MDT 10-K & 10-Q changes, risk factors and insider trading

Investing in our securities involves a variety of risks and uncertainties, known and unknown, including, among others, those discussed below. Each of the following risks should be carefully considered, together with all the other information included in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes and in our other filings with the SEC. Furthermore, additional risks and uncertaintyuncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. Our business, results of operations, financial condition, and cash flow and prospects could be materially and adversely affected by any of these risks or uncertainties.

We compete in both the therapeutic and diagnostic medical markets in more than 150 countries throughout the world. These markets are characterized by rapid change resulting from technological advances, innovations and scientific discoveries. In theOur product lines in which we compete, we face a rangemix of competitors ranging from large companies with multiple business lines to small, specialized manufacturers that offer a limited selection of niche products. Development by other companies of new or improved products, processes, technologies, or the introduction of reprocessed products or genericcompetitive versionsdevices when our proprietary products lose their patent protection may make our existing or planned products less competitive. InWe addition, wealso face competition from providers of alternative medical therapies, such as pharmaceutical companies, including those producing GLP-1s.

Competition may increase as additional companies enter our markets or modify their existing products to compete more directly with ours. In addition, academic institutions, governmental agencies and other public and private research organizations also may conduct research, seek patent protection and establish collaborative arrangements for discovery, research, clinical development and marketing of products similar to ours. These companies and institutions compete with us in recruiting and retaining qualified scientific and management personnel, as well as in acquiring necessary product technologies. From time to timetime, we have lost, and may in the future lose, market share in connection with product problems, physician advisories, safety alerts andalerts, publications about our products, or the introduction of competing technologies perceived to offer improved clinical, workflow, or economic outcomes, which highlights the importance of product quality, product efficacy and quality systems to our business. In the current environment of managed care, consolidation among healthcare providers, increased competition, decliningsite reimbursementof rates,service shifts, government efforts to control healthcare costs, and national and provincial tender pricing, as recently experienced in China, competitively priced product offerings are essential to our success. Government‑driven pricing and procurement mechanisms, including national and provincial tender pricing programs such as volume‑based procurement initiatives in China, may require significant price concessions and constrain our ability to compete on factors other than price. In addition, in some markets, pricing control mechanisms may also include retrospective payment adjustments or clawback arrangements, which could require us to refund previously received amounts or reduce future payments. These factors could adversely affect revenue, margins, and competitive positioning in impacted markets.

Our success depends on our ability to differentiate our productproducts and keepsuccessfully paceexecute withand scale emerging technologies.

Our continued growth and success depend on our ability to develop, acquire and market new and differentiated products, technologies and intellectual property, and as a result we also face competition for marketing, distribution, and collaborative development agreements, establishing relationships with academic and research institutions and licenses to intellectual property. InOur order to continueability to compete effectively,effectively also depends on our ability to successfully execute the development, regulatory approval process, manufacturing scale‑up, and market adoption of multiple differentiated products and technology platforms concurrently across different therapeutic, diagnostic, and geographic markets. The scope, complexity, and timing of executing these initiatives increase the risk of delays, cost overruns, supply chain readiness challenges, resource constraints, or inconsistencies in execution. If we are unable to execute effectively across these initiatives, or if one or more major product launches underperforms expectations, our growth, competitive position, and financial results could be materially adversely affected. We must continue to create, invest in or acquire advanced technology, incorporate this technology into our proprietary products, obtain regulatory approvals in a timely manner, and successfully manufacture and market our products.products, including at a scale and pace required to support sustained growth across our business. For example, data science, machine learning and AI are all impacting our products and operations and the competitive landscape in which we operate, and the application of these technologies is rapidly evolving at the same time as new laws and regulations ofgoverning AI are being developed in jurisdictions around the world. Compliance with developing regulations may require significant expenditures or may limit our ability to effectively use these technologies. There can be no assurance that the application of AI in our products and operations will be successful, or that we will not experience data security and privacy incidents in connection with our use of these technologies. If we are unable to effectively integrate, scale, or apply AI and digital technologies across our products and operations at a pace comparable to competitors or new market entrants, we could experience reduced competitiveness, slower growth, or loss of market share. Given these factors, we cannot guarantee that we will be able to compete effectively or continue our level of success.success, and failures in execution, delays in adoption, or the inability to integrate new technologies effectively could have an outsized impact on our business, results of operations, financial condition, and cash flows.

The manufacture of our products requires the timely delivery of a sufficient amount of quality components and materials and is highly exacting and complex, due in part to complex trade and strict regulatory requirements. We manufacture the majority of our products and procure critical third-party services, such as sterilization services, at numerous facilities worldwide. We purchase many of the components, raw materials and services needed to manufacture these products from numerous suppliers in various countries. We seek to maintain continuity of supply by use of multiple options for sourcing where possible. We have generally been able to obtain adequate supplies of such raw materials, components and services, although global shortages of certain components such as semiconductors and resins have previously caused, and may in the future cause, disruptions to our product manufacturing supply chain. In addition, for reasons of quality assurance, cost effectiveness, or availability, certain components, raw materials and services needed to manufacture our products are obtained from sole suppliers. Although we work closely with our suppliers to try to ensure continuity of supply while maintaining high quality and reliability, the supply of these components, raw materials and services may, at times, be interrupted or insufficient. In addition, due to the stringent regulations and requirements of trade and regulatory agencies, including the U.S. FDA, regarding the manufacture of our products, we may not be able to quickly establish additional or replacement sources. Additionally, many regulatory agencies are imposing new and evolving regulatory requirements onrelated to the safe use of chemicals, including ethylene oxides (EtOs) and polyfluoroalkyl substances (PFAS), and their potential impact on health and the environmentenvironment, which also may impact supply constraints. Furthermore, the prices of commodities and other materials used in our products, which are often volatile and outside of our control, and may be subject to tariffs, could adversely impact our supply. We use resins, other petroleum-based materials and pulp as raw materials in some of our products, and the prices of oil and gas also significantly affect our costs for freight and utilities. A reduction or interruption in supply, and an inability to develop alternative sources for such supply, could adversely affect our ability to manufacture our products in a timely or cost-effective manner and could result in lost sales.

