Medtronic Reports Strong Fiscal Year 2024 Results and Key Product Approvals

• Due to business divestiture and product line exits, this year's revenue was $57 million, compared to $114 million last year, categorized as other;

• Foreign currency translation had an unfavorable impact of $72 million on the remaining segments;

• As well as last year's $265 million in revenue from a one-time intellectual property (IP) agreement, which was reported by the Structural Heart and Aortic division within the Cardiovascular portfolio.

  
  

In FY24, GAAP net income and diluted earnings per share (EPS) were $3.676 billion and $27.60, respectively, both decreasing by 2%. As detailed in the financial schedules at the end of this press release, non-GAAP net income and non-GAAP diluted EPS for FY24 were $6.918 billion and $5.20, respectively, both declining by 2%. The FY24 non-GAAP diluted EPS included an unfavorable foreign exchange translation impact of $0.33. On a constant currency basis, FY24 non-GAAP diluted EPS grew by 5%.

Operating cash flow for FY24 was $6.787 billion, an increase of 12%. Free cash flow for FY24 was $52 billion, an increase of 14%, representing a 75% conversion rate of free cash flow to non-GAAP net income. The growth was driven by improvements in working capital.

Medtronic Chairman and CEO Geoff Martha said, "We delivered strong results in this fiscal year with robust performance across our businesses, achieving mid-single-digit or higher organic revenue growth in all four of our segments." "Our momentum is building as we enter the new fiscal year. We are starting new product cycles in some of the most attractive markets in medical technology, which will be further strengthened by the application of artificial intelligence in our portfolio. We are very optimistic about what we can achieve in fiscal year 25 and beyond."

Cardiovascular Portfolio Includes Cardiac Rhythm and Heart Failure (CRHF), Structural Heart and Aortic (SHA), and Coronary and Peripheral Vascular (CPV) divisions. The report shows revenue of $11.831 billion in FY24, growing by 2.7%, with organic growth of 5.0%. SHA achieved high single-digit growth, CPV had mid-single-digit growth, and CRHF experienced low single-digit growth, all organically. The fourth-quarter revenue was reported at $3.130 billion, declining by 5.2% but with organic growth of 4.0%. SHA and CPV saw mid-single-digit organic growth, while CRHF had lower single-digit organic growth.

• The Q4 results of CRHF include low single-digit growth in cardiac rhythm management, driven by high single-digit growth in cardiac pacing therapies, including low twenties growth of the Micra™ Transcatheter Pacing System; cardiac ablation solutions grew by mid-single digits, with strong growth in Pulse Field Ablation (PFA) offsetting the decline in cryoablation.

•SHA's fourth-quarter performance was driven by high single-digit growth in structural heart and cardiac surgery; structural heart achieved double-digit growth in Western Europe and Japan due to the continued adoption of the Evolut™ FX Transcatheter Aortic Valve Replacement (TAVR) system.

• CPV in the fourth quarter achieved mid-single-digit coronary growth, with increased strength in catheters and balloons; peripheral vascular health also grew at a mid-single-digit rate, while drug-coated balloons and vascular embolization products experienced growth in the mid-teens.

• The Evolut™ FX+ TAVR system received approval from the U.S. Food and Drug Administration in March and was commercially launched for the first time in the spring of 2024, with full market availability in the summer of 2024; the launch of the Avalus Ultra™ surgical aortic tissue valve in the U.S.; the Symplicity Spyral™ renal denervation system received approval from China's National Medical Products Administration (NMPA) and authorization from Health Canada.

• The one-year results of the SMART trial were simultaneously presented at the American College of Cardiology and published in The New England Journal of Medicine in April, demonstrating that the Medtronic Evolut™ TAVR platform is the optimal treatment for severe aortic stenosis in patients with small annuli (primarily women).

• The first human data of the Sphere-360™ PFA catheter was presented at the European Heart Rhythm Association Annual Meeting in April; the key study SPHERE-PER AF on Sphere-9™ Pulse Field (PF) and Radiofrequency (RF) ablation, as well as the one-year results of the high-density (HD) mapping catheter of the Affera cardiac mapping and navigation platform published last week in Heart Rhythm. This system has been submitted to the U.S. Food and Drug Administration (FDA) for review and approval.

The neuroscience portfolio includes Cranial & Spinal Technologies (CST), Specialty Therapies, and Neuromodulation. In fiscal year 24, revenue was reported at $9.406 billion, growing by 5.0%, with organic growth of 5.2%. CST achieved high single-digit growth, Specialty Therapies had mid-single-digit growth, and Neuromodulation experienced low single-digit growth, all on an organic basis. Fourth-quarter revenue was reported at $2.545 billion, increasing by 5.6% and organic growth of 6.5%. CST achieved high single-digit growth, Neuromodulation saw mid-single-digit growth, and Specialty Therapies had low single-digit growth, all organically.

• CST's fourth-quarter performance was driven by the continued adoption of the AiBLE™ ecosystem, with mid-teens growth in neurosurgery attributed to strong capital equipment sales, high single-digit growth in biologics, and mid-single-digit growth in Core Spine.

