filings.toolsItem 1. Financial Statements
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Item 1. Financial Statements
Medtronic plc
Condensed Consolidated Statements of Income
(Unaudited)
| Three months ended | |||||||||||||||||||||||
| (in millions, except per share data) | July 31, 2026 | July 25, 2025 | |||||||||||||||||||||
| Net sales | $ | 9,756 | $ | 8,578 | |||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of products sold, excluding amortization of intangible assets | 3,416 | 3,001 | |||||||||||||||||||||
| Research and development expense | 771 | 726 | |||||||||||||||||||||
| Selling, general, and administrative expense | 3,198 | 2,806 | |||||||||||||||||||||
| Amortization of intangible assets | 412 | 459 | |||||||||||||||||||||
| Restructuring charges, net | 72 | 45 | |||||||||||||||||||||
| Certain litigation charges, net | — | 27 | |||||||||||||||||||||
| Other operating expense (income), net | 123 | 70 | |||||||||||||||||||||
| Operating profit | 1,764 | 1,445 | |||||||||||||||||||||
| Other non-operating expense (income), net | (190) | (33) | |||||||||||||||||||||
| Interest expense, net | 186 | 176 | |||||||||||||||||||||
| Income before income taxes | 1,769 | 1,302 | |||||||||||||||||||||
| Income tax provision | 289 | 255 | |||||||||||||||||||||
| Net income | 1,479 | 1,047 | |||||||||||||||||||||
| Net income attributable to noncontrolling interests | (9) | (7) | |||||||||||||||||||||
| Net income attributable to Medtronic | $ | 1,470 | $ | 1,040 | |||||||||||||||||||
| Basic earnings per share | $ | 1.15 | $ | 0.81 | |||||||||||||||||||
| Diluted earnings per share | $ | 1.14 | $ | 0.81 | |||||||||||||||||||
| Basic weighted average shares outstanding | 1,279.8 | 1,281.6 | |||||||||||||||||||||
| Diluted weighted average shares outstanding | 1,285.1 | 1,287.1 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
Medtronic plc
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
| Three months ended | |||||||||||||||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | |||||||||||||||||||||
| Net income | $ | 1,479 | $ | 1,047 | |||||||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Unrealized gain (loss) on investment securities | (48) | 19 | |||||||||||||||||||||
| Translation adjustment | (479) | 349 | |||||||||||||||||||||
| Net investment hedges | 695 | (559) | |||||||||||||||||||||
| Net change in retirement obligations | 1 | 1 | |||||||||||||||||||||
| Unrealized gain (loss) on cash flow hedges | 173 | (128) | |||||||||||||||||||||
| Other comprehensive income (loss) | 342 | (318) | |||||||||||||||||||||
| Comprehensive income including noncontrolling interests | 1,821 | 729 | |||||||||||||||||||||
| Comprehensive income attributable to noncontrolling interests | (9) | (8) | |||||||||||||||||||||
| Comprehensive income attributable to Medtronic | $ | 1,812 | $ | 720 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
Medtronic plc
Condensed Consolidated Balance Sheets
(Unaudited)
| (in millions) | July 31, 2026 | April 24, 2026 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 1,691 | $ | 1,949 | |||||||
| Investments | 7,128 | 7,271 | |||||||||
| Accounts receivable, less allowances for credit losses of $203 and $190, respectively | 6,357 | 6,643 | |||||||||
| Inventories | 6,215 | 5,951 | |||||||||
| Other current assets | 2,999 | 2,972 | |||||||||
| Total current assets | 24,390 | 24,787 | |||||||||
| Property, plant, and equipment, net | 7,473 | 7,417 | |||||||||
| Goodwill | 43,187 | 42,587 | |||||||||
| Other intangible assets, net | 10,238 | 10,146 | |||||||||
| Tax assets | 3,703 | 3,943 | |||||||||
| Other assets | 4,315 | 4,147 | |||||||||
| Total assets | $ | 93,306 | $ | 93,028 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current debt obligations | $ | 2,536 | $ | 1,788 | |||||||
| Accounts payable | 2,695 | 2,644 | |||||||||
| Accrued compensation | 1,906 | 2,678 | |||||||||
| Accrued income taxes | 1,056 | 914 | |||||||||
| Other accrued expenses | 3,606 | 3,634 | |||||||||
| Total current liabilities | 11,799 | 11,658 | |||||||||
| Long-term debt | 25,617 | 26,173 | |||||||||
| Accrued compensation and retirement benefits | 1,167 | 1,193 | |||||||||
| Accrued income taxes | 1,522 | 1,515 | |||||||||
| Deferred tax liabilities | 349 | 362 | |||||||||
| Other liabilities | 2,001 | 2,055 | |||||||||
| Total liabilities | 42,456 | 42,956 | |||||||||
| Commitments and contingencies (Note 16) | |||||||||||
| Shareholders’ equity: | |||||||||||
| Ordinary shares— par value $0.0001, 2.6 billion shares authorized, 1,280,046,863 and 1,280,177,293 shares issued and outstanding, respectively | — | — | |||||||||
| Additional paid-in capital | 20,805 | 20,926 | |||||||||
| Retained earnings | 33,187 | 32,638 | |||||||||
| Accumulated other comprehensive loss | (3,759) | (4,101) | |||||||||
| Total shareholders’ equity | 50,232 | 49,463 | |||||||||
| Noncontrolling interests | 618 | 609 | |||||||||
| Total equity | 50,850 | 50,072 | |||||||||
| Total liabilities and equity | $ | 93,306 | $ | 93,028 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
Medtronic plc
Condensed Consolidated Statements of Equity
(Unaudited)
| Ordinary Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Number | Par Value | ||||||||||||||||||||||||||||||||||||||||||||||||
| April 24, 2026 | 1,280 | $ | — | $ | 20,926 | $ | 32,638 | $ | (4,101) | $ | 49,463 | $ | 609 | $ | 50,072 | |||||||||||||||||||||||||||||||||||
| Net income | — | — | — | 1,470 | — | 1,470 | 9 | 1,479 | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | 342 | 342 | — | 342 | ||||||||||||||||||||||||||||||||||||||||||
| Dividends to shareholders ($0.72 per ordinary share) | — | — | — | (921) | — | (921) | — | (921) | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares under stock purchase and award plans, net of shares withheld for taxes | 3 | — | (21) | — | — | (21) | — | (21) | ||||||||||||||||||||||||||||||||||||||||||
| Repurchase of ordinary shares | (3) | — | (226) | — | — | (226) | — | (226) | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 125 | — | — | 125 | — | 125 | ||||||||||||||||||||||||||||||||||||||||||
| July 31, 2026 | 1,280 | $ | — | $ | 20,805 | $ | 33,187 | $ | (3,759) | $ | 50,232 | $ | 618 | $ | 50,850 | |||||||||||||||||||||||||||||||||||
| Ordinary Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Number | Par Value | ||||||||||||||||||||||||||||||||||||||||||||||||
| April 25, 2025 | 1,282 | $ | — | $ | 20,833 | $ | 31,476 | $ | (4,284) | $ | 48,024 | $ | 232 | $ | 48,256 | |||||||||||||||||||||||||||||||||||
| Net income | — | — | — | 1,040 | — | 1,040 | 7 | 1,047 | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | (319) | (319) | 1 | (318) | ||||||||||||||||||||||||||||||||||||||||||
| Dividends to shareholders ($0.71 per ordinary share) | — | — | — | (910) | — | (910) | — | (910) | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares under stock purchase and award plans, net of shares withheld for taxes | 1 | — | 93 | — | — | 93 | — | 93 | ||||||||||||||||||||||||||||||||||||||||||
| Repurchase of ordinary shares | (1) | — | (120) | — | — | (120) | — | (120) | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 86 | — | — | 86 | — | 86 | ||||||||||||||||||||||||||||||||||||||||||
| July 25, 2025 | 1,282 | $ | — | $ | 20,891 | $ | 31,606 | $ | (4,604) | $ | 47,893 | $ | 240 | $ | 48,133 | |||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Medtronic plc
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three months ended | |||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | |||||||||
| Operating Activities: | |||||||||||
| Net income | $ | 1,479 | $ | 1,047 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 729 | 748 | |||||||||
| Provision for credit losses | 25 | 28 | |||||||||
| Deferred income taxes | 127 | 167 | |||||||||
| Stock-based compensation | 125 | 86 | |||||||||
| Other, net | (29) | 159 | |||||||||
| Change in operating assets and liabilities, net of acquisitions and divestitures: | |||||||||||
| Accounts receivable, net | 224 | 288 | |||||||||
| Inventories | (240) | (373) | |||||||||
| Accounts payable and accrued liabilities | (531) | (598) | |||||||||
| Other operating assets and liabilities | (118) | (464) | |||||||||
| Net cash provided by operating activities | 1,793 | 1,088 | |||||||||
| Investing Activities: | |||||||||||
| Acquisitions, net of cash acquired | (1,162) | — | |||||||||
| Additions to property, plant, and equipment | (503) | (504) | |||||||||
| Purchases of investments | (2,190) | (2,100) | |||||||||
| Sales and maturities of investments | 2,209 | 2,010 | |||||||||
| Other investing activities, net | 26 | (125) | |||||||||
| Net cash used in investing activities | (1,619) | (719) | |||||||||
| Financing Activities: | |||||||||||
| Change in current debt obligations, net | 812 | 649 | |||||||||
| Payments on long-term debt | — | (1,162) | |||||||||
| Dividends to shareholders | (921) | (910) | |||||||||
| Issuance of ordinary shares | 20 | 95 | |||||||||
| Repurchase of ordinary shares | (267) | (123) | |||||||||
| Other financing activities, net | 13 | 70 | |||||||||
| Net cash used in financing activities | (343) | (1,381) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (89) | 67 | |||||||||
| Net change in cash and cash equivalents | (258) | (945) | |||||||||
| Cash and cash equivalents at beginning of period | 1,949 | 2,218 | |||||||||
| Cash and cash equivalents at end of period | $ | 1,691 | $ | 1,273 | |||||||
| Supplemental Cash Flow Information | |||||||||||
| Cash paid for: | |||||||||||
| Income taxes | $ | 199 | $ | 402 | |||||||
| Interest | 83 | 81 | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Medtronic plc and its subsidiaries (Medtronic plc, Medtronic, or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.) (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the condensed consolidated financial statements include all the adjustments necessary for a fair statement in conformity with U.S. GAAP. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year.
Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates.
The accompanying unaudited condensed consolidated financial statements include the accounts of Medtronic plc, its wholly-owned subsidiaries, entities for which the Company has a controlling financial interest, and variable interest entities for which the Company is the primary beneficiary. Intercompany transactions and balances have been eliminated in consolidation. Amounts reported in millions within this quarterly report are computed based on the actual amounts, and therefore, the sum of the components may not equal the total amount reported in millions due to rounding. Additionally, certain columns and rows within tables may not sum due to rounding.
The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements of the Company and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 24, 2026, as filed with the Securities and Exchange Commission (SEC) on June 18, 2026. The Company’s fiscal years 2027, 2026, and 2025 will end or ended on April 30, 2027, April 24, 2026, and April 25, 2025, respectively. Fiscal year 2027 is a 53-week year, with the extra week occurring in the first fiscal month of the first quarter.
There have been no material changes to our significant accounting policies, as disclosed in Note 1 included in the Company's Annual Report on Form 10-K for the fiscal year ended April 24, 2026.
In May 2025, the Company announced its intent to separate the Diabetes Business, with the intention to create a new independent, publicly traded company, MiniMed Group, Inc. (MiniMed). On March 9, 2026, MiniMed completed an initial public offering (the IPO). Due to the Company retaining a controlling financial interest, the unaudited condensed consolidated financial statements include the financial results of MiniMed. Refer to Note 18 for additional information on the MiniMed separation.
2. New Accounting Pronouncements
Recently Adopted Accounting Standards
Derivatives and Hedging and Revenue from Contracts with Customers
In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-07, Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract (Topics 815 and 606). The guidance refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. This ASU also provides clarification under Topic 606 for share-based payments from a customer in a revenue contract. The Company early adopted this accounting guidance in the first quarter of fiscal year 2027. The adoption of this standard had no impact on our financial statements.
Government Grants
In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities (Topic 832), to establish guidance on the recognition, measurement, and presentation of government grants received by business entities. The Company early adopted this accounting guidance in the first quarter of fiscal year 2027. The adoption of this standard had no impact on our financial statements.
