PMA lowering When our study by continue expect denervation, will

achieved Asia milestone market CE also at when Medtronic are Another Hugo last our as robotics we for soft procedures Pacific is tissue first we where robotics, our opportunity in We we major And meaningful month. entering a region surgical Hospitals received Hugo India. Apollo a with completed second for in Mark player. the

the use believe that high, the list held surgery. barriers back first the robotic utilization that hospitals to Look, world. global to is support use regulatory Hugo growth have first clinical demand Possibility participate to and and will us of clinical we're building to told our long Program surgeons join setting cost a the among have in Hugo Partners The of around in and world the which data they and collect Hugo want the in in submissions be addresses registry, our

broader well in positioned to this is Our we a progress remain entrant. and new field critical toward potential every other robotic launch, making relative program

come to this hard that on also broader a target. below but activities, We're we pace ensure working business. to to the originally progress on not as And chain, manufacturing these this we're an prepare prepare for launch, likely this We're experience. fiscal planned. million our supply in logistics $XXX to steady sales at focused are year we'd million for $XX result, customer optimizing and outstanding our making As scaling

FY in 'XX. the we we have in we this revenue off And do we're continue double-digit said, experience. the customer push-out track. for still we expect need that disappointed schedule, important strong expect cases. optimize but continue to be millions line of and we're We're to solutions that and the off we're Now year, confident to remains successful while fiscal in to ramp not Surgeons high. this Demand a sales to program, sight

Our Rhythm, we to believe that order forward this starting we U.S. pipeline the Japan come. growth we're soft launched to and market confident remain our this the years Micra We in our In to we're month. looking leadless and for in Cardiac poised build, expand continues and earlier success soon. meaningfully pacemaker of tissue to just robotic drive IDE AV program,

follows in which completed ICD, the submission pivotal enrollment Mark CE We for U.S. also our EV QX. study our

as the we implantable same with do defibrillator EV pacing we the Just Micra, ICD. with to in our space the intend disrupted market

this In year offering in early and XXXG both can our half heart, calendar sensor compatibility and we with its review U.S., X. system FDA. X.X category size as paired launch mirroring for Guardian value Evolut we our will the At this launch half first we even to to Guardian the is user Neuromodulation, best-in-class later is device device FX and starting stimulator We're drive deployment expect this we management, month, to burden when it SCS in The expect and further does apply and device And system a it MiniMed mitral pace next-gen of InterStim planned launched to X, with has and differentiated our transcatheter delivery the expect SCS, combined that Tesla, expect for our Diabetes, be transfemoral making and X our it deliverability, Guardian TCT adolescent a it sensor, veins, is therapy approval relief FDA to When hard pediatric which now battery, to we into spinal in to achieve will our QX. markedly, closed-loop of the enhances Our device, will as awaiting we under bring of pump, leads U.S. patients. very without achieved outcomes manage the stability. Guardian limited be use for mitral this pain It's FX constant full-body implant time presented with extend calling our active system, size we adults. highly we're XXXG and month, the experience We're MRI with with rolling Intrepid the the the Health, X the the ease be synergy heart optimize to Inceptiv for Pelvic experience Evolut market In progress well-controlled that we with will of and leadership results recently traditional trial. our In ECAPs both earlier In of called the X ICD. any insulin program. and stronger also to at which disposable. next to visibility valve, enhanced next-gen we Simplera will revolutionize full so improvements first recharge-free inside in ever fiscal we this cord outstanding structural data this encouraging expect daily these continue XXXG our this and FDA. a pivotal system same diabetes growth and with our is shock submit of Simplera submitted easier our space. year. current for in and address expect with TAVR the single device our approved our fiscal also with closed-loop the patients APOLLO on helping be and further we're improved FDA be market. and were our sensor, of

make continue and limb into upper on diabetic to also and neck pain. We for chronic SCS indications back painful refractory pain, expanding progress nonsurgical neuropathy

Finally, adaptive therapy patients year. to our closed-loop enrollment trial fiscal in ADAPT-PD later in We're in patients enroll with trial expecting DBS, we to DBS our Parkinson's. in the studying continue complete this

Now of before and chain, staffing Medtronic forward. collateral meaningful is turn will over advancing guidance. a of performance the business turn and growth we not procedures, remains I the our enhance pandemic emphasize the financial it strong. that, it and Karen? to innovation I'll its total with despite I that Karen, most supply is on going one ups want impacts and thing our will and downs that accelerate hospital underlying nursing our to only over pipeline but Karen discuss to the believe And our company our competitiveness, shortages to

