MiniMed (MMED) Telefonkonferenz zum 1. Quartal des Geschäftsjahres 2027: Wachstumsprognose angehoben

Wichtigste Erkenntnisse

• Der Umsatz im ersten Quartal des Geschäftsjahres 2027 lag bei 843 Mio. US-Dollar, was einem organischen Plus von 15,8 % entspricht. Die zusätzliche Geschäftswoche trug schätzungsweise 4 bis 6 Prozentpunkte bei; ohne diese lag das Wachstum weiterhin im niedrigen zweistelligen Bereich.
• Der organische Umsatz in den USA stieg um 13,1 %, was eine Beschleunigung gegenüber 1,5 % im vierten Quartal darstellt. Die Zahl der in den USA neu verkauften Pumpen legte um mehr als 20 % zu, unterstützt durch die Markteinführung von MiniMed Flex.
• Der internationale organische Umsatz wuchs um 16,9 %, wobei Westeuropa einen Zuwachs im hohen Zehnerbereich verzeichnete. Ein erhöhtes Angebot an Simplera und die Einführung von Instinct unterstützten die Nachfrage nach Pumpen und CGM.
• Das bereinigte EBITDA lag bei 83 Mio. US-Dollar, was einer Marge von 9,9 % entspricht. Ohne beschleunigte Investitionen und eine FX-Neubewertungsaufwendung hätte die Marge 12,2 % betragen.
• MiniMed hob seine Prognose für das organische Umsatzwachstum im Geschäftsjahr 2027 von zuvor rund 10 % auf etwa 10,5 % an und bestätigte zugleich die Zielvorgabe für die bereinigte EBITDA-Marge von rund 16 %.
• Das Unternehmen trieb mehrere Pipeline-Programme voran: MiniMed Flex erhielt die CE-Kennzeichnung, MiniMed Fit wurde bei der FDA eingereicht, Vivera schloss die Rekrutierung für die Zulassungsstudie ab und der Sensor der nächsten Generation für verlängerte Tragedauer erhielt die IDE-Zulassung.

Wichtige Finanzdaten

Geschäfts- und operative Entwicklung

MiniMed Flex war der Haupttreiber der Beschleunigung in den USA. Die Auslieferung mit Simplera begann Ende Juni und trug im Quartal etwa fünf Wochen lang zu den Lieferungen bei. Der Großteil der Flex-Verkäufe ging an Patienten mit mehrmaligen täglichen Injektionen (MDI), die neu in der Pumpentherapie waren, gefolgt von Umstellungen von konkurrierenden schlauchgebundenen und schlauchlosen Systemen.

Die Zahl der neuen MiniMed-Verschreiber in den USA stieg im Jahresvergleich um 24 %. Das Unternehmen weitete zudem gegen Ende des ersten Quartals die Verfügbarkeit von Flex auf Medicare- und Medicare-Advantage-Begünstigte aus und begann am 17. August mit dem Versand von Flex mit dem Instinct-Sensor.

MiniMed Go trat in die frühe Phase der Markteinführung in den USA ein. Mehr als die Hälfte der bisherigen Bestellungen stammte von Patienten, die neu bei MiniMed sind. Das Management sieht die smarte MDI-Plattform sowohl als eigenständige Chance als auch als Einstiegspunkt in die automatisierte Insulinabgabe.

Typ-2-Patienten machten weiterhin etwa 40 % der Neueinstellungen in den USA aus. Laut Management hat sich die Patientenbindung sowohl bei Typ-1- als auch bei Typ-2-Nutzern verbessert. Es führte diesen Trend auf Produktmerkmale wie 300-Einheiten-Reservoire und eine längere Tragedauer sowie auf seine Patientenunterstützungsprogramme StartRight und StayRight zurück.

Das internationale Wachstum war auf breiter Basis über Pumpen, Sensoren und Verbrauchsmaterialien hinweg zu verzeichnen. Das Angebot an Simplera verdreifachte sich gegenüber dem Vorjahr. Die Pumpenverkäufe stiegen in Frankreich um mehr als 20 %, während das Vereinigte Königreich nach der Einführung von Instinct ein Wachstum von mehr als 50 % verzeichnete. Zudem sicherte sich MiniMed Go mehrere Zuschläge bei europäischen MDI-Ausschreibungen.

Pumpen und CGM wuchsen im niedrigen 20-Prozent-Bereich bzw. im hohen Zehnerbereich. Die Verbrauchsmaterialien stiegen im niedrigen zweistelligen Bereich, während die größere installierte Basis an Pumpen künftige Chancen für wiederkehrende Umsätze erweiterte.

Produkt-Pipeline

• MiniMed Flex: Erhielt die CE-Kennzeichnung vor dem angestrebten Ziel zum Ende des Kalenderjahres. MiniMed erwartet den Beginn der kommerziellen Einführung in Europa im November, zunächst mit Simplera und später mit Instinct.
• MiniMed Fit: Die 510(k)-Einreichung wurde vor dem Zeitplan abgeschlossen. Das Management erwartet eine vollständige Markteinführung in den USA bis Sommer 2027 und bereitet erste Kapazitäten für 20.000 Patienten vor, während eine weitere Expansion geplant wird.
• Vivera: Die Rekrutierung für die dreimonatige US-Zulassungsstudie wurde vor dem Zeitplan abgeschlossen. Das Management erwartet, dass der Fully-Closed-Loop-Algorithmus in der zweiten Hälfte des Kalenderjahres 2027 für Flex- und Fit-Nutzer auf den US-Markt kommt.
• Sensor für verlängerte Tragedauer: Der Sensor der nächsten Generation erhielt die IDE-Zulassung der FDA, wobei der Beginn einer Zulassungsstudie für Oktober erwartet wird. Das Unternehmen gab an, dass das Produkt seine bestehende Fertigungsplattform nutzen wird und im Laufe der Zeit zu einer Margenausweitung beitragen könnte.

