Why did non-GAAP EPS decline even though revenue grew strongly?

Revenue growth was offset by margin compression. Non-GAAP operating margin fell 130 bps for the year, and Q4 margin fell 230 bps, driven by a 160 bp MiniMed Blackstone payment, 80 bp of tariffs, and higher operating costs. Q4 non-GAAP EPS declined 4.3% despite 9.9% reported revenue growth.

What is driving the growth in the Cardiovascular business?

Cardiovascular revenue grew 10.1% organically in Q4. Cardiac Rhythm & Heart Failure grew high-teens organically, aided by Micra (mid-teens growth) and a strong OmniaSecure U.S. launch. Cardiac Ablation Solutions grew 78% globally, including 124% in the U.S., with about 8 points of U.S. share gained.

What does FY27 guidance imply for investors?

Management guided FY27 organic revenue growth of 6.75%–7.25% and non-GAAP diluted EPS of $5.90–$6.00, or 6.7%–8.5% growth. Part of the growth comes from the 53rd week and full-year Diabetes consolidation, and tariffs, interest, and tax are headwinds. The EPS guidance also assumes a neutral to 1% FX benefit.

Is the GAAP EPS improvement in Q4 a sign of underlying strength?

Not necessarily. Q4 GAAP diluted EPS rose 17.1% to $0.96, but that was largely due to lower amortization and litigation charges, plus a favorable $138 million non-operating income item. On a non-GAAP basis, which strips out these items, EPS fell 4.3%, so the GAAP improvement mainly reflects lower non-recurring charges.

What is the status of the Diabetes business separation?

Medtronic plans to separate its Diabetes business through capital markets transactions, which may include a spin-off, split-off, offering, or a combination. An offering and split-off is the current preferred structure, but no final decision has been reached. Diabetes grew 8.1% organically in Q4, and the planned separation adds execution and dis-synergy considerations for investors.

MDT 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed June 3, 2026. Cited figures are marked; the original filing is the authoritative source.

Medtronic plc (MDT) reported fourth quarter and fiscal year 2026 results (year ended April 24, 2026), highlighting its strongest annual top-line growth in roughly a decade.

FY26 revenue was $36.4 billion^a, up 8.4% as reported and 5.8% organic. Q4 revenue of $9.8 billion grew 9.9% reported and 6.6% organic, about 90 basis points ahead of implied guidance. Cardiovascular was the main driver, with Cardiac Ablation Solutions up 78% globally (124% in the U.S.) and Cardiac Rhythm & Heart Failure up high-teens organically, helped by Micra and the OmniaSecure launch.

Medical Surgical grew 5.1% organically and Neuroscience grew 3.0%. Profitability was more mixed. Non-GAAP diluted EPS for FY26 was $5.53^b, up only 0.7% (down 2.0% in constant currency), and non-GAAP operating margin fell 130 basis points to 24.4%.

Q4 non-GAAP EPS of $1.55^c declined 4.3% year over year, with margin pressured by a 160 bp MiniMed Blackstone payment and 80 bp of tariffs. GAAP results were stronger, with Q4 GAAP diluted EPS of $0.96 up 17.1%, largely reflecting lower amortization and litigation charges and a favorable other non-operating item. Free cash flow was $5.4 billion, up 4.6%, and the company returned $4.2 billion to shareholders.

Looking ahead, management guided FY27 organic revenue growth of 6.75% to 7.25% and non-GAAP diluted EPS of $5.90 to $6.00^d (6.7% to 8.5% growth). The outlook includes a 53rd week, full-year consolidation of Diabetes (MiniMed), increased M&A, and tariff and interest headwinds.

The board also raised the quarterly dividend to $0.72 (annualized $2.88), the 49th consecutive annual increase. The company continues to plan a separation of its Diabetes business, with an offering and split-off currently preferred but not finalized.

02—Key points

Key Highlights

FY26 revenue of $36.4B grew 8.4% reported and 5.8% organic, the strongest annual top-line growth in 10 years.
Q4 revenue of $9.8B grew 6.6% organically, 90 bps ahead of implied guidance; Cardiac Ablation Solutions grew 78% globally and 124% in the U.S.
FY26 non-GAAP diluted EPS of $5.53 rose only 0.7% (down 2.0% constant currency); non-GAAP operating margin fell 130 bps to 24.4%.
Q4 non-GAAP EPS of $1.55 was ahead of guidance but declined 4.3% year over year, with 160 bps from the MiniMed Blackstone payment and 80 bps from tariffs.
FY27 guidance calls for 6.75%–7.25% organic revenue growth and $5.90–$6.00 non-GAAP EPS, including a 53rd week and full-year Diabetes consolidation.
Quarterly dividend raised to $0.72 ($2.88 annualized), the 49th consecutive annual increase; FY26 free cash flow was $5.4B with $4.2B returned to shareholders.
Active tuck-in M&A (CathWorks completed; Scientia Vascular and SPR Therapeutics announced) and the planned Diabetes separation remain strategic catalysts.

03—Questions

Frequently Asked Questions

Why did non-GAAP EPS decline even though revenue grew strongly?
Revenue growth was offset by margin compression. Non-GAAP operating margin fell 130 bps for the year, and Q4 margin fell 230 bps, driven by a 160 bp MiniMed Blackstone payment, 80 bp of tariffs, and higher operating costs. Q4 non-GAAP EPS declined 4.3% despite 9.9% reported revenue growth.
What is driving the growth in the Cardiovascular business?
Cardiovascular revenue grew 10.1% organically in Q4. Cardiac Rhythm & Heart Failure grew high-teens organically, aided by Micra (mid-teens growth) and a strong OmniaSecure U.S. launch. Cardiac Ablation Solutions grew 78% globally, including 124% in the U.S., with about 8 points of U.S. share gained.
What does FY27 guidance imply for investors?
Management guided FY27 organic revenue growth of 6.75%–7.25% and non-GAAP diluted EPS of $5.90–$6.00, or 6.7%–8.5% growth. Part of the growth comes from the 53rd week and full-year Diabetes consolidation, and tariffs, interest, and tax are headwinds. The EPS guidance also assumes a neutral to 1% FX benefit.
Is the GAAP EPS improvement in Q4 a sign of underlying strength?
Not necessarily. Q4 GAAP diluted EPS rose 17.1% to $0.96, but that was largely due to lower amortization and litigation charges, plus a favorable $138 million non-operating income item. On a non-GAAP basis, which strips out these items, EPS fell 4.3%, so the GAAP improvement mainly reflects lower non-recurring charges.
What is the status of the Diabetes business separation?
Medtronic plans to separate its Diabetes business through capital markets transactions, which may include a spin-off, split-off, offering, or a combination. An offering and split-off is the current preferred structure, but no final decision has been reached. Diabetes grew 8.1% organically in Q4, and the planned separation adds execution and dis-synergy considerations for investors.

04—Continue

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