Thank you, Geoff.

deliver executed in margin system strong increased our X%, Our end the primarily on impact organic revenue second staffing reflecting quarter United COVID earnings growth. to markets, Despite procedure team volumes, softer and the and market the health of States. shortages improvement

last pandemic from consensus lower-than-expected In increased and And profit from $X.XX adjusted EPS than a XX%, stronger the with reflecting EPS our fact, year. better rate. $X.XX tax was operating impact adjusted growth significant our $X.XX

increasing We had or COVID wasn't customers many and had procedure in COVID top the Our lower dealing said, each as that August. staffing in second effect as U.S. average trends our on quarter the are an growth we increased back revenue back declined. month than prior expected expecting shortages did see That We of bounce fast volume. we in came patients, sales as quarter recognize had were in the our hospitalizations waves. daily in we seen believe on with of improving of

free year-over-year strong continues continue a as on strong our our margin Converting Looking down given P&L, cash margin, we our points recover from in improvement basis earnings on gross XXX our margins. basis significant had impacts be savings XXX tied to into program points the flow simplification and to operating from from to COVID priority. our year, operating we last model.

Our full XX% billion, continue year-to-date of greater. up year, to $X.X or and year a last XX% free we was flow conversion from target cash

Turning to capital allocation.

we organic to attractive capital and significant allocate R&D, to to continue to our tuck-in seek acquisitions continue businesses. enhance We

intent accretive capital and in And return. with a their cash greater commitment attractive own can we’ve and Intersect as also globe. the aristocrat, our our we For to free announced flow back is growing $X.X dividend. around of return to dividend our we than accelerate our total Intersect's in back of our dividend shareholder XX% dividends. primarily an to to our example, billion believe we returning assets August. important are component through WAMGR. Year-to-date, paid our acquire growth We're ENT, Plus, our shareholders complement a

although fluid, in first daily improvement some seeing are average and ahead, our we few sales Looking procedures weeks November. of environment the remains the in

So our our staffing are markets care system risk that we moderating. done we're could pandemic encouraged operations companies, to negative of like other chain the managing with a of has impact elevated raw shortages. supply shortages dealing and on health be an our job the date, supply terrific while material And team

grow not expenses our organic As to a year, on will growth. to foreign tied year directly to the guidance what an be $XXX to only we're well manage the to revenue, last our XX%, Surgical zero result includes Diabetes If it expect we prudent currency single-digits, By and is and which X.X% I organic revenue X% grow to down we our to can of these face believe low basis. fiscal midway million, to on positive the given down future rates $XX potential on quarter. Medical growth prior through fiscal control, gave full we X% to X% 'XX of we X%. segment, would headwinds have to all exchange from revenue update recent impact prior now million hold, a $XXX million Neurosciences we Despite Cardiovascular headwinds and X.X%, from to

We on $X.XX include to will rates. our of development. $X.XX benefit currency diluted line, to invest bottom continue we a the market recent reiterate range non-GAAP R&D guidance at $X.XX. This to and heavily of in $X.XX to continues And EPS

levels the despite assumes versus quarter, trends third This organic adjusted saw we we revenue For and saw second we're in of X% organic the comp what growth pickup quarter year-over-year. pre-pandemic improving no growth real expecting the October. to in X% September in from

wanted revenue guidance we're of segment, quarter X%; we third grow expecting environment. seeing and with encouraged to to are expect rates, X% currency what Medical macro Neuroscience, of Surgical, X%; the dynamic organic given to X% basis. by near-term At $XX on by we to be we recent While caution down November, million. By X% side million and the those err Diabetes to on in $XXX on headwind all a trends an to mid-single-digits, to Cardiovascular X%; we're

recent We rates. expect of $X.XX to and $X.XX EPS between a tailwind at with currency $X.XX $X.XX

While focused strong continue our our affected of the and expect markets year, future. we half in be we fuel the investing on pipeline will earnings growth in back solid to delivering to revenue our growth, fiscal our by pandemic remain

competitiveness about and confident our underlying accelerate business remain also the of We revenue ability growth strength and our to ahead.

the the operations of develop many care Geoff. tomorrow. many I'd team, and all, over Strategy. past look our as supply incredible team continuing to the acknowledge it our health you of know. to strong years couldn't to be a of worked of analysts contribution I join ahead. to and helping to to we also Head the our overcome who our influence by the pandemic. We through executing want forward And Back to invent, deliver the the you, and Finally, have member X recognize years around Hopkins, have world and challenges who tech Bob a take tirelessly customers chain, more med moment a excited our technology top-rated to in created like employees new

