Medtronic (MDT) 22 Feb 222022 Q3 Earnings call transcript

Good morning and welcome to a balmy February morning here in Minnesota. I am Ryan Weispfenning, Vice President and Head of Medtronic Investor Relations, and I am pleased that you are joining us for Medtronic’s Fiscal Year 2022 Third Quarter Earnings Video Webcast.

Before we start the prepared remarks, I will 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 third quarter, which ended on January 28, 2022 and our outlook for the remainder of the fiscal year. our questions VPs that from company. remarks, and join cover prepared take will 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

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

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

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

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some are customers of expect linger, supply While shortages on impacts and industry will chain do the healthcare and path inflation, we our the to like our markets, our the worker from recovery. pandemic, issues that

XX last enhancements the as Over months, pace And innovation significant incentives. focused These we our units well not expected. operating culture we major and model, by as competitiveness, recent product our and finished changes to evidenced driving improved to XX that filings operating change. to of and as made than changes approvals have have faster our our moving making are came

further global product We supply reduce cost. and availability are leveraging to and quality, improvements to scale our increase our accelerating operations, improve chain

processes. allocation addition, In capital portfolio management our have enhanced and we

to model us win sight long-term of of operating required giving is each and what new businesses. is Our in line our the compete into over

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from where cycles, slightly and that’s where in product businesses just significant certain months was constraints it their supply While some Medtronic are improvement XX down due to quarter is from ago. last a

with our our of over build leadership, largest starting we businesses, X.X Portfolio, adding in continue on our to one So, category Management, Rhythm points Cardiac Cardiovascular of share.

driven airways estimate Interventions, ventilation share we our recently our point point We points in and Respiratory Micra stents share sales Cardiac ultrasound our launched in video and core despite Micra portfolio, Japan our ventilator we recently are support In in in power premium in over basis We of in and international share. extracorporeal QX. in return won in seal Vascular of to portfolio, In our our Neuroscience share levels, low with Medical products. China, strength as Health, growth Technologies. Cranial laryngoscopes headwind our share of the In and AV Peripheral endotracheal Surgical pre-pandemic our venous gained share we winning X system. TaperGuard we XXX, to Generator venous with we & HP on deep Emprint share continue over launched endoscopic devices strong estimate gained Leadless Pacemaker GI, McGrath-Mac our X and VR with won we tubes. in in And both franchise. Abre Puritan Micra year-over-year growth with our we In the resulting increased market gained Surgery, Bennett in and the about closure by about high from of momentum in XX% XXX we Beacon of life Spinal

of have pain continue. launching over ecosystem both by which gained powered the we as pain of implants Omicron, we value SenSight of brain care enhance about Neuromodulation, business from brain lead. new our momentum implant in from estimate surgical from momentum the we technology our instruments, headwinds brain strong which company our point sensing DTM XX% share with we is drove directional to share, points preoperative BrainSense X the we surgery. while our and devices, modulation, new with in as In overall of over and imaging, technology, new that with in are share We Intellis well and are DBS paired driven transforming despite capabilities of X with products both overall Vanta In only Percept in on robotic to and adoption expect stimulators, all continue navigation point planning spine XX recharge-free our our in headwinds And replacement great stim deep spine systems systems. and grew stim, modulation. of this software, Medtronic face of neurostimulator QX

Another points are about business with we Neurovascular picking share, momentum this business, where to up is our back X winning quarter.

of treating are flow our strength pipeline seeing aneurysms. family for intracranial We diverters from

in Our flow this growth Mark United the Neurovascular propelled launches countries portfolio CE Japan, XX% States, diversion broader with and growth China, to in coupled quarter.

share that share, for we where some improving loss, Diagnostics, our in businesses In of focused QX, the while sequentially Cardiac winning despite lost Now, many time share in we the have we majority are are on first share quarters. performance. businesses year-over-year gained our

AccuRythm monitor have insertable our our made progress our patients capacity which we enabled rollout the intelligence We U.S. good II were increasing of cardiac in and LINQ LINQ for just our began algorithms, manufacturing II artificial for all

Tri-Staple Monitoring, news Reloads acute LigaSure strong The lost stapling hernia that to continued advanced and vessel We lost good our to detection points pressure of Reinforced Structural sales. we aortic difficult able market a adoption algorithms, and drive Valiant oximetry share X.X our the of QX, due from capnography comparison was additional ongoing Navion impacted business, expect demand Surgical expand in partially TAVR At given we our supply launches. resin & of meet the is indications supply we pulse as share the AI in last time we increased In we here to shortage expect new offset supply our estimate mid-teens. year our growing with due we portfolio. to Heart our constraints maintained share teams few as along the point and in in sutures. by little to Aortic improved improvement and same to monitor in business, share competitive from lost resin sealing and This due flagship have and growth. share gains strength though, In our overall Innovations that share over QX. market In in in had recall we well be our Patient and a a

for and four quarter However, our this share. the slowed Pelvic procedures consistent has some Health, been share lost past relatively In we past quarters.

