Medtronic (MDT) Q2 2026 earnings summary

Executive summary

• Q2 FY26 revenue reached $9.0 billion, up 6.6% reported and 5.5% organic, surpassing guidance midpoint, with strong cardiovascular growth led by Cardiac Ablation Solutions (up 71%) and robust procedure volumes.

• Achieved 8% non-GAAP EPS growth to $1.36 and 8% GAAP EPS growth to $1.07, both above guidance; net income and operating profit also increased year-over-year.

• Raised FY26 organic revenue growth guidance to 5.5% and adjusted EPS guidance to $5.62–$5.66, with further acceleration expected in H2 and high single-digit EPS growth projected for FY27.

• Significant contributions from launches and regulatory approvals for Altaviva, MiniMed 780G, Simplicity, and Hugo robotics; Diabetes business separation progressing toward completion by end of CY26.

• Strategic focus on scaling manufacturing, increased OpEx and R&D investments, tuck-in M&A, and portfolio management, including planned Diabetes separation.

Financial highlights

• Q2 revenue: $9.0B (+6.6% reported, +5.5% organic); adjusted operating profit: $2.2B (+6% Y/Y); adjusted EPS: $1.36 (+8% Y/Y); GAAP EPS: $1.07 (+8% Y/Y); net income: $1.75B (+7.8% Y/Y).

• Adjusted gross margin: 65.9% (+70 bps Y/Y); GAAP gross margin: 65.8%.

• Adjusted operating margin: 24.1% (down 20 bps Y/Y, up 50 bps sequentially); GAAP operating margin: 18.8%.

• Free cash flow for six months: $1.041B, up from $1.020B; operating cash flow: $2.013B.

• Effective tax rate: 13.5% GAAP, 16.4% non-GAAP; R&D expense: 8.4% of sales; SG&A: 32.7–33.1% of sales.

Outlook and guidance

• FY26 organic revenue growth guidance raised to 5.5%; adjusted EPS guidance increased to $5.62–$5.66.

• Q3 and Q4 expected to see further acceleration, with Q4 being the strongest.

• FY27 outlook includes high single-digit EPS growth, margin improvement, and share retirement post-Diabetes separation.

• Guidance includes a $185M tariff impact in FY26; gross margin expected slightly up ex-tariffs, but down about 40 bps including tariffs.

• Diabetes business separation expected by end of CY26.