Other disruptions in the manufacturing process or product sales, trade and fulfillment systems for any reason, including infrastructure, information and equipment malfunction, including due to cyber attacks, failure to follow specific protocols and procedures, supplier or Company facility shut-downs, defective raw materials, labor shortages, natural disasters such as hurricanes, tornadoes, earthquakes, or wildfires, property damage or facility closures from riots or public protests, and other environmental factors and the impact of epidemics, pandemics, or other public health crises, and actions by businesses, communities and governments in response, could lead to launch delays, product shortages, unanticipated costs, lost revenues and damage to our reputation. For example, in the past we were adversely impacted by the global COVID-19 pandemic, and may in the future be adversely impacted by other pandemics and the related responses of governments and of our partners, including suppliers, manufacturers, distributors and other businesses. Furthermore, any failure to identify and address manufacturing problems prior to the release of products to our customers could result in quality or safety issues.

Failure to identify, execute, and integrate acquired businesses into our operations successfully, or challenges related to the Company's strategic initiatives, including divestitures and third-party funding arrangements, as well as liabilities or claims relating to such acquired businesses, divestitures, or arrangements could adversely affect our business.

As part of our strategy to develop and identify new products and technologies and optimize our portfolio of products, we have made several significant acquisitions, divestitures and third-party research and development funding arrangements in recent years, and may make additional acquisitions, divestitures and funding arrangements in the future. Our integration of the operations of acquired businesses, or a divestiture of part of our existing businesses, including ourthe recentlyongoing announcedseparation intention to separateof our Diabetes businessBusiness from the Company, requires significant efforts, including the coordination of information technologies, research and development, sales and marketing, operations, manufacturing, and finance. These efforts result in additional expenses and involve significant amounts of management’s time that cannot then be dedicated to other projects. In addition, the cumulative effect of simultaneously executing multiple transactions may increase operational complexity, strain management and organizational resources, and heighten execution and timing risks. Our failureability to manage and coordinaterealize the growthanticipated benefits of acquisitions depends not only on the successful integration of acquired companiesbusinesses, successfully couldbut also have an adverse impact on our business.ability Further,to acquiredidentify appropriate acquisition targets, evaluate their strategic fit and long‑term value, accurately assess risks and liabilities, and negotiate and complete transactions on acceptable terms. Acquired businesses may have liabilities, or be subject to claims, litigation or investigationsinvestigations, including matters related to historical operations or corporate separations, that we did not anticipate or which exceed our estimates at the time of the acquisition. In addition, we cannot be certain that the businesses we acquire will become profitable or remain so. Factors that will affect the success of our acquisitions include:

•our ability to retain key employees, and

We also could experience negative effects on our business, results of operations, financial condition, and cash flows from acquisition-related charges, amortization of intangible assets and asset impairment charges. These effects, combined with transaction costs, separation‑related expenses, and potential delays in realizing anticipated synergies or strategic benefits, may place pressure on earnings or cash flows and limit our ability to allocate capital as planned.

In addition, the potential exists that expected strategic benefits from any planned or completed divestiture, including ourthe recentlyongoing announcedseparation intention to separateof our Diabetes businessBusiness from the Company, or third-party funding arrangement, by the Company may not be realized or may take longer to realize than expected, and there can be no assurance that disputes will not arise under the Company's third-party funding arrangements, or transition service, or other agreements that have or may be executed as part of a divestiture. Challenges associated with executing these transactions may materially adversely affect our business, results of operations, financial condition, and cash flows.

Our medical devices and technologies, as well as our business activities, are subject to a complex set of regulations and rigorous enforcement, including by the U.S. FDA, U.S. Department of Justice, Health and Human Services Office of the Inspector General, and numerous other federal, state, and non-U.S. governmental authorities.authorities in the countries where we operate. To varying degrees, each of these agencies requires us to comply with laws and regulations governing the development, testing, manufacturing, labeling, marketing and distribution of our products.products, including with respect to product safety and quality, marketing and promotional practices, reimbursement and healthcare fraud and abuse, data privacy, and competition and antitrust compliance. Alleged or actual violations of such laws in any jurisdiction could result in investigations, litigation, fines, damages, injunctions, or required changes to our business practices. As a part of the regulatory process of obtaining marketing clearance for new products and new indications for existing products, we conduct and participate in numerous clinical trials or delays with a variety of study designs, patient populations, and trial endpoints. Unfavorable clinical data from existing or future clinical trialstrials, or delays by regulators in approving or authorizing reimbursement for new productsproducts, may adversely impact (a) our ability to obtain product approvals, (b) our position in, and share of, the markets in which we participate, and (c) our business, results of operations, financial condition, and cash flows. We cannot guarantee that we will be able to obtain or maintain marketing clearance for our new products or enhancements or modifications to existing products, and the failure to maintain approvals or obtain approval or clearance could have a material adverse effect on our business, results of operations, financial condition, and cash flows. Even if we are able to obtain approval or clearance, it may:

