Medtronic (MDT) 23 Aug 222023 Q1 Earnings call transcript

Good morning, and welcome to Medtronic’s Fiscal Year 2023 First Quarter Earnings Broadcast. I’m Ryan Weispfenning, Vice President and Head of Medtronic Investor Relations. I’m inside one of our Medtronic mobile labs, which is making a stop here at our operational headquarters in Minneapolis. These high-tech mobile classrooms will give about 5,000 U.S. clinicians every year the opportunity to train on some of our most advanced state-of-the-art technology, including our O-arm and StealthStation.

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quarter, Company. will Karen Chief Financial first of Officer. and me Martha, an Chairman ended about program Medtronic Earlier the of and Medtronic VPs Joining which from on and Chief financial should results and this fiscal analysts XX, Parkhill, questions our hour. remarks, Karen summaries. a provide issued After divisional morning, July and our segments are geographic Geoff Executive comments the will sell-side containing our the revenue will Officer; remainder our prepared for press XXXX, and Today’s take for outlook on Geoff year. statements join release of us each last the Executive we our and the cover the four that

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

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

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today. everyone, expected. out quarter us and as thank our and reported Hello, largely joining We morning, played you the this results QX for

near-term the in diabetes neurovascular, several many pipeline core U.S. overall markets. revenue Our growth in same organization that accelerate the guidance like that discussed revenue Europe to executed the was exchange, to EPS comparisons along and EPS that difficult cardiac strong quarters, pacing, our the chain, foreign approaching to few with our we bright will in in time, and as future, our there to ahead in have line Macro year, our surgery, with catalysts spots And were and with forecasted factors strength growth. we of the including spine, deliver prior and look across we At and past businesses, caused over inflation supply quarter you guidance. decline. emerging several

and and is secular well-positioned growing markets. balance with healthcare on an strong growth many also initiatives our making We’re improvement. positions progress technology robust sheet, in around quality uncertain leadership economy, dividend and in our operating And our business

our impacted QX progressed through results, our chain we and We disruptions a our as Innovations saw supply at improvement the Surgical taking closer packaging areas notably, So, resin in expected, supply like performance, quarter. look most as business. acute

as to the expecting product year. chip we throughout We results, manage well on our continue and worked order our financial minimize Overall, executed across semiconductor to our impact, also linger our these teams shortages suppliers their shortages minimize our to businesses we’re have backlogs and quarter. our as closely availability with improving to fiscal as operations impact exited

we overall our improve to through as chain expect We fiscal move to issues continue year. the supply

to around can impacts procedure to our seeing the to dynamics. causing professional see is the side, these manage in hospital And customers some demand and We On and due physician doing are world. pockets shortages. labor health procedure we’re still still volumes cancellations COVID they deferrals all

levels, while our or pre-COVID we of procedures lagging. do volumes are markets most geographies So, procedure have certain volumes where at remain still in

to availability high-power our product is metric performance, quarterly growth, with our share along and share businesses, revenue share. annual market implants. at we an innovations capture Turning certain market free Medtronic of acute at is flow. challenges cash part opportunities surgical important CRM when And in This plan, incentive look and our impacted and including profitability

competitive in in and We’re some health U.S. facing pelvic pressures the also predominantly in diabetes,

progress the and product competitive acute good availability address on to have pressures over issues place time. in making pipeline We’re plans

spots. Spine, X%. XX% around market and strong bright mid-teens base. Now, U.S. pacemaker we and patient-specific overall emerging strength family which implants, enter including of the growth surgical as some markets. our quarter, new high-XXs globe double-digit unit markets. Europe the our market in and me growth to U.S. growth won our planning sequential the let platform strong grew growth CRM, in highlight Japan, in had leadless on Western share grew high-XXs portfolio, continues our we the as in good of AI-enabled Micra growth geographies expand including a CST, In existing We our had Core in In outperform business Micra penetration in driving is in our quarter which user pacing

target of and the market due pump, breadth our X And the XXXG imaging, directional markets enabling lead. to significant sensor. In combined MiniMed spinal designed Stim user robotic past with the and our In for in our other a the our navigation addition, U.S. The and Vanta key insulin we differentiator. Pain positive value Pain user see are over TLIF of gaining PLIF results In continues technologies Intellis of business, the DBS. couple Stim, QX. DTM recently with meaningful Guardian outside our in In our years drove system diabetes, and sensing U.S. In has toward of the we PL time range. the Neuromodulation this is initial supplies. with is very markets, no in sensors launched the a our now with launched, rechargeable our our in the driving increase and where customers significant PC Percept recurring growth DBS, markets experience SenSight gravitate implant system and continue differentiated both in recharge-free and capabilities to And and to neurostimulators. growth our base Catalyft XXXG CGM to base sensor increasing outside more fingersticks user Guardian revenue X share

Now, and every underestimated minutes real-time this boluses. X its missed insulin counts occasional boluses auto and correction basal is mealtime carb to address near due to

ones technologies meaningful disrupt to pipeline, growth. move existing and we’re let’s can accelerate several our advancing new create our that product Now, where markets,

