Q1 FY27
Filed Sep 1, 2026Medtronic reports first quarter fiscal 2027 results; delivers broad-based portfolio performance and raises fiscal 2027 guidance
Worldwide revenue increased 13.7% as reported and organic, all four reported operating businesses grew organically, GAAP and non-GAAP operating profit increased, operating cash flow and free cash flow increased, and the company raised FY27 organic revenue growth and diluted non-GAAP EPS guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Worldwide revenueGAAP | $9.756 billion | – | 13.7% as reported and 13.7% organic |
| GAAP gross marginGAAP | 65.0% | – | – |
| Non-GAAP gross marginnon-GAAP | 65.2% | – | – |
| GAAP operating profitGAAP | $1.764 billion | – | 22.1% |
| GAAP operating marginGAAP | 18.1% | – | 120 basis points |
| Non-GAAP operating profitnon-GAAP | $2.316 billion | – | 14.9% |
| Non-GAAP operating marginnon-GAAP | 23.7% | – | 10 basis points |
| GAAP net income attributable to MedtronicGAAP | $1.470 billion | – | 41.4% |
| Non-GAAP net income attributable to Medtronicnon-GAAP | $1.860 billion | – | 14.4% |
| GAAP diluted EPSGAAP | $1.14 | – | 40.7% |
| Non-GAAP diluted EPSnon-GAAP | $1.45 | – | 15.1% |
| GAAP effective tax rateGAAP | 16.4% | – | – |
| Non-GAAP effective tax ratenon-GAAP | 17.2% | – | – |
| Research and development expenseGAAP | $771 million | – | – |
| Selling, general, and administrative expenseGAAP | $3.198 billion | – | – |
| Net cash provided by operating activitiesGAAP | $1.793 billion | – | – |
| Free Cash Flownon-GAAP | $1.290 billion | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Cardiovascular PortfolioHigh-20s organic increase in Electrophysiology Therapies, high-single digit organic increase in Interventional Cardiology Therapies and CardioVascular Surgery, and low-double digit organic increase in Peripheral Vascular Health. | $3.927 billion | – | 19.5% as reported; 18.9% organic |
| Electrophysiology TherapiesNo qualitative driver specified. | $2,218 million | – | 29.5% as reported; 29.1% organic |
| Interventional Cardiology TherapiesNo qualitative driver specified. | $894 million | – | 7.2% as reported; 6.5% organic |
| CardioVascular SurgeryNo qualitative driver specified. | $477 million | – | 9.3% as reported; 8.1% organic |
| Peripheral Vascular HealthNo qualitative driver specified. | $338 million | – | 11.6% as reported; 11.0% organic |
| Neuroscience PortfolioLow-double digit organic increase in Cranial & Spinal Technologies, high-single digit organic increase in Specialty Therapies, and low-single digit organic increase in Neuromodulation. | $2.678 billion | – | 10.3% as reported; 9.3% organic |
| Cranial & Spinal TechnologiesThe release cited 13% growth in Cranial and Spinal Technologies, including low-20s growth in enabling technology. | $1,365 million | – | 12.8% as reported; 12.9% organic |
| Specialty TherapiesNo qualitative driver specified. | $774 million | – | 10.2% as reported; 7.4% organic |
| NeuromodulationNo qualitative driver specified. | $539 million | – | 4.7% as reported; 3.3% organic |
| Medical Surgical PortfolioHigh-single digit organic increase in Surgical & Endoscopy and mid-teens organic increase in Acute Care & Monitoring. | $2.279 billion | – | 10.0% as reported; 10.2% organic |
| Surgical & EndoscopyThe release cited 9% growth in Surgical. | $1,740 million | – | 8.7% as reported; 9.0% organic |
| Acute Care & MonitoringThe release cited 14% growth in Acute Care & Monitoring. | $539 million | – | 14.4% as reported; 14.2% organic |
| Diabetes businessNo qualitative driver specified. | $843 million | – | 16.9% as reported; 14.9% organic |
| OtherIncludes historical operations and ongoing transition agreements from businesses the Company has exited or divested, and adjustments to Italian payback accruals. | $29 million | – | NM |
FY27 outlook
- Revenue7.25% to 7.75% organic revenue growth
- NoteDiluted non-GAAP EPS of $5.94 to $6.00
- NoteEstimated neutral to 1% accretive impact from foreign currency exchange based on recent rates
Capital returns
- Dividends to shareholders of $921 million, compared with $910 million.
- Repurchase of ordinary shares of $267 million, compared with $123 million.
What drove it
- The company estimated that the extra fiscal week benefited Q1 organic growth by approximately $570 million.
- Q1 FY27 organic revenue growth excluded $29 million of Other revenue in the current year versus $72 million in the prior year, no current-year revenue from the Dutch Obesity Clinic divestiture versus $17 million in the prior year, $14 million of Scientia revenue, $5 million of SPR Therapeutics revenue, and $57 million of foreign exchange benefit on remaining net sales.
- Cardiovascular organic growth was led by Electrophysiology Therapies, while Neuroscience growth included Cranial and Spinal Technologies and Pelvic Health contribution from Altaviva.
- The company announced an expanded CE Mark indication for the Affera Mapping and Ablation System and Sphere-9 Catheter for ventricular arrhythmias, FDA clearance for Touch Surgery Aide next generation computing platform, a strategic investment in Pi-Cardia, and a strategic partnership with Cornerstone Robotics.
- The company completed acquisitions of Scientia Vascular and SPR Therapeutics, Inc.
