Medtronic raises fiscal 2027 outlook as Q1 organic revenue climbs 13.7% on CAS surge

Q1 revenue and earnings beat expectations

Medtronic opened fiscal 2027 with first-quarter revenue of $9.8 billion and adjusted earnings per share of $1.45, with organic revenue growth of 13.7% on a reported and organic basis. Management said the results were "well ahead of expectations," with U.S. revenue up 16% and international revenue up 12%. Adjusted gross margin was 65.2%, up 10 basis points year over year, while adjusted operating margin was 23.7%, also up 10 basis points, with operating profit up 15%.

Extra selling week inflates but does not explain the strength

The quarter included an extra selling week because fiscal 2027 is a 53-week fiscal year, a point emphasized by Head of Medtronic Investor Relations Ingrid Goldberg. That additional week contributed roughly $570 million, or about 670 basis points, to organic growth. Excluding the extra week, management characterized the underlying growth as the strongest in nearly eight years outside of COVID-related comparisons, framing it as evidence of demand durability rather than calendar effect.

Cardiac Ablation Solutions leads segment performance

Cardiac Ablation Solutions (CAS) organic revenue rose 88%, including 139% growth in the United States, pushing trailing 12-month revenue past $2 billion. Management said the U.S. Affera installed base grew 35% sequentially and that CAS is expected to grow about 2.5 times its market in fiscal 2027. The broader Cardiovascular portfolio grew 19%, with Electrophysiology Therapies, combining Cardiac Rhythm Management (CRM) and CAS, up 29%. CRM itself gained roughly 80 basis points of global share, while the Cardiovascular Surgery and Peripheral Vascular Health businesses grew 11% and 8%, respectively.

Neuroscience and Medical Surgical deliver broad-based gains

The Neuroscience portfolio reported organic growth of 9%, with Cranial and Spinal Technologies (CST) up 13%, Core Spine up 14% and Neurosurgery up 15%. Specialty Therapies grew 7%, paced by Pelvic Health, where Altaviva procedures doubled sequentially, while Neurovascular rose 4% and Neuromodulation rose 3%. Medical Surgical grew 10%, with Surgical up 9% and Acute Care and Monitoring up 14%. Diabetes revenue rose 15%, supported by U.S. acceleration, and management said 9,000 stock-keeping units were removed during the quarter as part of an ongoing rationalization effort.

Guidance raised across revenue and earnings

Management raised fiscal 2027 organic revenue growth guidance to a range of 7.25% to 7.75%, up 50 basis points from the prior outlook, and lifted adjusted EPS guidance to $5.94 to $6.00. For the second quarter, the company guided organic growth of roughly 6% and adjusted EPS of $1.32 to $1.34. Full-year operating profit growth is expected at about 10%, with operating margin expansion of 50 basis points, while foreign exchange is projected as a $50 million to $150 million headwind.

Pipeline and portfolio initiatives

Management highlighted progress on several growth platforms, including the Hugo robotic-assisted surgery system, where procedures are expected to reach 50,000 by fiscal year-end, and Touch Surgery, now used in about 1,500 operating rooms globally. The Symplicity SPYRAL AFFIRM renal denervation study was accepted as a late-breaker at the TCT conference. Gross-margin headwinds tied to mix in diabetes and CAS are expected to ease after the intended MiniMed separation, which management said is targeted to close before fiscal year-end, with Acute Care and Monitoring growth expected to normalize through 2027.

Next, investors will look to Medtronic's fiscal second-quarter results and updates on the planned MiniMed separation, which management said is intended to close before fiscal year-end.