Published
# Medtronic plc (MDT) — Business, Risks, and Management's Discussion Fiscal year 2026 ended April 24, 2026. Unless noted, the material below is drawn from Medtronic's Annual Report on Form 10-K for fiscal year 2026 (accession 0001628280-26-044354, filed June 18, 2026). --- ## Business Medtronic plc is headquartered in Galway, Ireland, was founded in 1949, and sells device-based medical therapies and services in more than 150 countries. It describes itself as the leading global healthcare technology company, working to a mission written by its founder in 1960 — "to contribute to human welfare by the application of biomedical engineering in the research, design, manufacture, and sale of products to alleviate pain, restore health, and extend life." Management frames current strategy around three priorities: accelerating innovation-driven growth, delivering better outcomes and experiences for patients and providers, and turning data, AI, and automation into action. The company has over 95,000 full-time employees, 43 percent of them in the U.S. or Puerto Rico. Total manufacturing and research space is roughly 10.2 million square feet, about 41 percent of it owned; the largest plants are in the U.S., Mexico, Puerto Rico, China, Ireland, the Dominican Republic, Switzerland, Italy, and France, with sales and administrative offices at approximately 110 locations in more than 60 countries. ### Reportable segments Three reportable segments carry the business: **Cardiovascular Portfolio** — Cardiac Rhythm & Heart Failure, Structural Heart & Aortic, and Coronary & Peripheral Vascular divisions. - Cardiac Rhythm & Heart Failure: implantable pacemakers (Azure, Adapta, Attesta, and the leadless Micra transcatheter pacing system); ICDs (Aurora extravascular ICD, Visia, Evera, Primo, and the Cobalt/Crome BlueSync families) and defibrillation leads (Sprint Quattro Secure, OmniaSecure); CRT-D and CRT-P systems; cardiac ablation, including the PulseSelect and Affera Sphere-360 single-shot pulsed field ablation catheters, the Affera Sphere-9 focal catheter, and the Arctic Front cryoablation system; insertable cardiac monitors (Reveal LINQ, LINQ II with AccuRhythm AI); the TYRX antibacterial mesh envelope; and remote monitoring services. Distribution of the HVAD System stopped in June 2021; a patient support program continues. - Structural Heart & Aortic: the CoreValve/Evolut TAVR family (Evolut PRO, PRO+, FX, FX+), surgical valves including Avalus Ultra, perfusion and blood-handling products, endovascular stent grafts (Endurant II/IIs, Valiant Captivia, Heli-FX EndoAnchor), transcatheter pulmonary valves (Harmony, Melody), the Penditure left atrial appendage exclusion system, and the VitalFlow ECMO system. - Coronary & Peripheral Vascular: drug-eluting stents (Onyx Frontier, Resolute Onyx), balloons and guide catheters, the Symplicity Spyral renal denervation system for hypertension, IN.PACT drug-coated balloons, the Abre venous stent, HawkOne atherectomy, the Liberant mechanical thrombectomy system, and endovenous products (ClosureFast, VenaSeal). **Neuroscience Portfolio** — Cranial & Spinal Technologies, Specialty Therapies, and Neuromodulation divisions. - Cranial & Spinal Technologies: the AiBLE spine technology ecosystem, StealthStation S8 navigation, Stealth Autoguide, the O-arm imaging system, Mazor robotic guidance, UNiD AI-driven surgical planning, Midas Rex drills, spinal implants (Catalyft PL/PL40, CD Horizon ModuLeX, T2 Stratosphere, Adaptix, Titan with nanoLOCK), the Infuse bone graft, and demineralized bone matrix products. - Specialty Therapies: neurovascular coils, stent retrievers and flow diverters (Pipeline Flex and Vantage, Solitaire, Riptide, Onyx liquid embolic, React catheters); ENT products (Straightshot M5, NIM Vital, Propel and Sinuva implants, StealthStation ENT, Stealth AXiS); and pelvic health (InterStim X, InterStim II, InterStim Micro, the NURO system, Altaviva). - Neuromodulation: spinal cord stimulation (Inceptiv closed-loop, Intellis, Vanta), brain modulation (the Percept family with BrainSense), the SynchroMed III drug infusion system, and interventional products (the Kyphon kyphoplasty