Medtronic (MDT) Q1 2025 earnings summary

Executive summary

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

• Adjusted EPS grew 3% to $1.23 (up 8% constant currency), and GAAP EPS rose 36% to $0.80, with net income of $1.592B (non-GAAP) and $1.042B (GAAP).

• Growth driven by innovation and execution in diabetes, cardiovascular, and neuroscience, supported by new product launches and operational rigor.

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

• Operating cash flow reached $1.0B, reflecting higher collections and lower vendor payments.

Financial highlights

• Adjusted revenue was $8.0B, up 5.3% organic year-over-year; GAAP revenue was $7.9B, up 2.8% as reported.

• Adjusted diluted EPS was $1.23, up 3% year-over-year and 7.5% in constant currency.

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

• Free cash flow was $466M, down from $521M year-over-year due to higher capital expenditures.

• Net income attributable to the company was $1.592B (non-GAAP) and $1.04B (GAAP).

Outlook and guidance

• FY25 organic revenue growth guidance raised to 4.5%-5% (from 4%-5%), with implied revenue range of ~$33.5B to $33.7B.

• FY25 non-GAAP diluted EPS guidance increased to $5.42-$5.50, representing 4%-6% growth.

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

• FX expected to be a headwind of $110M-$210M for FY25, with impact lessening after Q2.

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