Medtronic plc (MDT) September 8, 2026 Conference Transcript

Welcome to the stage, Chairman and Chief Executive Officer of Medtronic PLC, Jeffrey Martha, and CFO of Medtronic PLC, Thierry Pietone, and Managing Director and Senior Equity Research Analyst covering medical technology, Larry Beagleson. Okay.

Well, welcome everyone to the 21st Wells Fargo Healthcare Conference. I'm Larry Beagelson, the Medical Device Analyst at Wells Fargo, and on behalf of the entire research team, I want to thank everybody here for helping make this our most successful healthcare conference to date. We had about 2,000 people register, over 300 companies attending, a great turnout. So now, let's turn to our keynote speaker, Jeff Martha, the CEO of Medtronic, the world's leading medical device company. Jeff is also joined by Thierry Pietan, Medtronic's CFO. The format is going to be moderated Q&A. We'll spend the first part of the discussion on Industry trends, and then we'll turn to Medtronic-specific topics. So, Jeff and Thierry, thanks so much for being here and agreeing to be our keynote speaker today. So, let's jump into questions. Sure.

So, Jeff, you know, we've seen a rotation out of healthcare and out of med tech in recent years due to, you know, high growth, into high growth areas like AI and technology. As the industry leader, Jeff, why is this a good time to invest in med tech?

Well, first of all, Larry, congratulations on that conference. It's great to see it continue to grow, and thanks for having us. Look, I think it's a great time to invest in med tech, because we see some really great innovation happening, not just in the traditional biomedical engineering side, less invasive devices, smaller devices, longer batteries, etc., but when you take the AI and robotics, they're like force multipliers, and they've allowed us to We're going to expand our scope of innovation from not just improving patient outcomes, but to, you know, lowering costs over time and also expanding access. And so I think it's a great time to invest in MedTech right now. We're pulling, when you look at, you know, and we can go through this, when you look at our growth. And the growth acceleration at Medtronic, a lot of it, yeah, some of it's market share, but a lot of it's expanding the markets and pulling new patients in. In some cases, it's brand new segments like, you know, renal denervation for hypertension. But in other cases, it's just like lowering the threshold for, you know, 75-year-old businesses like cardiac rhythm management, you know, and expanding those markets and pulling more patients in. Above and beyond any kind of impact from, you know, chronic disease, rising chronic disease, or aging population. When you even factor that out, we're still pulling a lot more patients into some new therapies.

That's good to hear. So, Jeff, as you know, a concern right now is a potential impact to procedures and capital equipment spending from some of the policy changes going on. How are you thinking about the impact?

Well, the policy change I hear the most about would be, like, the ACA rollbacks. We've seen some of that commentary. First of all, our procedural mix is very acute. So that's one piece of it. We're not into these more elective procedures. We don't have as much exposure to that. And when it comes to ACA, linked to that acute nature, maybe two-thirds of our payer mix is Medicare, 25% commercial, and less than 10% Medicaid. And when you look at our exposure to ACA-related programs, it's less than 1% of our revenue globally. So it's just not a lot of exposure to it.

That makes sense. And you touched upon, Jeff, AI, which is transforming many industries. What impact is AI having across the industry and at Medtronic? What does it mean for revenue and for cost?

Well, look, I'll start on the revenue side. It's definitely having an impact on our revenue. Again, when we talk about AI, and like I said, especially when you combine it with robotics, but even by itself, it's a force multiplier. And when we talk about AI in our products, we're largely talking about, look, we have a lot of access to structured physiological data, structured device data, procedure data. This isn't, you know, we're not talking about large language models and just general data. We're talking about very precise data, and we're using that more in a machine learning environment, and it's dramatically, you know, impacting, like, our ability to diagnose things earlier, better, to, here's the big one, to personalize. It's going to be able to do therapy at scale. So whether it's personalizing your DBS therapy, personalizing like a surgical plan and spine for one patient, you're able to do that at scale and that's going to help clinical outcomes and then as I said just a second ago, it's helping us expand our aperture on what the benefits of the innovation to like talk about access, you know, take our, you know, like I just saw this example the other day, We are a genius for colonoscopy. Yes, in the U.S., it's quickly becoming the standard of care because we found in our clinical trials that anywhere from 25 to 50 percent of the polyps are missed in the leading centers in the U.S. Went over to, and so this has erased that, right? It's fixed that with the GI genius that we have. Go over to a place like India. I saw a massive hospital with hundreds of people in the waiting room getting colonoscopies. Here, what we saw is, like, very young physicians, and the CEO of the hospital said, look, these physicians are right out of medical, don't have the apprenticeships or the fellowships that you have in the U.S., but they're getting the exact same diagnostic yield as you're getting in the U.S. because of GI genius. So it provides good, democratizes good care.