Not Yet Adopted Accounting Standards
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), which requires tabular disclosures disaggregating certain costs and expenses within relevant income statement captions. The Company will adopt this
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
guidance beginning in the fourth quarter of fiscal year 2028 for our annual report and for interim periods starting in fiscal year 2029. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.
Internal-Use Software
In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40), to increase the operability of the recognition guidance by removing all references to "project stages" and clarifying when an entity is required to start capitalizing software costs. This accounting guidance is effective for the Company beginning in the first quarter of fiscal year 2029, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statements.
3. Revenue
The Company's revenues are principally derived from device-based medical therapies and services related to cardiac rhythm disorders, cardiovascular disease, hypertension, neurological surgery technologies, neurological disorders and diseases, spinal conditions and musculoskeletal trauma, chronic pain, ear, nose, and throat conditions, urological and digestive disorders, advanced and general surgical care products, respiratory and monitoring solutions, and diabetes conditions. The Company's primary customers include healthcare systems, clinics, third-party healthcare providers, distributors, and other institutions, including governmental healthcare programs and group purchasing organizations.
Starting in the first quarter of fiscal year 2027, the Cardiovascular Portfolio divisions transitioned from Cardiac Rhythm & Heart Failure, Structural Heart & Aortic, and Coronary & Peripheral Vascular to Electrophysiology Therapies (EPT), Interventional Cardiology Therapies (ICT), CardioVascular Surgery (CVS), and Peripheral Vascular Health (PVH). Our EPT division includes the Cardiac Rhythm Management and the Cardiac Ablation businesses. Our ICT division includes the Coronary and Renal Denervation and the Structural Heart businesses. Our CVS division includes the Cardiac Surgery and the Aortic businesses. Our PVH division includes the Peripheral Vascular Health business. Additionally, a product line from the Medical Surgical Portfolio in the Surgical & Endoscopy division moved to the Neuroscience Portfolio in the Neuromodulation division. Starting in the fourth quarter of fiscal year 2026, the Diabetes Business was no longer considered a reportable segment. Prior period net sales have been recast to conform to the new presentation.
The table below illustrates net sales by segment and division and by market geography for the three months ended July 31, 2026 and July 25, 2025. The U.S. revenue includes United States and U.S. territories, and the international revenue includes all other non-U.S. countries.
| Worldwide | |||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | |||||||||||||||||||||
| Electrophysiology Therapies | $ | 2,218 | $ | 1,712 | |||||||||||||||||||
| Interventional Cardiology Therapies | 894 | 834 | |||||||||||||||||||||
| CardioVascular Surgery | 477 | 436 | |||||||||||||||||||||
| Peripheral Vascular Health | 338 | 302 | |||||||||||||||||||||
| Cardiovascular | 3,927 | 3,285 | |||||||||||||||||||||
| Cranial & Spinal Technologies | 1,365 | 1,211 | |||||||||||||||||||||
| Specialty Therapies | 774 | 702 | |||||||||||||||||||||
| Neuromodulation | 539 | 514 | |||||||||||||||||||||
| Neuroscience | 2,678 | 2,427 | |||||||||||||||||||||
| Surgical & Endoscopy | 1,740 | 1,601 | |||||||||||||||||||||
| Acute Care & Monitoring | 539 | 471 | |||||||||||||||||||||
| Medical Surgical | 2,279 | 2,073 | |||||||||||||||||||||
| Reportable segment net sales | 8,884 | 7,785 | |||||||||||||||||||||
| Diabetes | 843 | 721 | |||||||||||||||||||||
| Other operating segment(1) | 29 | 33 | |||||||||||||||||||||
| Other adjustments(2) | — | 39 | |||||||||||||||||||||
| Total net sales | $ | 9,756 | $ | 8,578 |
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
| U.S. | International | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | July 31, 2026 | July 25, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cardiovascular | $ | 1,853 | $ | 1,479 | $ | 2,074 | $ | 1,806 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Neuroscience | 1,813 | 1,624 | 864 | 803 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Medical Surgical | 982 | 884 | 1,297 | 1,188 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segment net sales | 4,649 | 3,988 | 4,236 | 3,797 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diabetes | 240 | 217 | 603 | 504 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other operating segment(1) | 17 | 20 | 12 | 14 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other adjustments(2) | — | — | — | 39 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total net sales | $ | 4,906 | $ | 4,224 | $ | 4,850 | $ | 4,354 | |||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Includes operations and ongoing transition agreements from businesses the Company has exited or divested.
(2)Reflects adjustments to the Company's Italian payback accruals as further described below.
The amount of revenue recognized is reduced by sales rebates, distributor chargebacks, returns, and other adjustments. Adjustments to rebates, distributor chargebacks, returns reserves, and other adjustments are recorded as increases or decreases to revenue. At both July 31, 2026 and April 24, 2026, $1.0 billion and $0.3 billion of rebates and other adjustments were classified as other accrued expenses and other liabilities, respectively, and $0.7 billion of distributor chargebacks were classified as a reduction of accounts receivable in the condensed consolidated balance sheets.
During the three months ended July 25, 2025, the Company decreased its accrual for the Italian payback by $39 million as an adjustment to net sales in the condensed consolidated statements of income resulting from the June 2025 Legislative Decree published by the Italian government and formalized into law in August 2025 confirming a reduction of the amounts due for years 2015 to 2018. Refer to Note 16 for additional information. Other adjustments to variable consideration during the three months ended July 31, 2026 and July 25, 2025 were not material.
Deferred Revenue and Remaining Performance Obligations
Deferred revenue at both July 31, 2026 and April 24, 2026 was $0.5 billion, of which $0.4 billion was included in other accrued expenses, respectively, and $0.1 billion was included in other liabilities. During the three months ended July 31, 2026, the Company recognized $140 million of revenue that was included in deferred revenue as of April 24, 2026. During the three months ended July 25, 2025, the Company recognized $135 million of revenue that was included in deferred revenue as of April 25, 2025.
Remaining performance obligations include goods and services that have not yet been delivered or provided under existing, noncancellable, contracts with minimum purchase commitments. At July 31, 2026, the estimated revenue expected to be recognized in future periods related to unsatisfied performance obligations for executed contracts with an original duration of one year or more was approximately $0.4 billion. The Company expects to recognize revenue on the majority of these remaining performance obligations over the next three years.
4. Acquisitions, Dispositions, and Funded Research and Development Arrangements
Acquisition Activity
During the three months ended July 31, 2026 and the fiscal year ended April 24, 2026, the Company had acquisitions that were accounted for as business combinations. Goodwill resulting from business combinations is largely attributable to future, yet to be defined technologies, new customer relationships, existing workforce of the acquired businesses, and synergies expected to arise after the Company's acquisition of these businesses. The results of operations of acquired businesses have been included in the Company’s condensed consolidated statements of income since the date each business was acquired. The results of operations of acquired businesses and the pro forma impact of the acquisitions during the three months ended July 31, 2026 and fiscal year 2026 were not material, either individually or in the aggregate. For the three months ended July 31, 2026 and the fiscal year ended April 24, 2026, purchase price allocation adjustments were not material.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Fiscal Year 2027
Scientia Vascular
On June 12, 2026, the Company closed on the acquisition of all outstanding shares of Scientia Vascular (Scientia), a privately held company. The acquisition expands the Specialty Therapies division within the Neuroscience Portfolio through Scientia’s differentiated access products used to treat complex neurovascular conditions. Contingent consideration liabilities recognized in connection with the acquisition are comprised of product development and revenue-based milestones.
SPR Therapeutics, Inc.
On July 16, 2026, the Company acquired all outstanding equity of SPR Therapeutics, Inc (SPR), a privately held medical technology company. The acquisition expands the Neuromodulation division within the Neuroscience Portfolio with temporary peripheral nerve stimulation (PNS) technology, enabling earlier intervention for chronic pain sufferers.
The following tables summarize the preliminary fair value of consideration transferred and the preliminary fair values of the assets acquired and liabilities assumed:
| (in millions) | Scientia | SPR | |||||||||||||||
| Cash consideration paid at closing | $ | 527 | $ | 654 | |||||||||||||
| Fair value of contingent consideration | 123 | — | |||||||||||||||
| Total consideration transferred | 651 | 654 | |||||||||||||||
| Settlement of debt and accrued interest | 30 | — | |||||||||||||||
| Total purchase price | $ | 681 | $ | 654 |
| (in millions) | Scientia | SPR | |||||||||
| Current assets (excluding inventory) | $ | 21 | $ | 27 | |||||||
| Inventory | 33 | 31 | |||||||||
| Total current assets | 54 | 58 | |||||||||
| Property, plant, and equipment, net | 23 | 2 | |||||||||
| Goodwill | 511 | 422 | |||||||||
| Other intangible assets | 278 | 241 | |||||||||
| Other noncurrent assets | 8 | 8 | |||||||||
| Total assets acquired | 874 | 731 | |||||||||
| Other current liabilities | 7 | 13 | |||||||||
| Accrued income taxes | 145 | — | |||||||||
| Total current liabilities | 151 | 13 | |||||||||
| Deferred tax liabilities | — | 59 | |||||||||
| Other noncurrent liabilities | 42 | 4 | |||||||||
| Total liabilities assumed | 193 | 77 | |||||||||
| Net assets acquired | $ | 681 | $ | 654 |
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Goodwill for the Scientia and SPR acquisitions was assigned to the Neuroscience Portfolio and is not deductible for tax purposes. The fair value of intangible assets acquired was determined using the income approach, which requires the Company to make significant estimates. These estimates include the amount and timing of projected future cash flows of each project or technology, the discount rate used to discount those cash flows to present value, and the assessment of the asset's life cycle. For Scientia, the other intangible assets acquired primarily consists of $109 million of technology-based intangible assets with useful lives ranging from 6 years to 9 years, $155 million of customer-based intangible assets with useful lives of 18 years, and $13 million of in-process research and development. For SPR, the other intangible assets acquired primarily consists of $225 million of technology-based intangible assets with estimated useful lives of 15 years and $15 million of customer-based intangible assets with estimated useful lives of 4 years.
Fiscal Year 2026
CathWorks Ltd.
On April 20, 2026, the Company acquired all the remaining outstanding shares of CathWorks Ltd. (CathWorks), a privately held medical device company. The acquisition expands the Interventional Cardiology division within the Cardiovascular Portfolio by aiming to transform how coronary artery disease is diagnosed and treated.
Prior to the acquisition, the Company held an existing 15% equity interest in CathWorks, a debt investment in CathWorks, and an option to acquire the remaining 85% equity interest. On February 3, 2026, the Company exercised its option to acquire the remaining equity interest in CathWorks. This acquisition was accounted for as a step acquisition at the time of closing. Accordingly, the Company allocated the purchase price of the acquired company to the net tangible assets and intangible assets acquired based upon their preliminary estimated fair values. The Company remeasured the previously held equity interest in CathWorks to its fair value based upon a valuation of the acquired business which was developed using an income approach valuation model. This approach determines fair value based on cash flow projections which are discounted to present value using a risk-adjusted rate of return. The Company remeasured its previously held equity interest to fair value, resulting in a gain of $45 million, representing the difference between the carrying amount of the investment and its fair value at the acquisition date, within other non-operating expense (income), net in the consolidated statements of income during fiscal year 2026. Contingent consideration liabilities recognized in connection with the acquisition are based on future revenue achievements of the acquired business.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following tables summarize the preliminary fair value of consideration transferred and the preliminary fair values of the assets acquired and liabilities assumed:
| (in millions) | |||||
| Cash consideration paid at closing | $ | 410 | |||
| Fair value of contingent consideration | 115 | ||||
| Total consideration transferred | 525 | ||||
| Fair value of previously held equity interest in CathWorks | 93 | ||||
| Settlement of debt and accrued interest due from CathWorks | 88 | ||||
| Settlement of pre-existing relationships | 12 | ||||
| Total purchase price | $ | 718 | |||
| (in millions) | |||||
| Current assets | $ | 17 | |||
| Property, plant, and equipment, net | 11 | ||||
| Goodwill | 555 | ||||
| Other intangible assets | 200 | ||||
| Other assets | 1 | ||||
| Total assets acquired | 784 | ||||
| Current liabilities | 7 | ||||
| Accrued income taxes | 38 | ||||
| Total current liabilities | 45 | ||||
| Deferred tax liabilities | 21 | ||||
| Other noncurrent liabilities | 1 | ||||
| Total liabilities assumed | 66 | ||||
| Net assets acquired | $ | 718 |
Goodwill was assigned to the Company’s Cardiovascular Portfolio and is not deductible for tax purposes. The other intangible assets acquired consists of purchased technology and has an estimated useful life of ten years.
