When Thierry Piéton stepped into the role of executive vice president and chief financial officer of Medtronic earlier this year, he entered one of the largest and most complex organizations in the medical technology industry. Yet, despite that complexity and the company’s recent years of uneven performance, Piéton says he came in with conviction. Medtronic, in his view, is sitting on the edge of a long-awaited inflection point.
“I had the perception that the company was about to reach an inflection in terms of growth rate,” Piéton said during the 2025 BofA Securities Global Healthcare Conference in September 2025. “As I went through the selection process, we talked extensively about the growth opportunities within the business — cardiac ablation, renal denervation, Hugo robotic surgery — and I knew these would be present coming in.”
Six months into the job, Piéton said that everything he expected has been validated. And, more importantly, it has given him confidence to articulate a clear plan for investors, one centered on accelerating growth, expanding margins, and reinvesting intelligently to build the next generation of medical technology.
A Company Positioned for Acceleration
Piéton says his first priority is straightforward: capitalize on Medtronic’s emerging high-growth businesses. “We’re about to have an inflection,” he said. “Growth is going to accelerate in the second half, and our goal is to use part of that benefit to reinvest in innovation — both organically and through mergers and acquisitions — to fuel the next cycle of growth.”
For a company that operates across cardiac and vascular care, surgical robotics, neuroscience, diabetes management, and dozens of adjacent categories, sustaining that cycle is essential. Piéton believes Medtronic is now structured to do it.
Part of the renewed confidence comes from operational progress made over the past several years. Under CEO Geoff Martha, Medtronic centralized global operations, supply chain, manufacturing, and procurement — functions that once operated separately within each business unit. That shift, Piéton said, has meaningfully improved execution, predictability, and efficiency.
“Every site I visit now has the same KPIs, the same operating mechanisms, the same review processes,” he said. “Our manufacturing and procurement teams have been consolidated, and the discipline is much stronger. Over the last 10–12 quarters, execution has been significantly better.”
With that foundation in place, Piéton says the company can now focus on the next phase: capturing growth while delivering meaningful margin expansion.
Margin Expansion: Returning to Pre-Pandemic Levels
One of the CFO’s most direct messages to investors is that Medtronic intends to return its gross margin to pre-COVID-19 levels. According to Piéton, current gross margin is roughly 380 basis points lower than it was before the pandemic although he said that the drivers behind that decline are shifting. He breaks the equation into two parts: operational tailwinds and mix-driven headwinds.
Operational Tailwinds. Pricing and cost-management improvements are now material contributors.
“We used to be a business that lost price consistently,” Piéton said. “Now, we gain price year over year thanks to better contracting, stronger pricing controls, and differentiated innovation our customers are willing to pay for.”
In the first quarter, pricing contributed 40 basis points of gross-margin improvement. Cost reductions — driven by streamlined manufacturing operations, supplier consolidation, and global operations discipline — added another 30–40 basis points.
Mix-Driven Headwinds. Despite those improvements, mix issues have masked the underlying progress. First, the diabetes business, which carries lower margins but was growing faster than the rest of the company, exerted a consistent drag. With Medtronic in the process of divesting the diabetes division, that headwind will disappear in the second half of fiscal year 2027. Second, cardiac ablation, particularly pulsed-field ablation (PFA), has been dilutive in the near term due to high capital-equipment sales relative to catheter utilization.
“It’s a good problem to have,” Piéton noted. “The business is dilutive at the gross-margin level but very attractive from an operating-margin perspective. As the installed base grows, the mix will shift from capital to consumables, and that will become a tailwind.”
Starting in late fiscal 2027, those headwinds are expected to recede, allowing Medtronic’s operational improvements to show through clearly.
“We believe we’re on a solid path,” Piéton said. “Investors should expect meaningful, sustainable margin improvement beginning in the second half of 2027.”
