Stryker Corporation

07/31/2026 | Press release | Distributed by Public on 07/31/2026 09:41

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ABOUT STRYKER
Stryker Corporation ("we" or the "Company") is a global leader in
medical technologies and, together with our customers, we are
driven to make healthcare better. We offer innovative products
and services in MedSurg, Neurotechnology, and Orthopaedics
that help improve patient and healthcare outcomes. Alongside
our customers around the world, we impact more than 150 million
patients annually. Our goal is to achieve sales growth at the high-
end of the medical technology (MedTech) industry and maintain
our long-term capital allocation strategy that prioritizes: (1)
Acquisitions, (2) Dividends and (3) Share repurchases.
MedSurg and Neurotechnology products include surgical
equipment, patient and caregiver safety technologies, and a
comprehensive line of products for traditional brain and open
skull-based surgical procedures orthobiologic and biosurgery
products, including synthetic bone grafts and vertebral
augmentation (Instruments), endoscopic and communications
systems (Endoscopy), patient handling, emergency medical
equipment, intensive care disposable products, clinical
communication and artificial intelligence-assisted virtual care
platform technology (Medical), and minimally invasive products
for the treatment of acute ischemic and hemorrhagic stroke and
venous thromboembolism (Vascular). Orthopaedics products
include implants and surgical equipment such as navigation
systems and robotics used in total joint replacements, such as
hip, knee and shoulder, ankle and trauma and extremities
surgeries. We bring patients and physicians advanced implant
designs and specialized instrumentation that make orthopaedic
surgery and recovery simpler, faster and more effective. We
support surgeons with technologies, products and services they
need to support each patient's clinical challenge.
Overview of the Three and Six Months
In the three months 2026 we achieved sales growth of 9.4% from
2025. Excluding the impact of acquisitions and divestitures, sales
grew 9.0% in constant currency. We reported operating income
margin of 25.2%, net earnings of $1,276 and net earnings per
diluted share of $3.30. Excluding the impact of certain items,
adjusted operating income margin(1) increased by 170 basis
points to 27.4%, with adjusted net earnings(1) of $1,424 and
adjusted net earnings per diluted share(1) of $3.69, an increase of
17.9% from 2025.
In the six months 2026 we achieved sales growth of 6.1% from
2025. Excluding the impact of acquisitions and divestitures, sales
grew 5.8% in constant currency. We reported operating income
margin of 20.6%, net earnings of $2,021 and net earnings per
diluted share of $5.23. Excluding the impact of certain items,
adjusted operating income margin(1) increased by 10 basis points
to 24.4%, with adjusted net earnings(1) of $2,428 and adjusted
net earnings per diluted share(1) of $6.29, an increase of 5.4%
from 2025.
(1) Refer to "Non-GAAP Financial Measures" for a discussion of non-
GAAP financial measures used in this report and a reconciliation to the
most directly comparable GAAP financial measure.
CONSOLIDATED RESULTS OF OPERATIONS
Three Months
Six Months
Percent Net
Sales
Percentage
Percent Net
Sales
Percentage
2026
2025
2026
2025
Change
2026
2025
2026
2025
Change
Net sales
$6,589
$6,022
100.0%
100.0%
9.4%
$12,609
$11,888
100.0%
100.0%
6.1%
Gross profit
4,498
3,841
68.3
63.8
17.1
8,308
7,585
65.9
63.8
9.5
Research, development and engineering expenses
6.6
6.8
6.6
6.7
6.8
4.3
Selling, general and administrative expenses
2,229
2,079
33.8
34.5
7.2
4,510
4,379
35.8
36.8
3.0
Amortization of intangible assets
2.7
3.1
(6.4)
2.8
3.0
0.3
Goodwill and other impairments
-
0.9
nm
-
0.8
