Medtronic (MDT) 25 May 232023 Q4 Earnings call transcript

Good morning, I'm Ryan Weispfenning, Vice President and Head of Medtronic Investor Relations. Welcome to Minnesota, land of 10,000 lakes. I appreciate that you're joining us today for Medtronic's Fiscal Year 2023 Fourth Quarter Earnings Video Webcast.

Before we go inside to hear our prepared remarks, I'll share a few details about today's webcast.

Joining me are Geoff Martha, Medtronic Chairman and Chief Executive Officer; and Karen Parkhill, Medtronic Chief Financial Officer; Jeff and Karen will provide comments on the results of our fourth quarter and fiscal year 2023, which ended on April 28, 2023 and our outlook for fiscal year '24.

the the join from questions us, sell-side that remarks, four of from prepared analysts will segments and cover our executive each VPs our the After company. we'll take an Today's program hour. should about last this statements divisional financial Earlier containing revenue and we press and issued release morning, our summaries. geographic a

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

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

Additional to information reports differ and could any update we with actual periodic is that filings results and we make forward-looking statement. concerning to factors that other the our undertake contained not in SEC cause do

say of on excludes revenues the 'XX, and basis, currency; four, organic basis on all the a on and our quarter are as-reported in Care revenue revenue of impact we which from comparisons three, QX otherwise, of are the year-over-year foreign made one, comparisons intersect revenue and Renal ENT; from to acquisition fourth an intellectual quarter compared our two, divestiture four fiscal made basis. agreement, things: our business; sequential changes to year from of references one-time Solutions property and contribution a are prior an third an current Unless

losses that be fiscal during guidance our to to stated. adjustments compared charges at share press non-GAAP reported revenue otherwise investorrelations.medtronic.com. found refer or measures any all in as our calendar gains XXXX, share first the be the to XXXX finally, financial would to on calendar non-GAAP gains quarter of include not first earnings references website of in all our quarter or does year. And EPS release Reconciliations or can unless the of earnings And

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top and you of strong fiscal in coming with bottom a quarter ahead thank finish us line today. expectations. for year and our everyone, our to fourth results Hello, joining We had

growth we're in double-digit our generation selling Our was accelerating where organic and and growth Diabetes revenue neuroscience in Western cardiovascular, mid-single digit business Europe, in our latest Medical organic products. of Surgical broad-based with growth

Now costs the And invest heavily revenue pressures recovery, reduced improvements in procedure inflation macroeconomic product to continuing we in revenue and factors introductions. supply continued innovative and driven was despite in confident durable execution volume growth by drive And company, growth from delivered dissipate earnings we year recent our foreign across quarter. this we our as margin the like also to adjusted growth. businesses. future and drive delivering R&D our across ahead while We're growth exchange, headwinds

let's our turn results. the to QX of details So

leadership with Cardiac have growth businesses, Our growth CRM half And made robust established pacemakers in Rhythm, see we foundation quarter micro-leadless one up These strong franchise. to in positions. a the Surgical from durable grew ENT. plus and they X% our businesses the combined, as double-digit our quarter continue of largest organic. revenue Spine X% and share in started our grew and

Micra AV algorithm we ICD to power, pacemakers, and preparing extend XX% released we by battery And HRS, year. approval X the launch years, our leadless XX XX this projected life for Extravascular enhanced in data month, weekend we're a our our X, FDA this VR on Earlier high and next-generation and later at EVICD respectively. received which to last Aurora

share we X% provincial we China impacts X% exclude Innovations, to recover given on Surgical stapling or and the you regained quarter. grew when improvements. supply procedures continue VBP In in Surgical the

Sonicision XP and X. of continued products, we energy the advanced our in particular, from and rollout improving cordless benefited launched also supply, Our growing high-teens, our LigaSure

our leading Look, we're ecosystem Technologies growing of including attracted AI U.S. our and market are implants. and specific best-in-class surgical X%, our well, deliver to platform planning X% around innovative technology associated Core as to spine the implants to our success patient our world continue enabled growth Now differentiated in enabling to robotic pull-through Cranial able, From increasingly technologies. solutions. growth navigation and Spine. imaging, the and spinal our from Spinal Spine of surgeons solid seeing

So our a largest solid it businesses. quarter was for

businesses as and QX We we're digits mix to forward. feeding revenue that of going of combined, med with about a become businesses also larger grew durable them high-single they grow, markets. revenue in high these had expect tech And a XX% investments they organically, growth we that our and strong compete All our in our businesses secular and growth up these the need. part made our drive

Neurovascular, with XX%. and across now meaningful a driving ischemic including the at strength globally business We difference which saw of billion, is starting hemorrhagic for low over treatment neurovascular growth several grew in strong combined the diversion. large both broad death we with the number with stroke, annualizing stroke $X.X a come. double-digit and aspiration with of two in for is opportunity cause in flow growth So margins Stroke categories, years therapy and to see make to we penetration,

Evolut In improvements the the won Structural part share U.S. the driven holidays. in Heart, latter post-spring valve in Structural of in with launch our FX, we by predictable strength space, Heart grew double-digits durability which TAVR mid-quarter especially the on combines business We X% organic. TAVR of Evolut grew In low enhanced quarter and deployment. We're seeing FX. of the our industry Japan, leading

studying cardiac made efficacy the late we significant the grew our PULSE advances impressive results The in in were and presented X% Next, of the trial during published strong and catheter breaker In and persistent at single-shot March, both patients. our paroxysmal PulseSelect had circulation. in pivotal landmark safety quarter. journal solutions, pipeline our results in ablation ACC and AF a trial, as PFA

expect catheter PMA companies first PFA market. the be our and a the filed We U.S. of to one with we with FDA, in the

and and well as we our began March catheter. RF catheter, same our PFA We our CE mapping, Sphere-X ablation also can Sphere-X received as density for release. Mark and from system, limited the ablation mapping market high in perform both all Affera including

and technology, the catheter, to breadth of our full leading our PFA Pulse Sphere-X to our we're system with ablation Arctic Transseptal much system have to become single ecosystem meaningful in Access So technologies poised assembling space. $X Affera catheter catheter from Cryosolution NAV we're focal a leading our the a more Select PFA AcQCross EP player of and Front MAP growing and we billion shot fast

