Medtronic (MDT) Q1 2026 Earnings Call August 19, 2025 08:00 AM ET Company ParticipantsRyan Weispfenning - VP & Head - IRGeoff Martha - Chairman & CEOThierry Piéton - EVP & CFOTravis Steed - MD - Equity ResearchMike Kratky - Senior MD - Medical Devices & TechnologyAnthony Petrone - MD - Equity ResearchJoshua Jennings - Managing DirectorQue Dallara - EVP & President Diabetes Operating UnitJoanne Wuensch. - Managing DirectorMike Marinaro - EVP & President, Medical Surgical Portfolio & AmericasConference Call P ...

Financial Data and Key Metrics Changes - The company reported Q1 revenue of €8.6 billion, growing 8.4% reported and 4.8% organic, in line with guidance [38] - Adjusted EPS was €1.26, exceeding the midpoint of guidance by €0.03 [42] - Adjusted gross margin was 65.1%, down 80 basis points year over year, but stable compared to Q4 [38][39] Business Line Data and Key Metrics Changes - Cardiovascular grew 7% this quarter, with cardiac ablation solutions achieving nearly 50% growth [20][21] - Neuroscience grew 3%, with high single-digit growth in neurosurgery and neuromodulation [10][27] - MedSurg grew 2%, with advanced energy showing high single-digit growth [31] - Diabetes grew 8%, driven by the strength of the 780G system and Simplera Sync Sensor in international markets [34] Market Data and Key Metrics Changes - The U.S. market showed slower growth in certain segments, particularly in diabetes and pelvic health, while international markets performed better [61] - CAS growth was particularly strong in the U.S. and Japan, with low 70s growth in the U.S. and low 30s growth internationally [20][21] Company Strategy and Development Direction - The company is focused on accelerating growth through innovation in med tech and has raised its EPS guidance for the full year [6][7] - A planned separation of the diabetes business is expected to sharpen focus on core high-growth opportunities [17][37] - New board committees have been established to enhance focus on growth and operational efficiency [49][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to accelerate growth throughout fiscal 2026, citing strong demand and a robust product pipeline [6][17] - The company anticipates significant growth from the cardiac ablation solutions and renal denervation segments [12][13] - Management highlighted the importance of operational efficiency and innovation to drive long-term shareholder value [18][46] Other Important Information - The company expects to finalize the national coverage determination for the simplicity procedure for hypertension by October 8 [25] - The company is investing significantly in R&D, with a 7.7% increase in adjusted R&D spending [40] Q&A Session Summary Question: Update on CAS growth and its impact on U.S. growth - Management confirmed confidence in CAS growth, noting strong demand and utilization, and expects it to positively impact U.S. growth in the future [56][60] Question: Impact of new board committees on governance and capital allocation - Management explained that the new committees will provide focused oversight on growth and operational performance, enhancing communication with management [70][72] Question: Commitment to CAS annual sales target - Management reiterated commitment to the $2 billion annual sales target for CAS, indicating strong momentum and confidence in achieving this goal [76][78] Question: Discussion on capital allocation and EPS growth - Management emphasized a renewed focus on value creation, including potential M&A opportunities and increased investment in growth drivers [81][86] Question: Overall portfolio growth expectations - Management indicated that while significant growth drivers are emerging, the overall business will continue to improve, with a focus on maintaining operational efficiency and EPS growth [95][100]

智通财经APP获悉，周二美股盘前，医疗器械制造商美敦力(MDT.US)公布截至7月25日的2026财年第一 季度业绩。数据显示，该公司Q1营收为86亿美元，超过市场预期的84亿美元，这主要受心血管产品部 门增长的推动，其心脏消融产品营收增长了近50%;调整后每股收益增长2%至1.26美元，高于市场预期 的1.23美元。美敦力还下调关税成本预测并上调全年利润指引。 与史赛克(SYK.US)、波士顿科学(BSX.US)和GE HealthCare Technologies(GEHC.US)等同行一样，美敦力 下调了关税成本预测。根据周二发布的声明，美敦力目前预计关税将带来1.85亿美元的损失，而此前的 预期为2.0亿至3.5亿美元。 美敦力目前预计2026财年调整后每股收益为5.60美元至5.66美元，高于此前预测的5.50美元至5.60美元。 史赛克、波士顿科学和GE HealthCare Technologies也上调了利润指引。美敦力仍预计2026 财年营收的有 机增长率为5%。 据报道，在激进投资公司Elliott Investment Management 入股美敦力后，美敦力将扩大其董事会。为了提 升 ...