portfolio, OsteoCool, Emprint, Accurian). **Medical Surgical Portfolio** — Surgical & Endoscopy and Acute Care & Monitoring divisions. Advanced stapling (Tri-Staple, Endo GIA, Signia), energy and vessel sealing (LigaSure, Sonicision 7, Valleylab FT10/FX8), the Hugo robotic-assisted surgery system and Touch Surgery Enterprise, hernia products (AbsorbaTack, MaxTack, Symbotex, ProGrip), sutures (V-Loc, Polysorb, Monosof), endoscopy (GI Genius, PillCam, Bravo, Endoflip 300, Barrx, Nexpowder), and patient monitoring and airway management (Nellcor pulse oximetry, BIS, INVOS, Microstream capnography, McGRATH MAC laryngoscopes, Shiley tubes). **All other / Diabetes.** In May 2025 Medtronic announced its intent to separate the Diabetes Business into a new independent public company, MiniMed Group, Inc. MiniMed completed an initial public offering on March 9, 2026, and beginning in the fourth quarter of fiscal year 2026 the Diabetes Operating Unit was no longer treated as a reportable segment; prior-period net sales were recast. The Diabetes Business sells insulin pumps, continuous glucose monitoring systems, and consumables. ### How it sells Medtronic sells through a combination of direct sales representatives and third parties (independent distributors and agents), with a portion of revenue generated from consignment inventory held at hospitals. Medical supply products are marketed to materials managers, group purchasing organizations, and integrated delivery networks. Sales and marketing teams are generally organized around physician specialties. No single customer accounts for more than 10 percent of total net sales. Research and development is supplemented by external collaborations, investments, licensing, and acquisitions; the company reports no significant customer- or government-sponsored research. Products face approval and post-market regimes in each jurisdiction — the U.S. 510(k) and pre-market approval pathways, the CE Mark in the E.U., and comparable regimes in Japan and China. The E.U. Medical Device Regulation implementation period has been extended to the end of 2027 for high-risk devices and the end of 2028 for medium- and low-risk devices. The company also notes that workforce reductions and reorganization at the U.S. FDA and HHS could affect approval timelines and reimbursement programs. --- ## Risk factors The substantive risks, condensed from Item 1A. **Competition and technology shifts.** Medtronic competes in more than 150 countries against both large diversified manufacturers and small niche specialists, and also against providers of alternative therapies including pharmaceutical companies making GLP-1s. Rapid technological change can shift standards of care, physician preference, and site of service — including the growth of ambulatory surgical centers — faster than anticipated. Market share has moved historically on product corrective actions, physician advisories, and safety alerts. Government-driven pricing mechanisms, including volume-based procurement tenders in China, can require significant price concessions, and some markets impose retrospective payment adjustments or clawbacks. **Execution across multiple platforms.** Growth depends on developing, approving, manufacturing at scale, and gaining adoption for several differentiated platforms concurrently across therapeutic and geographic markets, raising the risk of delays, cost overruns, supply-chain readiness gaps, and underperforming launches. Management explicitly flags AI and digital technology: failure to integrate or scale them at competitor pace could cost growth and share, while developing AI regulation may require significant expenditure. **Supply and manufacturing.** Certain components, raw materials, and services — including sterilization — come from sole suppliers, and several key products are manufactured or sterilized at a single capacity-constrained facility with limited alternatives. FDA and other regulatory requirements make replacement sources slow to qualify. Shortages of semiconductors and resins have previously disrupted manufacturing. Evolving chemical regulation (ethylene oxide, PFAS) and commodity/tariff-driven input prices add further pressure. **Acquisitions, divestitures, and the Diabetes separation.