Medtronic Reports Q3 FY2025 Revenue of $8.292 Billion, Misses Expectations, Shares Drop 7.26%

Feb 19, 2025 10:30 CST Updated 10:30

Medtronic

Medical Device Manufacturer

Medtronic Announces Q3 Fiscal 2025 Results, Performance Is Average. Its Q3 revenue reached $8.292 billion, growing by 2.5%. Medtronic's Q3 performance fell below market expectations. Compared to Johnson & Johnson's 6.7% growth and Boston Scientific's...17.6%Growth, Medtronic's performance is indeed not very good. Therefore, Medtronic's market value is much lower than Johnson & Johnson and Boston Scientific, at only $110.3 billion (yesterday's stock price plummeted by 7.26%).

Q3 Performance for FY2025

Global revenue of $8.292 billion, reporting a 2.5% increase
GAAP Net Income of $1.294 billion ($1.01 per share), a year-on-year decrease of 2% (an increase of 2%).
Non-GAAP net profit of $1.787 billion ($1.39 per share), up 3% year-over-year (+7%)

Core Products Listed in the Past Twelve Months

Business Highlights

Cardiovascular Business (Revenue of $3.037 billion, Organic Growth of 5.0%)

Cardiac Rhythm and Heart Failure (CRHF): Organic growth of 6.3%

Cardiac Pacing Therapy: Low double-digit growth, but the star product Micra achieved high growth (25%+)
Cardiac Ablation: Growth below 20%, with the rapid increase in sales of PFA products (PulseSelect, Sphere-9) being the main driver for achieving high growth (it is uncertain whether Citi Bank's forecast can be achieved).

Structural Heart and Aorta (SHA): Organic growth of 5.1% (excluding congenital heart disease business), with the TAVR product -- Evolut FX+ continuing to gain momentum.
Coronary and Peripheral Vessels (CPV):Organic Growth 1.6%, but balloon products achieved high single-digit growth (it seems that the uptake of RDN is a bit slow, far below market expectations).
Highlights

FDA Approves New PFA Production Base in Galway, Ireland, Capable of Immediately Enhancing Affera andSphere-9 Production Capacity
Exclusive Distribution Agreement with Contego Medical (and Preferred Acquisition Rights) to Quickly Enter the Rapidly Growing Carotid Artery Market
CMS Initiates RDN National Coverage Analysis (NCA), Coverage Policy Expected to be Implemented in October 2025

Neuroscience Business (Revenue of $2.458 billion, Organic Growth of 5.2%)

Cranial and Spinal Technologies (CST): Organic growth of 4.6%, with its AiBLE intelligent ecosystem driving high growth in neurosurgical procedures
Specialty Care: Organic Growth 1.9%,Sacral Nerve Stimulation ProductsInterStim X is the Growth Driver
Neuromodulation: Organic growth of 12.9%, nearly 20% growth in the U.S. pain stimulation business, Percept RC DBS drives global double-digit growth in brain modulation.
Highlights

Adaptive Brain Pacemaker BrainSense Receives CE Approval for Market Launch

Surgical and Critical Care Business (RevenueRevenue of $2.072 billion, an organic decrease of 0.4%)

Surgical and Endoscopic (SE): Organic growth of 0.4%, high single-digit growth in emerging markets partially offsetting the impact of U.S. distribution model adjustments
Emergency and Monitoring (ACM): Organic growth -2.8%, primarily due to a 30% decline in Nellcor oximetry products.

The core assets of Covidien have begun to become a burden on Medtronic's performance, not only with low gross profit margins but also with weak (and even regressing) performance growth. If the progress of Hugo slows down further, it is estimated that this division will sooner or later be abandoned by Medtronic (as it will no longer be a quality asset).

Diabetes Business (Revenue of $694 million, Organic Growth of 10.4%)

United States: Mid-single-digit growth, increased installations of the MiniMed 780G Automated Insulin Delivery System
International Market: Low Double-Digit Growth, Simplera Sync Sensor Upgrade Drives CGM Adoption

Executive Evaluation

"This quarter, we achieved strong profitability, benefiting from organic revenue growth in the mid-single digits for nine consecutive quarters, significantly improving both our gross margin and operating profit margin. We are beginning to see the fruits of long-term investments in breakthrough innovations, such as pulsed field ablation technology, which are driving growth in the most attractive markets within the medical technology sector."

---Geoff Martha Chairman and CEO of Medtronic

Medtronic Reports Q3 FY2025 Revenue of $8.292 Billion, Misses Expectations, Shares Drop 7.26%

Medtronic

Cardiovascular Business (Revenue of $3.037 billion, Organic Growth of 5.0%)

Cardiac Rhythm and Heart Failure (CRHF): Organic growth of 6.3%

Cardiac Pacing Therapy: Low double-digit growth, but the star product Micra achieved high growth (25%+)

Cardiac Ablation: Growth below 20%, with the rapid increase in sales of PFA products (PulseSelect, Sphere-9) being the main driver for achieving high growth (it is uncertain whether Citi Bank's forecast can be achieved).

Neuroscience Business (Revenue of $2.458 billion, Organic Growth of 5.2%)

Cranial and Spinal Technologies (CST): Organic growth of 4.6%, with its AiBLE intelligent ecosystem driving high growth in neurosurgical procedures

Specialty Care: Organic Growth 1.9%,Sacral Nerve Stimulation ProductsInterStim X is the Growth Driver

Neuromodulation: Organic growth of 12.9%, nearly 20% growth in the U.S. pain stimulation business, Percept RC DBS drives global double-digit growth in brain modulation.

Highlights

Diabetes Business (Revenue of $694 million, Organic Growth of 10.4%)