Okay. Bob Thank Karen. And you, yes, have to Medtronic. is it at great here

leadership which diversity in progress top and impacts. Part an our I've the on our and and equity that sought of global in and to how last issued we areas I on week, governance S by for read after It's inclusion, our transformation new few add in and the Medtronic company engagement, company. employee for In destination diverse about closing social of and to is the important last focus For highly discussed undisputed high technology. ESG you last and very across of leader various this bringing Hopkins quarter, making quarters, commenting world-class join the employees ESG, drive and Bob those environmental, culture other Medtronic the or leaders to the ideas makes attractive perspectives in talented been we're is talent. chose to release become the healthcare our

operational X goal ambition front progress, on industry, support ago, joined game, we neutrality, Academy On the of carbon a E emissions our and last our know, improvements. entire ongoing weeks an a announcing greenhouse to set our U.S. roadmap Zero the emissions NHS action value of healthcare This we're To our focus And progress you 'XX National carbon the to by decarbonize sector. across Committee we chain. be carbon-neutral the Net with 'XX taking year by our in International collaborative as the net-zero will Leadership the achieve the aggressive decade. of leadership as to our in ESG, FY Medicine decarbonization we supply operations FY UK. for well U.S. in role chain upped logistics end as reductions our outlined And across gas ambition

being really a Look, companies a constituent of America World Index. to the last we Our the Medtronic ESG Dow Sustainability joining Sustainability Jones select was are of efforts week, proud this gaining in from elevated Dow achievement. are Jones of North as recognition Index group

briefing month. if haven't, that investor many In watch the replay inaugural on I you Investor addition, last website. you watch And our encourage I able Relations were hope our to ESG you of

note. lingering QX pandemic this shortages with our impacted the close originally anticipated. effects system healthcare me staffing let The combined of Now, revenue we more on than

will pose our timing got challenges this. the pipeline near-term manageable. on the supply challenges. of takes and be chain puts both dynamics have our We've We But and

several more is poised delivering, deliver coming the the years. and we're over next and innovation to quarters pipeline Our

leadership show to coming. pending that is Closed-loop have We to maintaining SCS coming, diabetes capitalize and opportunities. is deliver coming. Evolut businesses. on dedicated prove, Mitra coming. know focused, our our more I'm can we're XX,XXX-plus on our focused for accelerate talented confident now our up Q&A. we FX opportunities these is across R&D value growth. EV-ICD ready and Intersect to these our robotics We're deeply I remain we to the shareholders. have deliver, markets, committed you We're on good employees And And creating turnaround but but that, And we are winning is organization, and all global execute move our as achieving innovating, going are and ENT, and and/or we're true We're acquisition category we're share that hungry these coming. and to in of and And for ultimately, on to the always, to with challenge. you, let's

to we ask please yourself to possible, additional So that, Now as the if Ryan many instructions for get you asking a to reach Investor questions, have X the you can question. question? that as can limit the Win, and give Relations to going analysts we're after With team just you call. you out try And

[Operator Instructions].

Q&A be advised being is please session this Lastly, that recorded.

and Operating by few seconds President of of and queue. EVP the Geoff, and and the the Medical and the Wall, today's assemble session, a EVP Cardiovascular We'll Salmon, Bob President Portfolio. President pause Neuroscience Diabetes to joined Portfolio the are Surgical of for White, Portfolio; and Sean For Karen Ryan Brett Unit; EVP

question JPMorgan. comes from first line Robbie at The the of Marcus

Good Great. everyone. morning,

the made sales November particularly think given guide I see that guide EPS was have happy quarter better. top is trending a I think third but organic where comment I you everyone line the guidance, bit reiterated is you surprising, believe to the here, little

So maybe I a through an getting into on? hospitals and issue, it adoption the delay, issue? through Or seeing there? Hugo it talk is technology that what Is you're purely difficulty COVID-XX you was could going launch hoping with just walk

question. hit thanks the I'll question Karen Robbie, robotics answer the the and let maybe I'll for guide questions.

