Q1 2026 Medtronic PLC Earnings Call

Speaker #1: Hello everyone, and thanks for joining us today for our fiscal 2026 first quarter video earnings webcast. I'm Ryan Weispfenning, Vice President and Head of Medtronic Investor Relations.

Ryan Weispfenning: Hello everyone, and thanks for joining us today for our Fiscal 26 First Quarter Video Earnings Webcast. I'm Ryan Weispfenning, Vice President and Head of Medtronic Investor Relations. Joining me here today are Geoffrey Martha, Chairman and Chief Executive Officer, and Thierry Pieton, Chief Financial Officer. Geoff and Thierry will provide comments on the results of our first quarter, which ended on July 25, 2025, and our outlook for the remainder of Fiscal Year 26. After our prepared remarks, we'll take questions from the sell-side analysts that cover the company. Today's program should last about an hour. Earlier this morning, we issued a press release discussing our results and containing several financial schedules. We also posted an earnings presentation that provides additional details on our performance. The presentation can be accessed in our earnings press release or on our website at investorrelations.medtronic.com.

Speaker #1: Joining me here today are Geoff Martha, Chairman and Chief Executive Officer, and Thierry Pieton, Chief Financial Officer. Geoff and Thierry will provide comments on the results of our first quarter, which ended on July 25, 2025.

Speaker #1: And our outlook for the remainder of fiscal year 2026. After our prepared remarks, we'll take questions from the sell-side analysts that cover the company.

Speaker #1: Today's program should last about an hour. Earlier this morning, we issued a press release discussing our results and containing several financial schedules. We also posted an earnings presentation that provides additional details on our performance.

Speaker #1: The presentation can be accessed in our earnings press release or on our website at investorrelations.medtronic.com. During today's program, many of the statements we make may be considered forward-looking statements, and actual results may differ materially from those projected in any forward-looking statement.

Ryan Weispfenning: During today's program, many of the statements we make may be considered forward-looking statements, and actual results may differ materially from those projected in any forward-looking statement. Additional information concerning factors that could cause our actual results to differ is contained in our periodic reports and other filings that we make with the SEC, and we do not undertake to update any forward-looking statement. Unless we say otherwise, all comparisons are on a year-over-year basis, and revenue comparisons are made on an organic basis, which excludes the impact of foreign currency and first-quarter revenue in the current and prior year reported as other. References to sequential revenue changes compare to the fourth quarter of Fiscal 25 and are made on an as-reported basis. All share references are on a revenue and year-over-year basis and compare our first fiscal quarter to our competitor's second calendar quarter.

Speaker #1: Additional information concerning factors that could cause our actual results to differ is contained in our periodic reports and other filings that we make with the SEC.

Speaker #1: And we do not undertake to update any forward-looking statement. Unless we say otherwise, all comparisons are on a year-over-year basis, and revenue comparisons are made on an organic basis, which excludes the impact of foreign currency, and first quarter revenue in the current and prior year is reported as other.

Speaker #1: References to sequential revenue changes compared to the fourth quarter of fiscal 2025 are made on an as-reported basis. All share references are on a revenue and year-over-year basis, and compare our first fiscal quarter to our competitor's second calendar quarter.

Speaker #1: Reconciliations of all non-GAAP financial measures can be found in our earnings press release or on our website at investorrelations.medtronic.com. And finally, our EPS guidance does not include any charges or gains that would be reported as non-GAAP adjustments to earnings during the fiscal year.

Ryan Weispfenning: Reconciliations of all non-GAAP financial measures can be found in our earnings press release or on our website at investorrelations.medtronic.com. Finally, our EPS guidance does not include any charges or gains that would be reported as non-GAAP adjustments to earnings during the fiscal year. With that, over to you, Geoff.

Speaker #1: With that, over to you, Geoff.

Speaker #2: Alright, thanks, Ryan, and hello, everybody. Welcome to the call. Welcome to the new look. As you've seen from our press releases, we have a lot to talk about today, so why don't we just jump in, and I'll get going on our Q1 results here.

Geoffrey Martha: All right, thanks Ryan, and hello everybody. Welcome to the call, welcome to the new look. As you have seen from our press releases, we have a lot to talk about today, so why don't we just jump in and I'll get going on our Q1 results here. We started the fiscal year by delivering another consistent quarter of mid-single-digit revenue growth. We remain confident in our ability to accelerate growth as we move through Fiscal 26. Our top-line growth for the quarter was in line with our guidance, and EPS came in ahead of guidance. The entire organization is working with laser focus to execute on the incredible set of opportunities Medtronic has in front of us. We are pleased to be able to raise our EPS guidance for the full year on the back of this strong start of the year.

Speaker #2: So, we started the fiscal year by delivering another consistent quarter of mid-single-digit revenue growth. And look, we remain confident in our ability to accelerate growth as we move through fiscal 2026.

Speaker #2: Our top-line growth for the quarter was in line with our guidance, and EPS came in ahead of guidance. Look, the entire organization is working with laser focus to execute on the incredible set of opportunities Medtronic has in front of us.

Speaker #2: And we're pleased to be able to raise our EPS guidance for the full year on the back of this strong start to the year.

Speaker #2: And, as you're going to hear today, Medtronic is at the forefront of medtech innovation across product categories, and we're on the cusp of an acceleration in our financial results and our strategy.

Geoffrey Martha: As you are going to hear today, Medtronic is at the forefront of medtech innovation across product categories, and we are on the cusp of an acceleration in our financial results and our strategy. Let me take you through some key portfolio highlights before I turn the call over to Thierry Pieton, who is going to walk through the results across all of our businesses. I am going to start with cardiovascular, which grew high single digits again this quarter, and that is off a high single-digit comparison in the prior year. This is driven by our innovative product portfolio and a relentless execution in what is a core right-to-win area of the market for us. We achieved double-digit growth in cardiac surgery, in ICDs, and in leadless pacing. Critically, we reached nearly 50% growth in Cardiac Ablation Solutions on the rollout of our PulseSelect™ pulsed field ablation system.

Speaker #2: So let me take you through some key portfolio highlights, but before I turn the call over to Thierry Pieton, who's going to walk through the results across all of our businesses.

Speaker #2: So I'm going to start with cardiovascular, which grew high single digits again this quarter, and that's off a high single digit comparison in the prior year.

Speaker #2: And this is driven by our innovative product portfolio and a relentless execution in what is a core right-to-win area of the market for us.

Speaker #2: We achieved double-digit growth in cardiac surgery, in ICDs, and in leadless pacing. Critically, we reached nearly 50% growth in cardiac ablation solutions, due to the rollout of our PFA systems.

Speaker #2: This performance is reflective of our execution capabilities, and we're excited that our growth momentum in this pivotal area is only really just beginning. Look, this past quarter, I've witnessed Afera and our competitors in action in several ablation cases.

Geoffrey Martha: This performance is reflective of our execution capabilities, and we are excited that our growth momentum in this pivotal area is only really just beginning. This past quarter, I have witnessed Aferra™ mapping system and our competitors in action in several ablation cases. I can tell you firsthand that the advantages that we are bringing to the market in terms of procedure time and ease of use are truly differentiated. Physician feedback and utilization levels of our equipment are phenomenal. We have more conviction than ever that we have the right technology and the product pipeline to catapult us to category leadership in cardiac ablation. In neuroscience, we grew 3%, supported by high single-digit growth in both neurosurgery and neuromodulation.

Speaker #2: And I can tell you firsthand that the advantages we’re bringing to the market in terms of procedure time and ease of use are truly differentiated.

Speaker #2: Physician feedback and utilization levels of our equipment are phenomenal. We have more conviction than ever that we have the right technology and the product pipeline to catapult us to category leadership in cardiac ablation.

Speaker #2: Now in neuroscience, we grew 3%, supported by high single-digit growth in both neurosurgery and neuromodulation. Look, as I mentioned last quarter, our spine-able ecosystem is driving differentiated share gains as health systems are not just updating one piece of capital equipment when they upgrade.

Geoffrey Martha: Look, as I mentioned last quarter, our AiBLE™ spine surgery ecosystem is driving differentiated share gains as health systems, they are not just updating one piece of capital equipment when they upgrade. They are upgrading to the full AiBLE™ ecosystem, which is a powerful thing for us and creates a real moat, a competitive moat around that business. In neuromod, our innovative closed-loop sensing technology in both pain stim and brain modulation, combined with our strong commercial execution, is also winning share. That said, our neuroscience growth was a bit below trend due to our specialty therapies businesses, which was the result of some deliberate changes we will discuss in a few moments. We expect to improve starting in Q2 and further accelerate in the back half of the fiscal year. Switching to MedSurge, MedSurge grew 2% this quarter, in line with our current expectations.

Speaker #2: They're upgrading to the full Able ecosystem, which is a powerful thing for us and creates a real competitive moat around that business.

Speaker #2: In Neuromod, our innovative closed-loop sensing technology in both pain stimulation and brain modulation, combined with our strong commercial execution, is also winning share.

Speaker #2: That said, our neuroscience growth was a bipolar trend due to our specialty therapies businesses, which was the result of some deliberate changes we'll discuss in a few moments. However, we expect to improve starting in Q2 and further accelerate in the back half of the fiscal year.

Speaker #2: Switching to MedSurg. MedSurg grew 2% this quarter, in line with our current expectations. Diabetes continued to grow above the company average on the strength of our 780G system and Simplera Sync sensor in international markets.

Geoffrey Martha: Diabetes continued to grow above the company average on the strength of our MiniMed™ 780G system and Simplera Sync™ CGM sensor in international markets. Looking ahead, we are well positioned to accelerate growth in each of our segments in the second half of the year. In our earnings deck that we posted earlier today, we outlined several milestones that we have coming over the rest of the fiscal year that will drive this acceleration. The largest, of course, being our Cardiac Ablation Solutions business with our continued rollout of our PulseSelect™ pulsed field ablation system portfolio. In Q2, we expect our Cardiac Ablation Solutions business to grow even faster than the nearly 50% growth we posted this past quarter. We continue to have near-term line of sight to adding an incremental $1 billion in revenue off of our Fiscal 25 base.

Speaker #2: So, looking ahead, we're well positioned to accelerate growth in each of our segments in the second half of the year. In our earnings deck that we posted earlier today, we outlined several milestones that we have coming over the rest of the fiscal year that will drive this acceleration.

Speaker #2: The largest, of course, is our CAS business, with our continued rollout of our PFA portfolio. In Q2, we expect our CAS business to grow even faster than the nearly 50% growth we posted this past quarter.

Speaker #2: And we continue to have near-term line of sight to adding an incremental $1 billion in revenue off of our fiscal 2025 base. Demand remains extremely high, and we're executing against our plans to quickly ramp mapping system and catheter supply.

Geoffrey Martha: Demand remains extremely high, and we are executing against our plans to quickly ramp mapping system and catheter supply. Cardiac Ablation Solutions is just one of several upcoming growth accelerators for cardiovascular. Let us talk renal denervation. We are expecting the final national coverage from CMS on or before October 8th, and we expect the U.S. launch of our Symplicity Spyral™ renal denervation system procedure for hypertension to ramp after that. Our peripheral vascular business will start the launch of our Contigo carotid stent system this quarter and our LIBERANT mechanical thrombectomy system in the second half of the fiscal year. In neuroscience, we are poised to accelerate growth starting this quarter, with further acceleration in the back half of the fiscal year. First, we expect our pelvic health business to be a key driver for this segment in Fiscal 26 and beyond.

Speaker #2: And CAS is just one of several upcoming growth accelerators for cardiovascular. Let's talk renal denervation. We're expecting the final national coverage from CMS on or before October 8th.

Speaker #2: And we expect the U.S. launch of our simplicity procedure for hypertension to ramp after that. Our peripheral vascular business will start the launch of our Contiga carotid stent system this quarter and our Luberant mechanical thrombectomy system in the second half of the fiscal year.

Speaker #2: Now in neuroscience, we're poised to accelerate growth starting this quarter, with further acceleration in the back half of the fiscal year. First, we expect our pelvic health business to be a key driver for this segment in fiscal 2026 and beyond.

Speaker #2: Importantly, ahead of our tibial launches this fall, we took the opportunity to make some significant changes to our commercial organization in pelvic health during Q1.

Geoffrey Martha: Importantly, ahead of our pivotal launches this fall, we took the opportunity to make some significant changes to our commercial organization and pelvic health in Q1. While this had some short-term impact in the quarter, as we expected, it sets us up to capitalize on the large opportunity ahead as we anticipate accelerating growth from this business as we go through the year. In neurovascular, we expect growth to accelerate each quarter as we go through the remainder of the fiscal year and as we lap China DDP and product recall comps. We also have some new products ramping in carotid stenting and our hemorrhagic portfolio. In surgical, we have the U.S. launch for Hugo™ in the back half of the fiscal year, which we expect to be accretive to growth.

