mdt-20260731

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	July 31, 2026

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from __________ to __________

Commission File Number 001-36820


Medtronic plc
(Exact name of registrant as specified in its charter)

Ireland			98-1183488
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

Building Two, Parkmore Business Park West

Galway, Ireland

(Address of principal executive offices)

+353 1 438-1700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, par value $0.0001 per share	MDT	New York Stock Exchange
1.125% Senior Notes due 2027	MDT/27	New York Stock Exchange
0.375% Senior Notes due 2028	MDT/28	New York Stock Exchange
3.000% Senior Notes due 2028	MDT/28A	New York Stock Exchange
3.650% Senior Notes due 2029	MDT/29	New York Stock Exchange
2.950% Senior Notes due 2030	MDT/30	New York Stock Exchange
1.625% Senior Notes due 2031	MDT/31	New York Stock Exchange
1.000% Senior Notes due 2031	MDT/31A	New York Stock Exchange
3.125% Senior Notes due 2031	MDT/31B	New York Stock Exchange
0.750% Senior Notes due 2032	MDT/32	New York Stock Exchange
3.375% Senior Notes due 2034	MDT/34	New York Stock Exchange
3.875% Senior Notes due 2036	MDT/36	New York Stock Exchange
2.250% Senior Notes due 2039	MDT/39A	New York Stock Exchange
1.500% Senior Notes due 2039	MDT/39B	New York Stock Exchange
1.375% Senior Notes due 2040	MDT/40A	New York Stock Exchange
4.150% Senior Notes due 2043	MDT/43A	New York Stock Exchange
4.200% Senior Notes due 2045	MDT/45	New York Stock Exchange
1.750% Senior Notes due 2049	MDT/49	New York Stock Exchange
1.625% Senior Notes due 2050	MDT/50	New York Stock Exchange
4.150% Senior Notes due 2053	MDT/53	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Emerging growth company

☐

Non-accelerated filer

☐

Smaller Reporting Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of August 28, 2026, 1,279,137,890 ordinary shares, par value $0.0001, of the registrant were outstanding.

TABLE OF CONTENTS


Item	Description	Page

	PART I
1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Statements of Income	1
	Condensed Consolidated Statements of Comprehensive Income	2
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to the Condensed Consolidated Financial Statements	6
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
3.	Quantitative and Qualitative Disclosures About Market Risk	55
4.	Controls and Procedures	55
	PART II
1.	Legal Proceedings	55
2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
5.	Other Information	56
6.	Exhibits	57
	Signature	58

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Medtronic plc

Condensed Consolidated Statements of Income

(Unaudited)


	Three months ended
(in millions, except per share data)	July 31, 2026		July 25, 2025
Net sales	$	9,756	$	8,578
Costs and expenses:
Cost of products sold, excluding amortization of intangible assets	3,416		3,001
Research and development expense	771		726
Selling, general, and administrative expense	3,198		2,806
Amortization of intangible assets	412		459
Restructuring charges, net	72		45
Certain litigation charges, net	—		27
Other operating expense (income), net	123		70
Operating profit	1,764		1,445
Other non-operating expense (income), net	(190)		(33)
Interest expense, net	186		176
Income before income taxes	1,769		1,302
Income tax provision	289		255
Net income	1,479		1,047
Net income attributable to noncontrolling interests	(9)		(7)
Net income attributable to Medtronic	$	1,470	$	1,040
Basic earnings per share	$	1.15	$	0.81
Diluted earnings per share	$	1.14	$	0.81
Basic weighted average shares outstanding	1,279.8		1,281.6
Diluted weighted average shares outstanding	1,285.1		1,287.1

The accompanying notes are an integral part of these condensed consolidated financial statements.

Medtronic plc

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three months ended
(in millions)	July 31, 2026		July 25, 2025
Net income	$	1,479	$	1,047
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on investment securities	(48)		19
Translation adjustment	(479)		349
Net investment hedges	695		(559)
Net change in retirement obligations	1		1
Unrealized gain (loss) on cash flow hedges	173		(128)
Other comprehensive income (loss)	342		(318)
Comprehensive income including noncontrolling interests	1,821		729
Comprehensive income attributable to noncontrolling interests	(9)		(8)
Comprehensive income attributable to Medtronic	$	1,812	$	720

The accompanying notes are an integral part of these condensed consolidated financial statements.

Medtronic plc

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	July 31, 2026		April 24, 2026
ASSETS
Current assets:
Cash and cash equivalents	$	1,691	$	1,949
Investments	7,128		7,271
Accounts receivable, less allowances for credit losses of $203 and $190, respectively	6,357		6,643
Inventories	6,215		5,951
Other current assets	2,999		2,972
Total current assets	24,390		24,787
Property, plant, and equipment, net	7,473		7,417
Goodwill	43,187		42,587
Other intangible assets, net	10,238		10,146
Tax assets	3,703		3,943
Other assets	4,315		4,147
Total assets	$	93,306	$	93,028
LIABILITIES AND EQUITY
Current liabilities:
Current debt obligations	$	2,536	$	1,788
Accounts payable	2,695		2,644
Accrued compensation	1,906		2,678
Accrued income taxes	1,056		914
Other accrued expenses	3,606		3,634
Total current liabilities	11,799		11,658
Long-term debt	25,617		26,173
Accrued compensation and retirement benefits	1,167		1,193
Accrued income taxes	1,522		1,515
Deferred tax liabilities	349		362
Other liabilities	2,001		2,055
Total liabilities	42,456		42,956
Commitments and contingencies (Note 16)
Shareholders’ equity:
Ordinary shares— par value $0.0001, 2.6 billion shares authorized, 1,280,046,863 and 1,280,177,293 shares issued and outstanding, respectively	—		—
Additional paid-in capital	20,805		20,926
Retained earnings	33,187		32,638
Accumulated other comprehensive loss	(3,759)		(4,101)
Total shareholders’ equity	50,232		49,463
Noncontrolling interests	618		609
Total equity	50,850		50,072
Total liabilities and equity	$	93,306	$	93,028

The accompanying notes are an integral part of these condensed consolidated financial statements.

Medtronic plc

Condensed Consolidated Statements of Equity

(Unaudited)


	Ordinary Shares			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity		Noncontrolling Interests		Total Equity
(in millions)	Number	Par Value
April 24, 2026	1,280	$	—	$	20,926	$	32,638	$	(4,101)	$	49,463	$	609	$	50,072
Net income	—	—		—		1,470		—		1,470		9		1,479
Other comprehensive income (loss)	—	—		—		—		342		342		—		342
Dividends to shareholders ($0.72 per ordinary share)	—	—		—		(921)		—		(921)		—		(921)
Issuance of shares under stock purchase and award plans, net of shares withheld for taxes	3	—		(21)		—		—		(21)		—		(21)
Repurchase of ordinary shares	(3)	—		(226)		—		—		(226)		—		(226)
Stock-based compensation	—	—		125		—		—		125		—		125

July 31, 2026	1,280	$	—	$	20,805	$	33,187	$	(3,759)	$	50,232	$	618	$	50,850


	Ordinary Shares			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity		Noncontrolling Interests		Total Equity
(in millions)	Number	Par Value
April 25, 2025	1,282	$	—	$	20,833	$	31,476	$	(4,284)	$	48,024	$	232	$	48,256
Net income	—	—		—		1,040		—		1,040		7		1,047
Other comprehensive income (loss)	—	—		—		—		(319)		(319)		1		(318)
Dividends to shareholders ($0.71 per ordinary share)	—	—		—		(910)		—		(910)		—		(910)
Issuance of shares under stock purchase and award plans, net of shares withheld for taxes	1	—		93		—		—		93		—		93
Repurchase of ordinary shares	(1)	—		(120)		—		—		(120)		—		(120)
Stock-based compensation	—	—		86		—		—		86		—		86


July 25, 2025	1,282	$	—	$	20,891	$	31,606	$	(4,604)	$	47,893	$	240	$	48,133

The accompanying notes are an integral part of these condensed consolidated financial statements.

Medtronic plc

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three months ended
(in millions)	July 31, 2026		July 25, 2025
Operating Activities:
Net income	$	1,479	$	1,047
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	729		748
Provision for credit losses	25		28
Deferred income taxes	127		167
Stock-based compensation	125		86
Other, net	(29)		159
Change in operating assets and liabilities, net of acquisitions and divestitures:
Accounts receivable, net	224		288
Inventories	(240)		(373)
Accounts payable and accrued liabilities	(531)		(598)
Other operating assets and liabilities	(118)		(464)


Net cash provided by operating activities	1,793		1,088
Investing Activities:
Acquisitions, net of cash acquired	(1,162)		—

Additions to property, plant, and equipment	(503)		(504)
Purchases of investments	(2,190)		(2,100)
Sales and maturities of investments	2,209		2,010
Other investing activities, net	26		(125)
Net cash used in investing activities	(1,619)		(719)
Financing Activities:
Change in current debt obligations, net	812		649



Payments on long-term debt	—		(1,162)
Dividends to shareholders	(921)		(910)
Issuance of ordinary shares	20		95
Repurchase of ordinary shares	(267)		(123)
Other financing activities, net	13		70
Net cash used in financing activities	(343)		(1,381)
Effect of exchange rate changes on cash and cash equivalents	(89)		67
Net change in cash and cash equivalents	(258)		(945)
Cash and cash equivalents at beginning of period	1,949		2,218
Cash and cash equivalents at end of period	$	1,691	$	1,273

Supplemental Cash Flow Information
Cash paid for:
Income taxes	$	199	$	402
Interest	83		81

The accompanying notes are an integral part of these condensed consolidated financial statements.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Medtronic plc and its subsidiaries (Medtronic plc, Medtronic, or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.) (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the condensed consolidated financial statements include all the adjustments necessary for a fair statement in conformity with U.S. GAAP. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year.

Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates.

The accompanying unaudited condensed consolidated financial statements include the accounts of Medtronic plc, its wholly-owned subsidiaries, entities for which the Company has a controlling financial interest, and variable interest entities for which the Company is the primary beneficiary. Intercompany transactions and balances have been eliminated in consolidation. Amounts reported in millions within this quarterly report are computed based on the actual amounts, and therefore, the sum of the components may not equal the total amount reported in millions due to rounding. Additionally, certain columns and rows within tables may not sum due to rounding.

The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements of the Company and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 24, 2026, as filed with the Securities and Exchange Commission (SEC) on June 18, 2026. The Company’s fiscal years 2027, 2026, and 2025 will end or ended on April 30, 2027, April 24, 2026, and April 25, 2025, respectively. Fiscal year 2027 is a 53-week year, with the extra week occurring in the first fiscal month of the first quarter.

There have been no material changes to our significant accounting policies, as disclosed in Note 1 included in the Company's Annual Report on Form 10-K for the fiscal year ended April 24, 2026.

In May 2025, the Company announced its intent to separate the Diabetes Business, with the intention to create a new independent, publicly traded company, MiniMed Group, Inc. (MiniMed). On March 9, 2026, MiniMed completed an initial public offering (the IPO). Due to the Company retaining a controlling financial interest, the unaudited condensed consolidated financial statements include the financial results of MiniMed. Refer to Note 18 for additional information on the MiniMed separation.

2. New Accounting Pronouncements

Recently Adopted Accounting Standards

Derivatives and Hedging and Revenue from Contracts with Customers

In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-07, Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract (Topics 815 and 606). The guidance refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. This ASU also provides clarification under Topic 606 for share-based payments from a customer in a revenue contract. The Company early adopted this accounting guidance in the first quarter of fiscal year 2027. The adoption of this standard had no impact on our financial statements.

Government Grants

In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities (Topic 832), to establish guidance on the recognition, measurement, and presentation of government grants received by business entities. The Company early adopted this accounting guidance in the first quarter of fiscal year 2027. The adoption of this standard had no impact on our financial statements.

Not Yet Adopted Accounting Standards

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), which requires tabular disclosures disaggregating certain costs and expenses within relevant income statement captions. The Company will adopt this

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

guidance beginning in the fourth quarter of fiscal year 2028 for our annual report and for interim periods starting in fiscal year 2029. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40), to increase the operability of the recognition guidance by removing all references to "project stages" and clarifying when an entity is required to start capitalizing software costs. This accounting guidance is effective for the Company beginning in the first quarter of fiscal year 2029, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statements.

3. Revenue

The Company's revenues are principally derived from device-based medical therapies and services related to cardiac rhythm disorders, cardiovascular disease, hypertension, neurological surgery technologies, neurological disorders and diseases, spinal conditions and musculoskeletal trauma, chronic pain, ear, nose, and throat conditions, urological and digestive disorders, advanced and general surgical care products, respiratory and monitoring solutions, and diabetes conditions. The Company's primary customers include healthcare systems, clinics, third-party healthcare providers, distributors, and other institutions, including governmental healthcare programs and group purchasing organizations.

Starting in the first quarter of fiscal year 2027, the Cardiovascular Portfolio divisions transitioned from Cardiac Rhythm & Heart Failure, Structural Heart & Aortic, and Coronary & Peripheral Vascular to Electrophysiology Therapies (EPT), Interventional Cardiology Therapies (ICT), CardioVascular Surgery (CVS), and Peripheral Vascular Health (PVH). Our EPT division includes the Cardiac Rhythm Management and the Cardiac Ablation businesses. Our ICT division includes the Coronary and Renal Denervation and the Structural Heart businesses. Our CVS division includes the Cardiac Surgery and the Aortic businesses. Our PVH division includes the Peripheral Vascular Health business. Additionally, a product line from the Medical Surgical Portfolio in the Surgical & Endoscopy division moved to the Neuroscience Portfolio in the Neuromodulation division. Starting in the fourth quarter of fiscal year 2026, the Diabetes Business was no longer considered a reportable segment. Prior period net sales have been recast to conform to the new presentation.

The table below illustrates net sales by segment and division and by market geography for the three months ended July 31, 2026 and July 25, 2025. The U.S. revenue includes United States and U.S. territories, and the international revenue includes all other non-U.S. countries.


	Worldwide
	Three months ended
(in millions)	July 31, 2026		July 25, 2025
Electrophysiology Therapies	$	2,218	$	1,712
Interventional Cardiology Therapies	894		834
CardioVascular Surgery	477		436
Peripheral Vascular Health	338		302
Cardiovascular	3,927		3,285
Cranial & Spinal Technologies	1,365		1,211
Specialty Therapies	774		702
Neuromodulation	539		514
Neuroscience	2,678		2,427
Surgical & Endoscopy	1,740		1,601
Acute Care & Monitoring	539		471
Medical Surgical	2,279		2,073
Reportable segment net sales	8,884		7,785
Diabetes	843		721
Other operating segment(1)	29		33
Other adjustments(2)	—		39

Total net sales	$	9,756	$	8,578

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)


	U.S.				International
	Three months ended
(in millions)	July 31, 2026		July 25, 2025		July 31, 2026		July 25, 2025
Cardiovascular	$	1,853	$	1,479	$	2,074	$	1,806
Neuroscience	1,813		1,624		864		803
Medical Surgical	982		884		1,297		1,188
Reportable segment net sales	4,649		3,988		4,236		3,797
Diabetes	240		217		603		504
Other operating segment(1)	17		20		12		14
Other adjustments(2)	—		—		—		39
Total net sales	$	4,906	$	4,224	$	4,850	$	4,354

(1)Includes operations and ongoing transition agreements from businesses the Company has exited or divested.

(2)Reflects adjustments to the Company's Italian payback accruals as further described below.

The amount of revenue recognized is reduced by sales rebates, distributor chargebacks, returns, and other adjustments. Adjustments to rebates, distributor chargebacks, returns reserves, and other adjustments are recorded as increases or decreases to revenue. At both July 31, 2026 and April 24, 2026, $1.0 billion and $0.3 billion of rebates and other adjustments were classified as other accrued expenses and other liabilities, respectively, and $0.7 billion of distributor chargebacks were classified as a reduction of accounts receivable in the condensed consolidated balance sheets.

During the three months ended July 25, 2025, the Company decreased its accrual for the Italian payback by $39 million as an adjustment to net sales in the condensed consolidated statements of income resulting from the June 2025 Legislative Decree published by the Italian government and formalized into law in August 2025 confirming a reduction of the amounts due for years 2015 to 2018. Refer to Note 16 for additional information. Other adjustments to variable consideration during the three months ended July 31, 2026 and July 25, 2025 were not material.

Deferred Revenue and Remaining Performance Obligations

Deferred revenue at both July 31, 2026 and April 24, 2026 was $0.5 billion, of which $0.4 billion was included in other accrued expenses, respectively, and $0.1 billion was included in other liabilities. During the three months ended July 31, 2026, the Company recognized $140 million of revenue that was included in deferred revenue as of April 24, 2026. During the three months ended July 25, 2025, the Company recognized $135 million of revenue that was included in deferred revenue as of April 25, 2025.

Remaining performance obligations include goods and services that have not yet been delivered or provided under existing, noncancellable, contracts with minimum purchase commitments. At July 31, 2026, the estimated revenue expected to be recognized in future periods related to unsatisfied performance obligations for executed contracts with an original duration of one year or more was approximately $0.4 billion. The Company expects to recognize revenue on the majority of these remaining performance obligations over the next three years.

