Summary
- Non-GAAP EPS of $1.26 beat estimates by $0.03 in Q1 FY2026, and Non-GAAP revenue of $8.54 billion surpassed forecasts by $160 million in Q1 FY2026.
- The Diabetes segment posted double-digit revenue growth in Q4 FY2025, while Cardiovascular grew at a high single-digit rate, while The company maintained its eleventh consecutive quarter of mid-single-digit organic revenue growth.
- Full-year non-GAAP EPS guidance for FY2026 was raised, and plans to spin off the Diabetes business within 18 months were confirmed.
Medtronic (NYSE: MDT), a global medical technology leader specializing in cardiovascular, neuroscience, and surgical devices, reported Q1 FY2026 earnings on August 19, 2025. The most notable news from the release was a strong beat on both profits and revenue: Non-GAAP earnings per share reached $1.26, compared to estimates of $1.23, while Non-GAAP revenue hit $8.54 billion, $160 million above expectations.
The company also raised its full-year FY26 non-GAAP EPS outlook, supported by solid revenue growth in its Cardiovascular and Diabetes segments. Overall, The quarter showed continued operational momentum, but also revealed ongoing margin pressures and a major portfolio move with the planned spin-off of the Diabetes business.
| Metric | Q1 FY26(ended July 25, 2025) | Q1 FY26 Estimate | Q1 FY25(ended July 26, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.26 | $1.23 | $1.23 | 2% |
| Revenue (Non-GAAP) | $8.54 billion | $8.38 billion | $8.00 billion | 6.8% |
| Operating Margin (Non-GAAP) | 23.6% | 24.4% | (0.8) pp | |
| Free Cash Flow | $584 million | $466 million | 25.3% | |
| Revenue – Cardiovascular segment (GAAP) | $3.29 billion | $3.01 billion | 9.3% |
Source: Analyst estimates provided by FactSet.
Quarter Highlights
Medtronic surpassed analyst expectations on both Non-GAAP revenue and earnings in Q1 FY2026. This marked its eleventh consecutive quarter of mid-single-digit organic revenue growth. Non-GAAP EPS increased by 2% year over year. Non-GAAP revenue rose by 7.2% year over year, supported by broad-based gains in Cardiovascular, Neuroscience, and Diabetes segments.
Cardiovascular devices contributed the largest segment growth, reporting $3.29 billion in revenue—a 9.3% increase from the prior year. The Cardiac Ablation Solutions (CAS) family, which includes ablation catheters for treating abnormal heart rhythms, saw revenue jump nearly 50%, driven by strong demand for Pulsed Field Ablation (PFA) products in the United States. Management cited robust sales of Affera and Sphere-9 ablation catheters as primary drivers in Q4 FY2025. The Cardiac Rhythm & Heart Failure business grew 11.5% as reported, and clinical trial data for TAVR heart valves (used for minimally invasive heart valve replacements) helped expand adoption in the Structural Heart segment.
The Neuroscience portfolio posted $2.42 billion in revenue, up 4.3% year over year (GAAP), led by Cranial & Spinal Technologies and Neuromodulation product families. Key products include the AiBLE spinal surgery ecosystem, which utilizes artificial intelligence, robotics, and imaging, and the Inceptiv spinal cord stimulators with closed-loop technology that auto-adjust to patient feedback. The recent US launch of the BrainSense Adaptive Deep Brain Stimulation (DBS) system further strengthened Medtronic’s position in neurostimulation treatments for conditions such as Parkinson’s disease.
Medical Surgical sales grew 4.4%, with continued strength in advanced vessel-sealing products (LigaSure) and progress in the surgical robotics lineup, most notably the Hugo robotic-assisted surgery system. Hugo recently gained a key regulatory clearance with a European CE Mark for its LigaSure instrumentation and is now installed in over 30 countries.
The Diabetes segment continued its turnaround, recording its sixth straight quarter of double-digit revenue expansion, up 11.5% as reported to $721 million. Growth came from insulin pumps, continuous glucose monitoring (CGM) sensors such as MiniMed 780G and Simplera Sync, and consumable sales. Management highlighted forthcoming product launches and a planned spin-off of the Diabetes business in approximately 18 months (announced in May 2025), which is expected to streamline Medtronic’s portfolio and improve company-wide profitability.
Free cash flow increased 25.3% to $584 million compared to Q1 FY2025.
Medtronic maintained its quarterly dividend with no declared change. It paid $910 million in dividends, compared to $898 million in the prior-year period. The company has a track record of 48 consecutive annual dividend increases as of FY2025 and did not announce any change to its dividend policy with this release.