That makes sense. China, Jeff, as you know, has been very volatile in recent years. I think you've said in the past it's going to be 6%, 7% of Medtronic sales. I don't know if that's still the case. How are you thinking about what's, you know, how is your business performing in China and how are you thinking about that geography going forward?

Well, the percentage of our revenue has come down after the VVP, but it's stabilized, and look, we view China, it's performing well. It's a growth market for us. There's still a lot of the Chinese government's very focused on expanding health care to people that don't have coverage in a more higher-end health care that we play in, right? And they're serious about it. There's a lot of growth there, and it's a growth market for us, and it's a good, profitable market for us.

If it's growing and it's a growth market for you, you're in the minority right now. I think for most medtech companies, it's probably been less of a growth market in recent years because of VBP.

Well, look, in recent years, like I said, it's come down as a percentage of revenue. The VBP is more baked into our growth rate.

Yeah, I mean, we've come down to between 5% and 6%, but it's still a good contribution for us. And the VBP is mostly behind us, so now we're back into a normal sort of environment.

And you're committed to China going forward still?

Yeah. Yes, we are.

Okay.

Because I think we've seen some companies maybe pull back in recent years. Jeff, innovation, you know, is the lifeblood of the industry. You talked about it earlier. What's the state of innovation in the medical device industry today, and what are the areas you're most excited about?

Look, I said before, I think the state of innovation is strong. I mean, you're saying I know that there's concerns on procedures and things like that. We're just not seeing it. We're seeing strong procedure growth. You know, you've got the rise of chronic disease, you've got the aging demographics. But like I said earlier, above and beyond that, our markets are responding well to innovation. We're pooling in patients that otherwise would not be treated like with our AltaViva device for overactive bladder. These patients maybe not seek treatment, but now that you put this just below the skin on the ankle, this is opening up, you know, pulling more patients into med tech. There's like 16 million patients in the U.S. that's suffering from overactive bladder. This thing has turned around our public health business. Or you're bringing them from where they were using a pharma solution, like hypertension, right, or renal derivation, you know, or AFib, like PFA, right? That industry, there's, you know, a couple players there. PFA pulling people off of drugs and doing more of a procedure. So I see more and more of this. And then you've got, on top of that, the AI and the robotics. And as we, robotics is, you know, look, we think about it in the context of the United States. It's clearly a huge trend in the U.S., but outside the U.S., like in emerging markets, robotic surgery is less than 1% penetrated, and I do believe the combination of AI and robotics is going to change the way these countries train their physicians. We're not going to replace physicians anytime soon, but having a driver assist, the digital platform that's the heart and soul of that robotics ecosystem is going to, like I said earlier, democratize good surgery, and that's what I think is going to be an important part of emerging markets. New market growth where they just don't have, you know, there's a huge labor issue, trained physician issue.

Are there areas that you're excited about that you can share with us today that you're watching that you're not in today?

Larry, you're going to have to come to our investor day to hear more of that in December in Charlotte, North Carolina, where, you know, we're having at the ERCAT facility, and one of the main things we're going to get into there is new But I'd say in general, like, there's a lot in the neurotech area that we're excited about that's net new to, I think, medtech. And we have, within the medtech, we have the broadest and the deepest. We're literally number one in every single area of neuro. And so we're excited about that. But then there's a couple areas that we're not in that we, you know, we still like IVL and a few, you know, these high growth areas, you know, that we're not in. We're not looking at hips and knees or anything like that. It's not high growth, but we're looking at these high growth areas in cardiology that we're not in today, so we'll continue to look at those.

Got it. That's helpful. And I want to talk about the Investor Day later in the conversation. It's the first one you've done in, I think, five or six years here. Is that right? Since 2020.

