Medtronic plc (MDT) Q3 2025 Earnings Summary

Executive Summary

Q3 FY25 revenue was $8.292B (+2.5% reported, +4.1% organic) and non-GAAP diluted EPS was $1.39 (+7% YoY); adjusted EPS beat consensus by $0.03 and came in above the high end of guidance, driven by stronger gross margin and operating margin and a better-than-expected tax rate .
Strength was broad: Cardiac Ablation Solutions grew ~22% on rapid PFA adoption, Micra leadless pacemakers +24%, U.S. Cranial & Spinal Technologies +high single digits, and Diabetes +10% (organic); Medical Surgical was pressured by U.S. distributor destocking and stapling headwinds .
FY25 guidance reiterated: organic revenue growth 4.75%-5% and non-GAAP EPS $5.44-$5.50; management expects acceleration in Q4 and high-single-digit adjusted EPS growth for the back half; FX headwinds lessen in FY26 per commentary .
Near-term catalysts: CMS National Coverage Analysis for Renal Denervation (expected final by Oct 11, 2025), expanded PFA supply with new Galway site, continued Evolut FX+ TAVR adoption, and Adaptive DBS FDA approval following CE Mark—each supports growth narratives into FY26 .

What Went Well and What Went Wrong

What Went Well

Cardiac Ablation Solutions delivered ~22% growth; “We’ve hit a new gear on supply…demand for our PFA portfolio continues to accelerate. We are the only company with 2 PFA platforms, Affera and PulseSelect” .
Leadless pacing and Diabetes sustained double-digit growth; Micra leadless pacemakers were +24% and Diabetes printed ~10% growth on strong 780G adoption and high CGM attachment rates .
Margin leverage: adjusted gross margin 66.6% (+50 bps YoY) and adjusted operating margin 26.2% (+100 bps YoY) on COGS efficiency, better pricing, and mix—supporting EPS beat and guidance confidence .

What Went Wrong

Medical Surgical pressured by U.S. distributor destocking and stapling headwinds; management quantified “a couple of hundred basis point impact” to U.S. Surgical growth, with resolution expected as distributors reach target inventories entering FY26 Q1 .
CPV softness tied to China volume-based procurement volatility; management characterized this as a China-specific issue affecting Peripheral Vascular in the quarter .
FX remained a drag in FY25 (EPS guide factors ~5 points FX impact), though management is proactively mitigating via pricing and natural hedges; FX headwind expected to be “meaningfully less” in FY26 .

Financial Results

Consolidated Results vs Prior Quarters and Prior Year

Metric	Q1 FY25	Q2 FY25	Q3 FY25
Revenue ($USD Billions)	$7.915	$8.403	$8.292
GAAP Diluted EPS ($)	$0.80	$0.99	$1.01
Non-GAAP Diluted EPS ($)	$1.23	$1.26	$1.39
Adjusted Gross Margin (%)	65.9%	65.2%	66.6%
Adjusted Operating Margin (%)	24.4%	24.3%	26.2%
Organic Revenue Growth (%)	5.3%	5.0%	4.1%

Notes: Medtronic reports organic growth excluding “Other” revenue and FX; non-GAAP margins per reconciliations .

EPS Surprise vs Estimates (where available)

Metric	Q1 FY25	Q2 FY25	Q3 FY25
EPS Surprise ($)	N/A (management: “ahead of expectations”)	N/A (management: results “ahead of expectations”)	+$0.03 vs consensus (management)

Wall Street consensus detail via S&P Global was unavailable due to API limits; comparison based on management commentary . Values from S&P Global not retrieved.

