Medtronic reported a solid start to QQ1 2026 with revenue of $8.578 billion, up 8.38% year over year and a sequential decline of 3.91% quarter over quarter. The gross margin held at a robust 59.93%, enabling an operating margin of 16.84% and EBIT of $1.445 billion, supported by EBITDA of $2.225 billion (EBITDA margin 25.94%). Net income totaled $1.04 billion with an earnings per share (EPS) of $0.81, essentially flat versus the prior-year period and down modestly on a QoQ basis. Free cash flow reached $584 million, while cash from operating activities was $1.088 billion and capital expenditures were $504 million, underscoring meaningful cash generation even as working capital movements (-$1.147 billion) weighed on cash flow dynamics.
Management continued to emphasize a growth-oriented trajectory anchored in Medtronic’s diversified portfolios (Cardiovascular, Medical Surgical, Neuroscience, and Diabetes Operating Unit), ongoing R&D investment, and digital health initiatives. While no explicit full-year guidance was disclosed in the provided data, the quarter reflects a balance between growth investments and cost discipline, with margins and cash generation remaining resilient amidst ongoing macro and FX headwinds. Investors should monitor the cadence of product launches, reimbursement dynamics, foreign exchange effects, and the trajectory of working capital given the sizable quarterly working capital swing reported.