Speaker #2: Now, while this had some short-term impact in the quarter, as we expected, it sets us up. It sets us up to capitalize on the large opportunity ahead, as we anticipate accelerating growth from this business as we go through the year.

Speaker #2: In neurovascular, we expect growth to accelerate each quarter as we go through the remainder of the fiscal year and as we lap China BBP and product recall comps.

Speaker #2: And we also have some new products ramping in carotid stenting and our hemorrhagic portfolio. Now in surgical, we have the U.S. launch for Hugo in the back half of the fiscal year, which we expect to be a credentialed growth.

Speaker #2: And in diabetes, we expect performance to accelerate as we launch two new sensors: Simplera Sync this fall, and the Abbott-based sensor, which we're calling Instinct, in the coming months.

Geoffrey Martha: In diabetes, we expect performance to accelerate as we launch two new sensors, Simplera Sync™ this fall and the Abbott-based sensor, which we are calling Instinct™, in the coming months. Simplera Sync™ is half the size of our current sensor. It is disposable, and it is much easier to put on with no overtape. With Instinct™, our customers will get access to Abbott's most advanced CGM platform. When you combine these improved sensors with our MiniMed™ 780G automated insulin delivery system and its exclusive needle detection technology, we expect to see a positive inflection in our installed base and revenue growth. As for the separation of our diabetes business, MiniMed™, we are calling it, is proceeding according to plan. MiniMed™ is entering a strong innovation cycle in its own right.

Speaker #2: Simplera is half the size of our current sensor; it's disposable, and it's much easier to put on with no overtape. And with Instinct, our customers will get access to Abbott's most advanced CGM platform.

Speaker #2: And when you combine these improved sensors with our MiniMed 780G and its exclusive needle detection technology, we expect to see a positive inflection in our installed base and revenue growth.

Speaker #2: As for the separation of our diabetes business, MiniMed, we're calling it, is proceeding according to plan. MiniMed is entering a strong innovation cycle in its own right.

Speaker #2: The separation will sharpen Medtronic's focus on our core businesses, including high-growth opportunities like we discussed, PFA, Ardian, and others. It will also allow Medtronic to grow revenue and earnings faster without diabetes than we do with it today.

Geoffrey Martha: The separation will sharpen Medtronic's focus on our core businesses, including high-growth opportunities like we discussed, PFA and RDN and others. It will also allow Medtronic to grow revenue and earnings faster without diabetes than we do with it today. We continue to expect the separation to be immediately EPS accretive, even with conservative valuations. This portfolio move will be a value-creating separation for Medtronic shareholders. Clearly, there is a lot to be excited about at Medtronic in the next few quarters. As a result of the strength of our product pipeline, we are confident that not only will our revenue growth inflect in the near term, but we will also achieve higher earnings growth over time.

Speaker #2: We continue to expect the separation to be immediately EPS accretive, even with conservative valuations. This portfolio move will be a value-creating separation for Medtronic shareholders.

Speaker #2: Clearly, look, there's a lot to be excited about at Medtronic in the next few quarters. As a result of the strength of our product pipeline, we're confident that not only will our revenue growth inflect in the near term, but we'll also achieve higher earnings growth over time.

Speaker #2: This will come through a combination of natural P&L leverage and decisive, urgent action we're taking to improve efficiency in both COGS and our operating expenses.

Geoffrey Martha: This will come through a combination of natural P&L leverage and decisive, urgent action we are taking to improve efficiency in both COGS and our operating expenses. We are creating an environment at Medtronic where innovation fuels growth, and growth in turn creates the oxygen needed to fuel more high ROI investments into innovation. We have already started increasing these investments, as you saw this quarter, with our high single-digit increase in R&D. These investments will make our earnings power durable. Now with that, I will turn it over to Thierry, who is going to cover the details of our business performance, our financials, and of course, our guidance. So over to you, Thierry.

Speaker #2: We're creating an environment at Medtronic where innovation fuels growth, and growth, in turn, creates the oxygen needed to fuel more high ROI investments into innovation.

Speaker #2: We've already started increasing these investments, as you saw this quarter, with our high-single-digit increase in R&D. And it is these investments that will make our earnings power durable.

Speaker #2: Now, with that, I'll turn it over to Thierry, who's going to cover the details of our business performance, our financials, and, of course, our guidance.

Speaker #2: So over to you, Thierry.

Speaker #3: Hey, thanks, Geoff, and hello everyone. So I'll start first with our cardiovascular portfolio. So CV grew 7% this quarter, led by cardiac ablation solutions.

Thierry Pieton: Thanks, Geoff, and hello everyone. I will start first with our cardiovascular portfolio. CV grew 7% this quarter, led by Cardiac Ablation Solutions. CAS growth continued to accelerate to nearly 50%, including low 70s growth in both the US and Japan and low 30s growth in international markets. This rapid growth is being driven by high demand for our PulseSelect™ pulsed field ablation systems, including our PulseSelect™ anatomical catheter, and especially our Sphere-9™ focal catheter and Aferra™ mapping system. Aferra™ mapping system utilization is high, and the Sphere-9™ catheters are being used in a wide variety of cases. Our teams are quickly ramping supply, and our mapper hiring is on track.

Speaker #3: CAS growth continued to accelerate to nearly 50%, including low 70s growth in both the U.S. and Japan, and low 30s growth in international markets.

Speaker #3: This rapid growth is being driven by high demand for our pulse field ablation systems, including our PulseSelect anatomical catheter, and especially our Sphere 9 focal catheter and Afera mapping system.

Speaker #3: Afera mapping system utilization is high, and the Sphere 9 catheters are being used in a wide variety of cases. Our teams are quickly ramping supply, and our mapper hiring is on track.

Speaker #3: This is allowing us to enter new accounts, as well as going deeper into more labs in our established accounts. We're still early in the rollout, and we continue to execute with urgency.

Thierry Pieton: This is allowing us to enter new accounts, as well as going deeper into more labs in our established accounts. We are still early in the rollout, and we continue to execute with urgency to capitalize on this massive opportunity. We expect to continue to win share in this $11 billion space that is now growing over 25%. As we look forward, we are advancing our PFA pipeline, including our next-gen Aferra™ Sphere 360 catheter. We hear from many EPs that Sphere 360 is the most anticipated single-shot catheter in this space, driven by very positive early clinical data. We are expecting to start the pivotal trial for Sphere 360 this calendar year. Next, in structural heart, we grew 6%.

Speaker #3: To capitalize on this massive opportunity, we expect to continue to win share in this $11 billion space that is now growing over 25%. As we look forward, we're advancing our PFA pipeline, including our next-gen Afera Sphere 360 catheter.

Speaker #3: We hear from many EPs that Sphere 360 is the most anticipated single-shot catheter in this space, driven by very positive early clinical data.

Speaker #3: We're expecting to start the pivotal trial for Sphere 360 this calendar year. Next, in structural heart, we grew 6%. We continue to gain traction with our Evolut FX and TAVR device, along with our differentiated clinical evidence.

Thierry Pieton: We continue to gain traction with our Evolut™ FX+ TAVR system and our differentiated clinical evidence. We are getting our fair share of international revenue from Boston Scientific's market exit. We are also gaining momentum in several geographies, including Japan. We expect all of this to drive continued strength in our TAVR franchise in the quarters ahead. In cardiac rhythm management, we grew 3%, with 6% growth in defibrillation solutions and 3% in cardiac pacing therapies, offset by cardiovascular diagnostics. We continue to see strong adoption of our premium innovative products, including 83% growth of Aurora EV-ICD™ system, 14% growth in Micra™ leadless pacemakers, and 21% growth with our 3830 conduction system pacing lead. In hypertension, we were very pleased with CMS's proposed NCD for our Symplicity Spyral™ renal denervation system that they issued last month, as well as the positive comments that came in during the public comment period.

Speaker #3: We're getting our fair share of international revenue from Boston Scientific's market exit. We're also gaining momentum in several geographies, including Japan. We expect all of this to drive continued strength in our TAVR franchise in the quarters ahead.

Speaker #3: In cardiac rhythm management, we grew 3%, with 6% growth in defibrillation solutions and 3% in cardiac pacing therapies, offset by cardiovascular diagnostics. We continue to see strong adoption of our premium innovative products, including 83% growth of Aurora EV ICD, 14% growth in micro leadless pacemakers, and 21% growth with our 3830 conduction system pacing lead.

Speaker #3: In hypertension, we were very pleased with CMS's proposed NCD for our simplicity system that they issued last month, as well as the positive comments that came in during the public comment period.

Speaker #3: And then last week, we received the news that the ACC and AHA issued updated guidelines, recognizing Ardian as a treatment option for hypertension. These are very important steps to providing patients access to our innovative Simplicity procedure.

Thierry Pieton: Last week, we received the news that the ACC and AHA issued updated guidelines recognizing RDN as a treatment option for hypertension. These are very important steps to providing patients access to our innovative Symplicity Spyral™ renal denervation system. Nearly half of U.S. adults have hypertension, and one in four are uncontrolled, despite the broad availability of numerous generic drugs. CMS now expects to finalize the NCD on or before October 8th, and we expect procedures to ramp following that. Ahead of this, we are working with healthcare systems across the U.S. to train physicians and help them establish Symplicity Spyral™ service lines. We are rapidly hiring clinical specialists and market development and healthcare economics managers to drive the future growth. They will work alongside our existing coronary sales force to provide support for this important new treatment.

Speaker #3: Nearly half of U.S. adults have hypertension, and one in four are uncontrolled. Despite the broad availability of numerous generic drugs, CMS now expects to finalize the NCD on or before October 8th, and we expect procedures to ramp following that.

Speaker #3: Ahead of this, we're working with healthcare systems across the U.S. to train physicians and help them establish simplicity service lines. We're rapidly hiring clinical specialists, as well as market development and healthcare economics managers to drive future growth.

Speaker #3: They will work alongside our existing coronary sales force to provide support for this important new treatment. We also continue to invest in next-gen Ardian technology, including our next-gen catheter that will provide radial access.

Thierry Pieton: We also continue to invest in next-gen RDN technology, including our next-gen catheter that will provide radial access. We enrolled our first patient in our multi-organ denervation pilot study, which is called Spiral Gemini. Turning to the neuroscience business, which grew 3%. Our cranial and spinal technologies business grew mid-single digits, including 5% U.S. core spine growth and 8% U.S. neurosurgery growth. As Geoffrey Martha mentioned, we had a strong capital equipment quarter as our differentiated AiBLE™ spine surgery ecosystem continues to win share. Several categories of our enabling equipment grew double-digit globally, including Mizor, O-arm, Midas Rex, and Stealth Station. In neuromodulation, we had another very strong quarter, growing 9%. In pain stim, we grew 10% globally, including 11% in the U.S. Our Inceptiv™ spinal cord stimulator, with its responsive real-time therapy adjustments, is giving patients greater freedom.

Speaker #3: We enrolled our first patient in our multi-organ denervation pilot study, which is called Spiral Gemini. Now turning to the neuroscience business, which grew 3%.

Speaker #3: Our cranial and spinal technologies business grew mid-single digits, including 5% U.S. core spine growth and 8% U.S. neurosurgery growth. As Geoff mentioned, we had a strong capital equipment quarter, as our differentiated able spine ecosystem continues to win share.

Speaker #3: Several categories of our enabling equipment grew double digits globally, including Mizor, OARM, Midas Rex, and Stealth Station. In neuromodulation, we had another very strong quarter, growing 9%.

Speaker #3: In Pain Stim, we grew 10% globally, including 11% in the U.S. Our inceptive system, with its responsive real-time therapy adjustments, is giving patients greater freedom.

Speaker #3: And in brain modulation, we grew high single digits, as our groundbreaking BrainSense adaptive DBS technology is launching in the U.S., Europe, and Japan.

Thierry Pieton: In brain modulation, we grew high single digits as our groundbreaking BrainSense™ Adaptive Deep Brain Stimulation technology is launching in the U.S., Europe, and Japan. BrainSense™ is a fully closed-loop brain-computer interface that automatically provides personalized real-time therapy adjustments based on brain activity feedback for patients with Parkinson's disease. Next, turning to our MedSurge portfolio, which grew 2%. Our surgical business also grew 2% this quarter. The business had high single-digit growth in advanced energy, where our market-leading LigaSure™ vessel sealing technology won share again for the 12th quarter in a row. This, combined with high single-digit growth in emerging markets, helped offset two ongoing but stable market pressures. One is in bariatric surgery, and the other is from the shift to robotic surgery. Both are primarily in the U.S.