Yeah, 2020, I think. 2020, yeah.

But first, maybe let's talk about the start that you had to your fiscal year. You're on a fiscal year basis. You reported the Q1 results last week, I believe. Strong growth, I think 7% organic. I think you said something to the effect that Medtronic's at an inflection point. So just talk about the durability of the growth that you saw coming out of Q1.

Do you want to take this one?

Sure. Yeah. So, okay, thanks. Yeah, it was indeed a good quarter, so it was 13.7% with the extra week, about 7%, if you're correct from that element. Look, you know, one thing that you might have noticed in the Q1 earnings releases, we talked about the big franchises first, you know, because we got a lot of questions around cardiac ablation, around hypertension, etc., but we wanted to make a point that, first of all, our three franchises are We are growing significantly faster than they used to. So you take cardiac rhythm management, one of our biggest franchises in the portfolio. A lot of the competition considers this to be a pretty stable low single digit market growth. We were up, you know, 15% in the first quarter with the extra week. So, you know, about 9% corrected from that. We saw super strength driven by innovation. So EVICD was super strong. Everything around conduction system pacing was very, very strong, up strong double digit. And we saw even Leadless Pacemaker, you know, technology that we launched over a decade ago be double digit. So we continue to see strength in CRM. In our CST, in our spine business, large franchise, same thing. Stealth Access has enabled us to offer a full suite of products to the customer from navigation, visualization, And the big franchise now, big capital efficient franchise performing super well. And our surgical business was performed very well, including acute care and monitoring. So the big franchises were strong and they continue to accelerate. And on top of that, we've got these four super high growth areas between cardiac ablation, simplicity with hypertension, AltaViva in urges, and these two examples of the big franchises And Hugo in surgical that are, each one of them, multi-billion opportunities going forward. So that's kind of the algorithm going forward. Strengthen the base with big super penetrated franchises in which we protect the position with innovation. And then four large franchises at different stages of development that generate more growth going to that. This, as Jeff said, this will be a key element of our Investor Day in December. We'll talk about the dynamics of how that's going to unfold over time.

And you asked about the durability. Just to build on what he said, everything he just said, I just want to point out that effectively we've doubled the investment in innovation over the last couple of years because we've really ramped up the M&A machine. So venture investments in M&A to go with our organic. And when you do the dollars, it's effectively doubling our investment in innovation. And I would point, like, we've talked about breadth and depth, so we're, like, to his point, the breadth of the growth through the big businesses and all the businesses, also geographically dispersed growth, and now you have the growth drivers, and then we're a mix of organic and now inorganic. So, we're not relying on one thing. We're not relying on just inorganic. You know, we're not relying on just one country. You know, we've got breadth and depth, no matter how you look at it. Geography, business-wise, growth drivers, inorganic versus organic, it's breadth and depth.

That's helpful. It's hard not to ask about cardiac ablation. It is driving a lot of the growth, 88% growth, I think, a $2 billion business today. Were you one of the ones that said we wouldn't get there in time? I can't remember. No, that was someone else.

There's a lot of people that said, yeah, we said we're going to be $2 billion, and people laughed, and we beat that expectation by a lot.

And congratulations. So how are you thinking about it? At some point, the business slows, law of large numbers. Thierry, you know, you said you're going to grow more than 2.5% the market in 2020, fiscal 27.

Two and a half times the market.

Right. So just maybe put a finer point on that. How fast do you think the market's growing? What's more than two and a half times mean? Yeah.

I mean, look, what we see in the market from a market growth rate perspective is mid-teens, you know, around 15%. So you can do the math. The comps get a little bit harder during the year because we're lapping quarters where last year we were already up 70 or 80 percent, but we'll be up three times the market, over three times the market rate in the second quarter and around two and a half times market rate on the full year. So look, it's early innings. We still have a lot of opportunity commercially speaking. In the U.S., we're mostly focused on large accounts at this stage, and even those large accounts, they want to grow their install base, so we're growing internationally. We launched in Japan. We're adding indications. We added ventricular tachycardia in Europe this quarter, and we're applying for it in the US. And we're not stopping there from a portfolio perspective. So today, Sphere 9 is our main workhorse, and that's driving a big portion of the growth. As you know, we've got Sphere 360 coming up. It's now launched in Europe, and it's It's going through clinical trials in the US, and that'll be the next stage driving growth. And in addition to that, you know, you probably saw us make an investment in ICE. So we're trying to surround the electrophysiologist to have the full pictures. But clearly for us, we're still in very early innings for this business. I think the one thing to keep in mind short term is we grew the install base of capital equipment by 40% in Q4 and by 35% sequentially in Q1. So just in terms of the pull-through of catheters that that's going to generate, it's super good news for us going forward.