Prognose des Managements

MiniMed hob seinen Ausblick für das organische Umsatzwachstum im Geschäftsjahr 2027 auf rund 10,5 % an, verglichen mit der vorherigen Prognose von etwa 10 %. Die Zielvorgabe beinhaltet einen positiven Effekt von 1 bis 1,5 Prozentpunkten aus der zusätzlichen Woche in Q1.

Das Management rechnet im zweiten Quartal mit einer Normalisierung des ausgewiesenen Wachstums, da der Effekt der zusätzlichen Woche nicht erneut auftritt. Das zugrundeliegende Wachstum sowohl in den USA als auch auf den internationalen Märkten sollte ohne die Zusatzwoche eher mit den Raten von Q1 vergleichbar sein.

Das Unternehmen bestätigte die Prognose für die bereinigte EBITDA-Marge für das Geschäftsjahr 2027 von rund 16 %. Das Management geht davon aus, dass sich die Margen im Quartalsvergleich verbessern werden, wobei ein größerer Teil des Anstiegs in der zweiten Jahreshälfte eintreten dürfte, wenn der Umsatz zulegt, sich die Bruttomarge verbessert und der operative Hebel greift.

Risiken und zu beobachtende Faktoren

Die bereinigte EBITDA-Marge in Q1 war durch zwei Effekte mit etwa 230 Basispunkten belastet. MiniMed zog geplante Investitionen in Flex und Fit in Höhe von 8 Mio. US-Dollar vor, was die Marge um etwa 90 Basispunkte verringerte. Eine FX-Neubewertungsaufwendung von 12 Mio. US-Dollar reduzierte sie um weitere 140 Basispunkte. Das Unternehmen hat ein Devisensicherungsprogramm implementiert, wenngleich operative Währungsschwankungen die Rentabilität in Q1 ebenfalls beeinträchtigten.

Simplera weist derzeit eine geringere Marge als ältere Sensoren auf. Das Management erklärte jedoch, dass sich die Fertigungsausbeute schneller als erwartet verbessert, was die voraussichtlichen Auswirkungen auf das Gesamtjahr verringert.

Der freie Cashflow blieb negativ, da Aktivitäten im Zusammenhang mit der Ausgründung und dem eigenständigen Aufbau 111 Mio. US-Dollar verbrauchten. MiniMed startete mit rund 160 Übergangsdienstleistungsvereinbarungen mit Medtronic und hatte bis zum Quartalsende 17 davon beendet. Die meisten verbleibenden Ausstiege werden im Laufe des Kalenderjahres 2027 erwartet.

Der Zeitplan für die regulatorische Zulassung bleibt ungewiss. Das Management gab an, nicht vorhersagen zu können, wann die FDA MiniMed Fit zulassen wird, obwohl sich das Unternehmen darauf vorbereitet, das Produkt nach Erhalt der Zulassung auf den Markt zu bringen. Eine Kommerzialisierungsaufwendung von 162 Mio. US-Dollar für Fit ist in der Prognose für das Geschäftsjahr 2027 nicht enthalten.

Highlights der Fragerunde für Analysten

Laut Management befindet sich die Produktion von MiniMed Fit bereits in der Vorbereitung hinsichtlich Ausbeute und Ausstoß. Das Unternehmen plant zudem Kapazitäten über das ursprüngliche Niveau von 20.000 Patienten hinaus, um einem Szenario einer früher als erwarteten Zulassung gerecht zu werden.

Für Vivera umfassen die verbleibenden Schritte den Abschluss der dreimonatigen Studie, die Datenbanksperre, die Analyse der Ergebnisse und die Vorbereitung des Zulassungsantrags. Das Management sieht die Kombination aus einer Patch-Pumpe und einem Fully-Closed-Loop-Algorithmus als wesentlichen Treiber für die Neugewinnung von Patienten.

Auf Nachfrage zu Wechseln von Konkurrenzprodukten erklärte das Management, dass sich die Umstellungen von konkurrierenden Systemen gegenüber dem Vorjahr verdoppelt hätten. Es erwartet, dass neue Produkte sowohl die Marktexpansion bei MDI-Patienten als auch Marktanteilsgewinne in umkämpften Pumpenmärkten unterstützen werden.

Das Management hat potenzielle Kaufverzögerungen im Vorfeld der europäischen Markteinführung von Flex in seine Prognose einbezogen. Es wird erwartet, dass die derzeitige Dynamik aus der Akzeptanz von Instinct in mehreren westeuropäischen Ländern einen Teil dieses Effekts ausgleichen wird.

Vollständiges Transkript des Earnings Calls

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Good day, and welcome to MiniMed's First Quarter and Fiscal Year 2027 Earnings Webcast. At this time, all participants on a listen-only mode. [Operator Instructions] Today's call is being recorded. I will now hand the conference over to your speaker host, Ryan Weispfenning, VP of Investor Relations.

Ryan Weispfenning

Hello, everyone, and thanks for joining us today for our fiscal '27 quarter earnings webcast. I'm Ryan Weispfenning, Vice President and Head of MiniMed Investor Relations. Joining me today are Que Dallara, Chief Executive Officer; and Chad Spooner, Chief Financial Officer. Today's program will last no longer than 45 minutes so that we may complete the call before the market opens.

Earlier this morning, we issued a press release discussing our results and containing several financial schedules. We also posted an earnings presentation that provides additional details on our performance. Both can be accessed on our website at investors.minimed.com.

During today's program, many of the statements we make may be considered forward-looking statements, which are subject to risks and uncertainties. And actual results may differ materially from those projected in any forward-looking statement. Please take a moment to review the cautionary statements regarding forward-looking statements included in our earnings press release and the presentation.

