Medtronic (MDT) Q1 2025 earnings summary

Executive summary

• Achieved seventh consecutive quarter of mid-single-digit organic revenue growth, with Q1 FY25 organic revenue up 5.3% to $8.0B, exceeding guidance and consensus estimates.

• Adjusted EPS grew 3% to $1.23 (8% constant currency), and GAAP EPS rose 36% to $0.80, with non-GAAP net income at $1.592B.

• Growth was driven by innovation and execution in diabetes, cardiac ablation, neuromodulation, and TAVR, supported by new product launches and partnerships.

• Raised full-year FY25 organic revenue and EPS guidance based on Q1 outperformance and positive business momentum.

• $1.5B in incremental net share repurchases since last quarter, totaling $4B over two quarters.

Financial highlights

• Adjusted revenue reached $8.0B, up 5.3% organic year-over-year; GAAP revenue was $7.9B, up 3%.

• Adjusted diluted EPS was $1.23 (up 3%); GAAP diluted EPS was $0.80 (up 36%).

• Adjusted gross margin was 65.9% (down 50 bps reported, up 30 bps constant currency); adjusted operating margin was 24.4% (down 40 bps reported, up 60 bps constant currency).

• Operating cash flow was $1.0B; free cash flow was $466M, down from $521M year-over-year.

• Net income attributable to Medtronic was $1.04B; net income was nearly flat year-over-year.

Outlook and guidance

• FY25 organic revenue growth guidance raised to 4.5%-5% (from 4%-5%); adjusted EPS guidance increased to $5.42-$5.50, implying 4%-6% growth.

• Q2 organic revenue growth expected at ~4.5%; Q2 EPS expected at $1.24-$1.26.

• FX headwind expected to lessen in the second half; guidance includes an estimated -5% impact from foreign currency exchange.

• Implied FY25 adjusted revenue range: ~$33.5B to $33.7B.

• Implementation of OECD Pillar Two global minimum tax expected to affect future effective tax rates.