Jeff, what can Sphere 360 do to your cardiac ablation franchise? Why is that an important pipeline product?

Well, look, as you know, the single shot, right now Sphere 9 is in a class all by itself, A dual energy, you know, large tip catheter, you know, in the point-by-point space. It's by itself. That's one of the reasons. Plus, people love the maneuverability of it. Sphere 360 goes right at the heart of all of our competitors. And we think, you know, on the single shot, and we think it's a better mousetrap. And the large tip, the maneuverability of it, we think it's going to be a winner. And it's going, again, it's going right at the competition, and it's got... As you know, it's got a very, you know, it's very fast. It's very fast. So if you're going for efficiency of single shot, this is going to be your tool. And as Terry said, I mean, it's, we're not. We realize how competitive the market is. It's a very attractive market. We realize how competitive it is. We've fought like hell to get to where we are, and we're not resting on our laurels. So Terry just walked through all the things that we're doing, making these investments. We're looking ahead multiple quarters, multiple years, building around the procedure. And on top of all that, you know, like in the U.S., we're still in these large centers. We haven't really expanded to the medium and smaller centers. And to help do that, we've combined our cardiac rhythm and our CAST sales leadership to leverage those relationships. We're everywhere in cardiac rhythm. Our market share is at an all-time high. We're everywhere around the world, and we're going to use that business to help us ease into those relationships around the world. So we've been building for this.

That makes sense. The timeline for Sphere 360 in the U.S.?

Well, we just wrapped up the enrollment in the clinical trial, and I believe that's a 12-month follow-up, and then we'll submit, so.

That's helpful. So let's switch gears, talk about the soft tissue robotics or robotic-assisted surgery, as you call it, RAS. Big news on the Q1 call last week, $700 million investment and distribution agreement with Cornerstone based in Hong Kong. It gives you rights in select international markets. Talk about the rationale for that deal, please.

It gives its rights in 50 countries, right? So it's a lot of countries outside the U.S. Look, we're doubling down in the surgical soft tissue space, right? We're the leader in spine robotics. We're not outside of the U.S., particularly in certain markets. Our customers wanted more choice in terms of various different things. And, you know, Hugo, the focus is, you know, on developed markets. This offers us more choice outside the U.S. Remember, outside the U.S., our market share is disproportionately higher. You know, I mean, we're, there's not nearly as many, a lot of the competitors you hear about here in the U.S., you don't see them outside the U.S. It's really us, and we're dealing with health ministers. You know, it's socialized medicine. It's controlled at the country level. And they want an offering, and we weren't going to be there. And we have a big surgery business. You know, surgery is our biggest business in emerging markets by far. But everyone does surgery. Open and lap. Everybody. If you're going to have a hospital, anything in healthcare, you're going to have a surgical. We're by far, us and J&J are the biggest, and this gives us an opportunity to introduce robotics to these customers. So, look, the leader in the space, we've got a ways to go, but we are miles ahead of the next guy, and this extends our lead.

So what is it about Cornerstone, Sentai, or Robot that's more amenable to these emerging markets that Yugo doesn't provide?

Well, we can have a tiered approach in terms of various things, but that's one, and it's designed for those markets in mind. It was designed in Asia for those markets, so there are different preferences, there are different needs. It's got its own set of instruments. It's got real small instruments, like 5-millimeter instruments, 8-millimeter instruments. And it's a different design than Hugo, so there's a preference sometimes for that. So it just gives customers a choice.

But when you say tiered, do you talk about tiered pricing?

There'll be tiered pricing, tiered offering, yeah.

Got it. And how do you see the relationship with Cornerstone evolving over time?