Segment Revenue Breakdown (Q3 FY25 vs Q3 FY24)

Segment	Q3 FY24 ($MM)	Q3 FY25 ($MM)
Cardiovascular	$2,929	$3,037
- Cardiac Rhythm & Heart Failure	1,470	1,545
- Structural Heart & Aortic	843	874
- Coronary & Peripheral Vascular	616	618
Neuroscience	$2,355	$2,458
- Cranial & Spinal Technologies	1,204	1,250
- Specialty Therapies	726	732
- Neuromodulation	425	476
Medical Surgical	$2,112	$2,072
- Surgical & Endoscopy	1,616	1,596
- Acute Care & Monitoring	495	476
Diabetes	$640	$694
Total Reportable Segments	$8,035	$8,260
Other	$53	$32
TOTAL	$8,089	$8,292

KPIs

KPI	Q3 FY25	Comment
Adjusted Gross Margin (%)	66.6%	+50 bps YoY; pricing/mix/COGS efficiency
Adjusted Operating Margin (%)	26.2%	+100 bps YoY
Non-GAAP Effective Tax Rate (%)	15.7%	Better-than-expected aided EPS
Cash from Operations (9M FY25, $MM)	$4,516	YTD cash generation
Free Cash Flow (9M FY25, $MM)	$3,116	Operating cash minus capex
Cash & Equivalents (Jan 24, 2025, $MM)	$1,240	Balance sheet
Current Debt ($MM)	$2,622	Balance sheet
Long-term Debt ($MM)	$23,985	Balance sheet

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Revenue Growth (%)	FY25	4.5%–5.0% (Q1)	4.75%–5.0% (Q2 raised; reiterated in Q3)	Raised (Q2), Maintained (Q3)
Diluted Non-GAAP EPS ($)	FY25	$5.42–$5.50 (Q1)	$5.44–$5.50 (Q2 raised; reiterated in Q3)	Raised (Q2), Maintained (Q3)
FX Impact (Revenue, $MM)	FY25	N/A	~$275–$325 for FY25; $125–$175 in Q4 (recent rates)	New disclosure (Q3 call)
Dividend per Share ($)	Q4 FY25	$0.70 (declared Mar 6, 2025)	$0.70	Maintained vs May 2024 increase

Management also guided to high-single-digit adjusted EPS growth in the back half of FY25 and signaled “meaningfully less” FX headwind in FY26 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Pulsed Field Ablation (CAS)	Q1: CAS mid-single digit growth with PulseSelect PFA ; Q2: Affera Sphere-9 U.S. approval; commercial ramp; CAS flat overall offset by PFA strength	CAS +22% growth; dual-platform (Affera & PulseSelect); supply expanded via new Galway site; acceleration expected in Q4	Strong acceleration
Leadless Pacemakers (Micra)	Q1: low-20s growth ; Q2: high-teens growth	+24% growth; 10 quarters of upper single-digit pacing growth	Strengthening
Structural Heart (Evolut FX+)	Q1: limited U.S. release began ; Q2: U.S. launch and CE Mark; international rollout	High-single digit SH growth; upcoming ACC 5-year low-risk data; SMART trial 2-year data	Positive momentum
Diabetes (780G, CGM)	Q1: 11.8% reported; high CGM attachment; Simplera FDA approval and Abbott partnership ; Q2: 12.4% reported; Simplera Sync rollout internationally	~10% growth (organic +10.4%); U.S. Simplera Sync submitted; Abbott-based sensor integration progressing; pursuing type 2 labeling	Durable double-digit growth
Renal Denervation (RDN)	Q2: TPT payment effective Jan 1, 2025	CMS NCA open; expected national coverage by Oct 11, 2025; anticipated U.S. growth driver; international reimbursement progressing (e.g., France; China approval)	Major upcoming growth driver
Medical Surgical & Hugo Robotics	Q1: SE +low single digits; ACM flat ; Q2: SE flat YoY; Hugo procedures doubled YoY; capability expansion	U.S. distributor destocking pressured SE; plan to submit U.S. urology indication next month; completed hernia & benign GYN studies; adding ICG and LigaSure to Hugo	Near-term headwinds; medium-term improving
FX & Pricing	Q1/Q2: FX impacted EPS; estimated -5% FX in FY25 guide	Active mitigation via pricing (dynamic updates), incentive changes, natural hedges; less FX headwind in FY26	Improving risk management
Regional Dynamics	Q1/Q2: International strength (various portfolios)	International +5% with high-single-digit Japan; EM +high single digits (India +high teens, E. Europe +mid teens)	International outperformance