Financial Performance - Medtronic reported Q1 FY26 revenue of $8.539 billion, a 6.7% increase compared to Q1 FY25, with organic revenue growth of 4.8%[24] - Adjusted diluted EPS was $1.26, a 2.4% increase year-over-year[24] - The company is raising FY26 EPS guidance and expects high-single digit EPS growth in FY27[15, 58] Segment Performance - Cardiovascular segment revenue reached $3.285 billion, with 7.0% organic growth[21, 40] - Cardiac Ablation Solutions experienced nearly 50% global growth, including over 70% US growth[15, 32, 39] - Neuroscience segment revenue was $2.416 billion, with 3.1% organic growth[21, 45] - Medical Surgical segment revenue totaled $2.083 billion, with 2.4% organic growth[21, 50] - Diabetes segment revenue was $721 million, with 7.9% organic growth[21, 55] Strategic Initiatives - Medtronic is executing strategic portfolio management, including Diabetes separation within 15 months[15, 55] - The company anticipates a net FY26 tariff impact of approximately $185 million, a decrease from the previous estimate of $200-350 million[15] Future Outlook - Medtronic expects revenue growth to accelerate in the second half of the fiscal year due to significant product launches[14, 31] - Cardiac Ablation Solutions is expected to grow even faster in Q2 and H2 due to PFA supply expansion[15]

Medtronic reports profit that beat estimates and lifted full-year earnings guidance after lowering its forecast for tariff costs https://t.co/VInUi06ATM ...

Corporate Governance - Medtronic is making changes to its board after Elliott Investment Management became one of its largest shareholders [1]