Additional information concerning factors that could cause our actual results to differ is contained in the periodic reports and other filings we make with the SEC. Forward-looking statements speak only as of the date they are made, and we do not undertake to update any forward-looking statements or any of the information contained in today's program.

In today's program, unless we say otherwise, all comparisons are made on a year-over-year basis. and references to revenue growth are to organic revenue growth, a non-GAAP financial measure. A reconciliation of organic revenue growth to the most directly comparable GAAP financial measure is included in today's earnings press release.

With our organic revenue growth and adjusted EBITDA margin guidance, we do not provide reconciliations to the comparable GAAP measures because certain items in these forward-looking non-GAAP measures cannot be predicted without unreasonable effort.

We operated as part of Medtronic until our IPO in early March. So our GAAP financial statements for historical periods were prepared on a carve-out basis and include certain historical cost allocations from Medtronic for centralized support functions.

On today's program unless we say otherwise, year-over-year and sequential comparisons of P&L line items will be made to historical period financials that are presented on an adjusted stand-alone basis. which replaced historical Medtronic cost allocations with the expected run rate cost structure for stand-alone MiniMed.

This information also eliminated the impact of certain incremental nonrecurring costs. These stand-alone P&L items are non-GAAP financial measures and are included to provide consistency and comparability while evaluating operational performance on a run rate stand-alone basis for reporting periods after MiniMed's fiscal year 2026. A reconciliation of these stand-alone non-GAAP financial measures to their most directly comparable GAAP financial measures is included in today's earnings presentation.

With that, over to you, Que.

Que Dallara

Thank you, Ryan, and hello, everyone. It's good to be speaking with you today to update you on the momentum we have at MiniMed with our commercial growth, our innovation pipeline and our execution. We had an excellent start to our fiscal year in our first full quarter as a stand-alone public company.

Organic growth was 16% and ahead of expectations. The extra week in our fiscal calendar contributed approximately 4 to 6 points of that growth. Excluding it, we grew low double digits, an acceleration of roughly a couple of hundred basis points from Q4 and ahead of the outlook we gave you in June.

Our U.S. growth accelerated on the strength of our MiniMed Flex with Simplera launch, which started shipping late June and represented about 5 weeks of shipping for the quarter.

In our international region, we delivered another quarter of double-digit growth as we significantly increased sensor supply to meet strong customer demand, increasing Simplera supply throughout the quarter and launching Instinct with MiniMed 780G in July, well ahead of the calendar 2027 time frame we outlined during our IPO roadshow.

We also advanced 4 separate pipeline programs. we are releasing next generations of every part of our integrated system, sensors, insulin delivery devices, algorithms and apps. We are not launching individual products, we are building the next generation of MiniMed, one company, every option, one ecosystem.

Now looking at our Q1 growth in more detail, starting with the U.S., last quarter, we told you to expect an acceleration in revenue growth from Q4, and we delivered. U.S. revenue grew 13%, up from 1.5% in Q4. Excluding the extra week, U.S. growth was in the high single digits.

In addition, U.S. new pumps sold increased by over 20% year-over-year. This was driven largely by the launch of the MiniMed Flex insulin pump system, which started shipping in late June with our Simplera sensor. The majority of Flex sales are going to MDI patients that are new to pump therapy followed by conversions from tubed and tubeless competitor systems, all of which grow our installed base.

Importantly, Flex is doing exactly what we designed it to do. It is expanding our reach into new patients, driving competitive conversions and strengthening our position in AID. The reason is simple, patients have been telling us for years what they wanted, the outcomes of MiniMed in a simpler, smaller, more discrete form factor with the convenience of app control.

And MiniMed Flex is doing exactly that. Our new small insulin pump is half the size of the MiniMed 780G and our leading SmartGuard adaptive algorithm, the most clinically validated algorithm in the world. The early patient response to Flex has been very encouraging. We're seeing strong engagement in social media and hearing directly from patients who are excited about Flex's sleek and discrete form factor.

And patients pediatrics and people with Type 2 especially appreciate Flex's large 300-unit insulin reservoir and our long-lasting 7-day extended infusion sets and the strong outcomes they get with our SmartGuard algorithm.

Physicians are responding to Flex as well, particularly with the simplicity of the setup. We're seeing that interest translate into a broader and growing prescriber base with new MiniMed prescribers up 24% year-over-year.

We're still in the early innings of the Flex U.S. launch with a strong growth runway in front of us. Late in Q1, we expanded the availability of Flex to Medicare and Medicare Advantage beneficiaries. And 2 weeks ago, on August 17, we announced that we started shipping MiniMed Flex with the Instinct sensor, a combination that many patients have been waiting for.

In Q1, we also began the U.S. launch of MiniMed Go, our smart MDI solution that remembers reminds and recommend and can help us reach more than 2.5 million people in the U.S. who are using multiple daily injections. We are in the early stages of that launch. Our dedicated primary care sales force was fully deployed at near the end of Q1 and is now gaining traction at target accounts, many of which are new to Minimed.

Providers are prescribing MiniMed Go directly from their EMR to MiniMed pharmacy, where we handle the billing and ship directly to the patient. Encouragingly, more than half of orders to date have come from patients who are new to MiniMed, reinforcing our ability to expand beyond our traditional customer base. Through our [ Smart Pen ] CGM and connected app MiniMed Go serves as a new entry point to the MiniMed ecosystem.

We're also beginning to see early examples of patients progressing to our AID therapies, reinforcing our vision of MiniMed Go as both a meaningful MDI opportunity in its own right and a pathway to our AID therapy for those who prefer to advance their care.

Now let me spend a moment on Type 2 because it represents one of the largest opportunities in AID, and we believe we're still at a relatively early stage in realizing its full potential. It's also an area where analysts and investors have had questions, particularly around long-term adoption and retention.