nm
Interest expense
(141)
(159)
(2.1)
(2.6)
(11.3)
(289)
(296)
(2.3)
(2.5)
(2.4)
Other income
0.7
1.0
(25.8)
0.9
1.1
(14.3)
Income taxes
nm
nm
118.2
nm
nm
62.4
Net earnings
$1,276
$884
19.4%
14.7%
44.3%
$2,021
$1,538
16.0%
12.9%
31.4%
Net earnings per diluted share
$3.30
$2.29
44.1%
$5.23
$3.98
31.4%
Adjusted net earnings per diluted share(1)
$3.69
$3.13
17.9%
$6.29
$5.97
5.4%
nm - not meaningful
Dollar amounts are in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2026 Second Quarter Form 10-Q
SALES GROWTH ANALYSIS
Three Months
Six Months
Percentage Change
Percentage Change
2026
2025
As
Reported
Constant
Currency
2026
2025
As
Reported
Constant
Currency
MedSurg and Neurotechnology:
Instruments
United States
$840
$776
8.4%
8.4%
$1,606
$1,478
8.7%
8.7%
International
13.9
12.3
13.9
9.6
Total
$1,003
$918
9.3%
9.0%
$1,923
$1,756
9.6%
8.9%
Endoscopy
United States
$819
$742
10.2%
10.2%
$1,520
$1,452
4.6%
4.6%
International
18.8
16.5
12.4
8.1
Total
$1,004
$899
11.7%
11.3%
$1,872
$1,766
6.0%
5.3%
Medical
United States
$945
$840
12.6%
12.6%
$1,692
$1,642
3.1%
3.1%
International
17.9
15.0
13.2
8.1
Total
$1,122
$990
13.4%
13.0%
$2,024
$1,935
4.6%
3.9%
Vascular
United States
$250
$268
(6.7)%
(6.7)%
$530
$471
12.5%
12.5%
International
6.3
4.0
11.3
7.1
Total
$496
$498
(0.7)%
(1.8)%
$1,013
$904
11.9%
9.9%
MedSurg and Neurotechnology
United States
$2,854
$2,626
8.7%
8.7%
$5,348
$5,043
6.1%
6.1%
International
13.3
11.1
1,484
1,318
12.5
8.1
Total
$3,625
$3,305
9.7%
9.2%
$6,832
$6,361
7.4%
6.5%
Orthopaedics:
Knees
United States
$488
$460
6.2%
6.2%
$960
$924
3.8%
3.8%
International
14.0
12.4
13.7
9.2
Total
$693
$640
8.4%
8.0%
$1,363
$1,279
6.6%
5.3%
Hips
United States
$296
$283
4.9%
4.9%
$572
$552
3.6%
3.6%
International
-
(0.8)
2.9
(0.6)
Total
$479
$466
2.9%
2.6%
$939
$909
3.3%
1.9%
Trauma and Extremities
United States
$791
$702
12.5%
12.5%
$1,558
$1,415
10.1%
10.1%
International
10.3
8.5
12.7
7.7
Total
$1,072
$957
11.9%
11.5%
$2,107
$1,902
10.7%
9.4%
Ortho Tech
United States
$530
$483
9.5%
9.5%
$997
$942
5.8%
5.8%
International
12.8
11.8
12.9
9.2
Total
$717
$649
10.3%
10.0%
$1,363
$1,266
7.6%
6.7%
$2,961
$2,712
9.2%
8.8%
$5,772
$5,356
7.7%
6.5%
Spinal Implants
United States
$-
$-
(100.0)%
(100.0)%
$-
$118
(100.0)%
(100.0)%
International
(36.7)
(40.9)
(90.2)
(91.2)
Total
$3
$5
(36.7)%
(40.9)%
$5
$171
(96.9)%
(97.1)%
Orthopaedics
United States
$2,105
$1,928
9.1%
9.1%
$4,087
$3,951
3.4%
3.4%
International
8.9
7.6
1,690
1,576
7.2
3.0
Total
$2,964
$2,717
9.1%
8.7%
$5,777
$5,527
4.5%
3.3%
Geographic:
United States
$4,959
$4,554
8.9%
8.9%
$9,435
$8,994
4.9%
4.9%
International
1,630
1,468
11.0
9.2
3,174
2,894
9.7
5.3
Total
$6,589
$6,022
9.4%
9.0%
$12,609
$11,888
6.1%
5.0%
Note: In the first quarter 2026 we announced a change in our organizational structure. Our new Ortho Tech business combines the
orthopaedic instruments portfolio (Orthopaedic Instruments) from Instruments with Other Orthopaedics. In addition, Neuro Cranial and
the spine enabling technologies portfolio (Enabling Technologies) from Other Orthopaedics were combined with the remaining
Instruments business to align with our internal reporting structure. Ortho Tech includes sales related to Orthopaedic Instruments of $523
and $501 and Other Orthopaedics of $194 and $148 for the three months 2026 and 2025. For the six months 2026 and 2025 Ortho
Tech includes sales related to Orthopaedic Instruments of $1,012 and $985 and Other Orthopaedics of $351 and $281. Instruments
includes sales related to Neuro Cranial of $681 and $616 and Enabling Technologies of $28 and $34 for the three months 2026 and
2025. For the six months 2026 and 2025 Instruments includes sales related to Neuro Cranial of $1,287 and $1,179 and Enabling
Technologies of $54 and $63. We have reflected these changes in all historical periods presented.