• The Q4 performance of the Professional Therapies segment was driven by high single-digit growth in ENT, strong momentum in capital equipment and disposables, and robust sales of sinus implants for local drug delivery; neurovascular declined slightly due to volume-based procurement tenders in China offsetting strong performance in flow diversion products; pelvic health grew mid-single digits fueled by continued adoption of the InterStim X™ system.

• With the launch of the Percept™ RC neurostimulator featuring BrainSense™ technology, brain modulation in neuromodulation achieved low double-digit growth in the fourth quarter; pain therapy grew by a mid-single-digit rate, including low double-digit growth in targeted drug delivery and low single-digit growth in Pain Stim.

• Received U.S. FDA approval for the Inceptiv™ Closed-Loop Spinal Cord Stimulator on the last day of the fourth quarter; the OsteoCool™ 2.0 Bone Tumor Ablation System received U.S. FDA approval in the fourth quarter and is planned for broad market release later this calendar year.

The medical surgical product portfolio includes the Surgical and Endoscopic (SE) and Acute Care and Monitoring (ACM) divisions. The report shows that revenue for fiscal year 24 was $8.417 billion, increasing by 5.4%, with organic growth of 4.7%. SE grew at a mid-single-digit rate, while ACM grew at a low single-digit rate, both organically. It was reported that fourth-quarter revenue was $2.198 billion, increasing by 3.5%, with organic growth of 4.5%. SE experienced mid-single-digit organic growth, while ACM had lower single-digit organic growth.

• SE's fourth-quarter performance includes high single-digit growth in general surgical technology, strong growth in wound management and hernia products, low single-digit growth in advanced surgical technology, and high single-digit growth in the endoscopy business with robust capital sales.

• Driven by the strong demand for the McGrath™ Mac video laryngoscope, ACM's fourth-quarter performance saw a low single-digit growth in oxygen management due to robust sales of Nellcor™ pulse oximetry products, as well as a mid-single-digit growth from the aviation sector.

• Launched Touch Surgery™ Live Stream and 14 new artificial intelligence-driven algorithms on the Touch Surgery™ Performance Insights platform for laparoscopic and robot-assisted surgery; received FDA approval for the BIS™ Advance anesthesia monitor; initiated enrollment for two new indication studies of the Hugo™ robot-assisted surgical system: hernia and gynecology.

Reportedly, diabetes revenue in FY24 was $2.488 billion, increasing by 10.0%, with organic growth of 8.6%. Q4 revenue was reported at $660 million, growing by 10.9%, with organic growth of 11.1%.

• Due to the continued launch of the MiniMed™ 780G system, U.S. fourth-quarter revenue grew by a low double-digit percentage; sales of U.S. insulin pumps achieved high growth in the 40s, with strong growth in new patient sales.

• Outside the U.S., developed markets achieved high single-digit growth driven by the continued adoption of the MiniMed™ 780G system and increased CGM attachment rates.

• Submit Simplera Sync™ CGM to the U.S. Food and Drug Administration in the fourth quarter, seeking approval for use with the MiniMed™ 780G System.

The company expects organic revenue growth for fiscal year 25 to be between 4% and 5%. The guidance for organic revenue growth excludes the impact of foreign currency exchange and is reported under "Other." Including the impact of other income and foreign currency exchange, if recent foreign currency exchange rates remain unchanged, revenue growth for fiscal year 25 is expected to be between 2.4% and 3.7%.

The company expects fiscal year 2025 non-GAAP diluted earnings per share to be between $5.40 and $5.50, including a 5% unfavorable impact due to foreign exchange rates based on recent exchange rates. This implies fiscal year 2025 non-GAAP diluted earnings per share growth will be between 4% and 6%.

The company announced today that, effective May 22, 2024, the Medtronic Board of Directors approved an increase in the cash dividend for the first quarter of fiscal year 2025, raising the quarterly dividend to $0.70 per share of common stock. This represents an annual amount of $2.80 per share of common stock. Medtronic has a long history of dividend growth and is a component of the S&P 500 Dividend Aristocrats Index. Today’s announcement marks the 47th consecutive year of dividend payment increases. Including today’s increase, Medtronic's dividend per share has grown by 30% over the past five years, 130% over the past ten years, and at a compound annual growth rate of 16% over the past 47 years.

Medtronic has a strong track record of returning capital to shareholders, including $5.5 billion in fiscal year 2024. The company remains committed to returning at least 50% of its free cash flow to shareholders, primarily through dividends and, to a lesser extent, through share repurchases. The dividend will be paid on July 12, 2024, to registered shareholders as of the close of business on June 28, 2024.

Medtronic Executive Vice President and Chief Financial Officer Karen Parkhill said, "We delivered on our promises in the fourth quarter and for the fiscal year, driving sustained revenue growth, improved profitability, and strong free cash flow. Our guidance for fiscal year 2025, along with our dividend increase and recent share repurchase, reflects our confidence in the continued growth trajectory."