Medtronic released fiscal 2027 first-quarter earnings on September 1, posting revenue of $9.8 billion and organic growth of 13.7%, exceeding company guidance. The quarter ended July 31 and included an extra selling week that contributed approximately $570 million to the revenue figure. Management characterized the underlying performance as the strongest quarterly result in nearly eight years and raised its full-year outlook based on the beat.
Cardiovascular revenue grew 18.9% organically to $3.9 billion, with Cardiac Ablation Solutions emerging as a major driver, posting 88% worldwide growth. The ablation business surpassed $2 billion in trailing twelve-month revenue during the quarter, ahead of the company’s prior expectations. The Sphere-9 catheter added nine market share points in the pulsed field ablation market in the United States. Cardiac Rhythm Management, a legacy franchise generating over $5.5 billion annually, expanded 15% globally, supported by double-digit growth in the Micra pacemaker line. Additional growth came from Cranial & Spinal Technologies at 13%, Diabetes revenue rising 14.9% to $843 million, and Pelvic Health expanding 15% with doubled sequential procedures for the Altaviva system. The Hugo surgical robot is anticipated to complete 50,000 procedures by fiscal year-end, with procedure growth exceeding market rates by more than twice.
Some segments lagged company-wide momentum. Neuromodulation grew just 3% globally, pressured by softness in spinal cord stimulation and replacement challenges in deep brain stimulation. Structural Heart posted only low single-digit growth, significantly trailing cardiovascular’s overall pace. Management also cited a projected $50 million to $150 million foreign exchange headwind for the full fiscal year.
Cost pressures accompanied the revenue growth. SG&A expense increased 14% year-over-year to 32.4% of revenue as the company integrated acquisitions and commercialized newer platforms. Gross margin contracted 50 basis points due to unfavorable product mix, particularly from diabetes and the capital-intensive ablation business. Management raised fiscal 2027 organic revenue guidance to 7.25% to 7.75% and adjusted earnings per share guidance to $5.94 to $6.00, while adjusted operating margin expanded to 23.7%. The company projected that Cardiac Ablation Solutions growth will moderate over coming quarters as prior-year comparisons become more challenging.
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