Dollar amounts are in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2026 Second Quarter Form 10-Q
Consolidated Net Sales
Consolidated net sales increased 9.4% in the three months 2026
as reported and 9.0% in constant currency, as foreign currency
exchange rates positively impacted net sales by 0.4%. Net sales
in constant currency increased by 9.0% from increased unit
volume. The unit volume increase was due to higher product
shipments across most MedSurg and Neurotechnology
businesses and all Orthopaedics businesses.
Consolidated net sales increased 6.1% in the six months 2026 as
reported and 5.0% in constant currency as foreign currency
exchange rates positively impacted net sales by 1.1%. Excluding
the (0.8)% impact of acquisitions and divestitures, net sales in
constant currency increased by 5.6% from increased unit volume
and 0.2% due to higher prices. The unit volume increase was due
to higher product shipments across all MedSurg and
Neurotechnology businesses and all Orthopaedics businesses.
MedSurg and Neurotechnology Net Sales
MedSurg and Neurotechnology net sales increased 9.7% in the
three months 2026 as reported and 9.2% in constant currency, as
foreign currency exchange rates positively impacted net sales by
0.5%. Net sales in constant currency increased by 9.1% from
increased unit volume and 0.1% from higher prices. The unit
volume increase was due to higher shipments across most
Medsurg and Neurotechnology businesses.
MedSurg and Neurotechnology net sales increased 7.4% in the
six months 2026 as reported and 6.5% in constant currency, as
foreign currency exchange rates positively impacted net sales by
0.9%. Excluding the 1.3% impact of acquisitions and divestitures,
net sales in constant currency increased by 4.9% from increased
unit volume and 0.3% from higher prices. The unit volume
increase was due to higher shipments across all MedSurg and
Neurotechnology businesses.
Orthopaedics Net Sales
Orthopaedics net sales increased 9.1% in the three months 2026
as reported and 8.7% in constant currency, as foreign currency
exchange rates positively impacted net sales by 0.4%. Excluding
the 0.1% impact of acquisitions and divestitures, net sales in
constant currency increased 8.6% from increased unit volume.
The unit volume increase was due to higher shipments across all
Orthopaedics businesses.
Orthopaedics net sales increased 4.5% in the six months 2026 as
reported and 3.3% in constant currency, as foreign currency
exchange rates positively impacted net sales by 1.2%. Excluding
the (3.1)% impact of acquisitions and divestitures, net sales in
constant currency increased 6.4% from increased unit volume.
The unit volume increase was due to higher shipments across all
Orthopaedics businesses.
Gross Profit
Gross profit was $4,498 and $3,841 in the three months 2026
and 2025. The key components of the change were:
Gross Profit
Percent Net Sales
Three Months 2025
63.8%
Volume and mix
70 bps
Manufacturing and supply chain costs
(30) bps
Structural optimization and other special charges
40 bps
Inventory stepped up to fair value
110 bps
Reversal of 2025 tariffs
260 bps
Three Months 2026
68.3%
Gross profit as a percentage of net sales in the three months
2026 increased to 68.3% from 63.8% in 2025 primarily driven by
a reduction of certain import tariffs and lower amortization of
inventory stepped up to fair value.
Gross profit was $8,308 and $7,585 in the six months 2026 and
2025. The key components of the change were:
Gross Profit
Percent Net Sales
Six Months 2025
63.8%
Sales pricing
10 bps
Volume and mix
40 bps
Manufacturing and supply chain costs
(100) bps
Structural optimization and other special charges
50 bps
Inventory stepped up to fair value
80 bps
Reversal of 2025 tariffs
130 bps
Six Months 2026
65.9%
Gross profit as a percentage of net sales in the six months 2026
increased to 65.9% from 63.8% in 2025 driven by a reduction of
certain import tariffs and lower amortization of inventory stepped
up to fair value partially offset by higher manufacturing and
supply chain costs primarily due to idle production time related to
the cybersecurity incident in the first quarter 2026.
While segment mix was not a significant driver of the change in
gross profit as a percent of net sales between the six months
2026 and 2025, we generally expect segment mix to have an
unfavorable impact for the foreseeable future as we anticipate
more rapid sales growth in our lower gross margin MedSurg and
Neurotechnology segment than our Orthopaedics segment.
Research, Development and Engineering Expenses
Research, development and engineering expenses increased
$27 or 6.6% in the three months 2026 and $35 or 4.3% in the six
months 2026. Expenses as a percentage of net sales of 6.6% in
the three months and 6.7% in the six months 2026 remained
relatively flat with 6.8% in the three and six months 2025.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $150 or
7.2% in the three months 2026. As a percentage of net sales,
expenses decreased to 33.8% from 34.5% in 2025, primarily due
to continued spend discipline and lower acquisition and
integration-related charges partially offset by higher structural
optimization and other special charges.
