Medtronic Q3 2026 Earnings Report

Medtronic EPS Results

• Actual EPS: $1.36
• Consensus EPS: $1.34
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: $1.38

Medtronic Revenue Results

• Actual Revenue: $9.02 billion
• Expected Revenue: $8.89 billion
• Beat/Miss: Beat by +$122.01 million
• YoY Revenue Growth: +5.80%

Medtronic Announcement Details

• Quarter: Q3 2026
• Date: 2/17/2026
• Time: Before Market Opens
• Conference Call Date: Tuesday, February 17, 2026
• Conference Call Time: 8:00AM ET

Medtronic (NYSE:MDT) is a global medical technology company that develops, manufactures and sells devices and therapies used to diagnose and treat a broad range of medical conditions. Its products are designed for hospitals, physicians and patients across areas including cardiac care, diabetes, neurological disorders, spinal conditions and surgical procedures.

The company’s portfolio includes pacemakers, implantable cardioverter-defibrillators, cardiac ablation systems, heart valves, neurostimulation systems, implantable pumps, spinal implants and surgical technologies. Medtronic also provides insulin pumps and related diabetes management products, as well as surgical equipment and robotic-assisted technologies, including its Hugo robotic-assisted surgery system.

Medtronic traces its origins to 1949, when it was established as a medical equipment repair business in Minneapolis. The company serves healthcare markets worldwide and operates through a global network of research, manufacturing, sales and distribution locations. Medtronic is incorporated in Ireland, maintains major operational roots in Minnesota and is led by Chair and Chief Executive Officer Geoff Martha.

Medtronic Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Symplicity Spyral is positioned as a major growth driver with strong early demand (direct-to-consumer campaign drove a ~50x increase in site visits), expanding reimbursement (~100M covered lives) and growing clinical/physician adoption (200+ new accounts, physician finder >150).
• Positive Sentiment: UltraViva tibial neurostimulation shows early commercial traction—the company has trained 500+ physicians, highlights product advantages (no imaging/sedation, same‑day activation, up to 15-year battery) and is investing in omni-channel consumer and hospital support to scale procedures.
• Positive Sentiment: The Hugo surgical robot received FDA clearance for urologic procedures and already completed first U.S. installations/cases (Cleveland Clinic); Medtronic pairs Hugo with its Touch Surgery ecosystem (installations +20% sequentially, >1,000 systems globally) to drive adoption.
• Positive Sentiment: The Stealth AXiS system secured FDA clearance for spinal procedures, integrating AI planning, navigation and robotics into one workflow that targets the 70% of U.S. spine cases using navigation and is expected to contribute to CST results as soon as Q4.
• Neutral Sentiment: Q3 revenue beat—$9.0B, +8.7% reported and +6% organic—and FY26 organic growth guidance (~5.5%) was reiterated, but margins face headwinds from tariffs (~$185M FY26) and unfavorable mix (CAS and diabetes), while FY27 EPS guidance targets high single‑digit growth with some temporary dilution from the planned diabetes separation and M&A.

Presentation

[Operator]

Good morning, and welcome to our fiscal 2026 Q3 earnings webcast. I'm Ingrid Goldberg, head of Medtronic Investor Relations, and I'm joined by Geoff Martha, chairman and Chief Executive Officer, and Thierry Piéton, Chief Financial Officer. Geoff and Thierry will provide comments on the results of our Q3, which ended on January 23, 2026, and our outlook for the remainder of the fiscal year 2026.

[Operator]

After our prepared remarks, we'll take questions from the sell side analysts that cover the company. Earlier this morning, we issued a press release discussing our quarterly results and several financial schedules. We also posted an earnings presentation that provides additional details on our performance. The presentation can be accessed in the earnings press release and on our website at investorrelations.medtronic.com.

[Operator]

During today's program, many of our statements will be forward-looking, and actual results may differ materially, as explained in our SEC filings. We undertake no obligation to update any forward-looking statements. Unless otherwise stated, all comparisons are on a year-over-year basis, and revenue comparisons are made on an organic basis, which excludes the impact of foreign exchange, prior year revenue from the divestiture of the Dutch obesity clinic known as NOK, and Q3 revenue in the current and prior year reported as other.

[Operator]

References to sequential revenue changes compare to the Q2 of fiscal 2026 and are made on an as-reported basis. All share references are on a reported revenue and year-over-year basis and compare to our third fiscal quarter and our competitors' fourth calendar quarter.

[Operator]

Reconciliations of all non-GAAP financial measures can be found in our earnings press release or on our website at investorrelations.medtronic.com. Finally, our EPS guidance does not include any charges or gains that will be reported as non-GAAP adjustments to earnings during the fiscal year. With that, I'm now pleased to hand it over to you, Geoff.

[Geoff Martha, Chairman and CEO at Medtronic]

Okay. Thank you, Ingrid, and hello, everyone. It's an exciting time for Medtronic. We're unlocking new markets and accelerating our performance. Q3 marks the highest revenue growth Medtronic has achieved in 10 quarters, with 6% organic revenue growth. Our end markets are strong, and we're leaning into multiple new opportunities for revenue growth with a continuous pipeline of new and innovative technologies, either developed internally or through venture and M&A, in areas core to Medtronic.

[Geoff Martha, Chairman and CEO at Medtronic]

This includes 4 generational growth drivers: our PFA platform for AFib, Symplicity Spyral for hypertension, Altaviva for urge urinary incontinence, and our Hugo surgical robot. Each, each one of these individual products could ultimately deliver well over $1 billion of revenue, and each serves a large, under-penetrated market, where Medtronic is uniquely positioned to lead and to take share.

[Geoff Martha, Chairman and CEO at Medtronic]

With 80% growth year-over-year, our cardiac ablation solutions business was once again the fastest-growing in the segment, doubling the growth rate of our closest competitor. This quarter, PFA grew nearly 200% worldwide. We gained four points of share in this rapidly growing $13+ billion market with our Affera platform and our Sphere-9 catheter.

[Geoff Martha, Chairman and CEO at Medtronic]

Our catheters continue to demonstrate leading safety and durability, and the versatility of our Sphere-9 catheter is one of the many reasons we continue to see such high physician demand. Today, it's used in a broad range of cases across persistent and paroxysmal procedures globally.

[Geoff Martha, Chairman and CEO at Medtronic]

Now, alongside integrated mapping, 50%-60% of cases now utilize both PFA and RF energies, all with this one singular catheter. We know versatility and efficiency are very important for enabling safer cases and improving EP lab workflows.

[Geoff Martha, Chairman and CEO at Medtronic]

We significantly added to our installed base, a strong leading indicator for future revenue growth and margin expansion. We have a long runway ahead to expand our footprint and deepen our penetration, and we remain on track to double our revenue in this business, delivering $2 billion trailing in total CAS revenue by H1 of fiscal year 2027.

[Geoff Martha, Chairman and CEO at Medtronic]

Looking ahead, we're continuing to innovate and expand our current indications and geographies to drive continued growth. We are excited to bring Sphere-9 to Japan, and we're pursuing an expanded indication submission in VT. Both of these are planned for the H1 of calendar 2026.

[Geoff Martha, Chairman and CEO at Medtronic]

The only other catheter that is generating even more excitement than Sphere-9 is Sphere-360. Last month, we received CE Mark and initiated the U.S. pivotal trial for Sphere-360, which is our next-gen, single-shot, all-in-one PFA and mapping catheter.