Management Commentary

“We delivered strong earnings this quarter…on the back of our ninth quarter in a row of mid-single digit organic revenue growth” — Geoff Martha, CEO .
“CAS delivered meaningful acceleration, growing 22%. Our pulsed field ablation products are driving rapid growth…we have line of sight to $2 billion as our PFA portfolio expands” — Geoff Martha .
“Adjusted EPS was $1.39, up 6.9%. This was $0.03 above both consensus and the midpoint of our guidance…adjusted gross margin was 66.6%, up 50bps…adjusted operating margin 26.2%, up 100bps” — Gary Corona, Interim CFO .
“CMS opened a national coverage analysis on Renal Denervation…we will now have Medicare coverage in place within the next 8 months” — Geoff Martha .
“Hugo will be a growth driver for our surgical business in fiscal ’26 and a meaningful growth driver for Medtronic in the midterm” — Geoff Martha .

Q&A Highlights

FY26 financial algorithm: Management reiterated the objective of durable mid-single-digit revenue growth with leveraged high-single-digit EPS, consistent with FY25 back-half trajectory; formal FY26 guidance to come at Q4 .
PFA ramp: Dual-platform strategy (Affera mapping/ablation and PulseSelect single-shot) with improved supply from Galway; aggressive capacity and field expansion supports continued acceleration and “line of sight” to $2B .
Balancing investment and margin: Gross margin improvements, disciplined SG&A, and tuck-in M&A enable funding of mappers (PFA) and market development specialists (RDN) while expanding margins .
U.S. Surgical destocking: Temporary distributor inventory drawdown; end-customer purchases stable; not share loss; normalization expected as distributors reach target levels entering FY26 Q1 .
FX mitigation: Dynamic pricing, USD-based incentives in EM, and natural hedges in supply chain; materially smaller FX headwind expected in FY26 vs FY25 .

Estimates Context

Adjusted EPS of $1.39 beat consensus by $0.03 per management commentary; revenue outperformance was not quantified vs consensus in the documents .
S&P Global consensus details were unavailable at time of query due to API limits; use management’s disclosure for EPS surprise. Where needed, investors should cross-check Street models as CAS acceleration and RDN coverage prospects may drive upward revisions to cardiovascular growth and margin leverage, while U.S. Surgical is likely modeled conservatively near-term given distributor dynamics .

Key Takeaways for Investors

Margin-led EPS leverage is intact and accelerating: adjusted GM 66.6% and OM 26.2% underpinning a beat and supportive Q4 acceleration; focus on pricing/mix/COGS programs is working .
PFA is a hyper-growth driver with improving supply; dual-platform advantage and mapping integration raise revenue per case and competitive differentiation (safety/efficacy), positioning CAS for continued double-digit growth .
RDN U.S. coverage path is a 2025 catalyst; national Medicare coverage expected by Oct 11, 2025 with TPT payment already active—expect rapid ramp post-coverage and halo internationally (e.g., France reimbursement; China approval) .
Structural Heart momentum and data catalysts (ACC 5-year low-risk Evolut; SMART 2-year) reinforce TAVR competitiveness and international adoption of FX+ .
Diabetes durability continues, with 780G adoption and CGM attachment driving growth; U.S. Simplera Sync submission and Abbott-based sensor integration add 2025/26 upside, plus potential type 2 label expansion .
Medical Surgical headwinds appear transient (distributor destocking) and addressable; Hugo’s U.S. progress (urology submission, added features) supports a return toward corporate-average growth in FY26 .
FX risk management actions should reduce FY26 headwinds, supporting sustained EPS leverage while funding growth drivers and selective tuck-in M&A .

Additional notes: An explicit 8-K 2.02 filing for Q3 FY25 was not found in the available catalog; this recap relies on Medtronic’s Q3 FY25 earnings press release and full earnings call transcript, supplemented by related Q3-period press releases (CMS NCA for RDN, CFO appointment, Adaptive DBS FDA approval) .