** Integration and separation both consume management time and generate expense; acquired businesses may carry unanticipated liabilities, litigation, or investigations. The Diabetes separation is called out as a risk in its own right: Medtronic retains roughly 90 percent of MiniMed after the March 2026 IPO and expects to take further steps to dispose of some or all of that interest, with timing, structure, and terms subject to market conditions, SEC filing effectiveness, approvals, and completion of operational and legal separation. Dis-synergies, stranded costs, transition-agreement disputes, and adverse tax consequences from future separation steps are all identified. **Regulatory and legal exposure.** The company is subject to FDA, DOJ, HHS OIG, and numerous non-U.S. authorities. Inspection outcomes have in the past included Form 483 observations and warning letters, and enforcement directed at third-party suppliers or sterilizers can disrupt Medtronic's own products. Quality failures can drive recalls, safety alerts, and product liability claims; the strength of the Medtronic brand means an adverse event on one product can damage demand across the brand. Reimbursement rules (anti-kickback, false claims, self-referral, Open Payments) and changes in coverage or payment policy affect both compliance exposure and demand. **Intellectual property.** The business depends substantially on patents and other proprietary rights and operates in an industry with extensive IP litigation, generally as both plaintiff and defendant. Patents expire, applications may not issue, and enforcement in some jurisdictions is weaker; China is roughly six percent of total revenue and is called out as raising reverse-engineering and trade-secret exposure. Some U.S. states now prohibit or limit non-competition agreements. **Tax.** Medtronic is taxed in the U.S., Ireland, and elsewhere; treaty changes, retrospective law changes, and audit disagreements are risks. Pillar Two global minimum tax legislation, including in Ireland, took effect for Medtronic in fiscal year 2025. The long-running U.S. Tax Court dispute over the allocation of income between Medtronic, Inc. and its Puerto Rico subsidiary remains open — the Tax Court issued its opinion in August 2022, the IRS appealed in September 2023 and Medtronic cross-appealed in October 2023, and in September 2025 the Appellate Court remanded the case to the Tax Court. **Information technology and cybersecurity.** The company depends on IT systems it and third parties operate, and many products embed software or collect patient data. Ransomware is identified as the most prevalent attack on large organizations, and attacker techniques may be amplified by AI. On April 24, 2026, Medtronic announced that an unauthorized third party had accessed data in certain of its information technology systems. It contained the incident, activated incident response protocols, and engaged external cybersecurity experts. Based on the investigation to date it has identified no impact to products, patient safety, customer connections, manufacturing and distribution, financial reporting systems, or its ability to meet patient needs, and it does not currently expect a material impact on business or financial results; assessment is ongoing and notification of individuals whose data may have been accessed was expected to begin as early as the first quarter of fiscal year 2027. **Global operations and geopolitics.** Currency swings, tariffs and trade restrictions, sanctions, differing regulatory regimes, longer receivable cycles, and political instability all bear on results. Trade tension between the U.S. and China, and increased tariffs with Mexico, Canada, and the E.U., impose costs; targeted export controls on software, digital health, and AI-enabled tools could restrict operations in particular markets. Russia/Belarus and Israel each represent less than one percent of consolidated revenues and assets, but the Russia-Ukraine conflict affects sub-tier supply of materials such as palladium and neon, and Middle East conflict has disrupted maritime traffic and raised energy costs. Trade receivables with national healthcare systems depend on the financial stability of those countries. **Other named risks.