Q4 2025 Medtronic PLC Earnings Call Transcript
Key Points
- Medtronic PLC (MDT) reported a strong finish to the fiscal year with a 5.4% revenue growth, marking 2.5 years of mid-single-digit growth.
- The cardiovascular segment saw an 8% growth, driven by nearly 30% growth in Cardiac Ablation Solutions (CAS).
- The company achieved double-digit growth in neuro-modulation and diabetes, with high single-digit growth in cranial and spinal technologies in the US.
- Operational efficiency translated revenue growth into high single-digit operating profit and low double-digit EPS growth.
- Medtronic PLC (MDT) announced the separation of its Diabetes business, which is expected to enhance focus on high-margin growth markets and improve overall profitability.
- The company faces potential impacts from tariffs, with a forecasted net tariff impact to COGS in fiscal year '26 of approximately $200 million to $350 million.
- Despite strong revenue growth, the adjusted gross margin decreased by 70 basis points year-over-year due to mix from Diabetes and CAS as well as foreign exchange.
- The EPS guidance for fiscal year '26 is impacted by increased interest and tax expenses, resulting in a 300 basis points impact on EPS growth.
- The Diabetes business, despite its growth, has lower gross and operating margins compared to the overall company, affecting overall profitability.
- The ramp-up of new products like the Simplera sensor in the Diabetes segment is expected to initially pressure margins due to manufacturing costs.
Good morning. I'm Ryan Weispfenning, Vice President and Head of Medtronic Investor Relations. And I appreciate that you're joining us for our fiscal '25 fourth quarter video earnings 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, Chairman and Chief Executive Officer; and Thierry Pieton, Chief Financial Officer. Geoff and Thierry will provide comments on the results of our fourth quarter, which ended on April 25, 2025, and our outlook for fiscal year '26.
After our prepared remarks, the Executive VPs from each of our four segments will join us and we'll take questions from the sell-side analysts that cover the company. Today's program should last between 60 and 90 minutes.
Earlier this morning, we issued a press release containing our financial statements, divisional and geographic revenue summaries and non-GAAP reconciliations. We also posted an earnings presentation that provides additional details on our performance.
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