Speaker #3: BrainSense is a fully closed-loop brain-computer interface that automatically provides personalized, real-time therapy adjustments based on brain activity feedback for patients with Parkinson's disease.

Speaker #3: Next, turning to our MedSurg portfolio, which grew 2%. Our surgical business also grew 2% this quarter. The business had high single-digit growth in advanced energy, where our market-leading ligature vessel sealing technology won share again for the 12th quarter in a row.

Speaker #3: This, combined with high single-digit growth in emerging markets, helped offset two ongoing but stable market pressures. One is in bariatric surgery, and the other is from the shift to robotic surgery.

Speaker #3: And both are primarily in the U.S. We continue to expect our surgical growth to improve over time, starting in the back half of the fiscal year, as we begin to expand the launch of Hugo. Earlier this calendar year, we filed for FDA approval for Hugo, and we're looking forward to launching it in the important U.S. market.

Thierry Pieton: We continue to expect our surgical growth to improve over time, starting in the back half of the fiscal year, as we begin to expand the launch of Hugo™. Earlier this calendar year, we filed for FDA approval for Hugo™, and we are looking forward to launching it in the important U.S. market. In international markets, we are making good progress in surgical robotics as our revenue and procedure volumes continue to grow. Last month, we received CE mark for LigaSure™ technology on Hugo™. This was an important step for our robotic offering, given that LigaSure™ is the most preferred vessel sealing technology in the world, having been used over 35 million procedures. Robotics and the ecosystems that robotic-assisted surgery enables are important for our surgical business.

Speaker #3: In international markets, we're making good progress in surgical robotics, as our revenue and procedure volumes continue to grow. Last month, we received CE Mark for ligature technology on Hugo. This was an important step for our robotic offering, given that ligature is the most preferred vessel sealing technology in the world, having been used in over 35 million procedures.

Speaker #3: Robotics, and the ecosystems that robotic-assisted surgery enables, are important for our surgical business. As we look ahead, we see robotics and our world-class digital and AI capabilities as an important strategic differentiator that will benefit many of our franchises at Medtronic.

Thierry Pieton: As we look ahead, we see robotics and our world-class digital and AI capabilities as an important strategic differentiator that will benefit many of our franchises at Medtronic. To wrap up our business performance, in diabetes, we grew 8%. This included 11% growth in international markets, where our Simplera Sync™ CGM sensor technology is already available. We have heavily invested in diabetes over the past few years. Now we are entering a strong innovation cycle with both new technology and new indications. Last month, we received CE mark for expanded indications for the MiniMed™ 780G automated insulin delivery system for type 2 diabetes, children as young as two, and during pregnancy. Looking ahead, in addition to launching the two new sensors that Geoffrey Martha mentioned, we are expecting type 2 approval in the U.S. in the coming months. We also continue to make progress with our new insulin pump systems.

Speaker #3: To wrap up our business performance, in diabetes, we grew 8%. This included 11% growth in international markets, where our Simplera sensor technology is already available.

Speaker #3: We've heavily invested in diabetes over the past few years, and now we're entering a strong innovation cycle, with both new technology and new indications.

Speaker #3: Last month, we received CE mark for expanded indications for the 780G for type 2 diabetes, children as young as two, and during pregnancy. Looking ahead, in addition to launching the two new sensors that Geoff mentioned, we're expecting type 2 approval in the U.S. in the coming months, and we also continue to make progress with our new insulin pump systems.

Speaker #3: We intend to submit our next-generation durable pump, the MiniMed Flex, to the US FDA by the end of the fiscal year. Flex is much smaller than the 780G, as the screen is your phone, allowing for more discrete placement while still using the same reservoirs and infusion sets.

Thierry Pieton: We intend to submit our next-generation durable pump, the MiniMed™ Flex, to the U.S. FDA by the end of the fiscal year. Flex is much smaller than MiniMed™ 780G, as the screen is your phone, allowing for more discrete placement while still using the same reservoirs and infusion sets. Flex will work with both Simplera Sync™ CGM and Instinct™ sensors. Finally, as mentioned, our planned separation of MiniMed™ is on track. Our preferred path continues to be a two-step IPO and split, which we expect to have fully completed within 15 months from now. Upon separation, we continue to expect approximately 50 basis points of growth margin improvement and 100 basis points of operating margin improvement. Turning to the financials, Q1 revenue of $8.6 billion grew 8.4% reported and 4.8% organic, in line with our guidance. Our adjusted gross margin was 65.1%, down 80 basis points year over year.

Speaker #3: And Flex will work with both Simplera Sync and Instinct sensors. Finally, as mentioned, our planned separation of MiniMed is on track. Our preferred path continues to be a two-step IPO and split, which we expect to have fully completed within 15 months from now.

Speaker #3: Upon separation, we continue to expect approximately 50 basis points of growth margin improvement and 100 basis points of operating margin improvement. Now turning to the financials, Q1 revenue of $8.6 billion grew 8.4% reported and 4.8% organic, in line with our guidance.

Speaker #3: Our adjusted gross margin was 65.1%, down 80 basis points year over year. This was expected and stable when compared to Q4. I'll walk you through the four main components that drove the gross margin this quarter.

Thierry Pieton: This was expected and stable when compared to Q4. I will walk you through the four main components that drove the gross margin this quarter. First, we continue to benefit from pricing as we launch new products and maintain pricing discipline on contracting. This had a 30 basis points benefit. Second, business mix, as I noted last quarter, continues to be a near-term headwind. Approximately 70 basis points this quarter split roughly equally between Cardiac Ablation Solutions and diabetes. Cardiac Ablation Solutions today is impacted by the mix of lower margin capital to higher margin catheters, and diabetes is early in its manufacturing ramp of the Simplera Sync™ CGM sensor. Over time, we expect both of these to improve as we scale our Cardiac Ablation Solutions business and separate the diabetes business.

Speaker #3: First, we continue to benefit from pricing, as we launched new products and maintained pricing discipline on contracting, and this had a 30 basis point benefit.

Speaker #3: Second, the business mix, as I noted last quarter, continues to be a near-term headwind, approximately 70 basis points this quarter, split roughly equally between CAS and diabetes.

Speaker #3: CAS today is impacted by the mix of lower-margin capital to higher-margin catheters, and diabetes is early in its manufacturing ramp of the Simplera sensor.

Speaker #3: Over time, we expect both of these to improve as we scale our CAS business and separate the diabetes business. Third, our COGS efficiency programs, net of inflation, continue to benefit gross margin as our global operations and supply chain organization execute to deliver savings on materials and drive efficiencies in our manufacturing plants.

Thierry Pieton: Third, our COGS efficiency programs, net of inflation, continue to benefit gross margin as our global operations and supply chain organization execute to deliver savings on materials and drive efficiencies in our manufacturing plants. This quarter, this was more than offset, primarily by the manufacturing ramp of Aferra™ mapping system that we incurred last year. The net of these items was a 50 basis points headwind. Finally, foreign exchange was 10 basis points tailwind to gross margin. Moving down the P&L, adjusted R&D was up 7.7%, 100 basis points ahead of revenue growth. We are allocating significant capital to high-growth projects across our businesses, including large increases in both cardiovascular and diabetes. With SGNA, we continue to drive leverage, growing it 170 basis points below revenue growth.

Speaker #3: This quarter, this was more than offset primarily by the manufacturing ramp of Afera that we incurred last year. The net of these items was a 50 basis point headwind.

Speaker #3: And finally, foreign exchange was a 10-basis-point tailwind to gross margin. Moving down the P&L, adjusted R&D was up 7.7%, 100 basis points ahead of revenue growth.

Speaker #3: We're allocating significant capital to high-growth projects across our businesses, including large increases in both cardiovascular and diabetes. With SG&A, we continue to drive leverage, growing it 117 basis points below revenue growth.

Speaker #3: Importantly, we drove this significant leverage while also increasing investment in growth areas, including CAS as we hired more mappers and Ardian as we developed the market.

Thierry Pieton: Importantly, we drove the significant leverage while also increasing investment in growth areas, including Cardiac Ablation Solutions as we hired more mappers and RDN as we developed the market. We are extremely focused on making sure we fuel our growth drivers to maximize the opportunities from these technological breakthroughs. Our adjusted operating profit was $2 billion, resulting in an adjusted operating margin of 23.6%. Below the operating profit line, our adjusted tax rate was 17.8%, about 70 basis points better than expectations due to a jurisdictional mix of profits. The FX impact on EPS was neutral in the first quarter, a couple cents better than anticipated, given rate movements throughout the quarter. The net result was adjusted EPS of $1.26, three cents above the midpoint of our guidance. Now let's move to our guidance.

Speaker #3: We are extremely focused on making sure we fuel our growth drivers to maximize the opportunities from these technological breakthroughs. Our adjusted operating profit was $2 billion, resulting in an adjusted operating margin of 23.6%.

Speaker #3: Below the operating profit line, our adjusted tax rate was 17.8%, about 70 basis points better than expectations due to the jurisdictional mix of profits. The impact on EPS was neutral in the first quarter, a couple of cents better than anticipated, given rate movements throughout the quarter.

Speaker #3: The net result was an adjusted EPS of $1.26, three cents above the midpoint of our guidance. Now, let's move to our guidance. On the top line, we continue to expect fiscal year 2026 organic revenue growth of approximately 5%.

Thierry Pieton: On the top line, we continue to expect fiscal year 2026 organic revenue growth of approximately 5%. In Q2, we are expecting 4.5% to 5% organic growth, similar to what we just delivered in the first quarter. As Geoff Martha covered earlier, we are expecting revenue growth to accelerate in the back half of the fiscal year. Based on recent FX rates, which have moved substantially over the past quarter, we now see a tailwind of revenue of $550 million to $650 million in Fiscal 2026. This is over a half a billion dollar positive increase versus three months ago. In Q2, FX is currently a $50 million to $100 million tailwind based on the recent rates. Moving down the P&L, we are continuing to drive pricing discipline and to deliver savings on our COGS efficiency programs.

Speaker #3: In Q2, we're expecting four and a half to 5% organic growth, similar to what we just delivered in the first quarter. As Geoff covered earlier, we're expecting revenue growth to accelerate in the back half of the fiscal year. Based on recent exchange rate effects, which have moved substantially over the past quarter, we now see a tailwind of revenue of $550 million to $650 million in fiscal 2026.

Speaker #3: This is over half a billion dollar positive increase versus three months ago. In Q2, the effect is currently a $50 million to $100 million tailwind, based on the recent rates.

Speaker #3: Moving down the P&L, we'll continue to drive pricing discipline and deliver savings on our COGS efficiency programs. These will be offset in the near term by continued business mix, primarily in CAS and diabetes.

Thierry Pieton: These will be offset in the near term by continued business mix, primarily in Cardiac Ablation Solutions and diabetes. Regarding tariffs, you will recall we outlined two scenarios when we gave our annual guidance last quarter. Given where we are in the year, we can take the worst case, $350 million scenario, off the table for this year. The $200 million scenario has modestly improved, driven by our execution on mitigation efforts. As a result, tariffs are now expected to be approximately $185 million for Fiscal 2026. We also remain committed to increase investment in our current and future growth drivers, resulting in increased R&D and sales and marketing spend. At the same time, we are confident in our ability to drive leverage with our G&A expenses. Accordingly, there is no change in our expectation for Fiscal 2026 operating profit to grow materially faster than revenue.

Speaker #3: Regarding tariffs, you'll recall we outlined two scenarios when we gave our annual guidance last quarter. Given where we are in the year, we can take the worst-case $350 million scenario off the table for this year, and the $200 million scenario has modestly improved, driven by our execution on mitigation efforts.

Speaker #3: As a result, tariffs are now expected to be approximately $185 million for fiscal 2026. We also remain committed to increasing investment in our current and future growth drivers, resulting in increased R&D and sales and marketing spending.

Speaker #3: At the same time, we are confident in our ability to drive leverage with our G&A expenses. Accordingly, there’s no change in our expectation for fiscal 2026 operating profit to grow materially faster than revenue.

Speaker #3: Given our Q1 results, we're raising our underlying fiscal 2026 EPS growth expectation, which excludes the impact of tariffs, to 4.5% versus the prior 4%.

Thierry Pieton: Given our Q1 results, we are raising our underlying Fiscal 2026 EPS growth expectation, which excludes the impact of tariffs, to 4.5% versus the prior 4%. FX is now a flat to 1% benefit to Fiscal 2026 EPS. Including the impact of tariffs, we are now guiding EPS in the range of $5.60 to $5.66, a raise from our prior range of $5.50 to $5.60. For Q2, we would expect EPS of $1.30 to $1.32, which includes an approximate 1% benefit from foreign currency based on recent rates, as well as an approximate $18 million negative impact coming from tariffs. As I mentioned last quarter, we are expecting high single-digit EPS growth in Fiscal Year 2027, driven by accelerating revenue growth, improved business mix from Cardiac Ablation Solutions and diabetes, as well as the other financial benefit of the diabetes separation. To conclude, our confidence is building.

