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MDT
Earnings call · Jul 2026 (Q1 FY27)

Medtronic Q1 FY27 earnings call MDT

Sep 1, 2026 Source

Executive summary

Medtronic Q1 FY27 — Strong Start with Broad-Based Growth and Strategic Investments

Medtronic delivered a strong Q1 FY27, exceeding expectations on revenue and EPS, driven by broad-based organic growth across key businesses and strategic investments. The company is accelerating innovation and focusing its portfolio, reinforcing confidence in its long-term trajectory. Strategic tuck-in acquisitions and partnerships are expanding its presence in high-growth markets like robotics and structural heart, while operational efficiencies are beginning to translate into improved financial results.

Highlights

5

  • Organic revenue growth of 13.7% (including 670 bps from extra week), representing the strongest quarterly performance in nearly 8 years excluding COVID comps.

  • Adjusted EPS of $1.45, which was $0.06 above the midpoint of guidance and Street expectations.

  • Cardiac Ablation Solutions (CAS) delivered exceptional worldwide growth of 88%, with U.S. growth at 139%.

  • Cardiac Rhythm Management (CRM) grew 15% globally, gaining 80 basis points of global share.

  • Pelvic Health delivered strong growth of 15%, with Altaviva procedures doubling sequentially.

Concerns

3

  • Business mix was unfavorable by 50 basis points to gross margin, largely reflective of the Diabetes and CAS businesses.

  • Neuromodulation grew only 3% globally, driven by ongoing SCS market softness and replacement headwinds in DBS.

  • The adjusted tax rate benefit of 17.2% in Q1 was mostly timing and is expected to be offset later in the year.

Guidance & targets

CategoryTargetConfidence
Full-year FY27 organic revenue growth
7.25% to 7.75%
high materiality
High
Q2 FY27 organic revenue growth
Roughly 6%
medium materiality
High
Full-year FY27 FX impact
$50 million to $150 million headwind
medium materiality
High
Q2 FY27 FX impact
$25 million to $75 million headwind
medium materiality
High
Full-year FY27 operating profit growth
Approximately 10%
high materiality
High
Full-year FY27 operating margin expansion
Approximately 50 basis points
high materiality
High
Full-year FY27 adjusted EPS
$5.94 to $6.00
high materiality
High
Q2 FY27 adjusted EPS
$1.32 to $1.34
medium materiality
High
Cardiac Ablation Solutions (CAS) growth rate
Outpace market by more than 3x in Q2
high materiality
High
Hugo completed procedures
Surpass 50,000
medium materiality
High
MiniMed separation
Close prior to fiscal year-end
high materiality
High
Inorganic growth contribution from SPR and Scientia acquisitions
Over $150 million
medium materiality
High
Ardian transradial catheter launch
On track to launch
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Cardiovascular
Strong performance across the segment.
U.S. growth: 25%International growth: 14%
—19%——
Electrophysiology Therapies (EPT)
Includes CRM and CAS businesses, significant contributor to Cardiovascular growth.
U.S. growth: 41%International growth: 18%
—29%——
Cardiac Ablation Solutions (CAS)
Significant contributor to EPT, gaining share rapidly and in early stages of trajectory.
U.S. growth: 139%Sphere-9 U.S. share increase: 9 pointsU.S. Affera installed base sequential growth: 35%Trailing 12-month revenue: >$2 billion
—88%——
Cardiac Rhythm Management (CRM)
Balanced performance between U.S. and international markets, strong innovation pipeline.
Global share gain: 80 basis pointsConduction System Pacing contribution to CRM: >200 basis points
—15%——
Interventional Cardiology Therapies (ICT)
Includes structural heart and coronary and renal denervation.
International growth: 11%
—7%——
Structural Heart
U.S. procedure volume trends remain stable; internal programs on track.
—Low single digits——
Coronary and Renal Denervation
Ardian continues to make progress with positive trends in access, market development, and adoption.
Coronary business growth: Low double digitsCathWorks contribution to organic growth: ~300 basis points
—13%——
Cardiovascular Surgery
Includes cardiac surgery and aortic businesses.
—8%——
Peripheral Vascular Health
Strong growth in the segment.
—11%——
Neuroscience
Driven by Cranial and Spinal Technologies.
U.S. growth: 11%International growth: 7%
—9%——
Cranial and Spinal Technologies (CST)
AiBLE ecosystem resonating with customers, strong contribution from Stealth AXiS.
U.S. growth: 14%International growth: 10%Core Spine growth: 14%Neurosurgery growth: 15%Stealth AXiS contribution: Strong
—13%——
Specialty Therapies
Includes Neurovascular.
U.S. growth: 10%International growth: 4%
—7%——
Neurovascular
Continued strength across flow diversion, intrasaccular embolization, carotid stenting, and access devices.
Hemorrhagic growth: 9%
—4%——
Pelvic Health
Altaviva performance more than offsetting S&M market softness, expected to be a stronger contributor in FY27 and beyond.
Altaviva procedures: Doubled sequentially
—15%——
ENT
Strong growth in the segment.
U.S. growth: Low double digits
—7%——
Neuromodulation
Impacted by SCS market softness and DBS replacement headwinds. Strengthened by SPR Therapeutics acquisition and Medical distribution agreement.
—3%——
Medical Surgical
Balanced performance in the U.S. and internationally.
—10%——
Surgical
Strength in Advanced Energy and Wound Management, driven by share gains from LigaSure and VLOC Barb sutures.
Hugo contribution: Increased
—9%——
Endoscopy
Driven by momentum of Endoflip 300 system and PillCam.
—High single digits——
Acute Care and Monitoring (ACM)
Positive tailwind in Q1, expected to normalize through 2027.
U.S. growth: High teensMcGRATH video laryngoscopy growth: Mid-40sMicrostream capnography growth: High 30s
—14%——
Diabetes
Driven by U.S. acceleration and robust international growth.
—15%——