Both before and after a product is commercially released, we have ongoing responsibilities under the U.S. FDA and other applicable non-U.S. government agency regulations. For instance, many of our facilities and procedures, and those of our suppliers, contract manufacturers, and other third-party vendors, are subject to periodic inspections by the U.S. FDA to assess compliance with applicable regulations. The results of these inspections can include, and have in the past included, observations on the U.S. FDA’s Form 483, warning letters, or other forms of enforcement, such as a consent decree.decree, Ifissued to us or to third parties on which we rely for the development, manufacture, sterilization, or supply of our products or materials. Regulatory enforcement actions directed at such third parties may limit or disrupt our ability to manufacture, distribute, or sell affected products, even if Medtronic is not the direct subject of the enforcement action. Additionally, if the U.S. FDA were to conclude that we are not in compliance with applicable laws or regulations, or that any of our medical products are ineffective or pose an unreasonable health risk, the U.S. FDA could detain or seize what it believes to be adulterated or misbranded medical products, order a recall, repair, replacement, or refund of such products, refuse to grant pending pre-market approval applications or require certificates of non-U.S. governments for exports, and/or require us to notify health professionals and others that the devices present unreasonable risks of substantial harm to the public health, and in certain rare circumstances, ban medical devices. In addition, the U.S. FDA has taken the position that device manufacturers are prohibited from promoting their products other than for the uses and indications set forth in the approved product labeling, and any failure to comply could subject us to significant civil or criminal exposure, administrative obligations and costs, and/or other potential penalties from, and/or agreements with, the federal government.

Governmental regulations in the U.S. and outside the U.S. are constantly changing and may become increasingly stringent. In the E.U,E.U., for example, the Medical Device Regulation (EU MDR) includes significant additional pre-market and post-market requirements. Penalties for regulatory non-compliance could be severe, including fines and revocation or suspension of a company’s business license, mandatory price reductions and criminal sanctions. Implementation of the EU MDR was extended to the end of 2027 for high-risk devices and to the end of 2028 for medium- and low- risklow-risk devices. The development and implementation of future laws and regulations may have a material adverse effect on us.

Our failure to comply with laws and regulations relating to reimbursement of healthcare goods and servicesservices, or changes to such laws, coverage policies, and payment practices, may subject us to penalties and adversely impact demand, our reputation, business, results of operations, financial condition, and cash flows.

Our devices, products and therapies are purchased principally by hospitals or physicians that typically bill various third-party payors, such as governmental healthcare programs (e.g., Medicare, Medicaid and comparable non-U.S. programs), private insurance plans and managed care plans, for the healthcare services provided to their patients. The ability of our customers to obtain appropriate reimbursement for products and services from third-party payors is critical because it affects which products customers purchase and the prices, they are willing to pay. As a result, our devices, productsproducts, and therapies are subject to regulation regarding quality and cost by HHS, including the Centers for Medicare & Medicaid Services (CMS), as well as comparable state and non-U.S. agencies responsible for reimbursement and regulation of health care goods and services, including laws and regulations related to fair competition, kickbacks, false claims, self-referrals and healthcare fraud. Many states have similar laws that apply to reimbursement by state Medicaid and other funded programs as well as in some cases to all payors. In certain circumstances, insurance companies attempt to bring a private cause of action against a manufacturer for causing false claims. In addition, as a manufacturer of U.S. FDA-approved devices reimbursable by federal healthcare programs, we are subject to the Physician Payments Sunshine Act (Open Payments), which requires us to annually report certain payments and other transfers of value we make to U.S. licensed physicians, certain allied health professionals, and U.S. teaching hospitals. Any failure to comply with these laws and regulations could subject us or our officers and employees to criminal and/or civil financial penalties.

We also are subject to risks relating to changes in government and private medical reimbursement programs and policies, and changes in legal and regulatory requirements in the U.S. and around the world. Implementation of further legislative or administrative reforms to these reimbursement systems, or adverse decisions relating to coverage of or reimbursement for our products by administrators of these systems, could delay or reduce adoption, limit utilization, or otherwise have an impact on the acceptance of and demand for our products and the prices that our customers are willing to pay for them.

While we intend to defend against any threats to our intellectual property, our patents, trademarks, tradenames, copyrights, trade secrets or agreements (such as employee and non-disclosure agreements) may not adequately protect our intellectual property. Further, pending patent applications may not result in patents being issued to us, patents issued to or licensed by us may be challenged or circumvented by competitors and such patents may be found invalid, unenforceable or too limited in scope to protect our technology or provide us with any competitive advantage. In addition, our patents will expire over time, our ability to protect novel business models is uncertain, and infringement may go undetected. Third parties could obtain patents that may require us to negotiate licenses to conduct our business, and such licenses may not be available on reasonable terms or at all. In addition, license agreements could be terminated. We also rely on non-disclosure and non-competition agreements with certain employees, consultants and other parties to protect, in part, trade secrets and other proprietary rights. We cannot be certain that these agreements will not be breached, that such provisions will be enforceable, that we will have adequate remedies for any breach, that others will not independently develop substantially equivalent proprietary information, or that third parties will not otherwise gain access to our trade secrets or proprietary knowledge. Moreover, in the U.S.U.S., many states have enacted laws that prohibit or significantly limit non-competition agreements, and the Federal Trade Commission andhas variousasserted statesenforcement haveauthority adoptedon lawsa andcase-by-case regulations that purport to ban or severely restrict the use of non-competition agreements,basis, which may limit our ability to use and enforce non-competition agreements with employees.

In addition, the laws of certain countries in which we market or manufacture some of our products do not protect our intellectual property rights to the same extent as the laws of the U.S., which could make it easier for competitors to capture market position. For example, business in China comprises approximately sevensix percent of our total revenues. This may increase our vulnerability to our technology being reverse engineered or our trade secrets being compromised. If we are unable to protect our intellectual property in China or other countries, it could have a material adverse effect on our business, results of operations, financial condition, and cash flows. Competitors also may harm our sales by designing products that substantially mirror the capabilities of our products or technology without infringing our intellectual property rights.