You know, it's early. We'll see. I mean, we've been with them for a year, first of all. We've been over a year. We've been working with them. We've seen the robot. They've had thousands of cases. The quality's there. The technology is good. It's really good. And the management team is, you know, A+. I mean, these guys are very professionally run. And sometimes these emerging market companies, it's one founder who's also the lead inventor and engineer here. They've got just a great bench. And so we'll see. But right now, the focus is on. You know, we're both at important moments. Like in the U.S. for Hugo, we've got new indications coming. You know, we'll cross 50,000 cases by the year, 250, you know, unit installed installations around the world. You know, we've got new instruments coming. We've got these two new indications in the U.S. are important. It'll make it more of a workhorse. So that's where we're focused. And Sintere is starting their launch, right? They're going to be starting their launch, and they're more focused outside the U.S. So that's the focus right now. We'll see where it goes.

Just last question on this. So Ugo is your U.S. surgical robot. The U.S. is still the biggest market for surgical robots. When does Ugo start moving the needle in surgical and for total Medtronic? You gave us some numbers, but we don't know the baseline.

Yeah, we haven't gotten, I can tell you this, it's already having an impact on our surgical business. You're seeing it accelerate. I don't know if you want to go any further.

No, yeah, we haven't given specific numbers on it, but it's already having an impact on the surgical numbers for sure. And look, it's super encouraging. As Jeff said, you know, 50,000 procedures in the year, you know, we'll end the year with about 250 installed robots out there and build from that and it will generate pull through from our instrumentation perspective.

Those numbers are cumulative, though, 250 placements globally, over 50,000 procedures cumulatively.

And, and, and, yeah. But the thing, because we've had a pretty controlled launch here, when you don't just launch. A robot, right? And approval is one step that you need. You need reps. You need to be out there and seeing how these things perform in the wild. We learned that in the spine space. The stealth axis is our third generation. You know, Missouri had two generations, and this is our third. And you continue to improve performance. And Hugo, we've done a number of software updates. Look, we're getting great. Like, we're like a 99% uptime in the U.S. That's really We're very encouraged by the actual performance of the robot, and we've kind of learned along the way and made changes, and that's why we feel really good, because, like, unless you have those, I'd be surprised if some new player comes in and launches a robot, and all of a sudden it's just excellent and everything. It's going to take time. So, you know, we feel very optimistic where we are on Hugo.

That's helpful. Let's switch gears to the portfolio. Maybe a question for Thierry. Basically, if you sell the mini-med stake before the end of the fiscal year, how should we think about the accretion? Is it still maybe one to two cents a month?

You're talking on 27 numbers. I think it's highly dependent on the time that we would do the separation. So the way the math works is when we separate fully, then we don't consolidate their profit. So we lose the profit that they generate. But on the flip side, as we exchange the shares, we do a share count reductions. And so mechanically, you get an increase in EPS that comes. It's highly dependent on the timing in which you do it, even within a quarter, because there's a hockey stick and minimed sales. At the end, it wouldn't be a very material impact to our guidance. When we do the separation, obviously, we'll disclose exactly what the impact will be.

The guidance assumes you have it for the full fiscal year. Yes, that's correct. And you're saying if you did it, say, three to four months before the end of the fiscal year or six months, you're saying it would be fairly immaterial to EPS.

So, the later you do it, the less benefit you get from the share count reduction, the earlier you do it, you know, the less profit you consolidate. So, it kind of balances out. Net-net, it's not a huge factor, but we did take a conservative option of considering that we would keep it for the four-year. And, look, it's great to see that MiniMed's doing well from a business perspective. They had a good Q4. Q1 was even stronger. Their volume is picking up in the U.S. pretty significantly. They're on fire from a product schedule perspective. All their innovation is coming out ahead of time. And I think the street is starting to see that. You know, the stock has been up. It's the best performer in MedTech since the first of June. The stock's now above the price point when we did the IPO. So it's good to see the business performing, and we're encouraged by the way it's going. The intent doesn't change, though. You know, part of this improved performance is we can already see the benefits of them, you know, running the business separately, and so we're committed to making that change.