hybrid Japan system loop this new that the forward. continue to market success in Guardian sensor. products on In compete. our ENT, temporary take in will last integrated those and to to and lost end and for And resolved disruptions it extremely chain supply in XXXG bringing month. at expect that of U.S. we CGM strong with X the recover we predominantly markets, for pumps see coverage month, the this have in in warning going predict. well-positioned lose the country. Diabetes, share, to market share of time U.S. patients first we effect pleased are closed to the continue we is and a our including adoption resolving that expanded In to given Europe, And to letter we we XXXG some CMS international the expect difficult for are we launched We in December, this In with first the timing the are making insulin time, although our we Medicare available Look, focused sensors, long

pipeline. let’s to Next, our product turn

businesses. XX in these China in over an are U.S., are that and Japan in in across development products investments and increased time, technologies our have having launched to continue the with At we advance same the We impact XXX Europe, last Western the months new R&D.

growth investments disrupt these profile the markets, and expecting accelerate new create are existing to of Medtronic. We ones

in continue ICD disrupting Now, to our we make market our with Cardiac portfolio, on ICD. extravascular progress Aurora starting with Rhythm Cardiovascular Management the

is study pivotal U.S. Our enrolled. fully

expect calendar to and this approval continue year. year U.S. approval CE We calendar next later Mark

leader we a pace a a of both We adoption billion market. the XXXX. technologies and And same leads market device EV and Our this to it Aurora can single $X EP Ablation billion Cardiac the without heart ICD. veins. $X this make ablation size the does traditional in ICD Solutions, In a shock by a are ICDs of as will any advancing become number that believe and EV inside in accelerate is

our RF We treatment DiamondTempt ablation first as are line rolling exclusive our paroxysmal AF as system well our system. using cryoablation out indication

anatomical has device breakthrough designation We progress system, our make which PFA the from with also PulseSelect continue FDA. to

PFA market. pivotal in differentiated system about complementary including gap EP Affera. underway, a trial disrupt our system. a excited we mapping system that and is could Affera and month, the acquire and that closes a to global separate PFA system completed our platform programs intent ablation to Our very and navigation we has Last our anatomical competitive our how product back a announced portfolio development PFA November focal in are several enrollment

Medtronic. the to forward welcoming looking team are Affera We into

to expect complete the Moving to X-month our to continue year. hypertension, Symplicity calendar follow-up renal denervation our in the this for and of we MED procedure half ON enroll second study

We final U.S. scientific this full will market quarter, Evolut FDA into market Structural valve to the limited FX in market. April. the launch in our data to in our Adding seek release entry MED is approval sessions later X-year this visibility FX the enhances implant by our of PRO followed to MED release to begin deployment ON presented we first ACC be Evolut and In the TAVR China, we deliverability, Evolut from evidence, piece our will QX, then stability. of Symplicity. body pilot valve In submit data of underpenetrated submission expect now ease-of-use ‘XX. and the to as large in Heart, improvements our study fiscal ON at for expect our

this also meaningfully and development system implant for tricuspid first our to to pivotal TMVR, programs. and just system transcatheter transfemoral In our trial accelerate our using new We delivery APOLLO the patient expect enrollment. had advance mitral we continue we

our time, Moving same U.S. Medical At regulatory our portfolio clinical our we in progress start we to expand production. remain surgical Surgical made to Canada, manufacturing to and chain soon. market we most on supply focused add continue and intend release, Israel program, have and approvals our and scaling trial and and improving recently urology robotics limited our the Australia

in India and colorectal GYN and surgery be under to resection Hugo, cases our FDA, announced surgeons Chile Diabetes, approval combined in this this MiniMed letter. like surgeries. uro lower the with approved Europe. Guardian first procedures, and addition When to general procedures including month review and to earlier our advanced XXXG In in now performing U.S., accelerate diabetes to anterior In And warning are we Hugo be highly subject insulin cases, in continue Panama, the we X launched business. pump, and with the our with differentiated our expect system sensor, active with growth

Simplera quarter. generation next our of FDA fully apply is and of the submission Guardian to the expect sensor X. to continue Simplera half disposable, We this to easy size

pump for reasons. are programs, we multiple next-gen disclosed on details and making sensor haven’t patch including Finally, although progress pumps, we competitive

will accretive result pipeline and it technology company diabetes grow will take our the to making expect While in market. total growth important we with time, this investments we are eventually business being

FDA of million came Now, up earlier uniquely We to of indication pain in last SCS opportunities billion, turning believe ‘XX review market clinical submission DPN to that to presence our beginning FY suited following stim pleased an in the a were biggest our reach approval spinal are and $X.X communicated. of tech. opportunity The given for cord our approval our for we diabetes Intellis and one which neuropathy by Neuroscience the for markets. both execute month. had This receive med with the diabetic our making portfolio, process, stimulators the DPN years peripheral of to the Vanta and will multiyear market rigorous market TAM FDA’s $XXX development than represents annual previously we and we

In not SCS addition non-surgical to inceptive and pain. and was pain make neck that we for also our spinal excited to submitted upper loop enough last to the to stim, which year. for indications back FDA and stimulator, are DPN, also chronic progress pain limb refractory late on we expanding If closed ECAP’s we cord about continue

to We relief for inceptive’s market. that expect the therapy optimizes pain SCS closed-loop patients revolutionize

its the we our designed recharge-free FDA Karen financial category leadership half constant with to guidance. calendar X Pelvic And our compatibility device and expect current and this both With expecting sacral in Karen? MRI I Health, to will at performance Tesla, extend this X.X it for device battery, are will in our year. neuromodulation. in full-body our that, over next-gen Finally, discuss best-in-class we of approval InterStim and first turn