** Healthcare provider consolidation and the shift of procedures to ambulatory surgical centers create pricing pressure; cost-containment by payors can reduce device sales; the company depends on working relationships with healthcare professionals; it self-insures most insurable risks through a wholly-owned captive, retaining only directors-and-officers coverage with third parties; it carries substantial debt obligations whose refinancing terms may worsen; and environmental and sustainability regulation may raise costs or create liabilities. **Irish incorporation.** Shareholders may find it harder to protect their interests than in a U.S.-incorporated company: U.S. judgments are not automatically enforceable in Ireland, directors' duties run to the company rather than shareholders, and shareholder suits are limited. Transfers of shares outside DTC book-entry may attract Irish stamp duty of 1 percent, and gifts or inheritances of shares may attract Irish capital acquisitions tax. Irish law requires periodic shareholder authorization for share issuance; the authorizations approved at the 2025 Annual General Meeting (up to 20 percent of issued ordinary shares, with pre-emption rights disapplied) expire on April 16, 2027 unless renewed. --- ## Management's discussion and analysis — fiscal year 2026 Net sales rose 8.4 percent to $36.4 billion, or 5.8 percent organic — growth the company characterizes, in its fourth quarter fiscal 2026 earnings release (accession 0001628280-26-040034), as its highest annual revenue growth in ten years. Cardiovascular led it, up 12 percent, on pulsed field ablation in Cardiac Rhythm & Heart Failure. Net income attributable to Medtronic grew only 3.0 percent, because the effective tax rate rose to 21.2 percent from 16.6 percent. During the fourth quarter the Diabetes business was carved out into the separately listed MiniMed Group and ceased to be a reportable segment. ### Results | | FY2026 | FY2025 | Change | |---|---|---|---| | Net sales | $36,364M | $33,537M | +8% | | Operating profit | $6,467M | $5,955M | +9% | | GAAP income before income taxes | $6,136M | $5,628M | +9% | | Income tax provision | $1,299M | $936M | +39% | | GAAP net income attributable to Medtronic | $4,801M | $4,662M | +3% | | GAAP diluted EPS | $3.73 | $3.61 | +3% | | Effective tax rate | 21.2% | 16.6% | +460 bps | | Non-GAAP diluted EPS | $5.53 | $5.49 | +1% | | Non-GAAP nominal tax rate | 17.3% | 16.7% | +60 bps | | Net cash provided by operating activities | $7,330M | $7,044M | +4% | | Additions to property, plant, and equipment | $(1,904)M | $(1,859)M | +2% | | Free cash flow (non-GAAP) | $5,426M | $5,185M | +5% | Non-GAAP adjustments in fiscal year 2026 were amortization of intangible assets of $1,772 million pre-tax, restructuring and associated costs of $370 million, acquisition and divestiture-related items of $173 million, certain litigation charges of $113 million, losses on minority investments of $131 million, a $39 million credit for the Italian payback adjustment, and $260 million of certain tax adjustments. ### Net sales by segment | Segment / division | FY2026 | FY2025 | Change | |---|---|---|---| | Cardiac Rhythm & Heart Failure | $7,504M | $6,392M | +17% | | Structural Heart & Aortic | $3,817M | $3,554M | +7% | | Coronary & Peripheral Vascular | $2,656M | $2,535M | +5% | | **Cardiovascular** | **$13,976M** | **$12,481M** | **+12%** | | Cranial & Spinal Technologies | $5,222M | $4,973M | +5% | | Specialty Therapies | $2,997M | $2,940M | +2% | | Neuromodulation | $2,068M | $1,932M | +7% | | **Neuroscience** | **$10,287M** | **$9,846M** | **+4%** | | Surgical & Endoscopy | $6,764M | $6,498M | +4% | | Acute Care & Monitoring | $2,051M | $1,909M | +7% | | **Medical Surgical** | **$8,815M** | **$8,407M** | **+5%** | | Reportable segment net sales | $33,079M | $30,734M | +8% | | Diabetes | $3,112M | $2,755M | +13% | | Other operating segment | $135M | $137M | (1)% | | Other adjustments (Italian payback) | $39M | $(90)M | n/m | | **Total net