SYK grows 10.3% in Q3 2025; $4.81B Inari deal, $3B notes
Filing Impact
Filing Sentiment
Form Type
10-Q
Stryker (SYK) filed its Q3 2025 10‑Q reporting double‑digit top‑line growth. Net sales rose to $6,057 million from $5,494 million, and diluted EPS was $2.22 versus $2.16. For the nine months, revenue reached $17,945 million with diluted EPS of $6.20.
Growth was broad-based: MedSurg and Neurotechnology sales increased 14.4% to $3,803 million, while Orthopaedics rose 3.9% to $2,254 million. Vascular and Neuro Cranial stood out, reflecting the February acquisition of Inari Medical, which added minimally invasive venous thromboembolism products. Operating income was $1,135 million, and net earnings were $859 million.
Cash flow from operations improved to $2,901 million for the nine months, while investing cash flow of $(4,561) million reflected $4,810 million for the Inari acquisition. The company issued $3,000 million of senior notes and repaid $650 million, ending with total debt of $16,595 million and cash of $3,256 million. Stryker completed the sale of its Spinal Implants business. Shares outstanding were 382,423,648 as of September 30, 2025.
Positive
- None.
Negative
- None.
Insights
Solid revenue growth with portfolio reshaping and higher leverage.
Stryker delivered Q3 revenue of $6,057M (up 10.3%), driven by MedSurg and Neurotechnology, which reached $3,803M (up 14.4%). Orthopaedics grew more modestly to $2,254M (up 3.9%). Diluted EPS was $2.22, with net earnings of $859M. Segment tables show particularly strong contributions from Vascular and Neuro Cranial lines.
Strategically, the February acquisition of Inari for $4,810M broadened the Vascular portfolio. The company also completed the sale of its Spinal Implants business. These moves shift mix toward faster‑growing categories while exiting lower‑performing assets, consistent with disclosed segment performance.
Financing supported M&A: Stryker issued $3,000M of notes and repaid $650M, ending with total debt of $16,595M and cash of $3,256M. Operating cash flow of $2,901M provides internal support, though comprehensive income was tempered by translation losses recorded in AOCI. Subsequent filings may detail integration progress of Inari.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2025
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 001-13149
(Exact name of registrant as specified in its charter)
(State of incorporation) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices) | (Zip Code) | ||||||
(Registrant’s telephone number, including area code) | |||||||
Securities registered pursuant to Section 12(b) of the Act: | ||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.Yes ☒No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).Yes ☒No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting
company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | Emerging growth company | ||||
Non-accelerated filer | ☐ | Small reporting company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐No ☒
There were 382,423,648 shares of Common Stock, $0.10 par value, on September 30, 2025.
Dollar amounts are in millions except per share amounts or as otherwise specified. | 1 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
PART I – FINANCIAL INFORMATION
ITEM 1. | FINANCIAL STATEMENTS |
Stryker Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
Three Months | Nine Months | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Net sales | $ | $ | $ | $ | |||
Cost of sales | |||||||
Gross profit | $ | $ | $ | $ | |||
Research, development and engineering expenses | |||||||
Selling, general and administrative expenses | |||||||
Amortization of intangible assets | |||||||
Goodwill and other impairments | |||||||
Total operating expenses | $ | $ | $ | $ | |||
Operating income | $ | $ | $ | $ | |||
Other income (expense), net | ( | ( | ( | ( | |||
Earnings before income taxes | $ | $ | $ | $ | |||
Income taxes | |||||||
Net earnings | $ | $ | $ | $ | |||
Net earnings per share of common stock: | |||||||
Basic | $ | $ | $ | $ | |||
Diluted | $ | $ | $ | $ | |||
Weighted-average shares outstanding (in millions): | |||||||
Basic | |||||||
Effect of dilutive employee stock compensation | |||||||
Diluted | |||||||
Cash dividends declared per share of common stock | $ | $ | $ | $ | |||
Anti-dilutive shares excluded from the calculation of dilutive employee stock options were de minimis in all periods.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
Three Months | Nine Months | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Net earnings | $ | $ | $ | $ | |||
Other comprehensive income (loss), net of tax: | |||||||
Marketable securities | |||||||
Pension plans | ( | ( | |||||
Unrealized gains (losses) on designated hedges | ( | ( | |||||
Financial statement translation | ( | ( | ( | ( | |||
Total other comprehensive income (loss), net of tax | $( | $( | $( | $( | |||
Comprehensive income | $ | $ | $ | $ | |||
See accompanying notes to Consolidated Financial Statements.