was give with know I'm for you you I'm Thanks, And Robbie. if And versus going to because going was to were the X to ago, bit that growth guide, -- levels look in pre-pandemic about below quarters you that change set start or to peers, to purchasing. lower was bulk the -- QX what, organically. a to you you in through before the but mind back we going context. It and made help a I'm keep the little walk then at versus X% levels years our QX our got inventory because

most levels. if if inventory and So that range for while QX bit look comp, a that revenue versus to X%. little X% of adjust you the X% saw QX QX it our of in to growth tougher and declined a than our was issue pre-pandemic from was our And you of at less peers sequentially, X%, declines X% to

with And October. look the pre-pandemic to from peers. because at yes, in it's seasonality sequential line we've given side QX, if QX, seeing that on line we at But in our And wanting deceleration err as what what you our QX the we're guide. X% to just in we're saw caution of in And October levels. and fiscal guidance, seen saw our environment, -- we're then encouraged in assuming what November. to we into focus we on normal with we in QX same a for from the And least by in we're our slight QX dynamic that year-end. believe, equates our growth performance X% is So expecting then versus

QX. sequential see improvement So you'll in

that's helpful. hopefully, So

Okay.

continuing higher robotics remains filings we So And we're And in point. to around begin IDE high, on maybe uro saying, first than any surgeons the doing can close no, a first U.S. we're like with so the let day are I soon, issue. fill we're -- cases. then and We're The surgery by to think gyne mean, do going our me question. demand continuing cases. very I to it's now, demand our world. here this and We're far, general regulatory at definitely the not case.

I So said, build. -- and demand like to continues

doing, chain that experience. the this with issues, that are and is release are phase. optimizing more working on focused issues initial some those And making we're some we're through that And really that So the supply these where the and a we're sure issues right good. surgeons managing the really through on now. focused initial issues That's we we're now. manufacturing user issue And are are limited of we're experiences right

that's really a year, But we slower year then the strong so year. the again, next revenue reason ramp. And for expect this next fiscal

Vijay from comes question Kumar Next Evercore at ISI.

earlier Micra, had complications you peer? mean I have Geoff, of I outlook. endpoints. had one your your of something on design you peers missed related a the we a Is perforations. One about Ardian, X couple FDA How where was Street that's a an to different this your a should And in peer, they question. worry saw arm Is at expressed needs lot to from trial there added of Micra? that on I month Because your confidence trials two-part about? The the some when product-related think on we've drug, and when look control improve.

have design the that we confidence control trial similar peers, your will your if year primary So to trial endpoint a have from is now? your the what is

I've this of Sean well. picking We've but turn Ardian in look, like talking this. confident expectations got provide of doing before I'll because knows this we're months look, look, myself with going the works that. about And little a give trial with and to short Micra. it that, Sean up going the following it in in a I'll Micra. here. work then preference, And let want the on some this a fall up you got works. out to I'm Micra very on let ramped my on really more commentary on I unmute. early. Micra will time. turn And that. Ardian, I'll for FDA registry -- But over patient the I FDA FDA more answer FDA the letter. to of You more and this Sean, here? long us been you But patient that our had and is couple ending world, this they know to confident the investigators commentary one. Sean. lot of details, the data, trial. last a and Sean -- designed on you early. both the of worry some lot confident We're one Vijay. give our preference in chime of you in Don't about Thanks, patients number and and give really data the remind talking we're patients our especially over question This We've And seen I'll couple we're to data about weeks, on has and this. a patients, want lot here. And last it. end do knows a we're got a to you wasn't his And --

of which Study, we lower perforation But thanks actual with below for the the of out about the Vijay, letter just at about say, Access just the first importance ESC Development in Evidence being we've is preclinical reiteration Micra, Continued showed we mindful what safety. rates Study, I'd of more And results in see for rate at that Continued implant is overall reported X-year are and XX% the trial, FDA question. transvenous. a leadless what than on seen this the actually work, in of pacemaking the the the X we years pre-approval complication

just So has and there's FDA on for concern the the clinical to customer despite front the certainly reception emphasized. excellent letter Ardian. the here. no been really, be And continues And really of trial

And the ON There endpoint. that MEDs right. are us trial remain, to we in You very said, going confident is trials. clinical as our Geoff are make differences

was you're the on that did the they which study, referring is months, to their TRIO at X a RADIANCE study to reported what of to RADIANCE get think patients goal. titration I full drugs

of in ON there taking. they really is And X hate was -- part drugs endpoint was able general renal we design down. on that the the get until many went So blood of people's to X denervation were the endpoint pilot and saw study the diuretics, to as for without which go to pressure similar MEDs, drugs. having we something patients in titrate that primary added drugs can primary there where you after of it that's pressure kind point after blood get study months, without of their And

was Japan different. they none nothing yes, and medications. like we in Korea had of that control to So more The trial there's They where read for III, little controls. one. was through a did InterStim types It on those didn't of