[Geoff Martha, Chairman and CEO at Medtronic]

Sphere-360 demonstrated strong European clinical data and drew significant physician interest due to its safety and its durability. Now we're going to begin commercializing in Europe this spring, and we look forward to bringing this unique catheter to the US. Beyond CAS, we're also making material progress with Symplicity Spyral for hypertension and Altaviva for urge urinary incontinence.

[Geoff Martha, Chairman and CEO at Medtronic]

Symplicity delivers a one-time, durable, minimally invasive treatment for hypertension and represents one of our largest growth drivers. Now, this is gonna be a contributor for years to come, given the 18 million US patients with uncontrolled hypertension.

[Geoff Martha, Chairman and CEO at Medtronic]

We're seeing strong patient outcomes in the field and the R&D and value proposition, it resonates with both physicians and patients. Now we've got strong and growing clinical data, a broad label, and expanding reimbursement all in hand. Look, we built the foundation.

[Geoff Martha, Chairman and CEO at Medtronic]

Now we're focused on growing this new segment and transforming the hypertension treatment paradigm. We've recently activated our direct-to-consumer Go Beyond campaign in key markets around the U.S., which is resulting in a 50 times increase in website visits versus the prior quarter. So a lot of interest coming in from patients.

[Geoff Martha, Chairman and CEO at Medtronic]

Building a new market, it does take time. That is something Medtronic knows how to do exceptionally well. And in parallel to building out this new market, we're innovating for the long term. First, with our transradial catheter, which is on track to launch in the H2 of fiscal year 2027, and with our Spyral Gemini trial, evaluating multi-organ ablation to further boost efficacy. Now, similarly, we are scaling Altaviva, our tibial neurostimulation device.

[Geoff Martha, Chairman and CEO at Medtronic]

Altaviva is a simple, yet transformational option for treating urge urinary incontinence, which is a condition that affects 16 million people in the U.S. Altaviva is a very small device that requires no imaging, no sedation, activates the same day, is MRI ready, and offers up to 15 years of battery life, the longest in its category. Again, we are receiving great early interest and feedback from both physicians and patients, and we are training doctors.

[Geoff Martha, Chairman and CEO at Medtronic]

We're educating and supporting hospital staff and investing in omni-channel consumer activation. Look, it's early days for both of these launches, and we are focused on disciplined execution to convert early traction into procedures. Now pivoting to Hugo. This quarter, our Hugo robot received FDA clearance for urologic surgical procedures, enabling us to begin our purposeful U.S. launch.

[Geoff Martha, Chairman and CEO at Medtronic]

Today, I'm excited to share that we've already completed our first installations and initial cases. As noted in our release this morning, last week, we completed our first cases at Cleveland Clinic, where surgeons echoed the strong feedback we continuously receive on Hugo's differentiation across multiple areas. This includes its flexibility, portability, open console, and of course, our trusted instrumentation.

[Geoff Martha, Chairman and CEO at Medtronic]

Hugo is especially compelling when paired with our Touch Surgery digital ecosystem, an AI-powered data, connectivity, and analytics technology that is unique to Medtronic. This quarter, Touch Surgery installations increased over 20% sequentially and have now surpassed 1,000 systems globally. Further, we continue to evolve our Hugo system with the fourth generation software release and continuous system improvements. We are planning to expand into additional indications in the U.S., like hernia, part of our broader general surgery indication, where this system really shines.

[Geoff Martha, Chairman and CEO at Medtronic]

Customers value... I mean, they really value having a partner that spans the full continuum of surgical care. And Medtronic is the only company that has approved offerings across open, laparoscopic, and robotic-assisted surgeries, which matters as hospitals build and expand their surgical practices.

[Geoff Martha, Chairman and CEO at Medtronic]

Now, we are thrilled with these four generational growth drivers, but our innovation pipeline is far broader, and we are committed to driving sustained innovation across our portfolio and advancing a steady cadence of new technologies across high need, high growth categories, where we are well positioned, like MMA, Carotid Stenting, Thrombectomy, Coronary DCB, Cardiac Rhythm Management,

[Geoff Martha, Chairman and CEO at Medtronic]

Spine Surgery, as well as many others. And to that point, I am extremely excited to highlight a major milestone in our neuroscience business. Just last week, we secured FDA clearance for our Stealth Axis surgical system for spinal procedures.

[Geoff Martha, Chairman and CEO at Medtronic]

Stealth Axis is a new transformative platform that unifies AI-powered planning, robotics, and navigation into one seamless system, elevated by the entire AiBLE ecosystem. Stealth Axis was designed around navigation, which is paramount to surgeons' workflow in the OR. Today, navigation, which we pioneered and we lead, drives 70% of U.S. spine procedures, and really, it just dictates the workflow in the spine OR. So Stealth Axis is really two things.

[Geoff Martha, Chairman and CEO at Medtronic]

It's about taking share as a new platform with improved functionality, and it brings down barriers for physicians to step into robotics without disrupting their workflow. Now, building on our 10,000 unit install base, we are expanding and opening this segment and extending our leadership, and we're not stopping at spine. We anticipate pursuing future cranial and ENT indications for Stealth Axis.

[Geoff Martha, Chairman and CEO at Medtronic]

This is an important driver for our CST business and an exciting step forward to improve precision, predictability, and personalization of care. We're executing our M&A strategy as well with the CathWorks acquisition and CRDN, and we continue to build out our venture and minority investment portfolio with the Anteris investment in Structural Heart.

[Geoff Martha, Chairman and CEO at Medtronic]

Both transactions underscore our long-term strategy to digitize, enable, and build effective and efficient ecosystems within our core markets. Before I turn it over to Thierry to walk through the details of our business performance, our financials, and the guidance, I would like to close with the following remarks: At Medtronic, we are translating the breadth and the depth of innovation across the portfolio into durable growth.

[Geoff Martha, Chairman and CEO at Medtronic]

We have businesses at different stages of their growth journey, but the cadence of innovation across our portfolio suggests a steadily improving growth outlook for total Medtronic. We have businesses that are executing exceptionally well today and are positioned to be meaningful contributors for a very long time.

[Geoff Martha, Chairman and CEO at Medtronic]

This includes CAS, with its strong PFA pipeline, CST with Stealth Axis, and of course, CRM, a large and steady growth engine with meaningful innovation in defibrillators, and leadless, and in conduction system pacing. We have businesses where the pipeline is now just activating, where we have clear line of sight to meaningful, tangible opportunities that will enhance growth.

[Geoff Martha, Chairman and CEO at Medtronic]

From CRDN with the ramp of Symplicity, Pelvic Health with Altaviva, Peripheral Vascular Health with Neuroguard and Liberant, and Neurovascular with innovation like Artiss, Neuroguard, and expanding indication for Onyx into MMAE.

[Geoff Martha, Chairman and CEO at Medtronic]

And surgical, where the launch of Hugo in the U.S. is just beginning. These are all real drivers with tangible reasons for improvement and the potential to impact growth in the coming quarters and years. We also have areas where there is work to do, and we have defined plans underway, like in structural heart, where we're taking specific actions to fill out the portfolio and improve the trajectory.

[Geoff Martha, Chairman and CEO at Medtronic]

So with strong contributors delivering today, businesses on the cusp of step change improvement, and segments where we're taking deliberate actions to strengthen long-term competitiveness, we are confident in our ability to deliver durably. So with that, I'll turn it over to Thierry to walk through the details of our business performance. So over to you, Thierry.