Importantly, the trends we're seeing in our own data are very encouraging. As we've discussed previously, approximately 40% of new starts in the U.S. come from Type 2 patients, and that trend continued into Q1.

In addition, we continue to see retention improve over time across both Type 1 and Type 2 patient populations. We believe that reflects the strength of our differentiated insulin delivery devices, which have specific features geared at Type 2 patients and their physicians.

Flex and Fit both have 300-unit insulin reservoir and up to 7 days of wear, a plus for type 2 patients that typically require more insulin in Type 1 patients and benefit from fewer change-out.

We also designed our algorithms to be easier to use, which helps both patients and their physicians. And that's evident already today. Real-world data was published on over 6,500 Type 2 patients using our SmartGuard algorithm in diabetes care earlier this year. which show that these Type 2 users achieved on average timing range well above the ADA guidelines without [ bolusing ], in effect running in fully closed loop.

Within this cohort, those Type 2 users that use our recommended settings achieved a time in range of 82%, a remarkable 12 points above ADA guidelines. We expect Vivera, our fully closed-loop algorithm currently under study, to build on this foundation and reduce burden placed on both patients and providers.

Turning to international, we grew 16.9% organic, including the benefit of the extra week. Excluding it, we grew low double digits. This was a strong broad-based growth across pump sensors and consumables.

Importantly, this growth is occurring in markets where automated insulin delivery remains significantly underpenetrated and where our commercial infrastructure, reimbursement capabilities and clinical evidence are real advantages. In many of these markets, we believe the AID opportunity is still ahead of us.

We had notable strength in Western Europe, our largest international market, which grew in the high teens. These are contested markets, and our new products are performing very well in them. European growth this quarter was driven by increased availability of new sensors, which is driving both strong CGM growth and strong pump revenue growth.

Our Simplera sensor supply increased by 3x versus last year, and this is making an impact in countries like France, where our pump sales increased over 20%. In addition, we began our European commercial launch of the Instinct 15-day sensor at the start of July. As a reminder, this allows us to reach more than 4.5 million avid sensor users on intensive insulin therapy and bringing them into the MiniMed ecosystem.

In the countries where Instinct has launched, we're seeing meaningful increases in pump sales, including over 50% growth in the United Kingdom. Q1 was also our first full quarter of our European launch of MiniMed Go, which resulted in several MDI tender wins.

Now turning to our pipeline, which represents the next phase of our growth. Earlier today, we announced that MiniMed Flex received CE Mark approval well ahead of our calendar year end target, and we now expect to begin our European launch in November of this year.

We've also advanced 2 significant products that will come to the U.S. market next. MiniMed Fit, our patch pump; and Vivera, our fully closed-loop algorithm. Both are expected to be on the market in calendar year '27, at which point we will have completely upgraded every aspect of our product portfolio. with a full offering across every form factor for insulin-taking patients.

Starting with MiniMed Fit, we have an important update to share with you today. We completed the 510(k) filing for Fit with FDA ahead of our four targets, and we now expect a full U.S. launch by summer next year.

Fit brings MiniMed's differentiated therapy platform to the fastest-growing segment of the insulin pump market. Patients should not have to choose between convenience and outcome, and Fit is designed to deliver both.

Fit combines several important advantages, including the only 300-unit reservoir on a patch pump up to 7 days of wear, waterproof design, persistent Bluetooth connectivity and iOS and Android availability from day 1, seamless integration with both Simplera and Instinct and importantly, access to our industry-leading algorithms.

We believe many patients are simply not looking for the convenience just a patch pump, they're also looking for the best outcomes. It will pay a highly differentiated patch platform with our SmartGuard algorithm at launch and a simple over-the-air upgradability to fully closed-loop capabilities when Vivera is available. As we said in June, we expect to have manufacturing capacity to support 20,000 patients at launch. And we have designed our production line to scale efficiently as demand grows.

Now moving to Vivera fully closed loop algorithm. I have more good news to share with you today. We have recently completed enrollment in our U.S. pivotal trial ahead of schedule. Having roughly half enrolled when we spoke to you in June, this achievement further reinforces our leadership in AID as MiniMed is the only company with a fully enrolled U.S. pivotal trial for a fully closed-loop algorithm.

This represents a major milestone for toward what we believe will be the most meaningful advancement in diabetes management since no fingersticks came to CGM. Vivera has the potential to expand the penetration of automated insulin delivery by dramatically reducing the burden in place in both patients and providers. We expect to have Vivera on the U.S. market in the second half of calendar year '27 for both MiniMed Flex and MiniMed Fit users.

Vivera is our third-generation algorithmic platform leveraging our meal detection technology to achieve the original vision behind automated insulin delivery, and that is the delivery of outstanding glycemic outcomes with very little burden on the user or prescriber.

Unlike competitors' AID systems that still rely on meal announcements or counting, extensive physician programming and patient interaction, the only thing that Vivera requires to get started is a patient's total daily insulin dose and does not require meal announcement.

And we expect Vivera to reduce these burdens while still delivering a timing range above ADA guidelines. In feasibility data that we presented at ATTD in March, Type 1 users on average exceeded ADA guidelines with no user input at all and were able to achieve 74% timing range.

Vivera is designed to meet people where they are. You can let Vivera handle meals on its own or count [ cars ] when you want more control while it keeps learning in the background. That is the advantage of the architecture. One system can deliver simplicity for the least engaged user and positioned for the most without forcing either into a separate product.

We believe Vivera's outcomes are possible because of advantages competitors simply cannot replicate quickly, including over a decade of proprietary insulin and CGM data, our digital twin technology that allows us to simulate millions of patient scenarios before entering clinical trials and an algorithm architecture originally designed to mimic the function of a healthy pancreas.

