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August 19, 2025Medtronic (NYSE: MDT)Announced the financial results for the first quarter of fiscal year 2026. The company achievedRevenue of $8.54 billion (approximately RMB 61.3 billion), a year-on-year increase of 6.7%，Organic Growth 4.8%, maintaining the mid-single-digit growth range for the 11th consecutive quarter, and expects the growth rate to further accelerate in the second half of the year driven by the peak of product launches.

This quarter, the company achieved double-digit growth in multiple segments such as pulsed field ablation (PFA), leadless pacing, TAVR, DBS, and diabetes management. The core product technologies are gradually forming a growth loop.

At the same time, the company raised its full-year EPS guidance, expecting FY27 to achieve high single-digit EPS growth, and accelerated the spin-off process of its diabetes business to further unlock the segment's potential. The optimization of the board structure and the establishment of a growth committee, driven by the collaboration with Elliott, also indicate that Medtronic has entered a new cycle of value creation.

# Financial Performance: Stability with Potential for Acceleration

This quarter,Medtronic achieved revenue of $8.54 billion, a year-on-year increase of 6.7%.Organic growth of 4.8%; adjusted operating profit increased by 3.2% year-over-year to reach $2.02 billion; adjusted gross margin was 65.1%, in line with market consensus; adjusted EPS was $1.26, 3 cents higher than the midpoint of guidance.

Notably, the company raised its full-year EPS guidance for FY26 from $5.50-$5.60 to $5.60-$5.66 and projected high single-digit growth for FY27. Meanwhile, the estimated impact of tariffs was revised downward from $200-$350 million to approximately $185 million.

# Business Highlights: Four Sectors Driving Synergistically

Cardiovascular Sector: PFA and Catheter Technology Form the Main Axis of Growth

In the first quarter of fiscal year 2026, Medtronic's cardiovascular segment achievedRevenue of $3.285 billion, a year-on-year increase of 9.3%,Organic growth reached 7.0%, maintaining the leading growth rate across all businesses. The four core sub-businesses worked collaboratively to gradually build a multi-procedural growth loop centered on PFA, EV-ICD, and TAVR.

• Heart Rhythm and Heart Failure ManagementSector(USD 1.712 billion, +9.1% organic)Medtronic continues to lead with the strong performance of the Micra AV2/VR2 leadless pacemakers and the Aurora EV-ICD system. The company solidly maintains its position as a market leader in the CSP (Cardiac Systematic Pacing) field, enhancing the comprehensiveness of its electrophysiological treatment pathways.

• Cardiac Ablation SolutionsSectorGrowth rate nearly 50%The Affera Sphere-9 and PulseSelect PFA catheters are accelerating their global rollout, with an expected additional revenue of approximately $1 billion for the full year on top of FY25. The company is advancing the construction of a closed-loop PFA platform ecosystem through rapid production expansion, physician training, and system integration.

• Structural Heart Disease and AortaSector($930 million, +6.1% organic)Maintaining moderate growth, the TAVR product Evolut FX+ expands Redo-TAVI indications, while the Avalus Ultra surgical valve and Penditure left atrial appendage occlusion system synergistically enhance procedural integrity.

• Coronary and Peripheral VesselsSector($643 million, +2.9% organic)Growth remains relatively stable. The Symplicity Spyral RDN system received a draft National Coverage Decision from CMS, marking the countdown to commercialization in the United States. Established product lines such as ClosureFast and Abre solidify the revenue base, while new products Liberant and Neuroguard IEP are set to launch sequentially in the second half of the year, enhancing the flexibility of the peripheral portfolio.

Neuroscience Sector: Closed-loop Systems Accelerate Implantation, DBS Demand Rises

Neuroscience Business This QuarterRevenue of $2.416 billion, with organic growth of 3.1%.Among them, neuromodulation and cranial/spinal technologies serve as the core growth drivers. Some specialized treatment segments are still affected by policies and products, but overall, they demonstrate the advantages of "system capabilities + scenario integration."

• Neuromodulation：AchieveRevenue of $504 million, with organic growth of 8.6%.The strong growth of the Inceptiv™ Closed-Loop Spinal Cord Stimulation System and the Percept™ RC Deep Brain Stimulation System (integrated with BrainSense™ technology) has significantly accelerated advancements in pain management and brain disorder treatments.

• Cranial and Spinal Technology：AchieveRevenue of $1.211 billion, organic growth of 4.5%.AiBLE™ Intraoperative Navigation Ecosystem Quickly Deployed, Driving the Growth of Neurosurgical Devices; INFUSE™ Bone Graft Material for TLIF Clinical Trials Met Goals Ahead of Schedule, Preparing to Submit PMA Application to FDA.

• Professional Treatment: Revenue of $7.02 billion, an organic decrease of 2.7%,Main reasons include the recall of the Pipeline™ Vantage intracranial aneurysm device and the impact of China's centralized volume-based procurement. The company has expanded the production capacity of Pipeline Shield and is promoting the launch of Artisse™ intracranial clips in the European market to fill the gap.