Europe, to rate And have pipeline past China that average looking XX the pipeline, enhance XXX Japan Medtronic. near-term execute over will and we on catalysts several months. our market continue having over ahead, we received expect the regulatory We growth the U.S., weighted approaching approvals in of

greater three during is and this FX it market hemodynamic the starting enhances valve can the of release growth we limited U.S., and impact in the drivers maintains launch franchise PRO+ largest launch China, about and opportunities fall. The have cardiovascular we use PRO receiving the of of benefits really the the cardiac to combine an Aurora and platform. And precision portfolio reception. control valve today, is about customer five the market Medtronic, and next-gen When roughly next the U.S. to in for with all market, is market our as Europe globe. good this release we’re the TAVR billion TAVR our procedure, in Now, move around really FX expect the our which forward feel one ICD looking full and $X.X within Evolut years ease Evolut transcatheter we launch in overwhelmingly durability billion reach in positive billion valves. In we’re extravascular of single-chamber exceed Evolut the ICD. with our next implanters provides management, and you Evolut the FX in to with rhythm disrupting years. industry-leading $XX excited $X

true game may to the given With subcutaneous had has competitors where many the patient electrophysiologist deliver and its ability will it’s benefits the ICDs. the remained one in you inside painful longevity have having It as compared leads ICD, to including but Now, to created to market of ICD we’ve Aurora, a our heart. don’t antitachy lieu conventional life-threatening proven of for a traditional niche device know, of pacing years, limitations in arrhythmias. place and terminate battery changer shock use having Aurora trade-offs. a of same delivering to all does this a without size, make a the the

data late-breaking presented in weekend the session this ESC pivotal a will be Barcelona. Our Congress EV-ICD in global at

through will findings in is months. for on nearing Mark reviewed CE market, expect and six-month And and to The events, we procedure by next and our show next years HTN-ON SPYRAL target in pivotal been $X double from denervation, blood U.S. a few cohort to more including then which billion data completion nearly has real-world and stroke, the and procedure to FDA clinical in calendar MED piece of our presented $XXX procedure. other been on in for renal CV We’ll data pressure data time expect year. X,XXX present pressure This XXXX. final effect U.S. has have to complete submitted, the of And we Aurora, awaiting our year be health range breakthrough full the plan to and cardiovascular profound module reduction also billion the than This of failure data that three strong spend exceed the approval by including analyze patients we’re $X compelling every to the those We’re project hypertension, through million a this our public leader calendar trial sham follow-up patient XXXX In recently, blood module simplicity and approval results as the mortality. patients. study. over submission treat a received registry the could heart robust, the of we who closed. already data

Portfolio, which includes Medical our surgical robotics. to Moving Surgical

market continue to We on release execute robot. Hugo the of our limited

made geographies, data We’re progress system our over demand enhancing improving the urology quarter, U.S. manufacturing collecting We’ve continue of feedback, nearing for systems the trial be indication. Feedback supply chain resiliency start IDE installing last surgeon and clinical new and we’re on the in very and scaling the and approved based to strong. production. clinical

analytics user review it to a we’re to Enterprise, Overall, base Surgery market can We surgical comes also and for long improve now continue minimally surgical their in from player AI-powered surgeries continuously of advance our video With when Touch and our care. platform. leveraging invasive to robotics, Surgery the Touch easily Enterprise, decades increase to surgeons major heavily our in and patient surgery. of term, become investing experience leadership the film

inceptive Now turning to ECAPs portfolio. our submitted In we’ve closed-loop neuroscience stimulator. our Neuromodulation,

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

market warning diabetes, activities with annual of we’re addressable first the believe million We’re an commercial we opportunities expect market our diabetic focused med-tech, billion. our XXXG also with is sensor by the and largest of reps on X cohort to reach in now for remain the dialogue development regulatory after our $XXX with resolving trained. neuropathy We the one DPN total on our continuing market In the to in to submission up active peripheral we go and MiniMed with FYXX Guardian FDA ramp DPN $X opportunity the of letter. to

as letter reinspection. committed We’re represents next-generation toward than In and of is Simplera we FDA. we warning preparing And letter resolving investments, pipeline, for making disposable. X. Guardian to CGM to is to XX% commitments. This our our our of we’re good waiting prioritizing submit progress on Simplera diabetes to XXXG ready submitted to it average. we’re above warning U.S. We’ve progress we’re and considerable to Simplera for review. FDA, the more the actions submit corporate X regards substantial CE Guardian apply, and the It’s easier size file it’s Mark. pipeline, making overall completed sensor, with half our the the our R&D The the well

pipeline This that, our sensor to performance next-gen multiple of Karen over Karen? patch us can gives restore our including pipeline financial With diabetes programs, over to growth comprehensive coming and business years. a guidance. I’ll and turn have pump the strong confidence We pumps. first quarter it we our that to discuss

Geoff. you, Thank

revenue Our with in our Adjusted organic $X.XX XX%, guidance first line EPS quarter X.X%. exceeded range. guidance, of decreasing decreased

challenges As Surgical on last earnings we chain call, quarter, Innovations business. in our our supply the outlined faced particularly acute in we

We the tougher including third sales last growth strong following and faced recovery underlying COVID both good year. procedure also comparisons, wave of ventilator

results from declined X% our non-U.S. geographic our markets developed a at perspective, and both U.S. revenue X%. and emerging Looking our grew

markets emerging COVID China, lockdowns by procurement. quarter volume-based declined was given growth Our impacted this and X%, which

And Latin when East teams many other China, grew drove Asia and strong our However, in in and growth exclude growth South markets mid-teens markets, XX%. in high-teens Africa, low-double-digit in our and emerging you Middle growth the Asia. including America, Southeast growth

to Turning margins. our

basis points. the and the impact decline, of due increased declined Our adjusted given basis on primarily dollar gross freight, points The rest of as and well to the labor shipments. fuel materials margin XX as strengthening and expedited XXX surcharges inflation was drove

line, R&D R&D quarter. about Without you we development IP prioritize X% recast had programs that As to investment ahead. look told I beginning continue businesses. to currency to a last the continue year, negatively to in R&D remind you the into inflation we quarters last the impact that year’s we adjusted gross from our want at expense we our margin you, grown recast, and have the of across would as we expect affect when at our said of

our margin capital revenue year. the improvement XXX invest accelerates strong, our return allowing do pressures, expect shareholders. operating and remains to our margin sheet us we to show points future growth balance as While basis growth lower on to gross sequential declined revenue and in through And

target share to repurchases. strong our to last repurchased dividend. of our This returning shareholders, cash primarily past we and we quarter, opportunistic of returns flow our continue on year. $XXX of growing $X.X supplement these we the XX% fiscal And minimum million, is which We a repurchased through free through top billion

broad closed quarter, We also fuel growth. work, investments continue began and tuck-in our near-term we Their structured electrophysiologists Last part to minority future important advanced the access access CathWorks. first acquisition of acquisitions half portfolio we left-heart month, calendar also a and offering to We balance be distribution begin Intersect and the systems and our to of cardiologists. put and co-promotion the announced expect will the in cash ENT that by the on to transseptal an and sheet ‘XX. help path interventional of with our agreement Acutus toward investing in acquisition

