Medtronic plc Q1 FY2026 earnings call

• Started the fiscal year with mid-single-digit revenue growth, EPS ahead of guidance. Entire organization focused on executing opportunities. Cardiovascular's CAS grew strongly, Neuroscience growth slightly below trend due to Specialty Therapies delivery changes but expected to improve. MedSurg grew in line with expectations, Diabetes grew above average in international markets. Outlook for second half of fiscal year: each segment expected to accelerate growth with multiple milestones, e.g., CAS business to grow faster in Q2, Neuroscience segments to accelerate, Surgical's Hugo to launch in U.S. back half, Diabetes to launch new sensors and MiniMed separation to proceed. Focus on fueling growth drivers through product pipeline, natural P&L leverage, and efficiency improvements, with increased R&D investment.

Cardiovascular (CV)

• Grew 7% this quarter. Cardiac Ablation Solutions (CAS) grew nearly 50%, including low 70s growth in the U.S. and Japan and low 30s growth in international markets. Structural heart grew 6%. Cardiac Rhythm Management grew 3%, with 6% growth in defibrillation solutions and 3% in cardiac pacing therapies. For hypertension, CMS' proposed NCD for Symplicity system was positive and ACC and AHA updated guidelines recognized Ardian as a treatment option for hypertension.

Neuroscience

• Grew 3%. Cranial & Spinal Technologies business had mid-single digits growth, with 5% U.S. core Spine growth and 8% U.S. Neurosurgery growth, driven by the differentiated AiBLE spine ecosystem. Neuromodulation business grew 9%, with 10% global growth in Pain Stim (11% in the U.S.) and high single-digit growth in Brain Modulation, with BrainSense adaptive DBS technology launching in the U.S., Europe and Japan.

MedSurg

• Grew 2%. Surgical business grew 2%, with high single-digit growth in Advanced Energy where LigaSure vessel sealing technology won share for the 12th quarter in a row. International Surgical Robotics business saw continued revenue and procedure volume growth.

Diabetes

• Grew 8%, with 11% growth in international markets. Simplera sensor technology is available in international markets. Expect performance to accelerate in the second half with new sensor launches. MiniMed separation is on track, expected to be immediately EPS accretive and create value for shareholders, with expected gross margin and operating margin improvement upon separation.

• Fiscal 2026 organic revenue growth expected to be approximately 5%. Q2 organic growth expected 4.5%-5%. Adjusted EPS guidance for fiscal 2026 is $5.60 - $5.66, up from prior range. Q2 EPS expected $1.30 - $1.32. Fiscal 2027 expected high single-digit EPS growth driven by accelerating revenue growth, improved business mix from CAS and Diabetes, and financial benefit of Diabetes separation.

Q: Travis Steed asked about the pipeline, especially CAS growth and U.S. growth.

A: Geoffrey Martha and Thierry Pieton responded that CAS growth is accelerating, with sequential growth expected, and U.S. growth areas like Diabetes and Pelvic Health will bounce back and accelerate.

Q: Larry Biegelsen inquired about the new Board committees.

A: Geoffrey Martha explained that the committees will provide focus, support management, have med tech-experienced members, and increase touch points with management.

Q: Mike Kratky asked about how CAS growth impacts overall portfolio growth.

A: Thierry Pieton said they'll discuss in detail at Investor Day '26, but CAS and Ardian opportunities will have significant impact.

Q: Anthony Petrone asked about renal denervation.

A: Geoffrey Martha and Que Dallara responded on the positive developments in Ardian's reimbursement and market incorporation, and the large patient population for renal denervation.

Q: Joshua Jennings asked about Diabetes business.

A: Thierry Pieton said the separation is on track, and Que Dallara mentioned Simplera's international growth, Instinct's launch timeline, and growth acceleration expected in the second half.

Q: Matt O'Brien asked about softer business areas.

A: Geoffrey Martha responded on various growth accelerators in slower-growth businesses like Neurovascular, Pelvic Health, etc.

Q: Joanne Wuensch asked about Hugo.

A: Mike Marinaro responded on Hugo's progress in international markets, lessons learned, and U.S. market preparation.