Selling, general and administrative expenses increased $131 or
3.0% in the six months 2026. As a percentage of net sales,
expenses decreased to 35.8% from 36.8% in 2025, primarily due
to lower acquisition-related costs and continued spend discipline
partially offset by higher structural optimization and other special
charges. Expenses in the six months 2025 included a charge of
$139 for share-based awards for Inari employees that vested
upon our acquisition.
Amortization of Intangible Assets
Amortization of intangible assets was $175 and $187 in the three
months and $355 and $354 in the six months 2026 and 2025.
Refer to Note 7 to our Consolidated Financial Statements for
further information.
Goodwill and Other Impairments
Goodwill and other impairments was $1 and $55 in the three
months and $1 and $90 in the six months 2026 and 2025.
Operating Income
Operating income was $1,659 and $1,113 in the three months
2026 and 2025. Operating income as a percentage of net sales in
the three months 2026 increased to 25.2% from 18.5% in 2025.
Refer to the discussion above for the primary drivers of the
Dollar amounts are in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2026 Second Quarter Form 10-Q
change.
Operating income was $2,595 and $1,950 in the six months 2026
and 2025. Operating income as a percentage of net sales in the
six months 2026 increased to 20.6% from 16.4% in 2025. Refer
to the discussion above for the primary drivers of the change.
MedSurg and Neurotechnology operating income as a
percentage of net sales increased to 28.1% in the three months
2026 from 25.6% in 2025. Orthopaedics operating income as a
percentage of net sales increased to 34.0% in the three months
2026 from 33.1% in 2025. The key components of the change
were:
Operating Income
Percent Net Sales
MedSurg and
Neurotechnology
Orthopaedics
Three Months 2025
25.6%
33.1%
Volume
60 bps
50 bps
Manufacturing and supply chain costs
60 bps
(20) bps
Research, development and
engineering expenses
(10) bps
40 bps
Selling, general and administrative
expenses
140 bps
20 bps
Three Months 2026
28.1%
34.0%
The increase in MedSurg and Neurotechnology operating income
as a percentage of net sales for the three months was primarily
driven by lower selling, general and administrative expenses,
lower manufacturing and supply chain costs and higher unit
volumes, partially offset by higher research, development and
engineering expenses.
The increase in Orthopaedics operating income as a percentage
of net sales for the three months was primarily driven by higher
unit volumes, lower research, development and engineering
expenses and lower selling, general and administrative
expenses, partially offset by higher manufacturing and supply
chain costs.
MedSurg and Neurotechnology operating income as a
percentage of net sales of 25.2% in the six months 2026
remained flat with 2025. Orthopaedics operating income as a
percentage of net sales increased to 32.1% in the six months
2026 from 31.7% in 2025. The key components of the change
were:
Operating Income
Percent Net Sales
MedSurg and
Neurotechnology
Orthopaedics
Six Months 2025
25.2%
31.7%
Sales pricing
10 bps
0 bps
Volume
40 bps
20 bps
Manufacturing and supply chain costs
(70) bps
(100) bps
Research, development and
engineering expenses
(20) bps
40 bps
Selling, general and administrative
expenses
40 bps
80 bps
Six Months 2026
25.2%
32.1%
MedSurg and Neurotechnology operating income as a
percentage of net sales for the six months remained flat and was
primarily driven by lower selling, general and administrative
expenses and higher unit volumes and prices, offset by higher
manufacturing and supply chain costs and research,
development and engineering expenses.
The increase in Orthopaedics operating income as a percentage
of net sales for the six months was primarily driven by lower
selling, general and administrative expenses, lower research,
development and engineering expenses and higher unit volumes,
partially offset by higher manufacturing and supply chain costs.
Interest Expense
Interest expense was $141 and $159 in the three months and
$289 and $296 in the six months 2026 and 2025. The decrease
in interest expense in the three months and six months 2026 from
2025 was due to lower outstanding debt and credit facilities
partially offset by higher average interest rates.
Other Income
Other income was $46 and $62 in the three months and $108
and $126 in the six months 2026 and 2025. The decrease in
other income in the three and six months 2026 from 2025 was
primarily due to lower interest income in 2026.
Income Taxes
Our effective tax rates were 18.4% and 16.3% in the three and
six months 2026 and 13.0% and 13.6% in the three and six
months 2025. The effective tax rate for the three and six months
2026 increased from the three and six months 2025 due to the
2025 tax benefit related to the sale of the Spinal Implants
business. The effective tax rates for the three and six months
2026 and 2025 reflect the continued lower effective income tax
rates as a result of our European operations and certain discrete
tax items.
Our future results of operations could be affected by changes in
the effective tax rate as a result of changes in tax laws,
regulations and judicial rulings. We are continuing to evaluate the
impact of tax reform in the countries in which we operate as new
guidance is published and new regulations are adopted.