R&D Investment and SG&A Leverage: A Balanced Algorithm
Part of Medtronic’s strategic reallocation includes increasing research and development (R&D) spending. Today R&D sits around 8–8.5 percent of revenue; Piéton believes the right level is closer to 10 percent. Those incremental investments will focus heavily on high-growth platforms: cardiac ablation, renal denervation (RDN), and robotics. But higher R&D spending does not mean higher overall operating expenses. Piéton emphasized that Medtronic will fund R&D growth through SG&A [selling, general, and administrative] leverage and margin expansion, not through reductions in commercial capacity.
“We’ll protect the selling side,” he said. “For cardiac ablation we’re hiring more mappers; for renal denervation we’re building a direct marketing team. But G&A — our back office — still has significant opportunities for simplification and digitization.”
In the first quarter, R&D grew 100 basis points faster than revenue, while SG&A delivered 170 basis points of leverage; proof, Piéton says, that the model is working.
Improving Forecast Accuracy and Execution
Medtronic has historically been criticized for inconsistent forecasting and operational surprises. Piéton did not shy away from the issue.
“Execution is what’s going to make us successful,” he said. “A lot has been done already, and we’ve seen no major supply-chain surprises in recent quarters. But there’s still work ahead — simplifying our supplier base, optimizing manufacturing footprints, and designing new products for cost and manufacturability.”
Some of these changes, such as manufacturing-footprint optimization, will take years. Others, like SKU reduction and supplier consolidation, are already under way and delivering early benefits.
Designing Products for Cost: Sphere-360 as a Model
Piéton highlighted its upcoming pulsed-field ablation catheter, Sphere-360, as an example of how early engineering decisions can influence long-term margin expansion.
“Sphere-9 was originally difficult to manufacture,” he said. “The team did a great job stabilizing it, but with Sphere-360 we’re designing from the beginning to launch with a significantly better cost base.”
That difference will matter. Sphere-360’s expected 11-minute in-heart time (compared with longer durations for previous solutions) has generated substantial physician interest and could help Medtronic accelerate its share gains in a rapidly expanding PFA market.
Partnering with Elliott Investment Management
One of the biggest investor headlines in 2025 was Elliott Investment Management’s stake in Medtronic. Piéton described the relationship as collaborative and aligned with the company’s priorities. Elliott encouraged Medtronic to accelerate growth investments, bring more medtech expertise to its board, and create dedicated committees focused on growth and operations. Medtronic responded quickly, adding two new board members with deep medtech backgrounds and establishing new committees aligned with the company’s internal operating rhythm.
“The engagement has been constructive,” Piéton said. “Many of the things they emphasized were already areas we were focusing on. Their involvement accelerated decisions we were planning to make.”
M&A: Returning to a More Active Posture
After several cautious years focused on stabilizing operations, Medtronic now plans to re-enter the M&A market more aggressively.
“We’ve earned the right to go back on offense,” Piéton said. “We have a very strong balance sheet and capacity to do meaningful deals.”
His preferred “sweet spot” includes companies roughly $1–4 billion in value, typically at late-clinical or early-commercial stages where outcomes are more certain and integration risk is manageable. To qualify, targets must meet several criteria:
Operate in an attractive, growing market.
Offer synergy potential in at least one of three areas:
Commercial synergies (adding products to Medtronic’s existing sales channels).
R&D acceleration.
Supply-chain scale and manufacturing capability.
Provide a clear path to accretion and long-term profit contribution.
He pointed to the successful acquisition and scale-up of Affera, a cardiac mapping and ablation company, as a model.
Medtronic may also pursue minority investments in earlier-stage companies, sometimes with structured call options based on milestone achievement. This approach allows Medtronic to secure early access to innovative technologies without committing to full acquisition risk or earnings dilution.
Free Cash Flow: Reaching Back Toward 80 Percent Conversion
Piéton addressed investor concerns about free-cash-flow conversion and the perception that dividends might hinder R&D or dealmaking.