Geoff. you, Thank

third organic quarter Our X%. revenue increased

tracking guidance of developed adjusted the delivered perspective, COVID affected our quarterly X%, controlled impacts guidance of were to the in we with this our and given consensus. and revenue from in challenging expenses January, our $X.XX While flat, the and of we revenue impacts early EPS U.S. revenue, month the Despite was quarter. wave our non-U.S. of geographic latest markets Omicron. the line in From grew a ahead last

Our Converting the relatively flow earnings growing is into emerging Middle Latin with in America strong and X%, markets East and strength Africa. cash priority. were stronger, South our Asia, free a

and billion, to cash remain or free we XX% to returns. year-to-date focused on year was Our up strong last shareholder a continue full capital our year flow of target $X.X from future growth conversion XX% and generate we greater. allocating And

We could billion totaling companies was At the that future Affera. broadly supplementing pipeline acquisition become Since Ablation in case $X.X acquisitions. including are we last in X increasing the consideration, Geoff our to month’s business. as walked and over with R&D minority with fiscal we earlier in acquisitions year, Cardiac our last investments across the increasing this total are announced time, beginning of fuel company our through are tuck-in we attractive the the have same investments of organic that Affera acquisitions

cash to growing shareholders, We a XX% commitment primarily return more have of free to our dividend. than and flow attractive our through our

opportunistic Fiscal are share aristocrat. dividends our And was year-to-date, look repurchases see year-to-date, in dislocation, this we have And we billion We paid our share billion to the dividend an repurchased we stock. over over where S&P finally, case periods fiscal execute shareholders. price in particularly $X.X of $X.X as quarter. to we

the of guidance, first are see are Turning impacted to beginning while procedure weeks Omicron still February, in volumes to from improvement. we few

of be and our we quarter. end fourth continued to pre-COVID expect the assumes to before in recovery markets of through volume the levels And Our back March April. outlook most procedure

to growth, at Neuroscience X%, consensus $XXX we down for Diabetes of would X.X% currency to and a we X.X% X% segment, Surgical with growth Assuming approximately organic X% million. rates, revenue an that At growth, basis. comfortable approximately holds, quarter organic Medical quarter, recent X.X%. on Cardiovascular current fourth are the Street our would at at exchange all growth, on fourth headwind X.X% for X.X% revenue to X% of By be foreign to model

EPS fourth $X.XX to on slightly expect On have to non-GAAP consensus. line, the diluted And we the current range line currency bottom line. a we to positive the with in bottom expect quarter in at recent of $X.XX, flat impact rates,

Before over receive world. patients and of couple send the I it grateful therapies am that life-changing employees Geoff. you, to truly healthcare I to to back want additional employees the I around on have months. Geoff, resurgence and our acknowledge recent the strain that demonstrated COVID the customers to both placed workers ensure Back our for our our the perseverance past has

you, Karen. Thank

the few For The and work impacts. creating in to inclusion, Zero areas by impact equity released communities. the and I’ve down environmental, on or making entitled how I closing want last company our local that governance diversity barriers Today, our to recently opportunities shares commenting been is doubling remove social and ESG, XXXX highlight are we to progress global inclusive bias annual quarters, of the various environment, amplifying we efforts in removing accelerating or an report by our report Barriers. our

inability to racial, a even sustainable ID&E geographic the all to generational equities contribute health compel potential factors development and as society. reach Systemic a socioeconomic, and of member full and commitments Our goals to us solve UN their faster. achieve person’s health ability and contributing good or to

be inequity access of diagnosis technologies. colorectal as from health to crisis cancer. to such committed equity healthcare We’re the and treatment, One education, can mortality accelerating solved and is to urgently addressing global barriers by

the higher black of States. the rates one one United While screening make with XX% most population low preventable in is of for the deadliest, the it rates colorectal cancers, mortality

later Hispanic diagnosed the place to the Web Gastrointestinal more United Endoscopy treat. that of for difficult at more disease across with Services GI States. underserved Latino to Today, the adults Amazon American I’m to when likely is facilities announce that in addition, are modules low-income it’s to pleased and and be stages populations support collaborating Medtronic In Society and Genius

AI GI to and through colonoscopies using detection a vulnerable most Our that access both clinical accurate quality assist improves Increasing growth. impact Genius to can to significant technology can positive cancerous in earlier provide system of improve communities outcomes the cancer. physicians and detecting colorectal for more precancerous

health solutions continue inequities. We address creative for to one like to look this

this Now let close note. me on

of and more pandemic changes the haven’t the and expected, sight significant impacts we’re quality picture. operations, systems. While past company, couple We’ve in we the we made than lost our its affected quarters revenue have our associated of in big strengthening supply and chain global the

management catalysts also portfolio laser-focused pipeline. And in growth and with have We’re creating a capital several on to deep shareholder exciting commitment value. processes, deployment we our

expect market Omicron high-growth benefit lead we med-tech as reaccelerate and We procedures to post as in markets.

in challenges to can or all in I While do a liked, out, Karen still we have and And in through. to bumpier all in our we above our of corners who, growth I stakeholders. finally, the extraordinary four our around despite serve to we thanking day at it’s create our so long-term the work globe. been want customers day that faced and, of so, engineer patients for world the would join our to organization’s markets the value challenges the employees and have as I’m and sustain accelerate over than ability ride and our we grow confident profile

pain, health result life millions world. extending restoring we of the of around mission: Medtronic and the can As for people your a alleviating efforts, fulfill

