Ryan Weispfenning, Vice President and Head of Medtronic Investor Relations, welcomes viewers to the Fiscal 2025 First Quarter Video Earnings Webcast. He introduces the CEO and CFO who will provide comments on the first quarter results and outlook for the rest of the fiscal year. The Executive VPs from each segment will also join for a Q&A session. The company has issued a press release and posted an earnings presentation with financial information. Forward-looking statements may be made during the program and comparisons are made on a year-over-year and organic basis.

The paragraph discusses the financial results of Medtronic's first fiscal quarter, highlighting their mid-single-digit revenue growth and increase in adjusted EPS. The company's underlying markets are healthy and they continue to invest in their pipeline for future growth. They are also focused on driving scale and making progress on portfolio management. Overall, the company is confident in their ability to deliver strong returns for shareholders.

In the highest grossing businesses, there was an 8% growth and they made up 21% of the revenue. The company expects their contribution to continue increasing as they launch new technology. The PulseSelect PFA catheters have been successful with over 10,000 patients treated by 550 physicians in 20 countries. The company is increasing manufacturing capacity and expanding into new accounts to meet market demand. The Sphere-9 focal catheter, which can perform high-density mapping and ablations, is in limited launch in Europe and has been submitted for FDA approval. The company expects this technology to accelerate their overall growth and capture more revenue per procedure.

In Structural Heart, the company has achieved high single-digit growth excluding the impact of the Harmony Pulmonary Valve. They have launched the Evolut FX plus TAVR valve, which allows for easier coronary access and reaffirms their positive SMART trial results. The company is also investing in building a foundation for future growth in Surgical Robotics and has achieved targeted enrollment for the EXPAND EURO trial. In Diabetes, the company had a strong quarter with double-digit growth in both the US and international markets, driven by the launch of the MiniMed 780G AID system and high CGM attachment.

The company has received positive feedback on its Simplera Sync sensor in international markets and remains confident in its CGM pipeline. They have recently announced a global partnership with Abbott to bring an integrated CGM to market. In the hypertension space, the company is working to secure reimbursement for its simplicity blood pressure procedure, which has the potential to improve public health and reduce healthcare costs.

The company's Neuromodulation business saw significant growth this quarter, thanks to investments in sensing technology and closed-loop devices. The Pain Stim division grew 11% with the launch of their closed-loop spinal cord stimulator, which automatically adjusts stimulation without patient interaction. The Brain Modulation division also saw growth of 14% with the launch of Percept RC, which captures and records brain signals for personalized therapy. The company also received FDA approval for DBS surgery while the patient is asleep, demonstrating their leadership in this field. Their established market leaders, which make up half of their revenue, also saw steady growth and contribute significantly to their profits and cash flow.

In the Cardiac Rhythm Management division, there was high single-digit growth in Defibrillation Solutions and low double-digit growth in cardiac pacing therapies. The Micro leadless pacemaker franchise grew over 20%. In Surgical, there was low-single digit growth due to difficult comparisons from back order fulfillment and a slowdown in the Korean market. However, the division is expected to return to more normalized growth in the second half of the fiscal year. In Cranial and Spine Technologies, there was mid-single digit growth, with the spine business outperforming the market due to the success of the AiBLE ecosystem. Gary Corona, the Interim Chief Financial Officer, has taken over for Karen Parkhill and has been instrumental in enhancing the company's capabilities and achieving beats and raises.

The speaker is excited to take on their new role and lead the global finance team at Medtronic. They thank the company for their support and express their eagerness to work with the leadership team to achieve financial goals. The company had a strong first quarter with revenue and EPS exceeding expectations. Growth was seen in all areas, particularly in the cardiovascular portfolio and in the US and international markets. While the gross margin declined slightly due to currency impact, the company is making progress in improving margins through pricing and cost-saving measures. The operating margin was in line with expectations and showed improvement on a constant currency basis.

The company's philosophy on capital allocation remains the same, balancing investments for future growth with returning capital to shareholders. They have seen a value opportunity in their shares and have allocated more capital to share repurchases. Guidance for fiscal 2025 has been raised, with expected organic revenue growth of 4.5% to 5% and EPS guidance of $5.42 to $5.50. For the second quarter, they expect mid-single digit revenue growth and EPS of $1.24 to $1.26. Currency will have an unfavorable impact on revenue, but less of an impact on margins and bottom-line after the second quarter.

The company's fiscal year '25 guidance includes a 5% negative impact from foreign currency, but they are focused on driving top-line growth and restoring earnings. The CEO highlights changes made to improve performance, such as allocating capital to high-growth markets and investing in new product cycles. The company has also worked on strengthening its foundation, improving operations, and investing in digital capabilities. They are playing more offense, building capacity, and looking for M&A opportunities. A performance-driven mindset and incentive structure have been integrated.

In the paragraph, the speaker discusses the positive changes and growth that have taken place at Medtronic. They credit this success to changes in leadership and a mission-driven culture. The speaker also thanks their employees for embracing these changes and looks forward to the future of the company. They then open the floor for questions and introduce other members of the team. The first question is about the company's strong organic execution and how it relates to their annual guidance.

The company's performance in the first quarter was broad-based and sustainable, with no one-offs driving the results. The growth was driven by new technology in neuromod and consistent market growth in Structural Heart. Two businesses, Diabetes and Neuromod, had particularly strong performances, but it is uncertain if they can sustain that level throughout the year.

The company had a strong quarter, particularly in CRM, and is not relying on continued growth in that sector. They have a lot of new products in the early stages and are confident in their fundamentals. The new CFO addressed a question about guidance and explained that the EPS guidance includes a share repurchase, and that the strong revenue growth and gross margins contributed to the positive results.