There have been and continue to be actions and proposals by several governments, regulators and third-party payors globally, including the U.S. federal and state governments and the government in China, to control healthcare costs and, more generally, to reform healthcare systems. Certain of these actions and proposals, among other things, limit the prices we are able to charge for our products or the amounts of reimbursement available for our products, increase the importance of our ability to compete on cost,cost and outcomes, and could limit the acceptance and availability of our products. These actions and proposals could have a material adverse effect on our business, results of operations, financial condition, and cash flows.

We are increasingly dependent on sophisticated information technology systems to operate our business. That technology includes systems that could be used to process, transmit and store sensitive data. Additionally, many of our products and services include integrated software and information technology that collects data regarding patients or connects to other internal systems. One of the most prevalent attacks on large organizations has been ransomwareransomware, which can have a devastating impact on an organization’s operations. Our ransomware readiness program has required and will continue to require investment and will not guarantee that we will be immune from an incident or be able to respond rapidly enough to prevent a negative impact on our business. The techniques used to obtain unauthorized access to, or disrupt, information technology systems continue to evolve and may be further amplified by the use of AI and other emerging technologies by malicious actors. Like all organizations, we routinely experience attempted interference with the integrity of, and interruptions in, our technology systems via events such as cyber-attacks, malicious intrusions, or other breakdowns. The consequences of such an event could mean data breaches, interference with the integrity of our products and data, compromisethe compromising of our intellectual property or other proprietary information, operational disruptions, the need to implement manual processes or other temporary workarounds, or other significant disruptions. Furthermore, we rely on third-party vendors to supply and/or support certain aspects of our information technology systems and resulting products, and customers and payors use information technology systems to process payments relating to our products and services. These third-party systems could also become vulnerable to cyber-attack, malicious intrusions, breakdowns, interference, or other significant disruptions, and may contain defects in design or manufacture or other problems that could result in system disruption or compromise the information security of our own systems. In addition, our global profile and international operations expose us to geopolitical events or issues which may increase cybersecurity risks on a global basis. Lastly, we continue to grow in part through new business acquisitions and, as a result, may face risks associated with defects and vulnerabilities in acquired businesses’ systems, or difficulties or other breakdowns or disruptions in connection with the integration of the acquisitions into our information technology systems.

In addition, our information technology systems require an ongoing commitment of significant resources to maintain, protect, and enhance existing systems and develop new systems. Advances in cybersecurity technologies, including AI-enabled tools, may increase the volume, scope, speed, and depth with which potential vulnerabilities are identified, and may also result in vulnerabilities or issues that are difficult to detect promptly. These advances may require significant additional investment to assess, remediate, and manage identified risks, even in the absence of a cybersecurity incident. We experience continuing changes in information processing technology, legal and regulatory standards, patient and customer information use cases, techniques used to obtain unauthorized access to data and information systems, and the information technology needs associated with our changing products and services. We also face business and regulatory risks relating to our use of AI systems in our business operations and products. These systems are susceptible to flaws, biases, malfunctions or manipulations, which may disrupt our operations, result in erroneous decision-making, elevate our cyber risk profile, or expose us to penalties from non-compliance with emerging regulations. There can be no assurance that our efforts to keep pace with continuing changes in information processing technologies, including AI systems, and to deploy these technologies to our business operations and products will be successful or that additional systems issues will not arise in the future.

If our information technology systems, products or services or sensitive data are compromised, there are many consequences that could result.result, Consequences include, but are not limited to,including patients or employees being exposed to financial or medical identity theft or suffering a loss of product functionality, losing existing customers or having difficulty attracting new customers, experiencing difficulty preventing, detecting, and controlling fraud, being exposed to the loss or misuse of confidential information, having disputes with customers, physicians, and other healthcare professionals, suffering regulatory sanctions or penalties under federal laws, state laws, or the laws of other jurisdictions, experiencing increases in operating expenses or ana impairmentweakening in our ability to conduct our operations, incurring expenses or losing revenues as a result of a data privacy breach, product failure, information technology outages or disruptions, or suffering other adverse consequencesconsequences, including lawsuits or other legal action and damage to our reputation.

Global enforcement of anti-corruption laws has increased in recent years, includingincludes investigations and enforcement proceedingsproceedings, leadingwhich could lead to the assessment of significant fines and penalties against companies and individuals. Our international operations create a risk of unauthorized payments or offers of paymentspayment by one of our employees, consultants, sales agents, or distributors. We maintain various controls aligned with legal requirements to prevent and prohibit improper practices, including policies, programs, and training for our employees and third-party intermediaries acting on our behalf. However, existing safeguards and any future improvements may not always be effective, and our employees, consultants, sales agents or distributors may engage in conduct for which we could be held responsible. In addition, regulators could seek to hold us liable for conduct committed by companies in which we invest or that we acquire. Any alleged or actual violations of these regulations may subject us to government scrutiny, criminal or civil sanctions and other liabilities, including exclusion from government contracting, and could disrupt our business, adversely affect our reputation and result in a material adverse effect on our business, results of operations, financial condition, and cash flows.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Commerce Department’s Bureau of Industry and Security (BIS) administer certain laws and regulations that restrictimpose restrictions on U.S. persons and, in some instances, non-U.S. persons, inwhen conducting activities, transacting business with, or making investments in, certain countries, governments, entities and individuals subject to U.S. economic sanctions or export restrictions. Our international operations subject us to these laws and regulations, which are complex, restrict our business dealings with certain countries, governments, entities, and individuals, and are constantly changing. Further restrictions may be enacted, amended, enforced or interpreted in a manner that materially impacts our operations.