Net Earnings
Net earnings increased to $1,276 or $3.30 per diluted share in
the three months 2026 from $884 or $2.29 per diluted share in
2025. Net earnings increased to $2,021 or $5.23 per diluted
share in six months 2026 from $1,538 or $3.98 per diluted share
in 2025. Refer to the discussion above for the primary drivers of
the change.
Non-GAAP Financial Measures
We supplement the reporting of our financial information
determined under accounting principles generally accepted in the
United States (GAAP) with certain non-GAAP financial measures,
including percentage sales growth in constant currency;
percentage organic sales growth; adjusted gross profit; adjusted
selling, general and administrative expenses; adjusted research,
development and engineering expenses; adjusted operating
income; adjusted other income (expense), net; adjusted income
taxes; adjusted effective income tax rate; adjusted net earnings;
and adjusted net earnings per diluted share (Diluted EPS). We
believe these non-GAAP financial measures provide meaningful
information to assist investors and shareholders in understanding
our financial results and assessing our prospects for future
performance. Management believes percentage sales growth in
constant currency and the other adjusted measures described
above are important indicators of our operations because they
exclude items that may not be indicative of or are unrelated to our
core operating results and provide a baseline for analyzing trends
in our underlying businesses. Management uses these non-
GAAP financial measures for reviewing the operating results of
reportable business segments and analyzing potential future
business trends in connection with our budget process and bases
certain management incentive compensation on these non-GAAP
financial measures. To measure percentage sales growth in
constant currency, we remove the impact of changes in foreign
currency exchange rates that affect the comparability and trend
Dollar amounts are in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2026 Second Quarter Form 10-Q
of sales. Percentage sales growth in constant currency is
calculated by translating current and prior year results at the
same foreign currency exchange rate. To measure percentage
organic sales growth, we remove the impact of changes in
foreign currency exchange rates, acquisitions and divestitures,
which affect the comparability and trend of sales. Percentage
organic sales growth is calculated by translating current year and
prior year results at the same foreign currency exchange rates
excluding the impact of acquisitions and divestitures. To measure
earnings performance on a consistent and comparable basis, we
exclude certain items that affect the comparability of operating
results and the trend of earnings. The income tax effect of each
adjustment was determined based on the tax effect of the
jurisdiction in which the related pre-tax adjustment was recorded.
These adjustments are irregular in timing and may not be
indicative of our past and future performance. The following are
examples of the types of adjustments that may be included in a
period:
1.Acquisition and integration-related costs. Costs related to
integrating recently acquired businesses (e.g., costs
associated with the termination of sales relationships,
employee retention and workforce reductions, manufacturing
integration costs and other integration-related activities),
changes in the fair value of contingent consideration,
amortization of inventory stepped-up to fair value, specific
costs (e.g., deal costs and costs associated with legal entity
rationalization) related to the consummation of the
acquisition process and legal entity rationalization and
acquisition-related tax items.
2.Amortization of purchased intangible assets. Periodic
amortization expense related to purchased intangible assets.
3.Structural optimization and other special charges. Costs
associated with employee retention and workforce
reductions, the closure or transfer of manufacturing and
other facilities (e.g., site closure costs, contract termination
costs and redundant employee costs during the work
transfers), product line exits (primarily inventory, long-lived
asset and specifically-identified intangible asset write-offs),
certain long-lived and intangible asset write-offs and
impairments and other charges.
4.Medical device regulations. Costs specific to updating our
quality system, product labeling, asset write-offs and product
remanufacturing to comply with the new medical device
reporting regulations and other requirements of the
European Union.
5.Recall-related matters. Changes in our best estimate of the
probable loss, or the minimum of the range of probable
losses when a best estimate within a range is not known, to
resolve the Rejuvenate, LFIT V40, Wright legacy hip
products and other product recalls.
6.Regulatory and legal matters. Changes in our best estimate
of the probable loss, or the minimum of the range of
probable losses when a best estimate within a range is not
known, to resolve certain regulatory or other legal matters
and the amount of favorable awards from settlements.
7.Tax matters. Impact of accounting for certain significant and
discrete tax items.
Because non-GAAP financial measures are not standardized, it
may not be possible to compare these financial measures with
other companies' non-GAAP financial measures having the same
or similar names. These adjusted financial measures should not
be considered in isolation or as a substitute for reported sales
growth, gross profit, selling, general and administrative expenses,
research, development and engineering expenses, operating
income, other income (expense), net, income taxes, effective
income tax rate, net earnings and net earnings per diluted share,
the most directly comparable GAAP financial measures. These
non-GAAP financial measures are an additional way of viewing
aspects of our operations when viewed with our GAAP results
and the reconciliations to corresponding GAAP financial
measures at the end of the discussion of Consolidated Results of
Operations below. We strongly encourage investors and
shareholders to review our financial statements and publicly-filed
reports in their entirety and not to rely on any single financial
measure.