Dollar amounts are in millions except per share amounts or as otherwise specified. | 2 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
CONSOLIDATED BALANCE SHEETS
September 30 | December 31 | ||
2025 | 2024 | ||
(Unaudited) | |||
Assets | |||
Current assets | |||
Cash and cash equivalents | $ | $ | |
Short-term investments | |||
Marketable securities | |||
Accounts receivable, less allowance of $ | |||
Inventories: | |||
Materials and supplies | |||
Work in process | |||
Finished goods | |||
Total inventories | $ | $ | |
Prepaid expenses and other current assets | |||
Total current assets | $ | $ | |
Property, plant and equipment: | |||
Land, buildings and improvements | |||
Machinery and equipment | |||
Total property, plant and equipment | $ | $ | |
Less allowance for depreciation | |||
Property, plant and equipment, net | $ | $ | |
Goodwill | |||
Other intangibles, net | |||
Noncurrent deferred income tax assets | |||
Other noncurrent assets | |||
Total assets | $ | $ | |
Liabilities and shareholders' equity | |||
Current liabilities | |||
Accounts payable | $ | $ | |
Accrued compensation | |||
Income taxes | |||
Dividends payable | |||
Accrued expenses and other liabilities | |||
Current maturities of debt | |||
Total current liabilities | $ | $ | |
Long-term debt, excluding current maturities | |||
Income taxes | |||
Other noncurrent liabilities | |||
Total liabilities | $ | $ | |
Shareholders' equity | |||
Common stock, $ | |||
Additional paid-in capital | |||
Retained earnings | |||
Accumulated other comprehensive loss | ( | ( | |
Total shareholders' equity | $ | $ | |
Total liabilities and shareholders' equity | $ | $ |
See accompanying notes to Consolidated Financial Statements.
Dollar amounts are in millions except per share amounts or as otherwise specified. | 3 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
Three Months | Nine Months | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Common stock shares outstanding (in millions) | |||||||
Beginning | |||||||
Issuance of common stock under stock compensation and benefit plans | |||||||
Ending | |||||||
Common stock | |||||||
Beginning | $ | $ | $ | $ | |||
Issuance of common stock under stock compensation and benefit plans | |||||||
Ending | $ | $ | $ | $ | |||
Additional paid-in capital | |||||||
Beginning | $ | $ | $ | $ | |||
Issuance of common stock under stock compensation and benefit plans | ( | ( | ( | ( | |||
Share-based compensation | |||||||
Ending | $ | $ | $ | $ | |||
Retained earnings | |||||||
Beginning | $ | $ | $ | $ | |||
Net earnings | |||||||
Cash dividends declared | ( | ( | ( | ( | |||
Ending | $ | $ | $ | $ | |||
Accumulated other comprehensive income (loss) | |||||||
Beginning | $( | $( | $( | $( | |||
Other comprehensive income (loss) | ( | ( | ( | ( | |||
Ending | $( | $( | $( | $( | |||
Total shareholders' equity | $ | $ | $ | $ | |||
See accompanying notes to Consolidated Financial Statements.