Hugo have Hugo Expand trial. in execute momentum URO we Robotics, progress the system our to rollout our as robotics Surgical markets. to of And we international differentiated we're In pivotal bringing making positive U.S. continue the with

Enterprise first AI powered is of the for analytics a the Surgery surgical solution, which our saw video, operating also room. We meaningful in acceleration sales Touch platform

With robotic the over innovative Hugo position solutions to and the years. given and coming meaningful penetration global of to touch surgeons a around deliver as leader surgery, strong expect the growth our low surgery And surgical the in we we're bringing space, world.

in begin And our it to excited was growth consumers with us, XXXG drove the quarter we Guardian X as U.S. system in was very products them diabetes, FDA These letter for approval sensor. a and our week. of Europe warning shipping and MiniMed next to we're big received lifted Western double-digit

to come growth the to morning, wearable advanced to going ramp and our living professionals And diabetes delivery up Diabetes just Medtronic. a switch with people EOPatch, of U.S. EOFlow, over we as Health customers our to consumers expect for particularly announced delivering, we're existing detection innovation care the as are fully disposable device. technology. renewal our and intent acquire meal We this time insulin the and manufacture the appreciate tubeless, really

fast Korea Europe, the in EOPatch with and speed is patch has growing our manufacturability. a accelerate will South that in already the available market product The demonstrated And space this pump UAE. to

detection is MiniMed XXXG and In in work seek system addition, upon to authorization. integrate technology which algorithm, into quickly the the close, clinically marketing proven we'll our meal EOPatch

well at investor automated We for and important invest move CGM next diabetes, offense positioned development. Look, look we you and the patch continue and month blinked under and programs because durable to not on opportunities our our with trend. heavily at of Having is that customer we're briefing sensors, we forward of pens, updating to ecosystem this believe will shifting to we growth first ecosystem delivery, we pumps, really market comes in all service insulin smart when ADA. assembling diabetes, pumps, algorithms are multiple analyst as have to these from it to

Now turning quarter. to our synergistic businesses. the There were several performances strong in

growth the as availability X% on cardiac with had high-single grew adoption mid-XXs Diagnostics share LINQ surgery and had and product a insertable in Cardiac Our Cardiac monitor. quarter, digit aortic II great continued of differentiated AI-enabled the AAA cannula perfusion sales. improved. strength business growing a our in

new was And AccuRhythm our awarded earlier in this call monitoring. AI best technology we LINQ Award the technology, for which II AI XXXX MedTech solution Breakthrough month, the

AI GI continued strong and our procedure Our Genius, during GI help grew one products. detect of XX% physicians business uses another colonoscopies AI-enabled polyps. of volume recovery to on adoption GI Genius

strategic quarter could physicians can run potentially the for excited We with models collaboration Pharmaceuticals and solutions about and also as in that a NVIDIA to allow offer on platform. developers We're the AI apps to GI and third-party eventually validate train Genius the game-changing announced this Cosmo their GI patients.

continue of go on note that the Medtronic. Karen, to Now before to focus to I transformation we want I

show we're As beginning company the with growth. management our we capital portfolio up reduce for goal the financial and durable improve enhance and delivering of progress all efficiency our results. positioning complexity, drive in is allocation, the capabilities, to And making

us our were we impacts significant that these mitigate and investments planning and execute began teams. global cost personal foreign allowing those They the inflationary across in month, Well, our These reductions. I profitability. on us and necessary of our workforce. for never quarter to our which help increase impact last you exchange in with to shared reductions included easy plans the actions mindful decisions, I are We am last innovation. were are to also

on supply Look, we're which the monitoring, work our our our divestiture business to Renal results Solutions operations, all continue global path We yielding patient during Care we advance businesses. quality interventions for and active progress and processes. management to chain of on separation enhancing portfolio and and the the we quarter continue is closed respiratory making systems, our

setting be we're durable progress making to to and growth work still there's returns. Now company strong but deliver the up done,

With guidance Karen? financial over to discuss to performance that, I'll turn our give Karen fiscal for it and 'XX.

Geoff. Thanks,

exceeded end consensus. increased and EPS X% non-GAAP expectations, $X.XX fourth X.X%, was our quarter organic guidance and our ahead of revenue upper of Our at range the of grew

strong, revenue international remain impact returned Looking following geography, markets COVID to in and X%, at Europe our Western X%. quarter, developed markets last grew growing the by Japan growth non-U.S. our

of in volume-based our procurement which growth XX% procedures improved. the impact markets, XX%. growth as X% growing our China from to and recovered delivered to of up lockdowns double-digit growth from Emerging prior revenue, make returned quarter, also the

Europe, and growth We XXs Middle Asia, other growth markets, East low had double-digit XXs low mid-teens Eastern in in low strong including many the Africa, growth in Southeast growth growth in and America. Latin in

to margins. Turning

margin inflation adjusted sequentially, relatively declined percentage Our stable due but point impact year-over-year from gross was to X a and currency.

by the inventory first in margin our impact sold. gross incurred As pressures P&L I've delayed then manufacturing noted our onto as inflationary balance and from is into to three quarters, two sheet quarters, our variances, because prior our move to go is

While gross quarters. margins over they variances we remain the And adjusted sequential magnitude we our basis XXX these result, to pressure pressure, in begun continue operating to the ease a improvement margin. coming do that slightly, our has as Despite expect drove of a point high. on

rate was basis, as in the quarter. incremental expense of agreement along the tax reduced points our basis year-over-year, profits owed Ryan operating including the currency improved upfront, operating profit that with constant a Below jurisdictional adjusted IP that on expectations, reduction, XX was from margin our mentioned on taxes line, mix our compensation. drove nominal above our incentive XX.X%, we And