Yeah, we're, like I said, the intent hasn't changed. We're moving forward with this transaction. He walked through the timing, but, like, I remember when I first started as CEO, there's a lot of questions around diabetes, and we said we're going to fix it and get it humming and then make a decision from a position of strength, not weakness, where we were five, six years ago. You know, financially, that made sense, but also for the diabetes patients. Mini-Med is too big of a player in the type one space to not get it back to health, and it's now really in a great position.

So, Jeff, you can imagine where I'm going with the next question on medical, surgical. The cornerstone investment is significant, $700 million. You know, the investments you've made in Ugo are significant. You've disclosed some information about how expensive that program is. Why wouldn't it make sense to, you know, to also separate that business?

It has a lot more synergies with Medtronic, right? I mean, first of all, it's a hospital-based, or even as it goes to ASCs, it's a health institution-based business versus diabetes being direct-to-consumer. So there's a lot of synergies, like I just said, in the U.S., outside of the U.S., where we're dealing with these governments, right? The other, yeah, so we feel like it has a lot of synergies with the U.S., and I think, look, robotics is an important component for us. Again, if you take a step back, at Mintronic, we do two things. One is... You know, devices, pacemakers, spine implants, etc. And the other is surgeries and procedures, right? And robotics is going to be, is critical. It's in the early innings to all surgeries, and it's going to move more and more into interventional procedures. You may not have a big mainframe robot, you may have smaller, but robotics is a secular, is a trend in med tech, and it's important that we become a leader in that space.

I think the concern is just that it's so expensive, soft tissue robotics, and you're doubling down. That was your words on the Q1 call. The concern would be that it's taking capital away from cardio and neuroscience, which also require a lot of investment.

Well, look, we've also gotten a lot of feedback that you've got a healthy balance sheet. Use it. We have strong cash flow, healthy balance sheet. That was a balance sheet investment, and we're not constrained in that way.

Okay. And look, it's good news financially speaking, right, because through the distribution agreement, we'll do some sales of this entire product, get a margin on that, and then it will help, you know, improve the financial profile of the med-surg department or segment overall.

It's accretive to the surgical business, and you've got to remember, like, it helps cement our business. Remember, the surgical business is our largest. Outside the U.S., it's more or less, you know, intuitive is gaining traction with robotics, but it's outside the U.S., there's a lot of, you know, big contracts for the surgery business that goes between us and J&J, and contracting across Open, LAP, and now robotics is a big deal, and we're the only company that can do that.

Got it. All right, let's switch gears. We've got about 15 minutes left. Talk about some of the growth drivers. Renal denervation for hypertension or high blood pressure, a huge market. You talked about it annualizing in $100 million, exiting, I think, fiscal 2026. How are you thinking about the ramp going forward? You have an important meeting coming up in September for a Category 1 CPT code. How important is that? And that doesn't go, if you're successful, that doesn't go into effect until 2020.

Right, right. It's a nice, it'll be a nice ad. I mean, like. Because the market development is the piece that we're working on right now. First of all, the product, we've kind of skated right past that because the product is doing great, I mean, clinically. The data we're seeing in the wild is dramatically higher than the trial. The trial, you know, was designed a certain way, but out in the wild, we're seeing 18-point drops in blood pressure. It's amazing, and, you know, patients love it. Physicians are thrilled because they're heroes to these patients that have this intractable problem. Any kind of procedural concern is behind us, like the anesthesia, this, that's all dialed in. The product's working great, and it's durable. And I remember there was a lot of people who thought that, oh, ultrasound's a, well, the ultrasound competitor's not, you know, We're doing way better than anybody thought from a market share perspective, and the RF is showing durable results where ultrasound is not. So all ultrasound data, not cherry-picked, but every single piece of published ultrasound data, we have more durable, you know. So we feel really good about it clinically, and then we're continuing to invest in the product to make it faster, easier, radial access, etc. You know, shorter ablation times, multi-organ investments. So to make it, you know, so the product's in a great spot. The market development is what we're working on, and that is more insurance coverage. So we're going to build off that, and we're building off that national coverage decision in the U.S., now getting commercial payers to fall in line. Blue Cross Blue Shield and Medicare Advantage plans are all starting to fall. We just got Highmark recently. It's a big payer. There's some big ones out there that we need to get, and then building out that referral pathway. And that piece, we now have hospitals more coming to us because the doctors are saying, hey, look, I saw the clinical data, it was okay, but this, what I'm seeing in the wild is, in my own practice, is dramatic, and they're pushing their hospitals into it. And so they're coming to us. We're working on the payers, working on the market development, and we'll start doing more direct-to-consumer here in the fall, now that we have a little bit more of a base in the U.S. to build on, and we'll target a few cities and go from there. In addition to the social media we're doing.

