Medtronic Reports Strong Q2 Fiscal 2026 Results with 300% Surge in PFA Sales and 70 Bps Gross Margin Expansion

01

Medtronic's Second Fiscal Year Results Exceed Expectations

PFA Business Surges 300%

On November 18 local time, Medtronic announced its second fiscal year performance,Total Revenue of the Company this Quarter was $8.96 billion, a Year-on-Year Increase of 6.6%，Exceeding Wall Street's Expectations at $8.86 Billion; Adjusted earnings per share of $1.36, higher than the analysts' forecast of $1.31.

In view of the outstanding performance in the first half of the year,Medtronic Raises Guidance for Fiscal Year 2026, Anticipating Revenue Growth of Approximately 5.5%, which is 50 basis points higher than the previous forecast.

Medtronic Chairman and CEO Jeff Massa admitted that Medtronic's momentum in PFA is astonishing, andWith Symplicity™ and Altaviva™, we are just beginning to unlock some major new opportunities.。

Significant Contributions from Cardiac Ablation Business Accelerate Medtronic's Growth, especiallyStrong demand for PFA products，The significant growth in PFA business offset a 40% decline in the cryoablation business.

The financial report shows that Medtronic's second fiscal quarterCardiac Ablation Solutions business revenue grew by 71%, with a 128% increase in the United States, primarily driven by strong commercial demand for the AfferaSphere-9 and PulseSelect PFA catheters.. Among themPFA's growth in the U.S. and overseas markets exceeds 300%; It is expected that growth will continue to accelerate in the third quarter, with continuous market share growth anticipated throughout fiscal year 2026, and an incremental revenue of 1 billion US dollars expected starting from fiscal year 2025.

Medtronic says doctors appreciate Affera™Shorten operation timeAdvantages and ExcellenceDurability, with demand continuing to rise. Medtronic has submitted an IDE application to the U.S. Food and Drug Administration for approval of a pivotal trial in the United States, with the trial expected to commence in the third quarter.

02

Gross margin increased by 70 basis points

Diabetes Business Achieves High Single-Digit Growth

Highlights from Medtronic's Second Fiscal Quarter IncludeSignificant increase in gross margin，The adjusted gross margin is 65.9%.，Year-on-year growth of 70 basis pointsAmong them, 30 basis points were gained from pricing, and 40 basis points were gained from cost optimization programs after adjusting for inflation. Medtronic stated that the gross margin pressure caused by the increase in Affera™ production capacity has now passed.

However, the 70 basis points growth in gross margin was offset by business-related factors. The product mix factor had an 80 basis points unfavorable impact, with cardiovascular intervention (CAS) and diabetes businesses each accounting for half. CAS was affected by the change in the mix between low-margin capital products and high-margin catheter products, while the diabetes business is in the production ramp-up phase of Simplera™. Medtronic believes that as the company expands its cardiovascular intervention business and spins off the diabetes business, improvements in both areas are expected.

Medtronic PredictsThe gross margin for the fiscal year 2026 will increase slightly., despite the impact of tariffs, pricing strategies, foreign exchange rates, and cost-effectiveness plans will be sufficient to offset the negative effects brought by the business mix, especiallyImpact on Cardiac Ablation and Diabetes Business。

In all business aspects, the four core businesses have achieved growth to varying degrees, including the PFA business for treating atrial fibrillation, the Symplicity™ procedure for treating hypertension, the Hugo™ robotic-assisted surgery system, and the Altaviva™ treatment for urgency urinary incontinence.

Revenue and growth of each business unit are as follows:

Cardiovascular: $3.436 billion, organic growth of 9.3%;Neuroscience: $2.562 billion, organic growth of 3.9%;Medical Surgery: USD 2.171 billion; Organic growth 1.3%;Diabetes: $757 million; Organic growth: 7.1%; Others: $35 million.

RDN(In renal artery denervation),Symplicity™ Renal Denervation System Continuously and Stably Demonstrates Blood Pressure Reduction in Long-term Follow-upPatients who underwent the Symplicity™ procedure experienced an average reduction of 18.5 points in systolic blood pressure. Three weeks ago, Medtronic received the final Medicare National Coverage Decision (NCD) for Symplicity™ in the United States.Is currently the only company that meets the full NCD standards and has been approved for a continuous evidence development plan.。

Revenue from Symplicity™ is expected to grow in the second half of the year and continue to rise over the next few quarters, making a significant long-term contribution to Medtronic.

Being splitDiabetes BusinessIt also achieved high single-digit growth, with the international market growing by 11%. However, the performance in the U.S. market was lower, largely because customers were waiting for the launch of Medtronic's new sensor and thus reduced new orders.

In April this year, the FDA approved Medtronic's SimpleraSync™ sensor for use with the MiniMed™ 780G system. The SimpleraSync sensor is half the size of previous sensors, making it more convenient to use, and has gained widespread recognition in the international market.

Currently, MedtronicContinuing to expand the production scale of SimpleraSync™ products, to support its launch in Europe, with plans to roll it out more widely to U.S. consumers in the second half of this fiscal year. In addition,The last month of this quarter begins accepting pre-orders for the Instinct sensor in the U.S.，And is expected to begin shipping in late November.。

As Medtronic itself has stated, Medtronic is at an exciting inflection point and a period of strong momentum. Driven by business simplification, optimization, and innovative breakthroughs in emerging technologies, the world's leading device company is entering a new growth cycle.

END