Speaker #3: Effects are now a flat to 1% benefit to fiscal 2026 EPS. Including the impact of tariffs, we're now guiding EPS in the range of $5.60 to $5.66, an increase from our prior range of $5.50 to $5.60.

Speaker #3: For Q2, we would expect EPS of $1.30 to $1.32, which includes an approximate 1% benefit from foreign currency, based on recent rates, as well as an approximate $18 million negative impact coming from tariffs.

Speaker #3: As I mentioned last quarter, we're expecting high single-digit EPS growth in fiscal year 2027, driven by accelerating revenue growth, improved business mix from CAS and diabetes, as well as the other financial benefits of the diabetes separation.

Speaker #3: To conclude, our confidence is building; we're advancing our growth drivers to accelerate revenue and growth. We're executing on efficiencies in manufacturing, supply chain, and operating expenses to drive earnings growth.

Thierry Pieton: We're advancing our growth drivers to accelerate revenue and growth, and we're executing on efficiencies in manufacturing and supply chain and operating expenses to drive earnings growth. At the same time, we're increasing our growth investments in R&D and sales and marketing, all with a deliberate focus on creating long-term shareholder value. Geoff, back to you.

Speaker #3: At the same time, we're increasing our growth investments in R&D and sales and marketing, all with a deliberate focus on creating long-term shareholder value.

Speaker #3: Geoff, back to you.

Speaker #2: Okay, thank you, Thierry. And before we go to Q&A, I want to make a few brief remarks on the shareholder value creation initiatives we announced this morning, in partnership with Elliott Management.

Geoffrey Martha: Okay, thank you, Thierry. Before we go to Q&A, I want to make a few brief remarks on the shareholder value creation initiatives we announced this morning in partnership with Elliott Investment Management and on the opportunity that we both see ahead for Medtronic. Today, we've announced a series of governance enhancements that will help capitalize on the enormous opportunities in front of us and unlock the full extent of Medtronic's potential. To start, we've appointed two new independent board members, John Groetelaars and Bill Jellison, each of whom bring deep operational expertise in medtech and fresh perspectives to the table. The board and I are excited to welcome both John and Bill to Medtronic. As part of our inflection, the leadership and I are reinvigorating our laser focus up and down the organization on two key fronts: growth and creating oxygen to fuel that growth and drive earnings power.

Speaker #2: And on the opportunity that we both see ahead for Medtronic, today we've announced a series of governance enhancements that will help capitalize on the enormous opportunities in front of us and unlock the full extent of Medtronic's potential.

Speaker #2: To start, we've appointed two new independent board members: John Grotelaars and Bill Jellison, each of whom bring deep operational expertise in medtech and fresh perspectives to the table.

Speaker #2: The board and I are excited to welcome both John and Bill to Medtronic. As part of our inflection, the leadership and I are reinvigorating our laser focus up and down the organization on two key fronts.

Speaker #2: Growth and creating oxygen to fuel that growth, and drive earnings power. These two focus areas need to be linked. From the frontline employees of Medtronic, up through senior leadership, including me, and all the way to the board.

Geoffrey Martha: These two focus areas need to be linked from the frontline employees of Medtronic up through senior leadership, including me, and all the way to the board. Today, we announced that we've created two new board committees to support management: the Growth Committee, which will oversee our portfolio management and capital allocation decisions to accelerate growth, and an Operating Committee, which will provide oversight of our efforts to drive efficiency gains in our operations and expense base. This will enable a higher level of organic investment back into our business while also delivering improving margins and accelerating EPS growth. We'll have a fresh perspective from our two new board members, and these two committees will give us support and focus so we can execute with both speed and urgency. Finally, we look forward to sharing the culmination of these initiatives at an Investor Day sometime mid-calendar year 2026.

Speaker #2: So today we announced that we've created two new board committees to support management. The Growth Committee will oversee our portfolio management and capital allocation decisions to accelerate growth.

Speaker #2: And an operating committee, which will provide oversight of our efforts to drive efficiency gains in our operations and expense base. This will enable a higher level of organic investment back into our business, while also delivering improving margins and accelerating EPS growth.

Speaker #2: So we'll have a fresh perspective from our two new board members, and these two committees will give us support and focus so we can execute with both speed and urgency.

Speaker #2: And finally, we look forward to sharing the culmination of these initiatives at an investor day sometime mid-calendar year 2026. At this event, we intend to provide a comprehensive update for investors on our strategy post-diabetes, the value proposition of our go-forward portfolio, and new long-term financial targets for sustained value creation.

Geoffrey Martha: At this event, we intend to provide a comprehensive update for investors on our strategy post-diabetes, the value proposition of our go-forward portfolio, and new long-term financial targets for sustained value creation. To conclude, here's what we want you to take away from today's announcement with Elliott Investment Management. Medtronic is turning the page and will be entering a new period of greater revenue and earnings growth. We've put in place a stronger foundation for the company. Over the last few quarters, we've discussed how we have an incredible product pipeline that is poised to accelerate our organic growth. With our renewed focus on aligning our portfolio and capital allocation for higher growth, as well as enhancing operational excellence, we're putting the pieces together in place to translate that accelerating top line into a period of sustained, outsized earnings growth.

Speaker #2: So, to conclude, here's what we want you to take away from today's announcement with Elliott: Medtronic is turning the page and will be entering a new period of greater revenue and earnings growth.

Speaker #2: We've put in place a stronger foundation for the company. Over the last few quarters, we've discussed how we have an incredible product pipeline that is poised to accelerate our organic growth.

Speaker #2: And now, with our renewed focus on aligning our portfolio and capital allocation for higher growth, as well as enhancing operational excellence, we're putting the pieces together to translate that accelerating top line into a period of sustained, outsized earnings growth.

Speaker #2: We're entering a new phase of our transformation to act more boldly and more decisively to deliver the strategic clarity, growth profile, operational rigor, investment strategy, and shareholder returns that this company is capable of.

Geoffrey Martha: We're entering a new phase of our transformation to act more boldly and more decisively to deliver the strategic clarity, growth profile, operational rigor, investment strategy, and shareholder returns that this company is capable of. As I wrap up, I want to thank the Medtronic employees watching today. We've gone through a lot of change together to better position the company to deliver improved performance. I appreciate that you've accomplished this while also keeping the Medtronic mission front and center. You're striving without reserve for the greatest possible reliability and quality in our products, and you're doing so with dedication, honesty, integrity, and service. Your work is benefiting millions of patients around the world as we alleviate their pain, as we restore their health, and we extend their lives. So thank you.

Speaker #2: And as I wrap up, I want to thank the Medtronic employees watching today. We've gone through a lot of change together to better position the company to deliver improved performance.

Speaker #2: I appreciate that you've accomplished this while also keeping the Medtronic mission front and center. Your striving without reserve for the greatest possible reliability and quality in our products, and your doing so with dedication, honesty, integrity, and service.

Speaker #2: Your work is benefiting millions of patients around the world as we alleviate their pain, restore their health, and extend their lives.

Speaker #2: So thank you.

Speaker #1: Okay, now it's time to move on to Q&A, where we're going to try to get to as many of you analysts as possible. So, we ask that you limit yourself to just one question, and only if needed, a related follow-up.

Geoffrey Martha: Okay, now it's time to move on to Q&A, where we're going to try to get to as many of you analysts as possible. We ask that you limit yourself to just one question and only if needed a related follow-up. If you have additional questions, you can reach out to Ryan Weispfenning and the Investor Relations team after the call. So Ryan, can you please queue up the Q&A instructions?

Speaker #1: If you have additional questions, you can reach out to Ryan and the investor relations team after the call. So, Ryan, can you please queue up the Q&A instructions?

Speaker #3: Sure, Geoff. For the sell-side analysts that would like to ask a question, please select the Participants button and click Raise Hand. If you're using the mobile app, press the More button and select Raise Hand.

Ryan Weispfenning: Sure, Geoff. For the sell-side analysts that would like to ask a question, please select the Participants button and click Raise Hand. If you are using the mobile app, press the More button and select Raise Hand. Your lines are currently on mute, and when called upon, you will receive a request to unmute your line, which you must respond to before asking your question. Finally, please be advised that this Q&A session is being recorded. We will pause for a few seconds now to assemble the queue. Okay, we will take the first question from Travis Steed of B of A Securities. Please go ahead, Travis.

Speaker #3: Your lines are currently on mute, and when called upon, you will receive a request to unmute your line, which you must respond to before asking your question.

Speaker #3: Finally, please be advised that this Q&A session is being recorded. We'll pause for a few seconds now to assemble the queue.

Speaker #1: Okay, we'll take the first question from Travis Steed of BofA Securities. Please go ahead, Travis.

Speaker #4: Hey, thanks for taking the question. I guess, first of all, on the pipeline, you know, I see it's coming through this quarter, CAS, you know, 72% U.S. growth.

Mike Maynard: Hey, thanks for taking the question. I guess, first of all, on the pipeline, I see it is coming through this quarter, Cardiac Ablation Solutions, 72% U.S. growth. Sounds like supply is ramping up nicer there. So love an update on Cardiac Ablation Solutions, but also, it is not showing up in the total U.S. growth. U.S. growth, 3.5% this quarter, 1% structural heart growth. I guess just want to hear your confidence. You talked about being confident in the ability to accelerate growth over FY26, but how do you get confidence in kind of the base business still kind of growing mid-single digits so that the pipeline can kind of be on top of that?

Speaker #4: Sounds like supply is ramping up nicely there, so I'd love an update on CAS. But also, you know, it's not showing up in the total U.S. growth.

Speaker #4: You know, US growth, you know, three and a half percent this quarter, 1% structural heart growth. I guess just want to hear your confidence, like you talked about being confident in the ability to accelerate growth, you know, over FY26, but how do you get confidence in kind of the base business still kind of growing mid-single digits, so the pipeline can kind of be on top of that?

Speaker #1: Sure, yeah, thanks for the question, Travis. You know, look, let me start with just, you know, some context on the quarter. Like I said, another mid-single digit quarter, 4.8% organic revenue growth, coming in, you know, within our guidance of 4.5% to 5%. EPS coming in three cents above the midpoint.

Geoffrey Martha: Sure, yeah, thanks for the question, Travis. Look, let me start with just some context on the quarter. Like I said, we had another mid-single-digit quarter, 4.8% organic revenue growth, coming in within our guns of 4.5% to 5%. EPS coming in $0.03 above the midpoint. To your point, the growth drivers are accelerating. You highlighted Cardiac Ablation Solutions, I will come back to that. We have other ones coming, Symplicity Spyral™ renal denervation system, we talked about the tibial coming in the back half of the year. There are a couple of areas that came in a little below trend, like in neuroscience, for example, pelvic health, neurovascular, and then we will get to diabetes. Demand is strong there, but the U.S. growth came down a bit.

Speaker #1: To your point, the growth drivers are accelerating. You highlighted CAS; I'll come back to that. And we have other ones coming, you know, Ardian. We talked about the tibial coming in the back half of the year.

Speaker #1: You know, but there are a couple of areas that came in a little below trend, you know, like in neuroscience, for example, pelvic health, neurovascular, and then, you know, we'll get to diabetes. Demand is strong there, but the U.S. growth came down a bit.

Speaker #1: So, there are a couple of areas, and I'll turn those over to Thierry in a second, that are going to be kind of bouncing back and accelerating.

Geoffrey Martha: So there are a couple of areas, and I will turn those over to Thierry Pieton in a second, that are going to be kind of bouncing back and accelerating. On the U.S., that will impact the U.S., but also on the U.S. growth, all the new technology that is coming, the continued acceleration in Cardiac Ablation Solutions, Symplicity Spyral™ renal denervation system, like I mentioned, diabetes, pelvic health, plus the rebound of these others, they all will have an outsized impact on the U.S. growth. Thierry, do you want to talk about these?

Speaker #1: And then on the US, and that'll impact the US, but also on the US growth a lot, all the new technology that's coming, you know, the continued acceleration in CAS, Ardian, like I mentioned, diabetes, pelvic health, plus the rebound of these, they're all, will have an outsized impact on the US growth.

Speaker #1: I mean, Thierry, do you want to talk about the?

Speaker #3: Hey, no, I think you hit the main point. As you said, some of the pieces of the business that had relatively slower growth in the first quarter were mostly U.S. impacting. If you take a couple of these examples in pelvic health, you know, we made some changes in the commercial force, as we said in the commentary, to prepare for the launch of tibial.