Dollar amounts are in millions except per share amounts or as otherwise specified. | 4 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months | |||
2025 | 2024 | ||
Operating activities | |||
Net earnings | $ | $ | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation | |||
Amortization of intangible assets | |||
Asset impairments | |||
Share-based compensation | |||
Sale of inventory stepped-up to fair value at acquisition | |||
Deferred income tax (benefit) expense | ( | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | |||
Inventories | ( | ( | |
Accounts payable | ( | ( | |
Accrued expenses and other liabilities | ( | ( | |
Income taxes | ( | ( | |
Other, net | ( | ( | |
Net cash provided by operating activities | $ | $ | |
Investing activities | |||
Acquisitions, net of cash acquired | ( | ( | |
Purchases of marketable securities | ( | ( | |
Proceeds/(Purchases) of short-term investments | ( | ||
Proceeds from sales of marketable securities | |||
Purchases of property, plant and equipment | ( | ( | |
Proceeds from settlement of net investment hedges | |||
Proceeds from the sale of the Spinal Implants business | |||
Other investing, net | ( | ||
Net cash used in investing activities | $( | $( | |
Financing activities | |||
Proceeds (payments) on short-term borrowings, net | ( | ||
Proceeds from issuance of long-term debt | |||
Payments on long-term debt | ( | ( | |
Payments of dividends | ( | ( | |
Cash paid for taxes from withheld shares | ( | ( | |
Other financing, net | ( | ( | |
Net cash provided by (used in) financing activities | $ | $ | |
Effect of exchange rate changes on cash and cash equivalents | ( | ||
Change in cash and cash equivalents | $( | $ | |
Cash and cash equivalents at beginning of period | |||
Cash and cash equivalents at end of period | $ | $ | |
See accompanying notes to Consolidated Financial Statements.
Dollar amounts are in millions except per share amounts or as otherwise specified. | 5 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - BASIS OF PRESENTATION
General Information
Management believes the accompanying unaudited Consolidated
Financial Statements contain all adjustments, including normal
recurring items, considered necessary to fairly present the
financial position of Stryker Corporation and its consolidated
subsidiaries ("Stryker," the "Company," "we," "us" or "our") on
September 30, 2025 and the results of operations for the three
and nine months 2025. The results of operations included in
these Consolidated Financial Statements may not necessarily be
indicative of our annual results. These statements should be read
in conjunction with our Annual Report on Form 10-K for 2024.
In September 2025 the Financial Accounting Standards Board
(FASB) issued Accounting Standards Update (ASU) 2025-07
(Topics 815 and 606): Derivatives and Hedging: Derivatives
Scope Refinements and Revenue from Contracts with
Customers: Scope Clarification for Share-Based Noncash
Consideration from a Customer in a Revenue Contract. This
update expands the scope exception in Topic 815 to certain non-
exchange-traded contracts for which settlement is based on
operations or activities specific to one of the parties to the
contract. The update is effective for fiscal years beginning after
December 15, 2026 including interim periods within those fiscal
years. Early adoption is permitted. We are evaluating if the ASU
will have an impact on our Consolidated Financial Statements.
In September 2025 the FASB issued ASU 2025-06 (Subtopic
350-40): Intangibles - Goodwill and Other - Internal-Use
Software: Targeted Improvements to the Accounting for Internal-
Use Software. This update clarifies and modernizes the
accounting for costs related to internal-use software by removing
all references to project stages and clarifying that the probable-
to-complete threshold is not met if significant development
uncertainty exists. The update is effective for fiscal years
beginning after December 15, 2027 including interim periods
within those fiscal years. Early adoption is permitted. We are
evaluating if the ASU will have an impact on our Consolidated
Financial Statements.
In July 2025 the FASB issued ASU 2025-05 (Topic 326):
Financial Instruments - Credit Losses: Measurement of Credit
Losses for Accounts Receivable and Contract Assets. This
update provides a practical expedient allowing entities to assume
that current conditions as of the balance sheet date will remain
unchanged for the remaining life of the asset when estimating
expected credit losses for current accounts receivable and
current contract assets arising from transactions accounting for
under Accounting Standards Codification 606, Revenue from
Contracts with Customers. The update is effective for fiscal years
beginning after December 15, 2025 including interim periods
within those fiscal years. Early adoption is permitted. We are
evaluating if the ASU will have an impact on our Consolidated
Financial Statements.
