Medtronic Q1 Earnings Call Highlights

Key Points

• Medtronic raised its fiscal 2027 outlook after first-quarter revenue rose 13.7% to $9.8 billion and adjusted EPS reached $1.45, beating expectations. The company now expects 7.25%–7.75% organic revenue growth and adjusted EPS of $5.94–$6.00 for the full year.
• Cardiovascular led operating momentum, with revenue up 19% and Cardiac Ablation Solutions surging 88% globally and 139% in the U.S., driven by Sphere-9 and Affera adoption. CRM also grew 15% and gained global market share.
• Medtronic continues investing in growth, including its Hugo surgical-robotics platform and a $700 million Cornerstone Robotics agreement, while maintaining plans to separate its MiniMed diabetes business before fiscal year-end. Excluding diabetes would improve gross and operating margins but modestly reduce companywide growth.

Medtronic NYSE: MDT reported fiscal 2027 first-quarter revenue of $9.8 billion and adjusted earnings per share of $1.45, as the medical-device maker cited broad-based demand, commercial execution and momentum in several growth platforms.

Revenue increased 13.7% on both a reported and organic basis for the quarter ended July 31, 2026. However, Chief Financial Officer Thierry Piéton said the company’s 53-week fiscal year added an extra selling week to the first quarter, contributing an estimated $570 million, or 670 basis points, to enterprise organic revenue growth. Excluding the additional week, Piéton said the company delivered its strongest quarterly performance in nearly eight years, excluding comparisons with the COVID period.

Adjusted EPS of $1.45 was 6 cents above the midpoint of Medtronic’s guidance range and Street expectations, according to Piéton. The company raised its full-year organic revenue growth outlook by 50 basis points to a range of 7.25% to 7.75% and lifted its adjusted EPS outlook to $5.94 to $6.00.

Cardiovascular Growth Led by Ablation and CRM

Cardiovascular revenue grew 19%, including 25% growth in the U.S. and 14% internationally. Electrophysiology therapies, which includes Cardiac Rhythm Management and Cardiac Ablation Solutions, rose 29% globally.

Cardiac Ablation Solutions, or CAS, grew 88% worldwide and 139% in the U.S. CEO Geoff Martha said the business surpassed $2 billion in trailing 12-month revenue ahead of the company’s previously stated timetable. The company attributed the performance to continued adoption of its Sphere-9 platform and an expanding U.S. Affera installed base, which increased more than 35% sequentially during the quarter.

Martha said Sphere-9 gained nine points of U.S. share in the quarter. The company expects CAS to grow at more than 2.5 times the market rate for the full fiscal year and at more than three times the market rate in the second quarter, although growth is expected to moderate later in the year as comparisons become more difficult.

Cardiac Rhythm Management grew 15% globally and gained 80 basis points of global share. Piéton said conduction system pacing added more than 200 basis points to CRM growth during the quarter. Medtronic cited demand for Aurora EV-ICD, Micra and pacing technologies including OmniaSecure.

Elsewhere in cardiovascular, interventional cardiology therapies grew 7%, driven primarily by 11% international growth. Coronary and renal denervation rose 13%, while cardiovascular surgery increased 8% and peripheral vascular health grew 11%.

Management also highlighted progress in renal denervation through its Symplicity business. Martha said real-world clinical outcomes have continued to improve and that discussions with hospitals are increasingly focused on establishing renal denervation programs. A transradial catheter remains on track for a second-half fiscal 2027 launch. The company also said the SPYRAL AFFIRM trial was accepted as a late-breaker presentation at the TCT meeting this fall.

Neuroscience and Surgical Businesses Advance

Neuroscience revenue rose 9%, with Cranial & Spinal Technologies growing 13%. Core spine increased 14% and neurosurgery grew 15%, aided by the first full commercial quarter for the Stealth AXiS platform.

Pelvic health increased 15%, as procedures using the Altaviva therapy doubled sequentially. Management said physician training, reimbursement support and patient awareness are expanding, while Altaviva is offsetting softness in the sacral neuromodulation market.

Medical Surgical revenue rose 10%, including 9% growth in surgical and 14% growth in acute care and monitoring. Surgical growth reflected strength in advanced energy and wound management, including LigaSure vessel-sealing products and V-Loc barbed sutures. Acute care and monitoring benefited from mid-40% growth in McGRATH video laryngoscopy and high-30% growth in Microstream capnography, though Piéton said the business is expected to normalize as the fiscal year progresses.

In robotics, Martha said Medtronic expects its Hugo system to exceed 50,000 completed procedures and reach 250 installed units by the end of fiscal 2027. Hugo procedure growth is continuing at more than twice the market rate, according to the company.

Medtronic also announced a strategic investment and distribution agreement involving Cornerstone Robotics’ Sentire Surgical System in select markets outside the U.S. Management characterized the agreement as complementary to Hugo, extending Medtronic’s reach in international markets and broadening customer choice. Piéton said the $700 million investment will have a minimal operational effect this year beyond foregone interest income, with distribution-related contributions expected to begin in fiscal 2028.

Margins, Investments and Diabetes Separation

Adjusted gross margin was 65.2%, up 10 basis points year over year. Pricing added 30 basis points, while cost reductions net of inflation contributed 50 basis points. Those gains were partly offset by a 50-basis-point unfavorable mix effect, primarily related to diabetes and CAS. The company rationalized more than 9,000 SKUs during the quarter as part of its supply-chain and portfolio-efficiency efforts.

Adjusted operating margin was 23.7%, up 10 basis points, while adjusted operating profit increased 15% to $2.3 billion. Medtronic continues to project approximately 50 basis points of operating-margin expansion and roughly 10% operating-profit growth for the full fiscal year.

The company said it is reinvesting part of its revenue upside into commercialization and innovation initiatives. Piéton said recent acquisitions, including SPR Therapeutics and Scientia, are expected to add more than $150 million of inorganic revenue in fiscal 2027.

Diabetes revenue increased 15%, driven by U.S. acceleration and international growth. Management said its plan to separate the MiniMed diabetes business remains unchanged and that it intends to complete the transaction before fiscal year-end when the economics are optimal for stakeholders. Piéton said removing diabetes would increase Medtronic’s gross margin by about 50 basis points and operating margin by about 100 basis points, while reducing companywide growth by roughly 20 basis points.

Medtronic expects about 6% organic revenue growth in the second quarter and adjusted EPS of $1.32 to $1.34. The company also expects foreign exchange to represent a $50 million to $150 million headwind for the full fiscal year based on recent rates.

About Medtronic (NYSE:MDT)

Medtronic plc is a global medical technology company that develops and manufactures a broad range of therapeutic devices and health care solutions. Headquartered legally in Ireland with principal operational offices in the United States, the company markets products to hospitals, physicians and health systems worldwide and has grown from its founding in 1949 into one of the largest medical-device manufacturers serving global health-care markets.

Medtronic's offerings span several clinical areas, including cardiac rhythm and heart failure (pacemakers, implantable cardioverter‑defibrillators and related cardiac therapies), minimally invasive and surgical technologies (laparoscopic and advanced energy devices, visualization systems and surgical innovations), restorative therapies (spine and orthopedics, neuromodulation and neurovascular treatments) and diabetes management (insulin-delivery systems and glucose monitoring solutions).

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