Now, Q&A. let’s move to

possible. to analysts to as try many are get going as as We to

one follow-up. a question yourself we So related to and just you that limit needed, if only ask

instructions additional please Investor that, reach a If the With the the and Win, you asking after can Ryan Relations for questions, team give question? can you have you to call.

of Neuroscience are session, Instructions] portfolio; [Operator Karen Surgical of joined Salmon, Cardiovascular by Portfolio. unit; White, President the Ryan President today’s and EVP the the and and and Sean EVP President For Diabetes of Bob Brett and Medical operating the and Wall, Geoff, Portfolio EVP

a for pause the will assemble We seconds few to queue.

Robbie question from ahead. take Marcus go JPMorgan. We the at first Robbie, will

we some think I and some the here, warning with thinking the investor the my Diabetes especially a thoughts Maybe with seeing inflation about first should the range of and of ‘XX? on that’s question, building lot Thanks how a the Great. some letter one delays fiscal in Any pressure be early congrats your There bigger on estimates. of we’re quarter. is questions, wide on of competitors. and

you wanted So sense any I for Thanks. just us? get early to had

Sure. over Maybe question. for all, provide the big to maybe – ‘XX. thanks on FY to commentary I’ll it’s first a I Karen and some color question, this of agree turn I’ll

and Geoff you, Robbie. Thank

So you as And outlook May. in And on next I year would for puts full give normal to with we we’ve we’re first obviously, takes early. than process there our our going And before are we’re it’s say working speak. noted QX through fiscal our year. planning call more and that

let help of thoughts. some long-term sure. for by to continue organic to we broad So plus, X% our goal drive me revenue, revenue On sharing growth

Although ‘XX, I side talked more some FY plus would say in on of the plus the difficult be side, about. may challenges we’ve that LRP of just that, the given

being expecting million know, think markets. of them we think you as we that dollar next rates. a great line product several a in top procedure call. as launches, year, talked And expect about the on for recent continued do hundred on few volumes the about our in rebound headwind Geoff about as FX And are, We really at

pressure last to line, month hundred on we’ve points. macro that bottom the also a fiscal acquisition. Those expected combined year. dilution got impact EPS a increased we’ve few tailwind could heard headwind adjustments. currency last from some that environment. our And two that flip from And to And a you’ve from basis next increased by shared wage pressure like from around we’ve things noted the the we’ve got same On is others and inflation Affera

to going the plus future. to of on drivers X% that to and growth that our we really side over And the deliver certainly investments these those for While meaningful plus continue it’s offset long-range headwinds, want plan. don’t our are work the help we to shortchange investments us

challenging the the ‘XX FY a would And and to major just of next EPS But pipeline got investments adjustments, predict quality certainly. FX going above still are sure in year like the macro have they’ll forward, timing pace don’t year, obviously, grow along with to committed fiscal expect we which will plan. bottom investments not wage it subside very more-than-modest And our be to given launches. We’ve from forward. you it’s prioritizing, on that help should that we’re those I though, to environment this that take to And inflation at will currently sure, revenue the we be dilution macro growth we and this growth. while hard to we say I’m long-range our the and meaningful want line, experiencing. along the next to as year factors that do unique continue at I look away drive revenue go growth. expect we with that expect make ultimately stage, EPS So we’re

So hope is that Robbie. helpful, color I

conference, JPMorgan Yes, at first mentioned some the to my Geoff, doing be business. may bigger that’s And as follow-up, then you the great. changes

today. just little a bigger it some thinking Thanks. hoping actions? larger about I we of what the thinking. it flavor mentioned frame the you’re And it Is a of us divestitures? You breakup should company? you Is be again time the was for for what’s could potential give

if [indiscernible] summarize however, portfolio at are into I and strategy, owners the looking I are grow Star improve right assets? Robbie. specifics. said these assure then where will more the changes how looking Star we’re shareholders definitely to It’s Sure, Medtronic looking how point, growth. well consistency Medtronic, evaluating to Yes, can’t of you, our the be we’re or point, intently. this our deeply, stakeholders. right I how for our growth, can’t at the into of into they significant we’re the is I durable really we’re we at the on one, all and limited. the And them and to conference, more for, value know we’re our businesses? don’t – we like get of doing fit can well these add portfolio, deeply North – things this will improve to it, we, our And at fit our committed businesses looking I at North they But so we these still say

intend next any – terms this I said more at in I we what So the update over from year timing. have think of over is and of more analysis next several that the fiscal JPMorgan. have get the to through don’t the course we

lot. Alright. Thanks a Appreciate it.

