This will be a $1 billion business for us this fiscal year, and we have line of sight to $2 billion as our PFA portfolio expands into new accounts around the world.
— Geoff Martha
03Detailed Report
MDT
Company MDT
Period
Q3 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 22, 2026
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Executive Summary
Medtronic delivered another quarter of mid-single-digit revenue growth, underscored by strong contributions from high-growth franchises and continued margin leverage. The third quarter featured 4.1% organic revenue growth to $8.292 billion with improved gross margins (66.6%) and operating margins (26.2%), driving adjusted EPS of $1.39 (up 6.9% YoY). Management reiterated FY25 organic revenue growth guidance of 4.75-5% and high-single-digit EPS growth in the back half of the year, highlighting a robust earnings power trajectory enabled by product mix, pricing discipline, and efficiency programs. The narrative centers on stacking growth drivers (Cardiovascular CAS via Pulse Field Ablation, Evolut FX+, diabetes technology, neuromodulation) atop an already diversified base, with a multi-year path toward significant new market opportunities including renal denervation (RDN) and Hugo robotics. Management also signaled near-term operational headwinds (U.S. surgical distributor destocking) that are expected to normalize in Q1 FY2026, as well as FX headwinds that are anticipated to be meaningfully reduced in FY2026.
Key Performance Indicators
Revenue
Increasing
8.29B
QoQ: -1.32% | YoY: 2.51%
Gross Profit
Increasing
5.51B
66.49% margin
QoQ: 1.03% | YoY: 3.88%
Operating Income
Increasing
1.65B
QoQ: 3.20% | YoY: 10.99%
Net Income
Decreasing
1.29B
QoQ: 1.89% | YoY: -2.12%
EPS
Increasing
1.01
QoQ: 2.02% | YoY: 2.02%
Revenue Trend
Margin Analysis
Financial Highlights
Financial highlights (Q3 FY2025):
- Revenue: $8.292B; organic growth 4.1% YoY; Q2-Q3 dynamics reflected in mid-single-digit growth across most portfolios.
- Gross margin: 66.6% (up 50 bps YoY; up from prior-year level).
- Operating margin: 26.2% (up 100 bps YoY).
- Net income: $1.294B; net income margin 15.6%.
- EPS (adjusted): $1.39, up 6.9% YoY; GAAP EPS shown as $1.01 per share (earlier period basis).
- Cash flow: net cash provided by operating activities $2.572B; free cash flow $2.096B; capital expenditures $0.476B; dividends paid $0.897B; share repurchases $0.181B.
- Liquidity and leverage: cash and short-term investments $7.922B; total debt $26.607B; net debt $25.367B; current ratio 1.901; debt to capitalization ~0.350; dividend yield 0.78%.
- Guidance: FY25 organic revenue growth 4.75-5%; FY25 non-GAAP diluted EPS $5.44-$5.50; FX headwind expected to be $275-325M on revenue and a smaller proportion on EPS; Q4 to deliver mid-single-digit revenue growth and high-single-digit EPS growth in the back half of FY25.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
8.29B
2.51%
-1.32%
Gross Profit
5.51B
3.88%
1.03%
Operating Income
1.65B
10.99%
3.20%
Net Income
1.29B
-2.12%
1.89%
EPS
1.01
2.02%
2.02%
Key Financial Ratios
Gross Profit Margin
Excellent
66.50%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Good
19.90%
Operating margin is healthy and competitive within industry standards
Net Profit Margin
Good
15.60%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Weak
1.44%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
2.62%
Return on equity suggests inefficient capital allocation
Current Ratio
Healthy
1.90
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
Moderate
0.54
Debt-to-equity indicates balanced capital structure with manageable debt
P/E Ratio
Fair Value
22.35x
P/E ratio in line with market averages
Price to Book
Fair Value
2.34x
Price-to-book ratio reasonable for profitable companies
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