4. Acquisitions, Dispositions, and Funded Research and Development Arrangements

Acquisition Activity

During the three months ended July 31, 2026 and the fiscal year ended April 24, 2026, the Company had acquisitions that were accounted for as business combinations. Goodwill resulting from business combinations is largely attributable to future, yet to be defined technologies, new customer relationships, existing workforce of the acquired businesses, and synergies expected to arise after the Company's acquisition of these businesses. The results of operations of acquired businesses have been included in the Company’s condensed consolidated statements of income since the date each business was acquired. The results of operations of acquired businesses and the pro forma impact of the acquisitions during the three months ended July 31, 2026 and fiscal year 2026 were not material, either individually or in the aggregate. For the three months ended July 31, 2026 and the fiscal year ended April 24, 2026, purchase price allocation adjustments were not material.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Fiscal Year 2027

Scientia Vascular

On June 12, 2026, the Company closed on the acquisition of all outstanding shares of Scientia Vascular (Scientia), a privately held company. The acquisition expands the Specialty Therapies division within the Neuroscience Portfolio through Scientia’s differentiated access products used to treat complex neurovascular conditions. Contingent consideration liabilities recognized in connection with the acquisition are comprised of product development and revenue-based milestones.

SPR Therapeutics, Inc.

On July 16, 2026, the Company acquired all outstanding equity of SPR Therapeutics, Inc (SPR), a privately held medical technology company. The acquisition expands the Neuromodulation division within the Neuroscience Portfolio with temporary peripheral nerve stimulation (PNS) technology, enabling earlier intervention for chronic pain sufferers.

The following tables summarize the preliminary fair value of consideration transferred and the preliminary fair values of the assets acquired and liabilities assumed:


(in millions)	Scientia		SPR
Cash consideration paid at closing	$	527	$	654
Fair value of contingent consideration	123		—
Total consideration transferred	651		654
Settlement of debt and accrued interest	30		—
Total purchase price	$	681	$	654


(in millions)	Scientia		SPR
Current assets (excluding inventory)	$	21	$	27
Inventory	33		31
Total current assets	54		58
Property, plant, and equipment, net	23		2
Goodwill	511		422
Other intangible assets	278		241
Other noncurrent assets	8		8

Total assets acquired	874		731

Other current liabilities	7		13
Accrued income taxes	145		—
Total current liabilities	151		13
Deferred tax liabilities	—		59

Other noncurrent liabilities	42		4
Total liabilities assumed	193		77

Net assets acquired	$	681	$	654

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Goodwill for the Scientia and SPR acquisitions was assigned to the Neuroscience Portfolio and is not deductible for tax purposes. The fair value of intangible assets acquired was determined using the income approach, which requires the Company to make significant estimates. These estimates include the amount and timing of projected future cash flows of each project or technology, the discount rate used to discount those cash flows to present value, and the assessment of the asset's life cycle. For Scientia, the other intangible assets acquired primarily consists of $109 million of technology-based intangible assets with useful lives ranging from 6 years to 9 years, $155 million of customer-based intangible assets with useful lives of 18 years, and $13 million of in-process research and development. For SPR, the other intangible assets acquired primarily consists of $225 million of technology-based intangible assets with estimated useful lives of 15 years and $15 million of customer-based intangible assets with estimated useful lives of 4 years.

Fiscal Year 2026

CathWorks Ltd.

On April 20, 2026, the Company acquired all the remaining outstanding shares of CathWorks Ltd. (CathWorks), a privately held medical device company. The acquisition expands the Interventional Cardiology division within the Cardiovascular Portfolio by aiming to transform how coronary artery disease is diagnosed and treated.

Prior to the acquisition, the Company held an existing 15% equity interest in CathWorks, a debt investment in CathWorks, and an option to acquire the remaining 85% equity interest. On February 3, 2026, the Company exercised its option to acquire the remaining equity interest in CathWorks. This acquisition was accounted for as a step acquisition at the time of closing. Accordingly, the Company allocated the purchase price of the acquired company to the net tangible assets and intangible assets acquired based upon their preliminary estimated fair values. The Company remeasured the previously held equity interest in CathWorks to its fair value based upon a valuation of the acquired business which was developed using an income approach valuation model. This approach determines fair value based on cash flow projections which are discounted to present value using a risk-adjusted rate of return. The Company remeasured its previously held equity interest to fair value, resulting in a gain of $45 million, representing the difference between the carrying amount of the investment and its fair value at the acquisition date, within other non-operating expense (income), net in the consolidated statements of income during fiscal year 2026. Contingent consideration liabilities recognized in connection with the acquisition are based on future revenue achievements of the acquired business.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following tables summarize the preliminary fair value of consideration transferred and the preliminary fair values of the assets acquired and liabilities assumed:


(in millions)
Cash consideration paid at closing	$	410
Fair value of contingent consideration	115
Total consideration transferred	525
Fair value of previously held equity interest in CathWorks	93
Settlement of debt and accrued interest due from CathWorks	88
Settlement of pre-existing relationships	12
Total purchase price	$	718


(in millions)
Current assets	$	17
Property, plant, and equipment, net	11
Goodwill	555
Other intangible assets	200
Other assets	1
Total assets acquired	784

Current liabilities	7
Accrued income taxes	38
Total current liabilities	45
Deferred tax liabilities	21
Other noncurrent liabilities	1
Total liabilities assumed	66

Net assets acquired	$	718

Goodwill was assigned to the Company’s Cardiovascular Portfolio and is not deductible for tax purposes. The other intangible assets acquired consists of purchased technology and has an estimated useful life of ten years.

Contingent Consideration

Certain of the Company’s business combinations involve potential payment of future consideration that is contingent upon the achievement of certain product development milestones and/or contingent on the acquired business reaching certain performance milestones. A liability is recorded for the estimated fair value of the contingent consideration on the acquisition date. The fair value of the contingent consideration is remeasured at each reporting period, and the change in fair value is recognized within other operating expense (income), net in the condensed consolidated statements of income.

The fair value of contingent consideration liabilities at July 31, 2026 and April 24, 2026 was $275 million and $163 million, respectively. At July 31, 2026, $111 million was recorded in other accrued expenses and $164 million was recorded in other liabilities on the condensed consolidated balance sheets. At April 24, 2026, $32 million was reflected in other accrued expenses and $131 million was reflected in other liabilities on the condensed consolidated balance sheets.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table provides a reconciliation of the beginning and ending balances of contingent consideration liabilities:


	Three months ended
(in millions)	July 31, 2026
Beginning balance	$	163
Purchase price contingent consideration	123
Purchase price allocation adjustments	3
Payments	(14)

Ending balance	$	275

The roll-forward activity of contingent consideration liabilities for the three months ended July 25, 2025 was not material.

The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs:


(in millions)	Fair Value at July 31, 2026		Unobservable Input	Range	Weighted Average (1)
Revenue and other performance-based payments	$	220	Discount rate	7.8% - 28.2%	11.1%
			Projected fiscal year of payment	2027 - 2031	2029
Product development and other milestone-based payments	$	55	Discount rate	5.5%	5.5%
			Projected fiscal year of payment	2027 - 2028	2027

(1)Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. For projected fiscal year of payment, the amount represents the median of the inputs and is not a weighted average.

Funded Research and Development Arrangements

The Company has entered into various arrangements with affiliates of Blackstone Life Sciences Advisors L.L.C. (collectively, Blackstone) to receive funding related to the development of certain products within the Cardiovascular Portfolio and Diabetes Business. As there is substantive and genuine transfer of risk to Blackstone, the development funding is recognized by Medtronic as an obligation to perform contractual services. The Company recognizes the funding as income within other operating expense (income), net as the research and development costs are incurred and funding payments become due. Under these arrangements, the Company recognized income of $12 million and $36 million during the three months ended July 31, 2026 and July 25, 2025, respectively. As of July 31, 2026, the Company is eligible to receive additional funding of $237 million under these arrangements.

Following potential U.S. regulatory approval and commercial launch of each product covered by the Blackstone agreements, Blackstone will be eligible to receive a combination of fixed regulatory and commercial milestone payments up to $1.2 billion and royalties based on percent of sales of such products. During the fourth quarter of fiscal year 2026, one of the products funded by these arrangements within the Diabetes Business was approved by the U.S. FDA. As U.S. regulatory approval was received and commercial launch is probable, the Company recognized a $157 million charge within other operating expense (income), net in the consolidated statements of income during fiscal year 2026. The future minimum royalty payment obligation is primarily recognized within other liabilities in the condensed consolidated balance sheets as of July 31, 2026 and April 24, 2026. This charge is included in the $1.2 billion amount noted above. The $157 million future minimum royalty payment obligation of MiniMed is guaranteed by Medtronic, Inc.

Under certain termination provisions, the Company's payment obligation will survive, and in certain termination circumstances, a payment to Blackstone of a multiple of the funded amounts may be required. At the time of executing these contracts, the occurrence of such circumstances was deemed to be remote.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

5. Restructuring Charges

Total restructuring, associated, and other costs for the three months ended July 31, 2026 were $89 million, as compared to $67 million for the three months ended July 25, 2025.

MiniMed Restructuring Actions

In December 2025, the Board of Directors approved a series of restructuring actions designed to support the separation and position of both Medtronic and MiniMed by enabling greater strategic focus, improving operational efficiency, aligning organizational structures of each, and driving long-term business growth and efficiencies in the individual organizations.

The restructuring actions are expected to result in pre-tax restructuring charges of approximately $300 million to $500 million, to be incurred at varying intervals between the third quarter of fiscal year 2026 and the finalization of the Transition Services Agreement (which governs services to be provided to MiniMed by Medtronic, and which will conclude no later than 24 months following the March 9, 2026 MiniMed IPO). The expected completion date of these restructuring actions is fiscal year 2029. The restructuring activities include organizational realignments, workforce-related actions, and separation of duplicated shared services, locations, systems, and operational functions. Of the total actions, the Company anticipates that materially all of the charges will relate to employee termination benefits, with the potential for other charges to include contract termination costs and asset write-offs. The Company expects these costs to be recognized primarily within restructuring charges, net, cost of products sold, and selling, general, and administrative expense in the condensed consolidated statements of income. The costs of this program were not recorded in a specific reportable segment. Since inception, the Company has incurred pre-tax exit and disposal and other costs of $201 million in connection with the MiniMed Restructuring Actions.

The following table presents the classification of these restructuring, associated, and other costs in the condensed consolidated statements of income for the MiniMed restructuring activities:


	Three months ended
(in millions)	July 31, 2026

Selling, general, and administrative expenses	$	8
Restructuring charges, net	58
Total restructuring, associated, and other costs	$	67

The following table provides a reconciliation of the beginning and ending restructuring liability balances related to the MiniMed restructuring activities for the three months ended July 31, 2026:


(in millions)	Employee Termination Benefits		Associated and Other Costs		Total
April 24, 2026	$	119	$	—	$	119
Charges	62		5		67
Cash payments	(88)		(4)		(92)

July 31, 2026	$	93	$	1	$	93

Other Restructuring Activities

The Company also incurred restructuring charges during the three months ended July 31, 2026 and July 25, 2025 for individually immaterial restructuring activities. The restructuring, associated, and other costs for these activities primarily related to employee termination benefits provided to employees who have been involuntarily terminated, facility related and contract termination costs, and asset write-offs.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table presents the classification of these restructuring, associated, and other costs in the condensed consolidated statements of income for the other restructuring activities:


	Three months ended
(in millions)	July 31, 2026		July 25, 2025
Cost of products sold	$	8	$	16
Selling, general, and administrative expenses	2		5
Restructuring charges, net	13		45
Total restructuring, associated, and other costs	$	23	$	67

The following table provides a reconciliation of the beginning and ending restructuring liability balances relating to the other restructuring activities:


(in millions)	Employee Termination Benefits		Associated and Other Costs		Total
April 24, 2026	$	11	$	44	$	56
Charges	13		2		15
Cash payments	(9)		(19)		(28)

July 31, 2026	$	15	$	27	$	42

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

6. Financial Instruments

Debt Securities

The Company holds investments in marketable debt securities that are classified and accounted for as available-for-sale and are remeasured on a recurring basis. The following tables summarize the Company's investments in available-for-sale debt securities by significant investment category and the related condensed consolidated balance sheet classification at July 31, 2026 and April 24, 2026:


	July 31, 2026
	Valuation								Balance Sheet Classification
(in millions)	Cost		Unrealized Gains		Unrealized Losses		Fair Value		Investments		Other Assets
Level 1:
U.S. government and agency securities	$	366	$	—	$	(5)	$	362	$	362	$	—
Level 2:
Corporate debt securities	4,034		7		(39)		4,002		4,002		—
U.S. government and agency securities	764		—		(7)		757		757		—
Mortgage-backed securities	850		3		(23)		830		830		—
Non-U.S. government and agency securities	22		—		—		22		22		—

Other asset-backed securities	1,151		2		(10)		1,143		1,143		—
Total Level 2	6,822		12		(80)		6,754		6,754		—
Level 3:
Auction rate securities	36		—		(2)		34		—		34
Total available-for-sale debt securities	$	7,225	$	12	$	(87)	$	7,150	$	7,116	$	34


	April 24, 2026
	Valuation								Balance Sheet Classification
(in millions)	Cost		Unrealized Gains		Unrealized Losses		Fair Value		Investments		Other Assets
Level 1:
U.S. government and agency securities	$	420	$	—	$	(4)	$	416	$	416	$	—
Level 2:
Corporate debt securities	4,041		25		(15)		4,050		4,050		—
U.S. government and agency securities	812		—		(9)		803		803		—
Mortgage-backed securities	852		8		(18)		842		842		—
Non-U.S. government and agency securities	23		—		—		23		23		—

Other asset-backed securities	1,121		4		(7)		1,118		1,118		—
Total Level 2	6,849		37		(49)		6,837		6,837		—
Level 3:
Auction rate securities	36		—		(2)		34		—		34
Total available-for-sale debt securities	$	7,305	$	37	$	(56)	$	7,287	$	7,253	$	34

The amortized cost of debt securities excludes accrued interest, which is reported in other current assets in the condensed consolidated balance sheets.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following tables present the gross unrealized losses and fair values of the Company’s available-for-sale debt securities that have been in a continuous unrealized loss position deemed to be temporary, aggregated by investment category at July 31, 2026 and April 24, 2026:


	July 31, 2026
	Less than 12 months				More than 12 months
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Corporate debt securities	$	655	$	(3)	$	2,200	$	(37)
U.S. government and agency securities	397		(5)		290		(7)
Mortgage-backed securities	51		(1)		525		(22)
Other asset-backed securities	—		—		515		(10)
Auction rate securities	11		(1)		22		(2)
Total	$	1,114	$	(9)	$	3,553	$	(78)


	April 24, 2026
	Less than 12 months				More than 12 months
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Corporate debt securities	$	653	$	(3)	$	1,110	$	(12)
U.S. government and agency securities	313		(4)		434		(9)
Mortgage-backed securities	—		—		335		(18)
Other asset-backed securities	—		—		440		(7)
Auction rate securities	—		—		34		(2)
Total	$	966	$	(7)	$	2,353	$	(48)

The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There were no transfers into or out of Level 3 during the three months ended July 31, 2026 and fiscal year 2026. When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement.

Gains and losses on available-for-sale debt securities are recognized in other non-operating expense (income), net in the consolidated statements of income. During the three months ended July 31, 2026 and July 25, 2025, gross realized gains and losses on available-for-sale debt securities were not material. During the three months ended July 31, 2026 and July 25, 2025, proceeds from sales of available-for-sale debt securities were $2.2 billion and $2.0 billion, respectively.

The contractual maturities of available-for-sale debt securities at July 31, 2026 are shown in the following table. Within the table, maturities of mortgage-backed securities have been allocated based upon timing of estimated cash flows assuming no change in the current interest rate environment. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.


(in millions)	Amortized Cost		Fair Value
Due in one year or less	$	1,982	$	1,973
Due after one year through five years	3,235		3,209
Due after five years through ten years	1,497		1,482
Due after ten years	511		486
Total	$	7,225	$	7,150

Interest income, which includes income on marketable debt securities and the global liquidity structures, is recognized in other non-operating expense (income), net, in the condensed consolidated statements of income. During the three months ended July 31, 2026 and July 25, 2025, there was $102 million and $120 million of interest income, respectively.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Equity Securities, Equity Method Investments, and Other Investments

The following table summarizes the Company's equity and other investments and related accrued interest receivable at July 31, 2026 and April 24, 2026, which are classified primarily as other assets in the consolidated balance sheets:


(in millions)	July 31, 2026		April 24, 2026
Investments with readily determinable fair value (marketable equity securities)	$	163	$	130

Investments without readily determinable fair values	679		616
Equity method and other investments	72		78
Total equity and other investments	$	914	$	824

The table below includes activity related to the Company's portfolio of equity and other investments. Gains, losses, impairments, and interest income on equity and other investments are recognized in other non-operating expense (income), net in the consolidated statements of income.


	Three months ended
(in millions)	July 31, 2026		July 25, 2025
Proceeds from sales	$	24	$	17
Gross gains	68		7
Gross losses	(2)		(93)

Impairment losses recognized	(1)		(26)

During the three months ended July 31, 2026, there were $33 million of net unrealized gains on equity securities and other investments still held at July 31, 2026. During the three months ended July 25, 2025, there were $87 million of net unrealized losses on equity securities and other investments still held at July 25, 2025.

Mozarc Medical Investment

In fiscal year 2023 the Company sold half its Renal Care Solutions business to Mozarc Medical (Mozarc Medical or Mozarc), and as a result of the transaction, the Company retained a 50% non-controlling equity interest in Mozarc. This sale was part of an agreement between Medtronic and DaVita Inc. (DaVita) to form a new, independent kidney care-focused medical device company with equal equity ownership. This investment provides the Company with the ability to exercise significant influence over Mozarc and the Company has elected the fair value option to account for this equity method investment. The Company believes the fair value option best reflects the economics of the underlying transaction.

