GALWAY, Ireland, Nov. 19, 2024 /PRNewswire/ — Medtronic plc (NYSE: MDT) today announced financial results for its second quarter (Q2) of fiscal year 2025 (FY25), which ended October 25, 2024.
Key Highlights
- Revenue of $8.4 billion increased 5.3% as reported and 5.0% organic
- GAAP diluted earnings per share (EPS) of $0.99; non-GAAP diluted EPS of $1.26
- Company raises FY25 organic revenue growth and EPS guidance
Financial Results
Medtronic reported Q2 worldwide revenue of $8.403 billion, an increase of 5.3% as reported and 5.0% on an organic basis. Organic revenue growth comparison excludes:
- Other revenue of $37 million in the current year and $61 million in the prior year; and
- Foreign currency translation benefit of $45 million on the remaining segments.
As reported, Q2 GAAP net income and diluted earnings per share (EPS) were $1.270 billion and $0.99, respectively, representing increases of 40% and 46%, respectively. As detailed in the financial schedules included at the end of this release, Q2 non-GAAP net income and non-GAAP diluted EPS were $1.620 billion and $1.26, respectively, representing a decrease of 3% and an increase of 1%, respectively. Included in Q2 non-GAAP diluted EPS was a -9 cent impact from foreign currency translation. Non-GAAP adjusted diluted EPS grew 8% on a constant currency basis.
“Our momentum is building as we keep executing on our commitments, delivering yet another consecutive quarter of strong results that came in ahead of expectations,” said Geoff Martha, Medtronic chairman and chief executive officer. “Innovation matters, and innovation is really driving our growth today. As we look ahead, we’re confident that this diversified growth will keep going, especially given the strength of our pipeline in high-impact markets that will allow us to benefit even more patients around the world.”
Cardiovascular Portfolio
The Cardiovascular Portfolio includes the Cardiac Rhythm & Heart Failure (CRHF), Structural Heart & Aortic (SHA), and Coronary & Peripheral Vascular (CPV) divisions. Revenue of $3.102 billion increased 6.1% as reported and 5.6% organic, with a high-single digit increase in SHA and mid-single digit increases in CRHF and CPV, all on an organic basis.
- CRHF results included mid-single digit growth in Cardiac Rhythm Management, driven by high-single digit growth in Defibrillation Solutions and Cardiac Pacing Therapies, including high-teens growth in Micra™ transcatheter pacing systems; Cardiac Ablation Solutions had flat results as strong growth of the PulseSelect™ pulsed field ablation (PFA) system offset declines in cryoablation
- SHA results driven by high-single digit growth in Structural Heart, on the U.S. launch of the Evolut™ FX+ TAVR system, and low-double digit growth in Cardiac Surgery
- CPV delivered mid-single digit growth in both Coronary, with strength in guide catheters and balloons, and Peripheral Vascular Health
- Ramping commercial availability of the Affera™ Mapping and Ablation System and Sphere-9™ catheter following late October U.S. Food and Drug Administration (FDA) approval
- Received CE Mark for Evolut™ FX+ TAVR system in late October; started commercial launch across Europe this month
- Launched Avalus Ultra™ surgical valve in Western Europe and VitalFlow™ Extracorporeal Membrane Oxygenation (ECMO) system in the U.S.
- In September, Symplicity™ blood pressure procedure named to FORTUNE 2024 ‘Change the World’ list
- Earlier this month, granted transitional pass-through (TPT) payment under the U.S. Medicare Hospital Outpatient Prospective Payment System beginning January 1, 2025, for Symplicity Spyral™ renal denervation (RDN) catheter, used in the Symplicity™ blood pressure procedure
Neuroscience Portfolio
The Neuroscience Portfolio includes the Cranial & Spinal Technologies (CST), Specialty Therapies, and Neuromodulation divisions. Revenue of $2.451 billion increased 7.1% as reported and 6.7% organic, with a low-double digits increase in Neuromodulation and mid-single digit increases in both CST and Specialty Therapies, all on an organic basis.