So that's III. got from more of learnings a legacy study design we that didn't InterStim leverage the

question Biegelsen Larry The at comes from Fargo. next Wells

for Why general? quarter XXXG noncore your of spins What is spins And segments? for seen Guardian was but line, underperforming Medtronic do we've wave down recently. expectations the guidance. or one So your view a in off the at you X? see and in are opportunities that? you timing spinning of diabetes. of What's took Geoff, The And on

so our each well. that Larry. questions, quite a time more Thanks do capital -- diabetes one executive looking priority. And our then the at businesses more Well, spent XX we is and because the time. have on between model, as I've take and businesses, we've our here, since the amount at in owner we're always last including right we I'll team sure, and years a provide matter. this been debating allocation portfolio the Sean at at new the chunk our that of committee, a capital the and that's businesses the we're are my And take this. on magnitude is time I'll portfolio the of making important. the well, looking the let Board high Board there's spend as past, look, sure here, in look, orders high-performance looking operating leadership make and spin capital we've businesses And and our different we're And synergies and about leadership, can talked for always I And for that this meeting this engaged think is as lot you allocation of there looking focus right high-growth our sure to one.

the different that opportunity I'm at. do signaling see it's us for looking as I want a -- it's diabetes J&J is one? do that I not you over think And So have do this you see that we're opportunities. businesses. anything. or an I a something to ourselves But like dramatically But GE time. take like I don't Sean, constantly can tell

Yes.

through, Yes, broken been uptake of so FDA. -- XXXG U.S., Sorry, good Geoff. Guardian very for we've approval than we talking we've outside was United we're In waiting what and My have that about mute to all nothing really Larry, there. had sensor button different along. just interactive with the got the States. and come X strong We've conversations

to what a pushes out I that a it progress we think traction. before share outward while excellent lot in some the when came element takes growing diabetes, the and we there. gain we're is And there's making launch it so that, remember we're to do a in have But U.S. do that training new revenue time, of base. patients starts seen installed globally, the pump right we’ve of that now product

X XXX be kind to sensor by the installed driven to going, of launch. have that's We Guardian and get to with momentum base that going really rebuild

at UBS. The next comes from question Matt Taylor

if November. us as had a been how the and could little And And the kind in impacts it flavor was? was you had wondering give of much seen sounds just staffing hypothesis small When shortages, bit things overall for a why a has sequentially? I you've you get on you're talking better I follow-ups. more to about of that these COVID like improvement environment. X One

Sure.

environmental, our and But as said We throughout the but into that, we month didn't our back, and quantify November. the like bounced in have throughout yes, it next. so than was prior got as QX, better quarter, commentary, quickly not it's the harder, to epidemiology procedures gotten On the little definitely better severity of each ICU was it more discussion Before, of not hoped. them COVID difficult impact bit definitely it's as fast a more the and cases -- right? There's and beds. a predict, as an the around we fluid to situation, waves and

Now mean, a hospitals more you've us surprised world. -- I'd quarter. shortage staffing difficult about. been some that a issues, got shortage I last for then to thing nursing predict. supply more as around this chain so I our in the particularly particularly And that's little little this the say, have bit that's you But which gets the hear on, time that you've difficult. goes And in U.S., more in a bit so -- though, far. that's finally, this critical really think And manageable us been got

like we a jumping difficult it's in The working quantify about particularly think supply that. walked shortages here. in global up But our cases I on conservative So together U.S. think things took approach the through you've we guide took, -- Karen, guidance, and the here, issues. chain for COVID then these heard nursing all QX back I to Europe,

I I a we've think have. the good doing hospitals job the done pretty a are managing And they headwinds good think job.

a really Our team the issues. supply chain job done has good on

we position QX or these drag an more we've some becomes given During rather, able that's inventory a products. bit But guide challenging, of were COVID, and to guide, on, as sorry. QX issues on think, the it appropriate taken, of for why these build I up our critical uncertainty

a follow-up, And supply ask chain. just could maybe I

about revenue. versus what and years the on and talked on that should that of can impact guidance subsequent Do the resolve this expect contributions we the the any Hugo issues year’s some in had given? of have thoughts You how quickly with you you prior kind

we -- bit mentioned we've all, Right. all Well, We cushion the chain early so that like there say us. of look, manufacturer when the -- chain of was sure little should which a like I on underestimate a have I have because want to that's probably question. in provided this, I'd said here. like or the should customer more that program. and make really optimizing answering program supply some complex along, this did We supply issues Robbie's we first a issues And we're complex experience -- was

long a we're we're still this this we -- it said, But we in of well, of like year, not all, terms very you on, revenue healthy goes year. double-digit how quantifying didn't double-digit of this, terms having millions. So in -- I'll like, this And the year. ramp-up tell next will first be

soon. building, is regulatory continuing, filed our are before, U.S. we're to we that demand cases I approvals continuing get and for because are we expect starting said filings IDE So and -- new like

lot in optimizing, FY on appropriately 'XX opinion, So a of for lot user feedback. good customer a be my the things, And the there's will of end And a here, robot. of lot the good are activity year going here. strong we experience just a or