Robbie. you, Thank

Next Win. question, please,

from Kumar comes ISI. Vijay question Evercore Next ahead. at Go

are want the Vijay, you and question to back there? you come next to then Vijay? Do to go

Karen. Sorry my is – about is taking was made comments that. the Geoff, with plus you Diabetes ‘XX still I difficult. on is Is be FDA? question. first comment Diabetes? the morning X and Did thanks have in fiscal the points guess approval? being one of with There helpful. warning my going treating you meeting Is on XX What headwind from XXX that maybe Diabetes? Hi, one for guidance Good you guys second which letter plus the a to to delinked assuming the basis with are a that Or how assuming

last let part chime Karen of very On question, the and in. maybe Sean the I’ll

the is ongoing. FDA we’ve look, ongoing an mean with dialogue approval. XXXG We’ve warning dialogue on an got the the ongoing dialogue letter. – of terms on the I got In

are priorities, warning warning letter for we’ve about, Our and the priority X our both before the was is these, is – priority talked on issues, to been we letter now, years like as working issued. they even but first work

you to constructive, talk dialogue about of very say. So I it’s is do there? the the the want like with Karen, question and would ongoing, – I the part FDA said, last with

Sure, Vijay. Good morning. It’s still too early to get specific.

approval. before, variety of are the outcomes We’re depending on and there we talked planning a And can in as ranges happen, our about process. that

as specific will too be obviously We’re working that early focused possible, get as on getting guidance. on we that, to out quickly and towards approval but

the quarter give that for fourth will including call. business We guidance, units, in our

the And second maybe, Understood. robot. question Geoff, on my

What feedback the color helpful. mention to surgeons early or the is – Have supply Maybe some up is for where trained. would be ramping on some have did how Some been be production for you many seems has like positive. been book looking robot sense chain or production. order you’re resolved

that Yes. robot. here second in to on On of the making progress Maybe Bob overall, a I’ll continues provide in bring color on some more that. we’re Demand just strong. be – to

And We did to continue approvals, in our breadth Europe getting good think surgery a great last to feedback first a get is from I procedures quarter. more are additional continues of complex. couple more and surgeons our sign. there, regulatory get grow, which We the

in here is, hands like kind a But we so said Bob. add – before, And Bob, color And about achieve in give you ramp strong that some we’re the here. and of objectives the robot where want ‘XX. we’ve here? we’ve to we’re as long-term anticipate going really I’ll our our good FY something powerful to feeling got do

Yes. progress. with And was thanks time your certainly, question. Thanks, after Vijay, you is read for some Geoff. spent we’ve what to And report seen, the as Professor nice It the Vijay, nice we’ve seen Motree well.

more We’re systems across the installing world.

As have Mark you we know, now that our approval. CE

procedures. been those expand system thoracic, working the mind, design the Obviously, certainly about our to We all real procedures expect and a agencies. future has Hugo As excellent, to some Geoff And itself to OR think is care with The expand approach regulatory to colorectal, those hernia, and We is mentioned, which staff feedback really of staying to approvals team-based place. been kind bariatric in continue the more look council And surgery delivery. the where the regulatory the designed procedures Vijay. for that. the we open in physician with healthcare cross-functional taking whole all we like really positive, with council moving, to connected has visualization, certainly general of was countries. in

know, picked you multiple surgeons The way also up designed, this allowing in feedback. So our some train it’s system to obviously, is you parallel. as of

of we’re surgeons. sort And lots your training question, of

We have now up across opened training well. centers world geographies seeing good as traction and there the really in

throughout, Motree. for is going limited market spending make release to we’re Professor told these for thanks we time you do and our progress. So to expand what with the question, continue consistently thanks into markets which and But

Thanks, guys.

Vijay. Thank you,

Thanks, Vijay.

please, question, Next Win.

from The question Deutsche at next comes Chickering Pito Bank.

for questions. Thanks guys. Good my morning, taking

do that these for time? do Or do is Or labor some material environment offset pass But customers XXXX into understand revenue you you pretty can I would target? they question, to more inflation, as of and need think costs guidance your challenging. change look the that, pressures? think EPS those macro growth the long-term you On at you that over margin all your both

stab Let me a take at that.

that First, second even kicked there here. the a more talked of our as organizational doing. in we’re are think of operating XX inflation operating move about, But pressures. working. and I’ll these in inflationary obviously about we’ve areas we are things up into addition that a putting to; of we R&D in, and are, Karen one of units I And lot pace the model, is before let really kind into the of new some talk part facing innovation, speeding the and this

of – like Stim with about can in We’re that we spend commentary and our areas like diabetic product in couple I lists, for getting around working things are in our of we some about market much ECAP talked of the we Pain up. these approval than neuropathy launches anticipated, other of is evidence peripheral DPN, just off that submission pace I a good go pain. and launches – faster this and coming These or our product terms talked the

address going that. benefits operations the to global So there accelerating area I planned that to that, improvements scale are – serve, time. feel a get invest over us goods in if of had for simplifying operations. there sold going of to That in we’re give is enhanced our that’s cost and that good and we to cost another up is will, area. you opportunity an also to now simplify some set have about lower is us And there. some But more and And we to capabilities going

that So this. going is help address some of to

price we but looking mentioned plans – motion also are are accelerating hit. again You since put has before in we’ve – mean, more the at been acutely new I it then inflation price. price, were those our the inflation, technology. there and And

our at select ability have lot wake the some in of the inflation. have pricing. there And we improve the that to and of we this have new are I where We looking markets think world the are the coming the – a around of products we out, of opportunity – pricing of

are we well. at looking So pricing as

better of goods that want levers, both goods Karen, and up cost – you serve just reducing So time setting ourselves those do pricing our mentioned. the of and over cost cost for then sold to add? I to

Yes, I’ll bit. little a just add

While of it varies our direct by labor geography, almost seeing we X%. in are inflation currently wage

impact But revenue where through And a hundred couple cost expecting FY bit efficiencies right driving initiatives. and us the focused a much on materials on near-term of now, growth, near-term. That drive with. savings on just of them. points in than continued expense that is we’re efficiencies, dealing driving now, we able the that that’s long-term, productivity headwind on So down And opportunities that down right cost in a to and again, ‘XX. will net just we’re over higher inflation we’re we’re pricing have material basis And typically typical.

remain So committed we’re to focused and on that plan. long-range

much. Thank you so

Thanks, Pito.

