Medtronic’s Third Quarter Fiscal 2025 Revenue Surges to $8.29B

Medtronic plc (NYSE: MDT) released its financial results for the third quarter of fiscal year 2025, which concluded on January 24, 2025. The company reported a revenue of $8.292 billion, marking a 2.5% increase as reported and a 4.1% increase on an organic basis. This growth was primarily driven by significant advancements in various sectors such as Cardiac Ablation Solutions, Pacing, Structural Heart, Diabetes, and Neuromodulation.

The company’s GAAP diluted earnings per share (EPS) stood at $1.01, reflecting a 2% increase, while the non-GAAP diluted EPS was $1.39, showing a 7% rise. The Cardiovascular Portfolio, which includes Cardiac Rhythm & Heart Failure, Structural Heart & Aortic, and Coronary & Peripheral Vascular divisions, recorded a revenue of $3.037 billion. This represented a 3.7% increase as reported and a 5.0% increase on an organic basis. Notably, Cardiac Ablation Solutions saw low-20s growth due to the rapid adoption of the PulseSelect and Affera Sphere-9 systems. Meanwhile, the Neuroscience Portfolio achieved a revenue of $2.458 billion, growing 4.4% as reported and 5.2% organically, with Neuromodulation showing a low-double digit increase.

The Medical Surgical Portfolio, however, experienced a slight decline with revenue decreasing by 1.9% as reported and 0.4% organically. This was attributed to ongoing challenges in the stapling segment and changes in distributor buying patterns in the U.S. Despite these challenges, the Diabetes sector showed robust growth with an 8.4% increase in revenue, driven by the adoption of the MiniMed 780G system.

Medtronic Reports Third-Quarter with EPS Beat, Revenue Slightly Below Expectations

Medtronic’s third-quarter performance surpassed analysts’ expectations mostly, particularly in terms of earnings per share. Analysts had projected an EPS of $1.36, but the company reported a non-GAAP EPS of $1.39, exceeding expectations by $0.03. This achievement was attributed to the company’s strategic focus on innovation and operational efficiency, which led to improvements in gross and operating margins.

In terms of revenue, the company reported $8.292 billion, which was slightly below the expected $8.33 billion. Despite this, the overall performance was viewed positively due to the strong growth in key segments such as Cardiac Ablation Solutions and Diabetes. The company’s ability to maintain a steady growth trajectory in these areas was seen as a testament to its strategic investments in innovation and market expansion.

The Neuroscience Portfolio also performed well, with a 4.4% increase in revenue as reported. This was driven by significant growth in Neuromodulation, which saw a low-double digit increase. The Medical Surgical Portfolio, however, faced challenges with a slight decline in revenue, highlighting areas for potential improvement in future quarters.

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Medtronic Reiterates Guidance for Fiscal Year 2025, Expects Revenue Growth Between 4.75% to 5%

Medtronic has reiterated its guidance for fiscal year 2025, maintaining its expectations for organic revenue growth in the range of 4.75% to 5%. The company also expects its diluted non-GAAP EPS for the fiscal year to be between $5.44 and $5.50. This guidance reflects the company’s confidence in its strategic initiatives and its ability to continue delivering value to shareholders.

The company anticipates that the U.S. Centers for Medicare and Medicaid Services will finalize coverage for Renal Denervation for hypertension treatment by October 11, 2025. This development is expected to contribute positively to Medtronic’s future growth, particularly in the Cardiovascular Portfolio. Additionally, the recent FDA approval for an additional pulsed field ablation manufacturing site in Galway is expected to enhance the supply of Affera products, supporting further growth in the Cardiac Ablation Solutions segment.

Looking ahead, Medtronic aims to accelerate both top and bottom-line growth in the fourth quarter, with expectations of high-single digit adjusted EPS growth in the latter half of the fiscal year. The company remains committed to leveraging its strong earnings power and strategic investments to drive sustainable growth and innovation in the healthcare technology sector.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.

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