Vivera will launch through an over-the-air upgrade to our installed base, creating a powerful combination of clinical differentiation, scalability and commercial leverage. We do not view Vivera as the next version of an algorithm. We view it as a category-defining platform that brings fully closed-loop therapy to both Type 1 and Type 2 patients at scale, further expanding the gap between MiniMed and the competition.

Our fully closed-loop algorithm with either tubed or tubeless device options will be attracted to people on MDI and especially Type 2 users with the ultimate ease of use without compromising on glycemic control.

Finally, we're often asked what comes after Flex, Go, Fit and Vivera. Today, we can begin to answer that question. Our next-generation MiniMed extended wear sensor recently received IDE approval from the U.S. FDA, and we expect to begin our pivotal trial in October.

While we're not prepared to discuss the target wear duration or features at this stage, the sensor incorporates a new chemistry sensing platform relative to Simplera and represents the next step in our long-term sensor road map.

In addition to improving the user experience, our next-generation extended wear sensor will leverage the same manufacturing platform and production lines we use today, creating a direct path to both scale and margin expansion. As we continue to increase manufacturing output and improved yields, our longer wear sensor also allows us to spread sensor manufacturing costs over more days of use.

We expect this to be accretive to margins while strengthening our competitive position in a market where sensor longevity remains a key purchasing criterion.

Most importantly, this program demonstrates the innovation at MiniMed does not stop with the products scheduled to launch next year. We continue to invest aggressively in technologies that will define the next generation of diabetes management, including sensors, reinforcing our confidence in the durability of our product leadership, our long-term margin expansion opportunity and our ability to sustain growth well beyond our current product cycle. Flex, Go, Fit, Vivera and now our next-generation sensor. At MiniMed, we are building for the next quarter, the next year and the next decade.

With that, I'll turn it to Chad to walk through the Q1 financials and our guidance.

Chad Spooner

Thanks, Que. Q1 revenue was $843 million, up 15.8% organic, driven by an acceleration in our U.S. business which grew 13.1% and a strong 16.9% growth in international markets. As Que noted, our Q1 growth benefited from an extra week, giving our 52, 53-week fiscal calendar. We estimate the extra week added 1 to 1.5 percentage points of growth to the fiscal 2027, which translates into 4 to 6 points to Q1, consistent with our previous estimate.

Importantly, even excluding the benefit of the extra week, we saw accelerating demand trends across the business. Organic growth, excluding the extra week, was in the low double digits compared with 8.7% growth in Q4. Growth was driven by both pumps and CGM, which grew in the low 20% and the high teens, respectively, reflecting the success of our recent product launches.

Our continued sensor launches drove pump adoption globally, while the launch of MiniMed Flex in the U.S. further accelerated new pumps sold growth. This growth in pumps expands our installed base and creates future recurring revenue opportunities through CGM and consumables. Consumables grew low double digits in the quarter and together with CGM, represented 82% of our revenue, continuing to provide a durable and growing reoccurring revenue stream.

Q1 adjusted EBITDA was $83 million, resulting in an adjusted EBITDA margin of 9.9%. This included an approximate 230 basis points impact from two specific items: The acceleration of planned investment and a nonoperational FX remeasurement charge.

First, we elected to pull forward approximately $8 million of investment in support of key growth initiatives, including the Flex launch as well as accelerating the Fit FDA submission to deliver this milestone ahead of plan. This reduced Q1 EBITDA margin by approximately 90 basis points, but does not change our full year spending plans or EBITDA expectations as this was a timing shift of planned investment, not incremental spending.

Second, we recorded a $12 million FX remeasurement charge on balance sheet items, which reduced EBITDA margin by approximately 140 basis points. This nonoperational charge reflected changes in the value of foreign currency balances held on our balance sheet as exchange rates moved during the quarter.

Excluding these two timing-related and nonoperational items, adjusted EBITDA margin would have been 12.2% for the quarter, reflecting the underlying operational performance of the business. Our operational performance was affected by less favorable operating foreign exchange movements during the quarter, which had roughly similar impact to EBITDA margins as the balance sheet remeasurement.

During the quarter, we implemented our foreign exchange hedging program, which we expect will reduce the earnings impact of future currency volatility, including balance sheet remeasurement effects.

Importantly, our underlying business performance remains strong. Gross margin is trending ahead of the assumptions embedded in our original full year outlook, and we continue to deliver meaningful operating leverage across the business.

Together with the timing-related nature of the accelerated investment and the implementation of our foreign exchange hedging program, these factors support our confidence in delivering our full year EBITDA margin guidance.

Walking through Q1 P&L, our adjusted gross margin was 55.9%, ahead of our expectations. As we discussed previously, Simplera currently carries a lower margin than our legacy and interesting sensors, and that mix impact is reflected in our gross margin this year. However, Simplera yields are trending better than expected, resulting in less impact than we previously modeled for the full year.

Adjusted SG&A was 36.1% of revenue, an improvement of 30 basis points versus Q1 fiscal '26 or 70 basis points, excluding the pull forward of sales and marketing investments as we continue to drive efficiencies and leverage.

Adjusted R&D was 13.6% of revenue, R&D spend was down $2 million versus the prior year as we continue to drive efficiencies in clinical, engineering and operations R&D. R&D drove 260 basis points of improvement versus Q1 fiscal '20 or 300 basis points, excluding the pull forward of Fit investments.

Turning to our key business metrics. Q1 new pumps sold, or NPS, was 34,000, up 7.7% year-over-year. On a sequential basis, NPS was down, given normal Q4 to Q1 dynamics. As Que mentioned, U.S. NPS grew over 20% year-over-year, driven by the launch of Flex. NPS grew internationally as well as pump sales increased in Europe on new sensor launches.