Contingent Consideration
Certain of the Company’s business combinations involve potential payment of future consideration that is contingent upon the achievement of certain product development milestones and/or contingent on the acquired business reaching certain performance milestones. A liability is recorded for the estimated fair value of the contingent consideration on the acquisition date. The fair value of the contingent consideration is remeasured at each reporting period, and the change in fair value is recognized within other operating expense (income), net in the condensed consolidated statements of income.
The fair value of contingent consideration liabilities at July 31, 2026 and April 24, 2026 was $275 million and $163 million, respectively. At July 31, 2026, $111 million was recorded in other accrued expenses and $164 million was recorded in other liabilities on the condensed consolidated balance sheets. At April 24, 2026, $32 million was reflected in other accrued expenses and $131 million was reflected in other liabilities on the condensed consolidated balance sheets.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table provides a reconciliation of the beginning and ending balances of contingent consideration liabilities:
| Three months ended | |||||||||||
| (in millions) | July 31, 2026 | ||||||||||
| Beginning balance | $ | 163 | |||||||||
| Purchase price contingent consideration | 123 | ||||||||||
| Purchase price allocation adjustments | 3 | ||||||||||
| Payments | (14) | ||||||||||
| Ending balance | $ | 275 |
The roll-forward activity of contingent consideration liabilities for the three months ended July 25, 2025 was not material.
The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs:
| (in millions) | Fair Value at July 31, 2026 | Unobservable Input | Range | Weighted Average (1) | ||||||||||||||||||||||||||||
| Revenue and other performance-based payments | $ | 220 | Discount rate | 7.8% - 28.2% | 11.1% | |||||||||||||||||||||||||||
| Projected fiscal year of payment | 2027 - 2031 | 2029 | ||||||||||||||||||||||||||||||
| Product development and other milestone-based payments | $ | 55 | Discount rate | 5.5% | 5.5% | |||||||||||||||||||||||||||
| Projected fiscal year of payment | 2027 - 2028 | 2027 |
(1)Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. For projected fiscal year of payment, the amount represents the median of the inputs and is not a weighted average.
Funded Research and Development Arrangements
The Company has entered into various arrangements with affiliates of Blackstone Life Sciences Advisors L.L.C. (collectively, Blackstone) to receive funding related to the development of certain products within the Cardiovascular Portfolio and Diabetes Business. As there is substantive and genuine transfer of risk to Blackstone, the development funding is recognized by Medtronic as an obligation to perform contractual services. The Company recognizes the funding as income within other operating expense (income), net as the research and development costs are incurred and funding payments become due. Under these arrangements, the Company recognized income of $12 million and $36 million during the three months ended July 31, 2026 and July 25, 2025, respectively. As of July 31, 2026, the Company is eligible to receive additional funding of $237 million under these arrangements.
Following potential U.S. regulatory approval and commercial launch of each product covered by the Blackstone agreements, Blackstone will be eligible to receive a combination of fixed regulatory and commercial milestone payments up to $1.2 billion and royalties based on percent of sales of such products. During the fourth quarter of fiscal year 2026, one of the products funded by these arrangements within the Diabetes Business was approved by the U.S. FDA. As U.S. regulatory approval was received and commercial launch is probable, the Company recognized a $157 million charge within other operating expense (income), net in the consolidated statements of income during fiscal year 2026. The future minimum royalty payment obligation is primarily recognized within other liabilities in the condensed consolidated balance sheets as of July 31, 2026 and April 24, 2026. This charge is included in the $1.2 billion amount noted above. The $157 million future minimum royalty payment obligation of MiniMed is guaranteed by Medtronic, Inc.
Under certain termination provisions, the Company's payment obligation will survive, and in certain termination circumstances, a payment to Blackstone of a multiple of the funded amounts may be required. At the time of executing these contracts, the occurrence of such circumstances was deemed to be remote.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
5. Restructuring Charges
Total restructuring, associated, and other costs for the three months ended July 31, 2026 were $89 million, as compared to $67 million for the three months ended July 25, 2025.
MiniMed Restructuring Actions
In December 2025, the Board of Directors approved a series of restructuring actions designed to support the separation and position of both Medtronic and MiniMed by enabling greater strategic focus, improving operational efficiency, aligning organizational structures of each, and driving long-term business growth and efficiencies in the individual organizations.
The restructuring actions are expected to result in pre-tax restructuring charges of approximately $300 million to $500 million, to be incurred at varying intervals between the third quarter of fiscal year 2026 and the finalization of the Transition Services Agreement (which governs services to be provided to MiniMed by Medtronic, and which will conclude no later than 24 months following the March 9, 2026 MiniMed IPO). The expected completion date of these restructuring actions is fiscal year 2029. The restructuring activities include organizational realignments, workforce-related actions, and separation of duplicated shared services, locations, systems, and operational functions. Of the total actions, the Company anticipates that materially all of the charges will relate to employee termination benefits, with the potential for other charges to include contract termination costs and asset write-offs. The Company expects these costs to be recognized primarily within restructuring charges, net, cost of products sold, and selling, general, and administrative expense in the condensed consolidated statements of income. The costs of this program were not recorded in a specific reportable segment. Since inception, the Company has incurred pre-tax exit and disposal and other costs of $201 million in connection with the MiniMed Restructuring Actions.
The following table presents the classification of these restructuring, associated, and other costs in the condensed consolidated statements of income for the MiniMed restructuring activities:
| Three months ended | |||||||||||||||||
| (in millions) | July 31, 2026 | ||||||||||||||||
| Selling, general, and administrative expenses | $ | 8 | |||||||||||||||
| Restructuring charges, net | 58 | ||||||||||||||||
| Total restructuring, associated, and other costs | $ | 67 |
The following table provides a reconciliation of the beginning and ending restructuring liability balances related to the MiniMed restructuring activities for the three months ended July 31, 2026:
| (in millions) | Employee Termination Benefits | Associated and Other Costs | Total | ||||||||||||||
| April 24, 2026 | $ | 119 | $ | — | $ | 119 | |||||||||||
| Charges | 62 | 5 | 67 | ||||||||||||||
| Cash payments | (88) | (4) | (92) | ||||||||||||||
| July 31, 2026 | $ | 93 | $ | 1 | $ | 93 |
Other Restructuring Activities
The Company also incurred restructuring charges during the three months ended July 31, 2026 and July 25, 2025 for individually immaterial restructuring activities. The restructuring, associated, and other costs for these activities primarily related to employee termination benefits provided to employees who have been involuntarily terminated, facility related and contract termination costs, and asset write-offs.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table presents the classification of these restructuring, associated, and other costs in the condensed consolidated statements of income for the other restructuring activities:
| Three months ended | |||||||||||||||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | |||||||||||||||||||||
| Cost of products sold | $ | 8 | $ | 16 | |||||||||||||||||||
| Selling, general, and administrative expenses | 2 | 5 | |||||||||||||||||||||
| Restructuring charges, net | 13 | 45 | |||||||||||||||||||||
| Total restructuring, associated, and other costs | $ | 23 | $ | 67 |
The following table provides a reconciliation of the beginning and ending restructuring liability balances relating to the other restructuring activities:
| (in millions) | Employee Termination Benefits | Associated and Other Costs | Total | ||||||||||||||
| April 24, 2026 | $ | 11 | $ | 44 | $ | 56 | |||||||||||
| Charges | 13 | 2 | 15 | ||||||||||||||
| Cash payments | (9) | (19) | (28) | ||||||||||||||
| July 31, 2026 | $ | 15 | $ | 27 | $ | 42 | |||||||||||
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
6. Financial Instruments
Debt Securities
The Company holds investments in marketable debt securities that are classified and accounted for as available-for-sale and are remeasured on a recurring basis. The following tables summarize the Company's investments in available-for-sale debt securities by significant investment category and the related condensed consolidated balance sheet classification at July 31, 2026 and April 24, 2026:
| July 31, 2026 | |||||||||||||||||||||||||||||||||||
| Valuation | Balance Sheet Classification | ||||||||||||||||||||||||||||||||||
| (in millions) | Cost | Unrealized Gains | Unrealized Losses | Fair Value | Investments | Other Assets | |||||||||||||||||||||||||||||
| Level 1: | |||||||||||||||||||||||||||||||||||
| U.S. government and agency securities | $ | 366 | $ | — | $ | (5) | $ | 362 | $ | 362 | $ | — | |||||||||||||||||||||||
| Level 2: | |||||||||||||||||||||||||||||||||||
| Corporate debt securities | 4,034 | 7 | (39) | 4,002 | 4,002 | — | |||||||||||||||||||||||||||||
| U.S. government and agency securities | 764 | — | (7) | 757 | 757 | — | |||||||||||||||||||||||||||||
| Mortgage-backed securities | 850 | 3 | (23) | 830 | 830 | — | |||||||||||||||||||||||||||||
| Non-U.S. government and agency securities | 22 | — | — | 22 | 22 | — | |||||||||||||||||||||||||||||
| Other asset-backed securities | 1,151 | 2 | (10) | 1,143 | 1,143 | — | |||||||||||||||||||||||||||||
| Total Level 2 | 6,822 | 12 | (80) | 6,754 | 6,754 | — | |||||||||||||||||||||||||||||
| Level 3: | |||||||||||||||||||||||||||||||||||
| Auction rate securities | 36 | — | (2) | 34 | — | 34 | |||||||||||||||||||||||||||||
| Total available-for-sale debt securities | $ | 7,225 | $ | 12 | $ | (87) | $ | 7,150 | $ | 7,116 | $ | 34 |
| April 24, 2026 | |||||||||||||||||||||||||||||||||||
| Valuation | Balance Sheet Classification | ||||||||||||||||||||||||||||||||||
| (in millions) | Cost | Unrealized Gains | Unrealized Losses | Fair Value | Investments | Other Assets | |||||||||||||||||||||||||||||
| Level 1: | |||||||||||||||||||||||||||||||||||
| U.S. government and agency securities | $ | 420 | $ | — | $ | (4) | $ | 416 | $ | 416 | $ | — | |||||||||||||||||||||||
| Level 2: | |||||||||||||||||||||||||||||||||||
| Corporate debt securities | 4,041 | 25 | (15) | 4,050 | 4,050 | — | |||||||||||||||||||||||||||||
| U.S. government and agency securities | 812 | — | (9) | 803 | 803 | — | |||||||||||||||||||||||||||||
| Mortgage-backed securities | 852 | 8 | (18) | 842 | 842 | — | |||||||||||||||||||||||||||||
| Non-U.S. government and agency securities | 23 | — | — | 23 | 23 | — | |||||||||||||||||||||||||||||
| Other asset-backed securities | 1,121 | 4 | (7) | 1,118 | 1,118 | — | |||||||||||||||||||||||||||||
| Total Level 2 | 6,849 | 37 | (49) | 6,837 | 6,837 | — | |||||||||||||||||||||||||||||
| Level 3: | |||||||||||||||||||||||||||||||||||
| Auction rate securities | 36 | — | (2) | 34 | — | 34 | |||||||||||||||||||||||||||||
| Total available-for-sale debt securities | $ | 7,305 | $ | 37 | $ | (56) | $ | 7,287 | $ | 7,253 | $ | 34 |
The amortized cost of debt securities excludes accrued interest, which is reported in other current assets in the condensed consolidated balance sheets.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following tables present the gross unrealized losses and fair values of the Company’s available-for-sale debt securities that have been in a continuous unrealized loss position deemed to be temporary, aggregated by investment category at July 31, 2026 and April 24, 2026:
| July 31, 2026 | |||||||||||||||||||||||
| Less than 12 months | More than 12 months | ||||||||||||||||||||||
| (in millions) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||
| Corporate debt securities | $ | 655 | $ | (3) | $ | 2,200 | $ | (37) | |||||||||||||||
| U.S. government and agency securities | 397 | (5) | 290 | (7) | |||||||||||||||||||
| Mortgage-backed securities | 51 | (1) | 525 | (22) | |||||||||||||||||||
| Other asset-backed securities | — | — | 515 | (10) | |||||||||||||||||||
| Auction rate securities | 11 | (1) | 22 | (2) | |||||||||||||||||||
| Total | $ | 1,114 | $ | (9) | $ | 3,553 | $ | (78) |
| April 24, 2026 | |||||||||||||||||||||||
| Less than 12 months | More than 12 months | ||||||||||||||||||||||
| (in millions) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||
| Corporate debt securities | $ | 653 | $ | (3) | $ | 1,110 | $ | (12) | |||||||||||||||
| U.S. government and agency securities | 313 | (4) | 434 | (9) | |||||||||||||||||||
| Mortgage-backed securities | — | — | 335 | (18) | |||||||||||||||||||
| Other asset-backed securities | — | — | 440 | (7) | |||||||||||||||||||
| Auction rate securities | — | — | 34 | (2) | |||||||||||||||||||
| Total | $ | 966 | $ | (7) | $ | 2,353 | $ | (48) |
The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There were no transfers into or out of Level 3 during the three months ended July 31, 2026 and fiscal year 2026. When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement.