[Medtronic Q1 FY2026 Earnings Release](index=1&type=section&id=Medtronic%20Q1%20FY2026%20Earnings%20Release) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported its 11th consecutive quarter of mid-single digit organic revenue growth and raised its full-year EPS guidance Q1 FY2026 Key Financial Metrics | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Revenue | $8.6B | +8.4% as reported | | Adjusted Revenue | $8.5B | +4.8% organic | | GAAP Diluted EPS | $0.81 | +1% | | Non-GAAP Diluted EPS | $1.26 | +2% | - The company raised its full-year FY26 EPS guidance while reiterating its organic revenue growth guidance[3](index=3&type=chunk)[10](index=10&type=chunk) - Cardiac Ablation Solutions revenue demonstrated significant strength, increasing by **nearly 50%** overall and **72% in the U.S.**, driven by pulsed field ablation (PFA) products[3](index=3&type=chunk) - Management expressed confidence in accelerating revenue growth in the second half of the fiscal year, citing progress on major growth drivers[4](index=4&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) The company saw reported revenue growth of 8.4%, improved GAAP operating margins, and generated $584 million in free cash flow [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) Q1 FY2026 Revenue Performance | Metric | Q1 FY26 | Q1 FY25 | Growth | | :--- | :--- | :--- | :--- | | Total Reported Revenue | $8.578B | $7.915B | +8.4% | | Total Organic Revenue | $8.347B | $7.967B | +4.8% | - The organic revenue growth calculation for the quarter excludes a **$159 million** benefit from foreign currency and **$72 million** in 'Other revenue'[7](index=7&type=chunk)[28](index=28&type=chunk) [Profitability Analysis](index=3&type=section&id=Profitability%20Analysis) Q1 FY2026 Profitability Metrics (GAAP vs. Non-GAAP) | Metric | GAAP Value | GAAP Change | Non-GAAP Value | Non-GAAP Change | | :--- | :--- | :--- | :--- | :--- | | Operating Profit | $1.445B | +13% | $2.016B | +3% | | Operating Margin | 16.8% | +70 bps | 23.6% | -80 bps | | Net Income | $1.040B | Flat | $1.626B | +2% | | Diluted EPS | $0.81 | +1% | $1.26 | +2% | [Cash Flow Analysis](index=15&type=section&id=Cash%20Flow%20Analysis) Q1 FY2026 Cash Flow Summary | Metric | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,088M | $986M | | Additions to PP&E | ($504M) | ($520M) | | **Free Cash Flow** | **$584M** | **$466M** | - The company's net cash used in financing activities was **$1.381 billion**, primarily driven by payments on long-term debt ($1.162 billion) and dividend payments ($910 million)[60](index=60&type=chunk) [Business Segment Performance](index=2&type=section&id=Business%20Segment%20Performance) All business segments contributed to growth, led by the Cardiovascular portfolio with 7.0% organic growth and Diabetes with 7.9% [Cardiovascular Portfolio](index=2&type=section&id=Cardiovascular%20Portfolio) Cardiovascular Revenue (Organic) | Sub-segment | Q1 FY26 Revenue | Organic Growth | | :--- | :--- | :--- | | **Total Cardiovascular** | **$3.217B** | **+7.0%** | | Cardiac Rhythm & Heart Failure | $1.676B | +9.1% | | Structural Heart & Aortic | $908M | +6.1% | | Coronary & Peripheral Vascular | $633M | +2.9% | [Neuroscience Portfolio](index=2&type=section&id=Neuroscience%20Portfolio) Neuroscience Revenue (Organic) | Sub-segment | Q1 FY26 Revenue | Organic Growth | | :--- | :--- | :--- | | **Total Neuroscience** | **$2.389B** | **+3.1%** | | Neuromodulation | $496M | +8.6% | | Cranial & Spinal Technologies | $1.199B | +4.5% | | Specialty Therapies | $694M | -2.7% | [Medical Surgical Portfolio](index=3&type=section&id=Medical%20Surgical%20Portfolio) Medical Surgical Revenue (Organic) | Sub-segment | Q1 FY26 Revenue | Organic Growth | | :--- | :--- | :--- | | **Total Medical Surgical** | **$2.044B** | **+2.4%** | | Surgical & Endoscopy | $1.580B | +2.3% | | Acute Care & Monitoring | $464M | +2.6% | [Diabetes Business](index=3&type=section&id=Diabetes%20Business) Diabetes Revenue | Metric | Q1 FY26 Revenue | Growth | | :--- | :--- | :--- | | Reported | $721M | +11.5% | | Organic | $698M | +7.9% | [Geographic Performance](index=10&type=section&id=Geographic%20Performance) International markets demonstrated robust organic growth of 6.1%, outpacing the U.S. market's 3.5% organic growth [U.S. Revenue](index=10&type=section&id=U.S.%20Revenue) U.S. Revenue Performance (Organic) | Segment | Q1 FY26 Revenue | Organic Growth | | :--- | :--- | :--- | | **Total U.S.** | **$4.205B** | **+3.5%** | | Cardiovascular | $1.479B | +5.5% | | Neuroscience | $1.624B | +3.8% | | Medical Surgical | $884M | +0.4% | | Diabetes | $217M | +0.9% | [International Revenue](index=11&type=section&id=International%20Revenue) International Revenue Performance (Organic) | Segment | Q1 FY26 Revenue | Organic Growth | | :--- | :--- | :--- | | **Total International** | **$4.142B** | **+6.1%** | | Cardiovascular | $1.737B | +8.3% | | Neuroscience | $765M | +1.7% | | Medical Surgical | $1.159B | +4.0% | | Diabetes | $481M | +11.4% | [FY2026 Financial Guidance](index=3&type=section&id=FY2026%20Financial%20Guidance) The company reiterated its organic revenue growth guidance of approximately 5% and raised its non-GAAP EPS guidance to a new range - The company continues to expect FY26 organic revenue growth of **approximately 5%**[10](index=10&type=chunk) - Reported revenue growth for FY26 is expected to be in the range of **6.5% to 6.8%**, assuming recent foreign currency exchange rates[10](index=10&type=chunk) Updated FY2026 Diluted Non-GAAP EPS Guidance | Guidance | Prior Range | New Range | | :--- | :--- | :--- | | Diluted Non-GAAP EPS | $5.50 - $5.60 | $5.60 - $5.66 | - The EPS guidance was raised due to Q1 outperformance and a reduced potential impact from tariffs, now estimated at **approximately $185 million**[13](index=13&type=chunk)[14](index=14&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like organic revenue and adjusted EPS to provide insight into core operational performance - Management believes non-GAAP measures are useful for understanding underlying operational performance and facilitating comparisons with other companies in the med-tech industry[22](index=22&type=chunk) - Key non-GAAP adjustments in Q1 FY26 included amortization of intangible assets, restructuring costs, acquisition-related items, and gains/losses on minority investments[45](index=45&type=chunk) - The company does not provide reconciliations for forward-looking non-GAAP guidance to GAAP guidance because the timing and impact of potential charges are inherently uncertain[23](index=23&type=chunk)

