Medtronic (MDT) Tops Q2 Estimates and Raises FY26 Outlook

Medtronic plc (NYSE: MDT), a prominent player in healthcare technology, has released its financial results for the second quarter of fiscal year 2026, showcasing a robust performance that exceeded market expectations. The company also raised its guidance for the remainder of the fiscal year, signaling confidence in its continued growth trajectory.

Q2 Results Driven by Strong Procedure Volumes and Portfolio Strength

Medtronic’s performance in the second quarter of fiscal year 2026 has been commendable, with the company reporting revenue of $9.0 billion, marking a 6.6% increase as reported and a 5.5% organic growth. This result not only exceeded the company’s guidance midpoint by 75 basis points but also surpassed market expectations, which had anticipated revenue of $8.87 billion. The strong revenue performance was driven by significant growth in the Cardiovascular Portfolio, particularly in Cardiac Ablation Solutions, which saw a 71% increase, fueled by the pulsed field ablation (PFA) portfolio.

In terms of earnings, Medtronic reported a non-GAAP diluted EPS of $1.36, an 8% increase from the previous year, and above the expected EPS of $1.31. This earnings beat was supported by robust procedure volumes and effective execution across the business. The GAAP diluted EPS also rose by 8% to $1.07. The company’s operating profit and margin saw a slight increase, demonstrating efficiency gains despite a minor decrease in the operating margin.

Comparing the segments, the Cardiovascular Portfolio led with a 10.8% reported increase, while the Neuroscience Portfolio grew by 4.5% reported. The Medical Surgical Portfolio and Diabetes business also contributed positively, with reported increases of 2.1% and 10.3%, respectively. These results reflect Medtronic’s strategic focus on high-growth areas and its ability to leverage its diverse portfolio to drive overall revenue growth.

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Medtronic Raises FY26 Guidance on Continued Growth Drivers

Looking ahead, Medtronic has raised its guidance for fiscal year 2026, anticipating approximately 5.5% organic revenue growth, up from the previous guidance of 5.0%. The company has also adjusted its diluted non-GAAP EPS guidance to a range of $5.62 to $5.66, reflecting an increase from the prior range of $5.60 to $5.66. This revised guidance accounts for a potential impact from tariffs, estimated at approximately $185 million, which remains unchanged from previous forecasts.

Medtronic’s confidence in its future performance is underpinned by several growth drivers, including its PFA franchise for atrial fibrillation, the Symplicity™ procedure for hypertension, and the Hugo™ robotic-assisted surgery system. The company is also focusing on expanding its Altaviva™ therapy for urge urinary incontinence, which recently received U.S. FDA approval. These initiatives are expected to further accelerate revenue growth in the latter half of the fiscal year and beyond.

Thierry Piéton, Medtronic’s chief financial officer, highlighted the company’s strategic investments in research and development, as well as sales and marketing, to capitalize on the increasing demand for its key programs. The company’s focus on operational efficiency and strategic investments positions it well to sustain its growth momentum. As Medtronic continues to innovate and expand its portfolio, the raised guidance reflects its commitment to delivering value to shareholders and enhancing patient outcomes globally.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.