Our balance sheet remains strong.

investment our free shareholders. to opportunities, future toward XX% returning with them. efficiencies along opportunities, invest up to to across continue driving We We're free capital identifying return in direct and organic of capital in of our a high growth flow minimum to cash R&D business

growing continue term. same expect also to accelerate market supplement long evaluate disciplined our to should invested a returns our be organic the time, us maintaining growth We focus tuck-in At the over to our on with long-term capital on opportunities investments our to you average rate. acquisitions, with weighted

and strong for our XX our balance ability morning, our repurchases place year, power. increasing reflecting and we our in share We shareholders confidence earnings this our know the billion that fiscal just dividends 'XX, we are value dividend returned announced sheet Board's to consecutive return capital. in future the we $X In through and

back-to-back X.X% many of recovery in to growing guidance. digit the in markets. a turning half mid-single the Now We've procedure couple back growth, delivered of our quarter. of in fiscal fourth We're quarters the year, of the with encouraged X% with

like We competitive market. improving. position coming we our availability products product many new and across have Our is our to businesses innovative

at and of the year, revenue point, we it's guidance in our our fiscal additional setting prudent lower start that model new think to for X.X% details. from other organic end currency impact 'XX revenue segment. our the given it's to at you of range. This I X% guidance you guidance the slide this And foreign direct we're At excludes earnings the to of the for presentation and

the In our of our to are puts fourth our high exception growth the start launch of corporate year the on average below end have they and annual year which each By in XXXG. first X.X%, for ramp quarter with sequential both performance through the the the with first quarter, expect the average, year, seen which guiding corporate and growing takes we suggests revenue the one, we're what organic but the are of to segment, will a historically to with quarter. U.S. quarter with diabetes, from and range first aligned roughly there of all line the we

positive While on currency the including $XXX impact $XXX $XX full of an of is year impact fluid, have currency $XXX to million a at first impact in of million, the unfavorable on million May, to the beginning million rates based foreign quarter. would revenue of

macroeconomic I've interest and the now and factors in to for in continuing our quarters that R&D. fiscal lesser P&L, earnings impact we're rates inflation, prioritize power would down currency been foreign Moving And to investments tax several 'XX. sharing a extent, like

separation reduction Care the the time, business, revenue Jeff we've been Renal grow of to above we've same while the our expect a company, lessen the when for macro factors plans our as cost these we signaled we on to exclude fact, R&D earnings. now. In across impact as At executing mentioned, of our and

range 'XX account, diluted of an roughly we X% we repeat our in program hedging year. this pressure on EPS and our benefit driven non-GAAP the range to from at The our includes all rates foreign and last margins fiscal May of of currency unfavorable from into $X this will impact large beginning continued the by Taking the based expect on expect guiding year that don't $X.XX.

this basis, EPS year. our implies currency constant a On growth guidance low-single digit

For the quarter, expect $X.XX we first of to $X.XX. EPS

of would the approximate on May, X% based X%. constant currency from X% Excluding currency, to at impact of imply rates this foreign the growth beginning

transform everything have around the want been Jeff. employees To drive Back significant to they company, close, put and outstanding I recognize front to do company you, our stronger our done center. helping to patients the first. you always while world, have to change to make for and to who you our this and keeping Medtronic mission Thank

Karen. Thank you, Okay.

remained business tied differentiated growth, It supply. analyst to thoughts. Now Innovations surgeon close our I'll in with before questions, digit our go commitment Surgical our was strong. to good And a the to a improvement we few our broad-based with is products importantly, quarter growth back mid-single to

inflection businesses Heart, Structural an across and we're same momentum. Neurovascular in no and our pipeline. have growth Diabetes is businesses both and in point and importantly, of see Solutions, business we're Cardiac both their Ablation the technologies time, durable At to seeing and growth continue in other We losing arsenal nearing an

Behind the pushing scenes, and create up deliver for we've to comprehensive our with since durable shareholders. I've shared becoming really value you set a as transformation Medtronic growth CEO, to been

line. straight a been hasn't it Now

made some progress, Some our that's see of been But on and in market to results. that's this us. of factors and starting we've you're

down redirecting necessary we're advantage. quality, R&D key important turn global and divesting the to we're the We're in durability where We've non-core our our our to supply picking our adding and scale been into We're assets. capabilities shaping like of most making ensure investments markets doubling programs. an operations, tuck-ins to the And portfolio, improvements IT, growth. long-term investing chain and

that actions of All drive foundation growth. will us these are to strong establishing consistent sustainable allow and the

we've to you're the to Now confident our come the this continue all improvement. on in but we're to work make. and We're And right choices starting we there's still be that and see executing. done, together with path are study made

for around like world. my Finally, employees expressing Karen gratitude the to sincere our I'd join

a you. And and millions health you huge lives You've of world's confident improving the of do most every meaningful our year. some mission to Medtronic you for Thank our serve of I'm in played innovations role that every that all are Thank care creating us. people days the of best day. ahead

move just limit to to we let's only ask yourself question to related Now many needed, follow-up. where if going Q&A, so to get we're analysts as and to try one possible, to you a as

to additional the out questions, reach after If call. Investor can team you have Relations Ryan the and you

a please you the With can that, Brad, asking give for instructions question?