[Thierry Piéton, EVP and CFO at Renault Group]

Hey, thanks, Geoff, and hi, everyone. I appreciate all of you joining today. Let's start with our cardiovascular portfolio, where this quarter we delivered 11% year-over-year revenue growth with 13% growth in the U.S. This represents the strongest growth we've seen in cardiovascular in the last 10 years, excluding COVID comps. CAS grew 80% year-over-year, with PFA accounting for 80% of that revenue.

[Thierry Piéton, EVP and CFO at Renault Group]

Beyond CAS, the remainder of the cardiovascular portfolio delivered combined mid-single-digit growth. Cardiac rhythm management also had a strong quarter. CRM continued to contribute 15% of our total revenue, and it grew a healthy 5%.

[Thierry Piéton, EVP and CFO at Renault Group]

This was primarily driven by continued double-digit growth in Micra, mid-teens growth in 3830 CSP Lead, and over 70% growth in Aurora EV-ICD. In peripheral vascular health, we posted high single-digit growth, driven by broad strength across our endovenous portfolio.

[Thierry Piéton, EVP and CFO at Renault Group]

We look forward to the continued launch of NeuroGuard IEP carotid stents and the full market release of our Liberant mechanical thrombectomy system. In structural heart, Q3 was a little softer, as expected, and grew low single digits. We had a stronger quarter internationally and continued to gain share in Europe. This was partially offset in the U.S., where we annualized our Evolut FX+ launch and saw some competitive pressure.

[Thierry Piéton, EVP and CFO at Renault Group]

I'll now pivot to our neuroscience portfolio, which grew 3%. Growth was a little below our expectations this quarter, but neuroscience is also where we have one of our broadest pipelines and some of our most exciting opportunities. Importantly, we expect that pipeline to begin impacting growth in the Q4. Cranial and spinal technologies continues to be a powerful engine for Medtronic. This large business delivered mid-single-digit growth, including 8% growth from strong pull-through in core spine.

[Thierry Piéton, EVP and CFO at Renault Group]

We're excited to offer customers our new navigation and robotics platform, Stealth Axis, with Geoff, which Goeff just mentioned. With FDA clearance achieved, we expect to see Stealth Axis contribute neurosurgery and CST overall as soon as the Q4. Specialty therapies delivered flat results in the Q3. This is an area where we expect improved performance in the coming quarters, given the series of new product developments.

[Thierry Piéton, EVP and CFO at Renault Group]

Neurovascular has been challenged over the last quarters due to China VBP and to the Recall Advantage, both of which are now mostly behind us. We also have line of sight to a higher level of growth from the contribution of On-X's expanded indication. The NeuroGuard carotid stent launch will also contribute as it's being commercialized by both our neurovascular and peripheral vascular businesses.

[Thierry Piéton, EVP and CFO at Renault Group]

In pelvic health, we saw a slightly softer sacral nerve stimulation market environment, but look forward to seeing the increased contribution from Altaviva. In neuromodulation, we grew 4%, driven by the continued rollout of our differentiated, fully closed-loop technologies, Inceptiv SCS and BrainSense aDBS. Next, our MedSurg portfolio grew 3% ahead of expectations.

[Thierry Piéton, EVP and CFO at Renault Group]

First, endoscopy and ACM had strong quarters. Endoscopy revenue grew 10%, led by mid-teens growth in our esophageal portfolio, driven by Nexpowder and strong market adoption of EndoFLIP 300. Acute care and monitoring saw a 7% growth, led by strength in blood oxygen management and airway access. And finally, our surgical business grew by 1%. We saw strength and energy in wound management and hernia, with expected softness and stapling.

[Thierry Piéton, EVP and CFO at Renault Group]

The next phase of growth for this business is the rollout of Hugo, and we're thrilled to see our first installations and first cases so swiftly after the U.S. launch. Wrapping up our business performance is MiniMed, our diabetes business, which delivered 15% reported and over 8% organic growth. Performance was led by double-digit strength in international markets.

[Thierry Piéton, EVP and CFO at Renault Group]

We also saw acceleration in the U.S., with strong sequential lift, driven by Simplera Sync and Instinct, which both just launched in December. Our diabetes business continues its strong innovation cycle, supported by multiple recent regulatory and pipeline milestones. In addition to introducing Instinct and Simplera to the market, we secured several FDA clearances that further expand the 780G's indications. We also announced that the 780G system is now available through pharmacy, with agreements that cover the majority of commercially insured lives in the U.S.

[Thierry Piéton, EVP and CFO at Renault Group]

We submitted MiniMed Fit to the U.S. FDA and began the U.S. pivotal study for Vivera, our third generation, fully closed loop algorithm, which we believe will help maintain our leadership in delivering industry-leading outcomes. Finally, our MiniMed fit patch pump remains on track, and we intend to submit it to the U.S. FDA by this fall.

[Thierry Piéton, EVP and CFO at Renault Group]

The planned separation of MiniMed is perfectly on track. Our preferred path continues to be a two-step IPO and split. We continue to expect the separation to be complete by the end of calendar year 2026. Now, turning to the financials. This quarter, revenue of $9 billion grew 8.7% reported and 6% organic, a 50 basis point acceleration from prior quarter and 50 basis points above our guidance.

[Thierry Piéton, EVP and CFO at Renault Group]

Geographically, this performance was balanced, led by high single-digit growth in Western Europe, with mid-single digit growth across the U.S. and Japan. U.S. growth was 6% year-over-year, the strongest performance we've delivered since fiscal year 2019, excluding COVID comps. In China, we delivered low single-digit growth while navigating ongoing but manageable volume-based procurement in a few businesses.

[Thierry Piéton, EVP and CFO at Renault Group]

Excluding VBP, our growth rate in China was mid-single digit. Our adjusted gross margin was 64.9% ahead of expectations. As I've done in the last several quarters, let me walk you through the rough breakout of the components. We realized 30 basis points of benefit from pricing. Net of inflation, cost down was negative 20 basis points, as the Q3 is typically our lowest quarter for generating cost efficiency savings, and we had some prior year non-recurring items.

[Thierry Piéton, EVP and CFO at Renault Group]

Mix was negative 100 basis points, mostly driven by CAS and diabetes. As discussed in prior disclosures, with CAS in the early stages of launch, this business is currently impacted by the mix of lower margin capital to higher margin catheters, and diabetes is in its early manufacturing ramp-up of Simplera.

[Thierry Piéton, EVP and CFO at Renault Group]

Over time, as you know, we expect this mix dynamic to improve as we scale CAS and separate the diabetes business. Tariffs impacted the business $93 million, or 110 basis points, in line with forecast. And finally, foreign exchange provided an approximate 40 basis points tailwind. Adjusted R&D was 8% of revenue and increased 7.4%. On an organic basis, this outpaced revenue by 50 basis points. Adjusted SG&A was 32.3% of revenue, which is 30 basis points lower than the Q3 of last year.

[Thierry Piéton, EVP and CFO at Renault Group]

We continue to fuel our PFA launch and develop and build the markets for Symplicity, Altaviva, and Hugo, but at the same time, we delivered disciplined leverage in G&A. Our adjusted operating profit was $2.2 billion, resulting in an adjusted operating margin of 24.1%, ahead of expectations again. Our adjusted tax rate was 17.3%, about 100 basis points higher than forecast, largely due to jurisdictional mix of profits. All in all, adjusted EPS was $1.36, 3 cents above the midpoint of our guidance range.

[Thierry Piéton, EVP and CFO at Renault Group]

Now turning to guidance. On the top line, we're reiterating fiscal 2026 organic revenue growth guidance of approximately 5.5%. In the Q4, we expect revenue growth similar to Q3, so around 6% off a stronger Q4 2025 comp.