The company had a good quarter with some moving pieces, resulting in a net gain of $0.01. They expect similar leverage in the first half and second half of the year, with a stronger fourth quarter. They also discussed their strategy for Diabetes, stating that their partnership with Abbott does not change their overall strategy and that AID provides better outcomes than CGM or MDI alone.

The speaker discusses their company's commitment to their AID system and their belief in its benefits. They have found a way to expand access to a broader installed base and have had successful launches in Europe. They are also working on FDA approval for Simplera sync integration with the 780G system. The next question is about TAVR and the speaker is asked about their competitors and the impact of their FX Plus launch on the market and their share. The speaker also mentions the potential for this launch to help with smart data and their expectations for the TAVR market.

The paragraph discusses the TAVR market and the company's growth in this area. The low-risk data versus surgery has been compelling and the company will be releasing 5-year data soon. The SMART Day treatment strategy has been successful, particularly in women. The FX Plus device has also been well-received and will continue to grow in the market. The company plans to launch in other geographies and is excited about the market. A question is then asked about diabetes.

The speaker is asking about the partnership with Abbott and how it will impact the Diabetes business. The speaker mentions the opportunity to tap into Abbott's large installed base and provide a single app for users to choose between two sensor options. The speaker cannot give a timeline but assures that they are working to incorporate the sensor into their system. The next question is about the progress with Hugo, including the targeted enrollment in EXPAND Euro and the pivotal US trial. The speaker is asked about the timeline for data and potential launch, as well as addressing any concerns about their commitment to Hugo.

Mike Marinaro and Geoff Martha are discussing the progress of Medtronic's robotic surgery system, Hugo. They are pleased with the progress made in clinical trials and enrollment, but are not able to give a specific submission date for approval. They are committed to the success of Hugo and see it as a midterm growth driver for the company. They acknowledge the competition in the soft tissue space, but believe they have the necessary levers to pull and expertise to lead in the robotics market.

The speaker discusses the various technologies and investments that go into surgery, expressing confidence in the team and franchise. They mention being on the hunt for M&A opportunities and balancing short-term and long-term growth strategies.

The speaker is discussing the company's focus on value-creating tuck-in M&A, particularly in high-growth areas such as product tuck-ins and adjacencies. They mention that they have been focused on improving operations in the past 1.5 years, but now have more energy to focus on M&A. The speaker also addresses concerns about capacity in the Structural Heart market, stating that it is underpenetrated and patient benefits are clear. They then hand the question over to another speaker for further discussion.

Sean and Geoff discuss the current state of capacity in the Structural Heart market. While there may be some constraints in terms of post-procedure beds, there is not a significant concern about capacity at the operator level. Hospitals have the ability to expand capacity if needed, and there is a long runway for growth in this market. The company is prepared to help hospital partners with any capacity issues that may arise.

The company has seen strong demand for their PFA product, which has been offsetting the decline in their Cryo business. They are increasing their capacity to meet this demand and have a unique offering with both a single shot and point-by-point approach. The launch of this product is going well in both Europe and the United States.

Customers have been impressed with the precision and predictability of the handling of the catheter, as well as its visibility on mapping systems and ultrasound. The point-by-point approach and lattice tip of the Affera catheter are unique and beneficial for avoiding complications. While adoption may be slower in Europe due to cost constraints, the technology is performing well and upcoming data on durability should further increase its appeal. The safe and effective nature of the catheter may also help alleviate waiting lists for procedures.

The speaker discusses the potential for growth in the pulsed field ablation market and the company's unique offerings in both the single shot and point-by-point segments. They mention the success of their product PulseSelect and the upcoming launch of Affera, which is highly anticipated by the market. They also mention an expected acceleration in revenue and potential for outpacing market growth.

Geoff Martha, CEO of a company, responds to a question about the potential for growth in the renal denervation market now that reimbursement is becoming more available. He expresses excitement about their product and the progress of reimbursement, but notes that coverage is also important and they are still waiting for transitional pass-through payment.

The company recently received support from CMS for their approach to reimbursement for their breakthrough device, which will help with payment codes and patient access. They are working closely with CMS and commercial payers to ensure coverage policies are in place. The company is excited about the potential for their new service line and the positive outcomes seen in early patients. They believe reimbursement will be the key to unlocking the full potential of the technology. There is time for two more questions and one is about the impact of TAVR launch and stocking on pricing, and the other is about the FX device.

The analyst asks about the impact of FX on the company's top and bottom lines, and the executives explain that they price their products for value and expect an increase in volume and cases with the launch of a new product. They also mention that the US dollar has weakened, resulting in a smaller negative impact on revenue and a delayed benefit on the bottom line due to hedging. FX is expected to show up more in the gross margin line this year.

The company expects the impact of foreign exchange to lessen in the second half of the year, leading to strong earnings growth on a constant currency basis. This will benefit reported EPS in the second half. The company is committed to driving leverage down the P&L and reinvesting in the top-line, with measures in place to hold overhead and enabling expenses low.

The company is focused on allocating its human capital and expenses in a disciplined manner to support growth. They are committed to investing in high-growth areas, including R&D and tuck-in M&A. The company is also using AI and other programs to drive efficiencies in enabling functions. They believe this approach will result in earnings leverage and strong cash flow for future investments.

Geoff Martha, CEO of Medtronic, thanks everyone for their questions and support and invites them to join the Q2 earnings broadcast on November 19. He promises updates on the company's progress and long-term strategies.

This summary was generated with AI and may contain some inaccuracies.