Q1 CGM attachment rate was 69%, up 100 basis points from Q4 and an increase of 500 basis points year-over-year. As we launch our new products we expect our CGM attachment rate to continue to trend upwards as nearly every new MiniMed pump user is using our CGM to get the benefit of our SmartGuard automation.

Let me next talk about our readiness as a stand-alone company, including the progress we're making on TSA exits. As we've previously mentioned, we started with approximately 160 TSAs with Medtronic. Our dedicated teams have already exited 17 TSAs and continue to work alongside Medtronic to make significant progress across the remaining TSA portfolio. We remain confident that we'll exit the TSAs within the timelines we've established, most of which will occur in calendar 2027.

Importantly, these efforts continue to enhance our stand-alone capabilities while reducing our reliance on transition services over time, and they are allowing us to build a more focused, efficient and fit-for-purpose operating model for MiniMed.

Through this process, we continue to maintain a strong balance sheet and significant liquidity, ending the quarter with approximately $207 million of cash, no debt and an undrawn $500 million revolver.

As we continue to build out our stand-alone capabilities, we're also gaining increased visibility into underlying cash generation profile of the business. Operating cash flow in the quarter was a use of cash of $49 million and capital expenditures were $41 million. As a result, free cash flow was a use of cash of $90 million.

As we've discussed previously, our near-term cash flow profile reflects separation and stand-alone company build-out activities that are not indicative of the ongoing cash generation of the business. To provide additional transparency, we've included a cash flow bridge in today's earnings presentation.

Separation and standup-related activities consumed $111 million of cash during the quarter. Excluding those items, we generated $21 million of positive free cash flow. We're providing this additional visibility to illustrate the underlying cash generation of the stand-alone business and the rapidly improving cash flow profile that we expect to emerge as temporary separation and build-out activities roll off.

As we continue to execute our separation, exit TSAs and benefit from higher revenue, profitability and operating leverage; we expect cash generation to improve meaningfully over time.

Next, let's cover our outlook for the remainder of fiscal 2027. Given our strong start to the year and execution across the business, we're raising our fiscal 2027 organic revenue growth outlook to approximately 10.5% from our prior guidance of approximately 10%. This outlook continues to include the expected 1 to 1.5 percentage points benefit from the Q1 extra week.

Our increased revenue outlook is supported by accelerating growth in the U.S., strength in international markets and the successful execution of our recent product launches. We continue to see strong demand for MiniMed Flex and increasing adoption of our CGM sensors globally. As we look to Q2, reported growth rates will naturally normalize from Q1 as the extra benefit does not repeat.

Importantly, based on the positive trends we continue to see in the business today, we would expect organic revenue growth in both the U.S. and international markets to be more comparable to the underlying growth rates we delivered in Q1, excluding the extra week.

As I mentioned earlier, we are reaffirming our fiscal 2027 adjusted EBITDA margin guidance of approximately 16%. The underlying performance of the business remains strong. Gross margin is trending ahead of the assumptions embedded in our original outlook and is offsetting the foreign exchange impacts we experienced in Q1.

Combined with the continued operating leverage across the business, and our improved full year revenue growth outlook, these factors support our confidence in delivering our fiscal '27 EBITDA margin guidance.

As we look at quarterly cadence, we continue to expect EBITDA margin expansion over the course of the year. We expect EBITDA margins to improve from Q1 levels as we move throughout fiscal '27, with a larger portion of the improvement occurring in the second half of the year, similar to what we saw last year. This reflects building revenue and revenue growth contributions from our recent product launches, sequential gross margin improvement and increasing operating leverage across the business.

While we do not provide specific guidance in our key business metrics, we continue to expect growth in both new pumps sold and CGM attachment rates as we expand our installed base and continue rolling out our new products globally. For details on our guidance, see the guidance slide in our earnings presentation.

Que, back to you.

Que Dallara

Thanks, Chad. We're encouraged by the momentum we're seeing across the business. We delivered another quarter of strong growth, accelerated adoption of our newest products and advance our pipeline across multiple fronts. Most importantly, we continue to do what we said. Across both our commercial portfolio and pipeline, we are delivering against the commitments we made to investors and are doing so ahead of schedule.

2 weeks ago, we announced that we began shipping Flex with the Instinct sensor in the U.S. And today, we shared several important updates with you. We submitted the MiniMed Fit patch pump to the FDA ahead of our full target, and we expect the full U.S. launch next summer.

MiniMed Flex received CE Mark well ahead of our target of the end of the calendar year, and we expect full commercial launch starting in November of this year. We finished enrollment in Vivera U.S. pivotal trial and expect U.S. launch in the second half of calendar '27. And we received U.S. IDE approval for our next-generation extended wear sensor with a pivotal starting this October.

Taken together, these milestones highlight both the pace of innovation at MiniMed and our ability to consistently move the calendar to the left. More importantly, they reinforce the strategy we have been discussing for some time. We are building a complete platform for insulin-taking patients, smart pen, durable pump, patch pump, one algorithm, one app, one ecosystem.

What excites me most is that all these pieces are starting to come together. Flex is expanding our reach into new patients and helping us engage with many new accounts. Go is opening the door to millions of people on multiple daily injections. Fit will bring our differentiated technology platform to the fastest-growing segment of the insulin delivery market. And Vivera has the potential to make automated insulin delivery simpler and more accessible.

We believe the opportunity ahead remains significant. Automated insulin delivery remains greatly underpenetrated globally. Type 2 diabetes is still in the early stages of AID adoption, and millions of people continue to manage their diabetes with injections every day without the help of smart technology. We believe we're uniquely positioned to serve each of these populations with a broader portfolio better outcomes and a simpler user experience.

