Medtronic is evolving its business strategy around three key areas: accelerating innovation-driven growth, delivering superior outcomes, and turning data, artificial intelligence (AI), and automation into action. The company is investing in integrating AI and data analytics into its products and services to tailor therapies and facilitate remote monitoring.

In May 2025, Medtronic announced its intention to separate the Diabetes Operating Unit into a new independent, publicly traded company. This strategic divestiture is expected to be completed within 18 months, aiming to unlock value and allow the Diabetes business to pursue its own growth trajectory.

Net sales increases were driven by strong growth in Cardiac Ablation Solutions, Cardiac Pacing Therapies, TAVR, Diabetes, Neuromodulation, Spine, and Advanced Energy. Continued global penetration of Micra transcatheter pacing systems and acceptance of Evolut FX+ TAVR system highlight successful market adoption.

Medtronic incurred $303 million in restructuring and associated costs in fiscal year 2025, following $389 million in fiscal year 2024. These costs are primarily related to cost reduction initiatives, including employee termination benefits, facility consolidations, and asset write-downs, indicating ongoing efforts to optimize operations.

Management concluded that the Company’s internal control over financial reporting was effective as of April 25, 2025, with no material changes in internal control reported during the quarter. This indicates strong governance and financial oversight.

In February 2024, the Company decided to exit its ventilator product line, recording pre-tax charges of $439 million, including $371 million in non-cash impairments and write-downs. This decision reflects management's efforts to optimize its portfolio and focus on core profitable areas.

The global trend towards more comprehensive regulation of Artificial Intelligence (AI), including the EU AI Act, may impact Medtronic's business. Compliance with these evolving regulations could require significant expenditures or limit the effective use of AI in products and operations.

Medtronic relies on sole suppliers for certain critical components and raw materials, and stringent FDA regulations may hinder quick establishment of alternative sources. This dependence could lead to supply disruptions, increased costs, or lost sales, as experienced with past semiconductor shortages.

New uncertainties from global trade policies, including US and China tariffs, are estimated to have a net impact of $200 million to $350 million in fiscal year 2026. While the financial impact of Russia-Ukraine and Israel conflicts was immaterial in FY25, ongoing geopolitical risks could adversely affect supply chains and revenue.

Medtronic operates in highly competitive therapeutic and diagnostic medical markets across over 150 countries, facing diverse competitors from large manufacturers to niche specialists. The industry is characterized by rapid technological advances, innovations, and scientific discoveries.

The company faces declining reimbursement rates and increased price sensitivity due to managed care organizations, healthcare provider consolidation, and government cost-containment measures, such as volume-based procurement tenders in China. This necessitates competitively priced offerings to maintain market success.

Medtronic's ability to compete effectively depends on continuous innovation, including developing and acquiring new technologies, obtaining timely regulatory approvals, and maintaining high-quality manufacturing. This is crucial given the rapid pace of technological change and the entry of alternative therapies like GLP-1s.

Cost of products sold, excluding amortization of intangible assets, increased to $11,632 million in fiscal year 2025 from $11,216 million in fiscal year 2024. This rise was primarily driven by higher net sales and unfavorable currency impacts, partially offset by lower quality remediation costs.

Selling, general, and administrative expenses increased to $10,849 million in fiscal year 2025 from $10,736 million in fiscal year 2024. This increase is primarily attributed to new product launches and commercialization activities, reflecting investments in market expansion.

The company faces potential disruptions from volatile prices of commodities (e.g., resins, petroleum-based materials) and evolving regulatory requirements on chemical use (e.g., ethylene oxides, PFAS). These factors could impact supply constraints and the ability to manufacture cost-effectively.

Research and development expense remained high at $2,732 million in fiscal year 2025, consistent with $2,735 million in fiscal year 2024. This consistent investment underscores Medtronic's commitment to maintaining technological leadership and developing advanced and effective treatments.

Medtronic is actively integrating new technologies, including AI and data analytics, into its products, therapies, and services. This strategic focus aims to tailor therapies in real-time, facilitate remote monitoring, and create new standards of care, as highlighted in the business strategy.

Recent U.S. FDA approvals include the PulseSelect pulsed field ablation system and Affera mapping and ablation system (late October 2024), Evolut FX+ TAVR system (March 2024), Inceptiv closed-loop rechargeable SCS (April 2024), and Percept DBS (August 2024). These approvals demonstrate successful R&D commercialization.

Medtronic repurchased approximately 38 million shares in fiscal year 2025, up from 25 million shares in fiscal year 2024, under its share repurchase program. The Board authorized an additional $5.0 billion for repurchases in March 2024, with $2.1 billion remaining available as of April 25, 2025, indicating management's belief in undervalued shares.

The company declared and paid cash dividends of $0.70 per share for each quarter of fiscal year 2025, up from $0.69 per share in fiscal year 2024. Additionally, Medtronic announced an increase to $0.71 per share for the first quarter of fiscal year 2026, demonstrating a sustained commitment to returning value to shareholders.

Total debt increased to $28.5 billion at April 25, 2025, from $25.0 billion at April 26, 2024, primarily driven by the issuance of €3.0 billion ($3.2 billion) in Euro-denominated Senior Notes in June 2024. This indicates active management of the capital structure to fund operations and growth initiatives.

Medtronic achieved 100% pay equity for gender and ethnically diverse employees in the U.S. and 99% for gender globally. The company emphasizes an inclusive, diverse, and equitable workplace, supported by employee resource groups and skills-based development programs like MAPS, fostering a sense of belonging and growth.

The company has publicly committed to being net carbon neutral in its operations by 2030 and achieving net zero emissions by 2045. While ambitious, achieving these targets may require significant resource expenditure, potentially increasing operational costs.

Medtronic has implemented a cybersecurity risk management program based on the NIST Cyber Security Framework 2.0, led by a CISO with over 29 years of experience. The Board's Quality Committee oversees cybersecurity strategies, systems, and controls, ensuring reliability and preventing unauthorized access.

Changes in international trade policy, including additional tariffs imposed or proposed by the U.S. and China, are expected to result in a net tariff impact of $200 million to $350 million in fiscal year 2026. This evolving landscape presents a risk to the company's cost structure and financial performance.

While the financial impact of the Russia-Ukraine conflict and Israel's conflict was not material in fiscal year 2025 (each representing less than 1% of consolidated revenues), these geopolitical events continue to pose risks to revenue and supply chains, highlighting global instability.

The global regulatory environment, particularly regarding medical devices (e.g., EU MDR) and emerging AI technologies, is becoming more stringent and unpredictable. This could impact the cost and time needed for product approvals and potentially affect the company's ability to maintain existing or obtain future approvals.