The weighted-average diluted shares outstanding used in the
calculation of adjusted net earnings per diluted share are the
same as those used in the calculation of reported net earnings
per diluted share for the respective period.
Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2026
Gross
Profit
Selling,
General &
Administrative
Expenses
Research,
Development &
Engineering
Expenses
Operating
Income
Other
Income
(Expense),
Net
Income
Taxes
Net
Earnings
Effective
Tax Rate
Diluted
EPS
Reported
$4,498
$2,229
$434
$1,659
$(95)
$288
$1,276
18.4%
$3.30
Reported percent net sales
68.3%
33.8%
6.6%
25.2%
(1.4)%
nm
19.4%
Acquisition and integration-related costs:
Inventory stepped-up to fair value
-
-
-
-
-
-
-
-
-
Other acquisition and integration-related (a)
(14)
(4)
-
-
0.06
Amortization of purchased intangible assets
-
-
-
-
0.3
0.37
Structural optimization and other special charges (b)
(89)
(1)
(6)
0.3
0.18
Goodwill and other impairments (c)
-
-
-
-
-
-
-
Medical device regulations (d)
-
-
(5)
-
-
0.01
Recall-related matters (e)
(1)
(3)
-
-
-
-
Regulatory and legal matters (f)
-
(3)
-
-
-
-
-
Tax matters (g)
-
-
-
-
-
(39)
(2.5)
0.11
Reversal of 2025 tariffs
(158)
-
-
(158)
-
(25)
(133)
-
(0.34)
Adjusted
$4,351
$2,120
$424
$1,807
$(101)
$282
$1,424
16.5%
$3.69
Adjusted percent net sales
66.0%
32.2%
6.4%
27.4%
(1.5)%
nm
21.6%
Dollar amounts are in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2026 Second Quarter Form 10-Q
Three Months 2025
Gross
Profit
Selling,
General &
Administrative
Expenses
Research,
Development &
Engineering
Expenses
Operating
Income
Other
Income
(Expense),
Net
Income
Taxes
Net
Earnings
Effective
Tax Rate
Diluted
EPS
Reported
$3,841
$2,079
$407
$1,113
$(97)
$132
$884
13.0%
$2.29
Reported percent net sales
63.8%
34.5%
6.8%
18.5%
(1.6)%
nm
14.7%
Acquisition and integration-related costs:
Inventory stepped-up to fair value
-
-
-
0.5
0.12
Other acquisition and integration-related (a)
(76)
(1)
-
0.7
0.15
Amortization of purchased intangible assets
-
-
-
-
1.0
0.37
Structural optimization and other special charges (b)
(2)
(3)
(9)
(2)
(0.2)
0.01
Goodwill and other impairments (c)
-
-
-
-
1.2
0.10
Medical device regulations (d)
-
-
(7)
-
0.1
0.02
Recall-related matters (e)
(1)
-
-
(0.3)
0.06
Regulatory and legal matters (f)
-
(7)
-
-
0.1
0.01
Tax matters (g)
-
-
-
-
-
(2)
(0.2)
-
Adjusted
$3,934
$1,993
$396
$1,545
$(106)
$228
$1,211
15.9%
$3.13
Adjusted percent net sales
65.4%
33.1%
6.6%
25.7%
(1.8)%
nm
20.1%
nm - not meaningful
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
Three Months
2026
2025
Termination of sales relationships
$6
$-
Employee retention and workforce reductions
(3)
Changes in the fair value of contingent consideration
Manufacturing integration costs
Other integration-related activities
Adjustments to Operating Income
$25
$78
Adjustments to Income Taxes
$3
$20
Adjustments to Net Earnings
$22
$58
(b) Structural optimization and other special charges represent the costs associated with:
Three Months
2026
2025
Employee retention and workforce reductions
$6
$5
Closure/transfer of manufacturing and other facilities
Product line exits
(10)
Termination of sales relationships in certain countries
(3)
Other charges
Adjustments to Operating Income
$95
$11
Adjustments to Other Income (Expense), Net
$(6)
$(9)
Adjustments to Income Taxes
$20
$(2)
Adjustments to Net Earnings
$69
$4
(c) Goodwill and other impairments represent the costs associated with:
Three Months
2026
2025
Certain long-lived and intangible asset write-offs and impairments
$-
$52
Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs)
Adjustments to Operating Income
$1
$55
Adjustments to Income Taxes
$-
$22
Adjustments to Net Earnings
$1
$33
(d) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device
reporting regulations and other requirements of the new medical device regulations in the European Union.
