Executive Summary
Medtronic reported Q2 2025 revenue of $8.403 billion, a year-over-year decline of 2.17%, with gross profit of $5.457 billion and a gross margin of 64.94%. Despite a revenue downturn, the company delivered meaningful margin expansion and a sizeable swing to profitability, posting operating income of $1.595 billion (operating margin ~18.98%) and net income of $1.27 billion (net margin ~15.11%), up 51.5% and 94.2% YoY respectively. The strength in profitability was supported by disciplined cost management (R&D $697 million; SG&A $2.727 billion) and favorable product mix, contributing to EBITDA of $2.443 billion. Free cash flow reached $554 million, underpinning a solid liquidity profile even as the balance sheet remains levered with net debt around $26.9 billion. Management commentary on growth drivers and the path to sustainable profitability is limited in the provided data; as a result, the outlook hinges on continued execution in Diabetes care, AI-enabled surgical solutions, and cardiovascular device pipelines, alongside macro factors such as currency dynamics and reimbursement environments.
Key Performance Indicators
Key Insights
Revenue: $8.403B; YoY -2.17%; QoQ 0.00% | Gross Profit: $5.457B; YoY +5.00%; QoQ 0.00% | Operating Income: $1.595B; YoY +51.47%; QoQ 0.00% | Net Income: $1.270B; YoY +94.19%; QoQ 0.00% | EPS (Diluted): $0.99; YoY +102.04%; Gross Margin: 64.94%; Operating Margin: 18.98%; Net Margin: 15.11% | EBITDA: $2.443B; EBITDARatio: 29.07% | Current Ratio: 1.84; Quick Ratio: 1.39; Cash Ratio: 0.11 | Free Cash Flow: $0.554B | Cash at End: $1.394B; Total Debt: $28.326B; Net Debt: $26.932B | ROA: 1.41%; ROE: 2....
Financial Highlights
Revenue: $8.403B; YoY -2.17%; QoQ 0.00% | Gross Profit: $5.457B; YoY +5.00%; QoQ 0.00% | Operating Income: $1.595B; YoY +51.47%; QoQ 0.00% | Net Income: $1.270B; YoY +94.19%; QoQ 0.00% | EPS (Diluted): $0.99; YoY +102.04%; Gross Margin: 64.94%; Operating Margin: 18.98%; Net Margin: 15.11% | EBITDA: $2.443B; EBITDARatio: 29.07% | Current Ratio: 1.84; Quick Ratio: 1.39; Cash Ratio: 0.11 | Free Cash Flow: $0.554B | Cash at End: $1.394B; Total Debt: $28.326B; Net Debt: $26.932B | ROA: 1.41%; ROE: 2.62%; Debt/Capital: 36.9%
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
8.40B |
-2.17% |
0.00% |
| Gross Profit |
5.46B |
5.00% |
0.00% |
| Operating Income |
1.60B |
51.47% |
0.00% |
| Net Income |
1.27B |
94.19% |
0.00% |
| EPS |
0.99 |
102.04% |
N/A |
Key Financial Ratios
operatingProfitMargin
19%
operatingCashFlowPerShare
$0.75
freeCashFlowPerShare
$0.43
dividendPayoutRatio
70.6%
Management Commentary
No earnings call transcript data is provided in the supplied information; therefore, no verbatim management quotes or themes from the QQ2 2025 call can be cited here. The qualitative assessment below relies on the disclosed financials and industry context.
Forward Guidance
No formal forward guidance is included in the provided data. Given Medtronic’s mixed revenue trajectory (modest YoY decline) alongside margin resilience, investors should monitor: (1) currency impact, (2) cadence of new product launches and integration of AI-enabled surgical tools, (3) diabetes portfolio growth (insulin pumps, CGM, and related consumables), (4) cadence of cost optimization and supply chain efficiency, and (5) working capital dynamics given inventory and receivables trends. In a cautiously optimistic scenario with stabilizing currencies and continued execution in growth platforms, Medtronic could see improved operating leverage and free cash flow generation, supporting deleveraging and potential multiple expansion over the medium term.