Thierry Pieton: No, I think you hit the main point. As you said, some of the pieces of the business that had a relatively slower growth in the first quarter were mostly U.S. impacting. If you take a couple of these examples in pelvic health, we made some changes in the commercial force, as we said in the commentary, to prepare for the launch of tibial. That is primarily a U.S. impact, I would say. The second element I would say is diabetes. Diabetes grew very strongly outside of the U.S. We were up 11% in the international market. The U.S. was a bit slower, and that is mostly a product topic. We have the demand for Simplera Sync™ CGM, but the ramp-up is only starting, and that is impacting the U.S. as well. As this ramp-up occurs, we will see those things start kicking in the U.S.

Speaker #3: And that's primarily a U.S. impact, I would say. The second element I would mention is diabetes; diabetes grew very strongly outside of the U.S., with an increase of 11% in the international market.

Speaker #3: The U.S. was a bit slower, and that's mostly a product topic. So we have the demand for Simplera, but the ramp-up is only starting, and that's impacting the U.S. as well.

Speaker #3: And so, as this ramp-up occurs, we'll see those things start kicking in the U.S. and adjust, changing the profile that we mentioned between U.S. and international markets.

Thierry Pieton: and adjusting, changing the profile that we mentioned between U.S. and international markets. So, positive going forward in the U.S.

Speaker #3: So positive going forward in the U.S.

Speaker #1: Yeah, and you know, in CAS, like, you know, we showed in the earnings presentation, that's going to continue to accelerate. As you highlighted, Travis, we're getting the capital systems out there; the utilization is, you know, off the charts high.

Geoffrey Martha: Yeah, and in Cardiac Ablation Solutions, like you know, we showed in the earnings presentation, that is going to continue to accelerate. As you highlighted, Travis, we are getting the capital systems out there. The utilization is, you know, off the charts high. Everyone is, you know, everyone is excited about the catheters we have. They are also, you know, the catheters that are coming, you know, Sphere-9™ focal catheter and the single-shot space. So it is great. I was just in Japan the week before last. I was there for, you know, it is 50 years of Medtronic in Japan. I spent a lot of time with physicians, a lot of conversations on Cardiac Ablation Solutions. And, you know, there, you know, we are the number one market share. Aferra™ mapping system is approved, but not even launched there. This is on PulseSelect™ pulsed field ablation system.

Speaker #1: Everyone's, you know, everyone's excited about the catheters we have. They're also, you know, the catheters that are coming, you know, Sphere 360 and the single shot space.

Speaker #1: So it's great. I was just in Japan the week before last, there for, you know, it's 50 years of Medtronic in Japan. I spent a lot of time with physicians and had a lot of conversations on CAS. And you know, we're the number one in market share.

Speaker #1: And affairs approved, but not even launched there. This is on Pulse Select, and I know our competitor highlighted that they felt they were the number one, talking about how many cases they've done. We've done meaningfully more in Japan, and I know we're the number one there.

Geoffrey Martha: I know our competitor highlighted, you know, that they felt they were the number one, talked about how many cases they have done. We have done meaningfully more in Japan. I know we are the number one there. I asked, you know, what I was probing as to why. They talked about the precision of PulseSelect™ pulsed field ablation system and that, but really the safety profile of our catheters, both the publicized safety of PulseSelect™ pulsed field ablation system, but also Aferra™ mapping system, you know, in our IDE trials. They did their own, the largest centers there in Japan did their own, you know, IDE, their own trials, and that safety profile came through. I think that safety message, obviously, it means a lot in Japan. They really prioritize it.

Speaker #1: And I asked, you know, what I was probing as to why. And, you know, they talked about the precision of Pulse Select and that, but really the safety profile of our catheters, both the publicized safety of Pulse Select, but also Afera. You know, in our ID trials, and then they did their own, the largest centers there in Japan did their own ID, their own trials, and that safety profile came through.

Speaker #1: And I think that safety message, obviously it means a lot in Japan, they really prioritize it, but I think that as PFA grows, and becomes more ubiquitous, I think that's going to, you know, it's going to become a bigger kind of driver here in the US as well, and that plays to our favor.

Geoffrey Martha: I think that as PFA grows and becomes more ubiquitous, I think that is going to, you know, it is going to become a bigger kind of driver here in the US as well. That plays to our favor. So I think Cardiac Ablation Solutions is in a really good spot to continue to accelerate. Not only did it grow year over year, but it accelerated meaningfully sequentially. We saw strong sequential growth in Cardiac Ablation Solutions, especially in Aferra™ mapping system, which was, I think, like near 60% sequential. So, I mean, any way you slice it, our Cardiac Ablation Solutions business, you know, from technology to commercial execution, geographic expansion, safety profile data, physician experience, et cetera, is doing really well.

Speaker #1: I think CAS is in a really good spot to continue to accelerate. Not only did it grow year over year, but it accelerated meaningfully sequentially.

Speaker #1: We saw a strong sequential growth in CAS, especially in Afera, which was, I think, near 60% sequentially. So, I mean, any way you slice it, our CAS business, you know, from technology to commercial execution, geographic expansion, safety profile, data, physician experience, et cetera, is doing really well.

Speaker #3: And, Geoff, as you mentioned, the sequential growth is going to continue, right? And you saw that on the chart. We're going to have both a higher growth rate in Q2 than we did in Q1 in CAS.

Thierry Pieton: As Geoffrey Martha mentioned, the sequential growth is going to continue. You saw that on the chart. We are going to have both a higher growth rate in Q2 than we did in Q1 in Cardiac Ablation Solutions. We are also going to have an absolute value, significant sequential growth between the first quarter and the second quarter.

Speaker #3: And we're also going to have an absolute value significant sequential growth between the first quarter and the second quarter.

Speaker #1: Alright, thanks, Travis. I appreciate the one question. Next, we'll go to Larry Beagleson at Wells Fargo Securities. Larry, please go ahead.

Ryan Weispfenning: All right, thanks, Travis. Appreciate the one question. Next, we will go to Larry Biegelsen at Wells Fargo Securities. Larry, please go ahead.

Speaker #4: It's a new board committee. You know, one focused on growth, one focused on operations. What can these committees do that you couldn't do before?

Speaker 5: New board committees, one focused on growth, one focused on operations. What can these committees do that you couldn't do before? What would success look like? And how long before investors start to see an impact? Thank you.

Speaker #4: You know, what would success look like? And how long before investors start to see an impact? Thank you.

Speaker #1: Yeah, thanks, Larry. Look, the two committees, I think, like I mentioned in the commentary, we got to provide focus to support management. You know, I think particularly like the, there's the two committees: one on growth, one on operational performance. I think, you know, margins, think, continued focus on our supply chain.

Geoffrey Martha: Yeah, thanks, Larry. Look, the two committees, I think, like I mentioned in the comment, they are going to provide focus to support management. I think particularly there are the two committees, one on growth, one on operational performance. Think margins, think continued focus on our supply chain. One thing they are going to do, a couple of things. One, we are bringing on these two new directors with deep medtech experience. That will be a strong voice on the board. I believe we have had medtech experience in the past and recently not as much. Bringing in John Groetelaars and Bill Jellison will help a lot, and they will be on those two committees. The other thing is just the frequency. We have rearranged our committees.

Speaker #1: You know, one thing they're going to do— a couple of things. One, we're bringing on these two new directors with deep medtech experience, you know, that'll be a strong voice on the board.

Speaker #1: You know, I believe we've had Medtech experience in the past, and recently not as much. So bringing in, you know, John and Bill will help a lot, and they'll be on those two committees.

Speaker #1: The other thing is just the frequency. We've rearranged our committees; we didn't just add two committees. We're going to rearrange them so that we keep the same amount of committees, and these will be very focused on those two topics.

Geoffrey Martha: We did not just add two committees. We are going to rearrange them so that we keep the same amount of committees, and these will be very focused on those two topics. The amount of the intervals with management will be higher. It will be, I think, quite a bit higher than we have had in the past. A lot of off-cycle discussions that will help drive this. That is what I think. It is the focus, it is the interval, and it is touch points with management, and I think the medtech voice on those two committees.

Speaker #1: And the amount of the intervals with management will be higher. You know, it'll be, I think, quite a bit higher than we've had in the past. You know, a lot of off-cycle discussions that will help drive this.

Speaker #1: So that’s what I think. You know, it’s the focus, it’s the interval, and it’s of touch points with management. I think the MedTech voice on those two committees.

Speaker #4: Thank you very much.

Ryan Weispfenning: Thank you very much. Thanks, Larry. Next question we will take from Mike Krake at Leron Partners. Mike, please go ahead.

Speaker #1: Thanks, Larry. Next question, we'll take from Mike Cracki at Leering Partners. Mike, please go ahead.

Speaker #5: Hi, hi everyone. Thanks very much for taking our question. Maybe just going back to the CAS business: during your last call, you talked about CAS growth accelerating from 30%. You put up, you know, another great quarter of nearly 50%, expecting that to accelerate again.

Speaker 6: Hi everyone, thanks very much for taking our question. Going back to the Cardiac Ablation Solutions business, during your last call, you talked about Cardiac Ablation Solutions growth accelerating from 30%. You put up another great quarter of nearly 50%, expecting that to accelerate again. I am curious in terms of the ramp that you have seen, is that $2 billion that you have talked about in annual Cardiac Ablation Solutions sales now squarely on the table for Fiscal 2026, or what reservations would you have about committing to that?

Speaker #5: So I'm curious in terms of, you know, the ramp that you've seen is that $2 billion that you've talked about in annual CAS sales, now squarely on the table for fiscal 26, or what reservations would you have about, you know, committing to that?

Speaker #3: Yeah, no, thanks

Geoffrey Martha: Yeah, thanks for the question, Mike. When I said that, we are sticking to that. Nothing has changed. I said it is near term. I think getting it in Fiscal 20, and it is off, just to be clear, it is another billion on top of our FY25 base, right? So that is what we are anchored on, sticking to that. I said near term. So near term, it could be FY26. I think it will go into FY27, but it will not be far. So that is on track. Like I said, accelerating sequentially as well, and things are looking good. So no change there.

Speaker #1: For the question, Mike, you know, when I said that, we're sticking to that; nothing's changed. And I said it's near term, you know, I think getting it in fiscal 2020, and it's off. Just to be clear, it's another billion on top of our FY25 base, right?

Speaker #1: So that's what we're anchored on. Sticking to that, I said near term, so near term, you know, it could be FY26. You know, I think it'll go into FY27, but it won't be far.

Speaker #1: So that's on track, like I said, accelerating. Sequentially as well, and you know, things are looking good. So no change there.

Speaker #5: Got it, thanks very much.

Speaker 6: Got it. Thanks very much.

Speaker #1: Thanks, Mike. We'll take the next question from Robbie Marcus at JP Morgan. Robbie, please go ahead.

Ryan Weispfenning: Thanks, Mike. We will take the next question from Robbie Marcus at JP Morgan. Robbie, please go ahead.

Speaker #6: Oh, great. Thanks a lot for taking the question. I wanted to follow up on Larry's question about the new directors and the formation of the committee.

Speaker 7: Oh, great. Thanks a lot for taking the question. I wanted to follow up on Larry's question on the new directors and the formation of the committee. Geoff, Thierry, maybe you could give us a little more. Besides, you know, more touch points and communication, is this something where maybe the size of the company, the dividend, the capital allocation might, you know, be up for discussion, how to create more EPS growth? I am just trying to understand how much of this is, you know, more a continuation, Geoff, of your strategy since you became CEO? I know you have talked a lot about portfolio optimization versus maybe evaluating something more of a wholesale change. Thanks a lot.

Speaker #6: Geoff, Thierry, maybe you could give us a little more, besides, you know, more touch points and communication. Is this something where maybe the size of the company, the dividend, and the capital allocation might, you know, be up for discussion?

Speaker #6: How do we create more EPS growth? I'm just trying to understand how much of this is, you know, more a continuation of your strategy since you became CEO. I know you've talked a lot about portfolio optimization, versus maybe evaluating something more of a wholesale change.

Speaker #6: Thanks a lot.

Speaker #1: Yeah, look, Robbie, I'd say first of all, I think we're entering, like I said in the call, a new chapter here for the company.

Geoffrey Martha: Yeah, look, Robbie, I would say first of all, I think we are entering, like I said in the call, a new chapter here for the company. When I came in, it was met with a couple of challenges that we had to work our way through, some of our own making, some market like VBP and things like that. We have got a stable foundation. We have worked through that. Our growth drivers are kicking in, and we are going to execute to that, right? You will see this growth inflection in the back half of the year. On top of that, I think we feel confident. Our board feels confident.