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

President For today's are the the EVP Operating and President EVP of the by EVP Surgical JPMorgan. Medical the of Salmon, Karen portfolio. portfolio; [Operator Brett Ryan and We'll take Marcus and of go and at Neuroscience please Cardiovascular joined White, Wall, Robbie, ahead. session, from question Dallara, Instructions] and portfolio; Sean EVP President Jeff, Unit; Robbie Que first Diabetes and the Bob President of

Good for first maybe Jeff and Karen. And Great. thanks everyone taking and questions. the morning, question,

You us little give color guidance can a here. more the on

a year. of at the starting your declining but organic, You're and sales long want then to growth at off goal X.X% organic of range. range low bit EPS X% X% end little the for below the It's a us

return maybe us the are Why at at to you you growth? just EPS So do starting walk how and to how ended we through bottom range? up that plan

it. Robbie. it year, was sets Thanks guidance start to thought up year guidance When with were so fiscal the about we success. our the us that prudent question, Geoff through for thinking we much for talked for the

transform intensely delivering doing as commitments have we in and do puts year, while a there that -- while so to -- growth perspective on going and takes, new on from company. on We we always and FY focused on we're 'XX. our issues we are lot got continue we no but the the have We a Medtronic at

look 'XX from last performance momentum. of we a lingering And encouraged When China half at good in X% remains second by improving really we see we're drag our over year. and early May, VBP, we but geographies, that's as look our

to Our continues chain supply improve.

full a to got U.S. cardiac excited weighted really ablation pipeline continue then fiscal year, it's We've got we've in latter recover. we're markets the about the the XXXG of got towards Our that half Affera. with of the suite and We've

We've coming that's And we've got too. to hopefully to ramp. our got market, continuing Guardian robot

have new call year. tax On to about risk impacting any our good interest quarters past and talked don't we've feel a significant we got to So for mid-single and We the about digit inflation that's material approximately margins. includes growth. currency as EPS around that coming of the gross out. highlighted really headwind few EPS, is That we've X% headwinds I X%.

growth. you combine double-digit a is are they our when But decline. these So EPS headwind factors, guidance of all to just mid-single a digit

us driven savings and protect help like talked about. we've we've fund allow that significant So and offset just R&D those to savings important

will drive year of take improve. changed. our the our to And to be going our line. But bottom bottom just that's a we stabilize think margin have time, range goals it We're and impacted going one be But not improve then expect one And to about to term, at by the that's longer gross we do to got our inflation margin, the future. help currency. we've and As things to long obviously which is plan, work by line into time. gross key impacted going over that

and rates? to maybe low end half And half rate second to about pretty exit want more divergence a the you do Karen, guidance us the Thanks. have year growth a the importantly, of big And for between next at how first the quick comps, comps think start. Great. you just follow-up.

Yeah.

So but half. are back easier in weighted Robbie, the the our half, first pipelines comps the towards

QX our That's so we're take all now. you end full about being together, about guidance. thinking that And the when how we all of year QX through rates can it think on lower about right growth

next the take will question we Robbie, Brad. you, Thank

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

one there, Can trends Q-shaped and talk the down? start cadence the execution I think question. thanks you Hey, taking some the on the nice of guys. my noted kind to Q. on, the procedures year of for Jeff. exiting perhaps, strong you to maybe for your perhaps, of what first and or curious how I'm the just about here, our slowdown a Congrats XQ? Karen, peers

the to accelerate out in volume was for April to procedure Thanks Well, talk recovered front. began relative and Vijay. Good you. and was Europe, for bit, in U.S. well but it us Sure, quarters. little yes, May. prior a a lagged to mean, in question. tailwind to I particular,

that I clearly, beyond of in resulted Western issues staffing availability staffing back strong half So said, Western product better. QX Europe, high-single Europe. growth like for better and getting digit in a and But issues improving, the us

grew XX%, and exclude Emerging digits. mid-single mid-teens was China if Japan markets then you

lagged, around strong saw So a May, a we're a we strong but seeing pickup. there. Like I the pickup world U.S. into and said, April

So the procedures. that's how characterize I'd

product you it electric look therapy staffing. surgical and due GI MedSurg TAVR and as area procedures Stim as well procedures of I up, at if or some think, picked kind us, and -- maybe to Pain improved more If at you for procedures by look geography, like beyond it

headwind. still initial I coming recovery, Maybe one by at of and therapy for what be May. coronary was geography confirmed with into that's and all and outlier pleased replacement good out and it pleased this, but notable of behind this overall, a is Medtronic all even CRM procedure like with acceleration in kind look I specifically with volume area. might seeing we growth implant by we're said, the Overall, how are with April in

fiscal Understood. helpful on one And guidance. No, that's comment. maybe related the 'XX

innovation. of the point, your on improving in is surgical utilization you have space. some my EPS, line, been clear on headwinds top has more think But pretty I question Karen Medtronic on to

that's chain going be the our in I think versus easy, comps upside I think diabetes, getting is surprise are I think to supply better, prior incremental. assumptions, approvals they’ve, pulse

the points. there rate, and you is is more XXX to X.X%, being look right China perhaps Are perhaps. basis headwinds? perhaps these, why bear-off I Geoff. basis any X% is proven to range, that points or just Anything when XX tailwinds think at else not we're the So conservative

Karen that let to one. answer going I'm Yeah.

Yeah.

So Vijay, to year full a starting about good we just think is for that just I X.X% think, as we it, talked point. X% the

the new things happening tailwinds. out, no to have it's place it's QX But are We just risk for that named in us, great of start. you good call lot and a to a we only think

That was Thanks, good. guys.

Thanks for the Vijay. questions,

Brad, Thanks, taking Vijay. Thanks. next we please. are question,

from question Fargo. next at please go ahead. Larry, Biegelsen Wells The comes Larry

Good fiscal U.S. for time taking strong about morning. in finish in the wanted for Thanks Germany ask time I'd AID that to competitor and EOFlow the specifically we injunction recently. for I the Q, question and Europe congrats like the saw and a on an to acquisition, Yeah. system lines here. the year the thought lines the

at made is with to IP, and thoughts I'd how you any comfortable a high on what hear differentiated? So the level, love this product

spend. And update just, maybe monitoring maybe on the for patient any Karen,

be selling you're to going offset use I be the the business we've think seen potentially and could reports proceeds to well. as proceeds, to interested dilution, how basis dilutive tax the on know the to of use media are that people depending and

be we about you. should this? how So thinking Thank

Larry, questions. the Thanks, for

to questions. I turn think, Que the to answer it EOFlow I'll over

very excited EOFlow about We're acquisition. morning. Good the

CGM, From very a algorithms our integrated as manufacturing are positioned as the AIG. the As for in systems there. with player we're in both and technologies perspective, only well well challenges space, you as with familiar a know, dosing we diabetes technological well the tech very strategic space the as

and this differentiated We AID to holistic. are, market with of meet is a So be very expect introduction where the market, an want accelerates our the to acquisition we next the portfolio product. patch into and patients they to

you with system XXXG that along offering a combine expect is algorithm and in that our to sensor our the that's today next meal EFOs very market. to device with next-generation to So the intention detection see differentiated be

so think product terms In addresses time. in differentiation I that the -- the of