In November 2024 the FASB issued ASU 2024-03 (Subtopic
220-40): Income Statement: Reporting Comprehensive Income -
Expense Disaggregation Disclosures which requires
disaggregation of certain expense captions into specified
categories in disclosures within the Notes to the Consolidated
Financial Statements. The new disclosure requirements are
effective for fiscal years beginning after December 15, 2026 and
interim periods within fiscal years beginning after December 15,
2027. Early adoption is permitted. We are evaluating these new
expanded disclosure requirements.
In December 2023 the FASB issued ASU 2023-09 (Topic 740):
Income Taxes: Improvements to Income Tax Disclosures which
expands the existing rules on income tax disclosures. This
update requires entities to disclose specific categories in the tax
rate reconciliation, provide additional information for reconciling
items that meet a quantitative threshold and disclose additional
information about income taxes paid on an annual basis. The
new disclosure requirements are effective for fiscal years
beginning after December 15, 2024 and we will adopt this ASU in
the fourth quarter 2025.
We evaluate all ASUs issued by the FASB for consideration of
their applicability. ASUs not included in our disclosures were
assessed and determined to be either not applicable or are not
expected to have a material impact on our Consolidated Financial
Statements.
NOTE 2 - REVENUE RECOGNITION
Our policies for recognizing sales have not changed from those
described in our Annual Report on Form 10-K for 2024.
We disaggregate our net sales by business and geographic
location for each of our segments as we believe it best depicts
how the nature, amount, timing and certainty of our net sales and
cash flows are affected by economic factors.
In the first quarter 2025 we changed the name of our
Neurovascular business to Vascular due the acquisition of Inari
Medical, Inc. (Inari).
align with certain updates to our internal reporting structure. The
spine enabling technologies portfolio (Enabling Technologies)
was reclassified to Other Orthopaedics and Spine, the
interventional spine (IVS) portfolio was reclassified to Neuro
Cranial and the remaining Spine business was renamed to Spinal
Implants. In addition we changed the name of our "Orthopaedics
and Spine" operating segment to "Orthopaedics." Neuro Cranial
includes sales related to IVS of $100 and $296 for the three and
nine months 2024. Other Orthopaedics includes sales related to
Enabling Technologies of $32 and $94 for the three and nine
months 2024. We have reflected these changes in all historical
periods presented.
Net Sales by Business | |||||||
Three Months | Nine Months | ||||||
2025 | 2024 | 2025 | 2024 | ||||
MedSurg and Neurotechnology: | |||||||
Instruments | $ | $ | $ | $ | |||
Endoscopy | |||||||
Medical | |||||||
Vascular | |||||||
Neuro Cranial | |||||||
$ | $ | $ | $ | ||||
Orthopaedics: | |||||||
Knees | $ | $ | $ | $ | |||
Hips | |||||||
Trauma and Extremities | |||||||
Spinal Implants | |||||||
Other | |||||||
$ | $ | $ | $ | ||||
Total | $ | $ | $ | $ | |||
Dollar amounts are in millions except per share amounts or as otherwise specified. | 6 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
Net Sales by Geography | |||||
Three Months 2025 | Three Months 2024 | ||||
United States | International | United States | International | ||
MedSurg and Neurotechnology: | |||||
Instruments | $ | $ | $ | $ | |
Endoscopy | |||||
Medical | |||||
Vascular | |||||
Neuro Cranial | |||||
$ | $ | $ | $ | ||
Orthopaedics: | |||||
Knees | $ | $ | $ | $ | |
Hips | |||||
Trauma and Extremities | |||||
Spinal Implants | |||||
Other | |||||
$ | $ | $ | $ | ||
Total | $ | $ | $ | $ | |
Net Sales by Geography | |||||
Nine Months 2025 | Nine Months 2024 | ||||
United States | International | United States | International | ||