Under the fair value option, changes in the fair value of the investment are recognized through earnings each reporting period in other non-operating expense (income), net in the consolidated statements of income. As of the beginning of fiscal year 2026, the fair value of the investment was $140 million. During the three months ended July 25, 2025, the Company recognized a loss of $90 million primarily driven by historical financial results and projections of future cash flows, bringing the fair value of the investment to $50 million. During the fourth quarter of fiscal year 2026, the Company recognized a loss of the remaining $50 million investment, reducing the fair value of the investment to zero as of April 24, 2026. The fourth quarter losses were primarily driven by historical financial results, the restructuring and wind-down of certain product lines, the delay or discontinuation of certain research and development programs and associated product launches, and projections of future cash flows.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

7. Financing Arrangements

Commercial Paper

The Company maintains commercial paper programs that allow the Company to issue U.S. dollar or Euro-denominated unsecured commercial paper notes. The aggregate amount outstanding at any time under the commercial paper programs may not exceed the equivalent of $3.5 billion. There was $450 million of commercial paper outstanding at July 31, 2026. During the three months ended July 31, 2026, the weighted average interest rate was 3.81 percent. There was no commercial paper outstanding at April 24, 2026. During fiscal year 2026, the weighted average interest rate was 4.17 percent. The issuance of commercial paper reduces the amount of credit available under the Company’s existing Credit Facility, as defined below.

Line of Credit

The Company has a $3.5 billion five-year unsecured revolving credit facility (Credit Facility), which provides back-up funding for the commercial paper programs described above. The Credit Facility includes a multi-currency borrowing feature for certain specified foreign currencies. At July 31, 2026 and April 24, 2026, no amounts were outstanding under the Credit Facility.

Interest rates on advances on the Credit Facility are determined by a pricing matrix, based on the Company’s long-term debt ratings, assigned by Standard & Poor’s Ratings Services and Moody’s Investors Service. Facility fees are payable on the Credit Facility and are determined in the same manner as the interest rates. The Company is in compliance with the covenants under the Credit Facility.

MiniMed Line of Credit

In January 2026, as part of the impending separation of the Diabetes Operating Unit, Kangaroo US HoldCo 2, Inc. (the “Initial Borrower”), entered into a credit agreement which provides for a five-year senior secured revolving credit facility (the “MiniMed Revolving Credit Facility”) in an aggregate principal amount of $500 million to be made available in U.S. dollars and certain approved alternative currencies, initially including Euros, with Citibank, N.A. serving as administrative agent for a syndicate of lenders. Subject to the conditions to the borrowing therein, the commitments under the MiniMed Revolving Credit Facility became available upon the completion of the initial public offering of MiniMed Group, Inc., whereupon the Initial Borrower merged with and into MiniMed Group, Inc. (the “Merger”), with MiniMed Group, Inc. surviving the merger and continuing as the borrower. The MiniMed Revolving Credit Facility permits, subject to specified conditions, one or more of MiniMed Group, Inc.'s wholly owned subsidiaries to be added as additional borrowers.

Interest is payable on the loans under the MiniMed Revolving Credit Facility (1) in the case of borrowings denominated in U.S. dollars, Term SOFR (or, at the borrower’s option, the base rate) and (2) in the case of borrowings denominated in Euros, EURIBOR, plus, in each case, a margin determined pursuant to a pricing grid based on MiniMed Group, Inc.'s secured net leverage ratio. The commitment fees and letter of credit fees under the MiniMed Revolving Credit Facility are determined based upon the same grid. Interest payments are due (1) in the case of Term SOFR or EURIBOR borrowings, on the last day of each interest period applicable to the borrowing (or, in the case of any borrowing with an interest period of more than three months’ duration, every three months) and (2) in the case of base rate borrowings, on the last business day of each March, June, September, and December. No amounts have been drawn under the MiniMed Revolving Credit Facility as of July 31, 2026.

The MiniMed Revolving Credit Facility also contains representations and warranties, covenants, and events of default that are customary for this type of financing, including financial maintenance covenants and covenants restricting, inter alia, the incurrence of liens and indebtedness, the sale of assets, the making of restricted payments, investments and certain debt prepayments, and the entry into certain merger transactions. The obligations under the MiniMed Revolving Credit Facility are guaranteed by certain wholly-owned subsidiaries of the Initial Borrower (and following the consummation of the Merger, certain wholly-owned subsidiaries of MiniMed Group, Inc.), and secured by certain assets of such subsidiaries.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Debt Obligations

The Company's debt obligations consisted of the following:


(in millions)	Maturity by Fiscal Year	July 31, 2026		April 24, 2026
Current debt obligations	2027 - 2028	$	2,536	$	1,788

Long-term debt
4.250 percent five-year 2023 senior notes	2028	1,000		1,000
3.000 percent six-year 2022 senior notes	2029	1,139		1,174
0.375 percent eight-year 2020 senior notes	2029	1,139		1,174
3.650 percent five-year 2024 senior notes	2030	968		998
2.950 percent five-year 2025 senior notes	2031	854		881
1.625 percent twelve-year 2019 senior notes	2031	1,139		1,174
1.000 percent twelve-year 2019 senior notes	2032	1,139		1,174
3.125 percent nine-year 2022 senior notes	2032	1,139		1,174
0.750 percent twelve-year 2020 senior notes	2033	1,139		1,174
4.500 percent ten-year 2023 senior notes	2033	1,000		1,000
3.375 percent twelve-year 2022 senior notes	2035	1,139		1,174
4.375 percent twenty-year 2015 senior notes	2035	1,932		1,932
3.875 percent twelve-year 2024 senior notes	2037	968		998
6.550 percent thirty-year 2007 CIFSA senior notes	2038	253		253
2.250 percent twenty-year 2019 senior notes	2039	1,139		1,174
6.500 percent thirty-year 2009 senior notes	2039	158		158
1.500 percent twenty-year 2019 senior notes	2040	1,139		1,174
5.550 percent thirty-year 2010 senior notes	2040	224		224
1.375 percent twenty-year 2020 senior notes	2041	1,139		1,174
4.500 percent thirty-year 2012 senior notes	2042	105		105
4.000 percent thirty-year 2013 senior notes	2043	305		305
4.150 percent nineteen-year 2024 senior notes	2044	683		704
4.625 percent thirty-year 2014 senior notes	2044	127		127
4.625 percent thirty-year 2015 senior notes	2045	1,813		1,813
4.200 percent twenty-year 2025 senior notes	2046	854		881
1.750 percent thirty-year 2019 senior notes	2050	1,139		1,174
1.625 percent thirty-year 2020 senior notes	2051	1,139		1,174
4.150 percent twenty-nine year 2024 senior notes	2054	797		822

Finance lease obligations	2028 - 2041	52		54
Debt discount, net	2028 - 2054	(52)		(57)

Deferred financing costs	2028 - 2054	(110)		(114)
Other	2053	23		—
Total long-term debt		$	25,617	$	26,173

Interest expense on outstanding borrowings, including amortization of debt issuance costs and debt discounts and premiums, and the global liquidity structures is recognized in interest expense, net in the condensed consolidated statements of income. During the three months ended July 31, 2026 and July 25, 2025, there was $235 million and $217 million, respectively, of interest expense on outstanding borrowings, including amortization of debt issuance costs and debt discounts and premiums, and the global liquidity structures.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Senior Notes

The Company has outstanding unsecured senior obligations, described as senior notes in the tables above (collectively, the Senior Notes). The Senior Notes rank equally with all other unsecured and unsubordinated indebtedness of the Company. The Company is in compliance with all covenants related to the Senior Notes.

On September 29, 2025, Medtronic Inc. issued two tranches of Euro-denominated Senior Notes with an aggregate principal of €1.5 billion, with maturities in fiscal year 2031 and 2046, resulting in cash proceeds of approximately $1.7 billion, net of discounts and issuance costs.

The Euro-denominated debt issued in September 2025 is designated as a net investment hedge of certain of the Company's European operations. Refer to Note 8 for additional information regarding net investment hedges.

Financial Instruments Not Measured at Fair Value

At July 31, 2026, the estimated fair value of the Company’s Senior Notes was $24.4 billion compared to a principal value of $27.4 billion. At April 24, 2026, the estimated fair value of the Company's Senior Notes was $25.3 billion compared to a principal value of $28.1 billion. The fair value was estimated using quoted market prices for the publicly registered Senior Notes, which are classified as Level 2 within the fair value hierarchy. The fair values and principal values consider the terms of the related debt and exclude the impacts of debt discounts and hedging activity.

8. Derivatives and Currency Exchange Risk Management

The Company uses derivative instruments and foreign currency denominated debt to manage the impact that currency exchange rate and interest rate changes have on reported financial statements. The Company does not enter into derivative contracts for speculative purposes.

Cash Flow Hedges

The Company uses foreign currency forward and option contracts designated as cash flow hedges to manage its exposure to the variability of future cash flows that are denominated in a foreign currency.

At inception, foreign currency forward and option contracts are designated as cash flow hedges. Changes in the fair value of these derivatives are reported as a component of accumulated other comprehensive loss until the hedged transaction affects earnings. When the hedged transaction affects earnings, the gain or loss on the derivative is reclassified to earnings. Amounts excluded from the measurement of hedge effectiveness are recognized in earnings on a straight-line basis over the term of the hedge. Cash flows are reported as operating activities in the condensed consolidated statements of cash flows.

The Company's cash flow hedges will mature within the subsequent two-year period. At July 31, 2026 and April 24, 2026, the Company had $57 million in after-tax unrealized gains and $116 million in after-tax unrealized losses, respectively, associated with cash flow hedging instruments recorded in accumulated other comprehensive loss. The Company expects that $40 million of after-tax net unrealized gains at July 31, 2026 will be recognized in the condensed consolidated statements of income over the next 12 months.

Net Investment Hedges

The Company uses derivative instruments and foreign currency denominated debt to manage foreign currency risk associated with its net investment in foreign operations. The derivative instruments that the Company uses for this purpose may include foreign currency forward exchange contracts used on a standalone basis or in combination with option collars and standalone cross currency interest rate contracts.

For instruments that are designated as net investment hedges, the gains or losses are reported as a component of accumulated other comprehensive loss. The gains or losses are reclassified into earnings upon a liquidation event or deconsolidation of the foreign subsidiary. Amounts excluded from the assessment of effectiveness are recognized in interest expense, net on a straight-line basis over the term of the hedge. During the three months ended July 31, 2026 and July 25, 2025, the Company recognized $50 million and $45 million, respectively, of after-tax unrealized gains representing excluded components in interest expense, net. The cash flows related to the Company's derivative instruments designated as net investment hedges are reported as investing activities in the condensed consolidated statements of cash flows. Cash flows attributable to amounts excluded from the assessment of effectiveness are reported as operating activities in the condensed consolidated statements of cash flows.

Fair Value Hedges

In fiscal year 2025, the Company began using foreign currency forward contracts designated as fair value hedges to manage its exposure to changes in the fair value of a fixed-rate debt obligation. The contracts matured during the first quarter of fiscal year 2026.

At inception, foreign currency forward contracts are designated as fair value hedges. Changes in the fair value of these derivatives are reported as a component of other operating expense (income), net. For the three months ended July 25, 2025, amounts excluded from the

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

assessment of effectiveness were recognized in interest expense, net on a straight-line basis over the term of the hedge and were not material. Cash flows related to the Company's derivative instruments designated as fair value hedges are reported as financing activities in the condensed consolidated statements of cash flows. Cash flows attributed to amounts excluded from the assessment of effectiveness are reported as operating activities in the condensed consolidated statements of cash flows.

Undesignated Derivatives

The Company uses foreign currency forward exchange contracts to offset the Company’s exposure to the change in the value of non-functional currency denominated assets, liabilities, and cash flows.

These foreign currency forward exchange rate contracts are not designated as hedges at inception, and therefore, changes in the fair value of these contracts are recognized in the condensed consolidated statements of income. Cash flows related to the Company’s undesignated derivative contracts are reported in the condensed consolidated statements of cash flows based on the nature of the derivative instrument. The Company had total return swaps with a notional balance of $0.4 billion as of July 31, 2026. The Company has not included the total return swaps in the below tabular disclosures as the gain and loss activity for the three months ended July 31, 2026 and July 25, 2025, and the fair value as of July 31, 2026 and April 24, 2026 was not material.

Outstanding Instruments

The following table presents the contractual amounts of the Company's outstanding instruments:


		As of
(in billions)	Designation	July 31, 2026		April 24, 2026
Currency exchange rate contracts	Cash flow hedge	$	8.6	$	8.5
Currency exchange rate contracts(1)	Net investment hedge	6.1		7.5
Foreign currency-denominated debt(2)	Net investment hedge	20.5		21.1

Currency exchange rate contracts	Undesignated	4.1		4.3

(1)At July 31, 2026, includes derivative contracts with a notional value of €3.0 billion, or $3.4 billion, designated as hedges of a portion of our net investment in certain European operations, derivative contracts with a notional value of ¥345.8 billion, or $2.1 billion, designated as hedges of a portion of our net investment in certain Japanese operations, and derivative contracts with a notional value of CHF436 million, or $532 million, designated as hedges of a portion of our net investment in certain Swiss Franc operations. These derivative contracts mature in fiscal years 2027 through 2045.

(2)At July 31, 2026, includes €18.0 billion, or $20.5 billion, of outstanding Euro-denominated debt designated as hedges of a portion of our net investment in foreign operations. This debt matures in fiscal years 2027 through 2054.

Gains and Losses on Hedging Instruments and Derivatives not Designated as Hedging Instruments

The amount of the gains and losses on hedging instruments and the classification of those gains and losses within our condensed consolidated financial statements for the three months ended July 31, 2026 and July 25, 2025 were as follows:


	(Gain) Loss Recognized in Accumulated Other Comprehensive Loss				(Gain) Loss Reclassified into Income

	Three months ended					Three months ended					Location of (Gain) Loss in Income Statement
(in millions)	July 31, 2026		July 25, 2025				July 31, 2026		July 25, 2025
Cash flow hedges
Currency exchange rate contracts	$	(198)	$	97			$	6	$	20		Other operating expense (income), net
Currency exchange rate contracts	4		38				(4)		(19)			Cost of products sold
Net investment hedges
Foreign currency-denominated debt	(635)		582				—		—			N/A
Currency exchange rate contracts	(102)		(1)				—		—			N/A
Fair value hedges
Currency exchange rate contracts	—		1				—		(20)			Other operating expense (income), net
Total	$	(930)	$	717			$	2	$	(18)

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The amount of the gains and losses on our derivative instruments not designated as hedging instruments and the classification of those gains and losses within our condensed consolidated statements of income during the three months ended July 31, 2026 and July 25, 2025 were as follows:

(Gain) Loss Recognized in Income

Three months ended

Location of (Gain) Loss in Income Statement

(in millions)

July 31, 2026

July 25, 2025

Currency exchange rate contracts

(16)

(2)

Other operating expense (income), net

Balance Sheet Presentation

The following table summarizes the balance sheet classification and fair value of derivative instruments included in the condensed consolidated balance sheets at July 31, 2026 and April 24, 2026. The fair value amounts of qualified hedging instruments are presented on a gross basis and segregated between designated and not designated as hedging instruments. These hedging instruments are segregated by type of contract.


	Fair Value - Assets					Fair Value - Liabilities
(in millions)	July 31, 2026		April 24, 2026		Balance Sheet Classification	July 31, 2026		April 24, 2026		Balance Sheet Classification
Derivatives designated as hedging instruments
Currency exchange rate contracts	$	236	$	214	Other current assets	$	95	$	253	Other accrued expenses

Currency exchange rate contracts	395		328		Other assets	91		158		Other liabilities
Total derivatives designated as hedging instruments	630		542			186		411
Derivatives not designated as hedging instruments
Currency exchange rate contracts	10		13		Other current assets	11		10		Other accrued expenses




Total derivatives	$	640	$	555		$	197	$	420

The following table provides information by level for the derivative assets and liabilities that are measured at fair value on a recurring basis.


	July 31, 2026				April 24, 2026
(in millions)	Derivative Assets		Derivative Liabilities			Derivative Assets		Derivative Liabilities
Level 1	$	640	$	197		$	555	$	420

The Company has elected to present the fair value of derivative assets and liabilities within the condensed consolidated balance sheets on a gross basis, even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. The cash flows related to collateral posted and received are reported gross as investing and financing activities, respectively, in the condensed consolidated statements of cash flows.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following tables provide information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria as stipulated by the terms of the master netting arrangements with each of the counterparties. Derivatives not subject to master netting arrangements are not eligible for net presentation.


	July 31, 2026
			Gross Amount Not Offset on the Balance Sheet
(in millions)	Gross Amount of Recognized Assets (Liabilities)		Financial Instruments		Cash Collateral Received		Net Amount
Derivative assets:
Currency exchange rate contracts	$	640	$	(169)	$	(40)	$	432




Derivative liabilities:
Currency exchange rate contracts	(197)		169		—		(28)




Total	$	443	$	—	$	(40)	$	404


	April 24, 2026
			Gross Amount Not Offset on the Balance Sheet
(in millions)	Gross Amount of Recognized Assets (Liabilities)		Financial Instruments		Cash Collateral Posted		Net Amount
Derivative assets:
Currency exchange rate contracts	$	555	$	(232)	$	—	$	323




Derivative liabilities:
Currency exchange rate contracts	(420)		232		98		(91)




Total	$	135	$	—	$	98	$	233

Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of interest-bearing investments, derivative contracts, and trade accounts receivable. Global concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of customers and their dispersion across many geographic areas. The Company monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business.

The Company has cash and cash equivalents, investments, and certain other financial instruments positions (including currency exchange rate and interest rate derivative contracts) with various major financial institutions. The Company performs periodic evaluations of the relative credit standings of these financial institutions and limits the amount of credit exposure with any one institution. In addition, the Company has collateral credit agreements with its primary derivatives counterparties. Under these agreements, either party is required to post eligible collateral when the market value of transactions covered by the agreement exceeds specific thresholds, thus limiting credit exposure for both parties. As of July 31, 2026, the Company received net cash collateral of $40 million. Cash collateral received is recorded as an increase in cash and cash equivalents with the offset recorded in other accrued expenses in the condensed consolidated balance sheets. As of April 24, 2026, the Company posted net cash collateral of $98 million to its counterparties. Cash collateral posted is recorded as a reduction in cash and cash equivalents, with the offset recorded as an increase in other current assets in the consolidated balance sheets.

