Medtronic plc (MDT) Q2 2026 Earnings Summary

Executive Summary

Strong quarter with both revenue and EPS above expectations; Medtronic raised FY26 organic revenue growth to ~5.5% (from ~5.0%) and tightened EPS to $5.62–$5.66 on robust PFA, early RDN coverage progress, and Altaviva launch momentum .
Q2 revenue $8.961B (+6.6% reported, +5.5% organic) and non-GAAP EPS $1.36; adjusted gross margin improved 70 bps y/y to 65.9%, with mix headwinds offset by pricing and COGS efficiencies .
Cardiac Ablation Solutions grew 71% (U.S. +128%); PFA now ~75% of cardiac ablation revenue; Affera mapping installed base doubled—clear share gains and future catheter pull-through .
Key catalysts into 2H: accelerating PFA, CMS final NCD for Symplicity RDN with commercial payers coming online faster than expected, initial U.S. Altaviva launch, and potential U.S. Hugo approval for urology in 2H FY26 .

What Went Well and What Went Wrong

What Went Well
- PFA momentum and share gains: CAS up 71% (U.S. +128%); PFA now ~75% of ablation revenue; Affera mapping base doubled, positioning for catheter pull-through. “Our PFA business is really humming” and supply/mapping staffing are not constraints .
- Broad growth and margin execution: Cardiovascular +10.8% reported and +9.3% organic; adjusted gross margin +70 bps y/y to 65.9% from pricing and COGS programs; non-GAAP operating margin 24.1% (+50 bps q/q) .
- RDN and Altaviva catalysts: Final NCD for Symplicity; commercial coverage ramping (“coming online faster than anticipated”), and Altaviva U.S. approval/launch with oversubscribed trainings and early patient interest .
What Went Wrong
- Mix headwinds: Business mix (ablation capital vs consumables; early Simplera ramp in Diabetes) offset operational GM gains (~80 bps headwind) .
- Cryo declines: Cryo fell ~40% (90% of remaining cryo revenue now OUS), partially offset by PFA growth .
- Tariffs and near-term margin pressure: FY26 gross margin down ~~40 bps including tariffs (~~$185M); Q3 margins seasonally weaker as half of the annual tariff impact falls in Q3; Q3 EPS guide $1.32–$1.34 .

Financial Results

Overall results vs prior periods and vs estimates

Metric	Q4 2025	Q1 2026	Q2 2026
Revenue ($B)	8.927	8.578	8.961
Adj. Gross Margin %	65.1%	65.1%	65.9%
Adj. Operating Margin %	27.8%	23.6%	24.1%
GAAP EPS ($)	0.82	0.81	1.07
Non-GAAP EPS ($)	1.62	1.26	1.36

Q2 actual vs S&P Global consensus

Metric	Consensus	Actual
Revenue ($B)	8.863*	8.961
Non-GAAP EPS ($)	1.314*	1.36
EBITDA ($B)	2.437*	N/A

Values with asterisks (*) are from S&P Global; Values retrieved from S&P Global.

Segment breakdown – Q2 FY26

Segment	Revenue ($B)	Reported Growth %	Organic Growth %
Cardiovascular	3.436	10.8%	9.3%
Neuroscience	2.562	4.5%	3.9%
Medical Surgical	2.171	2.1%	1.3%
Diabetes	0.757	10.3%	7.1%
Total Reportable Segments	8.926	6.7%	5.5%

Select KPIs and operating drivers

KPI	Q2 FY26	Prior/Context
CAS (ablation) Growth	+71% y/y; U.S. +128%	Q1 CAS “nearly 50%” case growth commentary
PFA Mix in Ablation	~75% of ablation revenue	Shift from cryo (−40%; ~90% cryo OUS)
Affera Mapping Systems	Installed base doubled in Q2	Signals future catheter pull-through
Adjusted Tax Rate	16.4%	Q2 beat included ~$0.035 tax timing, expected to offset in Q4
Geography	Japan double-digit; U.S., W. Europe, China mid-single-digit growth	—

