Medtronic plc

and we look forward to bringing this unique catheter to the U.S. Beyond Cas, we're also making material progress with Simplicity Spiral for hypertension and AltaViva for urge urinary incontinence. Simplicity delivers a one-time, durable, minimally invasive treatment for hypertension and represents one of our largest growth drivers. Now, this is going to be a contributor for years to come, given the 18 million U.S. patients with uncontrolled hypertension. We're seeing strong patient outcomes in the field, and the RDN value proposition, it resonates with both physicians and patients. Now we've got strong and growing clinical data, a broad label, and expanding reimbursement all in hand. Look, we've built the foundation. Now we're focused on growing this new segment and transforming the hypertension treatment paradigm. We've recently activated our direct-to-consumer Go Beyond campaign in key markets around the U.S., which is resulting in a 50 times increase in website visits versus the prior quarter. So a lot of interest coming in from patients. Building a new market, it does take time. That is something Medtronic knows how to do exceptionally well. And in parallel to building out this new market, we're innovating for the long term. first with our trans-radial catheter, which is on track to launch in the second half of fiscal year 27, and with our spiral Gemini trial evaluating multi-organ ablation to further boost efficacy. Now, similarly, we are scaling AltaViva, our tibial neurostimulation device. AltaViva is a simple yet transformational option for treating urinary incontinence. which is a condition that affects 16 million people in the US. AltaViva is a very small device that requires no imaging, no sedation, activates the same day, is MRI ready, and offers up to 15 years of battery life, the longest in its category. Again, we are receiving great early interest and feedback from both physicians and patients. and we are training doctors. We're educating and supporting hospital staff and investing in omnichannel consumer activation. Look, it's early days for both of these launches, and we are focused on disciplined execution to convert early traction into procedures. Now, pivoting to Hugo. This quarter, our Hugo robot received FDA clearance for urologic surgical procedures, enabling us to begin our purposeful U.S. launch. And today, I'm excited to share that we've already completed our first installations and initial cases. As noted in our release this morning, last week we completed our first cases at Cleveland Clinic, where surgeons echoed the strong feedback we continuously receive on Hugo's differentiation across multiple areas. This includes its flexibility, portability, open console, and of course, our trusted instrumentation. Hugo is especially compelling when paired with our TouchSurgery digital ecosystem, an AI-powered data connectivity and analytics technology that is unique to Medtronic. This quarter, TouchSurgery installations increased over 20% sequentially and have now surpassed 1,000 systems globally. Further, we continue to evolve our Hugo system with the fourth-generation software release and continuous system improvements. We are planning to expand into additional indications in the U.S., like hernia, part of our broader general surgery indication, where this system really shines. Customers value, I mean, they really value having a partner that spans the full continuum of surgical care. And Medtronic is the only company that has approved offerings across open, laparoscopic, and robotic-assisted surgeries. which matters as hospitals build and expand their surgical practices. Now, we are thrilled with these four generational growth drivers, but our innovation pipeline is far broader, and we are committed to driving sustained innovation across our portfolio and advancing these steady caves of new technologies across high-need, high-growth categories where we are well-positioned, like MMA, carotid stenting, thrombectomy, coronary DCB, cardiac rhythm management, spine surgery, as well as many others. And to that point, I am extremely excited to highlight a major milestone in our neuroscience business. Just last week, we secured FDA clearance for our Stealth Access surgical system for spinal procedures. Stealth Access is a new transformative platform that unifies AI power planning, robotics, and navigation into one seamless system, elevated by the entire ABLE ecosystem. Stealth access was designed around navigation, which is paramount to surgeons' workflow in the OR. Today, navigation, which we pioneered and we lead, drives 70% of U.S. spine procedures, and really, it just dictates the workflow in the spine OR. So stealth is really two things. It's about taking share as a new platform with improved functionality, and it brings down barriers for physicians to step into robotics without disrupting their workflow. Now, building on our 10,000-unit installed base, we are expanding and opening this segment and extending our leadership. And we're not stopping at spine. We anticipate pursuing future cranial and ENT indications for stealth access. This is an important driver for our CST business and an exciting step forward to improve precision, predictability, and personalization of care. And we're executing our M&A strategy as well with the CathWorks acquisition and CRDN, And we continue to build out our venture and minority investment portfolio with the interis investment and structural heart. Both transactions underscore our long-term strategy to digitize, enable, and build effective and efficient ecosystems within our core markets. So before I turn it over to Thierry to walk through the details of our business performance, our financials, and the guidance, I would like to close with the following remarks. At Medtronic, we are translating the breadth and the depth of innovation across the portfolio into durable growth. We have businesses at different stages of their growth journey, but the cadence of innovation across our portfolio suggests a steadily improving growth outlook for Total Medtronic. We have businesses that are executing exceptionally well today in our position to be meaningful contributors for a very long time. This includes CAS with its strong PFA pipeline, CST with self-access, and, of course, CRM, a large and steady growth engine with meaningful innovation in defibrillation and leadless and in conduction system pacing. We have businesses where the pipeline is now just activating, where we have clear line of sight to meaningful, tangible opportunities that will enhance growth. From CRDN with the ramp of simplicity, pelvic health with AltaViva, peripheral vascular health with NeuroGuard and Liberant, and neurovascular with innovation like Artees, NeuroGuard, and expanding indication for Onyx into MMAE. And surgical, where the launch of Hugo in the U.S. is just beginning. These are all real drivers with tangible reasons for improvement and the potential to impact growth in the coming quarters and years. We also have areas where there is work to do and we have defined plans underway, like in Structural Heart, where we're taking specific actions to fill out the portfolio and improve the trajectory. So with strong contributors delivering today, businesses on the cusp of step change improvement, and segments where we're taking deliberate actions to strengthen long-term competitiveness, we are confident in our ability to deliver durably. So with that, I'll turn it over to Thierry to walk through the details of our business performance. So over to you, Thierry.