Speaker #1: I mean, when I came in, I was met with a couple of challenges that we had to work our way through. Some of those were our own making, and some were market-related, like VVP and things like that.

Speaker #1: You know, we’ve got a stable foundation. We’ve worked through that. Our growth drivers are kicking in, and we're going to execute to that, right?

Speaker #1: And you'll see this growth inflection in the back half of the year. On top of that, I think we feel confident—our board feels confident—and this is something that was in place before we started engaging with Elliott, that we can turn the page to a new chapter and be more aggressive on some of these other drivers, right, that we talked about.

Geoffrey Martha: This is something that was in place before we started engaging with Elliott Investment Management, that we can turn the page to a new chapter and be more aggressive on some of these other drivers, right, that we talked about. These are the same things that Elliott Investment Management has talked to us about, is whether it be, it is all about value creation and some bold decisions around a couple of areas. One is more M&A. The Aferra™ mapping system deal is looking great. Like I said, we feel like the team has the bandwidth to integrate more such deals like that, not necessarily in AFib, but across the company in these high-growth areas. So more M&A, a reinvigorated laser focus on the portfolio to reorient the whole portfolio between M&A and any kind of portfolio moves towards higher growth. So increase our WAMGR.

Speaker #1: And these are the same things that Elliott has talked to us about, whether it be it's all about value creation, and some bold decisions around a couple of areas.

Speaker #1: You know, one is more M&A, okay? You know, the Afera deal is looking great, and like I said, we feel like the team has the bandwidth to integrate more such deals like that.

Speaker #1: Not necessarily in AFib, but you know, across the company, in these high-growth areas, there’s more M&A. You know, a reinvigorated laser focus on the portfolio to reorient the whole portfolio between M&A and any kind of portfolio moves towards higher growth. So, you know, increase our WAMGR. The diabetes deal is a good proof point, but there are other opportunities we can look at here.

Geoffrey Martha: Diabetes deal is a good proof point, but there are other opportunities we can look at here. So that is one big area. The second is investing more in the company. So we have talked about capital allocation within the company, where we are investing our R&D and our G&A, where our growth-oriented G&A, where is that going? But making sure we are investing more in the company. Are we investing enough behind these big growth drivers? We think no, we would want to invest more. You see it in our R&D this quarter growing almost 8%. We would like to keep that trend going, invest more behind these growth drivers because they are secular growth drivers. Talking to Elliott Investment Management, they call them transformational growth drivers that we have not seen in decades. That is their words, not mine.

Speaker #1: So that's one big area. And then the second is investing more in the company. So we've talked about capital allocation within the company, where we're investing our R&D and our G&A, you know, our growth-oriented G&A, where's that going?

Speaker #1: But making sure we're investing more in the company, are we investing enough behind these big growth drivers? We think not; we'd want to invest more.

Speaker #1: You see it in our R&D, this quarter growing almost 8%. You know, we'd like to keep that trend going. Invest more behind these growth drivers, because they're secular growth drivers. Talking to Elliott, they call them transformational growth drivers that we haven't seen in decades.

Speaker #1: That's their words, not mine. So these are the themes: reorienting the portfolio for even higher growth that's durable, and then, you know, reinvesting more behind our growth drivers.

Geoffrey Martha: So these are the themes: reorienting the portfolio for even higher growth that is durable, and then reinvesting more behind our growth drivers. We have got that confidence. We have got the stable operational base to do this. We can work on those things as these other growth drivers that we have been working on for the past couple of years are taking us, accelerating our growth. We can do both of these at once, and these committees are going to help with that. I am super excited to have both John and Bill on the board. We talked about their Medtronic background, but specifically, operators, strong financial acumen, experienced in doing portfolio moves, M&A, and they are just a good fit. They went through our normal process through our nominating corporate governance committee. Everyone felt it was a good fit.

Speaker #1: We've got the confidence; we've got the stable operational base to do this. And we can work on those things as these other growth drivers that we've been working on for the past couple of years are accelerating our growth.

Speaker #1: So we can do both of these at once, and these committees are going to help with that. I'm super excited to have both John and Bill on the board.

Speaker #1: We talked about, you know, their medtech background, but specifically, you know, operators, strong financial acumen, experienced in doing portfolio moves, M&A. And they're just a good fit. You know, they went through our normal process, through our, you know, Nominating Corporate Governance Committee. You know, everyone, it was unanimous that everyone felt it was a good fit.

Speaker #1: We want them; they want us, and I think they're going to do a great job—not just supporting management but also representing all of our shareholders.

Geoffrey Martha: We want them, they want us, and I think they are going to do a great job not just supporting management, but also representing all of our shareholders. That is how I would answer that question, Robbie. It is all about value creation. We are going to do what it takes to get there. There is a big opportunity in front of us, and it is about capitalizing on this opportunity and accelerating it.

Speaker #1: So that's how I'd answer that question, Robbie. It's all about value creation; we're going to do what it takes to get there. It's a big opportunity in front of us, and it's about capitalizing on this opportunity and accelerating it.

Speaker #6: Great, thanks, Geoff. Can't wait to see what comes. I appreciate it.

Ryan Weispfenning: Great. Thanks, Geoff. Can't wait to see what comes. Appreciate it.

Speaker #1: Thanks, Robbie. I appreciate the question. Next, we'll go to the line of Matt Mixic at Barclays. Matt, please go ahead.

Geoffrey Martha: Thanks, Robbie. Appreciate the question.

Ryan Weispfenning: Next, we will go to the line of Matt Mixic at Barclays. Matt, please go ahead.

Speaker #4: Hey, thanks so much for taking the question. And congrats on some of the progress here that you're making in these major growth drivers. And so on that subject, you know, you've been investing in, you know, the groundwork for these major growth drivers now for several years, you know, diabetes, ablation, Ardian, and they're just starting to really come through.

Matt O'brien: Hey, thanks so much for taking the question. Congratulations on some of the progress here that you are making in these major growth drivers. On that subject, you have been investing in the groundwork for these major growth drivers now for several years: diabetes, ablation, RDN. They are just starting to really come through. We get excited. I think everyone gets excited about seeing the growth come through and hearing about rates like 50% growth in cardiac ablation. It would be super helpful if you could try to square, not to temper the enthusiasm, because they are great programs, but try to square what these can mean on an annual basis to sort of overall Medtronic portfolio growth.

Speaker #4: So you know, we get excited. I think everyone gets excited about seeing the growth come through and hearing about rates like 50% growth in cardiac ablation.

Speaker #4: But it'd be super helpful if you could try to square not the temper of the the enthusiasm, because they're great programs, but try to square what these can mean on an annual basis, to sort of overall Medtronic portfolio growth, just because I think the perception becomes we're accelerating growth, which means we're not going to do five, maybe we'll do six percent growth, or something like that, which to take that off the list for the long term, but maybe help us walk through a cadence of, to 25 or 50 basis points, you know, over the next 12 months, is it another 25 or 50 basis points, maybe in 27, just some way of gauging what this means to overall portfolio growth would be super helpful.

Matt O'brien: I think the perception becomes, we are accelerating growth, which means we are not going to do 5%, maybe we will do 6% growth or something like that, which, to take that off the list for the long term, but maybe help us walk through a cadence of, is it 25 or 50 basis points over the next 12 months? Is it another 25 or 50 basis points maybe in 2027? Some way of gauging what this means to overall portfolio growth would be super helpful. Thanks.

Speaker #4: Thanks.

Speaker #1: Okay, Mike, Thierry, do you want to take that one?

Ryan Weispfenning: Okay, Mike. Thierry, do you want to take that one?

Speaker #3: I guess I'll take a shot at it, and Geoff, you can comment. So first, you might have seen in the announcement that we will do an Investor Day sometime in mid-2026 to take you through sort of the next step in our financial profile.

Thierry Pieton: I guess I will take a shot at it, and Geoff, you can comment. First, you might have seen in the announcement that we will do an Investor Day sometime in mid-2026 to take you through the next step in our financial profile. I am not going to give you very specific targets until we get to that point, because that will be the whole purpose of that discussion. When we have that discussion, what we will do is we will show you where the company is going. We will show you the steps to get there, and we will show you what it means from a financial profile perspective, the new framework, financially speaking. We will give you the indicators that you can use to see that we are tracking towards that path.

Speaker #3: So, I'm not going to give you very specific targets until we get to that point, because that'll be the whole purpose of that discussion.

Speaker #3: You know, when we have that discussion, what we'll do is show you where the company is going, we'll show you the steps to get there, and we'll show you what it means from a financial profile perspective—the new sort of framework, financially speaking.

Speaker #3: And we'll give you the indicators that you can use to see that we're tracking towards that path. That being said, you know, to be a little more short term, look, you know, Geoff mentioned the magnitude of the opportunity that we've got in CAS.

Thierry Pieton: That being said, to be a little more short term, look, Geoff mentioned the magnitude of the opportunity that we have got in Cardiac Ablation Solutions. We are talking $1 billion of incremental revenue over the 2025 run rate within a relatively short timeframe. You can see the type of impact we are going to have there. On Symplicity Spyral™ renal denervation system, it is also a secular change for us and a massive transformation in terms of run rate, and you can see the size of the opportunity that this represents. These two things alone are going to have a pretty significant impact on our growth rates. Then, Geoff mentioned all the other elements such as tibial and Hugo™ robotic-assisted surgery system that are going to kick in, et cetera. It is very clear that we are talking macro-level impacts, growth opportunities.

Speaker #3: So, we're talking $1 billion of incremental revenue over the 25 run rate, within a relatively short timeframe, right? So you could see the type of impact we're going to have there.

Speaker #3: On Ardian, it's also a secular change for us, a massive transformation in terms of run rate, and you could see the size of the opportunity that this represents.

Speaker #3: So, these two things alone are going to have a pretty significant impact on our growth rates. And then, you know, Geoff mentioned all the other elements, such as Tibial and Hugo, that are going to kick in, et cetera.

Speaker #3: So it's very clear that we're talking macro-level impacts, growth opportunities, and to be clear, we're not giving up on the rest of the business, right?

Thierry Pieton: To be clear, we are not giving up on the rest of the business. We have made the underlying changes to make them run smoother. We are addressing with product and innovation some of the businesses that have been slower growth businesses or franchises for us in the past. You should see these large opportunities as being incremental, and that is what we are targeting. For the exact quantification, I am afraid you are going to have to wait a little bit. You will start seeing the signs in the second half, and then we will show the new framework when we talk to you in the mid of 2026.

Speaker #3: So we've made the underlying changes to make them run smoother. We're addressing with Product and Innovation some of the businesses that have been slower growth businesses or franchises for us in the past. So you should see these large opportunities as being incremental, and that's what we're targeting.

Speaker #3: For the exact quantification, I'm afraid you're going to have to wait a little bit. You'll start seeing the signs in the second half, and then we'll show the new framework when we talk to you in the middle of 2026.

Speaker #1: Yeah, no, the only thing I'd add to that is, look, you know, why now? We've got this new growth coming, right? You know, this inflection in the back half of the year, and very tangible new product innovation coming, and even from like this quarter. And you have some businesses that were growing below trend that also have nice products coming, or lapping an issue like VVP and neurovascular, that also contributes.

Geoffrey Martha: Yeah, the only thing I would add to that is, look, why now? We have this new growth coming, right? This inflection in the back half of the year and very tangible new product innovation coming. Even from this quarter, you have some businesses that were growing below trend that also have nice products coming or lapping an issue like BBP and neurovascular that also contributes. It leads to a nice back half growth that will continue. That higher growth allows us, gives us more just through some natural leverage and our cost control, our operational efficiencies. It gives us more oxygen to reinvest, which allows us to do more innovations. There was that chart of that cycle, and the only thing I think is missing from there is portfolio, right?

Speaker #1: It leads to a nice back half growth that will continue, and that higher growth allows us, gives us more just through some natural leverage and our cost control in our operational efficiencies, it gives us more oxygen to reinvest, which allows us to do more innovations.

Speaker #1: There was that chart of that cycle, and the only thing I think is missing from there is portfolio, right? So more growth leads to more oxygen, which leads to more investment, which leads to more innovation and more growth, and then you've got the portfolio in there.

Geoffrey Martha: So more growth leads to more oxygen, which leads to more investment, which leads to more innovation and more growth. Then you have the portfolio in there. So I do think it creates opportunities for a different algorithm here. But that's something we're not going to really talk too much about until we get to that Investor Day. I would like to think there will be some milestones along the way, but the broader strategy and algorithm, all that we will talk about on that Investor Day.

Speaker #1: So, I do think it creates opportunities for a different algorithm here, but that's something we're not going to really talk too much about until we get to that investor day.

