Medtronic plc (MDT) Q4 2025 Earnings Summary

Executive Summary

Q4 FY25 revenue $8.93B (+5.4% organic) and non-GAAP EPS $1.62, both ahead of Street; consensus was $8.83B and $1.58, respectively, while EBITDA missed versus consensus ($2.22B vs $2.76B)* .
Growth led by Cardiovascular (+7.8% organic), with Cardiac Ablation Solutions nearly +30% and TAVR Evolut strength; Diabetes posted its 6th straight double-digit quarter (+12% organic) .
FY26 guide: ~5% organic revenue growth, ~4% EPS growth ex-tariffs; EPS $5.50–$5.60 including tariffs (COGS headwind $200–$350mm, back-half weighted). Q1 FY26 EPS guided to $1.22–$1.24 .
Strategic catalyst: announced separation of Diabetes via IPO/split-off within 18 months; expected to lift Medtronic margins (~+50bps gross, ~+100bps operating) and be EPS accretive immediately upon completion .

What Went Well and What Went Wrong

What Went Well

Cardiovascular acceleration: CAS nearly +30% on PFA adoption; CV portfolio +7.8% organic with double-digit Structural Heart and strong CRM (Micra +17%, 3830 lead +19%) .
Neuroscience momentum: Neuromodulation +10% with U.S. Pain Stim mid-teens growth and BrainSense Adaptive DBS FDA approval/launch; CST U.S. +6.7% on AiBLE ecosystem pull-through .
Earnings leverage: adjusted operating margin 27.8% (+90bps YoY; +200bps cc) and non-GAAP EPS +11% YoY, supported by pricing and COGS efficiencies (labor, insourcing, scrap reduction) .

Management quote: “We had a strong finish to our fiscal year, growing 5.4%… translated our revenue growth into leveraged earnings with high single-digit operating profit and low double-digit EPS growth” .

What Went Wrong

Gross margin mix headwinds (~80bps) from CAS capital mix and Diabetes ramp; adjusted gross margin 65.1% (−70bps YoY) .
Specialty Therapies declined low-single digits in Q4, and CPV was roughly flat (−0.1% reported; +1.0% organic) .
Tariffs risk: FY26 COGS headwind $200–$350mm, weighted to Q3/Q4 (~30%/~60% of full-year impact), though mitigation plans underway .

Financial Results

Metric	Q2 FY25	Q3 FY25	Q4 FY25
Revenue ($USD Billions)	$8.40	$8.29	$8.93
GAAP Diluted EPS ($)	$0.99	$1.01	$0.82
Non-GAAP Diluted EPS ($)	$1.26	$1.39	$1.62
Adjusted Gross Margin (%)	65.2%	66.6%	65.1%
Adjusted Operating Margin (%)	24.3%	26.2%	27.8%

Versus S&P Global consensus (Q4 FY25):

Metric	Consensus	Actual
Revenue ($USD)	$8,828,707,900*	$8,927,000,000
Primary EPS ($)	$1.5775*	$1.62
EBITDA ($USD)	$2,755,642,930*	$2,215,000,000*

Values retrieved from S&P Global.*

Segment breakdown (Q4 FY25 vs Q4 FY24):

Segment ($USD Millions)	Q4 FY24	Q4 FY25	Reported Growth	Organic Growth
Cardiovascular	3,130	3,336	+6.6%	+7.8%
- CRHF	1,587	1,733	+9.2%	+10.3%
- SHA	883	944	+7.0%	+8.3%
- CPV	660	659	−0.1%	+1.0%
Neuroscience	2,545	2,620	+2.9%	+3.7%
- CST	1,291	1,342	+3.9%	+4.4%
- Specialty Therapies	778	759	−2.5%	−1.6%
- Neuromodulation	475	520	+9.3%	+10.2%
Medical Surgical	2,198	2,212	+0.6%	+2.0%
- SE	1,705	1,709	+0.2%	+1.7%
- ACM	492	503	+2.1%	+3.1%
Diabetes	660	728	+10.4%	+12.0%

Selected KPIs (quarterly trajectory):

