Medtronic(MDT -3.34%) reported first quarter fiscal 2026 results on August 19, 2025, delivering 4.8% year-over-year organic revenue growth and adjusted earnings per share (EPS) of $1.26, which beat the midpoint of prior guidance by $0.03 (adjusted). Management raised full-year fiscal 2026 EPS guidance to $5.60--$5.66, citing accelerating growth drivers, EPS leverage from operational improvements, and the upcoming Diabetes separation. The call unveiled major operational milestones in pulsed field ablation (PFA), highlighted transformative progress in Renal Denervation, and detailed newly announced board and governance changes in partnership with Elliott Management, all of which shape the company's long-term investment trajectory.
Pulsed field ablation propels Medtronic's U.S. growth
The Cardiac Ablation Solutions (CAS) business posted nearly 50% year-over-year organic revenue growth, including low 70s% growth in both the U.S. and Japan and low 30s% growth in international markets, with the $11 billion addressable PFA market now expanding above 25% per year. Recent product momentum from the Affera mapping system and Sphere-9 focal catheter, alongside upcoming pivotal trials for the next-gen Sphere-360 single-shot catheter expected to start in CY2025, positions Medtronic to expand market share and capitalize on high sequential and annual organic revenue growth trends.
"CAS growth continued to accelerate to nearly 50%, including low 70s growth in both the U.S. and Japan and low 30s growth in international markets. This rapid growth is being driven by high demand for our Pulsed Field Ablation system including our PulseSelect anatomical catheter and especially our Sphere-9 focal catheter and a Affera mapping system. Affera mapping system utilization is high and the Sphere-9 catheters are being used in a wide variety of cases. Our teams are quickly ramping supply and our mapper hiring is on track. This is allowing us to enter new accounts as well as going deeper into more labs in our established accounts. We're still early in the rollout, and we continue to execute with urgency to capitalize on this massive opportunity. We expect to continue to win share in this $11 billion space that is now growing over 25%. As we look forward, we're advancing our PFA pipeline, including our next-gen Affera Sphere-360 catheter. We hear from many EPs that Sphere-360 is the most anticipated single-shot catheter in this space, driven by very positive early clinical data. We're expecting to start the pivotal trial for Sphere-360 this calendar year."
-- Thierry Pieton, Chief Financial Officer
Medtronic's rapid expansion in PFA, supported by strong product adoption and a robust innovation pipeline, is driving significant share gains in a high-growth market segment.
Renal Denervation advances toward multi-billion dollar opportunity
The Symplicity system for Renal Denervation (RDN) awaits imminent Centers for Medicare & Medicaid Services (CMS) national coverage determination, with the final decision expected on or before October 8, and a U.S. addressable pool of 18 million patients with uncontrolled hypertension. Management is scaling physician training, ramping market development specialist hiring, and investing in next-generation technology and expanded clinical indications.
"so all the dominoes are falling. The puzzle pieces snapping into place that this is going to be a massive market. Now we're looking at CAS right now, it's very tangible. You see the transition from drugs to ablation. And within ablation from one technology over to PFA, and we've got a great technology there. It's growing like crazy. It's very tangible. I still think Ardian has a chance to even be bigger. The patient population is massive. We've talked about, how many, hundred million people in the U.S, 100 million to 200 million people in the U.S. that have hypertension. And of those, is that right, about 100 million? Ryan Weispfenning: Yes. I'll chime in, Geoff. 18 million that are uncontrolled hypertension. And so it's a massive population. Geoffrey Martha: And 1 in 4 people with hypertension have -- it's a huge number that's uncontrolled. And so we think this is going to be a -- could be the biggest thing that we ever do. And this is one of those areas that we talked about is investing behind this to really make this market develop and grow and be a driver for us and create a moat around our franchise, our Symplicity franchise, to protect it against competitors."
-- Geoffrey Martha, Chairman and Chief Executive Officer
The approaching commercial inflection in RDN represents a structurally new revenue and profit engine.
Board overhaul and governance reset accelerate value creation
As part of a partnership with activist investor Elliott Management, Medtronic added two veteran med-tech directors (John Groetelaars and Bill Jellison) and reorganized its board structure into new Growth and Operating committees, both with a mandate to intensify portfolio management, capital allocation discipline, operational rigor, and long-term shareholder returns. Management confirmed an Investor Day in mid-2026 to introduce an updated financial framework, new long-term earnings algorithms, and a strategy focused on post-Diabetes separation value creation.
"To start, we've appointed 2 new independent Board members, John Groetelaars and Bill Jellison, each of whom bring deep operational expertise in med tech and fresh perspectives to the table. The Board and I are excited to welcome both John and Bill to Medtronic. And as part of our inflection, the leadership and I are reinvigorating our laser focus up and down the organization on 2 key fronts: growth and creating oxygen to fuel that growth and drive earnings power. These 2 focus areas need to be linked from the front-line employees of Medtronic up through senior leadership, including me, and all the way to the Board. So today, we announced that we've created 2 new board committees to support management. The Growth Committee, which will oversee our portfolio management and capital allocation decisions to accelerate growth; and an Operating Committee, which will provide oversight of our efforts to drive efficiency gains in our operations and expense base. This will enable a higher level of organic investment back into our business while also delivering improving margins and accelerating EPS growth. So we'll have a fresh perspective from our 2 new board members, and these 2 committees will give us support and focus so we can execute with both speed and urgency. And finally, we look forward to sharing the culmination of these initiatives at an Investor Day sometime mid-calendar year '26. And at this event, we intend to provide a comprehensive update for investors on our strategy post Diabetes, the value proposition of our go-forward portfolio and new long-term financial targets for sustained value creation."
-- Geoffrey Martha, Chairman and Chief Executive Officer
The governance overhaul, including new board expertise and committee structures, is designed to accelerate operational improvements and align capital allocation with high-growth opportunities.
Looking Ahead
Management reiterated guidance for approximately 5% organic revenue growth, with organic revenue expected at 4.5% to 5% in Q2 and full-year adjusted EPS now guided to $5.60--$5.66 (up from $5.50--$5.60). Key milestones include CMS national coverage for Symplicity RDN on or before October 8, pivotal trials for next-gen ablation catheters, and the U.S. launch of Hugo surgical robotics and two next-generation diabetes sensors in the second half of fiscal 2026. The Diabetes separation remains on track for completion within 15 months; an Investor Day in mid-2026 will introduce post-separation portfolio strategy and long-term financial targets.
