01—Abstract
Summary
Summary of the 10-Q filed November 25, 2025. Cited figures are marked; the original filing is the authoritative source.
Medtronic plc (MDT) reported a strong second quarter for fiscal year 2026, with net sales increasing by 7% to $8.96 billion and diluted earnings per share rising to $1.07a from $0.99 in the prior year period.
The company demonstrated robust revenue growth across most of its key segments, including Cardiovascular, Neuroscience, and Medical Surgical, driven by strong product adoption and positive currency impacts. For the first six months of the fiscal year, net sales grew 8% year-over-year to $17.54 billionb, with diluted EPS of $1.87. Free cash flow remained solid, totaling $1.04 billion for the first six months, indicating effective operational management.
While the company navigated an evolving global economic landscape, including tariff impacts and geopolitical uncertainties, its diversified portfolio and strategic initiatives, such as the planned separation of its Diabetes business, position it for continued performance. Management highlighted investments in R&D and efforts to manage SG&A expenses, supporting long-term growth and shareholder value. The company's financial position remains strong, with ample liquidity to fund operations and strategic initiatives.
02—Key points
Key Highlights
- Net sales for the quarter increased 7% to $8.96 billion, and 8% for the six-month period to $17.54 billion, driven by broad-based growth across segments.
- Diluted EPS rose to $1.07 for the quarter, up from $0.99 in the prior year, reflecting improved profitability.
- Cardiovascular segment showed strong performance with 11% net sales growth for the quarter, driven by TAVR and cardiac rhythm management products.
- Neuroscience segment sales increased 5% for the quarter, supported by growth in Neuromodulation and Cranial & Spinal Technologies.
- Free cash flow for the first six months of the fiscal year was $1.04 billion, demonstrating strong cash generation.
- Medtronic announced its intent to separate its Diabetes business into a new independent company, expected to be completed within 18 months.
- The company provided an updated outlook on tariff impacts, estimating a pre-tax net tariff impact of $185 million in fiscal year 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Medtronic plc kept $0.15.
- Revenue$8.96B100.0%
- Cost of revenue−$3.06B34.2%
- Gross profit$5.90B65.8%
- Operating costs−$4.21B47.0%
- Operating income$1.69B18.8%
- Interest, other & tax−$305.0M3.4%
- Net income$1.38B15.4%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed November 25, 2025Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $8.96B$8.40B | +6.6% |
| Cost of Revenue | $3.06B$2.95B | +3.9% |
| Gross Profit | $5.90B$5.46B | +8.1% |
| SG&A Expenses | $2.96B$2.76B | +7.5% |
| Operating Income | $1.69B$1.59B | +5.7% |
| Net Income | $1.38B$1.28B | +8.1% |
| EPS (Basic) | $1.07$0.99 | +8.1% |
| EPS (Diluted) | $1.07$0.99 | +8.1% |
| Shares Outstanding (Basic) | 1.28B1.28B | 0.0% |
| Shares Outstanding (Diluted) | 1.29B1.29B | +0.1% |
05—Questions
Frequently Asked Questions
What was Medtronic's revenue performance in the reported quarter?
Medtronic reported net sales of $8.96 billion for the three months ended October 24, 2025, representing a 7% increase compared to $8.40 billion in the prior year period. This growth was broad-based across most of its reportable segments.
How did Medtronic's profitability change in this quarter?
Diluted earnings per share (EPS) increased to $1.07 for the three months ended October 24, 2025, up from $0.99 in the same period last year. This improvement reflects strong revenue growth and effective cost management.
What is the significance of the planned separation of the Diabetes business?
Medtronic announced its intent to separate its Diabetes Operating Unit into a new, independent publicly traded company. This strategic move aims to allow both Medtronic and the future standalone diabetes company to better focus on their respective growth strategies and capital allocation priorities.
What is the company's outlook regarding macroeconomic factors like tariffs?
Medtronic anticipates a pre-tax net tariff impact of $185 million in fiscal year 2026, with the majority expected in the second half of the fiscal year. The company is implementing strategies to mitigate these effects, but acknowledges the evolving nature of international trade policy presents ongoing risks.
06—Continue