I the to terms been Insulet. think In a know, covenant have we of it's sue you IP, disclosed that previously as with not

differentiated a position. technology. very And IP about our sensor we're so very algorithms confident device is this Medtronic with And and

So we're in market. very product differentiation in confident the the

pen, to And of from Que's comments beyond with delivery. detection differentiated with first product, our XXXG, believe in the technology, a that here Yes. insulin CGM delivery U.S. host big. seeing and outside there whether I'll across patch. technology system, we is instant a just it a it smart going of with build we terms trend the same the pen, on pump in automated and devices, to this just just meal the We're have AID, want of algorithms be

to of So of and well. as a it. armamentarium excited lot execution brought this about we're the adds better that just business And Que's

doing So helps deal in confidence a that our also like this.

future the diabetes to forward our looking So for business.

I'll have respiratory the answer separation. patient Karen question the interventions around monitoring and

Yeah. question, Vijay. Thanks for that

allows it to our separation and in be going the tax participate to value we on and minimizes separation the continue what leakage We is interventions. bar we work when opportunity. announced significant believe And patient monitoring it last said we shareholders because a spin year, of respiratory that a the to creation sets a high

We be do consider that possible believe because we as an we also would alternatives and to parties. sale attractive asset could many said a NewCo this

we take we will and ultimately transaction, on will at best we'll it's be bar that said whatever greater interest a shareholders, high from our course divergence later manage potential it. really for path also to got dilution spin because any this the attractive And in we is the details creation provide would spin determined we them by need attributes value have But provide how a opportunity. the be date. But really of this as

Larry. Thanks, Thank you.

questions. Larry. Thanks, the Appreciate

reminder to question please the and please. the one analysts question Just follow-up to next one a stick if will go to to needed. we Brad,

Miksic Barclays. at Matt from please comes go question Matt, next The ahead.

me, Hi. okay? you Can hear

Matt. can, we Yes,

you. Thank Great.

the taking and kind resetting nice for 'XX. of So the through here of thanks – a finish fiscal congrats year to questions, bar and navigating the for the on

the of to I last everyone we big Just PFA, one market. as U.S. to think meeting amount of and presentations for topic -- wanted weekend, know knows. the to main of you was Obviously, fair Medtronic. was news first of a expect HRS the flow and out I came given that there the -- the be

a for sort I perceived expect you time just If to as talk that of this might. more And the you -- have to you maybe on bit navigate expect could I follow-up, you how is line how then big pressure about And market? little one shop if single can? the

Sure. for mentioned. Matt. in well and the It's tailwinds positioned Yeah. that, we we're thanks those for exciting just Well, believe you industry,

So it to there. specific see, how around answer to positioned and I'm going and ask is good PFA questions Sean to we're the

We really Matt. position. like Yeah, our

maintained and single-shot filed we've just know, sometime you ferrous in product and data December. persistent the Europe, enrollment trial have we We completed a United the As year. in in PMA Mark States CE for point-by-point a (ph) readout solution for for next our we'll our

endpoint this we So year. reached expect of will that that, one-year fiscal mid be

In United And And launched how market play shot. we've of see are solutions. going among that initially we into XX% the we the strong as to the come all be solutions think in obviously, first the got at in for go much we've of single being been PFA when anatomical point-by-point to I or we terms segment and by really to opportunity to States we Europe, the point point. that's a in, us of And we shift, in those XX%. with bigger Cryo have other as

XX% that to get I to think don't do that. that to and market really of need from garner interest we'll the they wants PFA,

play the the have pool. [indiscernible] some interest attraction And will in also pull the potential you of having first of base globally, bigger that solutions coming your have swing So PFA anatomical for the from in anatomical, I we we'll pool. opportunity launch for think when course, offering in to of erosion very have a XX% you while

think frankly. There's more I us cannibalization, than the are So think I people I appreciating. overblowing greenfield concerns for think are about far

helpful. Larry's super congrats the but (ph) diabetes. to Sinclair And again on then quick approval letter follow-up one That's on warning intriguing. is Guardian Sensor just the approval, question (ph) The plump and and

given of forefront I the could that your timing sort see think you wondering what kind data are thoughts that, some potentially sensor from and of of a would platform you on of to technology. Thanks. more are move lot folks that

Yes. Thanks, Matt, definitely .

in jump and a forward, definitely is answer simpler I'll say, and that. Que I as ahead, jump have Go

excited the no to of It's sense. We're process, sensor, the current Guardian Geoff. all-in-one It's Sinclair. half size technology. Thanks, [indiscernible] our very about sensor for compared disposable an

to regulatory know, got to As you by hope actually, to FDA through that last year, able we fiscal we're that, process, should also the year. year to but anticipating Mark go summer CE approval. earlier we've this this the get We we've and be submitted

timing. So that's of best terms we the in have

Thank you.

the for Matt question. Thanks,

please next Steed question Global The BofA from comes at Research. go Travis, Travis ahead.