Gains and losses on available-for-sale debt securities are recognized in other non-operating expense (income), net in the consolidated statements of income. During the three months ended July 31, 2026 and July 25, 2025, gross realized gains and losses on available-for-sale debt securities were not material. During the three months ended July 31, 2026 and July 25, 2025, proceeds from sales of available-for-sale debt securities were $2.2 billion and $2.0 billion, respectively.
The contractual maturities of available-for-sale debt securities at July 31, 2026 are shown in the following table. Within the table, maturities of mortgage-backed securities have been allocated based upon timing of estimated cash flows assuming no change in the current interest rate environment. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.
| (in millions) | Amortized Cost | Fair Value | |||||||||
| Due in one year or less | $ | 1,982 | $ | 1,973 | |||||||
| Due after one year through five years | 3,235 | 3,209 | |||||||||
| Due after five years through ten years | 1,497 | 1,482 | |||||||||
| Due after ten years | 511 | 486 | |||||||||
| Total | $ | 7,225 | $ | 7,150 |
Interest income, which includes income on marketable debt securities and the global liquidity structures, is recognized in other non-operating expense (income), net, in the condensed consolidated statements of income. During the three months ended July 31, 2026 and July 25, 2025, there was $102 million and $120 million of interest income, respectively.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Equity Securities, Equity Method Investments, and Other Investments
The following table summarizes the Company's equity and other investments and related accrued interest receivable at July 31, 2026 and April 24, 2026, which are classified primarily as other assets in the consolidated balance sheets:
| (in millions) | July 31, 2026 | April 24, 2026 | ||||||||||||
| Investments with readily determinable fair value (marketable equity securities) | $ | 163 | $ | 130 | ||||||||||
| Investments without readily determinable fair values | 679 | 616 | ||||||||||||
| Equity method and other investments | 72 | 78 | ||||||||||||
| Total equity and other investments | $ | 914 | $ | 824 |
The table below includes activity related to the Company's portfolio of equity and other investments. Gains, losses, impairments, and interest income on equity and other investments are recognized in other non-operating expense (income), net in the consolidated statements of income.
| Three months ended | |||||||||||||||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | |||||||||||||||||||||
| Proceeds from sales | $ | 24 | $ | 17 | |||||||||||||||||||
| Gross gains | 68 | 7 | |||||||||||||||||||||
| Gross losses | (2) | (93) | |||||||||||||||||||||
| Impairment losses recognized | (1) | (26) |
During the three months ended July 31, 2026, there were $33 million of net unrealized gains on equity securities and other investments still held at July 31, 2026. During the three months ended July 25, 2025, there were $87 million of net unrealized losses on equity securities and other investments still held at July 25, 2025.
Mozarc Medical Investment
In fiscal year 2023 the Company sold half its Renal Care Solutions business to Mozarc Medical (Mozarc Medical or Mozarc), and as a result of the transaction, the Company retained a 50% non-controlling equity interest in Mozarc. This sale was part of an agreement between Medtronic and DaVita Inc. (DaVita) to form a new, independent kidney care-focused medical device company with equal equity ownership. This investment provides the Company with the ability to exercise significant influence over Mozarc and the Company has elected the fair value option to account for this equity method investment. The Company believes the fair value option best reflects the economics of the underlying transaction.
Under the fair value option, changes in the fair value of the investment are recognized through earnings each reporting period in other non-operating expense (income), net in the consolidated statements of income. As of the beginning of fiscal year 2026, the fair value of the investment was $140 million. During the three months ended July 25, 2025, the Company recognized a loss of $90 million primarily driven by historical financial results and projections of future cash flows, bringing the fair value of the investment to $50 million. During the fourth quarter of fiscal year 2026, the Company recognized a loss of the remaining $50 million investment, reducing the fair value of the investment to zero as of April 24, 2026. The fourth quarter losses were primarily driven by historical financial results, the restructuring and wind-down of certain product lines, the delay or discontinuation of certain research and development programs and associated product launches, and projections of future cash flows.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
7. Financing Arrangements
Commercial Paper
The Company maintains commercial paper programs that allow the Company to issue U.S. dollar or Euro-denominated unsecured commercial paper notes. The aggregate amount outstanding at any time under the commercial paper programs may not exceed the equivalent of $3.5 billion. There was $450 million of commercial paper outstanding at July 31, 2026. During the three months ended July 31, 2026, the weighted average interest rate was 3.81 percent. There was no commercial paper outstanding at April 24, 2026. During fiscal year 2026, the weighted average interest rate was 4.17 percent. The issuance of commercial paper reduces the amount of credit available under the Company’s existing Credit Facility, as defined below.
Line of Credit
The Company has a $3.5 billion five-year unsecured revolving credit facility (Credit Facility), which provides back-up funding for the commercial paper programs described above. The Credit Facility includes a multi-currency borrowing feature for certain specified foreign currencies. At July 31, 2026 and April 24, 2026, no amounts were outstanding under the Credit Facility.
Interest rates on advances on the Credit Facility are determined by a pricing matrix, based on the Company’s long-term debt ratings, assigned by Standard & Poor’s Ratings Services and Moody’s Investors Service. Facility fees are payable on the Credit Facility and are determined in the same manner as the interest rates. The Company is in compliance with the covenants under the Credit Facility.
MiniMed Line of Credit
In January 2026, as part of the impending separation of the Diabetes Operating Unit, Kangaroo US HoldCo 2, Inc. (the “Initial Borrower”), entered into a credit agreement which provides for a five-year senior secured revolving credit facility (the “MiniMed Revolving Credit Facility”) in an aggregate principal amount of $500 million to be made available in U.S. dollars and certain approved alternative currencies, initially including Euros, with Citibank, N.A. serving as administrative agent for a syndicate of lenders. Subject to the conditions to the borrowing therein, the commitments under the MiniMed Revolving Credit Facility became available upon the completion of the initial public offering of MiniMed Group, Inc., whereupon the Initial Borrower merged with and into MiniMed Group, Inc. (the “Merger”), with MiniMed Group, Inc. surviving the merger and continuing as the borrower. The MiniMed Revolving Credit Facility permits, subject to specified conditions, one or more of MiniMed Group, Inc.'s wholly owned subsidiaries to be added as additional borrowers.
Interest is payable on the loans under the MiniMed Revolving Credit Facility (1) in the case of borrowings denominated in U.S. dollars, Term SOFR (or, at the borrower’s option, the base rate) and (2) in the case of borrowings denominated in Euros, EURIBOR, plus, in each case, a margin determined pursuant to a pricing grid based on MiniMed Group, Inc.'s secured net leverage ratio. The commitment fees and letter of credit fees under the MiniMed Revolving Credit Facility are determined based upon the same grid. Interest payments are due (1) in the case of Term SOFR or EURIBOR borrowings, on the last day of each interest period applicable to the borrowing (or, in the case of any borrowing with an interest period of more than three months’ duration, every three months) and (2) in the case of base rate borrowings, on the last business day of each March, June, September, and December. No amounts have been drawn under the MiniMed Revolving Credit Facility as of July 31, 2026.
The MiniMed Revolving Credit Facility also contains representations and warranties, covenants, and events of default that are customary for this type of financing, including financial maintenance covenants and covenants restricting, inter alia, the incurrence of liens and indebtedness, the sale of assets, the making of restricted payments, investments and certain debt prepayments, and the entry into certain merger transactions. The obligations under the MiniMed Revolving Credit Facility are guaranteed by certain wholly-owned subsidiaries of the Initial Borrower (and following the consummation of the Merger, certain wholly-owned subsidiaries of MiniMed Group, Inc.), and secured by certain assets of such subsidiaries.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Debt Obligations
The Company's debt obligations consisted of the following:
| (in millions) | Maturity by Fiscal Year | July 31, 2026 | April 24, 2026 | |||||||||||||||||
| Current debt obligations | 2027 - 2028 | $ | 2,536 | $ | 1,788 | |||||||||||||||
| Long-term debt | ||||||||||||||||||||
| 4.250 percent five-year 2023 senior notes | 2028 | 1,000 | 1,000 | |||||||||||||||||
| 3.000 percent six-year 2022 senior notes | 2029 | 1,139 | 1,174 | |||||||||||||||||
| 0.375 percent eight-year 2020 senior notes | 2029 | 1,139 | 1,174 | |||||||||||||||||
| 3.650 percent five-year 2024 senior notes | 2030 | 968 | 998 | |||||||||||||||||
| 2.950 percent five-year 2025 senior notes | 2031 | 854 | 881 | |||||||||||||||||
| 1.625 percent twelve-year 2019 senior notes | 2031 | 1,139 | 1,174 | |||||||||||||||||
| 1.000 percent twelve-year 2019 senior notes | 2032 | 1,139 | 1,174 | |||||||||||||||||
| 3.125 percent nine-year 2022 senior notes | 2032 | 1,139 | 1,174 | |||||||||||||||||
| 0.750 percent twelve-year 2020 senior notes | 2033 | 1,139 | 1,174 | |||||||||||||||||
| 4.500 percent ten-year 2023 senior notes | 2033 | 1,000 | 1,000 | |||||||||||||||||
| 3.375 percent twelve-year 2022 senior notes | 2035 | 1,139 | 1,174 | |||||||||||||||||
| 4.375 percent twenty-year 2015 senior notes | 2035 | 1,932 | 1,932 | |||||||||||||||||
| 3.875 percent twelve-year 2024 senior notes | 2037 | 968 | 998 | |||||||||||||||||
| 6.550 percent thirty-year 2007 CIFSA senior notes | 2038 | 253 | 253 | |||||||||||||||||
| 2.250 percent twenty-year 2019 senior notes | 2039 | 1,139 | 1,174 | |||||||||||||||||
| 6.500 percent thirty-year 2009 senior notes | 2039 | 158 | 158 | |||||||||||||||||
| 1.500 percent twenty-year 2019 senior notes | 2040 | 1,139 | 1,174 | |||||||||||||||||
| 5.550 percent thirty-year 2010 senior notes | 2040 | 224 | 224 | |||||||||||||||||
| 1.375 percent twenty-year 2020 senior notes | 2041 | 1,139 | 1,174 | |||||||||||||||||
| 4.500 percent thirty-year 2012 senior notes | 2042 | 105 | 105 | |||||||||||||||||
| 4.000 percent thirty-year 2013 senior notes | 2043 | 305 | 305 | |||||||||||||||||
| 4.150 percent nineteen-year 2024 senior notes | 2044 | 683 | 704 | |||||||||||||||||
| 4.625 percent thirty-year 2014 senior notes | 2044 | 127 | 127 | |||||||||||||||||
| 4.625 percent thirty-year 2015 senior notes | 2045 | 1,813 | 1,813 | |||||||||||||||||
| 4.200 percent twenty-year 2025 senior notes | 2046 | 854 | 881 | |||||||||||||||||
| 1.750 percent thirty-year 2019 senior notes | 2050 | 1,139 | 1,174 | |||||||||||||||||
| 1.625 percent thirty-year 2020 senior notes | 2051 | 1,139 | 1,174 | |||||||||||||||||
| 4.150 percent twenty-nine year 2024 senior notes | 2054 | 797 | 822 | |||||||||||||||||
| Finance lease obligations | 2028 - 2041 | 52 | 54 | |||||||||||||||||
| Debt discount, net | 2028 - 2054 | (52) | (57) | |||||||||||||||||
| Deferred financing costs | 2028 - 2054 | (110) | (114) | |||||||||||||||||
| Other | 2053 | 23 | — | |||||||||||||||||
| Total long-term debt | $ | 25,617 | $ | 26,173 |
Interest expense on outstanding borrowings, including amortization of debt issuance costs and debt discounts and premiums, and the global liquidity structures is recognized in interest expense, net in the condensed consolidated statements of income. During the three months ended July 31, 2026 and July 25, 2025, there was $235 million and $217 million, respectively, of interest expense on outstanding borrowings, including amortization of debt issuance costs and debt discounts and premiums, and the global liquidity structures.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Senior Notes
The Company has outstanding unsecured senior obligations, described as senior notes in the tables above (collectively, the Senior Notes). The Senior Notes rank equally with all other unsecured and unsubordinated indebtedness of the Company. The Company is in compliance with all covenants related to the Senior Notes.