- CST above market performance driven by continued adoption of the AiBLE™ ecosystem of spine implants and enabling technology, with mid-single digit growth in Core Spine and high-single digit growth in Biologics and Neurosurgery
- Specialty Therapies results driven by mid-single digit growth in both Neurovascular, with continued strength in hemorrhagic stroke products, and Pelvic Health, on continued adoption of the InterStim X™ system; ENT grew low-single digits on strength in capital placements
- Neuromodulation drove above market performance, with high-teens growth in Brain Modulation on the continued launch of the Percept™ RC deep brain stimulator (DBS) with BrainSense™ technology; Pain Therapies grew low-double digits, including low-double digit growth in U.S. Pain Stim on the continued launch of the Inceptiv™ spinal cord stimulator
- Medtronic pioneering ADAPT-PD clinical trial methods and preliminary data studying adaptive deep brain stimulation (aDBS) published in September in npj Parkinson’s Disease, part of the prestigious Nature Portfolio of journals
- In September, expanded AiBLE™ spine surgery ecosystem with new technologies and announced partnership with Siemens Healthineers to co-market and integrate the Siemens Healthineers Multitom Rax™ imaging system
Medical Surgical Portfolio
The Medical Surgical Portfolio includes the Surgical & Endoscopy (SE) and the Acute Care & Monitoring (ACM) divisions. Revenue of $2.128 billion increased 1.2% as reported and increased 0.7% organic, with low-single digit organic increase in ACM and flat organic result in SE. SE year-over-year results were affected by a difficult comparison from prior year supply recovery in Surgical and increased high-single digits sequentially.
- SE results included flat results in both Advanced Surgical Technologies, with strength in Advanced Energy, driven by continued adoption of the LigaSure™ Maryland XP vessel sealer, offsetting declines in Advanced Stapling; General Surgical Technologies grew low-single digits, with strength in Hernia and Wound Management products
- ACM performance included high-single digit growth in Nellcor™ Blood Oxygen Management products
Diabetes
Revenue of $686 million increased 12.4% as reported and 11.0% organic.
- U.S. revenue grew high-single digits on the continued adoption of the MiniMed™ 780G automated insulin delivery (AID) system
- International revenue grew low-double digits on increasing CGM attachment rates and the continued roll-out of Simplera Sync™ sensor
- In September, meta-analysis of 28 randomized control trials published in Diabetes/Metabolism Research and Reviews concluded MiniMed™ 780G achieved highest time-in-range among seven commercial AID systems
Guidance
The company today raised its FY25 revenue growth and EPS guidance.
The company raised its FY25 organic revenue growth guidance to 4.75% to 5% versus the prior range of 4.5% to 5%. The organic revenue growth guidance excludes the impact of foreign currency and revenue reported as Other. Including Other revenue and the impact of foreign currency exchange, if recent foreign currency exchange rates hold, FY25 revenue growth on an adjusted basis would be in the range of 3.4% to 3.9%.
The company raised its FY25 diluted non-GAAP EPS guidance to the new range of $5.44 to $5.50 versus the prior $5.42 to $5.50. This includes an estimated -5% impact from foreign currency exchange based on recent rates, unchanged from the prior guidance. The company’s guidance represents FY25 diluted non-GAAP EPS growth in the range of 4.6% to 5.8%.
“We’re restoring our earnings power through our focus on underlying margin improvement, delivering another quarter of high-single digit constant currency adjusted EPS growth,” said Gary Corona, Medtronic interim chief financial officer. “And now, as the impact from foreign currency abates, we expect to report high-single digit adjusted EPS growth in the back half of our fiscal year, in line with our long-term commitment to deliver durable, mid-single digit organic revenue growth with EPS leverage.”
FY24 Impact Report
Today, Medtronic released its FY24 Impact Report demonstrating the company’s sustainability progress. Medtronic also launched a new Impact webpage and FY24 Highlights Report featuring notable key performance indicators and stories, as well as an online Data Hub that shows the company’s commitment to transparent disclosure and reporting:
- Achieved 2025 goal to reduce greenhouse gas intensity by 50% a year early, with a 52% reduction in FY24
- Exceeded goal to reduce aggregate product complaint rate by 10% for identified product families, with a 33% reduction in FY24
- More than 78 million patients served through expanded access strategies
- $2.7B spent in R&D investments to drive innovation
Video Webcast Information
Medtronic will host a video webcast today, November 19, at 8:00 a.m. EST (7:00 a.m. CST) to provide information about its businesses for the public, investors, analysts, and news media. This webcast can be accessed by clicking on the Events icon at investorrelations.medtronic.com, and this earnings release will be archived at news.medtronic.com. Within 24 hours of the webcast, a replay of the webcast and transcript of the company’s prepared remarks will be available by clicking on the Events icon at investorrelations.medtronic.com.
Medtronic plans to report its FY25 third and fourth quarter results on Tuesday, February 18, 2025, and Wednesday, May 21, 2025, respectively. Confirmation and additional details will be provided closer to the specific event.