Can me hear okay? you Hey.

hear can We you. Yeah. to Good Travis. from

to some savings cost growth, savings that we've X.XX% like Maybe, talk the Karen, investments. side and from R&D EPS this built the some you and into if offset estimated you of cost $X.XX of X% can about stuff then the

the about how and and a FY bit of 'XX you And puts what we transition back plus built on color have think some X% Just EPS on guide? to the to about more on EPS, then as of should or on EPS. takes early little the that just comments out-year the in of more think kind a

to On our the cost inflation significant just Yeah. a digit Thanks Travis. gross we exact But mentioned you margins. mid-single our savings. sense, driving questions, that are not give said savings, disclosing I for cost we we amount. have We're those on

we approximately and We have guidance And currency around are of digit interest impact EPS. But just mid-single and all a double-digit X%. tax combined X%, decline. those headwind to have our of is

goal when we are our allow we've and to they said So important obviously, the to protect And significant. R&D, revenue we is and protect us revenue about savings align with When we think that all to above can. innovation. talk -- R&D fund grow, when or along

this we strip R&D expense, care look And growing, business than we're our revenue that our RCS and in investment we revenue. in we had is R&D to the we fiscal separating, that coming higher our it and renal away year if at grow expect

So FY And starting we're to on just us. we It important did FY protect 'XX, it. is then 'XX.

strengthening been is through ready we've own And But busy all of been portfolio our been not managing have this investment cutting these been and results. the been We've structures. been on new with driving talk been impact really really So we're our XX starting FY an people about our last transformation driving mentioned 'XX. We've needs. to expenses. We've moves. setbacks. new We've amidst that that core We've to our for understanding months I us. have

already lasting focused 'XX goals Longer revenue That's us Medtronic. our the back term, seen digit our mid-single We're move focused now. on and growth driving You've our on and mid-single-digit FY delivering commitments a right we're turnaround on to top intensely changed. growth. line, at not priority that have on durable

we because work committed margins. that. place plans strong year a one now. to right going P&L. to driving work But have we do leveraged we're do to and are then stabilize the But where to both time And to a the have in just We this ultimately, we're our at and improve and take that's gross continued

gives that hope you context. I So some

earlier back answer [Multiple Karen's earlier to actions. Speakers] the answer, cost the the of on part Getting

think [indiscernible] some right the reinvestment areas the that as offsetting EPS of right, some or in of headwinds you we're of durability out think and kind there on growth PFA. focused med about striking robotics, diabetes, our affected EP, mentioned, with balance, revenue I of top the in between mitigating tech, the

So with exciting to growth these of is that durable. we're headwinds are sure R&D through right making she balance mitigating We've investments sure revenue the that these make got and making our the walked some and to opportunities.

as ask would the share. had patch Thank you. on the be digit quarter, follow-up quick about helpful you're want TAVR that. CGM on Is taking quick for EOFlow. a overall just they they going did pipeline the an that I A helpful. mid-single to I just a a well. on then super pipeline, seven-day seeing to growth market the Maybe keep and update And in just there trends their update TAVR and That's you're a something had too. in that know

the Que, you want question? take to EOFlow

to next-generation point. do plans additional Yes. Simpler it's further really technology we possible. pipeline choice. our And as as on think any comment patient new for algorithm look, well that into right our And we We patch detection important as want And as bring our now can't market. to the soon AID an integrate to this sensor details at

Sean, Que. question. the TAVR Thanks, response quick on

Sure, Travis.

really better, and sluggish little ride France in in the particularly is So coming strong back, a I'd little recovery quarter, the nice really Germany, procedures bumpy and and Europe out saw better States getting the United We breaks. recovery market had from within say. started spring a in a

there's a the bit called implant a rates or know, so But quarter consolidated some case little of exited of you supported, that in note the really lot we matter. we volumes, As strong, think double track the they just and for now, through say high-single is the low continue digits right we're which good -- we what are recovery underlying low I'd year. seeing about to market. trends, the really But will fundamentals we

the appreciate Travis. I questions,

Just question to reminder needed. follow-up Brad, a please. the and if next related question analysts one one

please The comes O'Brien Sandler next Piper from Matt go Matt, question Companies. at ahead.

Hey, Matt. Yeah. [indiscernible]

audio, got the back Brad. we've you. I problem to next that with please think Can check and your a We'll come question, Matt. take you

question please The Bank. next from ahead. comes Chickering Deutsche Peter Peter, at go

guys? Good guys. PFA was depletion about quite trends specifically, I the European guess, adoption you share, when market all Can growing you versus put together, losses morning, between growth, how so for PFA in Europe, pricing you interplay it talk the from a PFA

want one? Sean, do that you to take

I mean our Yeah. innings early for it's early, PFA We've done well. offering.

for to and that. trying just up training know, scale really both operations you we're As

We're been PFA just as is of trends, growth a that's to to Europe strong very but course, overall, though that. grow market. too ablation I'd will all you continued and there's in say continues within flavors, appraised fastest. how seeing grow a comment underlying of on keep the So early robust little to good really going. really general We'll

follow-up then And question. the last TAVR just on here a Okay. quick

guys talking share low What marketplace. do about high-single You're market you a XXXX? your within for double, digit assume

ends, launch we're have of into but the Europe FX the the with half in year. we and think we're good think FX, to we don't in the I share with giving momentum back shape we look

a -- we've the in in excellent and United and well States. is well being We Japan., done So received. done products that's

Great. Thanks lot. a

Thanks, Peter.

Next question, please, Brad.

question Matt, Taylor please go from next Matt ahead. The comes at Jefferies.

taking for question. okay? me Thanks the hear Can you

Yeah, now. we can

neutral Okay. that dilution for release. little And about could the I to thereafter. it first talks talk about accretive hoping to more earnings a X% and few bit you was years reading just

go years. maybe of ramps guideposts you assumptions So you first and some couple some I on the today looking And of business the that are revenue should of are business could how hoping What the guess wise that I of the that assumption into it. out acquire for the be assume touch that couple for what run you over years. that of we dilution key the rate was next as of

let the small the pretty could I Karen is assumption. business, revenue new about and in is, the Europe. and I'll right Matt But just now talk it's Well, say, dilution it's

Yeah.

integrate this with to is pump our here key algorithm. the So patch

we'll there? want what years. for That's first the so rate the that's few you talk and And dilution. to that be about spending And drives key on the from Que, run

Yes. might And to look you that want any for? milestones

for I to think the our critical out milestone really to development watch integrate work some is algorithm.