Next question, Win.

question Matt Suisse. next comes at Credit from The Miksic

hear me thanks so you much. okay? Can Hi,

Yes, you, we can hear Matt.

Great.

So clarification quick comments. portfolio then guidance a of I comments, one on your could. the if ‘XX just one on And sort

it So Geoff, Diabetes, puts or are and just I about to of, frankly. thinking folks sometimes commitment ask to your they portfolio bluntly, changes businesses, takes to put think when

mentioned, And on terms So just I it your I’d what now process at getting clarification, Karen. to back the is it that where of in speed. as one to then thoughts the love get portfolio, commitment I business in for have you stand your of

Sure.

done It’s past. the we’ve portfolio, guess, and on about On would it start by let wasn’t to dive, in I deep the comments be more say, I a whole real, on the the focused me we intended intent portfolio, Diabetes. okay, than made saying

we didn’t near-term in Regarding help. have here. of are I’d opportunities. know we pipeline Diabetes, solid I look, the growth turnaround turnaround letter technologies believe the say a warning and new are our story We some story. in confident confident we But

the right? a R&D, competitive in U.S., in especially the our products working Blackstone have for competitive the Our goal on new to And and market, partnership we letter organic in it’ll products well. and investments. we impact as JPMorgan on have clear conference, And know detail that the deliver we pipeline we reasons. we markets, here through have in to other getting patients do structured see the some huge pump and through through priority U.S. haven’t the the is these warning multiple technology, FDA CGM mentioned of parts though we some resolving shots on as In provided much a when situation

not Diabetes in letter, but narrative mind. it further we of the we’re warning So feel the having in terms along our in change doesn’t

the pipeline. a have about the It’s We technology, we and market, good high-growth it. have we feel

then you. items, I formal on few that from $X.XX to those from like guidance. EPS, Thank $X.XX point on it’s just $X.XX, other items? it, away quarter the also ‘XX mentioned And on – the But right, that’s from point the Diabetes make the Affera, appreciate or have put in to inclusive that’s we’re color just impact of here headwind Thanks. you math hundred just Karen, something of sure great. I somewhere impact And a of finer from to range – and a understand a we basis and on the FX dilution some ‘XX That’s

about a points a the you. just fiscal to the next Yes. are Matt, headwind tailwind dilution. talked hundred I basis exchange this and from few Those year from the year – thank items flipping that foreign from

to you would modest. say, foreign magnitude current rates, just flip, more is think than – I those so items. So, can the temporal exchange least And much we is at that see it at from

that’s so them point why we out. And

Thanks. Great.

Thanks Matt.

Next Win. question please,

Next from Biegelsen Go Fargo. question comes Larry Larry. ahead Wells at

taking for Thanks morning. Good question. the

looks comments JPMorgan recovery and So, the one today. was just on one like results China. and soft January given the related It on your at

lastly, in you the have I a color pretty flat QX how confidence for guys does the there? quarter. imply It Any So, just the in significant and what – about VBP on increase, a China, little bit growing high versus in sequentially. teens you guidance. more the February and QX are was that And seen question. color in on taking think Thanks second it on thinking what

Omicron it our cases. was employees our but I driven was worker think yes, to in cases broad-based short-term it it absenteeism, things absenteeism people Sure. out, separate to about impacted absenteeism, first And And versus Larry, heard healthcare FY the the workers, acute caused – just broad of and that’s shortage. working And ‘XX like applies more own more the centers, burn shortage, absenteeism on and omicron word is by absenteeism you and and of not by worker longer the factories a the all the the right. leaving healthcare broad-based. question, part to distribution our have last is we into workforce, from the use suppliers, versus just number going caused healthcare

hospitals, highlighted And will levels trends April the absenteeism, that cases back so into cases second end plus of that are fiscal March the QX. February. the procedure – half indicated and by think January elective guidance. we our improve to our as volumes and And favorable, throughout pre-COVID of we COVID And with of peaked suppressing first in half and now QX the

be these traveling they will persist, they what have XXXX, – and – and paying ‘XX, into mitigated hospital chronic these from are from just be – by the But telehealth. where but hospitals you administrators sorry. employees are remote shortages that more FY like we technologies into will still staff, However, temporary are staffing for hearing monitoring or how these

the And maybe prior levels will in them think Omicron. going to mitigants to from and so like will But saw prior we or to levels. get that XXX% we Delta XXX% waves, limit it those them of allow back normal pre-COVID

we have see and XXX% a imply we kind we of hospitals that’s But of it have that XXX%, waves. handle other improvement big like to kind in it, are seeing seen here So, a don’t capacity does how in levels QX.

