Sep 1, 2026 earnings call — Strong start to fiscal '27 growth
Medtronic reported Q1 revenue of $9.8 billion and adjusted EPS of $1.45, with organic revenue growth of 13.7%.
Revenue $9.8B (est $9.5B) · EPS $1.45 (est $1.39)
Key quotes
"By the end of the fiscal year, we expect Hugo to surpass 50,000 completed procedures with procedure growth continuing at more than twice the market rate."
"And I'm pleased to share that we achieved an important commitment this quarter, ahead of the time frame we promised, surpassing the $2 billion mark in trailing 12-month revenue."
"In Q1, we rationalized more than 9,000 SKUs, further streamlining our product portfolio to focus on the areas with the greatest customer impact, while enhancing supply chain performance and delivering cost efficiencies across the enterprise."
Analyst Q&A 8
Performance outside CAS and Cornerstone investment
Q (Travis Steed · BofA): Analyst asked how Medtronic's base business (excluding CAS) can accelerate, when Cornerstone shows up in surgery revenue, and whether margin guide moved due to investments.
A: Management said the quarter showed broad, multi-country strength beyond CAS, with other growth drivers like Altaviva, Ardian and Hugo progressing. They said Cornerstone is a global soft-tissue play complementing Hugo and that margin guidance was lowered slightly to reinvest part of revenue upside into growth, including foregone interest from the $700 million Cornerstone investment.
"There's -- yes, it's really the result of the investments that we're making." — Thierry Pieton (CFO)
Why buy Cornerstone; impact on Hugo and markets
Q (Larry Biegelsen · Wells Fargo): Analyst asked if Cornerstone signals a lack of confidence in Hugo, the deal rationale, financial impact, which markets it will launch in, U.S. inclusion, and if there is an acquisition option.
A: Management said Cornerstone is a distribution and partnership deal to build a global robotics portfolio and expand access, complementary to Hugo rather than replacing it. They expect minimal financial impact this year (aside from foregone interest) with distribution benefits starting in 2028, and said the investment gives strategic optionality including a potential path to acquire later.
"This is a distribution and partnership deal that we're very excited about." — Mike Marinaro
Timing of diabetes spin-off and CAS growth
Q (Vijay Kumar · Evercore): Analyst asked why the diabetes split-off hasn't been announced yet and whether CAS growth assumptions improved from 2x to 2.5x market growth.
A: Management confirmed CAS is now expected to grow about 2.5x the market for the full year and north of 3x in Q2, driven by Sphere-9 adoption, Sphere-360 progress, mapping upgrades and ecosystem investments. On diabetes, they said there is no hesitation; they will separate when the economics are optimal for shareholders and stakeholders.
"We had mentioned that we would do the separation when we think the economics are optimal for our shareholders and for our stakeholders, generally speaking, and we stick to that position." — Thierry Pieton (CFO)
Affera system use and market share
Q (Michael Kratky · Leerink): Analyst asked about post-installation utilization trends, how quickly PFA share shifts at centers after adding an Affera system, and where share stabilizes.
A: Management said Affera installs are concentrated in high-volume U.S. centers where utilization is high and many large accounts ask for more systems, leaving room to expand in lower-volume centers. They noted 75% of the U.S. installed base is at high-volume centers and that utilization and pull-through are encouraging, shown by sequential increases.
"Once Affera goes in there, most of our experience, Mike, is in these high-volume accounts, right?" — Geoffrey Martha (CEO·CHAIR)
Capital allocation after diabetes separation
Q (Anthony Petrone · Mizuho): Analyst asked how capital allocation will change after diabetes separation: more tuck-ins, scale deals, share buybacks, and overall approach.
A: Management said losing diabetes reduces growth by about 20 basis points but increases gross margin and operating margin, and they are reallocating capital to high-growth areas where they have a right to win. They expect continued emphasis on tuck-ins, venture and structured investments, and highlighted stronger R&D and investments already underway, with no specific buyback plans now.
"We've made that switch to allocating our capital to the highest growth opportunities in med tech, the highest growth, but also where we have confidence that they're going to be big." — Geoffrey Martha (CEO·CHAIR)
Renal denervation prospects and needs
Q (Matthew O'Brien · Piper Sandler): Analyst asked about the trajectory and market opportunity for renal denervation, and whether transradial access or reimbursement is needed to accelerate the franchise.
A: Management said they remain confident Ardian will be a major opportunity driven by improving clinical evidence, expanding reimbursement coverage and market development. They cited strong real-world and durability data, upcoming conference data, and growing payer coverage as reasons hospitals and KOLs are building programs, supporting a ramp over coming quarters and years.
"I still -- we have confidence and conviction that this is going to be one of the biggest things in med tech, right?" — Geoffrey Martha (CEO·CHAIR)
Reinvesting upside vs margin expansion; tariff refunds
Q (Robert Marcus · JPMorgan): Analyst asked how management balances reinvesting revenue upside versus expanding margins, and requested the tariff rebate amount.
A: Management said first-quarter tariff refunds nearly fully offset tariffs, but they did not assume future refunds in the year's plan. They reiterated they are in growth mode, reinvesting a portion of revenue upside into growth while still targeting about a 50 basis point full-year operating margin increase and leverage on the P&L from cost and pricing efforts.
"So we're taking a portion of the upside that we're seeing from a revenue perspective and reinvesting in the growth areas and a portion only." — Thierry Pieton (CFO)
Charlotte analyst meeting purpose and company growth path
Q (Joanne Wuensch · Citi): Analyst asked why the meeting is in Charlotte, what to expect at the analyst meeting, and whether Medtronic's historical growth/earnings formula has shifted.
A: Management said they see an inflection in growth and are increasing investment in organic and inorganic innovation while improving margins and cash flow. The Charlotte event at the IRCAD facility will showcase capital and digital technologies with physician demonstrations and deeper business-unit sessions to show the surgical ecosystems and next growth steps.
"It really helps to see it in action and IRCAD is set up so that you can actually see it." — Geoffrey Martha (CEO·CHAIR)