Hey, thanks, Jeff. And hi, everyone. I appreciate all of you joining today. Let's start with our cardiovascular portfolio, where this quarter we delivered 11% year-over-year revenue growth, with 13% growth in the US. This represents the strongest growth we've seen in cardiovascular in the last 10 years, excluding COVID comps. CAS grew 80% year-over-year, with PFA accounting for 80% of that revenue. Beyond CAS, the remainder of the cardiovascular portfolio delivered combined mid-single-digit growth. Cardiac rhythm management also had a strong quarter. CRM continued to contribute 15% of our total revenue, and it grew a healthy 5%. This was primarily driven by continued double-digit growth in MICRA, mid-teens growth in 3830 CSP LEAD, and over 70% growth in Aurora EVICD. In peripheral vascular health, we posted high single-digit growth driven by broad strength across our endovenous portfolio. We look forward to the continued launch of NeuroGuard IEP carotid stents and the full market release of our Liberant mechanical thrombectomy system. In structural heart, Q3 was a little softer, as expected, and grew low single digits. We had a stronger quarter internationally and continued to gain share in Europe. This was partially offset in the U.S., where we annualized our EvolutFX Plus launch and saw some competitive pressure. I'll now pivot to our neuroscience portfolio, which grew 3%. Growth was a little below our expectations this quarter, But neuroscience is also where we have one of our broadest pipelines and some of our most exciting opportunities. Importantly, we expect that pipeline to begin impacting growth in the fourth quarter. Cranial and spinal technologies continues to be a powerful engine for Medtronic. This large business delivered mid-single-digit growth including 8% growth from strong pull-through in core spine. We're excited to offer customers our new navigation and robotics platform, Stealth Access, which Jeff just mentioned. With FDA clearance achieved, we expect to see Stealth Access contribute neurosurgery and CST overall as soon as the fourth quarter. Specialty therapies delivered flat results in the third quarter. This is an area where we expect improved performance in the coming quarters, given the series of new product developments. Neurovascular has been challenged over the last quarters due to China VBP and to the recall of Vantage, both of which are now mostly behind us. We also have line of sight to a higher level of growth from the contribution of Onyx's expanded indication. The NeuroGuard carotid stent launch will also contribute, as it's being commercialized by both our neurovascular and peripheral vascular businesses. In pelvic health, we saw a slightly softer sacral nerve stimulation market environment, but look forward to seeing the increased contribution from Altaviva. In neuromodulation, we grew 4%, driven by the continued rollout of our differentiated fully closed-loop technologies, inceptive STS, and BrainSense ADVS. Next, our MedSearch portfolio grew 3% ahead of expectations. First, endoscopy and ACM had strong quarters. Endoscopy revenue grew 10%, led by mid-teens growth in RSF-Ageo portfolio, driven by Next Powder and strong market adoption of EndoFlip 300. Acute care and monitoring saw a 7% growth, led by strength in blood oxygen management and airway access. And finally, our surgical business grew by 1%. We saw strength in energy, in wound management and hernia, with expected softness and stapling. The next phase of growth for this business is the rollout of Hugo, and we're thrilled to see our first installations and first cases so swiftly after the U.S. launch. Wrapping up our business performance is MiniMed, our diabetes business, which delivered 15% reported and over 8% organic growth. Performance was led by double-digit strength in international markets, but we also saw acceleration in the U.S., with strong sequential lift driven by Simplera Sync and Instinct, which both just launched in December. Our diabetes business continues its strong innovation cycle, supported by multiple recent regulatory and pipeline milestones. In addition to introducing Instinct and Simplera to the market, we secured several FDA clearances that further expand 780's indications. We also announced that 780G system is now available through pharmacy with agreements that cover the majority of commercially insured lives in the U.S. And we submitted MediMedFlex to the U.S. FDA and began the U.S. pivotal study for Vivera, our third-generation fully closed-loop algorithm, which we believe will help maintain our leadership in delivering industry-leading outcomes. Finally, our MiniMed Fit Patch Pump remains on track, and we intend to submit it to the US FDA by this fall. The planned separation of MiniMed is perfectly on track. Our preferred path continues to be a two-step IPO and split. We continue to expect the separation to be complete by the end of calendar year 26. Now, turning to the financials, this quarter, revenue of $9 billion grew 8.7% reported and 6% organic, a 50 basis point acceleration from prior quarter and 50 basis points above our guidance. Geographically, this performance was