[Thierry Piéton, EVP and CFO at Renault Group]

Moving down the P&L, we expect our fiscal 2026 gross margin to increase slightly ex tariffs. Pricing, effects, and COGS efficiency programs are expected to more than offset the negative impacts of business mix, primarily from CAS and diabetes. We anticipate a tariff impact to COGS of approximately $185 million, including $75 million in the Q4.

[Thierry Piéton, EVP and CFO at Renault Group]

Including tariffs, we expect fiscal 2026 gross margin decrease of roughly 30 basis points. We expect fiscal 2026 adjusted operating profit to grow approximately 5% or 7% excluding tariffs. Our fiscal 2026 operating margin is expected to be roughly flat, excluding tariffs, and down about 50 basis points, including the tariff impact. In totality, we expect these results to deliver gross margin and operating margin leverage ex tariffs in the H2 of fiscal year 2026, as we stated last quarter.

[Thierry Piéton, EVP and CFO at Renault Group]

Turning to EPS, this quarter, we saw a beat of $0.03. This was largely due to slightly better than expected revenue in the quarter, mainly from CRM and ACM. This was partially offset by the aforementioned tax pressure that we saw in the quarter.

[Thierry Piéton, EVP and CFO at Renault Group]

As we expect CRM and ACM to normalize and the tax pressure to carry into Q4, we are maintaining our fiscal 2026 EPS guidance in the range of $5.62-$5.66. Look, we're excited about the quarter, and we think Q4 is gonna be another robust quarter, and that we will sustain our growth at a higher level and into the next year. We're making progress on margin expansion, and the negative mix effect from CAS and diabetes are gonna get better.

[Thierry Piéton, EVP and CFO at Renault Group]

We're going to continue to invest in growth areas like R&D, sales and marketing, and M&A to capitalize on the opportunities ahead of us. We will also continue to drive efficiency in functional areas. All told, we are committed to our guidance, and we maintain our expectation for high single-digit EPS growth in fiscal year 2027. Back to you, Jeoff.

[Geoff Martha, Chairman and CEO at Medtronic]

Okay, thanks, Thierry. Now, before we go to Q&A, let me close with a, a few final thoughts. So we're encouraged by the progress across the business, as Thierry just said, and we remain committed to stronger, durable revenue and earnings growth. Our PFA trajectory is strong, and we're, we're progressing on multiple billion-dollar opportunities. We're reinforcing our future pipeline, and we're committed to organic and inorganic investment to further bolster the portfolio.

[Geoff Martha, Chairman and CEO at Medtronic]

Bottom line, we are delivering. Now, to our Medtronic colleagues around the world, thank you for your unwavering commitment to our mission and to the patients we serve. You're delivering for customers and for patients, and you're turning our strategy into performance. So thank you. With that, let's turn to Q&A. So first, Ingrid, welcome to your first earnings call, and now can you please provide the instructions and queue up the analysts?

[Ingrid Goldberg, Head of Investor Relations at Medtronic]

Thank you, Geoff. For sell-side analysts that would like to ask a question, please select Participants button and click Raise Hand. If you're using the mobile app, please press More and then select Raise Hand. Your lines are currently on mute. When called upon, you'll receive a request to unmute your line. You must respond to this before asking your question. Finally, please be advised, this Q&A session is being recorded. We'll now pause to assemble the queue. We'll take our first question from TAVR Steed at Bank of America. TAVR, please go ahead.

[Travis Steed, Managing Director, Equity Research and Medical Technology at Bank of America]

Hi, everybody, thanks for taking the question. I guess first I'll start on just the comments on accelerating revenue growth next year and growing earnings high single digits. When you think about CAS, obviously... Can you hear me okay? Can you hear me okay?

[Geoff Martha, Chairman and CEO at Medtronic]

There we go.

[Thierry Piéton, EVP and CFO at Renault Group]

Yeah.

[Operator]

Yeah.

[Travis Steed, Managing Director, Equity Research and Medical Technology at Bank of America]

Okay. I just wanted to ask about the accelerating revenue growth for next year, and also the commitment to grow earnings high single digits. I guess when you think about the overall portfolio, obviously, CAS is starting to hit tougher comps and, you know, this quarter, you know, surgical is only growing 1%, so just trying to think about how you get that business accelerating with Hugo and just, like, the commitment to be able to deliver on the commitments that you've kind of laid out for FY 2027.

[Geoff Martha, Chairman and CEO at Medtronic]

Well, well, thanks, Travis, for the question. I'll give it a start and then, and hand it over to Thierry. I mean, look, on the top line, obviously, as you mentioned, we had a really strong quarter with CAS. You know, we still, you know, we think that growth is, is going to continue and become a larger part of the company. Obviously, we're well positioned there.

[Geoff Martha, Chairman and CEO at Medtronic]

And then we, you know, our other big growth drivers, particularly, Symplicity, for hypertension and Altaviva for overactive bladder, we see them, beginning to, kick in here, even in, Q4. And then you've got a number of other businesses here that, are going to, you know, start growing faster than they have been here recently. You know, one is, CST, with the, Stealth AXiS.

[Geoff Martha, Chairman and CEO at Medtronic]

I'm sure we'll get some questions on that, but I do think this is kind of underappreciated, quite frankly, you know, by the street. This is, you know, not just a new robot, it's not just an extension of Mazor, it's a whole new platform that has a lot of benefits to it, and I think that's gonna create growth from a short and long term for CST.

[Geoff Martha, Chairman and CEO at Medtronic]

Neurovascular is gonna kick up as well. Neurovascular's got a number of new products, like the On-X indication for MMAE, as well as our carotid stenting product and NeuroGuard, and then its anniversaries, VBP and a few other things. You're gonna see a kick up in Neurovascular as well. So I think, you know, we feel good about the growth, continuing here out, you know, not just in Q4, but out into, in FY 2027.

[Thierry Piéton, EVP and CFO at Renault Group]

Yeah, and on the EPS side. So, you know, as I mentioned in the comments, the algorithm is clear, right? So we have the accelerated growth, the things are getting better at the growth margin level, in particular in the H2, as we'll see, the mix effect from CAS getting better and the separation of diabetes will continue to drive the leverage on the functional areas, in particular in GNA.

[Thierry Piéton, EVP and CFO at Renault Group]

And we'll then continue to invest in R&D and in M&A. So we're reiterating the high single digit EPS growth guidance for 2027. We do have a couple, you know, meaningful puts and takes in the number next year. And as we're getting more visibility, we'll keep you posted on what the impacts are.

[Thierry Piéton, EVP and CFO at Renault Group]

But to name a few, so we'll have the carryover from the tariffs, the tariff settlement, going into next year. You know, this year we had about 2.5 quarters of tariffs, and that will carry over into the full year. I think the way to think about that is about $75 million per quarter. So on a full year basis, it means around $300 million of headwind versus the $185 we had in what we're having in 2026. We'll have a little bit of help from the fact that there's 53 weeks in fiscal year 2027, as opposed to 52 usually.

[Thierry Piéton, EVP and CFO at Renault Group]

Then, you know, the diabetes deal, we fully expect the deal to be accretive, but between the moment we do the IPO and the moment we do the split, you should expect some dilution to the tune of $0.01-$0.02 per month. The reason behind that is that most of the stock, the Medtronic stock retirement that we will do that drives the accretion, happens only upon the full separation.