sales** | **$36,364M** | **$33,537M** | **+8%** | U.S. net sales were $18,103 million (+5%) and international net sales were $18,261 million (+12%). Growth came from most businesses, plus favorable foreign currency and a change in estimate on the Italian payback accrual. Two July 2024 rulings by the Italian Constitutional Court and a June 2025 legislative decree (formalized into law in August 2025) covering years since 2015 produced a $39 million increase to net sales in fiscal year 2026, against a $90 million reduction in fiscal year 2025. **Cardiovascular** drove the year. Cardiac Rhythm & Heart Failure rose 17 percent on strong pulsed field ablation growth (partly offset by cryoablation declines) plus Micra leadless pacemakers, the Aurora EV-ICD, and the SelectSecure 3830 lead. Structural Heart & Aortic rose 7 percent on Structural Heart and Cardiac Surgery, with the Penditure LAA system, Avalus Ultra valve, and VitalFlow ECMO. Coronary & Peripheral Vascular rose 5 percent on Symplicity Spyral renal denervation, guide catheters and balloons, and endovenous products, offset by declining coronary stents. **Neuroscience** grew 4 percent: Cranial & Spinal Technologies +5 percent on AiBLE adoption in Core Spine and Neurosurgery; Specialty Therapies +2 percent on ENT and flow diversion, offset by Pelvic Health and the Pipeline Vantage recall; Neuromodulation +7 percent on the Inceptiv closed-loop spinal cord stimulator, the Percept RC neurostimulator with BrainSense, and Interventional. **Medical Surgical** grew 5 percent: Surgical & Endoscopy +4 percent on LigaSure, ProGrip, V-Loc, electrosurgery, and surgical robotics, partly offset by Advanced Stapling as procedures shifted to robotics and bariatric volumes declined, plus Endoscopy growth from Nexpowder and Endoflip 300; Acute Care & Monitoring +7 percent on Nellcor pulse oximetry, McGRATH MAC, and BIS/INVOS sensors. **Diabetes** grew 13 percent to $3.1 billion, chiefly on international adoption of the MiniMed 780G AID system with Simplera Sync and Guardian 4 sensors and Extended Infusion Sets. ### Costs, expenses, and taxes Cost of products sold was $12.7 billion (FY2025: $11.6 billion), and rose as a percentage of net sales, primarily on $185 million of increased tariffs and duties on imported goods and $84 million of asset write-offs, partly offset by favorable currency and the Italian payback change. Research and development expense was $2.9 billion (FY2025: $2.7 billion). Selling, general, and administrative expense was $11.8 billion (FY2025: $10.8 billion), up on selling expense tracking sales growth, new product launches, and expenses supporting the Diabetes separation. Accelerated amortization on certain Cardiovascular intangibles was $121 million (FY2025: $151 million). Other operating expense swung on currency remeasurement and hedging, a net loss of $238 million in fiscal year 2026 against a $3 million net loss in fiscal year 2025, plus a $157 million charge for a future minimum royalty obligation under a research and development funding arrangement. Other non-operating income, net fell to $384 million from $402 million, driven by a $93 million decrease in interest income, partly offset by smaller losses on minority investments ($131 million in fiscal year 2026 versus $213 million in fiscal year 2025). The effective tax rate rose to 21.2 percent from 16.6 percent, chiefly on certain tax adjustments, an increase in Pillar Two global minimum tax, and jurisdictional mix, partly offset by $148 million of net operational tax benefits. Certain tax adjustments netted to a $260 million cost, comprising $150 million from an intercompany sale of intellectual property, $70 million associated with the Diabetes separation, $66 million of amortization of previously established deferred tax assets, a $51 million benefit from a change in estimate of accrued interest on uncertain tax positions, and $25 million mainly from writing off certain deferred tax assets. The One Big Beautiful Bill Act of 2025, enacted July 4, 2025, did not materially affect the fiscal year 2026 rate and is not expected to materially affect fiscal year 2027 and beyond. ### Liquidity and capital Cash and cash