• Pelvic Floor HealthAndENT BusinessRemain stable. The pelvic floor business is expected to enter an upward channel after receiving FDA approval for the plantar nerve stimulator in the fall of 2025.

Surgical and Monitoring Sector: Expansion of Hugo Robotic Procedures, Intraoperative Navigation Layout Formed

Surgical and Monitoring Business Achievements This QuarterRevenue of $2.083 billion, organic growth of 2.4%.Against the backdrop of pressure on the growth of traditional devices, the company is using robotic systems and advanced energy platforms as pivots to build stabilizers for growth amidst the transition between old and new surgical techniques.

• Surgical & Endoscopy: Achieved revenue of 1.612 billion USD, with organic growth of 2.3%.The LigaSure™ Vessel Sealing System, ProGrip™ Hernia Repair Solution, and Endoflip™ 300 Endoscopic Impedance System are the core growth drivers; the Bravo™ Esophageal Monitoring System performs well. Some surgical staplers and bariatric surgery products are impacted by procedural substitutions in the U.S. market.

• Acute Care & Monitoring: Achieved revenue of 4.71 billion USD, with organic growth of 2.6%.The sales growth of Nellcor™ pulse oximetry sensors drove overall performance, and the company reached a strategic cooperation with Philips to jointly expand the inpatient monitoring scenarios.

• Hugo™ Surgical Robot System：Despite not yet being approved in the U.S., it has achieved double-digit growth in the Asia-Pacific and emerging markets. The newly obtained CE certification for the LigaSure™ RAS Sealing Technology supports its further expansion into gynecological, urological, and general surgical procedures.

Diabetes Sector: MiniMed 780G Strengthens Global Presence, Spin-off Process Accelerates

Diabetes Business Achieved This QuarterRevenue of $721 million, organic growth of 7.9%,The growth in the international market has been particularly significant, with the pipeline entering a period of intensive innovation, providing a solid growth foundation for the upcoming business spin-off.

• Automated Insulin Delivery System (AID)：MiniMed™ 780G is the current main growth engine, and has obtained EU CE certification expansion for children over 2 years old, pregnant populations, and type 2 diabetes patients. The latest clinical data shows that it can significantly improve blood glucose control in both children and T2D populations.

• Continuous Glucose Monitoring System (CGM)：Simplera Sync™ (Integrated Adhesive CGM) to Launch Globally in Fall 2025; Instinct™ CGM, Co-developed with Abbott, to Roll Out in the U.S. Within Months. Dual-Probe Strategy Builds a Product Ecosystem Combining Closed-Loop Control and Real-Time Monitoring.

• Future Product Pipeline：MiniMed™ Flex (Portable Pump) is expected to submit an FDA application within this fiscal year; MiniMed™ Fit (Patch Pump) has completed development and production line layout; MiniMed™ Go (InPen® Smart Injection Pen) is expected to launch in the U.S. within FY26.

• Spin-off Plan: The company reiterated that it will complete the spin-off of its diabetes business within 15 months, planning to establish an independent company "MiniMed" through an initial public offering (IPO) to accelerate market responsiveness and unlock valuation flexibility.

# Technology Pipeline: Product Launch Pace Significantly Accelerates

In Q1, Medtronic achieved over 10 key regulatory advancements globally, including:

• Visualase V2Laser Ablation System Receives FDA Approval

• VitalFlow ECMO SystemWithPrevail Balloon Dilatation CatheterObtained CE Certification

• MiniMed 780GExpanded Indications CE Certification

• Affera Sphere-360 PFA CatheterClinical Data Debuts at HRS

• Symplicity Spyral RDN SystemObtained Support for the NCD Draft

  Entering Q2 and the second half of the year, Hugo robots for urological indications in the U.S., Simplera Sync CGM, and the Tibial nerve stimulator are all expected to be launched, laying the foundation for accelerated growth throughout the year.

# Strategy and Governance: Clarifying the Path to Value Creation

Under Elliott's impetus, Medtronic has newly established a "Growth Committee" and an "Operations Committee," focusing respectively on strategic mergers and acquisitions, portfolio optimization, and operational improvements, clearly transitioning towards a "high-ROI business focus + efficiency-driven" direction.

The company also announced that it will host an Investor Day in 2026, where it will provide a comprehensive update on its growth algorithm, financial metrics, and strategic roadmap for the next three years.

# Trend Outlook: Acceleration Growth Engine in the New Phase

Medtronic is at a critical juncture transitioning from "preservation" to "reinvention." On one hand, multiple high-growth product lines such as PFA, closed-loop neuromodulation, TAVR, and CGM are entering the commercialization harvest phase. On the other hand, the company is proactively adjusting its organizational structure and capital pathways to enhance strategic flexibility.

From the current guidance, FY26 is expected to achieve annual revenue exceeding $35.8 billion, with strong growth momentum. As high-potential products continue to gain traction and the spin-off of the diabetes business approaches, Medtronic is poised to enter a new cycle of "revenue-profit dual drivers" in FY27.