Medtronic reported QQ2 2025 revenue of $8.403 billion, up 5% year over year on an organic basis, and posted an adjusted EPS of $1.26, surpassing the midpoint of guidance. Management highlighted eight consecutive quarters of mid-single-digit organic revenue growth and an 8% EPS increase on a constant currency basis, signaling durable earnings power as several high-growth initiatives move through the pipeline. The quarterly results were driven by strength in Diabetes, Neuromodulation, and Cardiac Rhythm Management, with robust contributions from established market leaders and synergies from synergistic businesses. Management raised full-year 2025 organic revenue growth to 4.75%-5% and the non-GAAP diluted EPS guidance to $5.44-$5.50, underscoring confidence in margin expansion despite FX headwinds and ongoing investments in new products and platforms.
Key drivers include the continued momentum of the TAVR franchise (FX+ launch in the U.S. and CE Mark in Europe), Pulse Field Ablation (PFA) via PulseSelect, Affera mapping/ablation system with Sphere-9 catheter, and early stage ramps in Hugo robotic surgery, Simplera, and Ardian. Diabetes delivered double-digit growth, with CGM volumes up >20% and the 780G system expanding patient access. Hypertension (Symplicity) remains a long-term growth catalyst, aided by CMS outpatient pass-through (TPT) and ongoing payer coverage discussions. The balance sheet remains healthy with a net debt of $26.9B, solid cash flow generation, and disciplined capital allocation including dividend and opportunistic buybacks. The quarterly margin dynamics reflect FX pressure and early product-launch mix, but management anticipates margin improvement in Q3 and Q4, supported by productivity gains and pricing discipline.
For investors, the key takeaway is MDT's strategic resilience: a diversified, innovation-led portfolio, ongoing margin discipline, and a clear path to mid-single-digit topline growth and EPS leverage through H2 FY25 and beyond, albeit with FX and execution risks tied to new product introductions and reimbursement evolution.