Executive Summary
Medtronic’s QQ3 2025 results show a modest top-line decline against a backdrop of meaningful profitability and cash-flow strength. Revenue was USD 8.292B, down 3.46% year-over-year and 1.32% sequentially, yet the company delivered robust gross margins (66.5%) and a solid operating margin near 19.9%, driving adjusted earnings momentum. Net income rose sharply year-over-year to USD 1.294B, supported by favorable tax dynamics and disciplined cost management, with EPS at USD 1.01. Operating cash flow reached USD 2.572B and free cash flow USD 2.096B, underpinning a strong liquidity profile despite a sizable debt load.
The balance sheet remains solid, with total assets of USD 89.97B and healthy equity (USD 49.39B). Net debt sits at USD 25.37B, reflecting a leverage profile that is manageable within the medtech space but warrants ongoing attention given cyclical revenue trends. The company continues to generate high-quality cash flow, supports a payout ratio around 69.3%, and maintains sizeable cash and short-term investments (USD 7.92B combined). Absent explicit forward-looking guidance in the data provided, the near-term focus appears to be sustaining margins, managing working capital, and funding R&D and strategic initiatives in a competitive and price-sensitive market.
Overall, Medtronic’s QQ3 2025 performance highlights margin resilience and cash-generation power even as top-line growth remains a challenge. The investment thesis hinges on continued demand for core devices, the ability to monetize remote-monitoring and digital health capabilities, and disciplined capital allocation that preserves optionality for buybacks and strategic investments.
Key Performance Indicators
Key Insights
Revenue: USD 8.292B; YoY change: -3.46%; QoQ change: -1.32%
Gross Profit: USD 5.513B; Gross Margin: 66.5% (0.665) ; YoY Gross Margin change: +6.08 percentage points; QoQ: +1.03 pp
Operating Income: USD 1.646B; Operating Margin: 19.85% (0.199) ; YoY Operating Margin change: +56.32 pp; QoQ: +3.20 pp
Net Income: USD 1.294B; Net Margin: 15.60% (0.156) ; YoY Net Margin change: +97.86 pp; QoQ: +1.89 pp
EPS: USD 1.01; Diluted EPS: USD 1.01; YoY EPS change: +106.12%; QoQ: +2.02%
Cash Flow: Operating Cas...
Financial Highlights
Revenue: USD 8.292B; YoY change: -3.46%; QoQ change: -1.32%
Gross Profit: USD 5.513B; Gross Margin: 66.5% (0.665) ; YoY Gross Margin change: +6.08 percentage points; QoQ: +1.03 pp
Operating Income: USD 1.646B; Operating Margin: 19.85% (0.199) ; YoY Operating Margin change: +56.32 pp; QoQ: +3.20 pp
Net Income: USD 1.294B; Net Margin: 15.60% (0.156) ; YoY Net Margin change: +97.86 pp; QoQ: +1.89 pp
EPS: USD 1.01; Diluted EPS: USD 1.01; YoY EPS change: +106.12%; QoQ: +2.02%
Cash Flow: Operating Cash Flow USD 2.572B; Capex USD -0.476B; Free Cash Flow USD 2.096B; FCF per share USD 1.634
Liquidity & Leverage: Cash & equivalents USD 1.24B; Short-term investments USD 6.682B; Total cash & investments USD 7.922B; Total debt USD 26.607B; Net debt USD 25.367B; Current ratio 1.901; Quick ratio 1.428; Interest Coverage 9.20; Debt-to-Capital 0.350; Payout Ratio 69.3%
Margins snapshot (ratio metrics): Gross Margin 66.5%; Operating Margin 19.9%; Pretax Margin 18.6%; Net Margin 15.6%; Tax Rate ≈ 15.4%
Valuation & Multiples (as reported): P/E 22.35x; P/BV 2.34x; P/S 13.95x; EV/EBITDA 58.74x; Dividend Yield ~0.78%; Free Cash Flow Yield not provided in dataset
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
8.29B |
-3.46% |
-1.32% |
| Gross Profit |
5.51B |
6.08% |
1.03% |
| Operating Income |
1.65B |
56.32% |
3.20% |
| Net Income |
1.29B |
97.86% |
1.89% |
| EPS |
1.01 |
106.12% |
2.02% |
Key Financial Ratios
operatingProfitMargin
19.9%
operatingCashFlowPerShare
$2.01
freeCashFlowPerShare
$1.63
dividendPayoutRatio
69.3%
Management Commentary
Important management insights are not available in the provided transcript dataset. The earnings transcript field is empty, so no verbatim quotes or thematic quotes can be extracted. As a result, transcript highlights are currently unavailable. If transcript access is provided, themes to extract would typically include: strategy shifts (product mix, pipeline development, and pricing discipline), operational execution (cost containment, supply chain resilience, and manufacturing efficiency), and market conditions (reimbursement dynamics, demand in key regions, and competitive landscape).
Forward Guidance
No formal forward guidance is included in the provided data. The QQ3 2025 results framework suggests a focus on margin discipline, cash generation, and capital allocation rather than explicit growth targets. Investors should monitor (a) any management commentary on revenue trajectory by segment (Cardiovascular, Diabetes, Neuroscience, Medical/Surgical), (b) progress on remote monitoring and data-enabled care, (c) currency and geographic mix effects, and (d) potential acquisitions or strategic partnerships that could shift the growth runway. Given the balance sheet strength and robust FCF generation, the downside risk would hinge on sustained top-line pressure and macro reimbursement dynamics; upside would depend on demand recovery, faster adoption of digital health offerings, and accretive capital deployment.