(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to
resolve certain recall-related matters.
(f) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to
resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.
(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:
Three Months
2026
2025
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions
$(55)
$(45)
Other tax matters
Adjustments to Income Taxes
$(39)
$(2)
Adjustments to Other Income (Expense), Net
$-
$-
Adjustments to Net Earnings
$39
$2
Dollar amounts are in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2026 Second Quarter Form 10-Q
Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Six Months 2026
Gross
Profit
Selling,
General &
Administrative
Expenses
Research,
Development &
Engineering
Expenses
Operating
Income
Other
Income
(Expense),
Net
Income
Taxes
Net
Earnings
Effective
Tax Rate
Diluted
EPS
Reported
$8,308
$4,510
$847
$2,595
$(181)
$393
$2,021
16.3%
$5.23
Reported percent net sales
65.9%
35.8%
6.7%
20.6%
(1.4)%
nm
16.0%
Acquisition and integration-related costs:
Inventory stepped-up to fair value
-
-
-
-
-
-
-
-
-
Other acquisition and integration-related (a)
(27)
(8)
-
-
0.10
Amortization of purchased intangible assets
-
-
-
-
0.3
0.75
Structural optimization and other special charges (b)
(193)
(1)
(17)
0.6
0.39
Goodwill and other impairments (c)
-
-
-
-
-
-
-
Medical device regulations (d)
-
-
(10)
-
-
0.02
Recall-related matters (e)
-
(12)
-
-
-
0.02
Regulatory and legal matters (f)
-
(6)
-
-
-
0.01
Tax matters (g)
-
-
-
-
-
(37)
(1.5)
0.11
Reversal of 2025 tariffs
(158)
-
-
(158)
-
(25)
(133)
-
(0.34)
Adjusted
$8,178
$4,272
$828
$3,078
$(198)
$452
$2,428
15.7%
$6.29
Adjusted percent net sales
64.9%
33.9%
6.6%
24.4%
(1.6)%
nm
19.3%
Six Months 2025
Gross
Profit
Selling,
General &
Administrative
Expenses
Research,
Development &
Engineering
Expenses
Operating
Income
Other
Income
(Expense),
Net
Income
Taxes
Net
Earnings
Effective
Tax Rate
Diluted
EPS
Reported
$7,585
$4,379
$812
$1,950
$(170)
$242
$1,538
13.6%
$3.98
Reported percent net sales
63.8%
36.8%
6.8%
16.4%
(1.4)%
nm
12.9%
Acquisition and integration-related costs:
Inventory stepped-up to fair value
-
-
-
0.5
0.19
Other acquisition and integration-related (a)
(247)
(2)
-
(0.7)
0.62
Amortization of purchased intangible assets
-
-
-
-
1.1
0.72
Structural optimization and other special charges (b)
(21)
(3)
(9)
0.3
0.08
Goodwill and other impairments (c)
-
-
-
-
1.0
0.16
Medical device regulations (d)
-
(18)
-
0.1
0.04
Recall-related matters (e)
(3)
-
-
0.1
0.12
Regulatory and legal matters (f)
-
(7)
-
-
0.1
0.01
Tax matters (g)
-
-
-
-
-
(21)
(1.2)
0.05
Adjusted
$7,779
$4,101
$789
$2,889
$(179)
$402
$2,308
14.9%
$5.97
Adjusted percent net sales
65.4%
34.5%
6.6%
24.3%
(1.5)%
nm
19.4%
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
Six Months
2026
2025
Termination of sales relationships
$6
$-
Employee retention and workforce reductions
-
Changes in the fair value of contingent consideration
Manufacturing integration costs
Stock compensation payments upon a change in control
-
Other integration-related activities
Adjustments to Operating Income
$44
$263
Adjustments to Income Taxes
$7
$26
Adjustments to Net Earnings
$37
$237
(b) Structural optimization and other special charges represent the costs associated with:
Six Months
2026
2025
Employee retention and workforce reductions
$13
$38
Closure/transfer of manufacturing and other facilities (e.g., site closure, contract termination and redundant employee costs)
Product line exits (e.g., inventory, long-lived asset and specifically-identified intangible asset write-offs)
(7)
Termination of sales relationships in certain countries
(4)
Other charges
Adjustments to Operating Income
$213
$52
Adjustments to Other Income (Expense), Net
$(17)
$(9)
Adjustments to Income Taxes
$45
$12
Adjustments to Net Earnings
$151
$31
Dollar amounts are in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2026 Second Quarter Form 10-Q
(c) Goodwill and other impairments represent the costs associated with:
Six Months
2026
2025
Certain long-lived and intangible asset write-offs and impairments
$-
$86
Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs)
Adjustments to Operating Income
$1
$90
Adjustments to Income Taxes
$-
$31
Adjustments to Net Earnings
$1
$59
(d) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device
reporting regulations and other requirements of the new medical device regulations in the European Union.
