Medtronic plc Files 10-Q for Q2 2025

Ticker: MDT · Form: 10-Q · Filed: Nov 26, 2024 · CIK: 1613103

Medtronic PLC 10-Q Filing Summary
FieldDetail
CompanyMedtronic PLC (MDT)
Form Type10-Q
Filed DateNov 26, 2024
Risk Levellow
Pages16
Reading Time20 min
Key Dollar Amounts$0.0001, $0
Sentimentneutral

Sentiment: neutral

Topics: 10-Q, debt, financials

TL;DR

Medtronic's Q2 2025 10-Q is in, showing debt obligations like senior notes due 2025-2028.

AI Summary

Medtronic plc filed its 10-Q for the period ending October 25, 2024, reporting on its financial performance. The filing details various financial instruments and debt obligations, including senior notes due in 2025, 2027, and 2028, with varying interest rates. The company's fiscal year ends on April 25th.

Why It Matters

This filing provides investors with an update on Medtronic's financial health and debt structure, crucial for understanding the company's stability and future investment potential.

Risk Assessment

Risk Level: low — This is a routine quarterly financial filing with no immediate red flags.

Key Numbers

Key Players & Entities

FAQ

What is the total amount of senior notes due in 2025?

The filing lists multiple senior notes due in 2025 with varying interest rates (e.g., 0.250%, 0.000%, 2.625%), but the total aggregate amount is not explicitly stated in this excerpt.

What is the interest rate on the senior notes due in 2027?

The filing indicates senior notes due in 2027 with an interest rate of 1.125%.

What is the interest rate on the senior notes due in 2028?

The filing mentions senior notes due in 2028 with an interest rate of 0.375%.

When does Medtronic's fiscal year end?

Medtronic's fiscal year ends on April 25th (0425).

What is the SEC file number for Medtronic?

The SEC file number for Medtronic is 001-36820.

Filing Stats: 4,893 words · 20 min read · ~16 pages · Grade level 14.5 · Accepted 2024-11-26 16:16:06

Key Financial Figures

Filing Documents

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Medtronic plc Consolidated Statements of Income (Unaudited) Three months ended Six months ended (in millions, except per share data) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 Net sales $ 8,403 $ 7,984 $ 16,318 $ 15,686 Costs and expenses: Cost of products sold, excluding amortization of intangible assets 2,946 2,761 5,707 5,390 Research and development expense 697 698 1,373 1,365 Selling, general, and administrative expense 2,757 2,686 5,412 5,299 Amortization of intangible assets 413 425 827 855 Restructuring charges, net 30 40 77 94 Certain litigation charges, net — 65 81 105 Other operating income, net ( 34 ) ( 31 ) ( 33 ) ( 30 ) Operating profit 1,595 1,340 2,873 2,608 Other non-operating income, net ( 173 ) ( 154 ) ( 330 ) ( 230 ) Interest expense, net 209 180 376 329 Income before income taxes 1,559 1,313 2,827 2,510 Income tax provision 281 402 500 802 Net income 1,278 911 2,327 1,708 Net income attributable to noncontrolling interests ( 9 ) ( 2 ) ( 15 ) ( 8 ) Net income attributable to Medtronic $ 1,270 $ 909 $ 2,312 $ 1,700 Basic earnings per share $ 0.99 $ 0.68 $ 1.79 $ 1.28 Diluted earnings per share $ 0.99 $ 0.68 $ 1.79 $ 1.28 Basic weighted average shares outstanding 1,282.4 1,330.2 1,288.6 1,330.3 Diluted weighted average shares outstanding 1,286.9 1,331.9 1,292.5 1,332.8 The accompanying notes are an integral part of these consolidated financial statements . 1 Medtronic plc Consolidated Statements of Comprehensive Income (Unaudited) Three months ended Six months ended (in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 Net income $ 1,278 $ 911 $ 2,327 $ 1,708 Other comprehensive income (loss), net of tax: Unrealized gain (loss) on investment securities 35 ( 19 ) 111 ( 38 ) Translation adjustment 116 ( 926 ) 218 ( 911 ) Net investment hedge 35 915 ( 170 ) 771 Net change in retirement obligations — 1 1 4 Unrealized (loss) gain