This is a billion-dollar product for Medtronic at some point? Absolutely. Absolutely.

Yes.

Okay. Maybe we'll get a timeline on that in December. Stay tuned.

Yeah, stay tuned.

Jeff, a couple other questions here. Taver was a growth driver for you for a long time. That seems to have slowed. Can that be a growth driver for you again?

Yeah, no, first of all, the low-risk data that came out definitely muted our growth the last couple quarters. That's stabilized now, and it's been stable for how long?

Since early Q4 of last year.

So we feel like we've, you know, hit that bottomed out there. We're not seeing that dynamic outside the U.S., that low risk is more so we're performing better outside the U.S. But even without that, right, I think the bigger opportunity for us is more shots on goal within structural heart. We think it's a growth segment in medtech. It's obviously it is. And we need more. We've made more investments there. So to get into balloon expanding, we have the interest investment. We just announced this Picardia deal. And look, that helps in valve and valve procedures. It's another tool in the box. We have a strong commercial presence. We're one of the market pioneers. Got a great reputation and a good product we need to build around it. So, balloon expanding. Other tools like Picardia, we've got plays in mitral and tricuspid replacement, and we're going to continue to make investments in the space.

That's helpful.

And with the growth of the rest of the company, we've been able to absorb the slowdown in that.

I know you brought AltaViva with you. Just talk about what this is doing for your public health business, please.

Yeah, well, it was up 15% in the first quarter.

Yeah, I mean, it's nine underlying. 15 including the extra week. Yes.

So nine underlying.

Nine underlying, yeah.

And that would have been flat, right? And you see our competitors flat. The S&M space has been a little sluggish. I think that will bounce back a bit, but this is going to...

So you think you've turned the corner in pelvic health because that's been...

Yeah.

A slower growth area for you.

So you'll still, sacral nerve still has opportunity to improve, but the real story is AltaViva. It's just under the skin, above the fascia. It's a very quick procedure. What you're doing is, first of all, you're bringing in a lot of physicians that weren't comfortable with a sacral nerve implant. That's an implant. We need to come up with a better name. It's like an insertion, right? The generic name. The procedure is not an implant procedure. It's just under the skin. No anesthesia, no imaging, no trial. It's easy. These guys are doing it in minutes, and the patient goes home right away with it turned on. The sacral nerve, you've got to test for it. You have to have imaging work up. You have to do a trial. When you get the sacral nerve implant, both ours and the competitor, you have to wait 30 days to turn it on. I mean, there's a lot to it. This is so much easier, and there's a lot of patients out there. And it's, you know, set it and forget it. You know, you don't have to, this thing will charge. We're debating on the business model. We need to charge it, like, once a year. So do you just go back to the physician once a year for your checkup, and you charge it while you're there in 20, 30 minutes? So I think this is a great product. And this is an example of us leveraging our breath. Technology platforms, this is basically a cardiac rhythm product that we, you know, the hardware, and then we customize the software and built an implant procedure around it.

Spine was good for you this last quarter, and that's an elective area. So you're not even seeing softness there going back to the procedure.

Spine would have even been better, quite frankly, you mentioned China. We have... You know, in China, we're not doing as well. That's our own issue, not a market issue. That's on us. Had that not been an issue, you know, you'd see even more growth. That business is mainly a U.S. business. It's like 80 percent U.S. and it's really strong. And as you've seen over the last decade. The enabling technology strategy has really changed the competitive dynamics. You know, you've seen a lot of big-name companies get out. It's a lot of investment. It's a lot of expertise to have that enabling technology, and it makes the implants more sticky, and we believe we're getting better patient outcomes.

Capital allocation. You've done, we've seen it pick up an M&A activity. Just talk about, you know, your willingness to kind of accept dilution, kind of what your criteria are for, you know, acquisitions.