(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to
resolve certain recall-related matters.
(f) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to
resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.
(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:
Six Months
2026
2025
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions
$(75)
$(92)
Other tax matters
Adjustments to Income Taxes
$(37)
$(21)
Adjustments to Other Income (Expense), Net
$-
$-
Adjustments to Net Earnings
$37
$21
FINANCIAL CONDITION AND LIQUIDITY
Six Months
Net cash provided by (used in):
2026
2025
Operating activities
$1,842
$1,361
Investing activities
(824)
(4,240)
Financing activities
(1,605)
1,545
Effect of exchange rate changes
(33)
Change in cash and cash equivalents
$(620)
$(1,277)
Operating Activities
Cash provided by operating activities was $1,842 and $1,361 in
the six months 2026 and 2025. The increase was primarily due to
changes in working capital accounts.
Investing Activities
Cash used in investing activities was $824 and $4,240 in the six
months 2026 and 2025. The six months 2026 included cash paid
for purchases of property, plant and equipment. The six months
2025 included cash paid to acquire Inari and purchases of
property, plant and equipment partially offset by proceeds from
the sale of short-term investments. Refer to Note 7 to our
Consolidated Financial Statements for further information on
acquisitions.
Financing Activities
Cash used in financing activities was $1,605 in the six months
2026 and cash provided by financing activities was $1,545 in the
six months 2025. In 2026, cash used was primarily driven by
repayments of $1,000 to pay off maturing unsecured notes as
described in Note 8 to our Consolidated Financial Statements
and dividend payments. Cash provided by financing activities in
2025 was primarily driven by proceeds from the issuance of
various senior unsecured notes which was partially offset by
dividend payments.
Liquidity
Cash, cash equivalents, short-term investments and marketable
securities were $3,476 and $4,100 on June 30, 2026 and
December 31, 2025. Current assets exceeded current liabilities
by $7,734 and $6,961 on June 30, 2026 and December 31, 2025.
We anticipate being able to support our short-term liquidity and
operating needs from a variety of sources including cash from
operations, commercial paper and existing credit lines.
We have raised funds in the capital markets and have accessed
the credit markets in the past and may continue to do so from
time-to-time. We continue to have strong investment-grade short-
term and long-term debt ratings that we believe should enable us
to refinance our debt as needed.
Our cash, cash equivalents, short-term investments and
marketable securities held in locations outside the United States
was 51% on June 30, 2026 compared to 20% on December 31,
2025.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There were no changes to our critical accounting policies and
estimates from those disclosed in our Annual Report on Form 10-
K for 2025, except as follows:
Refer to Note 11 for discussion on the impact of changes to our
organizational structure in the first quarter 2026 on our reportable
segments and the related goodwill.
Guarantees and Other Off-Balance Sheet Arrangements
We do not have guarantees or other off-balance sheet financing
arrangements, including variable interest entities, of a magnitude
that we believe could have a material impact on our financial
condition or liquidity.
OTHER MATTERS
Legal and Regulatory Matters
We are involved in various ongoing proceedings, legal actions
and claims arising in the normal course of our business, including
proceedings related to product, labor, tax, intellectual property
and other matters. Refer to Note 6 to our Consolidated Financial
Statements for further information.
FORWARD-LOOKING STATEMENTS
This report contains statements that are not historical facts and
are considered "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. These
statements are based on current projections about operations,
industry conditions, financial condition and liquidity. Words that
identify forward-looking statements include, without limitation,
words such as "may," "could," "will," "should," "possible," "plan,"
"predict," "forecast," "potential," "anticipate," "estimate," "expect,"
"project," "intend," "believe," "may impact," "on track," "goal,"
"strategy" and words and terms of similar substance used in
Dollar amounts are in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2026 Second Quarter Form 10-Q
connection with any discussion of future operating or financial
performance, an acquisition or our businesses. In addition, any
statements that refer to expectations, projections or other
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. Those
statements are not guarantees and are subject to risks,
uncertainties and assumptions that are difficult to predict,
including uncertainties related to the impact of the cybersecurity
incident first reported on March 11, 2026 on our operations and
financial results. Therefore, actual results could differ materially
and adversely from these forward-looking statements, historical
experience or our present expectations. Some important factors
that could cause our actual results to differ from our expectations
in any forward-looking statements include the risks discussed in
Stryker Corporation published this content on July 31, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 31, 2026 at 15:42 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]