Medtronic plc

Fourth-quarter revenue was $9.8 billion, up 9.9% reported and 6.6% organic year over year. Full-year fiscal 2026 revenue was $36.4 billion, up 8.4% reported and 5.8% organic, which management called the strongest top-line performance in 10 years. Adjusted EPS was $1.55 in Q4 and $5.53 for FY26. Adjusted gross margin was 65.4%, up 30 basis points year over year and up 50 basis points sequentially; adjusted operating margin was 25.5%, and free cash flow for FY26 was $5.4 billion. For FY27, management guided to 6.75% to 7.25% organic revenue growth, including about 11.5% to 12% organic growth in Q1, and EPS of $5.90 to $6.00. They also guided Q1 EPS to $1.38 to $1.40. On margins, they said FY27 gross margin should be down about 20 basis points including tariffs, with operating margin up 60 basis points.

Geoff Martha framed the quarter as proof that Medtronic’s strategic choices are compounding: the company is investing in innovation, focusing the portfolio, and using capital allocation to lean into higher-growth areas. He repeatedly pointed to CAS, Symplicity, Hugo, Altaviva, and Stealth AXiS as examples of businesses with runway, and said Medtronic is “accelerating” into FY27. His tone was confident and expansive, emphasizing that Medtronic is building an integrated technology ecosystem across robotics, AI, digital, and advanced electronics.

Thierry Pieton emphasized the quality of the quarter’s financial execution: adjusted gross margin was 65.4%, up 30 basis points year over year despite a $74 million tariff hit, and free cash flow reached $5.4 billion, the strongest since 2022. He said the company ended the year with $9.2 billion in cash and investments, while R&D ran at roughly 7% of revenue and SG&A was 30.5% of revenue. For FY27, he outlined roughly flat gross margin ex-tariffs, about $250 million of tariff cost, 2% M&A dilution, and approximately $150 million of inorganic revenue contribution from recent deals.

Analysts focused on whether CAS would slow in FY27, how to think about TAVR after the Evolut data, and whether MedSurg/Hugo can sustain the current growth pace. Management said CAS growth should remain very strong, with market growth expected in the mid- to high-teens and Medtronic growing north of 2x the market, while TAVR has stabilized over the last 8 to 10 weeks after a U.S.-centric slowdown tied to low-risk data. On Hugo, management said the launch is progressing well, procedure volumes and utilization are rising, and new indications were just submitted to the FDA. Other questions covered gross margin upside if tariffs ease and MiniMed separates, China exposure amid VBP, and whether Medtronic would keep MiniMed; management said the separation is about focus and capital allocation, not lack of confidence in MiniMed.