From time to time, certain of our subsidiaries have limited business dealings in countries subject to comprehensive sanctions, including Iran, Syria, Cuba, and the region of Crimea, as well as in other jurisdictions subject to significant sanctions or export controls, such as Russia and Belarus. Certain of our subsidiaries sell medical devices, and may provide related services, to distributors and other purchasing bodies in such countries or regions. These business dealings represent an insignificantimmaterial amount of our consolidated revenues and income but expose us to a heightened risk of violating applicable sanctions regulations. Violations of these regulations are punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts and revocations or restrictions of licenses, as well as criminal fines and imprisonment. We have established policies and procedures designed to assist with our compliance with such laws and regulations. However, such regulations may impact our ability to continue operations in certain countries and require additional licenseslicenses, which we may not be able to obtain or maintain. There can be no assurance that our policies and procedures will prevent us from violating these regulations in every transaction in which we may engage, and such a violation could adversely affect our reputation, business, results of operations, financial condition, and cash flows.

Climate change,change or legal, regulatory or market measures to address climate change may materially adversely affect our financial condition and business operations.

We are subject to environmental, health, and safety laws, and regulations concerning, among other things, the generation, handling, transportation, and disposal of hazardous substances or wastes, the remediation of hazardous substances or materials at various sites, and emissions or discharges into the land, air or water. We are further subject to numerous laws and regulations concerning, among other things, chemical constituents in medical products and end-of-life disposal and take-back programs for medical devices. Our operations and those of certain third-party suppliers involve the use of substances subject to these laws and regulations, primarily those used in manufacturing and sterilization processes. If we or our suppliers violate these environmental laws and regulations, facilities could be shut down and violators could be fined, subject to sanctions, or otherwisewe sanctioned.or our suppliers could be subject to civil litigation and penalties or costs associated with remediation. Additionally, even in the absence of violation of environmental laws or regulations, we may be subject to civil litigation, claims, liabilities or costs associated with remediation efforts or alleged harm, including claims for personal injury or other losses, arising out of our use, handling, release, or disposal of chemicals or other regulated substances, whether by us, our suppliers, or businesses that we have acquired or may acquire. New laws and regulations, violations of these laws or regulations, stricter enforcement of existing requirements, or the discovery of previously unknown contamination could require us to incur costs or could become the basis for new or increased liabilities that could be material.

There is continued focus from our stakeholders, as well as regulatory authorities in the U.S., E.U. and other global jurisdictions in which we operate, on sustainability practices and disclosure. If we do not succeed in meeting or are perceived as not meeting goals and objectives relating to environmental stewardship, inclusion initiatives, supply chain practices, good corporate governance, workplace conduct and support for local communities, or if we do not effectively respond to new or revised legal, regulatory or reporting requirements concerning climate change, inclusion, or other sustainability concerns, we may be subject to regulatory fines and penalties, including potential loss of eligibility as a U.S. government contractor, our reputation or the reputation of our brands may suffer, we may be unable to attract and retain top talent, and our stock price may be negatively affected. Failure to maintain or meet certain sustainability targets may also negatively impact our ability to compete in certain public or private tenders for the sale of our products. In addition, enhanced and sometimes conflicting sustainability laws, regulations and expectations in the jurisdictions in which we do business may increase compliance burdens and costs for third parties throughout our global supply chain, which could cause disruption in the sourcing, manufacturing and distribution of our products and adversely affect our business, financial condition or results of operations.

Further, we have made several public disclosures of objectives and targets (targets) relating to product stewardship, inclusion, patient safety and product quality, access and innovation, and climate stewardship, including our ambition to be net carbon neutral in our operations by 2030 and to achieve net zero emissions by 2045. Although we intend to achieve these targets, we may be required to expend significant resources to do so, which could increase our operational costs. In addition, there can be no assurance of the extent to which any of our targets will be achieved, or that any future investments we make to achieve such targets will meet investor, legal and/or any other regulatory expectations and requirements. If we are unable to meet our targets, we may face litigation and could incur regulatory fines and penalties or adverse publicity and reaction from investors, advocacy groups or other stakeholders that may adversely impact our business, demand for our products and services, and/or our financial condition and results of operations.

The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of the Company. The discussion focuses on our financial results for the fiscal year ended April 25,24, 20252026 (fiscal year 20252026) and the fiscal year ended April 26,25, 20242025 (fiscal year 20242025). A discussion on our results of operations for fiscal year 20242025 as compared to the fiscal year ended April 28,26, 20232024 (fiscal year 20232024) is included in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended April 26,25, 2024,2025, filed with the SEC on June 20, 2024,2025, and is incorporated by reference into this Form 10-K. You should read this discussion and analysis along with our consolidated financial statements and related notes thereto at April 25,24, 20252026 and April 26,25, 20242025 and for fiscal years 2026, 2025, 2024, and 2023,2024, which are presented within "Item 8. Financial Statements and Supplementary Data" in this Annual Report on Form 10-K. Amounts reported in millions within this annual report are computed based on the amountsactual in thousands,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.

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 and include certain charges or benefits that result from transactions or events that we believe may or may not recur with similar materiality or impact to our operations in future periods (Non-GAAPnon-GAAP Adjustmentsadjustments).

In the event there is a Non-GAAPnon-GAAP Adjustmentadjustment 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-GAAPnon-GAAP Adjustmentsadjustments 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 (Non-GAAP Nominal Tax Rate).rate. The Non-GAAPnon-GAAP Nominalnominal Taxtax Raterate is calculated as the income tax provision, adjusted for the impact of Non-GAAPnon-GAAP Adjustments,adjustments, as a percentage of income before income taxes, excluding Non-GAAPnon-GAAP Adjustments.adjustments.