9. Inventories

Inventory balances were as follows:


(in millions)	July 31, 2026		April 24, 2026
Finished goods	$	4,121	$	4,075
Work-in-process	900		800
Raw materials	1,194		1,076
Total	$	6,215	$	5,951

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

10. Goodwill and Other Intangible Assets

Goodwill

The following table presents the changes in the carrying amount of goodwill by reportable segment and goodwill assigned to the other operating segments:


(in millions)	Cardiovascular		Neuroscience		Medical Surgical		Reportable Segments		Other Operating Segments		Total
April 24, 2026	$	8,602	$	11,777	$	19,953	$	40,332	$	2,256	$	42,587
Goodwill as a result of acquisitions	—		933		—		933		—		933
Purchase accounting adjustments	18		—		—		18		—		18
Currency translation and other	(36)		(37)		(277)		(350)		(1)		(351)
July 31, 2026	$	8,583	$	12,673	$	19,675	$	40,932	$	2,255	$	43,187

No goodwill impairment was recognized during the three months ended July 31, 2026 and July 25, 2025.

Intangible Assets

The following table presents the gross carrying amount and accumulated amortization of intangible assets:


	July 31, 2026				April 24, 2026
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Definite-lived:
Customer-related	$	16,716	$	(10,824)	$	16,559	$	(10,596)
Purchased technology and patents	12,190		(8,481)		11,875		(8,319)
Trademarks and tradenames	424		(297)		422		(295)
Other	379		(135)		373		(126)
Total	$	29,709	$	(19,737)	$	29,229	$	(19,336)
Indefinite-lived:
IPR&D	$	265	$	—	$	253	$	—

The Company did not recognize any definite-lived or indefinite-lived intangible asset impairment charges during the three months ended July 31, 2026 and July 25, 2025. Due to the nature of IPR&D projects, the Company may experience future delays or failures to obtain regulatory approvals to conduct clinical trials, failures of clinical trials, delays or failures to obtain required market clearances, other failures to achieve a commercially viable product, or the discontinuation of certain projects, and as a result, may recognize impairment losses in the future.

Amortization Expense

Intangible asset amortization expense for the three months ended July 31, 2026 was $412 million. Intangible asset amortization expense for the three months ended July 25, 2025 was $459 million, including $45 million of accelerated amortization on certain intangible assets within the Cardiovascular Portfolio.

11. Income Taxes

The Company's effective tax rate for the three months ended July 31, 2026 was 16.4%, as compared to 19.6% for the three months ended July 25, 2025. The decrease in the effective tax rate for the three months ended July 31, 2026 primarily relates to the release of reserves for uncertain tax positions on prior period intercompany transactions and year-over-year changes in operational results by jurisdiction.

At July 31, 2026 and April 24, 2026, the Company's gross unrecognized tax benefits were $2.9 billion and $3.0 billion, respectively. The Company had interest and penalties net receivable of $34 million and $22 million at July 31, 2026 and April 24, 2026, respectively. If all of the Company’s unrecognized tax benefits were recognized, approximately $2.6 billion would impact the Company’s effective tax rate. At both July 31, 2026 and April 24, 2026, the amount of the Company's gross unrecognized tax benefits, net of cash advance, recorded as a noncurrent liability within accrued income taxes on the consolidated balance sheets was $2.0 billion. The Company recognizes interest and penalties related to income tax matters within income tax provision in the consolidated statements of income and records the liability within either current or noncurrent accrued income taxes on the consolidated balance sheets.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Refer to Note 16 for additional information regarding the status of current tax audits and proceedings.

On July 4, 2025, the U.S. Government enacted The One Big Beautiful Bill Act of 2025 which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. The impact for both the three months ended July 31, 2026 and July 25, 2025 was not material.

The Organization for Economic Co-operation and Development (OECD) published Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15% in each jurisdiction in which the group operates. The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax. A number of countries, including Ireland, have enacted legislation to implement the core elements of Pillar Two, which were effective for Medtronic in fiscal year 2025.

12. Earnings Per Share

Basic earnings per share is computed based on the weighted average number of ordinary shares outstanding. Diluted earnings per share is computed based on the weighted average number of ordinary shares outstanding, increased by the number of additional shares that would have been outstanding had the potentially dilutive ordinary shares been issued, and reduced by the number of shares the Company could have repurchased with the proceeds from issuance of the potentially dilutive shares. Potentially dilutive ordinary shares include stock-based awards granted under stock-based compensation plans and shares committed to be purchased under the employee stock purchase plan.

The table below sets forth the computation of basic and diluted earnings per share:


	Three months ended
(in millions, except per share data)	July 31, 2026		July 25, 2025
Numerator:
Net income attributable to ordinary shareholders	$	1,470	$	1,040
Denominator:
Basic – weighted average shares outstanding	1,279.8		1,281.6
Effect of dilutive securities:
Employee stock options	0.1		0.2
Employee restricted stock units	3.0		3.1
Employee performance share units	2.3		2.2
Diluted – weighted average shares outstanding	1,285.1		1,287.1
Basic earnings per share	$	1.15	$	0.81
Diluted earnings per share	$	1.14	$	0.81

The calculation of weighted average diluted shares outstanding excludes stock options, restricted stock units, and performance share units of approximately 25 million ordinary shares for the three months ended July 31, 2026 and 24 million ordinary shares for the three months ended July 25, 2025, because their effect would have been anti-dilutive on the Company’s earnings per share.

13. Stock-Based Compensation

The following table presents the components of stock-based compensation expense for stock options, restricted stock, performance share units, and employee stock purchase plan shares recognized for the three months ended July 31, 2026 and July 25, 2025:


	Three months ended
(in millions)	July 31, 2026		July 25, 2025
Stock options	$	8	$	10
Restricted stock	62		49
Performance share units	43		16
Employee stock purchase plan	13		11
Total stock-based compensation expense	$	125	$	86

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

14. Retirement Benefit Plans

The Company sponsors various retirement benefit plans, including defined benefit pension plans, post-retirement medical plans, defined contribution savings plans, and termination indemnity plans, covering substantially all U.S. employees and many employees outside the U.S. The net periodic benefit cost (credit) of the defined benefit pension plans included the following components for the three months ended July 31, 2026 and July 25, 2025:


	U.S.				Non-U.S.
	Three months ended
(in millions)	July 31, 2026		July 25, 2025		July 31, 2026		July 25, 2025

Service cost	$	12	$	12	$	12	$	11
Interest cost	42		42		14		12
Expected return on plan assets	(63)		(64)		(20)		(18)
Amortization of prior service cost	(1)		(1)		—		—
Amortization and settlement recognition of actuarial loss (gain)	5		5		1		1
Net periodic benefit cost (credit)	$	(4)	$	(6)	$	7	$	6

Components of net periodic benefit cost (credit) other than the service component are recognized in other non-operating expense (income), net in the condensed consolidated statements of income.

15. Accumulated Other Comprehensive Loss

The following table provides changes in accumulated other comprehensive loss (AOCL), net of tax, and by component:


(in millions)	Unrealized (Loss) Gain on Investment Securities		Cumulative Translation Adjustments		Net Investment Hedges		Net Change in Retirement Obligations		Unrealized (Loss) Gain on Cash Flow Hedges		Total Accumulated Other Comprehensive Loss
April 24, 2026	$	(15)	$	(2,447)	$	(1,024)	$	(498)	$	(116)	$	(4,101)
Other comprehensive income (loss) before reclassifications	(47)		(479)		695		—		163		333
Reclassifications	—		—		—		1		10		10
Other comprehensive income (loss)	(48)		(479)		695		1		173		342
July 31, 2026	$	(63)	$	(2,925)	$	(329)	$	(499)	$	57	$	(3,759)


(in millions)	Unrealized (Loss) Gain on Investment Securities		Cumulative Translation Adjustments		Net Investment Hedges		Net Change in Retirement Obligations		Unrealized Gain (Loss) on Cash Flow Hedges		Total Accumulated Other Comprehensive Loss
April 25, 2025	$	(63)	$	(2,835)	$	(597)	$	(640)	$	(149)	$	(4,284)
Other comprehensive income (loss) before reclassifications	18		348		(559)		(1)		(134)		(327)
Reclassifications	1		—		—		2		5		8
Other comprehensive income (loss)	19		348		(559)		1		(128)		(319)

July 25, 2025	$	(44)	$	(2,487)	$	(1,156)	$	(641)	$	(276)	$	(4,604)

The income tax on gains and losses on investment securities and retirement obligations in other comprehensive income (loss) before reclassifications and the income taxes on realized gains and losses on investment securities and gains and losses on defined benefit and pension items reclassified from AOCL during the three months ended July 31, 2026 and July 25, 2025 were not material. For the three months ended July 31, 2026 and July 25, 2025 there was no income tax on cumulative translation adjustments.

The income tax on net investment hedges in other comprehensive income (loss) before reclassifications during the three months ended July 31, 2026 and July 25, 2025, was an expense of $41 million and a benefit of $23 million, respectively. Refer to Note 8 for additional information.

The income tax on unrealized gains and losses on cash flow hedges in other comprehensive income (loss) before reclassifications during the three months ended July 31, 2026 was an expense of $30 million and during the three months ended July 25, 2025, was not material. During

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

the three months ended July 31, 2026 and July 25, 2025, gains and losses on cash flow hedges reclassified from AOCL were reduced by an immaterial amount of income taxes. Refer to Note 8 for additional information.

16. Commitments and Contingencies

Legal Matters

The Company and its affiliates are involved in a number of legal actions from time to time involving product liability, employment, intellectual property and commercial disputes, shareholder-related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations, including those described below. With respect to governmental proceedings and investigations, like other companies in our industry, the Company is subject to extensive regulation by national, state, and local governmental agencies in the United States and in other jurisdictions in which the Company and its affiliates operate. As a result, interaction with governmental agencies is ongoing. The Company’s standard practice is to cooperate with regulators and investigators in responding to inquiries. With respect to intellectual property disputes, the Company is involved in litigation relating to patents, trademarks, copyrights, trade secrets, and other intellectual property (IP) rights, and licenses, acquisitions or other agreements relating to such rights. This litigation includes, but is not limited to, alleged infringement or misappropriation of IP rights, or breach of obligations related to IP rights, or other claims asserted by competitors, individuals, or, consistent with a growing trend across technology-intensive industries, other entities created specifically to fund IP litigation. With respect to commercial disputes, antitrust and competition issues have gained increased prominence, enforcement and private litigation have increased globally, and the Company is involved in or at risk for antitrust litigation, investigations or enforcement actions regarding a range of commercial activities, including challenges to mergers and acquisition transactions, joint ventures, co-development or co-marketing arrangements, contracting practices, distribution agreements and employment agreements. The outcomes of legal actions are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, the enforcement agencies or private claimants seek significant monetary damages and/or royalty payments, as well as other civil or criminal remedies (including injunctions barring or restricting the sale of products that are the subject of the proceeding, placing restrictions on competitive strategies or practices, or unwinding consummated transactions), any or all of which could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.

The Company records a liability in the consolidated financial statements on an undiscounted basis for loss contingencies related to legal actions when a loss is known or considered probable and the amount may be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed. When determining the estimated loss or range of loss, significant judgment is required. Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, particularly when the matters are in early procedural stages with incomplete scientific facts or legal discovery, involve unsubstantiated or indeterminate claims for damages, potentially involve penalties, fines or punitive damages, or could result in a change in business practice. The Company classifies certain specified litigation charges and gains related to significant legal matters as certain litigation charges, net in the condensed consolidated statements of income and includes accrued certain litigation in other accrued expenses and other liabilities in the condensed consolidated balance sheets. The Company recognized no certain litigation charges, net, during the three months ended July 31, 2026. During the three months ended July 25, 2025, the Company recognized $27 million certain litigation charges, net. At both July 31, 2026 and April 24, 2026, accrued certain litigation was approximately $0.2 billion. The ultimate cost to the Company with respect to this litigation is difficult to predict, and the cost of any litigation, including litigation subject to accruals, could be materially different than the amount of the current estimates and accruals and could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.

Product Liability Matters

Hernia Mesh Litigation

Starting in fiscal year 2020, plaintiffs began filing lawsuits against certain subsidiaries of the Company in U.S. state and federal courts that allege personal injury from hernia mesh products sold by those subsidiaries. As of August 5, 2026, the Company and certain of its subsidiaries have been named as defendants in lawsuits filed on behalf of approximately 10,500 individual plaintiffs, and certain plaintiffs’ law firms have advised the Company that they may file additional cases in the future. Approximately 7,450 plaintiffs have pending lawsuits in a coordinated proceeding in Massachusetts state court, where they have been consolidated before a single judge. Approximately 500 plaintiffs have pending lawsuits in a coordinated action in Minnesota state court, and there are approximately 2,400 actions coordinated in a federal Multidistrict Litigation (MDL) in the U.S. District Court for the District of Massachusetts plus fewer than ten one-off cases filed in other courts. There are approximately 150 claims outside of the U.S. The pending lawsuits relate almost entirely to hernia mesh products that have not been subject to recalls, withdrawals, or other adverse regulatory action. The hernia mesh docket is made up of cases involving a variety of products, defect theories, and alleged injuries involving patients who have a variety of risk factors for complications.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The first MDL trial took place in the U.S. District Court for the District of Massachusetts in July and August 2026. On August 4, 2026, the jury returned a verdict in favor of the plaintiffs, awarding $88 million in damages. The Company believes that the verdict and damage award are inconsistent with the law and evidence at trial. The Company has strong arguments to challenge the verdict and damage award, and if necessary, will appeal to the appropriate appellate courts.

In assessing whether the Company should record an expense related to the jury verdict, we considered various factors, including the legal and factual circumstances of the case, the planned post-trial proceedings, applicable law, and the basis for the post-trial challenges we expect to mount. In light of the remaining post-trial motions and appeal, the ultimate result of this litigation remains uncertain. It is reasonably possible that as a result of post-trial challenges, including an appeal, some or all of the jury’s verdict and damages award could be overturned. An estimate of the ultimate loss or range of losses is not possible at this time. Accordingly, we have determined, in accordance with applicable accounting principles, a loss or range of losses that we may incur is not probable at this time and have therefore not recorded a liability related to this verdict.

The Company recognized certain litigation charges in fiscal year 2026 in connection with certain of these matters, and the Company's accrued expenses for these matters are included within accrued litigation as discussed above.

Diabetes Pump Retainer Ring Litigation

Starting in fiscal year 2021, plaintiffs began filing lawsuits against the Diabetes operating unit in U.S. state and federal courts alleging personal injury, including deaths, from Series 600 insulin pumps with allegedly defective clear retainer rings that were subject to field corrective actions in 2019 and 2021. As of August 7, 2026, there are 27 lawsuits filed on behalf of 105 individuals. Plaintiffs’ firms previously notified the Company that they may file additional lawsuits in the future on behalf of several thousand additional claimants. Most of the filed suits are coordinated in California state court. These lawsuits relate to products made by MiniMed. While the Company is a named defendant in these suits, as a result of the IPO, MiniMed will be responsible for any financial liabilities resulting therefrom. The Company recognized certain litigation charges in fiscal year 2026 in connection with certain of these matters, and the Company's accrued expenses for these matters are included within accrued litigation as discussed above.

Antitrust Matters

Applied Medical

The Company is a defendant in civil antitrust litigation brought by Applied Medical Resources Corporation (Applied) in the U.S. District Court for the Central District of California, alleging that the Company has engaged in anticompetitive and monopolistic conduct relating to its sales of advanced bipolar devices, including under contracts with group purchasing organizations. On August 15, 2025, the court denied the Company's motion for summary judgment concluding that there were disputed factual issues to be resolved at trial.

A jury trial was held in the U.S. District Court for the Central District of California from January 20, 2026, to February 4, 2026. On February 5, 2026, the jury returned a verdict in favor of Applied, awarding Applied $382 million in damages, which will be automatically trebled by the court as required by law. In addition, we expect that Applied will seek attorneys’ fees and reasonable costs, an estimate of which is not available at this time. Applied is also seeking injunctive relief, which will be argued before the Court in October 2026. The Company believes that the jury’s decision and amounts awarded are inconsistent with the law and evidence at trial and plans to appeal with the appropriate appellate courts. The Company plans to post surety bonds in the amount directed by the court once final judgment has been entered.

In assessing whether the Company should record an expense related to the jury verdict, we considered various factors, including the legal and factual circumstances of the case, the planned post-trial proceedings, applicable law, and the likelihood that the jury’s award will be upheld on appeal. In light of all those factors, the ultimate result of this litigation remains uncertain. It is reasonably possible that as a result of an appeal, that none, some, or all of the jury’s verdict and other relief sought might ultimately be awarded, and an estimate of the ultimate loss or range of losses is not possible at this time. Accordingly, as a result of this review, we have determined, in accordance with applicable accounting principles, a loss or range of losses that we may incur is not probable at this time and have therefore not recorded a liability for this matter.

Environmental Proceedings

The Company is a successor to several investigation and cleanup actions at various stages related to environmental remediation matters at a number of sites, including in Orrington, Maine. These projects relate to a variety of activities, including removal of solvents, metals and other hazardous substances from soil and groundwater. The ultimate cost of site cleanup and timing of future cash flows is difficult to predict given uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The Company is also a successor to a party named in a lawsuit filed in the U.S. District Court for the District of Maine in the early 2000's by the Natural Resources Defense Council and the Maine People's Alliance relating to mercury contamination of the Penobscot River and Bay and options for remediating such contamination. In October 2022, the court issued a final order approving the settlement and the parties are working with consultants on implementation of remedial activities. The final court order did not result in a change to the Company's previous accrual for this matter.