balanced, led by high single-digit growth in Western Europe with mid-single-digit growth across the U.S. and Japan. U.S. growth was 6% year over year, the strongest performance we've delivered since fiscal year 2019, excluding COVID comps. In China, we delivered low single-digit growth while navigating ongoing but manageable volume-based procurement in a few businesses. Excluding VBP, our growth rate in China was mid-single-digit. Our adjusted gross margin was 64.9% ahead of expectations. As I've done in the last several quarters, let me walk you through the rough breakout of the components. We realized 30 basis points of benefit from pricing. Net of inflation cost down was negative 20 basis points, as the third quarter is typically our lowest quarter for generating cost efficiency savings, and we had some prior year non-recurring items. Mix was negative 100 basis points, mostly driven by CAS and diabetes. As discussed in prior disclosures, with CAS in the early stages of launch, this business is currently impacted by the mix of lower margin capital to higher margin catheters, and diabetes is in its early manufacturing ramp-up of Simplera. Over time, as you know, we expect this mix dynamic to improve, as we scale CAS and separate the diabetes business. Tariffs impacted the business $93 million, or 110 basis points, in line with forecast. And finally, foreign exchange provided an approximate 40 basis points tailwind. Adjusted R&D was 8% of revenue and increased 7.4%. On an organic basis, this outpaced revenue by 50 basis points. Adjusted SG&A was 32.3% of revenue, which is 30 basis points lower than the third quarter of last year. We continue to fuel our PFA launch and develop and build the markets for Simplicity, AltaViva, and Hugo, but at the same time, we deliver disciplined leverage in G&A. Our adjusted operating profit was $2.2 billion, resulting in an adjusted operating margin of 24.1% ahead of expectations again. Our adjusted tax rate was 17.3%, about 100 basis points higher than forecast, largely due to jurisdictional mix of profits. All in all, adjusted EPS was $1.36, three cents above the midpoints of our guidance range. Now turning to guidance. On the top line, we're reiterating fiscal 26 organic revenue growth guidance of approximately 5.5%. In the fourth quarter, we expect revenue growth similar to Q3, so around 6% off a stronger Q4 25 comp. Moving down the P&L, we expect our fiscal 26 gross margin to increase slightly X tariffs. Pricing, FX, and COGS efficiency programs are expected to more than offset the negative impacts of business mix, primarily from CAS and diabetes. We anticipate a tariff impact to COGS of approximately $185 million, including $75 million in the fourth quarter. Including tariffs, we expect fiscal 26 gross margin decrease of roughly 30 basis points. We expect fiscal 26 adjusted operating profit to grow approximately 5% or 7% excluding tariffs. Our fiscal 26 operating margin is expected to be roughly flat excluding tariffs and down about 50 basis points including the tariff impact. In totality, we expect these results to deliver gross margin and operating margin leverage, X tariffs in the second half of the fiscal year 26, as we stated last quarter. Turning to EPS, this quarter we saw a beat of 3 cents. This was largely due to slightly better than expected revenue in the quarter, mainly from CRM and ACM. This was partially offset by the aforementioned tax pressure that we saw in the quarter. As we expect CRM and ACM to normalize and the tax pressure to carry into Q4, we are maintaining our fiscal 26 EPS guidance in the range of $5.62 to $5.66. Look, we're excited about the quarter, and we think Q4 is going to be another robust quarter and that we will sustain our growth at a higher level and into the next year. We're making progress on margin expansion, and the negative mixed effect from CAS and diabetes are going to get better. We're going to continue to invest in growth areas like R&D, sales and marketing, and M&A to capitalize on the opportunities ahead of us. and we will also continue to drive efficiency in functional areas. All told, we are committed to our guidance, and we maintain our expectation for high single-digit EPS growth in fiscal year 27. Back to you, Jeff.

Okay, thanks, Thierry. Now, before we go to Q&A, let me close with a few final thoughts. So we're encouraged by the progress across the business, as Thierry just said, and we remain committed to stronger, durable revenue and earnings growth. Our PFA trajectory is strong, and we're progressing on multiple billion-dollar opportunities. We're reinforcing our future pipeline, and we're committed to organic and inorganic investment to further bolster the portfolio. Bottom line, we are delivering. Now, to our Medtronic colleagues around the world, thank you for your unwavering commitment to our mission and to the patients we serve. You're delivering for customers and for patients, and you're turning our strategy into performance. So, thank you. With that, let's turn to Q&A. So, first, Ingrid, welcome to your first earnings call. And now, can you please provide the instructions and cue up the analysts?