(1)The Company recognized $121 million and $151 million of accelerated amortization on certain intangible assets related to product line exits within the Cardiovascular Portfolio.Portfolio for fiscal years 2026 and 2025, respectively.

(3)The charges primarily include exitbusiness ofcombination business-related charges,costs, changes in fair value of contingent consideration, businessexit combinationof costs,business-related charges, and gains related to certain business or asset sales. 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.

(65)Reflects adjustments to the recognition of incrementalCompany's Italian payback accruals resulting from the two July 22, 2024 rulings by the Constitutional Court ofand Italythe relatingLegislative toDecree published by the Italian government on June 30, 2025 for certain prior years since 2015.

(96)The net chargecharges for fiscal year 2026 primarily relates to the impact of an incomeintercompany sale of intellectual property, the net tax reservecharge adjustmentas associateda withresult of the Juneseparation 2023,of Israelithe Central-LodDiabetes District Court decisionBusiness and the establishmentamortization of apreviously valuationestablished allowancedeferred againsttax certainassets netarising operatingfrom lossesintercompany intellectual property transactions, which were partially offset by a tax benefit fromrecognized thedue to a change in aestimate Swissof Cantonalaccrued interest on uncertain tax ratepositions. associatedThe withcharges for fiscal year 2025 primarily includes amortization of previously established deferred tax assets from intercompany intellectual property transactions and the step up in tax basis for Swiss Cantonal purposes.transactions.

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

•Recent developments in global trade policy have introduced new uncertainties for our business. During and subsequent to the reporting period, theThe U.S., China, and other jurisdictions have recently imposed or proposed additional tariffs on imported goods. Based on current imposed or proposed rates as of MayJune 21,3, 2025,2026, we estimate the pre-tax net tariff impact to be $200 million to $350$250 million in fiscal year 2026,2027, withexcluding theany majority recognized in the consolidated statementsconsiderations of incomegovernment in the second half of the fiscal year. The lower end of the range assumes that the current U.S. (30%) and China (10%) tariffs persist, while the higher end of the range assumes tariffs revert to higher rates (U.S. 145%, China 125%) after the 90-day pause.refunds. The actual amount could vary based on changes in tariff rates, duration of tariffs, scope of tariffs, and potential countermeasures or mitigation actions. The impact of the tariffs on the financial results for fiscal year 2025 were not material. 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. Further escalation or expansion of trade barriers could have a material adverse effect on our results of operations. 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. As a result of this ruling, the U.S. Court of International Trade issued an order directing the U.S. Customs and Border Protection ("CBP") agency to begin formalizing a process for refunds. On April 20, 2026, the CBP launched an online portal that can be used to submit IEEPA tariff refund requests. All requests will be reviewed by the CBP to determine validity prior to the issuance of refunds. We continue to monitor the situation and the impact to our results of operations.

Starting in the firstfourth quarter of fiscal year 2025,2026, the CompanyDiabetes combinedBusiness theis non-U.S.no developedlonger marketsconsidered anda thereportable emerging markets into an international market geography.segment. Prior period net sales have been recast to conform to the new presentation. The charts below illustrate the percent of net sales by segmentbusiness for fiscal years 20252026 and 20242025:

The increase in net sales for fiscal year 20252026 was driven primarily by growth in most businesses, includingas strongfurther growthdescribed in Cardiacthe Ablationbusiness Solutions,sections Cardiacbelow. PacingIn Therapies,addition, TAVR, Diabetes, Neuromodulation, Spine, and Advanced Energy. Thethe net sales increase was partially offsetdriven by declinesimpacts of foreign currency fluctuations and changes in Staplingestimates andrelating ato $90 million incrementalour Italian payback accrual resulting from the two July 22, 2024 rulings by the Constitutional Court ofand Italythe relatingLegislative toDecree published by the Italian government in June 2025 and formalized into law in August 2025 for certain prior years since 2015. For fiscal year 2026, the impact of the Italian payback adjustment was an increase to net sales of $39 million as compared to a decrease in net sales of $90 million in fiscal year 2025.

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 Cardiac Rhythm & Heart Failure 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 Cardiac Rhythm & Heart Failure division. Cardiovascular's net sales for fiscal year 20252026 were $12.5$14.0 billion, an increase of 512 percent as compared to fiscal year 2024.2025. The net sales increase was primarily due to growth across most businesses and the strong performanceimpacts of Cardiacforeign Ablationcurrency Solutions, Cardiac Rhythm Management, Structural Heart, and Cardiac Surgery.fluctuations.

Cardiac Rhythm & Heart Failure (CRHF) net sales increased 717 percent in fiscal year 20252026 as compared to fiscal year 2024.2025. TheCardiac netAblation Solutions experienced strong growth in the pulsed ablation portfolio with partially offsetting declines in cryoablation. Net sales increasegrowth was also due to increases within Cardiac Rhythm Management, driven by growth in Micra transcatheterleadless pacing systems,pacemakers, Aurora extravascular implantable cardioverter defibrillator (EV-ICD) system, and TYRX,SelectSecure partially3830 offset by declines in CRT-Ds. Cardiac Ablation Solutions experienced strong growth in PulseSelect and Affera Sphere-9 pulsed field ablation with partially offsetting declines in cryoablation.lead.

Structural Heart & Aortic (SHA) net sales increased 67 percent in fiscal year 20252026 as compared to fiscal year 2024.2025. The net sales increase was driven by continued growth in Structural Heart from adoption of Evolut FX+ TAVR system and in Cardiac Surgery driven by growth in PerfusionPenditure LAA exclusion system, Avalus Ultra surgical valve, and SurgicalVitalFlow Valves.ECMO system.