The Company's accrued expenses for these various environmental proceedings are included within accrued litigation as discussed above.

Anti-Corruption Matters

The Company has regular and ongoing interactions with governmental agencies, and its practice is to cooperate with such inquiries. In addition, from time to time, the Company self-discloses potential concerns to governmental regulators. Like many in the medical device industry or with international operations, the Company engages in periodic discussions with the U.S. Securities and Exchange Commission, U.S. Department of Justice, and various authorities in other countries regarding certain activities in different global markets. The Company is committed to regularly evaluating and, as appropriate, strengthening its anti-corruption compliance programs and practices. Any possible future determination that certain of our operations and activities, and/or those of our third-party distributors, are not in compliance with existing laws could result in the imposition of fines, penalties, and equitable remedies in the United States or in other jurisdictions. The Company has not recorded an expense in connection with these matters because any potential loss is not currently probable and reasonably estimable. Additionally, the Company is unable to reasonably estimate the range of loss, if any, that may result from these matters.

Other Matters

Italian Payback

In 2015, “payback” legislation was enacted in Italy requiring companies selling medical devices to make payments to the Italian state if Italy’s medical device expenditures exceed annual regional maximum ceilings. The payment amounts are calculated based upon the amount by which the regional ceilings were exceeded for any given year. There has been significant scrutiny on the legality and enforceability of the payback law since its inception, and litigation challenging the law has been proceeding through the Italian Courts. Since the law was enacted, the Company has recognized an estimate for the amount of variable consideration.

In July 2024, two rulings by the Constitutional Court of Italy found that the medical device payback law is constitutional. In June 2025, the Italian government published a legislative decree confirming a reduction of the amounts due for years 2015 to 2018. The decree was formalized into law in August 2025. As a result, the Company decreased its liability pertaining to these years by $39 million during fiscal year 2026, as an increase to net sales in the condensed consolidated statements of income. Discussions are ongoing between the Italian government and industry groups related to the applicability of this legislation for years 2019 and beyond, as such, it is possible that the amount of the Company’s liability could materially differ from the amount currently accrued.

Mallinckrodt Bankruptcy Litigation

Certain of the Company’s affiliates are defendants in a lawsuit brought by a trust created in the bankruptcy of Mallinckrodt PLC (the “Trust”) in Delaware bankruptcy court. The Trust claims that Covidien LP spun off its pharmaceuticals business, Mallinckrodt, in 2013 to avoid potential liability relating to opioids. In January 2024, the Delaware bankruptcy court granted in part and denied in part an early-stage motion to dismiss all claims, finding that the claims alleging actual fraudulent transfer and alter ego or related liability could go forward, while dismissing the claims alleging constructive fraudulent transfer and breaches of fiduciary duty. In August 2025, the court granted in part and denied in part a motion for summary judgment filed by the Company’s affiliates arguing the Trust’s claims should be dismissed as a matter of law based on application of a safe harbor provision of the bankruptcy code. The case will now proceed to discovery into the merits of the Trust’s intentional fraudulent transfer and related claims. The Company’s affiliates believe they have substantial legal and factual defenses and intend to defend themselves vigorously. The Company has not recorded a liability in connection with this matter because any potential loss is not currently probable and reasonably estimable. Additionally, the Company is unable to reasonably estimate the range of loss, if any, that may result from this matter.

Income Taxes

In March 2009, the IRS issued its audit report on Medtronic, Inc. for fiscal years 2005 and 2006. Medtronic, Inc. reached agreement with the IRS on some, but not all matters related to these fiscal years. The remaining unresolved issue for fiscal years 2005 and 2006 relates to the allocation of income between Medtronic, Inc. and its wholly-owned subsidiary operating in Puerto Rico, which is one of the Company's key manufacturing sites. The Tax Court reviewed this dispute, and in June 2016, issued an opinion with respect to the allocation of income between the parties for fiscal years 2005 and 2006 whereby it generally rejected the IRS’s position, but also made certain modifications to the Medtronic, Inc. tax returns as filed. In April 2017, the IRS filed a Notice of Appeal to the U.S. Court of Appeals for the Eighth Circuit (the "Appellate Court") regarding the Tax Court opinion. The Appellate Court issued its opinion in August 2018 and remanded the case back to the Tax Court for additional factual findings. The Tax Court issued its second opinion in August 2022, the IRS filed a Notice of

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Appeal to the Appellate Court in September 2023, and Medtronic subsequently filed a cross-appeal in October 2023. In September 2025, the Appellate Court remanded the case back to the Tax Court for additional proceedings. The matter is currently before the Tax Court, but the parties have requested that the court stay proceedings to permit the parties to discuss the potential for a resolution of the matter. In the absence of any such resolution, we expect the proceedings to resume in the Tax Court.

The IRS had previously issued its audit reports on Medtronic, Inc. for fiscal years 2007 through 2016. Medtronic, Inc. and the IRS have reached agreement on all significant issues for fiscal years 2007 through 2016 except for the allocation of income between Medtronic, Inc. and its wholly-owned subsidiary operating in Puerto Rico for the businesses that are the subject of the U.S. Tax Court matter.

In April 2026, the IRS issued a preliminary audit report on Medtronic Group Holding, Inc. for fiscal years 2017 to 2019 that effectively settled some, but not all matters related to these fiscal years. The significant issues that remain unresolved relate to the allocation of income between Medtronic’s U.S. entities and its affiliated entity operating in Puerto Rico, the interest rates on intercompany debt, and the calculation of foreign tax credits. The Company disagrees with the IRS and will attempt to resolve these matters at the IRS Appellate level.

Medtronic Group Holding, Inc.’s fiscal years 2020 through 2023 U.S. federal income tax returns are currently being audited by the IRS.

Covidien LP (a wholly owned subsidiary of Medtronic plc) has either reached agreement with the IRS or the statute of limitations has lapsed on its U.S. federal income tax returns through fiscal year 2022. Covidien LP’s fiscal year 2023 federal income tax return is currently being audited by the IRS.

Although it is not possible to predict the outcome for most of the income tax matters discussed above, the Company believes it has adequately reserved for liabilities resulting from tax assessments by taxing authorities. However, it is possible that charges associated with these matters could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.

Refer to Note 11 for additional discussion of income taxes.

Guarantees

In the normal course of business, the Company and/or its affiliates periodically enter into agreements that require one or more of the Company and/or its affiliates to indemnify customers or suppliers for specific risks, such as claims for injury or property damage arising as a result of the Company or its affiliates’ products, the negligence of the Company's personnel, or claims alleging that the Company's products infringe on third-party patents or other intellectual property. The Company also offers warranties on various products. The Company’s maximum exposure under these guarantees is unable to be estimated. Historically, the Company has not experienced significant losses on these types of guarantees.

We also enter into standby letters of credit agreements, bank guarantees, and surety bonds with financial institutions to support various performance and other obligations, as well as ongoing tax matters. As of July 31, 2026, the aggregated amount outstanding under these instruments was approximately $1.3 billion.

The Company believes the ultimate resolution of the above guarantees is not expected to have a material effect on the Company’s consolidated earnings, financial position, and/or cash flows.

17. Segment and Geographic Information

The Company had changes to its reportable segments during the fourth quarter of fiscal year 2026. Although the Diabetes Business did not historically meet the quantitative thresholds to be considered a reportable segment, the Company has historically presented the Diabetes Business as a reportable segment because management deemed the information useful to investors. As a result of the MiniMed IPO, management no longer believes segment information about the Diabetes Business is useful to investors given the temporary nature of ownership as the Company has stated its intent to divest its remaining interest in MiniMed within fiscal year 2027 and the lack of strategic significance to ongoing operations. The Diabetes Business operating segment results are aggregated with the Other operating segment within the reconciliations below. Additionally, during the first quarter of fiscal year 2027, a product line moved from the Medical Surgical Portfolio to the Neuroscience Portfolio. Prior period information has been recast to conform to the current year presentation.

Since the fourth quarter of fiscal year 2026, the Company has three reportable segments: Cardiovascular Portfolio, Neuroscience Portfolio, and Medical Surgical Portfolio. The chief operating decision maker (CODM) is our Chief Executive Officer (CEO) and has chosen to organize the entity based upon therapy solutions provided by each segment. The three reportable segments are strategic businesses that are managed separately, as each one develops and manufactures products and provides services oriented toward targeted therapy solutions.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The CODM measures and evaluates segment performance and allocates resources based on net sales and segment operating profit. Net sales include end-customer revenues from products developed, manufactured, and distributed by the segments. Significant expense categories include cost of products sold excluding amortization of intangible assets, research and development expense, and selling, general, and administrative expenses. The CODM uses segment operating profit in the budget and forecasting process and to monitor budget and forecast variances versus actual when assessing segment performance and allocating capital resources to each segment.

Segment operating profit excludes interest income and expense, amortization of intangible assets, currency impact of remeasurement and hedging recorded in other operating expense (income), net, non-operating income or expense items, and other items not allocated to the segments.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 24, 2026. Certain depreciable assets may be recorded by one segment, while the depreciation expense is allocated to another segment. The allocation of depreciation expense is based on the proportion of the assets used by each segment. The CODM is not regularly provided with expenditures for additions to long-lived assets.

The following tables present reconciliations of financial information from the segments to the applicable line items in the Company's condensed consolidated financial statements:

Segment Operating Profit


	Three months ended July 31, 2026
(in millions)	Cardiovascular		Neuroscience		Medical Surgical		Total
Net sales	$	3,927	$	2,678	$	2,279	$	8,884
Reconciliation of revenues
Other operating segments net sales(1)							872

Total consolidated net sales							$	9,756

Less:
Cost of products sold, excluding amortization of intangible assets	1,308		786		919		3,013
Research and development expense	303		163		189		656
Selling, general, and administrative expense	1,269		922		681		2,872
Other segment items(2)	14		13		5		32
Reportable segment operating profit	$	1,033	$	793	$	485	$	2,311
Reconciliation of segment profit / (loss)
Other operating segments profit(1)							74
Currency and other							(69)
Interest expense, net							(186)
Other non-operating expense (income), net							190
Amortization of intangible assets							(412)
Restructuring and associated costs							(89)
Acquisition and divestiture-related items							(50)


Income before income taxes							$	1,769

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)


	Three months ended July 25, 2025
(in millions)	Cardiovascular		Neuroscience		Medical Surgical		Total
Net sales	$	3,285	$	2,427	$	2,073	$	7,785
Reconciliation of revenues
Other operating segments net sales(1)							755
Other adjustments(3)							39
Total consolidated net sales							$	8,578

Less:
Cost of products sold, excluding amortization of intangible assets	1,132		724		812		2,668
Research and development expense	280		157		169		606
Selling, general, and administrative expense	1,060		831		605		2,497
Other segment items(2)	(15)		2		1		(12)
Reportable segment operating profit	$	828	$	713	$	486	$	2,027
Reconciliation of segment profit / (loss)
Other operating segments profit(1)							37
Currency and other							(47)
Interest expense, net							(176)
Other non-operating expense (income), net							33
Amortization of intangible assets							(459)
Restructuring and associated costs							(67)
Acquisition and divestiture-related items							(58)
Certain litigation charges, net							(27)
Other adjustments(3)							39
Income before income taxes							$	1,302

(1)Includes the operations and ongoing transition agreements from businesses the Company has exited, divested, or intends to separate, including the Diabetes Business.

(2)Other segment items for the Cardiovascular, Neuroscience, and Medical Surgical segments include royalty expense. The Cardiovascular segment for both periods also include income from funded research and development arrangements.

(3)Includes adjustments to the Company's Italian payback accruals resulting from the June 30, 2025 Legislative Decree published by the Italian government for years 2015 to 2018.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Total Assets and Depreciation Expense


	Total Assets				Depreciation Expense
	As of				Three months ended
(in millions)	July 31, 2026		April 24, 2026		July 31, 2026		July 25, 2025
Cardiovascular	$	17,517	$	17,553	$	71	$	64
Neuroscience	19,942		18,514		78		77
Medical Surgical	31,905		32,535		65		54
Total reportable segments	69,364		68,602		215		194
Other operating segments(1)	4,747		4,827		34		31
Corporate	19,195		19,598		69		64
Total	$	93,306	$	93,028	$	317	$	289

(1)Includes the operations and ongoing transition agreements from businesses the Company has exited, divested, or intends to separate, including the Diabetes Business.

Geographic Information

Net sales are attributed to the country based on the location of the customer taking possession of the products or in which the services are rendered. The following table presents net sales for the three months ended July 31, 2026 and July 25, 2025 for the Company's country of domicile, countries with significant concentrations, and all other countries:


	Three months ended
(in millions)	July 31, 2026		July 25, 2025
Ireland	$	40	$	33

United States	4,906		4,224
Rest of world	4,810		4,321
Total other countries, excluding Ireland	9,716		8,545
Total	$	9,756	$	8,578

18. MiniMed Separation

On March 9, 2026, MiniMed completed an initial public offering of 28,000,000 shares of its common stock, par value $0.01 per share (MiniMed Common Stock), at an initial public offering price of $20.00 per share for net proceeds of $538 million. MiniMed shares began trading on the Nasdaq Global Select Market (Nasdaq) under the symbol "MMED."

As of the closing of the IPO, Medtronic owns 252,813,348 shares of MiniMed Common Stock, or approximately 90.03% of the total outstanding shares of MiniMed Common Stock. There were no changes to the number of shares the Company owned as of July 31, 2026. Due to the Company retaining a controlling financial interest, the condensed consolidated financial statements reflect the financial results of MiniMed. As of March 9, 2026, the non-controlling interest associated with MiniMed was $381 million. The difference between the net proceeds from the IPO and the non-controlling interest balance is recognized in additional paid-in capital on the condensed consolidated balance sheets.

Medtronic and MiniMed have entered into various definitive agreements that, among other things, set forth the terms and conditions of the separation, the most significant of which includes a Transition Services Agreement (“TSA”). The TSA specifies the services to be provided by Medtronic to MiniMed for a period generally not expected to exceed 24 months following the completion of the IPO. The services are intended to facilitate an orderly transition of the Diabetes Business to operate as an independent public company.

The Company plans to complete the separation of its Diabetes Business within the fiscal year.

Medtronic plc

Notes to Condensed Consolidated Financial Statements

(Unaudited)

19. Subsequent Events

Subsequent to quarter-end, in August 2026, the Company entered into a cross-currency swap derivative contract with a notional amount of $1.0 billion. This cross-currency swap derivative contract is designated as a net investment hedge of our Chinese Renminbi (CNY) denominated exposures from our investments in certain of our CNY denominated functional currency subsidiaries.

Additionally, on September 1, 2026, the Company announced a strategic partnership with Cornerstone Robotics (Cornerstone), an innovative surgical robotics company that shares Medtronic’s commitment to advancing minimally invasive surgery and improving accessibility to the latest in surgical care worldwide. This partnership includes an investment in Cornerstone and the rights to distribute Cornerstone’s Sentire surgical system in select markets outside the U.S. where the system is market approved. The Company paid approximately $700 million in cash for this investment in the second quarter of fiscal year 2027, which will be an increase primarily in other assets in the condensed consolidated financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

UNDERSTANDING OUR FINANCIAL INFORMATION

The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of Medtronic plc and its subsidiaries (Medtronic plc, Medtronic, or the Company, or we, us, or our). For a full understanding of financial condition and results of operations, this discussion and analysis should be read along with Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended April 24, 2026, as filed with the Securities and Exchange Commission (SEC) on June 18, 2026. In addition, this discussion and analysis should be read along with our condensed consolidated financial statements and related notes thereto at and for the three months ended July 31, 2026. Amounts reported in millions within this quarterly report are computed based on the actual amounts, and therefore, the sum of the components may not equal the total amount reported in millions due to rounding. Additionally, certain columns and rows within tables may not sum due to rounding.

Financial Trends

Throughout this Management’s Discussion and Analysis, we present certain financial measures that facilitate management's review of the operational performance of the Company and as a basis for strategic planning; however, such financial measures are not presented in our financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S.) (U.S. GAAP). These financial measures are considered non-GAAP financial measures and are intended to supplement, and should not be considered as superior to, financial measures presented in accordance with U.S. GAAP. We believe that non-GAAP financial measures provide information useful to investors in understanding the Company's underlying operational performance and trends and may facilitate comparisons with the performance of other companies in the medical technologies industry.

As presented in the "GAAP to Non-GAAP Reconciliations" section on the following pages, our non-GAAP financial measures exclude the impact of amortization of intangible assets and certain charges or benefits that contribute to or reduce earnings and that may affect financial trends. These measures include certain charges or benefits that result from transactions or events that we believe may or may not recur with similar materiality or impact our operations in future periods (non-GAAP adjustments).

In the event there is a non-GAAP adjustment recognized in our operating results, the tax cost or benefit attributable to that item is separately calculated and reported. Because the effective rate can be significantly impacted by the non-GAAP adjustments that take place during the period, we often refer to our tax rate using both the effective rate and the non-GAAP nominal tax rate. The non-GAAP nominal tax rate is calculated as the income tax provision, adjusted for the impact of non-GAAP adjustments, as a percentage of income before income taxes, excluding non-GAAP adjustments.

Free cash flow, a non-GAAP financial measure, is calculated by subtracting additions to property, plant, and equipment from net cash provided by operating activities.

Refer to the "GAAP to Non-GAAP Reconciliations," "Income Taxes," and "Free Cash Flow" sections for reconciliations of the non-GAAP financial measures to their most directly comparable financial measures prepared in accordance with U.S. GAAP.

