Medtronic executives said in the company's Aug. 23 earnings call that its cranial and spinal technologies business "remains attractive" despite revenue decreasing 7 percent year over year in the first quarter of fiscal year 2023, according to Seeking Alpha.
In the last quarter, revenue in Medtronic's spine and biologics segment decreased in the mid-single digits, but this was partially offset by a 4 percent increase in its core spine business in the U.S.
"We won market share on the strength of our overall portfolio, including our unit AI-enabled surgical planning platform and patient-specific implants, which had strong double-digit sequential growth in our U.S. user base," CEO Geoff Martha said. "In addition, our recently launched Catalyft PL spinal system designed to target the TLIF and PLIF markets, drove meaningful results in [the first quarter]. And the breadth of our enabling imaging, navigation and robotic technologies is a key differentiator."
Mr. Martha highlighted the importance of developing not just the spine robot, but all the enabling technologies that integrate with it. However, in the fiscal year first quarter, Medtronic noted extended purchasing times from hospitals, particularly toward the end of the quarter, as hospitals aim to preserve cash.
"We have more opportunities to put forth different models where we actually utilize the implantables and other disposable products as a way of financing this particular capital," said Brett Wall, president of Medtronic's neuroscience portfolio, which includes the cranial and spinal technologies segment. "We didn't see a significant uptick in our O-arms or StealthStations during the time … but we saw a little bit of an uptick with Mazor in that particular model."
Despite revenue dips in certain segments, Medtronic said it expects organic revenue growth in its fiscal year 2023 to be between 4 percent and 5 percent. However, if recent foreign currency exchange rates hold, fiscal year 2023 revenue growth would be negatively affected by between $1.4 billion and $1.5 billion versus the previously stated $1 billion to $1.1 billion.
"While our markets are facing macroeconomic challenges, we're focused on identifying ways to offset their impact to our financials," CFO Karen Parkhill said. "Looking ahead, we expect organic revenue growth to improve each quarter, with the second half of the fiscal year much stronger than the first. We are optimistic about our future, as we create markets and realize new opportunities."