We’re believe we which to FFR and FFR market. of the Medtronic acceleration. to investment can R&D traditional that disrupt promote their value technologies angio supplement tuck-ins innovative to and CathWorks we long-term partner that we a add believe the with can acquire, expect organic growth system, and our excited lot We

year revenue to X% revenue ENT hold, Intersect acquisition. which full maintaining movement currency an turning foreign full a and past our excludes Now, from rates of us, our at negative With our guidance organic, year quarter of million behind on guidance. are one we have $XXX to would $X.X recent If now billion quarter. currency the $X.X increase over exchange billion, revenue to impact X%

to provinces, grow grow continue our by grow Medical of we X.X%, revenue subside expect to in stronger Neuromodulation stronger Surgical to challenges the much the we procurement comparisons products decline X%, volume-based X% also given and expect to drive easier quarter, now noting to in now growth than go now face X.X% to we the outlook markets. of growth. the to our international worth the By on first, given with chain through increased many slightly We to X.XX% diabetes expectation fiscal improve cardiovascular of market; a the lower half supply second fiscal to many new increasingly Neuroscience that organic and an Chinese growth X.XX%, given to our driven segment acute year as It’s organic basis, for X.XX%, each year. and X.XX% that

$X.XX non-GAAP diluted margins, range past on over we’ve $X.XX. near-term materials our quarter. the the bottom Inflation inflation still headwinds line, creating impacts of and expect in EPS currency raw and on are and freight become the to continue we On larger to seen

We to prioritize on as future also well offset as continue impacts our macro initiatives investments to partially execute to drive these R&D growth.

guidance Given that the to these we year, end in dynamics, suggest EPS model you of we the fact are our early would closer and still our fiscal range. lower

growth includes revenue second of expect of the driven recent X.X%, guidance unfavorable acceleration, the to EPS product strong by Our an and we range launches. foreign $X.XX cadence is sequential at In organic availability X% in which quarter, to our a impact currency, rates. of the improved $X.XX implying approximately

exchange would recent million X.X%, currency to down we headwind to X%, Assuming and have and we down $XXX X.XX up point, headwind $XXX at Medical about Surgical organic $X.XX, expect between a grow FX to million. to to Cardiovascular $X.XX an segment, all X.X% on X.XX quarter second to including hold, rates $X.XX point And Neuroscience Diabetes to By the be be X% X% expect of X%, of rates. an current to basis. to grow EPS

create facing challenges, and financials, our our about their we to While new are we’re we opportunities. are offset impact optimistic on ways markets as future our and to prepare focused to realize identifying markets

take our the life-saving moment to to around who addition, thank to unwavering to Medtronic, a In people commitment I want their recognize deliver Geoff. employees Back at are world. to and in treatment you,

Karen. you, Thank

leadership, are it’s getting expect not but we these aggressive orders lot growth. down, actions on coming our to accelerate also of We’ve continue. the better. underlying are our because sub-tier we needed back co-located employees and suppliers. ultimately that with Smith’s And improvements under are are closely Greg With of our I because will chain, and progress suppliers of last external taking made this a agenda changes Now, of just our supply working with environment, the quarter,

and the conducting system our years. We’re issues of progress end-to-end managing quality, transformation making of resiliency On we’ve our supply on been the can couple through improvements a the I’m acute of over past enhance quality confident that chain. large

our very progress. this innovative to is working We’re regulators, with in quality leading important closely advancing ways, and

pipeline progress strategies to two together also growth and We’re on come portfolio our as create meaningful making drivers. these

did to we ENT products businesses We’re dependable Intersect ENT adding into tucking business. new like growth higher by our

points years put over healthcare the can that creation the overcome start We’re they been meaningful change, become growth engine so the I’m some been that stakeholders. of strategy model mega company, of the that also path up positioning level near-term setting our for more board with these and confident drivers as portfolio durable us changes, with capitalize increasingly All company, ablation technology And in be that fully we’re to can the the easy, enhancements a to growth of pipeline, the on the culture and trends has the benefit cardiac on underlying broadening making all incentive our Overall, combined of transformation not we’ve become deliver in product couple sustained. I businesses the of issues believe the apparent, work will total but fundamental like that a past and Medtronic. we changes op higher doing which the value will our markets, to are solutions. to

especially in a people want in focused It’s macro I extend life So, are our to in to employees. millions teams our health challenging playing globe. alleviate around and thanking to but going roles restore of helping environment, have through Karen stayed for the close, easy join and pain, critical change, never

Q&A. let’s to Now, move

just so try as get and if limit possible, you ask only yourself to needed, follow-up. question We’re many to one analysts going that related we a to to as

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

is recorded. this be Lastly, being session advised Instructions] [Operator please that Q&A