MDT operating KPIs by quarter

MDT operating KPIs stated on its earnings calls, by fiscal quarter
KPI Jan 2026 Q3 FY26 Apr 2026 Q4 FY26This call Jul 2026 Q1 FY27Change vs prior quarter
Installed base Touch Surgery
1,000+ This quarter, Touch Surgery installations increased over 20% sequentially and have now surpassed 1,000 systems globally. Source transcript
1,400+ And our Touch Surgery Digital Ecosystem, well, it continues to represent a clear advantage with over 1,400 installations, up 30% plus sequentially. Source transcript
1,500+ Today, Touch Surgery is used in more than 1,500 operating rooms globally, supporting AI-powered insights, collaboration and workflows. Source transcript
—

Operating figures the company states on every call, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
Onyx 12update
Sphere-9expansion
Touch Surgery Aidlaunch

Deals & partnerships

Cornerstone Strategic investment and distribution agreement for Sentire Surgical System. $700 million investment

For select markets outside the U.S., complements Hugo, broadens customer needs, expands global robotics portfolio. Provides strategic optionality for future acquisition.

Pi-Cardia Strategic investment in leaflet modification technology for TAVR procedures.

First FDA-cleared leaflet modification technology for TAVR for patients at risk for coronary obstruction. Part of broader theme to double down on Structural Heart.

Antares Strategic investment in the TAVR space.

Made earlier this year, part of broader theme to double down on Structural Heart.

Scientia Acquisition for advancement in navigation.

Completed this quarter, enables neuro interventionalists to reach historically difficult brain areas. Operates in markets with CAGRs exceeding 20%.

SPR Therapeutics Acquisition in peripheral nerve stimulation.

Strengthens neuromodulation position, increases exposure to attractive high-growth markets. Operates in markets with CAGRs exceeding 20%.

Medical Distribution agreement for BVNA.

Expands presence in BVNA, strengthens neuromodulation position, and increases exposure to attractive high-growth markets.

Risks & headwinds

Unfavorable business mix impact on gross margin Q1 FY27, expected to reduce following MiniMed separation

50 basis points headwind in Q1 FY27

Mitigation:Pricing discipline, COGS efficiency programs, and the planned MiniMed separation are expected to mitigate this headwind.

Neuromodulation market softness Q1 FY27, ongoing

3% global growth in Q1 FY27

Mitigation:Strategic actions including the acquisition of SPR Therapeutics and a distribution agreement with Medical for BVNA are strengthening the portfolio and increasing exposure to high-growth segments.

Tax rate benefit timing Q1 FY27, expected to be offset later in the year

Adjusted tax rate of 17.2% in Q1 FY27 (better than expected)

Mitigation:Management expects this to be a timing issue that will normalize over the fiscal year.

Foreign exchange impact FY27, Q2 FY27

$50 million to $150 million headwind for FY27, $25 million to $75 million headwind for Q2 FY27

Mitigation:No specific mitigation stated for the full year, but FX impact was roughly neutral in Q1.

