Medtronic Has Tuck-in M&A on Its MindMedtronic Has Tuck-in M&A on Its Mind

Medtronic, an MD+DI Medtech Company of the Year finalist, has increased its focus in recent months on pursuing what CEO Geoff Martha called "smart tuck-in M&A" and active portfolio management.

Although Martha declined to be too specific regarding what the company is looking for, both he and interim CFO Gary Corona emphasized tuck-in M&A during the company's second fiscal quarter earnings call Tuesday morning. In the same vein, both executives also underscored the importance of active portfolio management.

"This is an important part of our growth algorithm," Martha said. "And the type of assets, or the type of M&A we want to do is more tuck-in, and I don't want to forecast exactly where we're prioritizing, but it is more of a top-down approach here where our leadership team is looking at the areas that we're prioritizing and really looking to those areas to be the priority areas for M&A."

That means Medtronic's high-growth markets and high-growth segments, he said, but also some of the company's well-established businesses that need some tuck-in support from time to time to keep them going.

As for portfolio management, Martha said it's "an ongoing process, not a destination."

"We're constantly looking at the portfolio to make sure it's constructed in a way that's aligned with our mission, aligned with our strengths," he said. "I mean, it's a competitive world out there. We want to make sure we're playing to our strengths, and we've got a number of those."

The portfolio management process is also constructed in a way that can give Medtronic reliable, durable, innovation-driven growth at the mid-single-digit level, Martha added.

"On the top line, that can translate with the profitability mix," he said. " ...We want to make sure that all adds up to that earnings leverage down the P&L and the translation to cash flow that gets you to the dividend and gets you to that double-digit shareholder return. So, we are really actively looking at the portfolio to make sure it's constructed in a way to durably deliver that."

Medtronic also raised its guidance for the full 2025 fiscal year. The company now expects organic revenue growth of 4.75% to 5%, and non-GAAP diluted earnings per share of $5.44 to $5.50.