On September 29, 2025, Medtronic Inc. issued two tranches of Euro-denominated Senior Notes with an aggregate principal of €1.5 billion, with maturities in fiscal year 2031 and 2046, resulting in cash proceeds of approximately $1.7 billion, net of discounts and issuance costs.
The Euro-denominated debt issued in September 2025 is designated as a net investment hedge of certain of the Company's European operations. Refer to Note 8 for additional information regarding net investment hedges.
Financial Instruments Not Measured at Fair Value
At July 31, 2026, the estimated fair value of the Company’s Senior Notes was $24.4 billion compared to a principal value of $27.4 billion. At April 24, 2026, the estimated fair value of the Company's Senior Notes was $25.3 billion compared to a principal value of $28.1 billion. The fair value was estimated using quoted market prices for the publicly registered Senior Notes, which are classified as Level 2 within the fair value hierarchy. The fair values and principal values consider the terms of the related debt and exclude the impacts of debt discounts and hedging activity.
8. Derivatives and Currency Exchange Risk Management
The Company uses derivative instruments and foreign currency denominated debt to manage the impact that currency exchange rate and interest rate changes have on reported financial statements. The Company does not enter into derivative contracts for speculative purposes.
Cash Flow Hedges
The Company uses foreign currency forward and option contracts designated as cash flow hedges to manage its exposure to the variability of future cash flows that are denominated in a foreign currency.
At inception, foreign currency forward and option contracts are designated as cash flow hedges. Changes in the fair value of these derivatives are reported as a component of accumulated other comprehensive loss until the hedged transaction affects earnings. When the hedged transaction affects earnings, the gain or loss on the derivative is reclassified to earnings. Amounts excluded from the measurement of hedge effectiveness are recognized in earnings on a straight-line basis over the term of the hedge. Cash flows are reported as operating activities in the condensed consolidated statements of cash flows.
The Company's cash flow hedges will mature within the subsequent two-year period. At July 31, 2026 and April 24, 2026, the Company had $57 million in after-tax unrealized gains and $116 million in after-tax unrealized losses, respectively, associated with cash flow hedging instruments recorded in accumulated other comprehensive loss. The Company expects that $40 million of after-tax net unrealized gains at July 31, 2026 will be recognized in the condensed consolidated statements of income over the next 12 months.
Net Investment Hedges
The Company uses derivative instruments and foreign currency denominated debt to manage foreign currency risk associated with its net investment in foreign operations. The derivative instruments that the Company uses for this purpose may include foreign currency forward exchange contracts used on a standalone basis or in combination with option collars and standalone cross currency interest rate contracts.
For instruments that are designated as net investment hedges, the gains or losses are reported as a component of accumulated other comprehensive loss. The gains or losses are reclassified into earnings upon a liquidation event or deconsolidation of the foreign subsidiary. Amounts excluded from the assessment of effectiveness are recognized in interest expense, net on a straight-line basis over the term of the hedge. During the three months ended July 31, 2026 and July 25, 2025, the Company recognized $50 million and $45 million, respectively, of after-tax unrealized gains representing excluded components in interest expense, net. The cash flows related to the Company's derivative instruments designated as net investment hedges are reported as investing activities in the condensed consolidated statements of cash flows. Cash flows attributable to amounts excluded from the assessment of effectiveness are reported as operating activities in the condensed consolidated statements of cash flows.
Fair Value Hedges
In fiscal year 2025, the Company began using foreign currency forward contracts designated as fair value hedges to manage its exposure to changes in the fair value of a fixed-rate debt obligation. The contracts matured during the first quarter of fiscal year 2026.
At inception, foreign currency forward contracts are designated as fair value hedges. Changes in the fair value of these derivatives are reported as a component of other operating expense (income), net. For the three months ended July 25, 2025, amounts excluded from the
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
assessment of effectiveness were recognized in interest expense, net on a straight-line basis over the term of the hedge and were not material. Cash flows related to the Company's derivative instruments designated as fair value hedges are reported as financing activities in the condensed consolidated statements of cash flows. Cash flows attributed to amounts excluded from the assessment of effectiveness are reported as operating activities in the condensed consolidated statements of cash flows.
Undesignated Derivatives
The Company uses foreign currency forward exchange contracts to offset the Company’s exposure to the change in the value of non-functional currency denominated assets, liabilities, and cash flows.
These foreign currency forward exchange rate contracts are not designated as hedges at inception, and therefore, changes in the fair value of these contracts are recognized in the condensed consolidated statements of income. Cash flows related to the Company’s undesignated derivative contracts are reported in the condensed consolidated statements of cash flows based on the nature of the derivative instrument. The Company had total return swaps with a notional balance of $0.4 billion as of July 31, 2026. The Company has not included the total return swaps in the below tabular disclosures as the gain and loss activity for the three months ended July 31, 2026 and July 25, 2025, and the fair value as of July 31, 2026 and April 24, 2026 was not material.
Outstanding Instruments
The following table presents the contractual amounts of the Company's outstanding instruments:
| As of | ||||||||||||||
| (in billions) | Designation | July 31, 2026 | April 24, 2026 | |||||||||||
| Currency exchange rate contracts | Cash flow hedge | $ | 8.6 | $ | 8.5 | |||||||||
| Currency exchange rate contracts(1) | Net investment hedge | 6.1 | 7.5 | |||||||||||
| Foreign currency-denominated debt(2) | Net investment hedge | 20.5 | 21.1 | |||||||||||
| Currency exchange rate contracts | Undesignated | 4.1 | 4.3 |
(1)At July 31, 2026, includes derivative contracts with a notional value of €3.0 billion, or $3.4 billion, designated as hedges of a portion of our net investment in certain European operations, derivative contracts with a notional value of ¥345.8 billion, or $2.1 billion, designated as hedges of a portion of our net investment in certain Japanese operations, and derivative contracts with a notional value of CHF436 million, or $532 million, designated as hedges of a portion of our net investment in certain Swiss Franc operations. These derivative contracts mature in fiscal years 2027 through 2045.
(2)At July 31, 2026, includes €18.0 billion, or $20.5 billion, of outstanding Euro-denominated debt designated as hedges of a portion of our net investment in foreign operations. This debt matures in fiscal years 2027 through 2054.
Gains and Losses on Hedging Instruments and Derivatives not Designated as Hedging Instruments
The amount of the gains and losses on hedging instruments and the classification of those gains and losses within our condensed consolidated financial statements for the three months ended July 31, 2026 and July 25, 2025 were as follows:
| (Gain) Loss Recognized in Accumulated Other Comprehensive Loss | (Gain) Loss Reclassified into Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended | Three months ended | Location of (Gain) Loss in Income Statement | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | July 31, 2026 | July 25, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flow hedges | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Currency exchange rate contracts | $ | (198) | $ | 97 | $ | 6 | $ | 20 | Other operating expense (income), net | ||||||||||||||||||||||||||||||||||||||||||||
| Currency exchange rate contracts | 4 | 38 | (4) | (19) | Cost of products sold | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment hedges | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency-denominated debt | (635) | 582 | — | — | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||
| Currency exchange rate contracts | (102) | (1) | — | — | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||
| Fair value hedges | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Currency exchange rate contracts | — | 1 | — | (20) | Other operating expense (income), net | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | (930) | $ | 717 | $ | 2 | $ | (18) |
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The amount of the gains and losses on our derivative instruments not designated as hedging instruments and the classification of those gains and losses within our condensed consolidated statements of income during the three months ended July 31, 2026 and July 25, 2025 were as follows:
| (Gain) Loss Recognized in Income | |||||||||||||||||||||||||||||
| Three months ended | Location of (Gain) Loss in Income Statement | ||||||||||||||||||||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | |||||||||||||||||||||||||||
| Currency exchange rate contracts | $ | (16) | $ | (2) | Other operating expense (income), net | ||||||||||||||||||||||||
Balance Sheet Presentation
The following table summarizes the balance sheet classification and fair value of derivative instruments included in the condensed consolidated balance sheets at July 31, 2026 and April 24, 2026. The fair value amounts of qualified hedging instruments are presented on a gross basis and segregated between designated and not designated as hedging instruments. These hedging instruments are segregated by type of contract.
| Fair Value - Assets | Fair Value - Liabilities | ||||||||||||||||||||||||||||||||||
| (in millions) | July 31, 2026 | April 24, 2026 | Balance Sheet Classification | July 31, 2026 | April 24, 2026 | Balance Sheet Classification | |||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments | |||||||||||||||||||||||||||||||||||
| Currency exchange rate contracts | $ | 236 | $ | 214 | Other current assets | $ | 95 | $ | 253 | Other accrued expenses | |||||||||||||||||||||||||
| Currency exchange rate contracts | 395 | 328 | Other assets | 91 | 158 | Other liabilities | |||||||||||||||||||||||||||||
| Total derivatives designated as hedging instruments | 630 | 542 | 186 | 411 | |||||||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||||||||
| Currency exchange rate contracts | 10 | 13 | Other current assets | 11 | 10 | Other accrued expenses | |||||||||||||||||||||||||||||
| Total derivatives | $ | 640 | $ | 555 | $ | 197 | $ | 420 |
The following table provides information by level for the derivative assets and liabilities that are measured at fair value on a recurring basis.
| July 31, 2026 | April 24, 2026 | ||||||||||||||||||||||||||||||||||
| (in millions) | Derivative Assets | Derivative Liabilities | Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||||||
| Level 1 | $ | 640 | $ | 197 | $ | 555 | $ | 420 | |||||||||||||||||||||||||||
The Company has elected to present the fair value of derivative assets and liabilities within the condensed consolidated balance sheets on a gross basis, even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. The cash flows related to collateral posted and received are reported gross as investing and financing activities, respectively, in the condensed consolidated statements of cash flows.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following tables provide information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria as stipulated by the terms of the master netting arrangements with each of the counterparties. Derivatives not subject to master netting arrangements are not eligible for net presentation.
| July 31, 2026 | |||||||||||||||||||||||||||||
| Gross Amount Not Offset on the Balance Sheet | |||||||||||||||||||||||||||||
| (in millions) | Gross Amount of Recognized Assets (Liabilities) | Financial Instruments | Cash Collateral Received | Net Amount | |||||||||||||||||||||||||
| Derivative assets: | |||||||||||||||||||||||||||||
| Currency exchange rate contracts | $ | 640 | $ | (169) | $ | (40) | $ | 432 | |||||||||||||||||||||
| Derivative liabilities: | |||||||||||||||||||||||||||||
| Currency exchange rate contracts | (197) | 169 | — | (28) | |||||||||||||||||||||||||
| Total | $ | 443 | $ | — | $ | (40) | $ | 404 |
| April 24, 2026 | |||||||||||||||||||||||||||||||||||
| Gross Amount Not Offset on the Balance Sheet | |||||||||||||||||||||||||||||||||||
| (in millions) | Gross Amount of Recognized Assets (Liabilities) | Financial Instruments | Cash Collateral Posted | Net Amount | |||||||||||||||||||||||||||||||
| Derivative assets: | |||||||||||||||||||||||||||||||||||
| Currency exchange rate contracts | $ | 555 | $ | (232) | $ | — | $ | 323 | |||||||||||||||||||||||||||
| Derivative liabilities: | |||||||||||||||||||||||||||||||||||
| Currency exchange rate contracts | (420) | 232 | 98 | (91) | |||||||||||||||||||||||||||||||
| Total | $ | 135 | $ | — | $ | 98 | $ | 233 |
Concentrations of Credit Risk
Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of interest-bearing investments, derivative contracts, and trade accounts receivable. Global concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of customers and their dispersion across many geographic areas. The Company monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business.
The Company has cash and cash equivalents, investments, and certain other financial instruments positions (including currency exchange rate and interest rate derivative contracts) with various major financial institutions. The Company performs periodic evaluations of the relative credit standings of these financial institutions and limits the amount of credit exposure with any one institution. In addition, the Company has collateral credit agreements with its primary derivatives counterparties. Under these agreements, either party is required to post eligible collateral when the market value of transactions covered by the agreement exceeds specific thresholds, thus limiting credit exposure for both parties. As of July 31, 2026, the Company received net cash collateral of $40 million. Cash collateral received is recorded as an increase in cash and cash equivalents with the offset recorded in other accrued expenses in the condensed consolidated balance sheets. As of April 24, 2026, the Company posted net cash collateral of $98 million to its counterparties. Cash collateral posted is recorded as a reduction in cash and cash equivalents, with the offset recorded as an increase in other current assets in the consolidated balance sheets.