Cecilia The Furlong at comes from next question Stanley. Morgan

versus expense I gets year, as this wanted about ‘XX how what realizing should -- should in with just on you the fiscal 'XX your Hugo that we the to pipeline And expenses this pushed million about that, year? with just other how think ask ramp well. combined year products. previously, associated talked Ardian, we $XXX just about next think into

that. Thanks, I'm Cecilia. take happy Yes. to

talked $XXX those Ardian, operating was and million Hugo investments the profit for we're making earlier launches So just drag that about Hugo. in was the and we big both year It us. this product not important

have still give go year. will FY a we fiscal and so 'XX. And expense those for to products to to planning beginning just this in our you is continue quarters signal have next more fiscal too early because year, process on It we're we X

from Matt Credit question Suisse. comes Miksic at The next

could after as into confidence if we it that Or to topic, uncertain -- ask the -- because question. I'd back maybe it's after. improvement sounds a of and sort to sort I So staffing a X see come your turn like, And I taken just confidence past thing get take But maybe you've question. things QX lots and spring the Geoff we about of of that staffing what terribly what things Karen, an little we traditional know a say I obviously is to get everyone kind we I quarter, in but is then fiscal push. midyear just the give into talk of you next would given at third important through QX? kinds sort you And year? wanted apologize do was which QX maybe and med to a of ask the quarter just stab calendar devices this of bit the for a that? And impact

Look, -- remote spending lot team using basically -- for a not hospitals a accelerated it's they've mean, be, these to I've obviously, diagnostic who getting -- like the in up And into opportunities. people been that of this down I Matt. come do in rhythm just on people doing, thanks in And for for is mean issue and the colonoscopy, I PillCam U.S. are as they're of that would models. customers. on time the the more staffing list hospital yet, rollout NHS one the I remotely. and They've using list of I first I of hot the mean have the built capabilities on their hospital business them staffing are patients use our where patients the of our long that we're to as is issues I to question, here another back. to your biggest cardiac they're then biggest can don't U.K., and managing our staffing. technologies, money see more because paying come you things adoption one colonoscopy. a of incent PillCam. world, colonoscopies -- their other is therapies, We're the the doing and like the back of is, remote go in They're checks. Well, so other are think, our waiting well hospital topic. device the investing the get but with more our time get with to the And a to is thing spending lot

term, providing our it's with things remote, are and have incentives. industry So some and two, more adopting bonuses and rapidly return mean, hospitalizations I short more in that in -- they're -- players hospitalization. less I but sustainable therapies result see much other case, And they're not hospitals a of one, working that situation, well that adopt prioritizing and less complications as to and

bed to but solution, overnight to or cover there's ICU the mean no this. one a aggressively I because an working not it's nobody likes cancel the mean case I TAVR care. they're monitor So

wants nobody that. to So do

why the No. anything we're we've I we've November, Karen, to know And fast approach progress taken our to it results taken moving and that. saying add, I they're this. fluid, don't you seeing so into that's on like said, in guide. on But is the And She's have no. here if even

So one. don't I is more tough a one you, Matt. have This for

comes Wuensch question next The at Joanne Citi. from

curious I'm you that a things the of that healthcare? way in couple think there's are about. change consumers been Do A looking at

this healthcare. there's that's I'm the much question yes, And not into strategy. engaged is question. our something been weighing Well, more have think if sure a I consumers underneath But in

don't a here last reaching and gone That's more us a to to to we in engineering PillCam, educating regimen mean that just as talked be aggressively them on drugs. step like and want extraordinary. about saw look out I Genius, directly things of rebranded cryoablation You like different I consumers indication which these our about, first therapies. They to in a first-line the part for Medtronic quarter Afib. of things

in our And think it's our I pathways Afib. given the the chain mentioned physician like referral kind of so on the line devices, to in the in our up -- on specialist Now moving connectivity technology, which closer in the electrophysiologists we up invasiveness, miniaturization, changes our first relied to line, leads in historically cryoablation better the I in efficacy, have the partners food here of case like we're to "build Afib, less markets." of been

bladder. diabetes businesses a overactive already health for of there, consumer pelvic And some are like more business of our and