[Thierry Piéton, EVP and CFO at Renault Group]

And so we'll see the accretion later, but initially, we've got a little bit of pressure coming from that. And we've also embedded in the guidance, $0.04-$0.05 of dilution coming from M&A activity. So we've already announced, CathWorks and Anteris, and so we've embedded that in the guidance. So, it's all in.

[Thierry Piéton, EVP and CFO at Renault Group]

As we get more visibility to the timing of diabetes and, and the closing of the M&A deals, we'll give you more specifics on, on the different impacts in, in the Q4 release. But as you can see, we're, we're committed to the growth acceleration, we're committed to the investment with M&A and, and, and with R&D, and we're committed to the guidance.

[Geoff Martha, Chairman and CEO at Medtronic]

Yeah, and just-

[Travis Steed, Managing Director, Equity Research and Medical Technology at Bank of America]

Is the growth acceleration-

[Geoff Martha, Chairman and CEO at Medtronic]

Go ahead, Travis.

[Travis Steed, Managing Director, Equity Research and Medical Technology at Bank of America]

Excluding the selling day? Yeah, there's that extra selling week next year. Is that the growth acceleration excluding that extra selling day?

[Thierry Piéton, EVP and CFO at Renault Group]

So that'll be part of it. That'll be part of it. And again, we'll give you the details of the impacts, as we go into the Q4 announcement.

[Geoff Martha, Chairman and CEO at Medtronic]

When I think about the growth acceleration, you mentioned CAS in Q3. I mean, beyond CAS, you saw our CRM business and our peripheral vascular health business both step up in Q3. You know, Q4, like I said, and beyond, CSP—think about CST and neurovascular starting to accelerate. And then as you get into FY 2027, that's when the Ardian and Altaviva, you know, really kick in, and also Hugo. So we feel good about that acceleration.

[Travis Steed, Managing Director, Equity Research and Medical Technology at Bank of America]

Great. Thank you.

[Ingrid Goldberg, Head of Investor Relations at Medtronic]

All right, our next question comes from Vijay Kumar at Evercore. Please go ahead, Vijay.

[Vijay Kumar, Senior Managing Director at Evercore]

Thank you, Ingrid, and welcome to your inaugural earnings call here. Geoff, congrats on a nice sprint. You know, I had one product question and one clarification on the guidance. On the product, you mentioned RDN, you know, Altaviva, those will be growth accelerators in fiscal 26. How should we monitor the progress? Are there any goalposts that we can look forward to in tracking the launch curves for RDN and Altaviva?

[Geoff Martha, Chairman and CEO at Medtronic]

You know, it's a good question. I think we'll start to lay out more concrete goalposts as we go forward. Right now, we've been talking a lot about, you know, the leading indicators that we're seeing with both, and we're seeing, you know, really strong leading indicators. Like with Altaviva, we talked about, you know, training 500+ physicians.

[Geoff Martha, Chairman and CEO at Medtronic]

You have strong demand, training 500, you know, + physicians. And like I said last quarter, I mean, these are over the weekend, often traveling. It just shows the commitment here. And then things like in renal denervation, I'd say it's things like, you know, the opening of new accounts. Like this quarter, we opened 200, you know, over 200 new accounts.

[Geoff Martha, Chairman and CEO at Medtronic]

Our physician finder is up to 150 physicians, and remember, that's, that's a low, that's a low... It's a hard, it's a high bar to get in. You have to do five cases and plus opt in. So, there's a lot more physicians doing cases today. And we'll continue to track, like, the covered lives.

[Geoff Martha, Chairman and CEO at Medtronic]

We're like, and for reimbursement, for Ardian, we're already up to, like, 100 million covered lives, which is about one third of the population here in the U.S. So those are all leading indicators, and we'll start putting more, you know, other as you put goalposts out there, as this starts to mature a little bit, both of these launches. I don't know if you have anything to add to that, too.

[Thierry Piéton, EVP and CFO at Renault Group]

Nope.

[Vijay Kumar, Senior Managing Director at Evercore]

... Great, and just one clarification on the extra week, Geoff. On, you know, we're looking at exit rates of 6% organic, right? And let's assume next year is north of 6%. The extra week is almost 2 points of growth. So are we looking at, you know, base organic, excluding extra weeks, so somewhere in the 5%-ish range? Or any thoughts on how to think about extra week contribution?

[Thierry Piéton, EVP and CFO at Renault Group]

So, I'll maybe take that one. And thanks for the question. Look, first, it's a little bit less than 2 points of full growth, and again, we'll give you the specific calculations as we close the year. But the way to think of it is that there's gonna be growth acceleration excluding the extra week, right? So it should be upside, so we should have, you know, better growth than we have in fiscal year 2026, in 2027, and the extra week should be on top of that.

[Vijay Kumar, Senior Managing Director at Evercore]

Thank you so much.

[Geoff Martha, Chairman and CEO at Medtronic]

Is that clear, Vijay?

[Vijay Kumar, Senior Managing Director at Evercore]

Crystal clear, Geoff. Thank you.

[Operator]

Great. Our next question comes from Larry Biegelsen at Wells Fargo. Larry, you are live.

[Larry Biegelsen, Senior Medical Devices Analys at Wells Fargo]

Good morning. Thanks for taking the question. Yeah, Geoff, I wanted to ask about CAS, and your growth, you know, continued to accelerate this quarter to 80% worldwide, which implies the worldwide EP market grew about 20% in calendar year Q4.

[Larry Biegelsen, Senior Medical Devices Analys at Wells Fargo]

So my question is: you know, how are you thinking about the EP market growth in calendar year 2026 and your CAS growth, you know, going forward now that you're lapping the Affera US launch? I think to achieve the trailing 12month, you know, $2 billion goal, it looks like your CAS growth has to kind of sustain about 80%, the next two quarters. Is that directionally accurate? Thanks for taking the question.

[Geoff Martha, Chairman and CEO at Medtronic]

Well, first, I'd say you're—you know, we agree with you on the market growth in, in our, you know, fiscal Q3 or Q4 here of around 20%. You know, we think the market, you know, will, you know, continue to, to be like that in the near term. You know, for our fiscal 2027, we think it's gonna be at least high teens, and then thereafter, a strong double-digit market.

[Geoff Martha, Chairman and CEO at Medtronic]

We see the market growth continuing, and then, you know, we believe we're, we're really well positioned with our portfolio of, of catheters, you know, that, that we have, as well as mapping. In terms of our, our business growth, we do see it sustaining here in Q4, and we haven't provided guidance beyond that.

[Geoff Martha, Chairman and CEO at Medtronic]

But, again, I'd like to say, I think we're very well positioned here. When you look at the four players in PFA, I think we, you know, got two that are really, their value proposition right now is centering around mapping. And we feel like we're very well positioned against them because we still think the catheter carries the day, and we have integrated mapping.

[Geoff Martha, Chairman and CEO at Medtronic]

And then, when you look at our competitor, that's really their value proposition centers around catheters, we believe we have a better portfolio of catheters. Our Sphere-9 is, like I said in the commentary, proven to be quite versatile.

[Geoff Martha, Chairman and CEO at Medtronic]

I know initially, our competitor here did a pretty good job of putting out a narrative that Sphere-9 was more of a niche. And I think as that's gotten out there, that's proven not to be true, as it's being used in, you know, across persistent and paroxysmal. It's new cases, redos, it's simple versus complex. It's being used across the board.

[Geoff Martha, Chairman and CEO at Medtronic]

And then we've got Sphere-360, you know, got CE Mark, and it's a single-shot catheter. And again, you know, that's probably the one catheter that's got more excitement than Sphere-9. And we started the U.S. trial. And then, of course, we're gonna have mapping upgrades, you know, on a regular basis. Feeling pretty good about our position today, as well as tomorrow, and like I said, the underlying market's really strong.