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) 1. Basis of Presentation The accompanying unaudited consolidated financial statements of Medtronic plc and its subsidiaries (Medtronic plc, Medtronic, or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.) (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the consolidated financial statements include all the adjustments necessary for a fair statement in conformity with U.S. GAAP. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. The accompanying unaudited consolidated financial statements include the accounts of Medtronic plc, its wholly-owned subsidiaries, entities for which the Company has a controlling financial interest, and variable interest entities for which the Company is the primary beneficiary. Intercompany transactions and balances have been eliminated in consolidation. Amounts reported in millions within this quarterly report are computed based on the amounts in thousands, and therefore, the sum of the components may not equal the total amount reported in millions due to rounding. Additionally, certain columns and rows within tables may not sum due to rounding. The accompanying unaudited consolidated financial statements and related notes should be

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) The table below illustrates net sales by segment and division and by market geography for the three and six months ended October 25, 2024 and October 27, 2023. The U.S. revenue includes United States and U.S. territories, and the international revenue includes all other non-U.S. countries. World wide Three months ended Six months ended (in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 Cardiac Rhythm & Heart Failure $ 1,578 $ 1,492 $ 3,114 $ 2,938 Structural Heart & Aortic 881 819 1,736 1,633 Coronary & Peripheral Vascular 643 613 1,259 1,202 Cardiovascular 3,102 2,923 6,108 5,773 Cranial & Spinal Technologies 1,234 1,157 2,382 2,260 Specialty Therapies 737 705 1,450 1,400 Neuromodulation 480 426 937 846 Neuroscience 2,451 2,288 4,768 4,506 Surgical & Endoscopy 1,649 1,641 3,193 3,187 Acute Care & Monitoring 478 462 930 921 Medical Surgical 2,128 2,103 4,123 4,107 Diabetes 686 610 1,333 1,189 Reportable segment net sales 8,366 7,923 16,333 15,575 Other operating segment (1) 37 61 75 111 Other adjustments (2) — — ( 90 ) — Total net sales $ 8,403 $ 7,984 $ 16,318 $ 15,686 U.S. International U.S. International Three months ended Six months ended (in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 Cardiovascular $ 1,434 $ 1,427 $ 1,668 $ 1,496 $ 2,836 $ 2,776 $ 3,272 $ 2,996 Neuroscience 1,677 1,560 774 728 3,242 3,057 1,526 1,449 Medical Surgical 944 948 1,183 1,155 1,825 1,815 2,298 2,292 Diabetes 232 217 455 394 447 405 886 784 Reportable segment net sales 4,286 4,151 4,080 3,772 8,350 8,054 7,983 7,521 Other operating segment (1) 18 23 19 37 37 45 38 66 Other adjustments (2) — — — — — — ( 90 ) — Total net sales $ 4,304 $ 4,175 $ 4,099 $ 3,809 $ 8,387 $ 8,099 $ 7,931 $ 7,587 (1) Includes the historical operations and ongoing transition agreem

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) Deferred Revenue and Remaining Performance Obligations Deferred revenue at October 25, 2024 and April 26, 2024 was $ 467 million and $ 453 million, respectively. At October 25, 2024 and April 26, 2024, $ 369 million and $ 352 million was included in other accrued expenses, respectively, and $ 98 million and $ 101 million was included in other liabilities, respectively. During the six months ended October 25, 2024, the Company recognized $ 196 million of revenue that was included in deferred revenue as of April 26, 2024. During the six months ended October 27, 2023, the Company recognized $ 216 million of revenue that was included in deferred revenue as of April 28, 2023. Remaining performance obligations include goods and services that have not yet been delivered or provided under existing, noncancellable contracts with minimum purchase commitments. At October 25, 2024, the estimated revenue expected to be recognized in future periods related to unsatisfied performance obligations for executed contracts with an original duration of one year or more was approximately $ 0.4 billion. The Company expects to recognize revenue on the majority of these remaining performance obligations over the next three years . 4. Acquisitions and Dispositions Acquisition Activity During the three and six months ended October 25, 2024, the Company had no acquisitions that were accounted for as business combinations. During the fiscal year ended April 26, 2024, the Company had acquisitions that were accounted for as business combinations. For the three and six months ended October 25, 2024 and the fiscal year ended April 26, 2024, purchase price allocation adjustments were not significant. Fiscal year 2024 The acquisition date fair value of net assets acquired during the fiscal year ended April 26, 2024 was $ 335 million. Based on preliminary valuations, assets acquired were primarily comprised of $ 131 million of goodwill,