Concerns
- The first quarter included an extra fiscal week, which the company estimates benefited Q1 organic growth by approximately $570 million.
- Organic revenue calculations exclude foreign currency, Other revenue, and significant acquisitions, divestitures, or other significant discrete items.
- The Diabetes business separation remains subject to a final decision on transaction structure; the company stated that a split-off is currently its preferred structure but no final decision has been reached.
- Diabetes results reported by Medtronic may not correspond to MiniMed financial statement information because MiniMed financials were prepared on a carve out basis through its IPO date and standalone basis post IPO.
What to watch
- FY27 organic revenue growth against guidance of 7.25% to 7.75%.
- FY27 diluted non-GAAP EPS against guidance of $5.94 to $6.00.
- The extent to which revenue growth continues after the Q1 extra fiscal week, estimated to have benefited organic growth by approximately $570 million.
- Cardiovascular performance, including Electrophysiology Therapies, which delivered 29.1% organic growth.
- Progress on the Diabetes business separation and the final capital-markets transaction structure.
- The effect of foreign currency exchange, for which FY27 guidance assumes an estimated neutral to 1% accretive impact.
Balance sheet and cash flow
- Cash and cash equivalents at end of period were $1.691 billion, compared with $1.273 billion.
- Net cash provided by operating activities was $1.793 billion, compared with $1.088 billion.
- Additions to property, plant, and equipment were $503 million, compared with $504 million.
- Free Cash Flow was $1.290 billion, compared with $584 million.
- Acquisitions, net of cash acquired were $1.162 billion, compared with $0 million.
- Net cash used in investing activities was $1.619 billion, compared with $719 million.
- Net cash used in financing activities was $343 million, compared with $1.381 billion.
- Net change in cash and cash equivalents was $(258) million, compared with $(945) million.
- Change in current debt obligations, net was $812 million, compared with $649 million.
- Payments on long-term debt were $0 million, compared with $1.162 billion.
Analysis
Medtronic opened FY27 with worldwide revenue of $9.756 billion, up 13.7% as reported and 13.7% organic. Growth was broad across the portfolio: Cardiovascular grew 18.9% organically, Neuroscience grew 9.3%, Medical Surgical grew 10.2%, and Diabetes grew 14.9%. The strongest reported division was Electrophysiology Therapies, where revenue increased 29.1% organically to $2,218 million. The company also estimated that the extra fiscal week benefited Q1 organic growth by approximately $570 million, an important factor in evaluating the quarter's growth rate.
Profitability improved on both reported bases. GAAP operating profit rose 22.1% to $1.764 billion and GAAP operating margin increased 120 basis points to 18.1%. Non-GAAP operating profit increased 14.9% to $2.316 billion, while non-GAAP operating margin was 23.7%, up 10 basis points. GAAP diluted EPS increased 40.7% to $1.14 and non-GAAP diluted EPS increased 15.1% to $1.45. The difference in growth rates reflects reported GAAP adjustments including amortization, restructuring and associated costs, acquisition and divestiture-related items, and minority-investment gains or losses.
Cash generation increased materially. Net cash provided by operating activities was $1.793 billion compared with $1.088 billion, while Free Cash Flow was $1.290 billion compared with $584 million. The company spent $1.162 billion on acquisitions, net of cash acquired, paid $921 million in dividends, and repurchased $267 million of ordinary shares. Cash and cash equivalents ended the period at $1.691 billion, while current debt obligations increased by $812 million.
Management raised FY27 organic revenue growth guidance to 7.25% to 7.75% from 6.75% to 7.25% and raised diluted non-GAAP EPS guidance to $5.94 to $6.00 from $5.90 to $6.00. The guide includes an estimated neutral to 1% accretive impact from foreign currency exchange based on recent rates. The company highlighted investments in innovation, portfolio development and commercial execution, alongside acquisitions of Scientia Vascular and SPR Therapeutics and strategic actions involving Pi-Cardia and Cornerstone Robotics.
The portfolio presentation changed in FY27, with Cardiovascular divisions reorganized and a product line moved from Medical Surgical to Neuroscience; prior-year net sales were recast to conform to the current presentation. Diabetes remained a high-growth business, but its separation is still expected to involve a series of capital-markets transactions and the final structure has not been decided. The next key evidence points are the durability of broad organic growth outside the extra week, cardiovascular electrophysiology momentum, operating-margin progression, and execution of the Diabetes separation.
Management, verbatim
We are off to a strong start in fiscal 2027. What gives us confidence is not simply the strength of the quarter, but importantly, the breadth of performance across our businesses and the increasing contributions from newer growth platforms.
Geoff Martha, Medtronic chairman and chief executive officer
The combination of strong operating performance and disciplined financial management drove revenue and adjusted EPS ahead of expectations, enabling us to raise our fiscal 2027 guidance.
Thierry Piéton, Medtronic chief financial officer
Not in the filing
stated, not guessed- Prior-quarter revenue, segment revenue, operating profit, net income, EPS, margin, cash flow, and capital-return comparisons were not reported.
- Debt balance at July 31, 2026 was not reported.
- GAAP EPS guidance was not reported.
- FY27 gross margin, operating expense, and tax-rate guidance were not reported.
- A previous-release outlook section was not provided; therefore, no actual-versus-prior-guidance comparison is included.
- Qualitative drivers were not specified for Electrophysiology Therapies, Interventional Cardiology Therapies, CardioVascular Surgery, Peripheral Vascular Health, Specialty Therapies, Neuromodulation, and Diabetes.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.