Speaker #1: You know, I'd like to think there'll be some milestones along the way. But, you know, the broader strategy and algorithm—all that—we'll talk about on that investor day.

Speaker #3: If I can just add one comment, Geoff, on that: you know, we're talking about reinvesting more, but I want to be clear that we're not talking about reinvesting to the detriment of EPS, right?

Thierry Pieton: If I can just add one comment, Geoff, on that. We are talking about reinvesting more, but I want to be clear that we are not talking reinvesting to the detriment of EPS. So we are very clear on the fact that the growth will allow us to invest more while continuing to generate leverage in the income statement and improving EPS. I just want to be clear about that.

Speaker #3: So, it has to be "and." We're very clear on the fact that the growth will allow us to invest more while continuing to generate leverage in the income statement and improving EPS, right?

Speaker #3: I just want to be clear about that.

Speaker #1: Yeah, good point. Okay, thanks, Matt. Next, we'll go to the line of Anthony Petron at Mizuho. Anthony, please go ahead.

Geoffrey Martha: Good point.

Ryan Weispfenning: Okay, thanks, Matt. Next, we will go to the line of Anthony Petrone at Mizuho. Anthony, please go ahead.

Speaker #6: Great, and congratulations on the announcements. This morning, and maybe I'll zone in on one of the growth initiatives, which is renal denervation. We're looking at the targeted date of October 8th for the NCD, so maybe just frame for us what you would view as the best case outcome in terms of the targeted population and uncontrolled hypertension. When you sort of think about this new structure and growth initiatives, you know, where would you stack rank renal denervation on transforming the growth profile of this company? You know, can this be a multi-billion dollar product category over the next few years?

Anthony Petrone: Great, and congratulations on the announcements this morning. Maybe I'll zone in on one of the growth initiatives, which is renal denervation. We're looking at the targeted date of October 8th for the NCD. So, maybe just frame for us what you would view as the best case outcome in terms of the targeted population and uncontrolled hypertension. When you sort of think about this new structure, growth initiatives, where would you stack rank renal denervation on transforming the growth profile of this company? Can this be a multi-billion dollar product category over the next few years? Thanks.

Speaker #6: Thanks.

Speaker #1: Yeah, thanks for the question, Anthony. Look, you know, first of all, let's, you know, there was a update on Ardian this quarter, which I don't think we talked about, we didn't talk about in the commentary, but we did get through the comment period, that 30-day comment period ended with CMS, and there was a, I think a record, I'm told from our reimbursement folks, a record number of comments.

Geoffrey Martha: Yeah, thanks for the question, Anthony. Look, first of all, let's, there was an update on RDN this quarter, which I don't think we talked about. We didn't talk about in the commentary, but we did get through the comment period. That 30-day comment period ended with CMS, and there was a, I think, a record, I'm told, from our reimbursement folks, a record number of comments, overwhelmingly positive in support of RDN and the guideline and the kind of the CMS, how they framed reimbursement and what's required. That, like we said in our last call, is kind of a best, you know, it's a very good case for us that opens up this market.

Speaker #1: Overwhelmingly positive. And supportive of Ardian, and the guideline, and the kind of the CMS, how they framed reimbursement, and what's required, and that, like we said in our last call, is kind of the best, you know, is a very good case for us.

Speaker #1: That opens up this market. In addition to that, you're seeing physician societies— we already saw it in Europe a few months ago, now in the U.S.— incorporating renal denervation in our, you know, I guess they're saying our product name here, Simplicity. You can hear a lot more about that, into the care pathway.

Geoffrey Martha: In addition to that, you're seeing physician societies, we already saw it in Europe a few months ago, now in the US, incorporating renal denervation, you know, I guess I started saying our product name here, Symplicity. You're going to hear a lot more about that, into the care pathway. So all these puzzle pieces that we've been working on for so long, breakthrough FDA device designation, you know, a nice indication for this. The CMS proposed reimbursement, the comments, now you're seeing the physician societies incorporate Symplicity into, you know, the care pathways, how you take care of these patients. Strong demand from hospitals to say, okay, we need to get serious about this. How do we, we need to build these care pathways. We've put out, we've deployed a lot of market development specialists to support them in this.

Speaker #1: So all these puzzle pieces that we've been working on for so long: breakthrough FDA device designation, a nice indication for this, the CMS proposed reimbursement, the comments. Now you're seeing the physician societies incorporate Simplicity into the care pathways for how you take care of these patients.

Speaker #1: Strong demand from hospitals to say, "Okay, we need to get serious about this. How do we need to build these care pathways?" We've deployed a lot of market development specialists to support them in this, training of the physicians. Although that's not a huge burden, for a lot of the interventional cardiology community, this is not a big stretch for them.

Geoffrey Martha: Training of the physicians, although that's not a huge burden, a lot of interventional cardiology, the interventional cardiology community, this is not a big stretch for them. So that's not a huge burden, like something completely, you know, new. They got the catheter skills. All the dominoes are falling, the puzzle piece is snapping into place that this is going to be a massive market. Now, you know, we're looking at CAS right now. It's very tangible. You see the transition from, you know, from drugs to ablation, and within ablation from one technology over PFA, and we've got a great technology there. It's growing like crazy. It's very tangible. I still think RDN has a chance to even be bigger. The patient population is massive.

Speaker #1: So that's not a huge burden, like something completely new. They got the catheter skills, and so all the dominoes are falling, the puzzle pieces snapping into place, that this is going to be a massive market.

Speaker #1: Now, you know, we're looking at CAS right now. It's very tangible; you see the transition from drugs to ablation, and within ablation, from one technology to PFA. We've got a great technology there, and it's growing like crazy. It's very tangible. I still think Ardian has a chance to even be bigger.

Speaker #1: The patient population is massive. You know, we've talked about how many hundred million people in the U.S.—you know, 100 to 200 million people in the U.S. have hypertension. And of those, is that right, about 100 million?

Geoffrey Martha: You know, we've talked about how many hundred million people in the US, you know, 100 to 200 people, a million people in the US that have hypertension, and of those, is that right, about 100 million?

Speaker #1: I got a lot of numbers.

Thierry Pieton: Yeah, a lot of them.

Geoffrey Martha: A million in eight, I will chime in, Geoff, 18 million that are uncontrolled hypertension. It is a massive population. One in four people with hypertension have, you know, it is a huge number that is uncontrolled. We think this is going to be, could be the biggest thing that we ever do. This is one of those areas that we talked about is investing behind this to really make this market, you know, develop and grow and be a driver for us and create a moat around our franchise, our Symplicity Spyral™ renal denervation system franchise, to protect it against competitors. We have, you know, already our next generation of catheters ready to go. We have new clinical trials, ablating different places that we think, you know, in the early work, meaningfully helps the blood pressure reduction.

Speaker #3: I'll chime in, Geoff.

Speaker #1: 18 million that are uncontrolled hypertension, and so it's a massive population. And one in four people with hypertension have it's a huge number that's uncontrolled, and so we think this is going to be a, could be the biggest thing that we ever do, and this is one of those areas that we talked about is investing behind this.

Speaker #1: To really make this market develop and grow, and be a driver for us, and create a moat around our Simplicity franchise to protect it against competitors.

Speaker #1: We've got, you know, already our next generation of catheters ready to go. We've got new clinical trials, ablating different places that we think, you know, in the early work, meaningfully helps with blood pressure reduction. So, there's a lot of work going on here, and I'm just really pleased with the way it's all coming together.

Geoffrey Martha: There is a lot of work going on here and just really pleased with the way it is all coming together.

Speaker #1: Anything else you'd like to add? Great, thanks, Anthony. Next, we'll go to the line of Josh Jennings at TD Securities. Josh, please go ahead.

Ryan Weispfenning: Great, thanks, Anthony. Next, we will go to the line of Josh Jennings at TD Securities. Josh, please go ahead.

Speaker #7: Hi, good morning. Thanks for taking the question. I'm going to change that picture, update it—sorry about that. I wanted to just check back in, with the increased focus on the diabetes franchise with the IPO split-separation strategy.

Josh Jennings: Hi, good morning. Thanks for taking the question. I am going to change that picture, update it. Sorry about that. I wanted to just check back in with the increased focus on the diabetes franchise with the IPO split separation strategy. Just in the U.S., it sounds like that the slowdown may have been driven by just patients and physicians waiting for next-generation CGM and Instinct to collaboration with Abbott. Multi-part question, but just first, just wanted to check and make sure there had not been disruption that is leading to a slowdown. Then second, just to set expectations in terms of how we on the sell-side investors should be thinking about the ramp from here in that U.S. diabetes business. Lastly, just what is left for the approval and launch of Instinct and the integration with 780G. Sorry, three-parter there, but I hope you got all that.

Speaker #7: Just in the U.S., it sounds like the slowdown may have been driven by just patients and physicians waiting for next-generation CGM and the instinct to collaborate with Abbott.

Speaker #7: Multi-part question, but just first, I wanted to check and make sure there hadn't been disruption that's leading to a slowdown. And then, just to set expectations in terms of how we on the sell-side investors should be thinking about the ramp from here in that U.S. diabetes business.

Speaker #7: And then lastly, just what's left for the approval and launch of Instinct in the integration with 780G? Sorry, three-parter there, but I hope you got all that.

Speaker #1: Okay, we'll wait for the three-parter, you know, and change the picture if you want. But why don't I do two things here? I'll have Thierry update you just on, you know, the deal; you know it is on track, and let him talk about that, and I will bring Q on to talk about the business specifics.

Geoffrey Martha: Okay, we will answer the three-parter and change the picture if you want. Why do not I do two things here? I will have Thierry Pieton update you just on the deal. It is on track and let him talk about that. We will bring Que Dallara on to talk about the business specifics. Thierry, do you want to update us on the deal?

Speaker #1: So, Thierry, do you want to update us on the deal?

Speaker #3: Just on the deal, I would say the process is perfectly on track. So, you know, there's really two sides. One is the operational separation of the business, and the other is the transaction itself on both fronts.

Thierry Pieton: Just on the deal, I would say the process is perfectly on track. There is really two sides. One is the operational separation of the business and the other is the transaction itself. On both fronts, the teams are making progress exactly in the way we anticipated. The first investor engagements have been very, very encouraging. Look, we said three months ago we thought we would complete the separation within 18 months. It is three months later, now it feels like 15 months. So everything on track. That is all I would say on this front, Geoff.

Speaker #3: The teams are making progress exactly in the way we anticipated. You know, the first investor engagements have been very, very encouraging. So, look, we said three months ago we thought we'd complete the separation within 18 months. It's three months later, and now it feels like 15 months.

Speaker #3: So everything is on track; that's all I would say on this front, Geoff.

Speaker #1: Okay, you know, Q, do you want to answer the business questions that Josh had?

Geoffrey Martha: Q, do you want to answer the business questions that Josh had?

Speaker #8: Yeah. Yes, Josh, thanks. Josh, I think you got it right. It's really a matter of timing in the first half. We're really excited about Simplera, and you can see that we're achieving double-digit growth in the international markets with Simplera having been launched.

Que Dallara: Yes, yes, Geoff, thanks. Josh, I think you got it right. It is really a matter of timing in the first half. We are really excited about Simplera Sync™ CGM, and you can see that we are achieving double-digit growth in the international markets where Simplera Sync™ CGM has been launched. In the US, the demand is absolutely there. So we have this dynamic where patients are waiting for the new CGMs. To give you a sense of how we are ramping up production, we are going to be producing double what we made in Q1 and in the second half, double what we are making in the first half. So production is ramping up really nicely. In parallel to that, the Abbott-based sensor Instinct™, we expect to launch in the coming months, not too far behind Simplera Sync™ CGM.

Speaker #8: And in the U.S., the demand is absolutely there. So we have this dynamic where patients are waiting for the new CGMs. To give you a sense of how we're ramping up production, we're going to be producing double what we made in Q1, and in the second half, double what we're making in the first half.

Speaker #8: So, production is ramping up really nicely. In parallel to that, the Abbott-based sensor instinct is expected to launch in the coming months, so it is not too far behind Simplera.

Speaker #8: And you know, to put it in context, it's actually a very big moment for us because we're now going to have two competitive sensors on the market, giving patients choice, significant improvements in form factor, and days of wear. So really, it's a matter of timing, and why I'm actually extremely confident that we'll see growth acceleration in the second half.

Que Dallara: To put it in context, it is actually a very big moment for us because we are now going to have two competitive sensors on the market, giving patients choice, significant improvements in form factor, and days of wear. So really, it is a matter of timing and why I am actually extremely confident that we will see growth acceleration in the second half. You asked about what is left to get Instinct™ over the line. We told you that we submitted for ACE and IAGC back in April. We got ACE approved in July. Our expectation is that we will be in a very strong position to launch in the coming months.