KPI	Q2 FY25	Q3 FY25	Q4 FY25
Cardiac Ablation Solutions Growth	Flat	Low‑20s%	~+30%
U.S. Revenue Growth	+3.1%	+2.8%	+4.7% (U.S. total) / +5% company
Neuromodulation Growth (Reported)	+12.6%	+12.0%	+9.3%
Diabetes Revenue Growth (Reported / Organic)	+12.4% / +11.0%	+8.4% / +10.4%	+10.4% / +12.0%
Adjusted Op Margin (%)	24.3%	26.2%	27.8%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Revenue Growth	FY26	n/a	~5%	New
Diluted non‑GAAP EPS Growth (ex‑tariffs)	FY26	n/a	~4%	New
Diluted non‑GAAP EPS ($) incl. tariffs	FY26	n/a	$5.50–$5.60	New
EPS ($)	Q1 FY26	n/a	$1.22–$1.24	New
Tariffs net COGS impact	FY26	n/a	$200–$350mm; ~10% (Q2), ~30% (Q3), ~60% (Q4) of full-year impact	New
FX tailwind	FY26	n/a	$0–$100mm total; neutral in Q1	New
Adjusted margins post Diabetes separation	Post‑separation	n/a	+~50bps gross, +~100bps operating; EPS accretive immediately	New
Tax rate (adjusted)	FY26	n/a	~18%	New
R&D investment	FY26	n/a	R&D to grow faster than revenue (~+$200mm YoY)	New
Dividend	Q1 FY26	n/a	$0.71 per share quarterly (annual $2.84)	Raised

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 FY25)	Previous Mentions (Q3 FY25)	Current Period (Q4 FY25)	Trend
PFA/CAS growth	PulseSelect growth offset cryo; CAS flat	CAS low‑20s% growth; Affera supply ramp (Galway site)	CAS nearly +30%; Sphere‑9 leading; Sphere360 pivotal trial starting; near‑term path to $2B	Accelerating
TAVR (Evolut FX+)	CE Mark; U.S. launch	High‑single digit SH growth; positive SMART/TAVR data	SH +10%; more centers switching to Evolut; 5‑yr low‑risk data at ACC	Strong execution
RDN (Symplicity)	NCA opened; TPT payment starting 1/1/25	Awaiting reimbursement; ramp preparations	Draft NCD by Jul 13; final by Oct 11; hospital service line build‑out	Building for ramp
AiBLE spine	CST mid‑single digit growth; ecosystem expansion	U.S. CST high‑single digit; share gains	CST U.S. +6.7%; enabling tech drives implant decisions	Durable share gains
Diabetes CGM/pipeline	780G adoption; meta‑analysis highest TIR	Broad‑based growth; Simplera Sync EU rollout	U.S. FDA approval Simplera Sync; Abbott iAGC/ACE submissions; IPO/split‑off announced	Strong momentum; strategic separation
Margins/COGS	Restoring earnings power; margin improvements	Gross margin improvement	Adjusted op margin +90bps; gross margin −70bps on mix; COGS programs offset inflation	Leveraging despite mix
FX/Tariffs	FX headwinds in guidance	EPS back‑half growth as FX abates	FX neutral in Q1; tailwind potential; tariffs $200–$350mm COGS	External headwinds mitigated

Management Commentary

“Cardiac Ablation Solutions growth accelerated as forecasted to nearly 30%… our Sphere‑9 focal catheter is the most desired PFA catheter on the market, and we’re seeing large centers switch to Medtronic” — Geoffrey Martha .
“We intend to separate the Diabetes business… upon full separation, we’re expecting our adjusted gross and operating margins to improve by approximately 50 and 100 basis points, respectively” — Thierry Piéton .
“Our adjusted operating margin was 27.8%, an increase of 90 basis points… savings from our COGS efficiency programs more than offset the impact of inflation” — Thierry Piéton .
“CMS has indicated that they will finalize the NCD on or before October 11… Many large health care systems are establishing outpatient Symplicity service lines today” — Geoffrey Martha .

Q&A Highlights

Guidance construction: Operating profit growth ~7% ex‑tariffs, with below‑line headwinds (tax to ~18%, higher interest rates). Teams targeting upside via cost programs and pricing .
Tariff phasing/impact: Net FY26 COGS $200–$350mm; minimal in Q1, ~10% of full‑year in Q2, ~30% in Q3, ~60% in Q4; mitigation actions underway .
CAS ramp to $2B: High demand for Affera; multi‑system installations at leading centers; supply chain scaled; Sphere360 driving excitement .
RDN ramp vs PFA: RDN a longer ramp given patient work‑up; viewed as a durable growth driver post‑coverage .
Portfolio strategy: Diabetes spin enables focus on higher‑margin B2B growth areas; management sees more portfolio actions and tuck‑in M&A ahead .

Estimates Context

Q4 FY25 revenue and EPS beat: $8.93B vs $8.83B consensus; $1.62 vs $1.58 EPS. EBITDA missed vs consensus ($2.22B vs $2.76B)*.
Implications: Street likely to adjust EBITDA estimates to reflect gross margin mix from CAS capital and Diabetes ramp. Management reiterated operating leverage trajectory and mitigation of tariffs .