9. Inventories
Inventory balances were as follows:
| (in millions) | July 31, 2026 | April 24, 2026 | |||||||||
| Finished goods | $ | 4,121 | $ | 4,075 | |||||||
| Work-in-process | 900 | 800 | |||||||||
| Raw materials | 1,194 | 1,076 | |||||||||
| Total | $ | 6,215 | $ | 5,951 |
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
10. Goodwill and Other Intangible Assets
Goodwill
The following table presents the changes in the carrying amount of goodwill by reportable segment and goodwill assigned to the other operating segments:
| (in millions) | Cardiovascular | Neuroscience | Medical Surgical | Reportable Segments | Other Operating Segments | Total | |||||||||||||||||||||||||||||
| April 24, 2026 | $ | 8,602 | $ | 11,777 | $ | 19,953 | $ | 40,332 | $ | 2,256 | $ | 42,587 | |||||||||||||||||||||||
| Goodwill as a result of acquisitions | — | 933 | — | 933 | — | 933 | |||||||||||||||||||||||||||||
| Purchase accounting adjustments | 18 | — | — | 18 | — | 18 | |||||||||||||||||||||||||||||
| Currency translation and other | (36) | (37) | (277) | (350) | (1) | (351) | |||||||||||||||||||||||||||||
| July 31, 2026 | $ | 8,583 | $ | 12,673 | $ | 19,675 | $ | 40,932 | $ | 2,255 | $ | 43,187 |
No goodwill impairment was recognized during the three months ended July 31, 2026 and July 25, 2025.
Intangible Assets
The following table presents the gross carrying amount and accumulated amortization of intangible assets:
| July 31, 2026 | April 24, 2026 | ||||||||||||||||||||||
| (in millions) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||
| Definite-lived: | |||||||||||||||||||||||
| Customer-related | $ | 16,716 | $ | (10,824) | $ | 16,559 | $ | (10,596) | |||||||||||||||
| Purchased technology and patents | 12,190 | (8,481) | 11,875 | (8,319) | |||||||||||||||||||
| Trademarks and tradenames | 424 | (297) | 422 | (295) | |||||||||||||||||||
| Other | 379 | (135) | 373 | (126) | |||||||||||||||||||
| Total | $ | 29,709 | $ | (19,737) | $ | 29,229 | $ | (19,336) | |||||||||||||||
| Indefinite-lived: | |||||||||||||||||||||||
| IPR&D | $ | 265 | $ | — | $ | 253 | $ | — | |||||||||||||||
The Company did not recognize any definite-lived or indefinite-lived intangible asset impairment charges during the three months ended July 31, 2026 and July 25, 2025. Due to the nature of IPR&D projects, the Company may experience future delays or failures to obtain regulatory approvals to conduct clinical trials, failures of clinical trials, delays or failures to obtain required market clearances, other failures to achieve a commercially viable product, or the discontinuation of certain projects, and as a result, may recognize impairment losses in the future.
Amortization Expense
Intangible asset amortization expense for the three months ended July 31, 2026 was $412 million. Intangible asset amortization expense for the three months ended July 25, 2025 was $459 million, including $45 million of accelerated amortization on certain intangible assets within the Cardiovascular Portfolio.
11. Income Taxes
The Company's effective tax rate for the three months ended July 31, 2026 was 16.4%, as compared to 19.6% for the three months ended July 25, 2025. The decrease in the effective tax rate for the three months ended July 31, 2026 primarily relates to the release of reserves for uncertain tax positions on prior period intercompany transactions and year-over-year changes in operational results by jurisdiction.
At July 31, 2026 and April 24, 2026, the Company's gross unrecognized tax benefits were $2.9 billion and $3.0 billion, respectively. The Company had interest and penalties net receivable of $34 million and $22 million at July 31, 2026 and April 24, 2026, respectively. If all of the Company’s unrecognized tax benefits were recognized, approximately $2.6 billion would impact the Company’s effective tax rate. At both July 31, 2026 and April 24, 2026, the amount of the Company's gross unrecognized tax benefits, net of cash advance, recorded as a noncurrent liability within accrued income taxes on the consolidated balance sheets was $2.0 billion. The Company recognizes interest and penalties related to income tax matters within income tax provision in the consolidated statements of income and records the liability within either current or noncurrent accrued income taxes on the consolidated balance sheets.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Refer to Note 16 for additional information regarding the status of current tax audits and proceedings.
On July 4, 2025, the U.S. Government enacted The One Big Beautiful Bill Act of 2025 which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. The impact for both the three months ended July 31, 2026 and July 25, 2025 was not material.
The Organization for Economic Co-operation and Development (OECD) published Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15% in each jurisdiction in which the group operates. The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax. A number of countries, including Ireland, have enacted legislation to implement the core elements of Pillar Two, which were effective for Medtronic in fiscal year 2025.
12. Earnings Per Share
Basic earnings per share is computed based on the weighted average number of ordinary shares outstanding. Diluted earnings per share is computed based on the weighted average number of ordinary shares outstanding, increased by the number of additional shares that would have been outstanding had the potentially dilutive ordinary shares been issued, and reduced by the number of shares the Company could have repurchased with the proceeds from issuance of the potentially dilutive shares. Potentially dilutive ordinary shares include stock-based awards granted under stock-based compensation plans and shares committed to be purchased under the employee stock purchase plan.
The table below sets forth the computation of basic and diluted earnings per share:
| Three months ended | |||||||||||||||||||||||
| (in millions, except per share data) | July 31, 2026 | July 25, 2025 | |||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income attributable to ordinary shareholders | $ | 1,470 | $ | 1,040 | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Basic – weighted average shares outstanding | 1,279.8 | 1,281.6 | |||||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Employee stock options | 0.1 | 0.2 | |||||||||||||||||||||
| Employee restricted stock units | 3.0 | 3.1 | |||||||||||||||||||||
| Employee performance share units | 2.3 | 2.2 | |||||||||||||||||||||
| Diluted – weighted average shares outstanding | 1,285.1 | 1,287.1 | |||||||||||||||||||||
| Basic earnings per share | $ | 1.15 | $ | 0.81 | |||||||||||||||||||
| Diluted earnings per share | $ | 1.14 | $ | 0.81 |
The calculation of weighted average diluted shares outstanding excludes stock options, restricted stock units, and performance share units of approximately 25 million ordinary shares for the three months ended July 31, 2026 and 24 million ordinary shares for the three months ended July 25, 2025, because their effect would have been anti-dilutive on the Company’s earnings per share.
13. Stock-Based Compensation
The following table presents the components of stock-based compensation expense for stock options, restricted stock, performance share units, and employee stock purchase plan shares recognized for the three months ended July 31, 2026 and July 25, 2025:
| Three months ended | |||||||||||||||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | |||||||||||||||||||||
| Stock options | $ | 8 | $ | 10 | |||||||||||||||||||
| Restricted stock | 62 | 49 | |||||||||||||||||||||
| Performance share units | 43 | 16 | |||||||||||||||||||||
| Employee stock purchase plan | 13 | 11 | |||||||||||||||||||||
| Total stock-based compensation expense | $ | 125 | $ | 86 |
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
14. Retirement Benefit Plans
The Company sponsors various retirement benefit plans, including defined benefit pension plans, post-retirement medical plans, defined contribution savings plans, and termination indemnity plans, covering substantially all U.S. employees and many employees outside the U.S. The net periodic benefit cost (credit) of the defined benefit pension plans included the following components for the three months ended July 31, 2026 and July 25, 2025:
| U.S. | Non-U.S. | ||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | July 31, 2026 | July 25, 2025 | |||||||||||||||||||||||||||||||||||||||||||
| Service cost | $ | 12 | $ | 12 | $ | 12 | $ | 11 | |||||||||||||||||||||||||||||||||||||||
| Interest cost | 42 | 42 | 14 | 12 | |||||||||||||||||||||||||||||||||||||||||||
| Expected return on plan assets | (63) | (64) | (20) | (18) | |||||||||||||||||||||||||||||||||||||||||||
| Amortization of prior service cost | (1) | (1) | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Amortization and settlement recognition of actuarial loss (gain) | 5 | 5 | 1 | 1 | |||||||||||||||||||||||||||||||||||||||||||
| Net periodic benefit cost (credit) | $ | (4) | $ | (6) | $ | 7 | $ | 6 | |||||||||||||||||||||||||||||||||||||||
Components of net periodic benefit cost (credit) other than the service component are recognized in other non-operating expense (income), net in the condensed consolidated statements of income.
15. Accumulated Other Comprehensive Loss
The following table provides changes in accumulated other comprehensive loss (AOCL), net of tax, and by component:
| (in millions) | Unrealized (Loss) Gain on Investment Securities | Cumulative Translation Adjustments | Net Investment Hedges | Net Change in Retirement Obligations | Unrealized (Loss) Gain on Cash Flow Hedges | Total Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||
| April 24, 2026 | $ | (15) | $ | (2,447) | $ | (1,024) | $ | (498) | $ | (116) | $ | (4,101) | |||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (47) | (479) | 695 | — | 163 | 333 | |||||||||||||||||||||||||||||
| Reclassifications | — | — | — | 1 | 10 | 10 | |||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (48) | (479) | 695 | 1 | 173 | 342 | |||||||||||||||||||||||||||||
| July 31, 2026 | $ | (63) | $ | (2,925) | $ | (329) | $ | (499) | $ | 57 | $ | (3,759) | |||||||||||||||||||||||
| (in millions) | Unrealized (Loss) Gain on Investment Securities | Cumulative Translation Adjustments | Net Investment Hedges | Net Change in Retirement Obligations | Unrealized Gain (Loss) on Cash Flow Hedges | Total Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||
| April 25, 2025 | $ | (63) | $ | (2,835) | $ | (597) | $ | (640) | $ | (149) | $ | (4,284) | |||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 18 | 348 | (559) | (1) | (134) | (327) | |||||||||||||||||||||||||||||
| Reclassifications | 1 | — | — | 2 | 5 | 8 | |||||||||||||||||||||||||||||
| Other comprehensive income (loss) | 19 | 348 | (559) | 1 | (128) | (319) | |||||||||||||||||||||||||||||
| July 25, 2025 | $ | (44) | $ | (2,487) | $ | (1,156) | $ | (641) | $ | (276) | $ | (4,604) |
The income tax on gains and losses on investment securities and retirement obligations in other comprehensive income (loss) before reclassifications and the income taxes on realized gains and losses on investment securities and gains and losses on defined benefit and pension items reclassified from AOCL during the three months ended July 31, 2026 and July 25, 2025 were not material. For the three months ended July 31, 2026 and July 25, 2025 there was no income tax on cumulative translation adjustments.
The income tax on net investment hedges in other comprehensive income (loss) before reclassifications during the three months ended July 31, 2026 and July 25, 2025, was an expense of $41 million and a benefit of $23 million, respectively. Refer to Note 8 for additional information.
The income tax on unrealized gains and losses on cash flow hedges in other comprehensive income (loss) before reclassifications during the three months ended July 31, 2026 was an expense of $30 million and during the three months ended July 25, 2025, was not material. During
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
the three months ended July 31, 2026 and July 25, 2025, gains and losses on cash flow hedges reclassified from AOCL were reduced by an immaterial amount of income taxes. Refer to Note 8 for additional information.
16. Commitments and Contingencies
Legal Matters
The Company and its affiliates are involved in a number of legal actions from time to time involving product liability, employment, intellectual property and commercial disputes, shareholder-related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations, including those described below. With respect to governmental proceedings and investigations, like other companies in our industry, the Company is subject to extensive regulation by national, state, and local governmental agencies in the United States and in other jurisdictions in which the Company and its affiliates operate. As a result, interaction with governmental agencies is ongoing. The Company’s standard practice is to cooperate with regulators and investigators in responding to inquiries. With respect to intellectual property disputes, the Company is involved in litigation relating to patents, trademarks, copyrights, trade secrets, and other intellectual property (IP) rights, and licenses, acquisitions or other agreements relating to such rights. This litigation includes, but is not limited to, alleged infringement or misappropriation of IP rights, or breach of obligations related to IP rights, or other claims asserted by competitors, individuals, or, consistent with a growing trend across technology-intensive industries, other entities created specifically to fund IP litigation. With respect to commercial disputes, antitrust and competition issues have gained increased prominence, enforcement and private litigation have increased globally, and the Company is involved in or at risk for antitrust litigation, investigations or enforcement actions regarding a range of commercial activities, including challenges to mergers and acquisition transactions, joint ventures, co-development or co-marketing arrangements, contracting practices, distribution agreements and employment agreements. The outcomes of legal actions are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, the enforcement agencies or private claimants seek significant monetary damages and/or royalty payments, as well as other civil or criminal remedies (including injunctions barring or restricting the sale of products that are the subject of the proceeding, placing restrictions on competitive strategies or practices, or unwinding consummated transactions), any or all of which could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.