Acute Care and Monitoring (ACM) normalization Expected to normalize as we move through 2027

ACM grew 14% globally in Q1 FY27

Mitigation:No specific mitigation stated, implies natural market dynamics will lead to moderation after a strong Q1.

What to watch in Q2 FY27

CAS growth rate vs. market

Q2 FY27
Current 88% worldwide growth in Q1, expected to outpace market by >3x in Q2
Target Continued outperformance of market by >3x

Why it matters

Cardiac Ablation Solutions (CAS) is a significant growth driver; sustained outperformance indicates continued market share gains and platform strength.

In Q2, we expect to outpace the market by more than 3x with growth rates moderating over the remainder of the fiscal year as we lap increasingly strong comps.

Q&A highlights

Can you elaborate on the ability to accelerate the Medtronic business excluding CAS, and provide details on the Cornerstone deal's structure and its impact on the margin guidance?

Management highlighted broad-based performance beyond CAS, including Altaviva, Ardian, Hugo, Stealth AXiS, neurovascular acceleration, and neuromodulation partnerships. The margin guidance reduction from 60 to 50 bps is due to reinvesting a portion of the revenue upside to accelerate commercial performance and accounting for foregone interest from the Cornerstone investment.

“we're taking a portion of the upside from a revenue perspective and a portion only and reinvesting that to accelerate our commercial performance.”

asked by Travis Steed · answered by Thierry Pieton

2 min read 7 chapters

Detailed narrative

Q1 FY27 Performance Highlights

Medtronic reported Q1 FY27 revenue of $9.8 billion and adjusted EPS of $1.45, both exceeding expectations. Organic revenue grew 13.7%, including a 670 basis point contribution from an extra selling week. Excluding this, it was the strongest quarterly performance in nearly 8 years. The growth was broad-based across geographies, with the U.S. up nearly 16% and international up 12%.

Strategic Investments and Portfolio Expansion

The company announced strategic investments in Pi-Cardia (structural heart) and Cornerstone (soft tissue robotics), complementing existing platforms like Hugo and Touch Surgery. These investments aim to expand access to robotic surgery globally and strengthen Medtronic's position in high-growth markets, with acquired businesses like SPR Therapeutics and Scientia expected to contribute over $150 million to inorganic growth in FY27.

Cardiac Ablation Solutions (CAS) Momentum

CAS delivered exceptional worldwide growth of 88%, with U.S. growth at 139%. Sphere-9 gained 9 points of U.S. share, and the U.S. Affera installed base grew 35% sequentially. The business surpassed $2 billion in trailing 12-month revenue ahead of schedule and received CE Mark for Sphere-9 for ventricular arrhythmias, with U.S. VT pivotal trial enrollment underway.

Robotics and Surgical Ecosystem

Hugo robotic-assisted surgery system is expected to surpass 50,000 completed procedures by year-end, with procedure growth more than twice the market rate. The company is building a broader surgical ecosystem integrating robotics, advanced visualization, navigation, instrumentation, and AI-enabled capabilities like Touch Surgery, which is used in over 1,500 operating rooms globally. Touch Surgery Aid, unveiled at SRS, brings 300x more computing power to the OR.

Diabetes Business Separation

Medtronic reiterated its intent to separate the MiniMed diabetes business prior to fiscal year-end. This separation is expected to create two focused companies, allowing for distinct capital allocation strategies and improving Medtronic's gross margin by approximately 50 basis points and operating margin by 100 basis points upon deconsolidation. The diabetes business itself is performing well, with accelerating growth, particularly in the U.S., and innovation ahead of schedule.

Operational Efficiency and Margin Expansion

Adjusted gross margin increased 10 basis points to 65.2%, driven by pricing discipline (30 bps benefit) and COGS efficiency programs (50 bps benefit), offsetting unfavorable mix (50 bps). The company rationalized over 9,000 SKUs, streamlining its product portfolio and enhancing supply chain performance. Adjusted operating margin expanded 10 basis points to 23.7%, contributing to a leveraged P&L.

Renal Denervation (Ardian) Progress

Ardian continues to make progress, with real-world outcomes improving and SPYRAL AFFIRM clinical trial accepted for a late-breaker at TCT. The conversation with clinicians is shifting from awareness to access, with more hospitals establishing Ardian programs. Expanding coverage, including with commercial payers like Highmark, and integrating Ardian into the care pathway are key focus areas, supported by the upcoming transradial catheter launch in H2 FY27.

AI-generated summary of the company's earnings call. Not investment advice.