Medtronic(MDT) - 2026 Q1 - Quarterly Results

Medtronic Q1 FY2026 Earnings Release Financial Highlights 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][10] - 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] - Management expressed confidence in accelerating revenue growth in the second half of the fiscal year, citing progress on major growth drivers[4] Financial Performance Analysis The company saw reported revenue growth of 8.4%, improved GAAP operating margins, and generated $584 million in free cash flow Revenue Analysis 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][28] Profitability Analysis 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 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] Business Segment Performance All business segments contributed to growth, led by the Cardiovascular portfolio with 7.0% organic growth and Diabetes with 7.9% Cardiovascular Portfolio 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 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 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 Diabetes Revenue | Metric | Q1 FY26 Revenue | Growth | | :--- | :--- | :--- | | Reported | $721M | +11.5% | | Organic | $698M | +7.9% | Geographic Performance International markets demonstrated robust organic growth of 6.1%, outpacing the U.S. market's 3.5% organic growth U.S. Revenue 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 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 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] - 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] 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][14] Non-GAAP Financial Measures 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] - Key non-GAAP adjustments in Q1 FY26 included amortization of intangible assets, restructuring costs, acquisition-related items, and gains/losses on minority investments[45] - 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]