The Company records a liability in the consolidated financial statements on an undiscounted basis for loss contingencies related to legal actions when a loss is known or considered probable and the amount may be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed. When determining the estimated loss or range of loss, significant judgment is required. Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, particularly when the matters are in early procedural stages with incomplete scientific facts or legal discovery, involve unsubstantiated or indeterminate claims for damages, potentially involve penalties, fines or punitive damages, or could result in a change in business practice. The Company classifies certain specified litigation charges and gains related to significant legal matters as certain litigation charges, net in the condensed consolidated statements of income and includes accrued certain litigation in other accrued expenses and other liabilities in the condensed consolidated balance sheets. The Company recognized no certain litigation charges, net, during the three months ended July 31, 2026. During the three months ended July 25, 2025, the Company recognized $27 million certain litigation charges, net. At both July 31, 2026 and April 24, 2026, accrued certain litigation was approximately $0.2 billion. The ultimate cost to the Company with respect to this litigation is difficult to predict, and the cost of any litigation, including litigation subject to accruals, could be materially different than the amount of the current estimates and accruals and could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.
Product Liability Matters
Hernia Mesh Litigation
Starting in fiscal year 2020, plaintiffs began filing lawsuits against certain subsidiaries of the Company in U.S. state and federal courts that allege personal injury from hernia mesh products sold by those subsidiaries. As of August 5, 2026, the Company and certain of its subsidiaries have been named as defendants in lawsuits filed on behalf of approximately 10,500 individual plaintiffs, and certain plaintiffs’ law firms have advised the Company that they may file additional cases in the future. Approximately 7,450 plaintiffs have pending lawsuits in a coordinated proceeding in Massachusetts state court, where they have been consolidated before a single judge. Approximately 500 plaintiffs have pending lawsuits in a coordinated action in Minnesota state court, and there are approximately 2,400 actions coordinated in a federal Multidistrict Litigation (MDL) in the U.S. District Court for the District of Massachusetts plus fewer than ten one-off cases filed in other courts. There are approximately 150 claims outside of the U.S. The pending lawsuits relate almost entirely to hernia mesh products that have not been subject to recalls, withdrawals, or other adverse regulatory action. The hernia mesh docket is made up of cases involving a variety of products, defect theories, and alleged injuries involving patients who have a variety of risk factors for complications.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The first MDL trial took place in the U.S. District Court for the District of Massachusetts in July and August 2026. On August 4, 2026, the jury returned a verdict in favor of the plaintiffs, awarding $88 million in damages. The Company believes that the verdict and damage award are inconsistent with the law and evidence at trial. The Company has strong arguments to challenge the verdict and damage award, and if necessary, will appeal to the appropriate appellate courts.
In assessing whether the Company should record an expense related to the jury verdict, we considered various factors, including the legal and factual circumstances of the case, the planned post-trial proceedings, applicable law, and the basis for the post-trial challenges we expect to mount. In light of the remaining post-trial motions and appeal, the ultimate result of this litigation remains uncertain. It is reasonably possible that as a result of post-trial challenges, including an appeal, some or all of the jury’s verdict and damages award could be overturned. An estimate of the ultimate loss or range of losses is not possible at this time. Accordingly, we have determined, in accordance with applicable accounting principles, a loss or range of losses that we may incur is not probable at this time and have therefore not recorded a liability related to this verdict.
The Company recognized certain litigation charges in fiscal year 2026 in connection with certain of these matters, and the Company's accrued expenses for these matters are included within accrued litigation as discussed above.
Diabetes Pump Retainer Ring Litigation
Starting in fiscal year 2021, plaintiffs began filing lawsuits against the Diabetes operating unit in U.S. state and federal courts alleging personal injury, including deaths, from Series 600 insulin pumps with allegedly defective clear retainer rings that were subject to field corrective actions in 2019 and 2021. As of August 7, 2026, there are 27 lawsuits filed on behalf of 105 individuals. Plaintiffs’ firms previously notified the Company that they may file additional lawsuits in the future on behalf of several thousand additional claimants. Most of the filed suits are coordinated in California state court. These lawsuits relate to products made by MiniMed. While the Company is a named defendant in these suits, as a result of the IPO, MiniMed will be responsible for any financial liabilities resulting therefrom. The Company recognized certain litigation charges in fiscal year 2026 in connection with certain of these matters, and the Company's accrued expenses for these matters are included within accrued litigation as discussed above.
Antitrust Matters
Applied Medical
The Company is a defendant in civil antitrust litigation brought by Applied Medical Resources Corporation (Applied) in the U.S. District Court for the Central District of California, alleging that the Company has engaged in anticompetitive and monopolistic conduct relating to its sales of advanced bipolar devices, including under contracts with group purchasing organizations. On August 15, 2025, the court denied the Company's motion for summary judgment concluding that there were disputed factual issues to be resolved at trial.
A jury trial was held in the U.S. District Court for the Central District of California from January 20, 2026, to February 4, 2026. On February 5, 2026, the jury returned a verdict in favor of Applied, awarding Applied $382 million in damages, which will be automatically trebled by the court as required by law. In addition, we expect that Applied will seek attorneys’ fees and reasonable costs, an estimate of which is not available at this time. Applied is also seeking injunctive relief, which will be argued before the Court in October 2026. The Company believes that the jury’s decision and amounts awarded are inconsistent with the law and evidence at trial and plans to appeal with the appropriate appellate courts. The Company plans to post surety bonds in the amount directed by the court once final judgment has been entered.
In assessing whether the Company should record an expense related to the jury verdict, we considered various factors, including the legal and factual circumstances of the case, the planned post-trial proceedings, applicable law, and the likelihood that the jury’s award will be upheld on appeal. In light of all those factors, the ultimate result of this litigation remains uncertain. It is reasonably possible that as a result of an appeal, that none, some, or all of the jury’s verdict and other relief sought might ultimately be awarded, and an estimate of the ultimate loss or range of losses is not possible at this time. Accordingly, as a result of this review, we have determined, in accordance with applicable accounting principles, a loss or range of losses that we may incur is not probable at this time and have therefore not recorded a liability for this matter.
Environmental Proceedings
The Company is a successor to several investigation and cleanup actions at various stages related to environmental remediation matters at a number of sites, including in Orrington, Maine. These projects relate to a variety of activities, including removal of solvents, metals and other hazardous substances from soil and groundwater. The ultimate cost of site cleanup and timing of future cash flows is difficult to predict given uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The Company is also a successor to a party named in a lawsuit filed in the U.S. District Court for the District of Maine in the early 2000's by the Natural Resources Defense Council and the Maine People's Alliance relating to mercury contamination of the Penobscot River and Bay and options for remediating such contamination. In October 2022, the court issued a final order approving the settlement and the parties are working with consultants on implementation of remedial activities. The final court order did not result in a change to the Company's previous accrual for this matter.
The Company's accrued expenses for these various environmental proceedings are included within accrued litigation as discussed above.
Anti-Corruption Matters
The Company has regular and ongoing interactions with governmental agencies, and its practice is to cooperate with such inquiries. In addition, from time to time, the Company self-discloses potential concerns to governmental regulators. Like many in the medical device industry or with international operations, the Company engages in periodic discussions with the U.S. Securities and Exchange Commission, U.S. Department of Justice, and various authorities in other countries regarding certain activities in different global markets. The Company is committed to regularly evaluating and, as appropriate, strengthening its anti-corruption compliance programs and practices. Any possible future determination that certain of our operations and activities, and/or those of our third-party distributors, are not in compliance with existing laws could result in the imposition of fines, penalties, and equitable remedies in the United States or in other jurisdictions. The Company has not recorded an expense in connection with these matters because any potential loss is not currently probable and reasonably estimable. Additionally, the Company is unable to reasonably estimate the range of loss, if any, that may result from these matters.
Other Matters
Italian Payback
In 2015, “payback” legislation was enacted in Italy requiring companies selling medical devices to make payments to the Italian state if Italy’s medical device expenditures exceed annual regional maximum ceilings. The payment amounts are calculated based upon the amount by which the regional ceilings were exceeded for any given year. There has been significant scrutiny on the legality and enforceability of the payback law since its inception, and litigation challenging the law has been proceeding through the Italian Courts. Since the law was enacted, the Company has recognized an estimate for the amount of variable consideration.
In July 2024, two rulings by the Constitutional Court of Italy found that the medical device payback law is constitutional. In June 2025, the Italian government published a legislative decree confirming a reduction of the amounts due for years 2015 to 2018. The decree was formalized into law in August 2025. As a result, the Company decreased its liability pertaining to these years by $39 million during fiscal year 2026, as an increase to net sales in the condensed consolidated statements of income. Discussions are ongoing between the Italian government and industry groups related to the applicability of this legislation for years 2019 and beyond, as such, it is possible that the amount of the Company’s liability could materially differ from the amount currently accrued.
Mallinckrodt Bankruptcy Litigation
Certain of the Company’s affiliates are defendants in a lawsuit brought by a trust created in the bankruptcy of Mallinckrodt PLC (the “Trust”) in Delaware bankruptcy court. The Trust claims that Covidien LP spun off its pharmaceuticals business, Mallinckrodt, in 2013 to avoid potential liability relating to opioids. In January 2024, the Delaware bankruptcy court granted in part and denied in part an early-stage motion to dismiss all claims, finding that the claims alleging actual fraudulent transfer and alter ego or related liability could go forward, while dismissing the claims alleging constructive fraudulent transfer and breaches of fiduciary duty. In August 2025, the court granted in part and denied in part a motion for summary judgment filed by the Company’s affiliates arguing the Trust’s claims should be dismissed as a matter of law based on application of a safe harbor provision of the bankruptcy code. The case will now proceed to discovery into the merits of the Trust’s intentional fraudulent transfer and related claims. The Company’s affiliates believe they have substantial legal and factual defenses and intend to defend themselves vigorously. The Company has not recorded a liability in connection with this matter because any potential loss is not currently probable and reasonably estimable. Additionally, the Company is unable to reasonably estimate the range of loss, if any, that may result from this matter.
Income Taxes
In March 2009, the IRS issued its audit report on Medtronic, Inc. for fiscal years 2005 and 2006. Medtronic, Inc. reached agreement with the IRS on some, but not all matters related to these fiscal years. The remaining unresolved issue for fiscal years 2005 and 2006 relates to the allocation of income between Medtronic, Inc. and its wholly-owned subsidiary operating in Puerto Rico, which is one of the Company's key manufacturing sites. The Tax Court reviewed this dispute, and in June 2016, issued an opinion with respect to the allocation of income between the parties for fiscal years 2005 and 2006 whereby it generally rejected the IRS’s position, but also made certain modifications to the Medtronic, Inc. tax returns as filed. In April 2017, the IRS filed a Notice of Appeal to the U.S. Court of Appeals for the Eighth Circuit (the "Appellate Court") regarding the Tax Court opinion. The Appellate Court issued its opinion in August 2018 and remanded the case back to the Tax Court for additional factual findings. The Tax Court issued its second opinion in August 2022, the IRS filed a Notice of
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Appeal to the Appellate Court in September 2023, and Medtronic subsequently filed a cross-appeal in October 2023. In September 2025, the Appellate Court remanded the case back to the Tax Court for additional proceedings. The matter is currently before the Tax Court, but the parties have requested that the court stay proceedings to permit the parties to discuss the potential for a resolution of the matter. In the absence of any such resolution, we expect the proceedings to resume in the Tax Court.
The IRS had previously issued its audit reports on Medtronic, Inc. for fiscal years 2007 through 2016. Medtronic, Inc. and the IRS have reached agreement on all significant issues for fiscal years 2007 through 2016 except for the allocation of income between Medtronic, Inc. and its wholly-owned subsidiary operating in Puerto Rico for the businesses that are the subject of the U.S. Tax Court matter.