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

Marcus first the Robbie question We’ll from at JPMorgan. take

one. ask X.XX% quarter everyone, little the quarter. and by thinking street than congrats lower morning, in growth. is on Good guide a better came on was Maybe questions my the X.X%, in maybe where The second both than organic I’ll expected, quarter sales upfront but

cadence what’s material if maybe could Thanks lot product with how also, narrowed pretty a And those segment, issues So, It guidance it year. from of or you’re then quarter. of looks that? What’s Maybe like driving organic segment big offset. you a sales you walk through talk of any you moderated to includes us impact the you’re lowered step-up the about each thinking dollar a driving seeing the basis? share lot. the had? growth to a diabetes some outlooks supply on the And

remain -- for question. then I’ll as over Robbie, on making out a thanks I think look, issues, and resins and the packaging. expected, lot like progress macro look, unpack. well, there played these and I managing supply Karen. largely headwinds through start Maybe the hand quarter remaining quarter. chain to to mean, a There’s tough three mean, it Getting quarters exit this you some out largely are out the at you’ll coming anniversarying. comps one, see first of improvement year, to of procedures see month-over-month and I the had coming quarter, the of pretty levels. And seeing good pre-COVID we the And

last we grew tough them we and starting year, LVADs, there. supply have to behind I and I put like earlier, acute think anniversarying of packaging. QX mentioned these issues, then in us. some resins vents we’re And certain XX% chain mentioned and I comps

products we in I’ll half of half. number, the growth get -- a have a nice got many to with And put and businesses number But specifics we’ll us. lot little for Karen into of of the get a longer. will the But a across behind us we’ve issues starting drivers acute second the QX We dealing second have let that we’re the that still semiconductors with then, be coming well. we’re even versus a of to year, that. that turn EV-ICD well I’ll that provide little pick -- momentum, market they more three as go of are Evolut a and number it up as existing full to as over the whole cadence and quarters. -- and there’s through the on release Maybe FX or there’s there the it’s like And a out of details launches the Karen other

Robbie. Yes. and morning, Geoff, Thanks, good

So, I would that expect do some add we improvement procedural QX in on fundamentals. also underlying modest

example, come expect For And come last back. to impacted we had back. China to cardio some we we contrast from procedures expect that procedures that were supply slightly quarter

we impact only fiscal grew some versus on of was year, the have also last QX, just and pressure the for the volume-based prior and We X% continued to a We potential national in in that important in comparisons provincial procurement continue volumes. But spine much tender the easier factor in tenders in Delta incremental variant including year. from and given reminder, VBP do an potential shortages labor SI. China, procedure

year. the And continue that We easing product move had note were back uncertainties, just mentioned year. it’s think last that our in prudent inflation also being roughly easier in headwind QX particularly And in in would we and and challenges. where portfolios a as have then exciting still vent in did growth, quarter, our to X.X% chain in the the fiscal and and the back growth we’re half So, continue. particularly just QX the with offset, year, greater to continued that we on diabetes strength with we international year freight. our guidance. in And also see then, We’ve lot the this early we get acute expect QX. into yes, in over comparisons overall supply they in from of then, the we improvement half. our I We of macro And and diabetes launches with the going got of terms Geoff have what’s

be wanted that prudent. I hope again, so, And helps. we just to

Thanks, question, Robbie. Take next the Brad.

next go at ISI. take We’ll question please ahead. from Vijay Evercore Vijay, the Kumar

presentation adcom, a this a RDN Is conference? think on that upcoming could can talk the chance any be maybe us, we and that that looks what one said we to and or an expect going from FDA questions, data just be it’s Will when two headline you to a the Geoff, the at on can product-related any at I RDN, formal the RDN? release? I sense months. in Is on expect hold had press and robot. there one can you data?

Sure. the out. by saying over answer on Sean it Well, for here the one. going think the we’re start thanks Well, I’ll last seen I for as question. over -- hand to feedback. But of more it is in of whatever, KOL conferences, and good a his the a couple I’m session data number you months and more to coming the you’ve -- to hear and an saw with this I did was interview or space,

physician sites positive. -- have of excitement our data more continues emerging, as they our data and trial and super long time, lot working these to with more patients -- there build been a confidence a and quite is and the more and So, more for sites, be

to kind studies, and we’re them So, prefer it’s patient has to preference out Sean’s optimistic. their management. FDA done this patients before, clear this that medical own And of the pointed

we So, I market have to those the as or questions, your here of know the well. will the that specifics answer have to hit But for they’re up on this you. adcom I’ll data and on an to looking timing the open Sean what

whatever we enrollment have and this we most will be -- to very the shortly, ramping the likely which fall, comps finished very, a then in target to, So, six-month up we was get Vijay, which endpoint and AHA.

we’d the the So, that would place we’ll that submit an AHA. see results. it And gets be accepted, if

that And same a and So, line been Now, clinical that reviewed module we’ve in top make right? outstanding. of we’d It’s part those submitted, just other the also the available that last publish reminder, of just that’s is has is every results the data and what -- time. closed. period

as So, close we’re been. as we’ve ever

book Got This I I’m remarks, And call. healthy the like me the robot. about you. in momentum bullish. with chain commentary thought the then, Geoff, a order And have one pretty IDE the key historic. surgical challenges on saw U.S. addressed, wrong, correct was feels if been supply installations, versus I last change maybe prepared a tone

months? what’s can perhaps the three you last changed So in comment on

of with lot surgical I pleased They And of hearing was approach is indications our they with part asking be that And -- building I I we Sure. like sales was there’s some on continue resolve think, ahead and this They market. that design. instrument instruments the chime to made, out capacity reps, had chain installs Bob our the number big with And we really manufacturing that in they are of some expanded them, of had IDE number I for we surgeon like we But sales a some number quarter to this specific what going strong. what chance a journey taking won’t And well, be with when I’ll reps. us of as have innovations launch, you quite U.S. from us. have it, concerns but And and to bit issues we’re and to and quarter progress we the the yet, want importantly, the in get in we to as And had, building of on realize the of actually to good a the yes, feedback. the our word well. like a supply surgeons? And I more as a Europe. have meet heard. cases, your continues of had a feedback We we’re out. the was be all to

commentary, I I appropriately So, are to expectations some built the close And out manufacturing like U.S. IDE. set. the said real capacity. this We think we in are

you Bob, to want what add don’t And to so do know, that? I

No, well. and and the our we’ve seen quarter. continue train we’re characterize supply And and accelerated Touch to to surgical progress We a quarter thanks surgeons thanks, there. we previous progress multiple think our question. there. as well. the ecosystem with the And about solid performance, I hardening And really as think with closed installations and third, And Surgery we right spoken robotic chain But, on calls, like Geoff. you’re our as be globe across progress lot so as then specialties, ecosystem. Vijay, continued on the really And to as were mentioned, solid Hugo really across Yes. I’ve as our focused we Geoff for it making do progress good an with we in operations