equivalents were $1.9 billion at April 24, 2026, with $7.3 billion of current investments. Total debt was $28.0 billion, down from $28.5 billion, on Euro-denominated repayments net of issuances offset by exchange-rate effects. In July 2025 Medtronic repaid at maturity €1.0 billion ($1.2 billion) of Senior Notes. In September 2025 Medtronic, Inc. issued two tranches of Euro-denominated Senior Notes totaling €1.5 billion, maturing in fiscal years 2031 and 2046, for approximately $1.7 billion net; the proceeds repaid €500 million of Medtronic Luxco's 2.625% Senior Notes for $587 million in September 2025 and €1.0 billion of Luxco's 0.000% Senior Notes for $1.2 billion in October 2025. No commercial paper was outstanding at year-end against a $3.5 billion program, and nothing was drawn on the $3.5 billion five-year syndicated credit facility expiring December 2030 (expandable by a further $1.0 billion). S&P and Moody's ratings were unchanged year over year. Contractual interest on outstanding debt is projected at $0.7 billion short-term and $7.9 billion long-term; purchase commitments are estimated at $0.5 billion short-term and $1.1 billion long-term. Operating cash flow rose $286 million on higher customer collections, offset by higher payments to suppliers (including tariff duties), taxes, and certain litigation payments. Net cash used in investing rose $997 million, mainly $889 million more in net investment purchases and $308 million more paid for acquisitions. Net cash used in financing rose $390 million: a $3.3 billion year-over-year swing in debt (a $1.2 billion outflow in fiscal year 2026 against a $2.1 billion inflow in fiscal year 2025), partly offset by $538 million of MiniMed IPO proceeds and $2.2 billion less in net share repurchases. Under the $5.0 billion authorization approved in March 2024, Medtronic repurchased 10 million shares in fiscal year 2026 at an average $93.25 (fiscal year 2025: 38 million shares at $83.36), leaving approximately $1.2 billion of authorization at April 24, 2026. Ordinary cash dividends declared and paid were $0.71 per share in each quarter of fiscal year 2026 (fiscal year 2025: $0.70). There were approximately 17,816 shareholders of record on June 12, 2026. ### Goodwill The annual third-quarter impairment test found the Medical Surgical reporting unit's fair value exceeded its carrying value including goodwill by approximately 12 percent; $20.0 billion of goodwill was allocated to that unit at April 24, 2026. The remaining reporting units' fair values materially exceeded carrying values. MiniMed's stock price declined after its IPO; as of the filing date, its estimated fair value exceeded carrying value and no impairment was recorded, but future impairment is possible if fair value declines. ### Portfolio moves during the year - **MiniMed IPO (March 9, 2026).** MiniMed sold 28,000,000 shares at $20.00 per share for net proceeds of $538 million and listed on Nasdaq under "MMED." Medtronic holds 252,813,348 shares, about 90.03 percent, and consolidates MiniMed; non-controlling interest at March 9, 2026 was $381 million. A Transition Services Agreement covers services for a period generally not expected to exceed 24 months. Medtronic plans to complete the separation within the next fiscal year. - **CathWorks Ltd. (April 20, 2026).** Medtronic acquired all remaining outstanding shares of the privately held CathWorks for $525 million of consideration transferred, including $115 million of contingent consideration, expanding the Coronary & Peripheral Vascular division. ### Litigation and other contingencies Certain litigation charges, net were $113 million in fiscal year 2026, against $317 million in fiscal year 2025 and $149 million in fiscal year 2024; accrued litigation was approximately $0.2 billion at April 24, 2026 (April 25, 2025: $0.4 billion). - **Applied Medical (antitrust).