Medtronic plc reported fiscal second‑quarter 2026 revenue of $8.961 billion, a 6.6% year‑over‑year increase and 5.5% organic growth, surpassing consensus estimates of $8.86 billion. Diluted earnings per share rose to $1.07, an 8% increase from the same period a year earlier, and beat the analyst expectation of $1.31 by $0.05, a 3.8% margin. The earnings beat was driven by a high‑margin product mix, disciplined cost management, and robust demand in key cardiovascular and neuroscience segments.
The quarter’s revenue lift was largely powered by a 71% jump in Cardiac Ablation Solutions (CAS) revenue, with U.S. CAS sales growing 128%. The PFA portfolio, a core driver of CAS growth, captured significant market share in the U.S. cardiovascular market. The broader Cardiovascular portfolio grew 10.8% year‑over‑year, while the Neuroscience portfolio added 4.5% and the Diabetes business increased 10.3%. Medical Surgical revenue grew modestly by 2.1%. These segment gains offset modest declines in legacy product lines and reinforced Medtronic’s high‑margin focus.
Operating profit reached $1.686 billion on a GAAP basis, with a 18.8% operating margin, while non‑GAAP operating profit climbed to $2.162 billion, a 24.1% margin. The margin expansion reflects both a shift toward higher‑margin products and effective cost controls, despite increased R&D spending to support the expanding PFA and Hugo robotic‑assisted surgery programs. Net income was $1.374 billion, and non‑GAAP net income was $1.746 billion, both up 8% from the prior year.
Management raised its fiscal‑2026 outlook, lifting organic revenue growth guidance to 5.5% from the previous 5.0% and expanding the diluted non‑GAAP EPS range to $5.62–$5.66 from $5.60–$5.66. The company reiterated a potential tariff impact of approximately $185 million, unchanged from prior guidance. The upward revision signals confidence in sustained demand for high‑margin cardiovascular and neuroscience products and in the company’s ability to maintain cost discipline while investing in growth drivers.
Geoff Martha, Medtronic’s Chairman and CEO, said the quarter “demonstrated strong execution across the business, with both revenue and earnings beating expectations.” CFO Thierry Piéton added that the company “drove underlying efficiency gains in gross margin, significantly increased R&D to fuel future growth, and strategically invested in sales and marketing to support the momentum of key programs.”
R&D spending rose to support the expansion of high‑margin product lines, particularly the PFA portfolio and the Hugo robotic‑assisted surgery system, which has secured FDA approval for urology applications and is poised for broader market adoption. The company’s focus on innovation, combined with disciplined cost management, underpins its ability to generate higher earnings while investing in future growth drivers.
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