over Karen. on And to China piece, then hope will that that the question. maybe answers that I So, turn I

it happen as those Thanks, did tenders happening trauma China, On happening, regional space. Yes. and we down see see bit or to some beginning And in their we was flat a the Geoff. buying. slows tenders the channel in QX

where mentioned, mentioned, are by device obviously, as do tenders So, top public that we have we national potential been government the surgical medical have we on the two other I And know, in would just gone advance. regional And have now we be products exposure, list But insurance to industry just XX spending. tender. through we general trauma in you somewhere spine VBP exposure stapling. and happens joints. players stents focus on and if look in is total you expect of business And in is to there and at ultimate seeing through company there on that this large stents, in that ultimate see on more uncertainty the pull-through and China, timing. than tenders, the revenue. less we gross that China, that X% would be so those. including so – the know, of our And you our just to these because gross based that be lot should I of with between net X.X% around be spine obviously we working offsets got the and a number, experienced products But we will what to stapling have

these among X% plus next happen year. for in at that And anticipating pressure our long-term goal are least are those plus the to We things ‘XX. one of tenders the side of FY on put

hope that’s I So, helpful.

Karen. much Thank you so

Larry. Thanks

Win. question Next

Citi. question The comes at Joanne Wuensch from next

hear Good you Can morning. okay? me

Yes, you doing? How are sure, Joanne.

for for I build X%, next even plus investors do somewhat okay. they question. want my to plus number side for turnaround. have needs side say of I you but am think on Thank diabetes who the you off a get specifically, just after order a taking I can’t to And of year Karen’s the the last to what comments happen doing or that, without in the there? year, get of

time, strength really several going obviously, is by about manufacturing on the these have of Hugo, that lot of strength some and like to of through that we about what the here the work will the breadth portfolio pipeline. issues. And are we – drivers. we focus what right and current And I talked of impact now of good Well, we a and about supply have. have that on And Hugo the I position the is chain and we feeling good think is feeling – and quality the breadth are of There we and there. our the certainly,

that, see – back the diabetes. will get data But as well. I business billion things Ablation that $X billion. we got will about We Afib, EV-ICD Cardiac And Solutions for there will talked I and coming, cardiovascular, just PFA. and be highlight to a to market will Ardian you our our in few, start got I you have we And beyond – like we $X readout then got come have

In SI. board coming. will DiamondTemp cycle in a our just portfolio is There an And here. PFA product its course, coming have is then beyond of and peak, MedSurg, we Of – a positioned. have rollout is impact Hugo, neuroscience number of nice is got SI products hitting part across the will our that well

You strength-on-strength heard in doing because our is there. the commentary that’s DTM in and ECAPs pain, about well neuromodulation DPN pain, in with

back a the continues be stronger line ENT market going. to believe gaining definitely closed adding is health, market business poised Intersect. of then to is the today market technology and heard Pelvic up broad that enabling that our the with we growth with will be you there. great really and And I base that got where And spine just loop. a favors It product DBS share. got You neurovascular us. sensing have and is

the on We have that. relied – over we years, have

refilling keep that’s base think expect that of And model, focus. a to I up, technology. So, broad it’s new I operating with the the it pipeline

– the starts X growth. to feel remember, on takes broad think So, more But and as in the there it, year this normal that’s XXXG is to based puts getting good top back And sure, and I committed long-term good that, it next has have – than Karen the gone Guardian good. detail. are with line And and do with we about feel she we I we Diabetes, nature the the said, plan, of for through sensor. say. what would We

pen a with diabetes with our our beyond companion with and from paired be a could our sensor. Simplera We sensor for will timeframe new that also that pens sensor Simplera. smart whole in with of have growth vector that paired And new creating business there

there. you ‘XX. get to once And So, doesn’t a of there it X% happen get to drivers past that all, it all FY to need plus number you is take

is from And not pipeline the dependent over X% from And just the my confident Joanne, want the thing, it’s Geoff mentioned. it any I but because we emphasize to strength – plus that in are it’s on one the that that really long-term. seat, of

Thank you Excellent. so much.

Joanne. Thanks,

Next Win. question

comes The SVB Leerink. from Antalffy line question from Danielle of the next

Hi Danielle.

hear Can sorry. okay? I me you guys am so

Yes, you. we can hear

Just fine.

guys out Thank the the commentary Okay. look you provided you year. And we over so Great. fiscal appreciate next all as much.

major as launches. question product you think a the ramp about Just quick new in

beyond for little just think So, so obviously thinking the also how on these and bit be question, are we talked ramp? about has changed I have next is much. but so about about far as beyond, as you fiscal RBN. know I year, major we contribution there anything Thank data. Joanne’s ‘XX But as about product a should some we waiting follow-up for that here, guess the fiscal of Hugo thinking new to launches? you And

the to Well, provide Ardian. Sean on question, pull Ardian here maybe an in update Salmon on I will

give year. are then on that there But late milestone more of early in of think Geoff, So timeframe you this fall, confidence. the Ardian, readout calendar winter in data a and expecting we be and kind between I may now now

the that’s data important data time at why that X-year the year. And with long-term ON be first presented this we had from is pilot trial being the have We MED’s will ACC have follow-up. randomized

does It long important that here. wear after body for All going But has point. be an effect a we It’s to we preparations had remain inflection making launch the payers. are consistent, how of and for go That’s very important evidence blockbuster the really really Ardian around last? to confident. doesn’t out. be to question the So, very we continued