EXECUTIVE LEVEL OVERVIEW

Medtronic is the leading global healthcare technology company — alleviating pain, restoring health, and extending life for millions of people around the world. Our primary products include those for cardiac rhythm disorders, cardiovascular disease, neurological disorders and diseases, spinal conditions and musculoskeletal trauma, ear, nose, and throat conditions, urological and digestive disorders, advanced and general surgical care, respiratory and monitoring solutions, and diabetes conditions.

Fiscal year 2027 is a 53-week fiscal year, with the extra week occurring in the first fiscal month of the first quarter and included in the three months ended July 31, 2026 results.

The following is a summary of net sales, diluted earnings per share, and operating cash flow for the three months ended July 31, 2026:

Executive Level Overview Infographic Q1 FY27.jpg

GAAP to Non-GAAP Reconciliations

The tables below present our GAAP to non-GAAP reconciliations for the three months ended July 31, 2026 and July 25, 2025:


	Three months ended July 31, 2026
(in millions, except per share data)	Income Before Income Taxes		Income Tax Provision (Benefit)		Net Income attributable to Medtronic		Diluted EPS		Effective Tax Rate
GAAP	$	1,769	$	289	$	1,470	$	1.14	16.4	%
Non-GAAP adjustments:
Amortization of intangible assets	412		75		337		0.26		18.2
Restructuring and associated costs(1)	89		19		70		0.05		21.2
Acquisition and divestiture-related items(2)	50		9		41		0.03		18.2

(Gain)/loss on minority investments(3)	(64)		—		(64)		(0.05)		(0.1)


Certain tax adjustments, net(4)	—		(5)		5		—		—
Non-GAAP	$	2,257	$	387	$	1,860	$	1.45	17.2	%

	Three months ended July 25, 2025
(in millions, except per share data)	Income Before Income Taxes		Income Tax Provision (Benefit)		Net Income attributable to Medtronic		Diluted EPS		Effective Tax Rate
GAAP	$	1,302	$	255	$	1,040	$	0.81	19.6	%
Non-GAAP adjustments:
Amortization of intangible assets(5)	459		85		374		0.29		18.5
Restructuring and associated costs(1)	67		15		51		0.04		22.4
Acquisition and divestiture-related items(2)	58		10		48		0.04		17.2
Certain litigation charges, net	27		6		21		0.02		22.2
(Gain)/loss on minority investments(3)	113		7		107		0.08		6.2

Other(6)	(39)		(8)		(30)		(0.02)		20.5
Certain tax adjustments, net(4)	—		(16)		16		0.01		—
Non-GAAP	$	1,987	$	354	$	1,626	$	1.26	17.8	%

(1)The charges primarily relate to employee termination benefits, facility related and contract termination costs, and asset write offs.

(2)The charges primarily include business combination costs, changes in fair value of contingent consideration, and exit of business-related charges. Exit of business-related charges primarily relate to the impending separation of the Diabetes Business and costs associated with the Company's June 2021 decision to stop the distribution and sale of the Medtronic HVAD System.

(3)We exclude unrealized and realized gains and losses on our minority investments as we do not believe that these components of income or expense have a direct correlation to our ongoing or future business operations.

(4)The net charges for the three months ended July 31, 2026 and July 25, 2025, primarily relate to amortization of previously established deferred tax assets arising from previous intercompany intellectual property transactions. The net charges for the three months ended July 31, 2026, were partially offset by the release of reserves for uncertain tax positions on prior period intercompany transactions.

(5)The Company recognized $45 million of accelerated amortization on certain intangible assets within the Cardiovascular Portfolio.

(6)Reflects adjustments to the Company's Italian payback accruals resulting from the June 30, 2025 Legislative Decree published by the Italian government for years 2015 to 2018.

Free Cash Flow

Free cash flow, a non-GAAP financial measure, is calculated by subtracting additions to property, plant, and equipment from net cash provided by operating activities. Management uses this non-GAAP financial measure, in addition to U.S. GAAP financial measures, to evaluate our operating results. Free cash flow should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with U.S. GAAP. Reconciliations between net cash provided by operating activities (the most comparable U.S. GAAP measure) and free cash flow are as follows:


	Three months ended
(in millions)	July 31, 2026		July 25, 2025
Net cash provided by operating activities	$	1,793	$	1,088
Additions to property, plant, and equipment	(503)		(504)
Free cash flow	$	1,290	$	584

Refer to the Summary of Cash Flows section for drivers of the change in cash provided by operating activities.

Macroeconomic Trends

Looking ahead, a number of macroeconomic and geopolitical factors could negatively impact our business, including without limitation:

•Competitive product launches and pricing pressure, geographic macroeconomic developments including changes in global trade policies and fluctuations in currency exchange rates, general price inflation, changes in interest rates, reimbursement challenges, impacts from changes in the mix of our product offerings, delays in product registration approvals, national and provincial tender pricing for certain products, particularly in China, replacement cycle challenges, and supply chain challenges from time to time.

•Recent developments in global trade policy have introduced new uncertainties for our business. The U.S., China, and other jurisdictions have recently imposed or proposed additional tariffs on imported goods. While we are taking proactive steps to mitigate the effects of these tariffs, the evolving nature of international trade policy continues to present a risk to our cost structure and financial performance. On February 20, 2026, the U.S. Supreme Court ruled that President Trump's tariff policies under the International Emergency Economic Powers Act ("IEEPA") are unconstitutional. Following that ruling, U.S. Customs and Border Protection ("CBP") implemented procedures for the processing of IEEPA tariff refunds, and the Company has participated in those processes where appropriate. We continue to monitor developments in global trade policy, including changes to tariff regimes and related administrative actions. The impact of such developments, including further escalation or expansion of trade barriers, could have a material adverse effect on our results of operations.

•The planned exit of certain businesses, including our Diabetes Business, may involve separation activities, costs, and risks associated with transitioning operations, arrangements, and infrastructure. The timing and execution of these activities, as well as any related disposition steps, could affect our future results and financial condition.

NET SALES

The charts below illustrate the percent of net sales by business for the three months ended July 31, 2026 and July 25, 2025:

The table below illustrates net sales by segment and division and market geography for the three months ended July 31, 2026 and July 25, 2025:


	Three months ended
(in millions)	July 31, 2026		July 25, 2025		% Change
Electrophysiology Therapies	$	2,218	$	1,712	30	%
Interventional Cardiology Therapies	894		834		7
CardioVascular Surgery	477		436		9
Peripheral Vascular Health	338		302		12
Cardiovascular	3,927		3,285		20
Cranial & Spinal Technologies	1,365		1,211		13
Specialty Therapies	774		702		10
Neuromodulation	539		514		5
Neuroscience	2,678		2,427		10
Surgical & Endoscopy	1,740		1,601		9
Acute Care & Monitoring	539		471		14
Medical Surgical	2,279		2,073		10
Reportable segment net sales	8,884		7,785		14
Diabetes	843		721		17
Other operating segment(1)	29		33		(12)
Other adjustments(2)	—		39		NM(3)
Total net sales	$	9,756	$	8,578	14	%


	U.S.						International
	Three months ended						Three months ended
(in millions)	July 31, 2026		July 25, 2025		% Change		July 31, 2026		July 25, 2025		% Change
Cardiovascular	$	1,853	$	1,479	25	%	$	2,074	$	1,806	15	%
Neuroscience	1,813		1,624		12		864		803		8
Medical Surgical	982		884		11		1,297		1,188		9
Reportable segment net sales	4,649		3,988		17		4,236		3,797		12
Diabetes	240		217		11		603		504		20
Other operating segment(1)	17		20		(12)		12		14		(14)
Other adjustments(2)	—		—		—		—		39		NM(3)
Total net sales	$	4,906	$	4,224	16	%	$	4,850	$	4,354	11	%

(1)Includes operations and ongoing transition agreements from businesses the Company has exited or divested.

(2)Reflects adjustments to the Company's Italian payback accruals as further described below.

(3)Not meaningful (NM).

The increase in net sales for the three months ended July 31, 2026, as compared to the corresponding period in the prior fiscal year, was driven primarily by growth in most businesses, as further described in the business sections below, including an extra week occurring in the first fiscal month of the first fiscal quarter in 2027 with an estimated benefit to reported growth of approximately $570 million and by impacts of foreign currency fluctuations. In addition, the net sales were partially offset by changes in estimates relating to our Italian payback accrual resulting from the Legislative Decree published by the Italian government in June 2025 and formalized into law in August 2025 for years 2015 to 2018. For the three months ended July 25, 2025, the accrual decreased by $39 million as an adjustment to net sales in the condensed consolidated statements of income.

Cardiovascular

Cardiovascular products include pacemakers, insertable cardiac monitors, cardiac resynchronization therapy devices, implantable cardioverter defibrillators, leads and delivery systems, products for the treatment of atrial fibrillation, information systems for the management of patients with Electrophysiology Therapy devices, products designed to reduce surgical site infections, coronary and peripheral stents and related delivery systems, balloons and related delivery systems, endovascular stent graft systems, heart valve

replacement technologies, cardiac tissue ablation systems, open heart and coronary bypass grafting surgical products, and renal denervation systems for the treatment of hypertension. Cardiovascular also includes Care Management Services and Cath Lab Managed Services (CLMS) within the Electrophysiology Therapies division. Cardiovascular's net sales for the three months ended July 31, 2026 were $3.9 billion, an increase of 20 percent, as compared to the corresponding period in the prior fiscal year, resulting from growth across most businesses.

The graphs below illustrate the percent of Cardiovascular net sales by division for the three months ended July 31, 2026 and July 25, 2025:

Electrophysiology Therapies (EPT) net sales for the three months ended July 31, 2026 increased 30 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by Cardiac Ablation Solutions due to growth in the pulsed field ablation portfolio and Cardiac Rhythm Management due to growth in Cardiac Pacing Therapies and Defibrillation Solutions.

Interventional Cardiology Therapies (ICT) net sales for the three months ended July 31, 2026 increased 7 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by TAVR, Symplicity Spyral renal denervation system, guide catheters and balloons.

CardioVascular Surgery (CVS) net sales for the three months ended July 31, 2026 increased 9 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by Aortic and growth in Cardiac Surgery due to growth in Avalus Ultra surgical valve and VitalFlow ECMO system.

Peripheral Vascular Health (PVH) net sales for the three months ended July 31, 2026 increased 12 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by growth in Peripheral Vascular and endoVenous.

In addition to the macroeconomic and geopolitical factors described in the Executive Level Overview, looking ahead, we expect Cardiovascular could be affected by the following:

•Global adoption and growth of Aurora EV-ICD.

•Growth of the Cobalt and Crome portfolio of ICDs and CRT-Ds.

•Continued growth and utilization of the TYRX Envelope for implantable devices.

•Market acceptance and growth of OmniaSecure defibrillation lead. OmniaSecure received CE Mark in March 2026.

•Continued global penetration of our Micra transcatheter pacing portfolio.

•Continued global growth of Azure pacing system.

•Continued acceptance and growth of the SelectSecure 3830 lead.

•Continued growth and acceptance of Reveal LINQ and expansion of the LINQ II cardiac monitor.

•Continued acceptance, adoption, and growth of our innovative portfolio of products in the Electrophysiology Therapies division, including the PulseSelect pulsed field ablation system and the Affera mapping and ablation system with Sphere-9 catheter.

•Continued growth and market acceptance of the Affera Mapping and Ablation System, Sphere-9 catheter, and Sphere-360 pulsed field ablation single-shot catheter. The Sphere-360 catheter received CE Mark in January 2026. In August 2026, there was an expanded CE Mark indication for Affera Mapping and Ablation System and Sphere-9 catheter for treatment of ventricular arrhythmias.

•Continued acceptance and growth of the self-expanding CoreValve Evolut transcatheter aortic valve replacement (TAVR) platform. This includes Evolut PRO+ which provides enhanced hemodynamics, reliable delivery, enhanced durability, advanced sealing, and Evolut FX, a system designed to improve the overall procedural experience through enhancements in deliverability, implant visibility, and deployment stability. The Evolut FX+ TAVR system maintains the valve performance benefits of the legacy Evolut TAVR platform and is designed to facilitate coronary access.

•Continued acceptance and growth of the Onyx Frontier drug-eluting stent (DES) platform. Onyx Frontier is a DES that introduces an enhanced delivery system and is used for complex percutaneous coronary intervention (PCI).

•Continued acceptance and growth of Prevail, Paclitaxel Coated PTCA Balloon Catheter.

•Strengthening our position in the Interventional Cardiology Therapies division as a result of the April 2026 acquisition of CathWorks Ltd. The acquisition expands the ICT division by aiming to transform how coronary artery disease is diagnosed and treated.

•Market acceptance and reimbursement for the Symplicity Spyral renal denervation system, also known as the Symplicity blood pressure procedure, for the treatment of hypertension. The U.S. Centers for Medicare and Medicaid Services (CMS) finalized National Coverage Determination in October 2025.

•Continued acceptance and growth VitalFlow ECMO. An accessory to VitalFlow EMCO system, VitalFlow Transport Frame Air and Ground, received CE Mark in May 2026.

•Market acceptance and growth of the Penditure LAA Exclusion System. The system received CE Mark in October 2025.

•Acceptance and growth of IN.PACT 018 drug-coated balloons (DCB). IN.PACT 018 adds to the existing IN.PACT Admiral DCB portfolio and is used to treat femoropopliteal disease.

•Continued market acceptance and growth of the Neuroguard IEP stenting system for carotid stenting procedures through our distribution agreement with Contego Medical.

•Continued market acceptance and growth of the Liberant mechanical thrombectomy system.

•Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of, and commercialize the products within our pipeline.

Neuroscience

Neuroscience's products include various spinal implants, bone graft substitutes, biologic products, image-guided surgery and intra-operative imaging systems, robotic guidance systems used in the robot-assisted spine procedures, and systems that incorporate advanced energy surgical instruments. Neuroscience's products also focus on therapies to treat the diseases of the vasculature in and around the brain, including coils, neurovascular stents, and flow diversion products, as well as products to treat the ear, nose, and throat (ENT), and the treatment of overactive bladder and urinary retention. Neuroscience also manufactures products related to implantable neurostimulation therapies and drug delivery systems for the treatment of chronic pain, movement disorders, and epilepsy. Neuroscience’s net sales for the three months ended July 31, 2026 was $2.7 billion, an increase of 10 percent, as compared to the corresponding period in the prior fiscal year, resulting from growth across most businesses.

The graphs below illustrate the percent of Neuroscience net sales by division for the three months ended July 31, 2026 and July 25, 2025:

Cranial & Spinal Technologies (CST) net sales for the three months ended July 31, 2026 increased 13 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by the continued adoption of the AiBLE ecosystem of spine implants and enabling technology with growth in Core Spine and Neurosurgery.

Specialty Therapies (Specialty) net sales for the three months ended July 31, 2026 increased 10 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by growth in the Altaviva implantable tibial neuromodulation system, ENT, and Neurovascular, primarily driven by the Scientia acquisition and Flow Diversion, partially offset by the Pipeline Vantage recall.

Neuromodulation (NM) net sales for the three months ended July 31, 2026 increased 5 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was driven by Pain Stim and the Percept RC neurostimulator with BrainSense technology.

In addition to the macroeconomic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Neuroscience could be affected by the following:

•Continued global adoption, growth, and market acceptance of integrated solutions through the AiBLE offering, which integrates spinal implants with enabling technologies (StealthStation, O-arm surgical imaging system, and Midas Rex), Mazor robotic guidance platform, and UNiD patient-specific rods with AI-driven technology for surgical planning and personalized spinal implants. The Stealth AXiS surgical system received U.S. FDA approval for spinal procedures in February 2026, followed by expanded approval for cranial and ENT applications in March 2026. The system received CE mark approval for spinal and cranial procedures in April 2026, and for ENT procedures in June 2026. The system incorporates navigation workflows with a modular robotic architecture.

•Market acceptance and continued global adoption of innovative spine products and procedural solutions within our CST operating unit, such as Catalyft PL & PL40, CD Horizon ModuLeX and Voyager Systems, and our Infinity OCT systems, as well as continued growth from Titan spine titanium interbody implants with Nanolock technology.

•Continued global growth of commercially available Pipeline Embolization Devices, endovascular treatments for certain wide-necked brain aneurysms.

•Continued global acceptance of the Solitaire X revascularization device for treatment of acute ischemic stroke and our React Catheter and Riptide aspiration system.

•Continued global acceptance and growth of our Pelvic Health therapies, including our InterStim therapy with InterStim X and InterStim II recharge-free neurostimulators and InterStim Micro rechargeable neurostimulator for patients suffering from overactive bladder, (non-obtrusive) urinary retention, and chronic fecal incontinence. The Altaviva

implantable tibial neuromodulation system received U.S. FDA approval in September 2025 for urinary urge incontinence.

•Continued global adoption, growth, and market acceptance of our ENT therapies, including the intraoperative NIM Vital nerve monitoring system, the Propel sinus implants used in the treatment of chronic rhinosinusitis, and global capital equipment sales of the StealthStation ENT surgical navigation system and the U.S. FDA approved Stealth AXiS Surgical System for ENT applications, which received approval in March 2026, followed by CE mark approval in June 2026.

•Continued global acceptance and growth from spinal cord stimulation (SCS) therapy for treating chronic pain and Diabetic Peripheral Neuropathy (DPN) on the Inceptiv closed-loop rechargeable neurostimulator, Intellis rechargeable neurostimulator and Vanta recharge-free neurostimulator.

•Continued global acceptance and growth of our Percept family of deep brain stimulation (DBS) devices with proprietary BrainSense technology for objectifying and personalizing the treatment of Parkinson's Disease, epilepsy, and other movement disorders. BrainSense Adaptive DBS and BrainSense Electrode Identifier received CE Mark in January 2025 and U.S. FDA approval in February 2025.