Core Viewpoint - Medtronic plc has appointed John Groetelaars and Bill Jellison as independent directors to enhance its strategic focus and operational execution, following constructive engagement with Elliott Management [1][4][5] Group 1: Board Appointments and Committees - John Groetelaars and Bill Jellison have been appointed to the Board of Directors, effective immediately [1] - The Board has formed new Growth and Operating committees to improve strategic portfolio management and capital allocation, with CEO Geoff Martha serving as Chair [2][3] - Groetelaars and Jellison will also serve on one or both of the newly formed committees [2] Group 2: Strategic Focus and Growth Initiatives - The formation of the committees aims to align governance with management's focus on operational improvement and capital allocation [2] - The Growth Committee will guide evaluations of M&A opportunities, R&D investments, and potential divestitures, including the separation of the Diabetes business [6] - The Operating Committee will focus on optimizing operational performance and driving earnings acceleration [6] Group 3: Future Outlook and Investor Engagement - Medtronic plans to host an Investor Day in mid-2026 to discuss strategic priorities and financial algorithms [3] - The company is experiencing strong momentum with multiple growth drivers and plans to launch additional breakthrough therapies [3] - Elliott Management expresses confidence in Medtronic's potential for exceptional value creation through operational improvements and strategic clarity [5] Group 4: New Board Member Backgrounds - John Groetelaars has over 30 years of experience in the medical device sector, previously serving as interim CEO of Dentsply Sirona and CEO of Hillrom [8][9] - William Jellison is a former CFO of Stryker Corporation and has extensive experience in corporate finance within the medical technology industry [10][11]

Core Insights - Medtronic plc reported its first quarter fiscal 2026 financial results, achieving mid-single digit organic revenue growth for the 11th consecutive quarter, with expectations to accelerate growth in the second half of the fiscal year [1][2][3] Financial Performance - The company reported worldwide revenue of $8.578 billion, an increase of 8.4% as reported and 4.8% on an organic basis [3][4] - GAAP operating profit was $1.445 billion with an operating margin of 16.8%, reflecting a 13% increase and a 70 basis point improvement [3][4] - Non-GAAP operating profit was $2.016 billion with a margin of 23.6%, showing a 3% increase but an 80 basis point decrease [3][4] Earnings and Guidance - GAAP net income was $1.040 billion, with diluted earnings per share (EPS) at $0.81, remaining flat, while non-GAAP diluted EPS increased by 2% to $1.26 [4][8] - The company raised its FY26 EPS guidance to a range of $5.60 to $5.66, up from the previous range of $5.50 to $5.60, and reiterated its organic revenue growth guidance of approximately 5% [7][8][9] Segment Performance - Cardiac Ablation Solutions revenue surged nearly 50%, with a 72% increase in the U.S. driven by pulsed field ablation products [4][5] - The Cardiovascular Portfolio generated $3.285 billion in revenue, a 9.3% increase as reported and 7.0% organic [5][19] - The Diabetes business reported revenue of $721 million, an increase of 11.5% as reported and 7.9% organic [5][19] International and U.S. Revenue - International revenue reached $4.354 billion, a 13.6% increase, while U.S. revenue was $4.224 billion, reflecting a 3.5% increase [22][19] - The Cardiovascular segment in the international market grew by 12.6%, with notable increases in Cardiac Rhythm & Heart Failure and Structural Heart & Aortic categories [22][19] Operational Efficiency - The company is focused on improving efficiencies in manufacturing, supply chain, and operating expenses to drive earnings growth while increasing investments in R&D, sales, and marketing [9][8]

Medtronic is set to expand its board after activist firm Elliott Investment Management took a stake in the company, the Wall Street Journal reports https://t.co/oQknQBVZis ...