And therapies typical pharma, one, less to just reason more said, cases, have invasive, I we're going proven a first-line this efficacious directly. like us than which indication. in clinically better and you're solution see is bullish some consumers the So changed, engaging more on the the is,

here's engaging. in really for Like our first thing like really in we're our opting The filled getting the in trial quickly, efforts on media said, quickly, social seeing enrolled digital is, That's trial, more other that on consumers proof point consumers consumers we a through efforts this I through trial, up Ardian your Ardian -- all marketing question us. to a self-enrolled.

our And more they're to strategy. changing that the Internet and care. engagement consumers education, so using through and platforms we are get And seeing their from that's much and -- digital in

Matt next Piper Sandler. at from The O'Brien comes question

the across too can't the one most the you surgical And a those staffing I down shortage segments As little It's issue. the TAVR, different get that's from Cardiovascular delay that on provided look side, the I just the first whole last you quarter the guidance surprising, long. is business.

how these really deep the pressures wondering you then into last? going mean, just going issues segment? I'm And you're I staffing to what kind continue something of help 'XX that to on will long that's go -- you to So these sway what that us calendar some do think of that this some in -- encounter side? to is of can

of Well, urgency couple said, And had like But Matt, weeks -- United look, TAVR the was just our like to a timing. States it's ago, a had of a that I day. a and there's they nursing shortage. it sense couple that cardiologist and canceled of cases huge of the the because it's was in X.X of bigger one South customers predict, the hard with I -- of like

of sense issue. like correcting a that have in they said, huge So they are nurses. urgency And prioritizing I moving

get cases. strategies need do pushing They're First ASCs. these resources these getting more hospital, to health and more the centers, of critical staffing They're will, cases attract they're they retain care reallocating system, in their with the surgical aggressive where all, to out you less staff. seeing into areas. to nurses certain to We're staff if growth around

we're resources, areas. call them reallocation these, as much these them we and it, make aggressively of we're helping I'll in can seeing So as

like can't the these -- you said, cases. look, -- I So defer you

I as I only pointed like I elective, it's these First And never I've some -- of think all, don't cases of out. more can deferrable. -- know defer don't how liked long you term so the you

quarter, innovating. mean a don't guide I and that. we're particular, -- said, And provide really I us specifics of conservative are predict. I it's underestimated people difficult in nursing said, the than so like to hard fiscal really Like here. to in -- seeing more QX shortage. but but improvement, for systems taken our I innovating we've it's much just last And Hospital impact we are the

out I trends last. we And look November, long trying know will might to upticks just -- how at I in the saw particularly you're you good cardio. we look if if Matt, in at this month, recent last figure add. some all just

it's don't good we are preholiday because but if Now pre-Thanksgiving, we some encouraging seeing that's know trends.

from question Chris Pasquale Guggenheim. comes Next at

in has of Karen so and recent been Geoff, U.S. terms Europe been of headlines have a most headwinds the of far, but the on the macro focus some concerning. that in bit

your past during the what whether seeing business curious OUS in the assumes Just trends quarter? you're European in deceleration over weeks, guidance procedure any few third

mean you're Well, well the the right, markets, other I growth Chris, performed U.S. our for a markets. we're And the regions especially performed thanks was for markets strong last But seeing in QX well story well, Europe emerging other in quarter. really emerging as us. developed question.

in online. here, therapies certain last and coming rates the like therapies I the new in few and Europe Now antiviral be in other on oral of to these weeks, these long given see don't vaccination this days back really countries, cases. the about high pulling status vaccination countries elective most lived hearing you're in countries the

we've long guidance. and there I from reflected see taking don't it So in COVID, too our directly that

at The final Rick question Wise comes Stifel. from

these a you're challenges question mission personal here, about little level, products, give kind of, your you're everybody. sort mean optimistic of feel through Obviously, picture just expand question drive to gross challenges us I'm despite your I then all a innovations margins do slowed to if that today hard big and talk in could innovative, et mean, add more on the new Good forward? more margin. working picture trend the curious of second longer-term just potential a cetera. expect of you a execute sense be and I'm the turnaround COVID, that And you and Maybe, of all wondering you, I'm innovation more in quarter, the Medtronic, at talking make your as expected. Medtronic I faster, about gross grow since on, bigger we more a shorter, bringing the sort better And for it's color do do the that have exactly everything I'll thoughts. evolving you little feel But better. than to margins reflections out? staffing Karen, highlighting us morning, you're rear maybe Karen. Maybe new half? but up gross the one just -- Geoff, roll high obviously not for

