Financial Trends -- 6/10
Solidly improving but not exceptional. Organic revenue re-accelerating to +6.6% in FY26Q4 and
+5.8% for FY26 (best in a decade), powered by Cardiovascular (CRHF +18% organic, PFA/Affera +78%
with +8pts U.S. share). But the rest of the P&L is merely stable: flat gross/operating margins
(no 100bp expansion), non-GAAP EPS essentially unchanged at $5.53 (+0.7%), FCF at $5.4B still below
the FY2022 peak with margin compressing to ~14.9% on rising capex, and only fractional share-count
reduction. No penalty modifiers trigger.
Weight: 25%
FY26 Organic Rev
+5.8%
Best in 10 years | Reported +8.4%
FY26Q4 Organic
+6.6%
Accelerating | Reported +9.9%
Margins
Flat
No 100bp expansion | Op margin ~24.4%
FCF
$5.4B
+4.6% YoY | Below FY22 peak
Quarterly Revenue Trajectory (last 8 quarters)
| Fiscal Qtr | FY25Q1 | FY25Q2 | FY25Q3 | FY25Q4 | FY26Q1 | FY26Q2 | FY26Q3 | FY26Q4 |
|---|---|---|---|---|---|---|---|---|
| Reportable Seg Rev | $7,967M | $8,366M | $8,260M | $8,896M | $8,506M | $8,926M | $8,985M | $8,936M |
| Reported rev YoY | +0.5% | +5.3% | +2.5% | +3.9% | +2.8% | +5.3% | +6.4% | +9.9% |
| Organic rev YoY | +5.3% | +5.3% | +4.1% | +5.4% | +4.8% | +5.0% | +5.5% | +6.6% |
| GM (GAAP) | 65.1% | 64.9% | 66.5% | 64.7% | 65.0% | 65.8% | 63.8% | 65.4% |
| FCF ($M) | $466M | $554M | $2,096M | $2,069M | $584M | $457M | $2,300M | $2,085M |
Organic growth modestly accelerating: ~5.3% to +6.6% into FY26Q4.
Sequential YoY organic rates ran 5.3% → 5.3% → 4.1% → 5.4% → 4.8% → 5.0% → 5.5% → 6.6%,
with reported growth accelerating faster (+9.9% in FY26Q4) helped by FX and the FY26 segment recast.
Standout: Cardiovascular FY26Q4 reported +13.8% / organic +10.1%, driven by CRHF +18.2% organic and
Cardiac Ablation (PFA/Affera) +78% global / +124% U.S. (+8pts U.S. share). Diabetes re-accelerated to organic +8.1%.
Gross & Operating Margins
Margins essentially flat — no 100bp expansion.
GAAP gross margin is within ~30bps and non-GAAP within ~80bps of peak; non-GAAP operating margin
holds near 24.4%. This holds the profile near the "5" (flat ±50bps) condition with a slight
negative bias, and is the primary reason the dimension scores 6 rather than 8. Note: Daloopa's
segment-profit/EBITDA series were recast in FY2026, so margin direction is anchored to reported
non-GAAP operating margin and Daloopa gross margin.
Annual Financial Summary (FY ends late April)
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
| Total Revenue ($M) | $31,686M | $31,227M | $32,364M | $33,537M | $36,364M |
| Rev YoY (reported) | — | -1.4% | +3.6% | +3.6% | +8.4% |
| Rev YoY (organic) | — | ~+4.8% | ~+4.9% | ~+4.9% | +5.8% |
| Diluted EPS Non-GAAP | $5.55 | $5.29 | $5.20 | $5.49 | $5.53 |
| Diluted EPS GAAP | $3.73 | $2.82 | $2.76 | $3.61 | $3.73 |
| FCF ($M) | $5,978M | $4,580M | $5,200M | $5,185M | $5,426M |
| FCF margin | 18.9% | 14.7% | 16.1% | 15.5% | 14.9% |
| Diluted Shares (M) | 1,351.4 | 1,332.8 | 1,330.2 | 1,289.9 | 1,288.1 |
Key trends
- Revenue re-accelerating: $31.7B (FY22) to $36.4B (FY26); organic growth climbed to +5.8% in FY26 (reported +8.4%), management's "highest annual revenue growth in 10 years"
- Non-GAAP EPS essentially flat: $5.55 (FY22) to $5.53 (FY26), just +0.7% cumulative as margin and FX offset volume; the guided FY27 inflection ($5.90-$6.00, +6.7-8.5%) is ahead, not yet in reported numbers
- FCF below the FY2022 peak: $5.4B in FY26 (+4.6% YoY) still trails the $6.0B FY22 peak, with FCF margin compressing from 18.9% to 14.9% on rising capex ($1,368M to $1,904M)
- Share count declining only fractionally: 1,351.4M to 1,288.1M (-4.7% over 5 years, just -0.1% in FY26) — mild, intermittent buyback
Segment Revenue ($M, Annual)
Cardiovascular is the growth engine. Up from $11.4B (FY22) to
$14.0B (FY26), accelerating on CRHF (+18% organic) and Cardiac Ablation (PFA/Affera). Neuroscience is
steady (~$8.8B to $10.3B), and Diabetes re-accelerated to $3.1B before the MiniMed separation. Medical
Surgical (~24% of revenue) rounds out the four-segment platform.
Free Cash Flow & Cash Generation ($M)
FCF positive and growing modestly, but still below the FY2022 peak.
FY26 FCF of $5.4B (+4.6% YoY) is the strongest since FY2022 but trails the $6.0B peak, and FCF margin
has compressed from 18.9% to 14.9% on rising capex (up 39% over four years). Quarterly FCF is highly
seasonal (fiscal Q3/Q4 strong, Q1/Q2 weak). Stable and lumpy, not accelerating — a key reason the
cash-generation leg does not yet support an 8+ score.
Scoring logic
Score of 6/10 reflects an above-stable financial profile: accelerating revenue is the one strong leg, while margins are flat and FCF/share-count only mildly supportive. Better than the "5" stable case on revenue acceleration, short of the "8+" that requires margin expansion plus accelerating FCF.
Base rubric mapping:
- Revenue YoY: modestly accelerating (organic ~4.8% → 6.6% over the year; reported +8.4% FY26) — positive, toward the 7-8 band
- Margins: flat (GAAP gross -30bps, non-GAAP gross -80bps from peak, non-GAAP op margin ~flat at 24.4%) — NOT expanding 100bps; holds near the "5" condition with a slight negative bias
- Share count: declining but only -0.1% YoY in FY2026 (-4.7% over 5yr) — mild, intermittent buyback, not a consistent reducer
- FCF: positive and growing modestly (+4.6% FY26) but still below the FY2022 peak, FCF margin compressing (18.9% → 14.9%), and lumpy — stable, not accelerating
Penalty modifiers: None trigger — FCF is positive (no -2), no dilution (shares declining, no -1/-2), operating income is rising alongside revenue (no -1), and net debt/EBITDA is stable at 2.68x with debt not outgrowing revenue 3+ quarters (no -1). Final score 6/10.
The EPS-growth inflection is guided (FY27 organic +6.75-7.25%, non-GAAP EPS $5.90-$6.00, +6.7-8.5%) but not yet in the reported numbers — a 6/10 defensive compounder whose trajectory is improving but whose margin and cash-generation trends have not yet inflected.
Data sourced from Daloopa (company_id: 483). Fiscal year ends late April; FY2026 = May 2025 - Apr 2026. All financials in USD.