What drove MDT's earnings surprise in Q4 2024?

Medtronic's (MDT) Q4 2024 earnings report exceeded expectations due to several key factors:

1. **Revenue Growth**: Medtronic reported a total revenue of $8.4 billion for the quarter, which represents a 5.3% increase over the same period last year. This growth was primarily driven by strong performance across key franchises such as TAVR, PFA, leadless pacemakers, diabetes, spine, and neuromodulation. The company's cardiovascular segment grew by mid-single digits, while the neuroscience segment showed high single-digit growth. The international markets also contributed to the growth, with high single-digit growth and low double-digit growth in emerging markets.
2. **Diabetes Segment Performance**: The diabetes segment grew by 11%, with CGM sales increasing by over 20%. This significant increase reflects the segment's successful market penetration and customer acceptance of innovative products.
3. **Neuromodulation Segment Strength**: The neuroscience segment, specifically the neuromodulation franchise, achieved high single-digit growth, with net sales exceeding analyst estimates. This indicates robust demand for Medtronic's neuromodulation products, which are critical in treating chronic pain and other neurological conditions.
4. **Financial Guidance Update**: Medtronic updated its FY 2025 earnings guidance, raising the full-year revenue forecast to $33.5 billion-$33.6 billion, in line with the consensus estimate of $33.6 billion. This guidance reflects the company's confidence in maintaining its growth trajectory.
5. **Currency Adjustments**: Despite facing foreign currency headwinds that impacted gross and operating margins, Medtronic's revenue growth was robust. The company's 5% organic revenue growth exceeded guidance by 50 basis points, indicating effective management of currency-related challenges.

In summary, Medtronic's earnings surprise in Q4 2024 was driven by strong organic revenue growth across key segments, particularly in diabetes and neuromodulation, along with effective management of currency-related challenges.