So, of we we’re start on IDE, believe and near our track. continue we so the

thanks, And Vijay. thanks, So Geoff.

Bob mentioned all it. piece the space, another the have around spine but in the something robot, not Touch learned That’s big Surgery. with That’s is this to we it the enabling important here how just technologies ecosystem.

surgeons and secure Touch sharing We’re are kind storage with analytical customers the and starting and are of to now Hugo -- with the to for and benefits of impressed training starting capabilities whatnot. video review the use Surgery case and

as robot soft along is our nicely, coming So, for ecosystem the tissue Bob mentioned.

definitely end. there’s on So, some our excitement

Vijay. Thanks,

please, Next Brad. question,

Steed question Bank from at Research. next Global Travis comes of The America

your So And it that. Geoff, I’ll if earlier. other weighted variables And start see about said with started of for this we was solving highlighting than like didn’t process. been you on at you’re average portfolio follow-up the then, the a highlighting portfolio Karen, stuff. you more market know in management It’s stage FYXX. I months quick X growth since something seems could that something rate

think the better I with quarter momentum. exiting said you

on and some a and like of little you bit concern if been could curious with August comment investors there’s about So, the stuff trends, some vacations that.

color on love August. get any to So, would

I’ll things both, to Yes, look, And and question, looking we’re for look, continuing Medtronic and for addition we’ve definitely the Okay. allocation, portfolio make look through we’re about the at out, pointed and you intently, Yes. selling actively right stakeholders. mentioned. we’re market start talking growth now, Thanks is portfolio sure at, buying as whether the this more and side subtraction to you been and growth the capital looking as management deeply and be committed rate, for really And weighted or doing by portfolio are more months the all to shareholders saying, to it when that our we whole that several at improve really durable. Travis. doing average the

just making with progress time. Solutions play I but we here side an look things the at subtraction DaVita, also a remind we’re I’ll continuous last did Renal of will over on we business. Care process. made announce -- you, look, set the lot the lot on be making with a -- process want step this approach So -- a And we and we’re quarter, initial out to expectation each will JV to that of strategically

continues. So unchanged. process The the are goals goal this durable growth. And like is the

question. So, over for increasing Karen the leave it is to it’s at other it turn a growth lot I’ll and easier to well. grow and rate our And rated that as market

quarter businesses. did backlogs. of in reduction Yes. We do Thanks, each the the And issues better saw Travis. as in quarter. our with some at And August, month through still our We saw exit momentum. managing look continued early. improvement of -- supply still some We we’re have it’s we a we

are operating the the not when issues in So, by a largely cloudy. weeks in units three when But, year. guidance took that supply we’re our are the last that we at impacted quarter second -- we the trending into numbers account first and through of little August, with of look line

and continued improvement. seeing momentum So

Thanks, question, Travis. Take Brad. next the please,

The next Stanley. Morgan Furlong question comes at from Cecilia

I pressures? It timing ask the OUS, also expecting the diabetes then, in U.S. both OUS of about I like there. year. But for to your for And you’re Simplera the business, wanted now, updated from guidance what the up. follow submission came then sounded but stronger. your wanted in strategy competitive to just Obviously, shifted

you. about submission. Thank could Just if how on thinking comment cadence of you’re the you

positive mean, particular. mentioned really And the I question, U.S., growth Karen than Sensor really mentioned seeing clinical we’re the thanks system. we’re Guardian plus with patients patient importantly on X and seeing for growth, mean, in as Well, I even look, feedback diabetes, Europe -- in in results her it’s Yes. experience the Sure. it outside Cecilia. more quarterly the comments, and is in the XXXG the strong the more

business had impact Dallara, not introduce us that, And we ago there. is, then, is in already a we’ve I’ll just our to We and her. became I’ll from you now pump patch, well the earnings other first XX the it’s right think get the into first Que? it’s working great Medtronic. And that, high They powering insulin got weeks and we’ve see what everybody entry. integrated we that, market is to durable in a been her of a with and high-growth and these on the delivery because bodes are I maybe Que’s through, of when a years a the call. her couple Que franchise down with doubled Sean a I we diabetes, and believe that competing welcome this been we’ve product and a And the the what Sean thing why -- look, encouraging. to it sustainable that CEO think, in hopefully results and barriers And team Que, Que we big on be recently U.S. Europe. And say to -- delight very got did questions. -- algorithms, We where with of the a advantage but who’s market-leading really job And we’ll had focusing from and device. with position transition On So specific in competitive two had very great there it stabilizing road with focus system a pen we I we’re the up Europe questions And for it business about picking when has and we -- that lot map. -- really think have our sensors, down got going road is with do. this helping on top a investment. having we us, now, we’re to for insulin transition. have and introduce a don’t delivery at we the a that XX, leadership

FDA the that, and the and gone look, the on to Guardian I’m Thanks, with And as we our I as your also well to road around of short-term making focus sensor really X the would in is approval restoring what this warning Simplera, letter U.S. progress remediating innovation transition two as the and the progress we’re around XXXG well, see as say questions Sean around growth business has really system. the with Geoff. Yes, address specific say with making encouraged would well map. I