** After a January 20 – February 4, 2026 jury trial in the U.S. District Court for the Central District of California, the jury on February 5, 2026 returned a verdict for Applied Medical Resources Corporation awarding $382 million in damages, to be automatically trebled by the court, on claims that Medtronic engaged in anticompetitive conduct in advanced bipolar devices. Applied is expected to seek attorneys' fees and injunctive relief. Medtronic has filed a post-trial motion and plans to post surety bonds once final judgment is entered. No liability has been recorded, as management does not consider a loss probable and cannot estimate a range. - **Colibri (patent).** On July 18, 2025 the Federal Circuit reversed the lower court and vacated the approximately $106 million February 2023 jury verdict against Medtronic relating to the Evolut TAVR family, ruling no infringement. All appellate avenues have closed and the potential liability is eliminated. - **Hernia mesh.** As of June 10, 2026, subsidiaries were named in suits on behalf of approximately 10,350 individual plaintiffs — roughly 7,450 in a coordinated Massachusetts state proceeding, about 500 in Minnesota state court, and about 2,400 in a federal MDL in the District of Massachusetts. Most relate to products not subject to recall or adverse regulatory action. Charges were recognized in fiscal year 2026. - **Diabetes pump retainer ring.** As of June 8, 2026, fifteen lawsuits on behalf of 55 individuals, mostly coordinated in California state court, over Series 600 insulin pumps subject to 2019 and 2021 field corrective actions. Following the IPO, MiniMed is responsible for resulting financial liabilities. - **Mallinckrodt bankruptcy.** A trust created in Mallinckrodt PLC's bankruptcy claims Covidien spun off the pharmaceuticals business in 2013 to avoid opioid liability. In August 2025 the court granted in part and denied in part summary judgment for Medtronic's affiliates on a bankruptcy safe-harbor argument; the case proceeds to discovery on intentional fraudulent transfer and related claims. No liability recorded. - **Environmental.** Successor to cleanup actions including Orrington, Maine, and to the Penobscot River and Bay mercury litigation, for which a final settlement order issued in October 2022 and remediation is being implemented. - **Income taxes.** Beyond the Puerto Rico allocation matter described above, the IRS issued a preliminary audit report in April 2026 on Medtronic Group Holding, Inc. for fiscal years 2017 to 2019. Unresolved issues include the allocation of income between U.S. entities and the Puerto Rico affiliate, intercompany debt interest rates, and foreign tax credit calculation; Medtronic disagrees and will pursue IRS Appeals. ### Macroeconomic outlook management flags Based on rates as of June 3, 2026, Medtronic estimates a pre-tax net tariff impact of $250 million in fiscal year 2027, excluding any government refunds. On February 20, 2026 the U.S. Supreme Court ruled that tariff policies under the International Emergency Economic Powers Act are unconstitutional; the U.S. Court of International Trade directed Customs and Border Protection to formalize a refund process, and on April 20, 2026 CBP launched an online portal for IEEPA refund requests, all of which it will review for validity. Management also flags competitive launches and pricing pressure, currency, inflation, interest rates, reimbursement, product mix, registration delays, tender pricing especially in China, replacement-cycle effects, and supply-chain disruption. --- ## Third quarter of fiscal year 2026 From the Quarterly Report on Form 10-Q for the quarter ended January 23, 2026 (accession 0001628280-26-011107, filed February 24, 2026), which reports a period inside the fiscal year covered above. Net sales were $9,017 million for the three months and $26,557 million for the nine months, against $8,292 million and $24,610 million a year earlier. Diluted EPS was $0.89 for the quarter and $2.76 for the nine months, against $1.01 and $2.79. The effective tax rate was 18.1 percent for the quarter and 16.8 percent for the nine months, against 15.4 percent and 16.9 percent; the non-GAAP nominal tax rate was 17.3 percent and 17.2 percent. By segment for the quarter, Cardiovascular net sales were $3.5 billion, up 14 percent (Cardiac Rhythm & Heart Failure +20 percent, Structural Heart & Aortic +6 percent, Coronary & Peripheral Vascular +9 percent); Neuroscience was $2.6 billion, up 