Speaker #8: And then you asked about, you know, what's left to get Instinct over the line. We told you that we submitted for ACE and IAGC back in April. We got ACE approved in July, and so our expectation is that we'll be in a very, very strong position to launch in the coming months.

Speaker #1: Yeah, look, I’d summarize it. There’s a, however you want to phrase it, a super cycle of innovation here that diabetes has. It’s on the very front end of, and we think this transaction’s going to be a value-creating, significant value-creating event for shareholders. But in the meantime, you know, we still, Medtronic is the owner of this company for, you know, a year plus, and we’re very focused on it.

Geoffrey Martha: Yeah, look, I would summarize it. There is, however you want to phrase it, a super cycle of innovation here that diabetes has. It is on the very front end of, and we think this transaction is going to be a value creating, a significant value creating event for shareholders. But meantime, you know, we still, Medtronic is the owner of this company for, you know, a year plus, and we are very focused on it. This is an important part of the company, and you know, we are committed to making this, this, this, this capitalize on this cycle of innovation that we have been building towards and making this transaction a meaningful value creator for investors.

Speaker #1: This is an important part of the company, and you know, we're committed to capitalizing on this cycle of innovation that we've been building towards, and making this transaction a meaningful value creator for investors.

Speaker #1: Great, thanks, Josh. We'll take two more questions here before we wrap up, so we'll go to the line of Matt O'Brien at Piper Sandler.

Ryan Weispfenning: Great, thanks, Josh. We will take two more questions here before we wrap up. We will go to the line of Matt O'Brien at Piper Sandler. Matt, please go ahead.

Speaker #1: Matt, please go ahead.

Speaker #4: Morning, thanks for taking the question. I'd love to ask a little more about Ardian, but I think the other thing to think about here is the overall business. As you spin off diabetes, you've got half the business that's doing really well, growing very quickly, but another half that's, you know, a little softer, not growing quite as quickly—maybe some structural headwinds.

Matt O'brien: Morning, thanks for taking the question. I would love to ask a little more about RDN, but I think the other thing to think about here is the overall business as you spin off diabetes. You have half the business that is doing really well, growing very quickly, but another half that is a little softer, not growing quite as quickly, maybe some structural headwinds. You do have a couple new products in tibial and robotics that may be able to help kind of some of these softer areas, but are there other products on the organic side of things that can help kind of bring some of these softer businesses up to the other half of the business that is doing so well, or do we need to wait for more inorganic additions to really help with that side of the business, maybe post the Elliott Investment Management contributions?

Speaker #4: You do have a couple of new products in tibial and robotics that may be able to help with some of these softer areas, but are there other products on the organic side of things that can help bring some of these softer businesses up to, you know, the other half of the business that's doing so well? Or do we need to wait for more inorganic additions to really help with that side of the business?

Speaker #4: You know, maybe post the Elliott contributions. Thanks so much.

Matt O'brien: Thanks so much.

Speaker #1: Yeah, thanks, Matt. No, look, the short answer to your question is some of the businesses that came in below trend or lower growth in the portfolio have very specific growth accelerators that are already organic.

Geoffrey Martha: Yeah, thanks, Matt. No, look, the short answer to your question is some of the businesses that came in, you know, below trend or lower growth in the portfolio, they have very specific growth accelerators already, you know, organic. We talked about neurovascular, for example. That has been a good grower for us in the past, and it has to get through a major, you know, probably the biggest VBP impact we have had on any one business. Neurovascular for us is huge in China. That is, we have got to, we are moving through that. Also at a recall, you know, which we are, you know, not technically lapping that, but the replacement product now is ramping up. So that is going to accelerate.

Speaker #1: We talked about neurovascular; for example, that's been a good grower for us in the past. And it has to get through the major, probably the biggest VVP impact we've had on any one business. Neurovascular for us is huge in China.

Speaker #1: And so that is, we've got to, we're moving through that. And also at a recall, you know, which we're, you know, not technically lapping that, but the replacement product now is ramping up, so that's going to accelerate.

Speaker #1: And then I mentioned, you know, through the Contigo partnership, some products that we'll be putting in our neurovascular and our peripheral vascular bag will come to PV in a second.

Geoffrey Martha: Then I mentioned, you know, through the Contigo partnership, some products that we will be putting in our neurovascular and our peripheral vascular bag. I will come to PV in a second. That will help with its growth. Then finally, we have got some hemorrhagic products in neurovascular. So neurovascular, you are going to see a meaningful acceleration. We talked about pelvic health, and I think this is an underappreciated one. This overactive bladder is an under, it is a huge market. It is millions of patients.

Speaker #1: That will help with its growth, and then finally we've got some hemorrhagic products in neurovascular. So, in neurovascular, you're going to see a meaningful acceleration.

Speaker #1: We talked about pelvic health, and I think this is an underappreciated one. This overactive bladder is an under, it's a huge market, it's millions of patients, and you know, the idea of going from basically an implantable device in your upper buttocks, the sacral nerve modulation, to something that's above your fascia on the ankle, it's not quite a wearable, but it's pretty close to a wearable.

Geoffrey Martha: You know, the idea of going from basically an implantable device in your upper buttocks, the sacral nerve modulation, to something that is above your fascia on the ankle, it is not quite a wearable, but it is pretty close to a wearable, is really, you know, is really going to open up that market. We will take market share, which will be fun, but the bigger thing, we are going to grow this market like crazy. So that is another one. You know, neuroscience is, over the years, been a consistent performer for us, and it is very well positioned competitively, and it will be that way. I think these two will help accelerate it. Peripheral vascular as well. Again, the Contigo Transactin, we will put those carotid stenting products in their bag. They have some other organic products coming in aspiration, Liberant.

Speaker #1: Is really, you know, is really going to open up that market. We'll take market share, which will be fun, but the bigger thing is we're going to grow this market like crazy.

Speaker #1: So that's another one, and you know, neuroscience is over the years been a consistent performer for us, and it's very well positioned competitively, and it will be that way and I think these two will help accelerate it.

Speaker #1: Peripheral vascular as well. Again, the Contigo transaction—we'll put those carotid stenting products in their bag. They have some other organic products coming in aspiration, Liverant, and there's another example as well.

Geoffrey Martha: So there is another example as well. Those are some of the floor. Then we talked to you about diabetes, you know. Then our, you know, the other two things are big, you know, look, we have talked about there, are those headwinds, they are stable, but consistent headwinds that we are dealing with there. Then in our other two big franchises, Spine and CRM, we are in great shape. You know, Spine had a mid-single-digit revenue overall, and it was like 4.5%. I think we had over 8% in capital worldwide. I know our competitor, you know.

Speaker #1: Those are some of the slower, and then we talked to you about diabetes. You know, and then our, you know, the other two things are big. You know, look, we, what we've talked about, there are those headwinds—there are stable but consistent headwinds that we're dealing with there.

Speaker #1: And then in our other two big franchises, Spine and CRM, we're in great shape. You know, Spine had a mid-single digit revenue overall, and it was like 4.5%; I think we had over 8% in capital worldwide.

Speaker #1: I know our competitor, you know, said something about their capital was lower, a little lower or a lot lower. And there were concerns about capital in that area.

Ryan Weispfenning: Since their capital was lower, a little lower or a lot lower, and there were concerns about capital in that area. Our capital has grown like crazy, globally over 8%, 13% in large capital. We got a motor on that spine business that is going to be durable. Cardiac rhythm, it had some tougher comps to deal with, but there is a lot of innovation there. Aurora EV-ICD™ system growing. First of all, leadless pacing is still growing over 14% this quarter. It is over a decade and still growing in the teens, even with competition, 14% this last quarter. You have Aurora EV-ICD™ system growing over 80%. Our conduction system pacing lead was 20 some percent, 21%, I think. We have got a new high power conduction system lead coming, OmniSecure. I think that business is in a great shape.

Speaker #1: No, our capital is growing like crazy. You know, globally over 8%, 13% in large capital. We got a motor on that Spine business that's going to be durable, and then Cardiac Rhythm, you know, it had some tougher comps to deal with, but there's a lot of innovation there.

Speaker #1: EVICD is growing well. First of all, Leadless is still growing over 14% this quarter. It's been over a decade, and it's still growing in the teams.

Speaker #1: Even with competition, we achieved 14% growth this last quarter. You know, we've got EVICD growing over 80%, and then our conduction system pacing lead was up about 21%, I think. Additionally, we've got a new high-power conduction system lead coming, OmniSecure.

Ryan Weispfenning: You look around the portfolio, you see major growth drivers and you see some, I will call them singles or doubles coming in some of these lower growth businesses, except for pelvic health. That is more than a single or that is a big one that are going to get the rest of the company up and really support this back half ramp and keep it durable. Did I miss anything?

Geoffrey Martha: No, I think that was very comprehensive.

Ryan Weispfenning: Yeah. Thanks, Matt. Yeah.

Geoffrey Martha: Thanks, Matt. We will take one more question. We will go to the line of Joanne Wench at Citi. Joanne, please go ahead with your question.

Thierry Pieton: Thank you, and good morning. I like the new background look. At SRS earlier this summer, Hugo™ had a really significant showcasing. I am curious, what are your thoughts on what you have learned in the European market and how that could translate to when it comes into the US market? I am also curious if you can give us any sort of metrics on revenue, robots placed, anything that sort of helps ground us to the progress that is being made in that segment. Thank you.

Geoffrey Martha: Thanks, Drew. I think we will call Mike Maynard to answer those questions, but I will start by saying, you know, Hugo continues to make progress. This is an important program for us. We are counting on it being one of our growth drivers, particularly when it gets into the U.S. We talked about in the back half of the year, but I will turn it over to Mike to answer those specific questions. Mike?

Mike Maynard: Thanks, Jeff, and thanks, Joanne. So, maybe first ask the answer to the questions around what we have learned in the international markets. I think importantly, we have learned that we have a form factor that has been received very well, particularly the open console, the modular design, which is now really starting to play out in a very meaningful way in general surgery. We are seeing that general surgery applications are really a place where the modularity of this system really shines because you can take a true lap-like approach. We are learning that partnership really matters. We are not really selling, we are selling robots and the performance of the robot obviously is critically important, but we are really building partnerships.

Mike Maynard: So, training, education, how we surround the robot, how we come to customers as a full surgical business, these are all critical lessons that we have learned so far and also lessons that we are borrowing from our spine business, which I think Jeff just talked through, that there is really a whole ecosystem play here that we are thinking about as we come to the U.S. market. From a performance perspective, we are now in over 30 countries in markets around the globe. We have logged tens of thousands of procedures and we are seeing significant double-digit growth in our current accounts on a year-on-year basis. So, very good progress there. We are tracking that momentum very carefully because how those accounts perform on a year-on-year basis obviously is a good indicator for what we should expect moving forward.

Mike Maynard: As you know, we have filed and as you talked about at SRS, Joanne, I think you were there, we filed for FDA approval for our urology study, our urology indication rather, here this year. We are progressing well in talks with FDA. We are preparing to launch or rather submit hernia and GYN shortly thereafter. Those are all submitted by very large data sets that we are presenting at major conferences. So, we presented urology at AUA, a very large data set at the European Urology Society, GYN data at SRS. We are presenting the hernia enable hernia, which will be the data to support our U.S. approval at the American Hernia Society here coming up in September.

Mike Maynard: We are taking a very, sort of forward-leaning public approach to really displaying the safety and efficacy of the system so that customers and the community can see what that looks like. We are shortly preparing to enroll our first patient in our GYN-ONC study so that we can pursue that indication as well. There is a whole series of progress that is being made here in addition to our digital ecosystem, which grew significantly last year, both in lap and robotics, including in competitive systems. It is poised to more than double again this year. I think Geoff Martha said it, we are making very good progress. We have seen now the performance of the system. We have learned from that. We have seen how critical it is to really come in as full partners.

Mike Maynard: We are expanding the number of countries and significantly increasing the number of procedures on a quarter-by-quarter basis. Thanks for the question.

Geoffrey Martha: Okay, thank you, Mike, and thanks, Joanne, for the question. I think we're going to bring the call to a close here. First, I want to thank all the analysts for their questions and all the support. Thank you for joining us today. I'd like to announce our next, our Q2 earnings call is going to be broadcast the week of Thanksgiving, actually, Tuesday, November 18th.

Ryan Weispfenning: The week before.

Geoffrey Martha: The week before, I'm sorry, the week before Thanksgiving, Tuesday, November 18th. That is the week before Thanksgiving. We will update you on our progress. With that, I will bring the call to the close. Thanks for joining us and have a great day.