Coronary & Peripheral Vascular (CPV) net sales increased 25 percent in fiscal year 20252026 as compared to fiscal year 2024.2025. The net sales increase was driven by growth in Coronary and Renal Denervation led by guide catheters, balloons, and the Symplicity Spyral renal denervation system, partiallyguide offset by a decline in stentscatheters and impactsballoons, fromas tenderwell pricingas in Chinagrowth in Peripheral Vascular Health.Health from Endovenous. The net sales increase was partially offset by declines in coronary stents.

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

•Continued acceptance and growth from the Azure XT and Azure S SureScan pacing systems andof the 3830 lead.

•Global adoption and growth of Aurora EV-ICD.

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

•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. The system was approved by the U.S. FDA in March 2024 and received CE Mark in late October 2024.

•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.

•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.pipeline, including VT indication expansion for Sphere 9 and commercialization of Affera Sphere-360 pulsed field ablation single-shot catheter.

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 fiscal year 20252026 were $9.8$10.3 billion, an increase of 54 percent as compared to fiscal year 2024.2025, Theresulting net sales increase was primarily due tofrom growth in Neuromodulation, SpineCranial and Biologics,Spinal Technologies, Neuromodulation, ENT, and Neurosurgery.the impacts of foreign currency fluctuations.

Cranial & Spinal Technologies (CST) net sales for fiscal year 20252026 increased 5 percent as compared to fiscal year 2024.2025. 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, Biologics,Spine and Neurosurgery.

Specialty Therapies (Specialty) net sales for fiscal year 20252026 increased 12 percent as compared to fiscal year 2024.2025. The net sales increase was driven by growth onin continued adoption of the Interstim X systemENT and ENT,Flow partiallyDiversion, offset by impactsPelvic fromHealth tenderand pricingthe inPipeline ChinaVantage in Neurovascular.recall.

Neuromodulation (NM) net sales for fiscal year 20252026 increased 117 percent as compared to fiscal year 2024.2025. The net sales increase was driven by growth in Pain Stimulation due to the continued launch of the Inceptiv closed-loop spinal cord stimulator, Brain Modulation driven by the Percept RC deepneurostimulator brainwith neurostimulator,BrainSense technology, and Interventional.

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

•Continued adoptionglobal adoption, growth, and growthmarket acceptance of our integrated solutions through the AiBLE offering, which integrates spinal implants with enabling technologies (StealthStation, O-arm Imaging Systems, and Midas), Mazor robotics, and UNiD Adaptive Spine Intelligence 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 new spine products and procedural solutions within our CST operating unit, such as Catalyft PL,PL ModuLeX,& PL40, CD Horizon ModuLeX and Voyager System,Systems, and our Infinity OCT System, 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 large or giantcertain wide-necked brain aneurysms.

•Continued global acceptance and growth 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 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. The Inceptiv closed-loop rechargeable SCS received U.S. FDA approval in April 2024.

•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. In August 2024, the U.S. FDA approved Asleep DBS surgery for people with Parkinson's and people with essential tremor. BrainSense Adaptive DBS and BrainSense Electrode Identifier received CE Mark in January 2025 and U.S. FDA approval in February 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 include the hemorrhagic stroke intravascular device, our next-generation spine enabling technologies, and the percutaneousimplantable tibial neuromodulationbladder system.control stimulator.

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 fiscal year 20252026 were $8.4$8.8 billion, flatan increase of 5 percent as compared to fiscal year 2024,2025, withresulting performancefrom outlinedgrowth below.across most businesses and the impacts of foreign currency fluctuations.

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, youthis discussion and analysis should be read this discussion 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 25,24, 2025.2026, as filed with the Securities and Exchange Commission (SEC) on June 18, 2026. In addition, youthis discussion and analysis should be read this discussion along with our condensed consolidated financial statements and related notes thereto at and for the three and nine months ended JanuaryJuly 23,31, 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.

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 trendstrends. andThese 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 to our operations in future periods (Non-GAAPnon-GAAP Adjustmentsadjustments).

In the event there is a Non-GAAPnon-GAAP Adjustmentadjustment 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-GAAPnon-GAAP Adjustmentsadjustments 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 (Non-GAAP Nominal Tax Rate).rate. The Non-GAAPnon-GAAP Nominalnominal Taxtax Raterate is calculated as the income tax provision, adjusted for the impact of Non-GAAPnon-GAAP Adjustments,adjustments, as a percentage of income before income taxes, excluding Non-GAAPnon-GAAP Adjustments.adjustments.

Free cash flow isflow, a non-GAAP financial measuremeasure, is calculated by subtracting additions to property, plant, and equipment additionsfrom fromnet cash provided by operating cash flows.activities.

The following is a summary of net sales andsales, diluted earnings per share for the three months ended January 23, 2026 and January 24, 2025share, and operating cash flow for the ninethree months ended JanuaryJuly 23,31, 2026 and January 24, 2025:

The tables below present our GAAP to Non-GAAPnon-GAAP reconciliations for the three months ended JanuaryJuly 23,31, 2026 and JanuaryJuly 24,25, 2025:

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

(64)The net charges for the ninethree months ended JanuaryJuly 23,31, 2026 and July 25, 2025, primarily includes a tax benefit recognized duerelate to a change in interest accrued on uncertain tax positions, offset by amortization of previously established deferred tax assets arising from previous intercompany intellectual property transactions. The net charges for the ninethree months ended JanuaryJuly 24,31, 20252026, primarilywere includespartially amortizationoffset by the release of previouslyreserves establishedfor deferreduncertain tax assetspositions arisingon fromprior period intercompany intellectual property transactions.