We the have be sensor so today, of approvals will variable. XXXG going that We're that our ready through obviously part system. as

bit So has manufacturing The at scale. lot, a manufacturability not development a the of exists. there's work, outflow proven

straightforward integration market. relatively a approval is it so And and get to process to that

through disposable in wearable but we this we second is commercialization it's obviously, solution. launch a next-generation process, CGM, go believe patch offering patch our available Once system think, market with we market and the that with to AID strong and very

appreciate feedback. I that. for the Great. Thanks

Thank you, Matt.

Next question, please Brad.

Truist. comes ahead. question next please at from Newitter Rich Rich, The go

Can you me? hear

we me? Yes, Rich. you hear to issues maybe don't can. have with might we next and hear go I Rich? Yes, some know, Can We'll the us? Can back. you connection come question

from comes question Capital ahead. next please Markets. of Shagun Shagun, RBC The Singh go

Great. Can you hear me, okay?

Yes.

in? that And XX how front call you out previously to until some initial M&A XX more was this I been the months be at your talk It's perhaps that concerned talk areas Thank indicated see to M&A are the anticipated, on can to that hold you off does something it worried just about? if then if I areas on may front. about what And wanted get you quarter. about are announced on on your point? thoughts secondly, taking you you one interested this just for you size you something M&A. deal your of changed? would you for and outlook encouraging quick questions. for China. to There impact COVID active larger than seems has become bit months business. Has about the be be of appetite anything separation And A think I to little for can And talk you wondering cases, a

some one start thanks of signs M&A. not our China, of point at watch get we're in wouldn't we've that call of about the questions. the heard but that I felt of to closely. too an talking COVID care in our this China, it to health On China those then with to COVID worried and this outbreak, they're the point -- at some but haven't Well, I'll it, yeah, about some of going for we customers, the -- any impact --

investing And on is our In healthcare overall an it's are and working terms market view look, economy largest procurement. But still back. -- care area we're of the Obviously, it's back that volume-based through going I was world. China, we're just the procedures in health the to the and be there in.

have before, we been more exit and reset we've volume based talked business contracted, us believe China, some we is grow based and through marketing to this double-digit 'XX, back end, FY costs. and now by from that procurement, allowed year, then we costs volume as this from and to procurement there adjusted and out get sales as about exit take taking believe, that we And by this as the purchases we out growth fiscal some next rather, in the it's that we'll

that And double-digit get growth. for so that back business us it's still a profitable we'll to

government of a the will this time having. And good in on are the but Obviously, it's recent with that market to countries some continue lot between optimistic this more are here encouraging we're us. the China going a to to the and two have geopolitics U.S. two we be of spend conversations for watch countries, the

our one yeah, tuck-in we traditional our have area in a of of EOFlow in. In of strong type terms of M&A, one that obviously, is looks acquisition -- a position high-growth deals like the

deals, our have You lot those type going bigger deals are of the and to for -- are Affera our appetite business I asked a we EOFlow technology. would that we bringing and right on fits technology deal for and to into deal, focusing deals that And a this those had still like up that like deals in and we ENT for of about a navigation deals diabetes patch have PFA mold, Medtronic, Intersect say some that of believe ENT, the on like PFA kind business. impact mapping API that,

say would I nothing has DaVita. we changed. just divestitures, dialysis of mean terms I In completed with venture the joint

running that large the So which you off Karen separation, called, walked we're and is out patient through, through about officially, body the and and closed [indiscernible] of as and a work. excited we're that's new name, monitoring is working and company's respiratory interventions

forward, we're And executing pretty you and something execution tuck-in what in from that, you process focus will. one If for, smaller. of And continues at focused appetite, kind along, we're and terms But divestitures, still thought where on these a our of bigger but are. I Those to look right it, opportunities analysis focus of those as we'd a it's the of that examples our large-scale portfolio and hunting see comes are think little standpoint. at an deals is type look that areas. the -- could little if than bigger look size now our gave, the the be not three along and

to anything covered answers know, add I don't hope have So it. if I that Karen your M&A. question I on you or

well. it covered You

Thank you so much.

can, Thanks back we try final Shagun. don't the take to we'll our Well, Rich, we for to then if and go two why Brad, questions, questions.

please go comes ahead. from Newitter Truist Rich Rich, Securities. question next The at

for Thanks issues the apologize for there. I me. to back calling Hi.

there? and any of NuVasive? just Spine. know Any trends or you're to Can there guys you wanted that really and bit have to last may kind potential start I'd then I leading what's going tzzhe year with nice Mazor? that turnaround front you up hear some a in emerging -- capital about off disruption likes. the capital are talk that with maybe seen -- business that of competitor, on in the the on Globus to you so. I little a the So seeing M&A be love a updates And between potential

disruptive, question, planning bringing the it going it powered Able. seen details in Spine start and the know talk number I'll for a years navigation, our been AI-based I together we've to Thanks proposition Brett Rich. we enabling some in that trend, I is, don't imaging, centering trend call about other brought second now, instruments, in a moving this turn technology, of called it's and that one ecosystem to capital just if the the of robotics, value all together, and over with for this the being industry, of of But surgical and Sure. around I'm trends.

in the now around seeing you're impact are it's marketplace You And the doing seeing what to of marketplace. that the consolidation.