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Revenue Growth	FY26	~5.0%	~5.5%	Raised
Diluted Non-GAAP EPS	FY26	$5.60–$5.66	$5.62–$5.66	Tightened/raised at low end
Tariffs (COGS impact)	FY26	~$(185)M	~$(185)M	Maintained
Gross Margin (incl. tariffs)	FY26	n/a	~−40 bps y/y; slightly up ex tariffs	New detail
Adj. Operating Profit Growth	FY26	n/a	~5% (~7% ex tariffs)	New detail
FX Revenue Tailwind	FY26	n/a	~$625–$725M; Q3 +$150–$200M	New detail
Q3 EPS (Non-GAAP)	Q3 FY26	n/a	$1.32–$1.34	New item

Dividend unchanged from prior policy (context: recent increases disclosed in Q4 FY25 release) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 FY25 and Q1 FY26)	Current Period (Q2 FY26)	Trend
PFA/CAS	Q4: CAS near +30%; doubling to ~$2B in sight; capacity ramp . Q1: CAS ~+50% cases; mapping/affera pipeline .	+71% y/y; U.S. +128%; PFA ~75% of ablation; doubled Affera install base; supply & mappers not constraints	Accelerating
RDN/Symplicity	Q4: ramp after coverage; hospitals building pathways . Q1: Proposed NCD; “best-case” scenario commentary .	Final NCD issued; commercial payers coming online faster; efficacy reinforced by 3-year data	From setup to execution
Robotics (Hugo)	Q4: FDA urology submission; growing procedures; ecosystem build . Q1: momentum and IDE updates .	Expect U.S. urology indication approval in 2H FY26; Embrace Gyn IDE launched	Building toward U.S. entry
Pelvic Health (Altaviva)	Q4: Tibial system preview as major growth driver .	FDA approved; U.S. launch: oversubscribed trainings; early patient demand	New launch ramp
Tariffs/FX	Q4: FY26 tariff scenarios outlined; FX turning tailwind in FY27 .	FY26 tariffs ~$185M; heavier in Q3; FX tailwinds to revenue guide	Headwind managed; FX supportive
R&D/OpEx	Q4: step-up in R&D to ~10% over time, invest behind growth drivers . Q1: reiterated reinvestment .	R&D +8.9% y/y to 8.4% of revenue; SG&A leverage despite targeted S&M spend	Consistent reinvestment

Management Commentary

“We delivered a strong second quarter... We’re positioned for even greater acceleration... driven by our PFA franchise for AFib, Symplicity for hypertension, Hugo, and Altaviva” — CEO .
“Adjusted gross margin was 65.9%, up 70 bps y/y... 30 bps pricing and 40 bps COGS efficiency; mix was an ~80 bps headwind” — CFO .
“Commercial payers... are coming online faster... One difference is more emphasis on being on a few medications for a while” — CEO on RDN coverage .
“We expect FY26 adjusted operating profit to grow ~5% (~7% ex tariffs)... FY26 gross margin slightly up ex tariffs; down ~40 bps including tariffs” — CFO .

Q&A Highlights

RDN ramp and coverage: Final NCD viewed as broad; commercial coverage progressing; management expects ramp measured in quarters, not years; U.S. run-rate context and multi-year potential discussed .
Margin/investment cadence: Deliberate step-up in R&D and targeted S&M for PFA/RDN; SG&A leverage expected in 2H; tariff impact concentrated in Q3; focus on pricing, cost-down, and mix improvement as catheters outgrow capital .
PFA capacity and share: Supply not a constraint; mapper hiring ahead of needs; large centers adding systems; expectation to double CAS revenue off FY25 ~$1B base .
TAVR phasing: Strong Q2; expected Q3 deceleration with pickup in Q4 due to phasing; continued share gains internationally .
Portfolio/M&A: Ongoing portfolio optimization; focus on tuck-in M&A in higher-growth cardiology and neuroscience; active ventures pipeline .

Estimates Context

Q2 beats: Revenue $8.961B vs $8.863B consensus*; non-GAAP EPS $1.36 vs $1.314*; EBITDA consensus* $2.437B (company does not guide EBITDA) .
FY26: Company raised organic growth to ~5.5% and EPS to $5.62–$5.66; consensus EPS* ~$5.639 sits near the midpoint. With FX tailwind and 2H growth acceleration (PFA, emerging RDN, Altaviva), estimates may drift modestly higher on revenue; EPS trajectory constrained near term by tariffs and mix .
Q3: Guide $1.32–$1.34 is broadly in line with consensus EPS* ~$1.337 amid tariff concentration and holiday-season cost saves lull .