[Larry Biegelsen, Senior Medical Devices Analys at Wells Fargo]

All right. Thanks so much, Geoff.

[Operator]

Thank you, Larry. Our next question comes from Patrick Wood at Morgan Stanley. Patrick, please go ahead.

[Patrick Wood, Analyst at Morgan Stanley]

Perfect. Thank you so much for taking the question. I'll keep it to one, just given there's so much going on. Obviously, the CathWorks and the Anteris deals, I know you were close to CathWorks for a long time. You know, how are we thinking about capital allocation, M&A? There's a lot of other companies doing very large deals in this space, and I'm just trying to work out, you know, directionally, do you guys feel still more that it's kind of bolt-on M&A, technology, tuck-ins, that kind of things relative to larger deals, and how do you think about capital allocation going forward? Thanks.

[Geoff Martha, Chairman and CEO at Medtronic]

Well, thanks for the question, Patrick. And, like, as we've stated, you know, we're very committed to accelerating M&A, and you're starting to see that with CathWorks and Anteris. And again, it's, it's very, you know, focused, tied to our, our strategy venture investments that might lead to ultimately to M&A, and, and then, and then M&A. And we are focused on, you know, more like what we would define as tuck-in deals.

[Geoff Martha, Chairman and CEO at Medtronic]

They can get up to $several billion, but tuck-in, in or v- you know, a close adjacency to our existing business, and a number of them, though. I mean, that's the other thing. I think it's a, you know, a, a fairly, you know, meaningful amount of capital among several different tuck-in, opportu- venture and tuck-in opportunities across our portfolio.

[Geoff Martha, Chairman and CEO at Medtronic]

Again, prioritizing maybe the higher growth areas, and in some cases, maybe having multiple shots on goal, like we did with pulsed field ablation, right? We had an organic program. We went out and got Affera. We may, you may see us do that again in some of these high growth, really must-win, you know, markets where... But that's how I would say it: tuck-in across many of our different segments and subsegments as well as venture.

[Patrick Wood, Analyst at Morgan Stanley]

Appreciate it. Thanks for taking the question, guys.

[Operator]

... Great. So Robbie Marcus from JPMorgan will be our next question. Please go ahead, Robbie.

[Robbie Marcus, Managing Director and Senior Analyst at JPMorgan]

Great. Can you hear me okay?

[Geoff Martha, Chairman and CEO at Medtronic]

Yep.

[Robbie Marcus, Managing Director and Senior Analyst at JPMorgan]

Great. Good morning. Thank you for taking the questions. Two from me. Maybe I'll ask them just as one. Geoffrey, or maybe Thierry, as you think about the fiscal 2027 guidance, and especially I imagine you'll have Hugo and renal denervation and tibial spend to support those launches and continued investment in CAS, you know, how do you think about getting to the high single-digit EPS growth? If you could give us some high level drivers there.

[Robbie Marcus, Managing Director and Senior Analyst at JPMorgan]

And then second part, the street's sitting at 8.5% EPS growth. I know traditionally, you do something like 6.5-9.4 is high single. Do you think the street at 8.5 is at a good midpoint of the range to start here? Thanks a lot.

[Thierry Piéton, EVP and CFO at Renault Group]

Yeah. Hi, hi, Robbie. Thanks for the question. Again, on EPS, you know, the high level drivers, we talked about, you know, the accelerated growth and, and obviously that's going to help, you know, from a leverage standpoint. If you look at the gross margin line, what you've seen so far is operational improvements in pricing and cost out that have been offset by the mix effects on CAS and diabetes.

[Thierry Piéton, EVP and CFO at Renault Group]

As I've stated a couple of times already, those are going to get better. The CAS improvement comes from the mix shifting towards more catheters and less capital equipment, which will help from a margin perspective. Then on the diabetes side, it comes from the separation, right?

[Thierry Piéton, EVP and CFO at Renault Group]

So diabetes has a lower gross margin rate than the rest of the business, and so once that business go away, it'll give us a natural lift from a gross margin perspective. If you start looking at overhead, look, we're going to continue to lean into R&D and sales and marketing to develop the franchises that you mentioned. So we're putting resources in Ardian, we're putting resources in CAS, we're hiring the mappers that are necessary. We're doing the direct-to-consumer marketing on, in particular on, renal denervation and Altaviva, and we'll continue to do that.

[Thierry Piéton, EVP and CFO at Renault Group]

The SG&A line will provide leverage because we, as we're having this quarter, for example, or Q3, you know, what you see is the leverage that we get on the GNA line, more than offsets the resources that we're putting from our sales and marketing perspective.

[Thierry Piéton, EVP and CFO at Renault Group]

So look, that will provide some improvements on operating margin, and then, below the line, you know, we'll continue to have a little bit of headwinds on the interest line because we're refinancing debt that was contracted almost at 0%, you know, four or five years ago, with debt that's now at, you know, sort of 3.5%-4%. And we'll continue to have some pressure on tax, but the tax line is kind of getting to where it's going to stabilize now.

[Thierry Piéton, EVP and CFO at Renault Group]

And then, look, you know, I mentioned we have a few puts and takes where we need to understand the timing between now and year end. One is the timing of the diabetes separation, and as I said, you know, between the IPO and the split, we get about $0.01-$0.02 of dilution from the fact that we're losing 20% of the profit of diabetes, but we don't have the benefit from the share count reduction yet.

[Thierry Piéton, EVP and CFO at Renault Group]

You know, that share count reduction is calculated on a 12-month rolling average, so you'll see that gradually get better. And then we'll have some dilution coming from M&A. So, the guidance is all in at a high single-digit EPS growth.

[Thierry Piéton, EVP and CFO at Renault Group]

Now, the second part of your question on the 8.5%, it feels like some of the latter items that I mentioned, so the sort of temporary dilution that we get from diabetes and some of the M&A dilution is maybe not fully embedded in what the street sees right now. And as we get more visibility, we'll help clarify that.

[Robbie Marcus, Managing Director and Senior Analyst at JPMorgan]

Thank you very much.

[Operator]

Our next question comes from Matthew Taylor at Jefferies. Matthew, please go ahead.

[Matthew Taylor, Managing Director and Senior Equity Research Analyst at Jefferies]

Hi, thanks for taking the question this morning. I wanted to follow up on the question around capital allocation and TAVR. I guess it was interesting to see the investment in Anteris. I was wondering if you could comment about why you didn't just buy the whole company versus invest. And we also saw over the weekend, the results of longer term follow-up for CoreValve, published in JACC, and similar to the Edwards trials, there was some late catch up in mortality. I was wondering if you could comment on that in the TAVR arm.

[Geoff Martha, Chairman and CEO at Medtronic]

Sure. I think, you know, on your first go on Travis, I mean, it's just we feel the structural heart space is one of the spaces we helped pioneer. We have a really strong position, great reputation, but we want to expand in that. You know, we've got some organic program—obviously, we have our Evolut platform, you know, we've got mitral and tricuspid replacement programs, but we still think there's an opportunity here to expand. And in the case of TAVR, the balloon expandable is the larger piece of the market, and this is an opportunity to get into that market.