Yeah, so look, I think, you know, clearly Jeff said we've accelerated the investment in innovation, and it's been on the organic side, but also in the M&A side. So we used to be running for four or five hundred million of M&A per year for the last six or seven years, and we've announced, I think, 2.7 or 2.8 billion in the last 12 months. So, you know, clearly going back on offense. But it's always with a view of complementing the portfolio in a tuck-in fashion. So if you take Scientia, for example, you know, in neurovascular, it's bringing the access part to the portfolio that we didn't have. We have complementing the portfolio in neuromodulation with PNS or BVNA. So it's always with this type of size of acquisition where the risk is acceptable, but the perspective of a positive financial outcome is there. And we're going to continue to do that. Look, with the cash that we generate, the cash generation is getting better and better. We're getting close to an 80% conversion on free cash flow now. We have ample firepower to do a meaningful amount of M&A going forward. From a dilution perspective, look, you know, some of these deals have put some dilution in the P&L, and we embedded that in the algorithm that we have going forward. And we have to offset it with our leverage that we get on overhead and, you know, improving gross margins over time. So it can't be either or acquisitions or EPS growth. We have to reconcile both. And that's what we'll do this year, and that's what we plan to do going forward.

Let's talk about the last five minutes here, the kind of the investor day and the algorithm, the outlook here you talked about. So maybe, Jeff, this is your first investor day in six years. At a high level, you know, what can we expect, and why did you choose to host the meeting at ERCAD, which is a surgical robotic training facility?

Yeah, I mean, look, when it comes to the robotics, both soft tissue and our Spine robot, and the ecosystem around it, including the digital piece of it, right, you got to see it. You got to see it and how the ecosystem works together and to see how the workflow, especially in Spine, it's not a collection of products. It's an ecosystem. We branded it Able, and you can see the workflow, you see the digital, and ERCAT is set up to demonstrate this to audiences, right? And you'll hear from physicians that are not just, they work with our competition. You'll hear from them. I think that's more compelling than, quite frankly, than hearing from us sometimes. And, yeah, I think we've done this with our board and other stakeholders, and it really, it's a great way to see it. And we're going to focus on not just the big growth drivers that you know about, but there's a lot of growth drivers that we haven't talked about that, you know, we just don't get the air time to do that. We're going to talk more about them, and it's a great environment to do that.

Great. And then just in terms of the algorithm, last investor day, 5% plus on the top line, 8% plus EPS CAGR. I think this year it's about 6%, right, at the midpoint? High single-digit EPS growth. Anything, you know, without giving away exactly what the LRP is going to be, What, what, you know, why would it be different from that mid-single-digit, high-single-digit, you know, mid-single-digit top line, high-single-digit EPS? Why would it be any different?

And look, that's what we're going to talk about during the investor day. So how are we going to make this accelerated growth sustainable? And how are we going to generate leveraged earnings in a sustainable fashion as well? So that'll be a key topic.

And anything, Thierry, on like fiscal 28, some of the, you have the extra week, you've got a tariff refund, so does that make that high single digit next year tougher?

Look, we'll talk about the 28 guidance later on in the year, but there'll be an impact of one less week for sure, mechanically, but we will also have completed the diabetes deal. We will have sailed past the tariff issue on a consistent fashion this year. We've got some headwind coming from fuel and things like that, so let's put some takes. And you'll get more details as we go in the year.

Okay. Helpful. We've got a couple minutes left. Any questions in the audience we didn't get to? Well, I know there has been a lot of traffic at the elevators, so if I give people one or two minutes extra to get to their next meeting, they'd probably appreciate it. But, Jeff, before we end, I'd love to give you the last word, make any closing remarks.

Look, first of all, again, thanks for having us here. I mean, we're excited to be here. I mean, the company's in a great spot. You know, you can see the accelerating revenue. It's innovation-driven, and we see healthy in markets. I get some of the concerns, but that's not what we're seeing out there. And we've got a uniquely strong pipeline, broad and deep, and really excited to play out the next couple of quarters and get into the investor day and talk about how it's durable and how we're going to drive that leveraged earnings, right? Because I know that's something people want to see. For sure.

All right. Jeff and Thierry, thanks so much for being here.

Thank you.

Appreciate it.