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs: Fair Value at (in millions) October 25, 2024 Unobservable Input Range Weighted Average (1) Revenue and other performance-based payments $ 58 Discount rate 16.5 % - 28.2 % 22.1 % Projected fiscal year of payment 2025 - 2029 2027 Product development and other milestone-based payments $ 66 Discount rate 5.5 % 5.5 % Projected fiscal year of payment 2025 - 2027 2025 (1) Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. For projected fiscal year of payment, the amount represents the median of the inputs and is not a weighted average. On April 1, 2023, the Company and DaVita Inc. ("DaVita") completed the transaction for the Company to sell half of its Renal Care Solutions (RCS) business. In connection with the sale, the Company may be entitled to receive additional consideration based on the achievement of certain revenue, regulatory, and profitability milestones, with potential payouts starting in fiscal year 2026 through 2029. The fair value of the contingent consideration receivable at October 25, 2024 and April 26, 2024 was $ 61 million and $ 58 million, and was recorded in other assets in the consolidated balance sheet. The following table provides a reconciliation of the beginning and ending balances of the Level 3 measurement of contingent consideration receivable: Three months ended Six months ended (in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 Beginning balance $ 58 $ 152 $ 58 $ 195 Change in fair value 3 — 3 ( 43 ) Ending balance $ 61 $ 152 $ 61 $ 152 5 . Restructuring and Other Costs Restructuring and associated costs for the three and six months ended October 25, 2024 were $ 46 million and $ 108 million, respectively, as compared to

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) The following table summarizes the activity for the six months ended October 25, 2024: (in millions) Employee Termination Benefits Associated and Other Costs Total April 26, 2024 $ 136 $ 11 $ 147 Charges 87 31 118 Cash payments ( 156 ) ( 25 ) ( 181 ) Settled non-cash — ( 4 ) ( 4 ) Accrual adjustments (1) ( 10 ) — ( 10 ) October 25, 2024 $ 58 $ 13 $ 70 (1) Accrual adjustments primarily relate to certain employees identified for termination, finding other positions within the Company. 10 Medtronic plc

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) 6 . Financial Instruments Debt Securities The Company holds investments in marketable debt securities that are classified and accounted for as available-for-sale and are remeasured on a recurring basis. The following tables summarize the Company's investments in available-for-sale debt securities by significant investment category and the related consolidated balance sheet classification at October 25, 2024 and April 26, 2024: October 25, 2024 Valuation Balance Sheet Classification (in millions) Cost Unrealized Gains Unrealized Losses Fair Value Investments Other Assets Level 1: U.S. government and agency securities $ 538 $ — $ ( 11 ) $ 527 $ 527 $ — Level 2: Corporate debt securities 3,429 13 ( 59 ) 3,384 3,384 — U.S. government and agency securities 874 — ( 28 ) 845 845 — Mortgage-backed securities 772 3 ( 33 ) 742 742 — Non-U.S. government and agency securities 9 — — 9 9 — Other asset-backed securities 1,051 5 ( 3 ) 1,053 1,053 — Total Level 2 6,134 22 ( 124 ) 6,032 6,032 — Level 3: Auction rate securities 36 — ( 3 ) 33 — 33 Total available-for-sale debt securities $ 6,708 $ 22 $ ( 138 ) $ 6,592 $ 6,559 $ 33 April 26, 2024 Valuation Balance Sheet Classification (in millions) Cost Unrealized Gains Unrealized Losses Fair Value Investments Other Assets Level 1: U.S. government and agency securities $ 494 $ — $ ( 22 ) $ 472 $ 472 $ — Level 2: Corporate debt securities 3,953 4 ( 125 ) 3,832 3,832 — U.S. government and agency securities 847 — ( 43 ) 804 8

View Full Filing

View this 10-Q filing on SEC EDGAR

View on Read The Filing