[Geoff Martha, Chairman and CEO at Medtronic]

Again, we may have multiple shots on goal here, but thinking Anteris is a good one to invest in and partner with, and we'll see where we go from here there. And then in terms of the JACC article, you know, I would say here that, you know, look, this is, I just wanna emphasize that this is, you know, an old valve that's no longer commercially available, and it's an old procedural technique that, you know, that we've provided guidance. So basically, all that communication did is reiterate the guidance that we provided back in 2020. And so that's, you know, that's what's happening there.

[Geoff Martha, Chairman and CEO at Medtronic]

And, you know, like I said, we're collaborating with our physicians to make sure they understand all of this and, you know, moving forward from here. So that's ... I don't know if you have anything to add there. But bullish on the structural heart space, and, and, I would, you know, the Anteris investment and, you know, who knows, maybe more following that.

[Matthew Taylor, Managing Director and Senior Equity Research Analyst at Jefferies]

All right. Thanks for the call, Geoff.

[Operator]

All right, our next question comes from Matthew Miksic at Barclays. Matthew, please go ahead.

[Matthew Miksic, Managing Director and Senior Equity Research Analyst at Barclays]

Great. Thanks, thanks so much for taking the question. And congrats on the Affera investment, by the way. So, on cath, I'll just ask one question. You mentioned, you know, generator sales or kind of a headwind to gross margins at this point, you know, the mix is maybe shifting a little more towards capital. If you could give us a sense of when that starts to normalize. And then also, in terms of the runway, I think we understand that hiring mappers is maybe the bottleneck here, if you wanna put it that way. You know, you need more people to open more centers to get more catheter use.

[Matthew Miksic, Managing Director and Senior Equity Research Analyst at Barclays]

Any sense of where you are in that, in that continuum, through the academic centers or into the general, you know, centers in the U.S. and, and some sense of, of the pace that you're able to maintain, for hiring centers? So helpful color. Appreciate you taking the question.

[Geoff Martha, Chairman and CEO at Medtronic]

Thanks, Matthew. You know, on the last part of it, and where are we? I still think we're kind of relatively early in our launch here, where we still have a long runway to go, which is good, in penetrating some of these high volume academic centers, as well as getting out beyond that. And, to your point, the mappers, hiring mappers has been critical. It's not, you know, the topic, if you will, but it is an important topic here. We've been able to stay ahead of it, but it is the thing that we're probably the most focused on right now is continuing to hire mappers.

[Geoff Martha, Chairman and CEO at Medtronic]

You know, and a lot of these mappers tend to be pretty dedicated to this space, and they're seeing where the direction of travel is, or to use a Minnesota term, where the puck's going. And so that helps a lot as well. So that, that's how I would, you know, you know, comment on there. What was the first part of the question again?

[Thierry Piéton, EVP and CFO at Renault Group]

The first part was on the dilution that comes from the capital equipment-

[Geoff Martha, Chairman and CEO at Medtronic]

Yeah.

[Thierry Piéton, EVP and CFO at Renault Group]

When does the mix turn around? So first, what I want to say is cath is a fantastic business from an operating margin perspective, right?

[Geoff Martha, Chairman and CEO at Medtronic]

Right.

[Thierry Piéton, EVP and CFO at Renault Group]

So it is slightly dilutive because of this mix issue at the GM level, but it's driving significant, you know, profitability at the total business level, at the operating margin level. You know, when it's gonna turn around between capital equipment and catheters, you know, I wanna say it's almost a good problem to have. So I hope-

[Geoff Martha, Chairman and CEO at Medtronic]

Right

[Thierry Piéton, EVP and CFO at Renault Group]

... it turns around as late as possible, 'cause as we're building the install base, it's always gonna be good, good news going forward. That being said, I think you'll start to see an inflection in the H2 of next year. The mix is, you know, starting to improve with the catheter sales increasing. And look, year over year, cath is gonna drive gross margin improvement as early as 2027. So look, it's a great business to be in, and it's all good news going forward.

[Matthew Miksic, Managing Director and Senior Equity Research Analyst at Barclays]

Great. Thank you.

[Operator]

Our next question comes from Chris Pasquale at Nephron. Chris, go ahead.

[Chris Pasquale, Partner & Senior Analyst, Medical Devices & Supplies at Nephron Research]

Thanks. I wanted to ask about Hugo. Goeff, you talked about the impact of Symplicity and AltaValve really beginning to kick in as soon as next quarter. I don't think you included Hugo in that group, so I would love to hear how you're thinking about the timeline for Hugo to really begin to move the needle within the surgical business and any qualitative comments you can make about the system pipeline right now.

[Geoff Martha, Chairman and CEO at Medtronic]

Well, first of all, look, super excited about where we are with Hugo. Big quarter for us this past quarter, getting the FDA approval. We just announced this morning, we did—you know, we completed our first cases in the U.S. in February, earlier this month, in Cleveland Clinic. We got more scheduled this week at other centers. And all the leading indicators of Hugo.

[Geoff Martha, Chairman and CEO at Medtronic]

And, oh, by the way, on those cases, we got great feedback in terms of how the system's performing and its future opportunity in the U.S. market. The leading indicators are all positive in terms of, you know, the smooth case rate, procedures, procedure growth globally, and utilization. They can both continue to be really strong. We watch those every week. I know the business watches it every day.

[Geoff Martha, Chairman and CEO at Medtronic]

I see them every week. And we're seeing, you know, a pretty meaningful step up in installations around the world, especially as U.S. kicks in. And so we look, we expect to step up in Q4. Now, the surgical business, as a big business, has some puts and takes, so you may not, you know, you may not move the needle on the surgical business quite yet, but underneath the covers there, Hugo is growing and growing, you know, pretty fast now.

[Geoff Martha, Chairman and CEO at Medtronic]

And it'll eventually you'll see you'll start to see this move, that big $6 billion business. But we like where we sit. Really excited about getting in the U.S. market and the reception that we're getting and the orders that we have. Great. Thanks, Geoff.

[Operator]

Okay, next question comes from Danielle Antalffy at UBS. Danielle, you are live.

[Danielle Antalffy, Senior Analyst at UBS]

Good morning, everyone. Thank you so much for taking the question. Geoff, I was hoping you could talk a little bit more about how we should think about renal denervation, Symplicity, and the market development that you're talking about. You know, we've talked to some referring physicians who've been involved in renal denervation since the very beginning, and she sounds like she's getting a lot of calls from folks. I'm just curious, what goes into actually developing this market, building out helping centers build out referral networks, et cetera?

[Geoff Martha, Chairman and CEO at Medtronic]

Yeah, sure.

[Danielle Antalffy, Senior Analyst at UBS]

And if you could give any color on actual numbers to date, you know, even directionally. Thanks so much. Sorry about that.

[Geoff Martha, Chairman and CEO at Medtronic]

Sure. Thanks, Danielle. I mean, I appreciate that question. I mean, you know, first of all, you know, in terms of physicians getting a lot of calls, that is really starting to kick in. Just to give you, again, I appreciate that it's a leading indicator, but it's pretty powerful. So on our direct-to-consumer website around Symplicity, I'm just double-checking. Last quarter, we had maybe 50,000... Or Q2 rather, we had about 50,000 visits. In Q3, we had 2.5 million visits.

[Geoff Martha, Chairman and CEO at Medtronic]

So the consumer demand is really spiking here, and we're just getting started. Like I said earlier, we opened up over 200 accounts. The physician finder's up, reimbursement's strong. We're getting that strong consumer demand, and most importantly, we're getting, you know, terrific patient results, patient outcomes, right? With the blood pressure coming down meaningfully.