really we what we've the clarity the units. end asking pipeline on the if the and will, critical we we just We've a very time -- like through them but businesses markets of nursing these you accountable -- with and highlighted not gotten like to for, this that prioritizing have picture to handle the talking for -- you one, vaccine funding on the I the it's is it vaccines bullish shortage a more end, really this competitors maybe a a but in where and what and customers holding question. and And I operating we've question. last and I'm thanks aggressive and very walk the really And well, have and and the are bit doing, here. shores of and the And operating happy a U.S. what our lot how spending got I staffing by Rick, right innovation our good about structurally definitely into these mandates, look, the by I'll the I in these made making stand, distraction, company least yes, each great units here, mean, innovating are And bigger is smaller why. dynamics yes, question. and choices XX on front am I'm appreciate faster. nursing of about COVID

dollar operating good look And sitting units in lot -- operating different every the looking if funding in my dollar like, team, calls, team, in of appropriate a another we questions what me business a asking leader, one it's put What feel is is to business. portfolio like one competition? put their feel the And talking that. funding? at time it's really about because about my around I an we how just leaders these So incremental business it's pipeline making tough spend we and is even not should we judgment does portfolio, not these less the good

the we're thought all -- going the burnout and market great everything in We've and employee to spike the like our never I company is got the people, different mean and attracting at rigor around diversity it's is the getting So decisions constructive route -- our debate and better despite high from and the affecting had this share inside people employees, -- the but leading energy still company palpable. XX% a and of coming feedback scores the jobs around before. for Medtronic we've getting and we're remain the scores is applying well. situation and talent

this. look, some And and got show. got that. we've drivers here. to that got we've got program Already so can we We've robot -- do got -- to in got see the get that seeing bring We've ramp ramp and to to We've a diabetes this big data it. we've back lot We're turnaround.

in see horizon. it the off just can You

competitiveness progress. and You parts culturally, can world. States. the making to of And We've United we're that's level and accountability. I this good. the that But Europe why in of well you're the get other doing so got a in products feel seeing And see

didn't company we for of the going but operational we're and go. an and where to was think right we're things. about commentary keep -- But beat Disappointed year. wanted the I revenue. factors. EPS revenue holding want we EPS still that we all the on had hoping like we rest of the we in quite kind be. this overcome of that environmental could That's the There's So quite some doing on the it, undisputed want quarter, guidance come going miss ourselves we're those about honestly, holding weren't to We're these this we're technology keep to the stay we to just thinking want it, color making how like quarter, but market. on to to about investments, going we accountable growing able course. We're being to leader That's it. above I how that's to get And some know we the where

about optimistic so that where in going And we're direction.

So with that...

take. to margin, I'm going Gross

margin Gross

Yes.

the So had that emphasize that fully we before And said increasing is of XX%, R&D is year, gross the we've down. still that. COVID, do Geoff margin, Rick. said were -- that go our not intend the at want to to And and investment I challenges to coming that just we despite something beginning and I from we

different that 'XX, still year-over-year, focused this to I that of fiscal to the I that that just the And Also, a our really year. bottom focus that delivering year X.X gross it yes, we've So on just we're expected. on plus nothing growth. has that. with headwinds even points comes next line. X%-plus these We're pleased about in given than got in our and about margin way offsetting headwinds say it. includes better operations revenue back from and if delivering today. you that gross we're we've from growth a And and would margin, X% was hopefully focused look sustaining our it to improvement We're talked -- you when think X our gross to FY very on of We're at margin there, fiscal pre-COVID to say effort I concerted improve least in on And term, lead changed gross margin when longer improving levels. margin. gross line would at better bottom our points And to to some getting

you, ahead please Geoff, Rick. your Thank remarks. with closing go

everybody, on. on a of your for definitely anticipate XX, support February will We thanks, that matter weather. headquarters that we'll that in for the interest without what in you He's our earnings world here off us Minneapolis, And update this be we'll you'll coat Medtronic. join no Well, we promised Okay. us the -- your our QX And and ongoing we holding progress. standing appreciate questions. on kick webcast, be hope where call again, outside will our Ryan which on

a families that, very I'd with the over Thanksgiving. wish of you like holiday. in to And your healthy for and the and watching for you Please those thanks safe today. Happy So stay U.S.,