How Medtronic Makes Money

Medtronic (MDT) is a billion-dollar global leader in medical technology, offering medical devices and therapies to more than 72 million people across 150+ countries. Medtronic—derived from combining the terms ‘medical’ and ‘electronic’—was formed in a Minneapolis garage by Earl Bakken (who later created the battery-powered pacemaker) and accomplished engineer Palmer Hermundslie.

Medtronic has a footprint extending far beyond its Minneapolis, Minnesota operational headquarters, with locations in Southeast Asia, China, Japan, Korea, Europe, Asia, Australia, Africa, and Latin America.

Medtronic’s Financials

For fiscal year (FY) 2023, Medtronic reported net sales of $31.2 billion (a 1.4% decrease from 2022) and a net income of $3.8 billion (a 25% year-over-year decrease).

Between Medtronic’s four primary business units are: cardiovascular (37% of net sales), medical-surgical (27%), neuroscience (28.7%), and diabetes (7.2%).

Cardiovascular Segment

Medtronic’s cardiac and vascular unit accounted for $11.6 billion of total revenue in FY 2023. This segment makes pacemakers and defibrillators, among many other devices. It is divided further into subgroups that manage the following types of diseases: cardiac rhythm and heart failure, coronary and structural heart, and aortic and peripheral vascular.

Another heart product in the Medtronic line is the cryoballoon, which freezes heart tissue responsible for irregular beats. The devices are sold to hospitals, enabling thousands of patients to be treated.

Medtronic makes other devices that would have been the stuff of science fiction to the eyes of the company’s nineteenth-century founders. This includes cardiac monitors inserted into the body that record electrical activity during fainting spells and palpitations and surgical replacements for diseased heart valves.

Medical-Surgical

Medtronic’s medical-surgical division accounted for $8.4 billion of total revenue in FY 2023.

This division’s products span the entire continuum of patient care from diagnosis to recovery, with a focus on diseases of preventable complications and the:

• gastrointestinal tract
• pelvic region
• kidneys
• obesity
• lungs

The products include:

• Sensors and monitors for pulse oximetry, capnography, level of consciousness, and cerebral oximetry
• Advanced and general surgical products
• Vessel sealing instruments
• Hernia mechanical devices
• Surgical stapling devices
• Electrosurgery products
• Renal care products
• Interventional lung
• Advanced ablation
• Airway products
• Wound closure
• Mesh implants
• Ventilators

Neuroscience

Neuroscience earned $9 billion in sales in FY 2023.

Neuroscience’s products include various spinal implants, bone graft substitutes, biologic products, image-guided surgery, intra-operative imaging systems, robotic guidance systems used in robot-assisted spine procedures, and systems that incorporate advanced energy surgical instruments.

Neuroscience products also treat overactive bladder, urinary retention, and fecal incontinence. It also produces products for the ear, nose, and throat (ENT) and therapies to treat the diseases of the vasculature in and around the brain, including coils, neurovascular stents, and flow diversion products. Neuroscience also manufactures products related to implantable neurostimulation therapies and drug delivery systems for treating chronic pain, movement disorders, and epilepsy.

Diabetes Segment

Lastly, there’s Medtronic’s diabetes group, which generated $2.3 billion in revenue for FY 2023.

Spurred by the spread of one of the world’s fastest-growing diseases, Medtronic is betting big on helping to manage diabetes and has become known for its insulin pump that continually monitors the levels of glucose in a patient’s blood.

A generation ago, the average person with diabetes injected themselves with a hypodermic needle and could only hope that the insulin would do its job—let alone track and save data. Today, a tiny integrated system can administer insulin and suspend its delivery when glucose levels stabilize.

Recent Developments

Medtronic continues to expand its portfolio with new medical therapies and devices for those who need them. In 2022, it won a contract with the Department of Veterans Affairs to provide its new artifical intelligence-assisted endoscopy module.

Also, in 2022, to promote education in science, technology, engineering, and math (STEM), the Medtronic Foundation launched 10 partnerships in several areas to help remove barriers to STEM educational opportunities.

The Bottom Line

Check the logo the next time you’re lying prone in a surgical imaging machine. First, it will take your mind off whatever analysis the technicians are conducting on your body, and second, you’ll have first-hand evidence of Medtronic’s importance in a modern, advanced economy. As one of the most technologically adept companies in its industry, Medtronic continues to grow and innovate.