[Geoff Martha, Chairman and CEO at Medtronic]

It's staying patients, you know, and it's really resonating with patients, and that, in and of itself, is getting doctors excited. So what we're doing is we've been hiring a lot of people in terms of market development, and there's several different roles here, right? One is building that referral pathway from the general practitioners and the hypertension hypertensive specialists into the hospital, into that proceduralist.

[Geoff Martha, Chairman and CEO at Medtronic]

We've got a lot of people around health economics, around coding and billing as well, helping the hospitals. So it's a number of roles like that, right? Health economics, coding, billing as well as some of the other roles I said in terms of the market development, building those referral pathways. And that's really where things are right now.

[Geoff Martha, Chairman and CEO at Medtronic]

I'd say all the market, like the initial foundational elements, have all been like the chips have turned over green, right? The FDA approval is breakthrough approval, and it's broad. The CMS reimbursement, it's a good number, and it's broad. You know, the commercial payers are, you know, falling in line, and, you know, the competitive dynamics are way better than we thought.

[Geoff Martha, Chairman and CEO at Medtronic]

We initially here, we're doing. I saw different analysts, you know, over the last couple of years, predictions on the mix between us and the other competitor on the market. We're doing way better than any of those models. And so now we just got to build this market. It's all those things we said, Danielle.

[Geoff Martha, Chairman and CEO at Medtronic]

But again, where we're really excited, where you feel the energy is it all starts with those patient outcomes and how this is resonating with consumers. So the other thing we're going to do over time, besides building the referral pathway, working with hospitals, is building the brand around Symplicity, right? So all the, the 50,000 to 2.5 million I talked about in site visits, that's all about lead development, lead generation.

[Geoff Martha, Chairman and CEO at Medtronic]

We'd also like to build the brand of Symplicity and make it synonymous with hypertension management. So that's, that's gonna be an investment that, that Gary talked about for, for FY27. So a lot of exciting, a lot of excitement right now in, in RD. And it'll start to, you know, the numbers in FY -- will be more meaningful in FY27 for us, the actual revenue, the lagging indicators.And again, it'll be... It's very profitable right out of the gate for us.

[Danielle Antalffy, Senior Analyst at UBS]

Thank you so much.

[Operator]

All right, and as we reach the top of the hour here, our last question is going to come from Joanne Wuensch, Citigroup. And before we move to Joanne, please, of course, email us for any of those we did not reach today. Sorry, and thank you, and we'll look forward to talking to you soon. But Joanne, please go ahead.

[Joanne Wuensch, Managing Director at Citi]

Thank you so much, and good morning. I'm gonna ask the Stealth AXiS question and what you can share with us about the product and why you're so excited about it. Thank you.

[Geoff Martha, Chairman and CEO at Medtronic]

Well, thanks, Joanne, for that question. You know, it, first of all, like I said, I do think this is, has been, is meaningfully underappreciated in the... Not so much in, maybe in the clinical community from spine surgeons, but maybe in the investment community. Because, look, this robot does two things. First of all, it's not an extension of Mazor. It's a new platform with a ton of new functionality that's gonna be very value-added.

[Geoff Martha, Chairman and CEO at Medtronic]

But the other thing that's really important here is how it fits into the workflow. So today, 70%, I mentioned in the commentary, 70% of procedures in the U.S. are navigated. That's like navigation and OR, which we invented, and we lead by far. And, you know, today, robotics doesn't work well with that workflow.

[Geoff Martha, Chairman and CEO at Medtronic]

So that's why robotic penetration is a lot smaller than the 70% that we're seeing with navigation. The Stealth AXiS fits right into that workflow, so it's one seamless system from the initial imaging to the AI-based surgical planning, right into the case, navigation, imaging, and now robotics. One seamless workflow that, trust me, surgeons really have been waiting for.

[Geoff Martha, Chairman and CEO at Medtronic]

So you got a better robot with more functionality, and then you've got a much, much, much better workflow that, as you know, is super important to physicians and health systems. And this is just effectively lowering the barriers to step into robotics for spine surgery. And it's going to grow the market, I believe, and we are definitely gonna continue to take share. And this really, you know, this really-...

[Geoff Martha, Chairman and CEO at Medtronic]

You know, lengthens our, or extends our lead, in my opinion, from our primary competitor in this space. The competitive dynamics have dramatically changed over the last couple of years. We're enabling technology, and our AiBLE suite is key to winning. And this is, like I said, extends our lead over our, our, our competitor. And so super excited about that.

[Geoff Martha, Chairman and CEO at Medtronic]

You know, but in closing here, I'd say beyond some of the big generational growth drivers we mentioned, we talked a lot about CAS and Ardian, a little bit about Altaviva and Hugo. I would add to that robotics piece, I would add, you know, Stealth AXiS. But we've got a breadth of innovation right now in Medtronic, which is why we're getting the excitement here.

[Geoff Martha, Chairman and CEO at Medtronic]

You know, whether, you know, you saw it from this quarter, like I mentioned, from CRM and Peripheral Vascular Health, which we didn't get any questions on. Their growth is has meaningfully improved here from a number of new products like carotid and thrombectomy. We talked about CST accelerating.

[Geoff Martha, Chairman and CEO at Medtronic]

Neurovascular is accelerating with new products that they've got, you know, between the NeuroGuard carotid, you know, product, as well as, you know, MMAE, it's a mouthful. And then you've got these, like I said, these, these bigger growth drivers like Ardian and Altaviva, that are at the very, very... And Hugo, that are at the very early stages. So you're starting to see the breadth kick in, which is beautiful to see.

[Geoff Martha, Chairman and CEO at Medtronic]

I know that in this business, innovation is key, and we've got a depth of innovation with these big generational growth drivers, but we also have the breadth. And, you know, as Thierry walked you through, I think it was Robbie's question, we're pulling different levers to make sure that we're investing appropriately in these organically, whether it's increasing R&D, funding direct to consumer, hiring a ton of mappers.

[Geoff Martha, Chairman and CEO at Medtronic]

And if you're a mapper out there, you know, hit our website up. You know, and then kicking in the M&A, right? So, you know, we're really shifting our stance, moving into more of an offensive footing here, and it's based on just the momentum that we have and the momentum we see coming.

[Operator]

All right. Thank you, everyone, and I'll turn to Geoff for some closing remarks.

[Geoff Martha, Chairman and CEO at Medtronic]

I thought that was the close. Okay. Thank you, thank you all for joining today, and all of your questions. You know, appreciate your support and continued interest in Medtronic, and we hope that you'll join us for our Q4 and our full year, fiscal 2026 earnings broadcast, where we're going to update you on the continued progress that we just talked about against our short and long-term strategies. With that, have a great rest of your day.

Participants

Executives

• Geoff Martha, Chairman and CEO
• Ingrid Goldberg, Head of Investor Relations

Analysts

• Thierry Piéton, EVP and CFO at Renault Group
• Travis Steed, Managing Director, Equity Research and Medical Technology at Bank of America
• Vijay Kumar, Senior Managing Director at Evercore
• Larry Biegelsen, Senior Medical Devices Analys at Wells Fargo
• Patrick Wood, Analyst at Morgan Stanley
• Robbie Marcus, Managing Director and Senior Analyst at JPMorgan
• Matthew Taylor, Managing Director and Senior Equity Research Analyst at Jefferies
• Matthew Miksic, Managing Director and Senior Equity Research Analyst at Barclays
• Chris Pasquale, Partner & Senior Analyst, Medical Devices & Supplies at Nephron Research
• Danielle Antalffy, Senior Analyst at UBS
• Joanne Wuensch, Managing Director at Citi