•Continued market acceptance and growth of the Neuroguard IEP stenting system for carotid stenting procedures through our distribution agreement with Contego Medical.

•Strengthening our Specialty Therapies division as a result of the June 2026 acquisition of Scientia Vascular. The acquisition expands the Specialty Therapies division by treating complex neurovascular conditions. Additionally, strengthening our Neuromodulation division through the SPR Therapeutics July 2026 acquisition. The acquisition aids temporary peripheral nerve stimulation (PNS) technology, enabling earlier intervention for chronic pain sufferers.

•Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of, and commercialize the products within our pipeline, which include the hemorrhagic stroke device, our next-generation spine enabling technologies, and the implantable tibial bladder control stimulator.

Medical Surgical

Medical Surgical’s products span the entire continuum of patient care from diagnosis to recovery, with a focus on diseases of the gastrointestinal tract, lungs, pelvic region, obesity, and preventable complications. The products include those for advanced and general surgical products, surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products, hernia mechanical devices, mesh implants, advanced ablation, interventional lung, airway products, and sensors and monitors for pulse oximetry, capnography, level of consciousness and cerebral oximetry. Medical Surgical's net sales for the three months ended July 31, 2026 was $2.3 billion, an increase of 10 percent as compared to the corresponding period in the prior fiscal year, resulting from growth across most businesses.

The graphs below illustrate the percent of Medical Surgical net sales by division for the three months ended July 31, 2026 and July 25, 2025:

Surgical & Endoscopy (SE) net sales for the three months ended July 31, 2026 increased 9 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was primarily due to growth in Surgical, with strength in LigaSure vessel sealing technology, V-Loc barbed sutures, ProGrip self-gripping polyester mesh, Hugo robotic assisted surgery (RAS) system, and Endoscopy.

Acute Care & Monitoring (ACM) net sales for the three months ended July 31, 2026 increased 14 percent as compared to the corresponding period in the prior fiscal year. The net sales increase was primarily due to growth in Nellcor pulse oximetry and McGRATH MAC video laryngoscope, and Microstream Capnography.

In addition to the macroeconomic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Medical Surgical could be affected by the following:

•Acceptance and continued growth of Open-to-MIS (minimally invasive surgery) techniques and tools through our efforts to transition open surgery to MIS. Open-to-MIS initiative focuses on capturing the market opportunity that exists in transitioning open procedures to MIS, whether through traditional MIS, advanced instrumentation, or robotics. Through our approach, in parallel, we also expand our presence and optimize open surgery in current open surgery markets.

•Continued global acceptance and future growth of powered stapling and energy platform.

•Our ability to execute ongoing strategies addressing the pressures to bariatric surgery procedure volumes in the U.S. from pharmaceuticals, and growth of surgical soft tissue robotics procedures in the U.S.

•Our ability to create markets and drive products and procedures into emerging markets with our high quality and cost-effective surgical products designed for customers in emerging markets.

•Continued acceptance and growth in patient monitoring and airway management. Key products in this area include Microstream Capnography, Nellcor pulse oximetry system with OxiMax technology, Shiley tracheostomy and endotracheal tubes, and McGRATH MAC video laryngoscopes.

•Acceptance of less invasive standards of care in chronic and colorectal, as well as hepatology products, including products that span the care continuum from diagnostics to therapeutics.

•Expanding the use of less invasive treatments and furthering our commitment to improving options for women with abnormal uterine bleeding. Our expanded and strengthened surgical offerings complement our global gynecology business.

•Global adoption of robotic-assisted surgery and the safe and effective use of the Hugo RAS system, including system reliability and acceptability, for urologic, bariatric, gynecologic, hernia, and general surgery procedures. This includes continued integration and adoption of Touch Surgery Enterprise with the first artificial intelligence (AI) powered surgical videos and analytics platform to make it easier to analyze performance, train, and discover new techniques within the robotics platform. The Hugo RAS system is designed to help reduce unwanted variability, improve patient outcomes, and, by extension, lower per procedure cost. LigaSure RAS vessel-sealing technology received CE Mark in July 2025, expanding Hugo RAS system capabilities for gynecologic, general, and urologic procedures. The Hugo RAS system received U.S. FDA clearance for use in urologic surgical procedures in December 2025.

•Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of, and commercialize the products within our pipeline, which includes future indications and instrument expansions for our Hugo RAS system in the U.S. and the adoption of AI in Endoscopy and Digital Surgical Technologies.

Diabetes

Diabetes' products include insulin pumps, continuous glucose monitoring (CGM) systems, and consumables. Diabetes' net sales for the three months ended July 31, 2026 was $843 million, an increase of 17% as compared to the corresponding period in the prior fiscal year. The net sales increase was primarily driven by growth in the U.S. due to the commercial launch of MiniMed Flex with Simplera Sync and continued international growth due to the continued adoption of the MiniMed 780G AID system, including the Simplera Sync and Instinct sensors.

Refer to the Executive Level Overview for other factors that could impact the Diabetes Business.

COSTS AND EXPENSES

The following is a summary of cost of products sold, research and development, and selling, general, and administrative expenses as a percent of net sales for the three months ended July 31, 2026 and July 25, 2025:

Cost of Products Sold Cost of products sold for the three months ended July 31, 2026 was $3.4 billion as compared to $3.0 billion for the corresponding period in the prior fiscal year. Cost of products sold as a percentage of net sales for the three months ended July 31, 2026 was flat as compared to the corresponding period in the prior fiscal year, which was primarily driven by favorable pricing and cost-down initiatives, partially offset by unfavorable mixes. The year-over-year impact of tariffs did not have a material impact when including the benefit of refunds.

Research and Development Expense We remain committed to deliver the best possible experiences for patients, physicians, and caregivers we serve; to create technologies that expand what’s possible across the human body to transform lives; to turn data and insights into real action to serve patient needs, improving care; and to expand healthcare access and deliver positive outcomes. Research and development expense for the three months ended July 31, 2026 was $771 million as compared to $726 million for the corresponding period in the prior fiscal year.

Selling, General, and Administrative Expense Our goal is to continue to leverage selling, general, and administrative expense management initiatives. Selling, general, and administrative expense primarily consists of salaries and wages, other administrative costs, such as professional fees and marketing expenses, and certain acquisition and divestiture-related costs. Selling, general, and administrative expense for the three months ended July 31, 2026 was $3.2 billion as compared to $2.8 billion for the corresponding period in the prior fiscal year. The increase in selling, general, and administrative expense was primarily due to increased selling expenses in line with sales growth and new product launches and related commercialization activities.

The following is a summary of other costs and expenses (income):


	Three months ended
(in millions)	July 31, 2026		July 25, 2025
Amortization of intangible assets	$	412	$	459
Restructuring charges, net	72		45
Certain litigation charges, net	—		27
Other operating expense (income), net	123		70
Other non-operating expense (income), net	(190)		(33)
Interest expense, net	186		176

Amortization of Intangible Assets Amortization of intangible assets includes the amortization expense of our definite-lived intangible assets, consisting of customer relationships, purchased technology and patents, trademarks, tradenames, and other intangible assets.

The decrease in amortization expense for the three months ended July 31, 2026 is primarily driven by $45 million of accelerated amortization on certain intangible assets within the Cardiovascular Portfolio recognized in the prior year.

Restructuring Charges, Net For the three months ended July 31, 2026 and July 25, 2025, restructuring costs primarily consist of employee termination benefits, facility related and contract termination costs, and asset write-offs.

For additional information about our restructuring activities, refer to Note 5 to the condensed consolidated financial statements.

Certain Litigation Charges, Net We classify specified certain litigation charges and gains related to significant legal matters as certain litigation charges, net in the condensed consolidated statements of income. For additional information, refer to Note 16 to the condensed consolidated financial statements.

Other Operating Expense (Income), Net Other operating expense (income), net primarily includes expenses associated with royalties paid for the in-license of intellectual property from third parties, currency remeasurement and derivative gains and losses, changes in the fair value of contingent consideration, certain acquisition and divestiture-related items, and expenses and income associated with funded research and development arrangements.

For the three months ended July 31, 2026, the change in other operating expense (income), net was largely driven by a reduction in income relating to our research and development funding arrangements, partially offset by the net impact of currency remeasurement and our hedging programs resulting in a net loss of $48 million as compared to a net loss of $62 million for the corresponding period in the prior fiscal year.

For additional information on the research and development funding arrangements, refer to Note 4 to our condensed consolidated financial statements. For additional information on the derivative gains and losses, refer to Note 8 to our condensed consolidated financial statements.

Other Non-Operating Expense (Income), Net Other non-operating expense (income), net includes the non-service component of net periodic pension and postretirement benefit cost, investment gains and losses, and interest income, which includes income on marketable debt securities, our global liquidity structures, and equity and other investments.

The increase in other non-operating expense (income), net was primarily driven by net gains on minority investments of $64 million as compared to net losses of $113 million for the corresponding period in the prior fiscal year, partially offset by a decrease of $17 million of interest income.

Interest Expense, Net Interest expense, net includes interest incurred on our outstanding borrowings, global liquidity structures, amortization of debt issuance costs and debt premiums or discounts, and amortization of amounts excluded from the effectiveness assessment of certain net investment and fair value hedges.

For the three months ended July 31, 2026, the increase in interest expense, net was not material.

INCOME TAXES


	Three months ended
(in millions)	July 31, 2026			July 25, 2025
Income tax provision	$	289		$	255
Income before income taxes	1,769			1,302
Effective tax rate	16.4		%	19.6		%

Non-GAAP income tax provision	$	387		$	354
Non-GAAP income before income taxes	2,257			1,987
Non-GAAP nominal tax rate	17.2		%	17.8		%

Difference between the effective tax rate and non-GAAP nominal tax rate	0.8		%	(1.8)		%

Our non-GAAP nominal tax rate for the three months ended July 31, 2026 was 17.2%, as compared to 17.8% for the three months ended July 25, 2025, respectively. The decrease in our non-GAAP nominal tax rate for the three months ended July 31, 2026 primarily relates to year-over-year changes in operational results by jurisdiction. An increase in our non-GAAP nominal tax rate of 1 percent would result in an additional income tax provision for the three months ended July 31, 2026 of approximately $23 million.

On July 4, 2025, the U.S. Government enacted The One Big Beautiful Bill Act of 2025, which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. The impact for both the three months ended July 31, 2026 and July 25, 2025 was not material, nor does the Company expect the provisions of the Act to materially impact the remainder of fiscal year 2027 or beyond.

LIQUIDITY AND CAPITAL RESOURCES

We are currently in a strong financial position, and we believe our balance sheet and liquidity as of July 31, 2026, provide us with flexibility. We believe our cash, cash equivalents, and current investments, with our credit facility and related commercial paper programs, will satisfy our foreseeable operating needs.

Our liquidity and capital structures are evaluated regularly within the context of our annual operating and strategic planning processes. We consider the liquidity necessary to fund our operations, which includes working capital needs, investments in research and development, property, plant, and equipment, and other operating costs. We also consider capital allocation alternatives that balance returning value to shareholders through dividends and share repurchases, satisfying maturing debt, and acquiring businesses and technology.

Summary of Cash Flows

The following is a summary of cash provided by (used in) operating, investing, and financing activities, the effect of exchange rate changes on cash and cash equivalents, and the net change in cash and cash equivalents:


	Three months ended
(in millions)	July 31, 2026		July 25, 2025
Cash provided by (used in):
Operating activities	$	1,793	$	1,088
Investing activities	(1,619)		(719)
Financing activities	(343)		(1,381)
Effect of exchange rate changes on cash and cash equivalents	(89)		67
Net change in cash and cash equivalents	$	(258)	$	(945)

Operating Activities During the three months ended July 31, 2026, there was an increase of $705 million in net cash provided by operating activities as compared to the corresponding period in the prior fiscal year. The increase was primarily driven by an increase in cash collected from customers due to an increase in sales and decrease in cash paid for taxes and certain litigation payments, partially offset by an increase in cash paid to suppliers and other vendors.

Investing Activities During the three months ended July 31, 2026, there was an increase of $900 million in cash used in investing activities as compared to the corresponding period in the prior fiscal year. The increase was primarily driven by an increase in acquisitions of $1.2 billion, partially offset by net sales of investments of $109 million. The remaining change primarily relates to derivatives activity.

Financing Activities During the three months ended July 31, 2026, there was a decrease of $1.0 billion in net cash used in financing activities as compared to the corresponding period in the prior fiscal year.

The decrease was driven by a $1.3 billion change in debt year-over-year, with $812 million of cash inflows in fiscal year 2027 as compared to cash outflows of $513 million in fiscal year 2026. During the three months ended July 31, 2026, the Company had an increase of short-term borrowings of $812 million as compared to $649 million increase during the three months ended July 25, 2025. During the three months ended July 25, 2025, the Company also repaid at maturity €1.0 billion of Medtronic Luxco Senior Notes for $1.2 billion total consideration.

Partially offsetting the decrease in net cash used was an increase of $219 million in net share repurchases for the three months ended July 31, 2026. The remaining change primarily relates to derivative activity.

For additional information on financing arrangements, refer to Note 7 to the condensed consolidated financial statements.

Debt and Capital

Our capital structure consists of equity and interest-bearing debt. We primarily utilize unsecured senior debt obligations to meet our financing needs and, to a lesser extent, bank borrowings. From time to time, we may repurchase our outstanding debt obligations in the open market or through privately negotiated transactions.

Total debt at July 31, 2026 was $28.2 billion as compared to $28.0 billion at April 24, 2026. The increase in total debt was primarily driven by the increase in short-term borrowings, partially offset by the impact of foreign exchange rates on our foreign currency denominated debt.

We repurchase our ordinary shares on occasion as part of our focus on returning value to our shareholders. In March 2024, the Company's Board of Directors authorized the repurchase of $5.0 billion of the Company's ordinary shares. There is no specific time period associated with these repurchase authorizations. During the three months ended July 31, 2026, the Company repurchased a total of 3 million shares under this program at an average price of $81.56. At July 31, 2026, we had approximately $1.0 billion remaining under the share repurchase program authorized by our Board of Directors.

For more information on credit arrangements, refer to Note 7 to the condensed consolidated financial statements and Note 6 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 24, 2026.

Liquidity

Our liquidity sources at July 31, 2026 included $1.7 billion of cash and cash equivalents and $7.1 billion of current investments. Additionally, we maintain commercial paper programs and a Credit Facility.

Our investments primarily include available-for-sale debt securities, including U.S. and non-U.S. government and agency securities, corporate debt securities, mortgage-backed securities, and other asset-backed securities. Refer to Note 6 to the condensed consolidated financial statements for additional information regarding fair value measurements.

We maintain multicurrency commercial paper programs for short-term financing, which allow us to issue unsecured commercial paper notes on a private placement basis up to a maximum aggregate amount outstanding at any time of $3.5 billion. At July 31, 2026 and April 24, 2026, we had $450 million and no commercial paper outstanding, respectively. The issuance of commercial paper reduces the amount of credit available under our existing line of credit, as explained below.

We also have a $3.5 billion five-year syndicated credit facility (Credit Facility), which expires in December 2030. At each anniversary date of the Credit Facility we can request a one-year extension of the maturity date. The Credit Facility provides backup funding for the commercial paper programs and may also be used for general corporate purposes. The Credit Facility provides us with the ability to increase our borrowing capacity by an additional $1.0 billion at any time during the term of the agreement. At July 31, 2026 and April 24, 2026, no amounts were outstanding under the Credit Facility.

Interest rates on advances of our Credit Facility are determined by a pricing matrix based on our long-term debt ratings assigned by Standard & Poor's Ratings Services (S&P) and Moody's Investors Service (Moody’s). Facility fees are payable on the Credit Facility and are determined in the same manner as the interest rates. We are in compliance with all covenants related to the Credit Facility.

The following table is a summary of our S&P and Moody's long-term debt ratings and short-term debt ratings:

Agency Rating(1)

July 31, 2026

April 24, 2026

Standard & Poor's Ratings Services

Long-term debt

Short-term debt

A-1

Moody's Investors Service

Long-term debt

Short-term debt

P-2

(1)Agency ratings are subject to change, and there may be no assurance that an agency will continue to provide ratings and/or maintain its current ratings. A security rating is not a recommendation to buy, sell or hold securities, and may be subject to revision or withdrawal at any time by the rating agency, and each rating should be evaluated independently of any other rating.

S&P and Moody's long-term debt ratings and short-term debt ratings at July 31, 2026 were unchanged as compared to the ratings at April 24, 2026. We do not expect the S&P and Moody's ratings to have a significant impact on our liquidity or future flexibility to access additional liquidity given our balance sheet, Credit Facility, and related commercial paper programs.

Contractual Obligations and Cash Requirements

We have future contractual obligations and other minimum commercial commitments that are entered into in the normal course of business. We believe our off-balance sheet arrangements do not have a material current or anticipated future effect on our consolidated earnings, financial position, and/or cash flows. Refer to the Debt and Capital section above for changes in debt obligations, Note 16 for updates to guarantees and other commitments and contingencies, and Note 4 for updates to research and development funding arrangement obligations. There have been no other material changes to our long-term contractual obligations as reported in our most recent Annual Report filed on Form 10-K for the fiscal year ended April 24, 2026.

ACQUISITIONS AND DISPOSITIONS

Information regarding acquisitions and disposition activity is included in Note 4 to the condensed consolidated financial statements.

MiniMed Separation

In May 2025, the Company announced its intent to separate the Diabetes Business, with the intention to create a new independent, publicly traded company, MiniMed Group, Inc. On March 9, 2026, MiniMed completed an initial public offering. Due to the Company retaining a controlling financial interest, the condensed consolidated financial statements reflect the financial results of MiniMed. The Company plans to complete the separation of its Diabetes Business within this fiscal year.