We continue encouraged progress. be making to that, good by

And and so, remediate our hope the term. in we is near secure approval that that can

site XXXG technology. XX which FDA extended-wear Now not seen if probably in In with It’s for -- do up synchronize, approved and allows are not only the set, changes U.S., is as for be our their as years the and a the close And this area CGM we’ve the leading infusion X we’re better InPen changes, system patients. still. infusion able game set last sensor like, innovation well we the see to where to our has for that, but growth standing to biggest to by comfort changer launching the in in our this customers. patients recovery you days we very been to

in are we the happening. we obviously that’s focused do It’s prioritizing about for submitted in half of Simplera, We’ve have still is But the X warning we July that standing product. We products size Mark the approved but on the mean, the Guardian thinner. ready It’s we’re I the we’re -- XXXG regards XXXG, submission efforts in excited to a to very anticipate with It So, said not sensor. as well remain U.S. to respect And this CE would. approval. go the as U.S. we letter around as we with

Okay. Thank you, Que.

Cecilia. Thanks,

Next question, please, Brad.

from comes question Fargo next Securities. at Larry Wells The Biegelsen

just for from First, the sales? And QX, the hedging are impact talk in some was million What constraints, I ‘XX. on supply about lastly, Karen, assuming a was FX impact. expectations lost your gain QX? catch-up guidance How you now QX? maybe you in And about think the are it said $XXX in much for

think rolls And in that? fiscal I about how million to should much. think off so million. Thanks that it $XXX $XXX how we XXXX, was

were I’ll on the on the looking look, stuff. and mentioned, for most Like those and beyond issues, -- that Larry. these us supply I’m acute for QX mirror rearview in start quarters. we’re the expectations on on Well, supply QX, definitely chain glad thanks the question, for I chain QX I’ll the

woods yet, our orders coming the of out totally but down. -- the of back are out not We’re

preserving to result We’re XXX improvement A products and in of but us go more them in areas tight. aware through, this and if while, into contracts over And prioritize resins getting them life like and that the or well will, Medtronic, given semiconductors getting finisher of communication with planning sure supplier this. and in these co-locating suppliers suppliers board that. a still semiconductor of are our help particular. going with seeing And companies macro work really raw make mean, packaging directly the of suppliers medical across one working prioritization, is commodity a we’ve the earlier us and to done raw just that’s top across a -- versus you us lot distributor, these that particular employees those to on to top some things that’s life also, kind and order, our of that cases, the Company. of in is taking the a addition them, tight, going be for our the co-located our or And with material importantly, saving. is the areas, the the in the some directly The middleman, I is making back locking I out of better. to between especially is weren’t material suppliers mentioned market difference. we’re that with little employees products

order definitely all this So to continue and of we’ll go down see time. back is helping, over this

we’re to behind us. acute think piece I said, most I As starting put the of this

a for there has XXX%, is hard catching lost worker sales, and heard out seen And like which In into of still now, you’ve up COVID, our XXX% bolus of sales with coming guidance. it’s at particular, terms through of put healthcare as lost of on a is there to run gotten right better, kind procedures governor bit in don’t of the customers a we but levels. kind shortage, on pre-COVID of little

because So a into haven’t that, on baked the guidance. of sales we really catch-up

quantification specific you want Karen. made. on, anything comments that to else some and add And qualitative to over Karen, to those had You the questions I’ll I turn

Thank you.

the we get built from little you We happened supply get not again, improving, did well quarter, expect better, it what necessarily covered expect We the think the here. in to it we but it and catch-up bolus have supply guide. say worse do chain. on a into I got to chain better that’s that first it but a before

have seen, In currency-based reported you’ve had offset. to some well, all just impact benefit the cost foreign quarter. we’ve expense And have peers. our for the hedging foreign of sales do currency-based and as the strengthening interest dollar like continue FX, revenue, a of impact as terms produce it And many has program, we FX We the in bottom provided which to our currency did now multiyear overhead. as significant gains, and those know, smaller our in you we have and Larry, of also of resulted line that

now. volatile. in foreign would for FX, mind, continually rates ahead are that exchange say, We’ve look we got QX only it’s keep I As

from recent stay move the would headwind to the But, going hope fiscal fiscal be we rates, expect year, fiscal that headwind if on I the next they’re similar helps. know this we to to year based if look we rates year, next same. here. So, again, at

Yes. Larry. Thanks,

please, Brad. question, Next

question Yes. The Citi. comes next at Joanne Wuensch from

process or remainder And there of a the just is throughout quarter-over-quarter margins it the year, take your on that into improving Hugo, and what does bring the the quickly. And one margins improve. parameter second is revenue operating Thanks. to also if gross States? Briefly, I’ll my throw timing? a United thought

margins Joanne. do Thanks, improves. the year we expect as revenue sequentially On to Yes. improve through margins,

to one answer that And Geoff, is then, for... yes. the So,

Obviously, United -- U.S. our that which physicians specifics Bob, Yes, -- it up we IDE, set take does the in on is more sure. our trained, On want give And past to our that? some mentioned Hugo, which on. to to Bob’s customers our start been got to here. States? get getting and sites But for working we’ve do you trial ready what

be start begins we’re we U.S. the event, milestone It that on Geoff. start that process. right, mentioned, Joanne, that it. certainly IDE -- our guide U.S. will exactly update but we’ll investors will the key as And nearing You’re the with

Okay. Thanks, Joanne.

Next question, please.