“It’s an urban legend,” he said. “Our dividend does not constrain our ability to increase R&D or pursue M&A. We generate more than $5 billion in free cash flow annually and have significant balance-sheet capacity.”
The company is targeting a return to 80 percent free cash flow conversion by fiscal year 2027, driven by operating-margin expansion, working-capital improvements, and inventory optimization, noted Piéton.
Key Growth Drivers
Although Medtronic operates across dozens of markets, three programs are notable as transformative for the next several years: Cardiac ablation, Hugo robotic-assisted surgery, and renal denervation.
Cardiac Ablation and Pulsed-Field Ablation. Medtronic sees cardiac ablation — particularly pulsed-field ablation (PFA) — as one of its most powerful growth engines. The company is currently fourth in market share but intends to lead the category.
“We have the ambition to be number one,” Piéton said. “Sphere-9 and Pulse-Select are in extremely high demand. If we could ramp capital equipment faster, we would sell faster.”
As the installed base grows, consumable usage will accelerate, a dynamic that could produce exponential revenue growth. Sphere-360, with its reduced procedure time and improved manufacturability, is expected to further widen that opportunity.
Hugo Robotic-Assisted Surgery System. Medtronic has long dominated conventional surgical instrumentation through its Medtronic Surgical (Med-Surg) portfolio. Hugo and its accompanying digital ecosystem will be central to maintaining that leadership. Piéton draws a parallel with Medtronic’s spine franchise, where a combination of AI-based planning, robotics, imaging, and navigation transformed what was once a commoditized implant business into a margin-accretive ecosystem.
“Hugo and the digital suite aim to achieve the same in general surgery,” he said. “Pre-op planning, intraoperative guidance, post-op analytics. AI will help physicians improve speed, consistency, and outcomes.”
Hugo already has an installed base in more than 30 countries, and the company anticipates U.S. FDA clearance before the end of the fiscal year, with meaningful revenue impact beginning in fiscal 2027.
Renal Denervation. Perhaps the biggest opportunity is renal denervation — Medtronic’s new therapy for hypertension, developed over more than 15 years.
“There are 18 million eligible patients in the U.S. alone,” Piéton said. “If even 1 percent are treated, at about $16,000 per procedure, it’s a very large opportunity.”
Clinical-trial participants self-enrolled, an indication of strong patient demand. Medtronic plans to launch consumer-awareness initiatives, optimize referral pathways, and scale procedural capacity. Piéton says the company expects a faster ramp-up than the company’s Watchman left-atrial-appendage closure device, which reached $500 million by year five.
Looking Ahead: A Mid-2026 Strategic Update
Investors won’t have to wait long for more detail. Medtronic plans to present an updated strategic framework in mid-2026.
Without revealing specifics, Piéton emphasized that the update will articulate post-inflection growth priorities, next-generation platform investments, a refreshed financial algorithm for the midterm, and new KPIs for tracking progress.
“It’s about setting the next step after this wave of growth,” he said. “We’re going to reinvest, accelerate innovation, and outline the targets we expect to achieve.”
Conclusion: A More Focused, Faster Medtronic
In his first half-year as CFO, Piéton has immersed himself in a company with a long legacy and a wide footprint but he sees the next phase as fundamentally different. The combination of accelerating growth drivers, operational discipline, strengthened governance, and a renewed appetite for innovation and M&A has given Medtronic what he calls a “flywheel” for long-term value creation.
“We want to deliver earnings growth for shareholders, expand margins, and reinvest part of that into what will make us successful in the future,” he said. “This is an innovation industry. Our job is to make sure we have the fuel to keep innovating.”
For an organization of Medtronic’s size, turning the flywheel takes time but once in motion, Piéton believes the next era of growth will be stronger, more predictable, and more strategically focused than the last.
This article was written by Sherrie Trigg, Editor and Director of Content, Medical Design Briefs. She can be reached at