Scientia Vascular Acquisition

On June 12, 2026, the Company closed on the acquisition of all outstanding shares of Scientia Vascular (Scientia) (a privately held company), for $681 million of total consideration transferred, including $123 million of contingent consideration. The acquisition will expand the Specialty Therapies division within the Neuroscience Portfolio through Scientia’s differentiated access products used to treat complex neurovascular conditions.

SPR Therapeutics, Inc. Acquisition

On July 16, 2026, the Company closed on the acquisition of all outstanding equity of SPR Therapeutics, Inc., a privately held medical technology company, for $654 million of total consideration transferred. The acquisition enhances the Neuromodulation division within the Neuroscience Portfolio with temporary peripheral nerve stimulation (PNS) technology, enabling earlier intervention for chronic pain sufferers.

CRITICAL ACCOUNTING ESTIMATES

We have used various accounting policies to prepare the condensed consolidated financial statements in accordance with U.S. GAAP. Our significant accounting policies are disclosed in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 24, 2026.

The preparation of the condensed consolidated financial statements, in conformity with U.S. GAAP, requires us to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates reflect our best judgment about economic and market conditions and the potential effects on the valuation and/or carrying value of assets and liabilities based upon relevant information available. We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Our critical accounting estimates are more fully described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended April 24, 2026.

Valuation of Intangible Assets and Goodwill When we acquire a business, the assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. Goodwill is the excess of the purchase price over the estimated fair value of identified net assets of acquired businesses. Intangible assets primarily include patents, trademarks, tradenames, customer relationships, purchased technology, and in-process research and development.

Determining the fair value of intangible assets acquired as part of a business combination requires us to make significant estimates. These estimates include the amount and timing of projected future cash flows of each project or technology, the discount rate used to discount those cash flows to present value, and the assessment of the asset’s life cycle. The estimates could be impacted by legal, technical, regulatory, economic, and competitive risks.

Goodwill and indefinite lived intangible assets are tested for impairment annually in the third quarter of the fiscal year and whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired. Intangible assets with a definite life are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group, which includes intangible assets, may not be recoverable. If goodwill or intangible assets are determined to be impaired, they are written down to their estimated fair value.

We have four goodwill reporting units with goodwill assigned to them. The test for impairment of goodwill requires us to make several estimates related to projected future cash flows to determine the fair value of the goodwill reporting units. We estimated the fair value of these reporting units using the income and the market approaches, weighted 50 percent each. Fair value under the income approach was determined by discounting to present value the estimated future cash flows of the reporting unit. Fair value under the market approach utilized revenue and earnings multiples using comparable public company information, which uses valuation indicators determined from other businesses that are similar to our reporting unit. We use estimates that are consistent with the highest and best use of the assets based on a market participant's view of the assets being evaluated.

The most critical assumptions used in the calculation of the fair value of each reporting unit are the projected revenue, projected earnings, projected future cash flows, and discount rate. Our forecast of future cash flows is based on estimates of projected revenue and projected earnings, based primarily on pricing, raw material costs, market share, industry outlook, general economic conditions and strategic actions to improve our earnings. The fair value of the reporting unit’s goodwill is sensitive to differences between estimated and actual cash flows, including changes in the projected revenue, projected earnings, and discount rate used to evaluate the fair value of the reporting unit.

As part of our annual impairment analysis in the third quarter of fiscal year 2026, we completed a quantitative impairment analysis of all of our reporting units to determine if their fair value was less than their carrying amount. Based on the quantitative test, the Medical Surgical reporting unit had an estimated fair value that exceeded its carrying value, including goodwill, by approximately 12%. As of July 31, 2026,

$19.7 billion of goodwill was allocated to the Medical Surgical reporting unit. The remaining reporting units' fair values materially exceeded their carrying values.

The following table highlights the sensitivities of the most critical assumptions used in the goodwill impairment test as of the date of our annual testing:


Assumption:
Approximate % by which the fair value exceeds the carrying value based on annual impairment test						12% - 335%
Approximate % by which the fair value exceeds the carrying value if the discount rate was to increase 1%						3% - 307%
Approximate % by which the fair value exceeds the carrying value if the future cash flows in the income approach and revenue and earnings in the market approach were to decrease by 5%						7% - 313%

Although we believe our estimate of fair value is reasonable, actual results may differ from our estimates due to a number of factors including, among others, changes in competitive conditions, timing of regulatory approval, results of clinical trials, changes in worldwide economic conditions, and fluctuations in currency exchange rates.

NEW ACCOUNTING PRONOUNCEMENTS

Information regarding new accounting pronouncements is included in Note 2 to the condensed consolidated financial statements.

SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

Medtronic plc and Medtronic Global Holdings S.C.A. (Medtronic Luxco), a wholly-owned subsidiary guarantor, each have provided full and unconditional guarantees of the obligations of Medtronic, Inc., a wholly-owned subsidiary issuer, under the Senior Notes (Medtronic Senior Notes) and full and unconditional guarantees of the obligations of Covidien International Finance S.A. (CIFSA), a wholly-owned subsidiary issuer, under the Senior Notes (CIFSA Senior Notes). The guarantees of the CIFSA Senior Notes are in addition to the guarantees of the CIFSA Senior Notes by Covidien Ltd. and Covidien Group Holdings Ltd., both of which are wholly-owned subsidiary guarantors of the CIFSA Senior Notes. Medtronic plc and Medtronic, Inc. each have provided a full and unconditional guarantee of the obligations of Medtronic Luxco under the Senior Notes (Medtronic Luxco Senior Notes). The following is a summary of these guarantees:

Guarantees of Medtronic Senior Notes

•Parent Company Guarantor – Medtronic plc

•Subsidiary Issuer – Medtronic, Inc.

•Subsidiary Guarantor – Medtronic Luxco

Guarantees of Medtronic Luxco Senior Notes

•Parent Company Guarantor – Medtronic plc

•Subsidiary Issuer – Medtronic Luxco

•Subsidiary Guarantor – Medtronic, Inc.

Guarantees of CIFSA Senior Notes

•Parent Company Guarantor – Medtronic plc

•Subsidiary Issuer – CIFSA

•Subsidiary Guarantors – Medtronic Luxco, Covidien Ltd., and Covidien Group Holdings Ltd. (CIFSA Subsidiary Guarantors)

The following tables present summarized financial information for the three months ended July 31, 2026 and summarized balance sheet information at July 31, 2026 and April 24, 2026 for the obligor groups of Medtronic and Medtronic Luxco Senior Notes, and CIFSA Senior Notes. The obligor group consists of the parent company guarantor, subsidiary issuer, and subsidiary guarantors for the applicable senior notes. The summarized financial information is presented after elimination of (i) intercompany transactions and balances among the guarantors and issuers and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor or issuer.

The summarized results of operations information for the three months ended July 31, 2026 was as follows:


(in millions)	Medtronic & Medtronic Luxco Senior Notes(1)		CIFSA Senior Notes(2)
Net sales	$	946	$	—
Operating profit (loss)	(79)		(32)
Income (loss) before income taxes	(158)		(105)
Net loss attributable to Medtronic	(188)		(132)

The summarized balance sheet information at July 31, 2026 was as follows:


(in millions)	Medtronic & Medtronic Luxco Senior Notes(1)		CIFSA Senior Notes(2)
Total current assets(3)	$	21,243	$	4,805
Total noncurrent assets(4)	13,881		6,778
Total current liabilities(5)	28,124		17,318
Total noncurrent liabilities(6)	35,350		23,671
Noncontrolling interests	618		618

(1)The Medtronic Senior Notes and Medtronic Luxco Senior Notes obligor group consists of the following entities: Medtronic plc, Medtronic Luxco, and Medtronic, Inc. Refer to the guarantee summary above for further details.

(2)The CIFSA Senior Notes obligor group consists of the following entities: Medtronic plc, Medtronic Luxco, CIFSA, and CIFSA Subsidiary Guarantors. Refer to the guarantee summary above for further details.

(3)Includes receivables due from non-guarantor subsidiaries of $17.6 billion and $1.9 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

(4)Includes loans receivable due from non-guarantor subsidiaries of $6.6 billion and $6.4 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

(5)Includes payables due to non-guarantor subsidiaries of $23.3 billion and $14.3 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

(6)Includes loans payable due to non-guarantor subsidiaries of $7.9 billion and $7.7 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

The summarized balance sheet information at April 24, 2026 was as follows:


(in millions)	Medtronic & Medtronic Luxco Senior Notes(1)		CIFSA Senior Notes(2)
Total current assets(3)	$	21,798	$	4,640
Total noncurrent assets(4)	14,224		6,953
Total current liabilities(5)	26,263		16,216
Total noncurrent liabilities(6)	36,302		24,110
Noncontrolling interests	609		609

(3)Includes receivables due from non-guarantor subsidiaries of $17.9 billion and $1.5 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

(4)Includes loans receivable due from non-guarantor subsidiaries of $6.8 billion and $6.7 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

(5)Includes payables due to non-guarantor subsidiaries of $21.9 billion and $14.1 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

(6)Includes loans payable due to non-guarantor subsidiaries of $8.5 billion and $7.7 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, and other written reports of Medtronic plc, organized under the laws of Ireland (together with its consolidated subsidiaries, Medtronic, the Company, or we, us, or our), and oral statements made by or on behalf of the Company from time to time, may include “forward-looking” statements. In some cases, such statements may be identified by the use of terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “looking ahead,” “may,” “plan,” “possible,” “potential,” “project,” “should,” “will,” and similar words or expressions. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans, objectives of management for future operations and current expectations or forecasts of future results, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Our forward-looking statements, including those in this Quarterly Report, may include statements related to: our growth and growth strategies; our ability to drive long-term shareholder value; developments in the markets for our products, therapies and services and continued or future acceptance of such products, therapies and services; financial results and financial condition; product development, launches, and performance; integration of new technologies, such as artificial intelligence (AI) and data analytics; research and development strategy and the expected timing of research studies; United States (U.S.) Food and Drug Administration (U.S. FDA) and non-U.S. regulatory approvals; competitive strengths and market positioning, including changes in market share and demand; the potential or anticipated direct or indirect impact of public health crises, geopolitical conflicts, general economic conditions, or changing governmental executive actions and regulations (including relating to global trade policies, tariffs, enforcement priorities and compliance requirements) on our business, results of operations and/or financial condition; restructuring and cost-saving initiatives; intellectual property rights; litigation and tax matters; governmental proceedings and investigations; mergers, acquisitions, and divestitures, including integration and separation activities; accounting estimates; financing activities; ongoing contractual obligations; working capital adequacy; accounts receivable exposure; the value of our investments; our effective tax rate; our expected returns to shareholders; human capital management; reimbursement, pricing pressures, and changes in standards of care; and sales efforts.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, results of operations, financial condition, and/or cash flows. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in the “Risk Factors” section and elsewhere in our Annual Report on Form 10-K. Because forward-looking statements are inherently subject to risks and uncertainties, known and unknown, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. Risks and uncertainties include those discussed in the section entitled “Government Regulation” within “Item 1. Business” and those discussed in “Item 1A. Risk Factors” in our Annual Report on Form 10-K, as well as those related to:

•competition in the medical device industry,

•rapid technological change,

•regulatory approval delays or denials,

•reduction or interruption in our supply chain or manufacturing operations,

•failure to complete or achieve the intended benefits of acquisitions or divestitures,

•adverse regulatory action,

•laws and governmental regulations,

•litigation, claims, and investigations,

•intellectual property protection and enforcement,

•quality problems,

•healthcare policy changes,

•public health crises,

•cybersecurity and data privacy incidents,

•international operations, including the impact of armed conflicts,

•insurance coverage and self-insurance adequacy,

•tax law changes and tax disputes,

•pricing pressure and reimbursement challenges,

•liquidity shortfalls,

•fluctuations in currency exchange rates and macroeconomic volatility,

•inflation, or

•disruption of our current plans and operations.

Consequently, no forward-looking statement may be guaranteed, and actual results may vary materially from those projected in the forward-looking statements. We intend to take advantage of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding our forward-looking statements. Except as required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

CURRENCY EXCHANGE RATE RISK

Due to the global nature of our operations, we are exposed to currency exchange rate changes, which may cause fluctuations in earnings and cash flows. Fluctuations in the currency exchange rates of currency exposures that are unhedged, such as in certain emerging markets, may result in future earnings and cash flow volatility. The gross notional amount of all currency exchange rate derivative instruments outstanding at July 31, 2026 and April 24, 2026 was $18.8 billion and $20.3 billion, respectively. At July 31, 2026, these contracts were in a net unrealized gain position of $443 million. Additional information regarding our currency exchange rate derivative instruments is included in Note 8 to the condensed consolidated financial statements.

A sensitivity analysis of changes in the fair value of all currency exchange rate derivative contracts at July 31, 2026 and April 24, 2026 indicates that, if the U.S. dollar uniformly strengthened/weakened by 10 percent against all currencies, the fair value of these contracts would increase/decrease by approximately $1.5 billion and $1.7 billion, respectively. Any gains and losses on the fair value of derivative contracts would generally be offset by gains and losses on the underlying transactions. These offsetting gains and losses are not reflected in the above analysis.

INTEREST RATE RISK

We are subject to interest rate risk on our short-term investments and our borrowings. We manage interest rate risk in the aggregate, while focusing on our immediate and intermediate liquidity needs. Our debt portfolio at July 31, 2026 was comprised of debt predominantly denominated in U.S. dollars and Euros, which is primarily fixed rate debt. We are also exposed to interest rate changes affecting our investments in interest rate sensitive instruments, which include our marketable debt securities.

A sensitivity analysis of the impact on our interest rate-sensitive financial instruments of a hypothetical 50 basis point change in interest rates, as compared to interest rates at July 31, 2026 and April 24, 2026, indicates that the fair value of these instruments would correspondingly change by $92 million and $91 million, respectively.

For a discussion of current market conditions and the impact on our financial condition and results of operations, please see the “Liquidity” section of the Management's Discussion and Analysis. For additional discussion of market risk, refer to Notes 6 and 8 to the condensed consolidated financial statements.

Item 4. Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) and changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this quarterly report, our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) are effective.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

In accordance with Item 103 of Regulation S-K, we have adopted a $1 million disclosure threshold for proceedings under environmental laws to which a governmental authority is a party, as we believe matters under this threshold are not material to the Company. A discussion of the Company’s legal proceedings and other loss contingencies are described in Note 16 to the condensed consolidated financial statements.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table provides information about the shares repurchased by the Company during the first quarter of fiscal year 2027:


Fiscal Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as a Part of Publicly Announced Program	Maximum Approximate Dollar Value of Shares that may yet be Purchased Under the Program
4/25/2026-5/29/2026	502,144	$	80.67	502,144	$	1,143,229,337
5/30/2026-7/3/2026	1,246,200	80.54		1,246,200	1,042,857,247
7/4/2026-7/31/2026	1,017,165	83.24		1,017,165	958,184,382
Total	2,765,509	$	81.56	2,765,509	$	958,184,382

In March 2024, the Company's Board of Directors authorized the repurchase of $5.0 billion of the Company's ordinary shares. There is no specific time period associated with these repurchase authorizations.

Item 5. Other Information

Rule 10b5-1 Director and Officer Trading Arrangements

During the quarter ended July 31, 2026, the following officer adopted a “Rule 10b5-1 trading arrangements” intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act as follows.

On July 16, 2026, Geoff Martha, Chairman and Chief Executive Officer, adopted a Rule 10b5-1 trading plan. The trading plan provides for the sale of up to 50,000 shares of the Company’s common stock starting as early as October 15, 2026, prior to the plan's termination date of November 30, 2026.

Securities Exchange Act Section 13(r) Disclosure

Medtronic has engaged in certain activities that it is required to disclose pursuant to Section 13(r)(1)(D)(ii) of the Securities Exchange Act of 1934, as amended. In particular, during the first quarter of fiscal year 2027, Medtronic engaged in certain regulatory activities involving Russia’s Federal Security Service (“FSB”) related to its medical devices that were expressly authorized by the U.S. Government under applicable economic sanctions regulations.

During the first quarter of fiscal year 2027 ending July 31, 2026, in the normal course of business and consistent with the Office of Foreign Assets Control ("OFAC") authorizations as in effect at the time, Medtronic Russia filed three notifications with the FSB, as required under local Russian law for the import of medical devices that make use of encryption functionality. This activity did not directly result in any revenues or profits for Medtronic. To the extent that notifications with the FSB remain permissible under U.S. law, Medtronic may decide to continue engaging in such activities for the limited purposes of complying with local law requirements in Russia.

Item 6. Exhibits

(a)

Exhibits

3.1

Certificate of Incorporation of Medtronic plc (incorporated by reference to Exhibit 3.1 to Medtronic plc’s Current Report on Form 8-K, filed on January 27, 2015, File No. 001-36820).

3.2

Amended and Restated Memorandum and Articles of Association of Medtronic plc (incorporated by reference to Exhibit 3.1 to Medtronic plc’s Current Report on Form 8-K, filed on October 21, 2025, File No. 001-36820).

List of Senior Notes, Issuers and Guarantors.

#31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

#31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .

#32.1

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

#32.2

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

#101.SCH

Inline XBRL Schema Document.

#101.CAL

Inline XBRL Calculation Linkbase Document.

#101.DEF

Inline XBRL Definition Linkbase Document.

#101.LAB

Inline XBRL Label Linkbase Document.

#101.PRE

Inline XBRL Presentation Linkbase Document.

#104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

#Filed herewith

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned authorized officer.


		Medtronic plc
		(Registrant)

Date:	September 3, 2026	/s/ Denise L. Blomquist
		Denise L. Blomquist
		Vice President, Global Controller and Chief Accounting Officer (Principal Accounting Officer)