James. from at Raymond The Bedford next question comes Jayson

in if remediate It Just a get you the questions. near Do clarity approval the diabetes warning letter couple for while outstanding? can mentioned XXXG you secure to approval XXXG for and hope was you letter still on have the term. that is of warning

thanks think the -- question. I the for

as love warning the remediate doing priority think we’d an to. is variance think I work I that. I the option. focus said is to earlier, -- letter, entirely to and Obviously, But our now on with is primary path FDA the

that but patient remediation first and plans actions. in launch robust. those the we to focused making our sure our We’re we’re the really product, make very foremost are safety, eager mind corrective It’s on that

are those sensor the getting So, parallel Those to continue -- FDA our things approved. engaged X In and on focus. primary with both we the that’s system that, XXXG to Guardian predictive make both those around pleased the progress. but will making It’s on hard things that progress be very completely us of I’m with when obviously really those. we’re happen, for to

I when missed And if this to Okay. apologize will But I earlier. you FDA? submit Simplera the

as do feel progress well will the progress XXXG. we’ve We as sufficient as soon confident letter on on we warning made that the as that remediation

our approval for you on remediation sure said So, the we that just July, as we immediate to make XXXG. want Mark know, we goals short-term of submitted and would. in letter And focus remains those as warning we for CE

Thanks, Jayson.

question, please, Next Brad.

question next The Lichtman of from comes Co. Steve Oppenheimer &

you’ve are benefits and far talked do about operations changes along making from team his you longer start and Smith initiatives? more we little them could a those Greg calls, in prior thinking you How durable when seeing think term, would margin Geoff, say and in

great short relatively a April made quite in one, of bit in started Steve. a Thanks of Greg period XXXX. a That’s -- of for They’re progress question. that they’ve time.

a those chain centralized, will, if chain big been executive And have and is of we’ll trying model to time. empowered, list to been drive the of things, -- one and/or it’s those. limited where small supply you standards. our into the decentralized with definitely leverage businesses This the opportunities we’ve we’ve year. scale in same So, them and is team, little function. drive more new And one as time, we’re Certain play businesses operations supply certain our global over the that at then and in a refer And the operating the things play are working a units. or where

we’ve change made,, change, probably that even biggest the operating to So, is the made change, more units. which organizational we’ve that than going organizational XX

significant. it’s And so,

planning, we’re been operations at we’ve making And we’ve and what There’s last from few, cetera. big so invest chain, capabilities like we function: planning, and capabilities, planning if addition, been and are to that is at et industry, cases, hiring and in focus various And things in of and productivity global the automation, planning, you majority supply in outside team think on seen within things we’ve new in quality; we’ve goods many supply been from to resiliency, has systems the -- technology, et on started of like demand functions, getting various things different will, looking cetera. new people time, investments the one be have Xx resiliency impact hired factory the quality. quite the number a more three sub historically of because quality you’re the company, they I year, or and a sold that and over that Greg’s in outside In Medtronic. cost or best-in-class would this

And over so, that will play out time.

yet. that seen haven’t We

thing lot in other got there. The -- you’ve on a going

you to over we’re inflation that time got don’t it. that to... and we it’s of impact And goods been the quantified you do in of here sold hard cost haven’t are of our decipher seeing, see of if will, want But said, of I But because sold. kind the any like term masking of like the will exact overshadowing, kind or and inflationary we things productivity on that of kind we that confident. kind You’ve I timing a cost of know, goods are any little Karen, so. short

for Yes. Geoff, question. and thanks Thanks, the

ops And got, offset the We in term goal or progress impacts front. driving cost either are inflation. a to lot on our of going pricing is making we’ve that enough offset the a be focus in to shorter

would predictably next And to for hopefully guidance this to revenue work help of get line, the goal the initial but as better but not on line, products sold than more to over Geoff year, just available mentioned, is quality ready we too, operations stead. just more the have then in that’s cost time, issues I that offset. to not going can give offset. also fiscal We’re goods in on and say,

help will it think I both. on So,

Okay. Thanks, Steve.

Brad. Next question, please,

from comes Rich question Truist next Newitter at Securities. The

changes in there you’re I and was then little hoping the taking a of direct selling meanwhile, spine, and items, capital of may orthopedics on did these what that about out seeing models, and environment spine changing the about competitors talk navigation place the broadly. in way you’re but especially robotics Just capital purchases. decline. talk called see your more types could we capital robotic robotics? on think your you the And guys one Any a pickup pipeline are saw bit robotics funnel more I rentals actually sequential competitor business you

spine on your get great would be in So, to capital environment robotics. the on going it specifically color what’s and Thanks.

that Brett to the going Rich. Mr. question, Thanks Neuroscience, I’m Wall, Sure. field have for question.

particularly within capital, CST end we times, overall, system extended move the ecosystem quarter. business. what the through purchasing Yes, saw and was our Rich. to as have Sure, very looking And we a our extensive we capital of

selling as have relates that technology models, to specifically, approaches it and use. the we of Now different the a variety we

we’re positioned. And so, well

cash. seem a preserving work markets to the and hospitals mode in are However, of

if to bit of look model, these referenced forth other particular QX, where opportunities utilize a to but during in that. competitor you -- during capital, our calendar and very we we probably model. time placement Mazor times, We and uptick think well. different in time our them way financing outstrip saw calculations, implantables and the in of see or the of models particular our put actual StealthStations little there, O-arms And that with robots. at We that products more continue sales a disposable see of The this you have this works we’ll we we per an a more significant that uptick actually didn’t with as

earnings and that double there base to continue our we reported last amount so, procedural And the almost do call. they in is that nearing their

pretty there. underlying spine X% saw business then And remains there. So, we core are well increase business in a We attractive. the spine our positioned very

So we’re how recovering. with that’s pleased

Yes.

with and that how about bear the built approach. ecosystem recent over spine the excited our business come the in we’ve the the that’s implant market the that launches really last side, shifting but to We’re positioning product of decade to and is ecosystem how

here. we good move So, spine about we’re forward feeling as

Rich. Thanks, Yes.

question, more for got think time I one Brad. we’ve

Nicolaus comes question Stifel, final Company. Our & at Rick from Wise

I think, exciting, your Geoff, on was opportunities. you’d closing, in just hoping, expand two pipeline of I

programs much year, trial, You of major Any you highlighted as be approval opportunity. Aurora, the Maybe that. latest and submission next on opportunity like just leadless fiscal hoping pulsed so in of and talk you’d timelines subcu this internal about opportunity fair thinking U.S. timing. just U.S. next And device. share year would Thanks there. was the a great. next just year, last, time on could you’re I your field approval or update you didn’t the you talk about this and and follow-up, talk in your us saying was that when the hoping ablation. seems terms I Medtronic about program some calendar the And much.