•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. Based on current rates as of February 17, 2026, we estimate the pre-tax net tariff impact to be $185 million in fiscal year 2026, with the majority recognized in the consolidated statements of income in the second half of the fiscal year. The actual amount could vary based on changes in tariff rates, duration of tariffs, scope of tariffs, and potential countermeasures or mitigation actions. 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. Further escalation or expansion of trade barriers could have a material adverse effect on our results of operations. 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 thedevelopments situationin global trade policy, including changes to tariff regimes and therelated administrative actions. The impact toof such developments, including further escalation or expansion of trade barriers, could have a material adverse effect on our results of operations.

The charts below illustrate the percent of net sales by segmentbusiness for the three months ended JanuaryJuly 23,31, 2026 and JanuaryJuly 24,25, 2025:

The table below illustrates net sales by segment and division and market geography for the three and nine months ended JanuaryJuly 23,31, 2026 and JanuaryJuly 24,25, 2025:

The increase in net sales for the three and nine months ended JanuaryJuly 23,31, 2026, as compared to the corresponding periodsperiod in the prior fiscal year, was driven primarily by growth in most businesses, as further described in the business sections below.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 increasewere waspartially drivenoffset by impacts of foreign currency fluctuations and, for the nine months ended January 23, 2026, changes in estimates relating to our Italian payback accrual resulting from the two July 2024 rulings by the Constitutional Court and the Legislative Decree published by the Italian government in June 2025 and formalized into law in August 2025 for certain prior years since2015 2015.to 2018. For the ninethree months ended JanuaryJuly 23,25, 2026,2025, the impactaccrual ofdecreased theby Italian$39 paybackmillion adjustment wasas an increaseadjustment to net sales of $39 million as compared to a decrease in netthe salescondensed consolidated statements of $90 million for the nine months ended January 24, 2025.income.

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 CardiacElectrophysiology Rhythm & Heart FailureTherapy 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 CardiacElectrophysiology Rhythm & Heart FailureTherapies division. Cardiovascular's net sales for the three and nine months ended JanuaryJuly 23,31, 2026 were $3.5 billion and $10.2$3.9 billion, respectively, an increase of 14 percent and 1120 percent, respectively, as compared to the corresponding periodsperiod in the prior fiscal year, resulting from growth across most businesses and the impacts of foreign currency fluctuations.businesses.

The graphs below illustrate the percent of Cardiovascular net sales by division for the three months ended JanuaryJuly 23,31, 2026 and JanuaryJuly 24,25, 2025:

CardiacElectrophysiology Rhythm & Heart FailureTherapies (CRHFEPT) net sales for the three and nine months ended JanuaryJuly 23,31, 2026 increased 2030 percent and 16 percent, respectively, as compared to the corresponding periodsperiod in the prior fiscal year. The net sales increase was driven by Cardiac Ablation Solutions experienceddue strongto growth in the pulsed field ablation portfolio withand partiallyCardiac offsettingRhythm declines in cryoablation. Net sales growth was alsoManagement due to increases within Cardiac Rhythm Management, driven by growth in MicraCardiac leadlessPacing pacemakers, Aurora extravascular implantable cardioverter defibrillator (EV-ICD) system, SelectSure 3830 lead,Therapies and continuedDefibrillation Transvenous Tachy momentum.Solutions.

CoronaryInterventional &Cardiology Peripheral VascularTherapies (CPVICT) net sales for the three and nine months ended JanuaryJuly 23,31, 2026 increased 97 percent and 5 percent, respectively, as compared to the corresponding periodsperiod in the prior fiscal year. The net sales increase was driven by growth in theTAVR, Symplicity Spyral renal denervation system, guide catheters and balloons, as well as growth in Peripheral Vascular Health from endoVenous. The net sales increase was partially offset by declines in coronary stents.balloons.

•ContinuedMarket acceptance and growth and market acceptance of AfferaOmniaSecure Sphere-360defibrillation pulsedlead. field ablation single-shot catheter. The catheterOmniaSecure received CE Mark in JanuaryMarch 2026.

•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. The system was approved by the U.S. FDA in March 2024 and received CE Mark in late October 2024.

•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.

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

•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, including Affera Sphere-360 pulsed field ablation single-shot catheter.pipeline.

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 and nine months ended JanuaryJuly 23,31, 2026 werewas $2.6 billion and $7.5$2.7 billion, respectively, an increase of 410 percent for both periods,percent, as compared to the corresponding periodsperiod in the prior fiscal year, resulting from growth inacross Cranialmost and Spinal Technologies, Neuromodulation, ENT, and the impacts of foreign currency fluctuations.businesses.

The graphs below illustrate the percent of Neuroscience net sales by division for the three months ended JanuaryJuly 23,31, 2026 and JanuaryJuly 24,25, 2025:

Cranial & Spinal Technologies (CST) net sales for the three and nine months ended JanuaryJuly 23,31, 2026 increased 513 percent for both periods, as compared to the corresponding periodsperiod 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 and nine months ended JanuaryJuly 23,31, 2026 increased 210 percent and remained flat, respectively, as compared to the corresponding periodsperiod 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 Pelvic Health and the Pipeline Vantage recall for Neurovascular.recall.

Neuromodulation (NM) net sales for the three and nine months ended JanuaryJuly 23,31, 2026 increased 65 percent and 8 percent, respectively, as compared to the corresponding periodsperiod in the prior fiscal year. The net sales increase was driven by thePain InceptivStim closed-loop spinal cord stimulator,and the Percept RC deepneurostimulator brainwith neurostimulator,BrainSense and Interventional.technology.