Good. two Danielle, comment things mentioned in the And pain. little Brett will have Wall is commentary, on that a bit in we another have that one I maybe

peripheral two they DTM. is business diabetic meaningful. well you think Brett, But submission, do things, positioned the I neuropathy already pain pretty to Our and on because ECAPs are with our comment the want those

meaningful. received quickly. pretty We X.X anticipated that. as about pretty think market that’s the neuropathy before approval Geoff $XXX to peripheral that, a million diabetic said is these We years are commentary, to things Danielle, sure. in the Yes, going we grow two

and We the with the that. that we that data, very there submitted other field. data reflective And in are strong that has positioned it’s well been data of presented same is

have to be right and So, we every accordingly. moving will win we and investing there,

In with And ECAPs in in ECAPs algorithm sensing last the are addition, back And but SCS. portfolio, of a filing. stimulation late capability therapy our embodiment closed-loop allow utilized is in more we particular really with we submitted that SCS to effective the will the for be there. DTM really share, year loop our gaining now neuromodulation close the and with and to programs across

Omicron therapies and the this up share recover, as down set of we area. markets the growth So, wind entirety the procedures field recover this and across portfolio is more as as entire for in gain with effective

Yes.

piece the earlier, place, of the see are – move to move And we to new quality type across don’t that the in we on like moving I fast sacrifice Historically, we start-up, innovation this opportunities. But said and right. operating both the other smaller see you reliable brought thing the at we it’s fast, great are fast. in supply like with put in both just the beyond and with ECAP but these with portfolio leaders really sets have us is both just I these in well. in one up cases, focus a of that starting – this of new on from that model, comment really last and from we there, look, some so with challenge the want haven’t company. I to a focused outside we mean them gave are love chain on I make now And moving instances case that it innovation, cost obviously, pace. also end-to-end how about here. is we leaders to this, smaller And we much position moved to our teams as These signaled now the that. companies they did had way them And capabilities the that in faster just our improving sure

where headed, like So, those company like particular. in the two is examples

you so Thank much.

question. that one And Can to take we apologize, the get Win? not be but able Danielle. are going do Thanks, all to analysts to we more have for I we today, time

Our Stifel. Rick final question at comes Go ahead Wise from Rick.

how on years? there Are on year prioritizing your lot your Just to minority flow you morning your a are the Geoff. using spending Hi Where your Good talk just are a portion for opportunities an Win. little sense there next of welcome. reflections Are you What a and and of continuing Karen. for appreciation the any comment can the of and stepped-up Maybe opportunities? cash you more, – just be your Thank in a lot a very targeting? would targets? M&A updates of thinking for are given increase Thanks commentary give of you. what investments? extension us your sort R&D your several about you latest about R&D, calendar

it broader and separate. separate for the Sure. earlier. business answer One, I view portfolio we to hear tuck-in tuck-ins. from from is is of of is Thanks will part comments I Rick, everyday These investing, our great ways. venture This acquisitions that’s question. a made you. here that doing this what couple

venture ago X And maybe stepped have One, up M&A We have I to venture of focus. team separated our so years our say. investing. would team we our from couple more a things

these Karen, – the and that from team, We operating mechanisms others several Committee have myself in. with with this Executive participate separate

structured have down those to the of or just And lot them more us a And some some opportunities debt investments, are up them line. so we are give of investments stepped equity, but investments. of those

COVID, is been evaluations pipeline So, would it bit That that over prior I initially, X present hoping, is a go I down on in down And have but that like a valuations than fuller then happen come up. significantly calls, was opportunities. And last space, bit. the acquisition has during our didn’t the said years. and

a PFA how the it meaningful really Affera little like and MapNav dollar have announced The the in range about will have bit revenue. they our deal have hugely It’s still that ablation the I repositions our because and business we in What That those earlier take development, offerings. that ENT ENT, type deal billion like Intersect the got the see that for by but our providing business, complements deal, it case Intersect longer. of deal. for Affera is an multibillion – in – of are – You strengthens immediate deal will there Solutions that impact impactful. our Intersect Ablation acquisitions

are we as neuroscience, in lot a interesting across things a things So, cardiology of say, the would seeing well. if interesting board, things of Particularly, in will. you the space I lot

So, that’s answer how I would that question.

much. very you Thank

Thanks, Rick. remarks. please go closing your with Geoff, ahead

Okay. Alright. Thanks, Ryan.

and are challenges we deliver in growth. to obviously our extraordinary on Okay. certainly puts are appreciate these and – – company that and that the steadfast that working we to I that we changes you that made the plan, your continued with marketplace we these outlined. durable interest meaningful in past Karen some and takes challenges plan our past a in we the through these and – that are have – think deliver in support and make your look, and appreciate combine Look, long and range for like move ability – higher move we thanks, also to continue Medtronic. in through. that opportunities have opportunities outlaid work on But And we impact, the that I great have am And outlined the some having commitment these have everybody, we deliver questions. of work And confident

you we a fiscal at will us look which QX we ahead even XX, we year anticipate our for So fiscal on and we then update where hope May detailed on more how webcast, the ‘XX. you look, finish earnings holding join

So today. tuning with that, for of and a stay day. Please in and thanks safe, healthy rest great your have