Yes, for give to over Rick. the like and sure. can about Yes. But what I bigger we would hand from to now I been two to topics are this define a talk And -- mean, Thanks I’m Aurora, think to you as some we we segment. we take question, nichey Sean somewhat in to those shift it up with and the what mentioned this has going segment -- like here commentary, to details. on it

you’re here impact think Aurora, that XXXX. get that just don’t trade-offs here. don’t about have by the talking a patients with physicians much to We traditional make -- with traditional you’re you we approach billion and less or We’re the from we had our think invasive $X ICD making

that. Affera. Affera, business, And you internal We to that you it then program over this that between our PFA Sean our I’ll and think ablation whole Affera on And business. really out on the But cardiac and Acutus, plus mentioned so, AFib it’s turn rounds solutions on business. Sean again, will PFA, give details

been for round We’re say. market would -- where business Affera anticipating -- specific to because this -- really out a a the Rick’s on specifics? on an real this a your on high know, don’t of that Company. acquisition approval FTC growth the make move growth some forward want is on little dive we’ve And from and aggressively that here. it I driver But would into I we’ll question, And that nichey, you Sean, the bit do

sure. Yes,

sort we That’s devices, device of of I smaller of all expand arrhythmia life, annually. is, traditional in So both reason million limitations Rick, is that arrhythmia. years, and shock million, strong get went really pace And targeting those $XXX calendar to being Geoff current And today’s IC, picking commentary, we that market rather like within the it trial, of with patients calendar the to the kind November, million, to a as treated leads out we approval with completed ability monoliner million put XX up U.S. market we’re a because we have of ablation, billion benefits weren’t And to disease expands $XXX can than first is of mentioned be could the year, subcutaneous in last $XXX we next the to the half timing, as When pacing. the for know, saying where the regard for niche year of the started the been ICD segment. Pulsed out its and $X growth. point to can what we finer you acuity of leaves $XXX think that around that, having it’s we’re this follow-up that the next that’s saw on field that, it’s new period. to

of that spring That’s be our filing put at for presented. that time. the probably in would time. most be So of us availability of the of would course, the to data And, point in one likely technology

And out anatomically right? have or Affera the pulsed own and the regulatory other we’re the be pulmonary expands us the our point-by-point that with would based. sleeve, So, closure bag. mentioned, you And of Geoff both then, really isolation waiting and veins we It with internal that do that RF catheter. blocks ablation PFAs conduction As ablation. for more Affera, really linear come for with of point-by-point a within lines what fuller gives it’s of catheters for field,

importantly, nice Abbot, So, a we restrained But dominate systems. and more PFA. market monopoly for control that the complementary being really because between don’t There’s full from control we’ve been two the technologies able participate in field. sort particularly mapping navigation and Webster to of players, Biosense really strong

our now market. was by allows stuff and that acquisition in to navigation time of rolls catheters that Affera the continues and participate this to opportunity grow $XX be, expands mapping billion, into we’ll Should market. that billion today have to close an able all really robustly all with to fully be So, us out, it $X the

two So, growth really them, of important excited drivers, both on we’re about making meaningful we’re progress and them.

Yes.

to the that this, short others, sequential two mentioned, improvement there. our our Rick, things in a we’ll with QX, see right? the like pretty on one and in So, of a host see more sequential you -- areas But along from nice is uptick continues. QX term, we’re these growth Micra confident yes just going from then reason

As There’s year, obviously, We in the robotics but PFA just mitral RDN, tricuspid on cardiology. cardiac area. forgot economic fiscal the then to -- a I But down the out on the will -- and Micra, Hugo space. then bit a the in little on beyond coming this see -- out that the what’s hit of there, year, you on cardiology lot EV-ICD mentioned, this hit mention the tissue we that’s another impact cardiac just and data, side. call be there’s in side. -- and Sean and road, and soft there but

surgical You that that ecosystem got than robot. more that’s the surrounding soft with that the way we’re tissue whole robot. And

of little sensing on talk Europe do the the and time mirror. bit And a issues of not semiconductor all gave on Simplera And product rearview we’re questions DBS Percept leads get spine lot shortages. we’re that the the this, didn’t the and EU, mentioned, changes shifting system neuroscience. we’ve in You’ve a we the the this doing sure. forward mentioned the on changes here, But it going in sending and seeing quarters in We trial I and you on what gone surgical But the it’s quarters. And are loop ecosystem. that And the diabetes into looking about we more for go the dynamics in and going closed those talked U.S. apparent will in and there’s now, made and with us would got the the then any Like we heard and The in all submission become operational here, will we’re ECAPs a more made when them pain. the through, the stronger. and that XXXG there. just she we’re it in Que benefits we with And it. completely -- apparent become ahead excited to lot that about about with you it the

So is with I think the Q&A, the for time all for the you just, that, want again, I engagement. questions, to all have. that we thank And

Medtronic. before our we which on and earnings here As we Thanksgiving, our in updating earnings interest the about look you your on -- we to before continued call, we Thanksgiving. in forward next here so on U.S. your our continued just And appreciate broadcast, holding support just QX progress, XX, talked November always, anticipate

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