In April 2026, the IRS issued a preliminary audit report on Medtronic Group Holding, Inc. for fiscal years 2017 to 2019 that effectively settled some, but not all matters related to these fiscal years. The significant issues that remain unresolved relate to the allocation of income between Medtronic’s U.S. entities and its affiliated entity operating in Puerto Rico, the interest rates on intercompany debt, and the calculation of foreign tax credits. The Company disagrees with the IRS and will attempt to resolve these matters at the IRS Appellate level.
Medtronic Group Holding, Inc.’s fiscal years 2020 through 2023 U.S. federal income tax returns are currently being audited by the IRS.
Covidien LP (a wholly owned subsidiary of Medtronic plc) has either reached agreement with the IRS or the statute of limitations has lapsed on its U.S. federal income tax returns through fiscal year 2022. Covidien LP’s fiscal year 2023 federal income tax return is currently being audited by the IRS.
Although it is not possible to predict the outcome for most of the income tax matters discussed above, the Company believes it has adequately reserved for liabilities resulting from tax assessments by taxing authorities. However, it is possible that charges associated with these matters could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.
Refer to Note 11 for additional discussion of income taxes.
Guarantees
In the normal course of business, the Company and/or its affiliates periodically enter into agreements that require one or more of the Company and/or its affiliates to indemnify customers or suppliers for specific risks, such as claims for injury or property damage arising as a result of the Company or its affiliates’ products, the negligence of the Company's personnel, or claims alleging that the Company's products infringe on third-party patents or other intellectual property. The Company also offers warranties on various products. The Company’s maximum exposure under these guarantees is unable to be estimated. Historically, the Company has not experienced significant losses on these types of guarantees.
We also enter into standby letters of credit agreements, bank guarantees, and surety bonds with financial institutions to support various performance and other obligations, as well as ongoing tax matters. As of July 31, 2026, the aggregated amount outstanding under these instruments was approximately $1.3 billion.
The Company believes the ultimate resolution of the above guarantees is not expected to have a material effect on the Company’s consolidated earnings, financial position, and/or cash flows.
17. Segment and Geographic Information
The Company had changes to its reportable segments during the fourth quarter of fiscal year 2026. Although the Diabetes Business did not historically meet the quantitative thresholds to be considered a reportable segment, the Company has historically presented the Diabetes Business as a reportable segment because management deemed the information useful to investors. As a result of the MiniMed IPO, management no longer believes segment information about the Diabetes Business is useful to investors given the temporary nature of ownership as the Company has stated its intent to divest its remaining interest in MiniMed within fiscal year 2027 and the lack of strategic significance to ongoing operations. The Diabetes Business operating segment results are aggregated with the Other operating segment within the reconciliations below. Additionally, during the first quarter of fiscal year 2027, a product line moved from the Medical Surgical Portfolio to the Neuroscience Portfolio. Prior period information has been recast to conform to the current year presentation.
Since the fourth quarter of fiscal year 2026, the Company has three reportable segments: Cardiovascular Portfolio, Neuroscience Portfolio, and Medical Surgical Portfolio. The chief operating decision maker (CODM) is our Chief Executive Officer (CEO) and has chosen to organize the entity based upon therapy solutions provided by each segment. The three reportable segments are strategic businesses that are managed separately, as each one develops and manufactures products and provides services oriented toward targeted therapy solutions.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The CODM measures and evaluates segment performance and allocates resources based on net sales and segment operating profit. Net sales include end-customer revenues from products developed, manufactured, and distributed by the segments. Significant expense categories include cost of products sold excluding amortization of intangible assets, research and development expense, and selling, general, and administrative expenses. The CODM uses segment operating profit in the budget and forecasting process and to monitor budget and forecast variances versus actual when assessing segment performance and allocating capital resources to each segment.
Segment operating profit excludes interest income and expense, amortization of intangible assets, currency impact of remeasurement and hedging recorded in other operating expense (income), net, non-operating income or expense items, and other items not allocated to the segments.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 24, 2026. Certain depreciable assets may be recorded by one segment, while the depreciation expense is allocated to another segment. The allocation of depreciation expense is based on the proportion of the assets used by each segment. The CODM is not regularly provided with expenditures for additions to long-lived assets.
The following tables present reconciliations of financial information from the segments to the applicable line items in the Company's condensed consolidated financial statements:
Segment Operating Profit
| Three months ended July 31, 2026 | |||||||||||||||||||||||
| (in millions) | Cardiovascular | Neuroscience | Medical Surgical | Total | |||||||||||||||||||
| Net sales | $ | 3,927 | $ | 2,678 | $ | 2,279 | $ | 8,884 | |||||||||||||||
| Reconciliation of revenues | |||||||||||||||||||||||
| Other operating segments net sales(1) | 872 | ||||||||||||||||||||||
| Total consolidated net sales | $ | 9,756 | |||||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Cost of products sold, excluding amortization of intangible assets | 1,308 | 786 | 919 | 3,013 | |||||||||||||||||||
| Research and development expense | 303 | 163 | 189 | 656 | |||||||||||||||||||
| Selling, general, and administrative expense | 1,269 | 922 | 681 | 2,872 | |||||||||||||||||||
| Other segment items(2) | 14 | 13 | 5 | 32 | |||||||||||||||||||
| Reportable segment operating profit | $ | 1,033 | $ | 793 | $ | 485 | $ | 2,311 | |||||||||||||||
| Reconciliation of segment profit / (loss) | |||||||||||||||||||||||
| Other operating segments profit(1) | 74 | ||||||||||||||||||||||
| Currency and other | (69) | ||||||||||||||||||||||
| Interest expense, net | (186) | ||||||||||||||||||||||
| Other non-operating expense (income), net | 190 | ||||||||||||||||||||||
| Amortization of intangible assets | (412) | ||||||||||||||||||||||
| Restructuring and associated costs | (89) | ||||||||||||||||||||||
| Acquisition and divestiture-related items | (50) | ||||||||||||||||||||||
| Income before income taxes | $ | 1,769 |
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
| Three months ended July 25, 2025 | |||||||||||||||||||||||
| (in millions) | Cardiovascular | Neuroscience | Medical Surgical | Total | |||||||||||||||||||
| Net sales | $ | 3,285 | $ | 2,427 | $ | 2,073 | $ | 7,785 | |||||||||||||||
| Reconciliation of revenues | |||||||||||||||||||||||
| Other operating segments net sales(1) | 755 | ||||||||||||||||||||||
| Other adjustments(3) | 39 | ||||||||||||||||||||||
| Total consolidated net sales | $ | 8,578 | |||||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Cost of products sold, excluding amortization of intangible assets | 1,132 | 724 | 812 | 2,668 | |||||||||||||||||||
| Research and development expense | 280 | 157 | 169 | 606 | |||||||||||||||||||
| Selling, general, and administrative expense | 1,060 | 831 | 605 | 2,497 | |||||||||||||||||||
| Other segment items(2) | (15) | 2 | 1 | (12) | |||||||||||||||||||
| Reportable segment operating profit | $ | 828 | $ | 713 | $ | 486 | $ | 2,027 | |||||||||||||||
| Reconciliation of segment profit / (loss) | |||||||||||||||||||||||
| Other operating segments profit(1) | 37 | ||||||||||||||||||||||
| Currency and other | (47) | ||||||||||||||||||||||
| Interest expense, net | (176) | ||||||||||||||||||||||
| Other non-operating expense (income), net | 33 | ||||||||||||||||||||||
| Amortization of intangible assets | (459) | ||||||||||||||||||||||
| Restructuring and associated costs | (67) | ||||||||||||||||||||||
| Acquisition and divestiture-related items | (58) | ||||||||||||||||||||||
| Certain litigation charges, net | (27) | ||||||||||||||||||||||
| Other adjustments(3) | 39 | ||||||||||||||||||||||
| Income before income taxes | $ | 1,302 |
(1)Includes the operations and ongoing transition agreements from businesses the Company has exited, divested, or intends to separate, including the Diabetes Business.
(2)Other segment items for the Cardiovascular, Neuroscience, and Medical Surgical segments include royalty expense. The Cardiovascular segment for both periods also include income from funded research and development arrangements.
(3)Includes adjustments to the Company's Italian payback accruals resulting from the June 30, 2025 Legislative Decree published by the Italian government for years 2015 to 2018.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Total Assets and Depreciation Expense
| Total Assets | Depreciation Expense | ||||||||||||||||||||||
| As of | Three months ended | ||||||||||||||||||||||
| (in millions) | July 31, 2026 | April 24, 2026 | July 31, 2026 | July 25, 2025 | |||||||||||||||||||
| Cardiovascular | $ | 17,517 | $ | 17,553 | $ | 71 | $ | 64 | |||||||||||||||
| Neuroscience | 19,942 | 18,514 | 78 | 77 | |||||||||||||||||||
| Medical Surgical | 31,905 | 32,535 | 65 | 54 | |||||||||||||||||||
| Total reportable segments | 69,364 | 68,602 | 215 | 194 | |||||||||||||||||||
| Other operating segments(1) | 4,747 | 4,827 | 34 | 31 | |||||||||||||||||||
| Corporate | 19,195 | 19,598 | 69 | 64 | |||||||||||||||||||
| Total | $ | 93,306 | $ | 93,028 | $ | 317 | $ | 289 |
(1)Includes the operations and ongoing transition agreements from businesses the Company has exited, divested, or intends to separate, including the Diabetes Business.
Geographic Information
Net sales are attributed to the country based on the location of the customer taking possession of the products or in which the services are rendered. The following table presents net sales for the three months ended July 31, 2026 and July 25, 2025 for the Company's country of domicile, countries with significant concentrations, and all other countries:
| Three months ended | |||||||||||||||||||||||
| (in millions) | July 31, 2026 | July 25, 2025 | |||||||||||||||||||||
| Ireland | $ | 40 | $ | 33 | |||||||||||||||||||
| United States | 4,906 | 4,224 | |||||||||||||||||||||
| Rest of world | 4,810 | 4,321 | |||||||||||||||||||||
| Total other countries, excluding Ireland | 9,716 | 8,545 | |||||||||||||||||||||
| Total | $ | 9,756 | $ | 8,578 |
18. MiniMed Separation
On March 9, 2026, MiniMed completed an initial public offering of 28,000,000 shares of its common stock, par value $0.01 per share (MiniMed Common Stock), at an initial public offering price of $20.00 per share for net proceeds of $538 million. MiniMed shares began trading on the Nasdaq Global Select Market (Nasdaq) under the symbol "MMED."
As of the closing of the IPO, Medtronic owns 252,813,348 shares of MiniMed Common Stock, or approximately 90.03% of the total outstanding shares of MiniMed Common Stock. There were no changes to the number of shares the Company owned as of July 31, 2026. Due to the Company retaining a controlling financial interest, the condensed consolidated financial statements reflect the financial results of MiniMed. As of March 9, 2026, the non-controlling interest associated with MiniMed was $381 million. The difference between the net proceeds from the IPO and the non-controlling interest balance is recognized in additional paid-in capital on the condensed consolidated balance sheets.
Medtronic and MiniMed have entered into various definitive agreements that, among other things, set forth the terms and conditions of the separation, the most significant of which includes a Transition Services Agreement (“TSA”). The TSA specifies the services to be provided by Medtronic to MiniMed for a period generally not expected to exceed 24 months following the completion of the IPO. The services are intended to facilitate an orderly transition of the Diabetes Business to operate as an independent public company.
The Company plans to complete the separation of its Diabetes Business within the fiscal year.
Medtronic plc
Notes to Condensed Consolidated Financial Statements
(Unaudited)
19. Subsequent Events
Subsequent to quarter-end, in August 2026, the Company entered into a cross-currency swap derivative contract with a notional amount of $1.0 billion. This cross-currency swap derivative contract is designated as a net investment hedge of our Chinese Renminbi (CNY) denominated exposures from our investments in certain of our CNY denominated functional currency subsidiaries.
Additionally, on September 1, 2026, the Company announced a strategic partnership with Cornerstone Robotics (Cornerstone), an innovative surgical robotics company that shares Medtronic’s commitment to advancing minimally invasive surgery and improving accessibility to the latest in surgical care worldwide. This partnership includes an investment in Cornerstone and the rights to distribute Cornerstone’s Sentire surgical system in select markets outside the U.S. where the system is market approved. The Company paid approximately $700 million in cash for this investment in the second quarter of fiscal year 2027, which will be an increase primarily in other assets in the condensed consolidated financial statements.
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