As we do that, we believe we create long-term shareholder value. We are expanding our installed base, we are increasing recurring revenue streams we are driving operating leverage, and we are investing behind the products and technologies that we believe will support sustainable growth for many years to come.

Before we open the line for questions, I'd like to thank our employees around the world. This quarter, our team launched products, advanced clinical programs, expanded manufacturing capacity, increased patient access and continue to deliver for customers while operating as a newly stand-alone company. Their commitment, dedication and passion for the people we serve continue to be one of MiniMed's greatest strength.

We talked today about growth. We've talked about innovation, and we've talked about execution. What gives me confidence is that all three are moving in the right direction at the same time. The opportunity remains large. The roadmap is strong, and our focus remains the same, do what we say, continue innovating and continue creating long-term value for patients, providers and shareholders.

With that, let's go to Q&A. Operator?

Operator

[Operator Instructions] Our first question in queue coming from the line of Travis Steed with Bank of America.

Fragen und Antworten

Travis Steed

Congrats on the updates on the pipeline. I guess with Fit, just the 20,000 at launch reiterated, if it gets approved early, could that launch 20,000 still be the case? Are you going to be ready at launch no matter when the approval comes and how does that scale over time?

And for Vivera, what else is left between now and approval and the kind of key milestones that you need to complete? And when you have kind of both of those product in the portfolio, how do you think about new patient starts accelerating in this business?

Que Dallara

Thanks, Travis. In terms of the Fit launch volume capacity, we're working on that. We're focused on getting ready for commercial launch. Obviously, we run multiple scenarios. I think you've seen from our track record that we want to be prepared for if a happy event and things are early that we're ready. So that's one of the tenors that we run. And so now we're running water through the pipes, making sure that our yields and output are there, and we're already planning for additional capacity beyond the 20,000.

On Vivera, the last -- we've completed enrollment. The study is 3 months, and we're very excited with this trial, we're excited to see the data. So once the last patient is completed, we locked down the database, we obviously run a lot of analytics and prepared for the submission. But those are the steps.

And I think the combination of the patch pump with a fully closed-loop algorithm is really a killer app in the market. And we think that the product will do extremely well. It's not just the patch form factor, but the fact that patients really without any input can achieve above the ADA guidelines.

Travis Steed

Great. That's helpful. And Chad, maybe a follow-up on margins. I don't know any other color on the $8 million in investment this quarter on Fit and Flex acceleration that you'd provide and -- but more importantly, kind of moving forward, calling for gross margin expansion, more leverage on the P&L later in the second half of this year; just give any other color building confidence in the margin expansion moving forward would be helpful.

Chad Spooner

Yes, of course. Thanks, Travis. From an investment standpoint, we felt it was important for us to really support our innovation and the pull forwards that we've seen with both Flex and Fit.

So for example, for Fit, we used $4 million with outside vendors to help accelerate the submission. And they do things like actually testing the units and validation, so things that we can use third parties to accelerate our submissions for. We actually used those and brought those in a little bit early to make sure that we hit that early submission date that we wanted to do.

And then from a Flex investment standpoint, we want to make sure since we pulled it forward, we went out as strong as possible and did things at sales and marketing with ads and online where you can do investments and pull those in. We did another 4 million in things of that sort. So very targeted, very specific monies that we were going to spend in the next quarter or so that will not repeat, so they do not have an impact on the full year EBITDA.

And then from a gross margin standpoint, yes, we're very happy, excited by the progress we've seen on two fronts. First is on Simplera, we've talked about his Simplera will have a negative impact on the margin for the current year, but we're seeing better yields than we had anticipated initially. We're doing a lot of work from a manufacturing side, and that's resulting in better yields.

So the second half of the year, we'll have better gross margins. And also, our warranty expense is much better than we expected as product reliability goes up. So things that we have clear line of sight to that gives us confidence in those numbers.

Operator

Next question coming from the line of Patrick Wood with UBS.

Patrick Wood

Beautiful. I'll keep it just to one. Were you guys surprised by the incremental pump shipments following Instinct? I mean you mentioned the U.K. and other side of things. And I guess the way I'm sort of thinking about it is looking forward and thinking about Flex, Vivera and everything else like that; do you think the ability to take share of patients is perhaps faster than you might have thought otherwise? Or put another way, people are just more willing to switch than maybe we had thought when you have a better solution in the market?

Que Dallara

Patrick, I think, look, the market is expanding. And I think if we just look at the data that we're seeing in the U.S. for Flex, we are seeing the majority of our new customers coming from MDI. So that shows you that's an expanding market.

What we've also seen is that our competitive conversions, competitive conversions systems, have doubled versus a year ago. So that's very encouraging from building the installed base. And we expect a similar experience when Flex is launched in November in Europe. Obviously, new CGMs help that as well. That's been Achilles' heel for a very long time. But the new form factors coming out there, that's also driving pump growth.

When you look at new pumps sold in the U.S., as an example, up 20%, another indicator, I would say that's very consistent is our new -- the number of prescribers writing MiniMed Flex is up 24%. So when we look at all these indicators, they are moving in the same direction. And so I think net-net, with all these new products coming out, we believe our ability to drive share gains as well as growth in the expanding market is enhanced.

Operator

Our next question comes from Lawrence Biegelsen with Wells Fargo.

Larry Biegelsen

Congrats on a nice quarter here. Two for me. I'll ask upfront. Just one on MiniMed. How are you thinking about deferrals ahead of the launch, we saw a little bit with Flex?

And second, Que, please, given that I think you said over 40% or 40% of new starts are Type 2. Just give us a little more color on Type 2 attrition? How does it compare to Type 1? Why do you think your retention would be higher than one of your competitors?