heading, our is technology I the dynamic. it the we for do him business a move lot years position. mean big capital and the value let this, of where forward, overseeing impact lot of and prowess we're into this is And But get and a consolidation takes more Brett's proposition a sheet this takes has to -- also on detail really excited I'll and talk about business and number of now been it's and that the is as balance it about a a seeing. industry having on heading, you're

extremely in with We've to some of Yes. procedures really surgical core back robotics, the for overall surgical Jeff the And in Spine, the the Rich, capital which changing And a that is When now core trends environment. helpful. tools, question. mentioned, We're procedure expansion the reflects ecosystem had there. navigation, procedure quarters is Thanks, multiple which put broad-based and imaging, we together we've development, Jeff. planning. seeing AI spine, taking of that thanks good the look as at getting power ecosystem normal,

in itself, capital we're actually to transformation the these look entire strong have seeing If the we we It with are teams that exceptionally spine the put organizations trying the middle the across capital are think And and and I spine an broadest, consolidation. competitors, system is footprint of world see world. most one mentioned together today. in is and in more of, most at comprehensive two complete, what that you most in you'll expensive, of transaction

quarters, that, we've we've earn-out is with seen lease continued in into but good the What seen agreements. We've as of is higher capital with capital, States, United transition a of some preponderance socket. We're few of growth of converting The getting news in the that type on given top been a now earn-out good of the transition or we've situations is across into an where situations. the seen we're sockets. also bit the current those situations last that a, economic implants that current get we about

hardware. seen then globally performance strong in And a we've our also very

component capital And just the we're critical other capable critical consolidations. here to is extensive But I Medtronic strong also this business. very seeing with that the footprint of the think is to some It's and So the growth.

you, right. Thanks, Rich. Thank All Rich.

Next question please.

Joanne, question ahead. please comes from Citi. go next The Wuensch, Joanne

down be the or are also Good morning Briefly, to second development. those way and along? shut start my next. the had question. patch those my going us for generates two And you launch Thank in you year products continuing pump of could the thinking is, in to this I'll And and nice field end about the of memory as revenue Are sort where ask Hugo, robots total update on should that outside as an States? be the is give Medtronic of United amount it family? or the you. number we

to want Que, question? Okay. you patch the Thanks, do questions. take Joanne. great Two

Yes.

gas, a that market type will at to we're complementary features next-generation but go reasons, we're It's anything, for that competitive expand market. stepping program help two organic point prepared our including complementary program. on not have with on continues. program We that If to this the that access,

Yeah.

an with important our this the is gas to Hugo. of although better and -- Que reemphasize quick and patch we've and business faith turn are think, our performed business Just now said the segment it never there, we're real leadership well never we couple execution about the last just segment. new that we've over what Que the is her on down over doubling before just years, putting foot lost hasn't to technology. team Bob just I I years, bringing, And our talk on to the of

we shots So multiple about there. on feel goal good having

And So do you Hugo? say diabetes. want to what why I'll about Bob, that's on talk

Thanks, the Jeff, Yes. thanks, question. and Joanne, for

way. of that really that remembering, done assisted liked momentum, than less know, you Joanna, we So be our could or actually as that robotically X% procedures done

customers. prior opportunity. than system development So Hugo the by the quarter, the sell and systems franchise Hugo And ecosystem. did And is and it's install And interoperability, really leading a we with the recognized importantly, quarter. about our modularity really we being market our every tremendous more the surgical

look at respond meaningful of we the Medtronic to I question, to both, So would at don't we We disclose Jeff a number where robots this at pointed that. driver your as look And right? for as growth look overall. to,

So our us. excited We like and we're position. feedback, our we of ahead opportunity about like our

Thanks, Okay. to go we'll Thanks, for final question. Bob. And Brad, the Jon, questions. the

question Anthony, go Petrone from Anthony ahead. final Securities. comes Mizuho Our at please

hear Can okay?. me you. Thank you

Anthony. belated Yeah, birthday by way. the Happy

there of May, One, A share questions Thank April you Is volumes. and could underlying on the anything picture, particular. just in you. Thank couple on very here. volume much. you

seem is underlying bit an XQ, did a markets. X.X% many color X% had just about in the bridge but favorable it little so X.X% You improvement maybe comps, like Certainly of to volumes. on we in have growth, organic a guidance, underlying

And Thanks So on much just then, into just of volumes? baked is anything X% the again. note to guidance? XXXG, how comments on that is the your of underlying X.X%, in

Europe quite because getting as the been I that and lot. time. Western ask we growth saw strong seeing seeing has our we've say, that? on would growth into markets. Sean comments volumes procedures some that think the And up. it, of mentioned strong lagged might in U.S. I some Sean, particular, to in but Cardiology a of underlying just know, all And quarter, QX it couple if and lines. in for surgical in. then comment volume And And we're of some I May. earlier, throughout Anthony, different I also accelerated came second definitely a surgical of the this, but a emerging stronger to last But is procedure any we see picked April cardiovascular Well, for across us in Japan don't business, out have pickup our across you on in I underlying has

in coronary U.S., record as recovery our Yes, surgery been indicator improvement time We that really a before, well. said improving below grew particular, I mentioned has In the across we States the as Jeff, really Europe, it we a the you nice kind United board saw the long saw of procedures. And leading in now. levels for pre-COVID throughout curiously well which quarter, including in for stents, saw procedure volume. -- a the in

up of for that of the levels we the or about saw XX% come So the half of the pre-COVID half back to quarter. back year

So the impressive how look, to fast China also moving I'm COVID a stuff step see both encouraged, happened new We're year, shutdown And sure, the back procedure may after it into better globally. and space it and looks strong. for happens. was it the in

I think starting that cardiology. with think see I volumes the which we cardiology And we're is see So procedure by a think all the the in too looking as encouraged in course. U.S. of of now, saw place joints, trends and We are most I recovery to encouraging. we're and globally, is large up

the question your annual to it on to anything note to noted on And Anthony, good we and fiscal we expect XXXG, the United more the with the guidance and obviously the the begin in diabetes that of of XXXG return And to the we growth it. this expect year. on year comes as year in below patients revenue corporate consumable that and but bring off more average, we States ramp throughout

helpful. Thank Very you.

ahead closing with go please your Geoff, Anthony. Thanks, remarks. Yeah.

okay, Okay. Thanks, Thanks the for questions. Well, Ryan. everyone. All right.

you update on to diabetes our progress you'll we'll in your interest where we coming QX join Medtronic. Tuesday, mentioned update and our ADA our as on hope broadcast, the really you business June continued XX we appreciate XX, us we'll usual, we earnings an for across and As which I August be support with earlier, on company. And from anticipate on holding

your for day. have of great With us a rest that, thanks spending and with today time