4 percent; Medical Surgical was $2.2 billion, up 5 percent; and Diabetes was $796 million, up 15 percent. Cost of products sold was $3.3 billion for the quarter and $9.3 billion for the nine months, rising as a percentage of sales on roughly $90 million and $110 million respectively of increased tariff duties, $84 million of asset write-offs, and unfavorable currency. Research and development was $722 million and $2.2 billion; selling, general, and administrative was $3.0 billion and $8.7 billion. Total debt was $28.1 billion at January 23, 2026, with $1.1 billion of cash and $7.2 billion of current investments, and $140 million of commercial paper outstanding. At that date the tariff estimate management was working to, based on rates as of February 17, 2026, was a pre-tax net impact of $185 million in fiscal year 2026, with the majority recognized in the second half. The quarter's subsequent-events note recorded the February 3, 2026 announcement of the intent to exercise Medtronic's option to acquire CathWorks Ltd., valued at up to $585 million with potential revenue-based contingent consideration — the transaction that closed on April 20, 2026 for $525 million of consideration transferred — and the February 20, 2026 Supreme Court ruling on IEEPA tariffs. --- ## Subsequent events Events after the April 24, 2026 fiscal year end, from the annual report's subsequent-events note and the discussion of acquisitions and dispositions, with closing dates as reported in the September 1, 2026 earnings release (accession 0001628280-26-059697). - **Scientia Vascular acquisition — closed June 12, 2026.** Medtronic closed on the acquisition of all outstanding shares of Scientia Vascular, a privately held company, expanding the Neuroscience portfolio with differentiated access products for complex neurovascular conditions. Total consideration was approximately $550 million up front, plus revenue- and regulatory-based contingent consideration of up to $375 million. - **SPR Therapeutics, Inc. — announced May 20, 2026, closed July 16, 2026.** Medtronic acquired all outstanding equity of SPR Therapeutics, Inc., a privately held medical technology company whose temporary peripheral nerve stimulation technology enhances the Neuromodulation division. Consideration was expected to be approximately $650 million, subject to customary closing adjustments. ### First quarter of fiscal year 2027 Medtronic reported results for the quarter ended July 31, 2026 in a press release issued September 1, 2026 and furnished as Exhibit 99.1 to a Current Report on Form 8-K (accession 0001628280-26-059697). Revenue was $9.756 billion, up 13.7 percent as reported and 13.7 percent organic. GAAP net income was $1.470 billion and GAAP diluted EPS was $1.14, up 41.4 percent and 40.7 percent; non-GAAP net income was $1.860 billion and non-GAAP diluted EPS was $1.45. GAAP operating profit was $1.764 billion at an 18.1 percent margin; non-GAAP operating profit was $2.316 billion at a 23.7 percent margin. Results include an extra fiscal week that fell in the quarter, which the company estimates benefited organic growth by approximately $570 million. By portfolio, Cardiovascular revenue was $3.927 billion (+18.9 percent organic), Neuroscience $2.678 billion (+9.3 percent organic), Medical Surgical $2.279 billion (+10.2 percent organic), and the Diabetes business $843 million (+14.9 percent organic). The release notes the closing of both the Scientia Vascular acquisition (June 12) and the SPR Therapeutics acquisition (July 16), contributing $14 million and $5 million of revenue respectively in the quarter. Medtronic raised fiscal year 2027 guidance: organic revenue growth of 7.25 percent to 7.75 percent (from 6.75 percent to 7.25 percent) and diluted non-GAAP EPS of $5.94 to $6.00 (from $5.90 to $6.00), including an estimated neutral to 1 percent accretive impact from foreign currency at recent rates. The release also states that the Diabetes separation is expected to be completed through a series of capital markets transactions — a spin-off, split-off, offering, or combination — with a split-off the company's current preferred structure and no final decision reached.