Que Dallara

Larry, on Fit the waiting mode, we actually think that Fit will address the new segment of patients that want a pathform factor. I think if you look at our installed base, I'm sure some of them may want a path, but the reality is if they wanted a patch, they would have gone to a patch by now. So we think that MDI patients and people who really like that form factor will be new to MiniMed and that's what Fit will address.

On your question about Type 2 attrition, I would say a couple of things. One is we've seen our retention improve quite a bit from both Type 1 and Type 2 versus, say, a few years ago. And that's really driven by two things. One is the -- obviously, the new product innovations help that a lot. You need to have that. But that's a necessary but not sufficient condition.

We have a very large clinical team. And for years, we run a program called StartRight. It's really helping customers onboard the therapy very quickly and that they're successful on therapy through sensor changes and troubleshooting with strategic touch points. And then we have [ StayRight ] program that also, again, from 6 months to 4 years, we also keep in touch with them because this is a long -- lifelong relationship, and we want them to do well.

And so the programs in addition to the innovation really helped us improve retention, and we're not seeing anything alarming at all from an attrition standpoint in Type 2. If anything, it's improved.

And then I would also say that the product portfolio we have with the larger reservoir, the longer wear; it really has a better product market fit with Type 2s, which is why we're excited with Fit, we've cited with the outcomes. But also just I think we're the only patch pump coming to the market with a 300-unit reservoir.

Operator

Our next question is coming from the line of Marie Thibault with U.S. Bank of BTIG.

Marie Thibault

The OUS launch of Flex that we'll have coming up here in November. Just how should we think about that ramp relative to the U.S. experience and then again, I guess, the question of potential deferrals as maybe patients look forward to that pump in the next fiscal quarter?

Que Dallara

Yes, let me take the first part. It will be similar to the U.S. We have plenty of capacity. We typically roll out in ways of countries. And we expect that we'll have a very similar ramp. Again, it starts -- the launch will be with Simplera initially, followed by Instinct. And then, Chad, maybe you can comment on the waiting line.

Chad Spooner

Yes. So we've actually incorporated waiting mode into our forecast for OUS. One of the things that we do have with OUS having such a variety of different countries, we have very strong quarters starting in certain Western European countries, given the adoption and integration of Instinct.

So we have a lot of momentum right now in certain countries, which is really putting us off to a strong start to this quarter, which helps us offset some of the waiting mode that we may see, which we've incorporated in our forecast.

Que Dallara

I think we're going to take two more questions here. So we'll go to the next question, please, Olivia.

Operator

Next question coming from the line of Anthony Petrone with Mizuho Group.

Unknown Analyst

This is Dimitry on for Anthony. Once again, congrats on the quarter. It's good to see the performance and growth in the U.S. But I had a quick one on international. I know last quarter, you gave some color on new pump starts, quarter-on-quarter, was high single digits. I don't know if it was you're providing any color for that quarter-on-quarter growth this quarter.

And I know at least one of your competitors increasing their efforts in the international arena. And I wanted to know if you're seeing any competitive pressures there with new pump starts attrition.

Que Dallara

Yes. I think -- look, we are very encouraged with new pump starts. I think, in the commentary, we mentioned that in France, pumps were up 20%; in the U.K., up 50%, and these are contested market. So CGM is having an impact. And I think the pump is eagerly -- the Flex pump is eagerly anticipated as well will be the first upgrade in 60 years. And so we expect it to do incredibly well even in contested markets.

Unknown Analyst

Okay. Sounds great. And just a quick follow-up. I know you guys said you expect to ramp -- have many benefit at full launch mid-'27. So is the timing for approval -- what are you guys expecting like a 3-month or a 6-month approval and then kind of just to get an idea of the pace of the ramp?

Que Dallara

We can't really predict what the agency process will be. We're always hopeful for early approval, of course. But that's not something we can predict. But as we -- as I mentioned, we always plan for different scenarios and we want to be ready as soon as approval comes, we'll be ready to launch commercially.

Operator

Last question will come from the line of Joanne Wuensch with Citi.

Joanne Wuensch

Based on your commentary for summer of '27 FDA approval, it sounds like your milestone payment will be more of a first quarter fiscal year '28 than the second quarter of fiscal year '28 event. Can you just confirm if I'm thinking about that correctly?

And then just a quick follow-up, which is if your physicians are talking to patients and they have to talk about new Flex option and Fit coming, how do you guide or suspect that they are having those conversations?

Chad Spooner

Joanne, first in regarding to the Fit charges, we do not have it in our fiscal year '27 because as Que said, we can't predict when the agency will approve. But obviously, once they do approve just like with Flex, we'll announce that, and then we will -- once we commercialize, we'll have a $162 million charge for Fit, but that is not in our forecast for this year.

Que Dallara

Joanne, I think, look, I've done a lot of visits in the field, I would say there's just renewed interest starting with CGM. We saw just excitement around that. And with Flex coming out, again, an uptick in interest, then I suspect that there's going to be a large addressable audience from a patch pump standpoint that love our algorithm.

They want to be part of our ecosystem, but they want the patch form factor, and we'll have that starting with SmartGuard, but with a quick follow with Vivera. So we're really excited with really the rolling thunder that's coming out in the full stack experience they're going to have.

The other thing I'll mention is the apps that you get from MiniMed Go, from Flex, very similar look and feel. And so that really helps users when they onboard into our system to stay within our ecosystem.

Ryan Weispfenning

Okay. Thank you, Joanne. And for those analysts we didn't get to today, we're happy to follow up with you after the call. I'd also like to thank everyone for joining us today and for your continued interest in MiniMed. We appreciate the engagement and thoughtful dialogue as we continue to execute against our roadmap. We look forward to updating you on our progress and sharing more color with you on our Q2 earnings call later this fall. So with that, thank you for your time today, and have a great rest of your day.

Operator

This concludes our conference call. Thank you for your participation. You may now disconnect.