MedSurg and Neurotechnology: | |||||
Instruments | $ | $ | $ | $ | |
Endoscopy | |||||
Medical | |||||
Vascular | |||||
Neuro Cranial | |||||
$ | $ | $ | $ | ||
Orthopaedics: | |||||
Knees | $ | $ | $ | $ | |
Hips | |||||
Trauma and Extremities | |||||
Spinal Implants | |||||
Other | |||||
$ | $ | $ | $ | ||
Total | $ | $ | $ | $ | |
We typically do not incur costs to fulfill a contract before a
product or service is provided to a customer due to the nature of
our products and services. Our costs to obtain contracts are
typically in the form of sales commissions paid to employees or
third-party agents. Certain sales commissions paid to employees
prior to recognition of sales are recorded as deferred contract
costs. We expense sales commissions associated with obtaining
a contract at the time of the sale or as incurred as the
amortization period is generally less than one year. These costs
have been presented within selling, general and administrative
expenses. On September 30, 2025 and December 31, 2024
deferred contracts costs recorded in our Consolidated Balance
Sheets were not significant.
Contract Assets and Liabilities
Our contract assets primarily relate to conditional rights to
consideration for work completed but not billed at the reporting
date. On September 30, 2025 and December 31, 2024 contract
assets recorded in our Consolidated Balance Sheets were not
significant.
Our contract liabilities arise as a result of consideration received
from customers at inception of contracts for certain businesses or
where the timing of billing for services precedes satisfaction of
our performance obligations. This occurs primarily when payment
is received upfront for certain multi-period extended service
contracts. Our contract liabilities of $939 and $978 on
September 30, 2025 and December 31, 2024 are classified within
accrued expenses and other liabilities and other noncurrent
liabilities in our Consolidated Balance Sheets based on the timing
of when we expect to complete our performance obligations.
as follows:
September 30 | |
2025 | |
Beginning contract liabilities | $ |
Revenue recognized from beginning of year contract liabilities | ( |
Net advance consideration received during the period | |
Ending contract liabilities | $ |
Transfers and Servicing of Financial Assets
We sell certain customer lease agreements and the related
leased assets to third-party financial institutions to accelerate our
cash collection cycle. The lease receivables are sold without
recourse and are derecognized from our Consolidated Balance
Sheets at the time of sale. Under the terms of our arrangements,
we collect lease payments on behalf of the financial institutions
but maintain no other form of continuing involvement. Sales of
these lease agreements are classified as operating activities in
our Consolidated Statements of Cash Flows. Fees earned for our
servicing activities are immaterial. Revenue related to customer
lease agreements sold under these arrangements represented
less than 4
2025 and 2024.
NOTE 3 - ACCUMULATED OTHER COMPREHENSIVE (LOSS)
INCOME (AOCI)
Three Months 2025 | Marketable Securities | Pension Plans | Hedges | Financial Statement Translation | Total |
Beginning | $ | $ | $ | $( | $( |
OCI | ( | ||||
Income taxes | ( | ( | |||
Reclassifications to: | |||||
Cost of sales | ( | ( | |||
Other (income) expense, net | ( | ( | ( | ||
Income taxes | |||||
Net OCI | $ | $ | $ | $( | $( |
Ending | $ | $ | $ | $( | $( |
Three Months 2024 | Marketable Securities | Pension Plans | Hedges | Financial Statement Translation | Total |
Beginning | $ | $( | $ | $( | $( |
OCI | ( | ( | ( | ( | |
Income taxes | ( | ||||
Reclassifications to: | |||||
Cost of sales | ( | ( | |||
Other (income) expense, net | ( | ( | |||
Income taxes | |||||
Net OCI | $ | $( | $( | $( | $( |
Ending | $ | $( | $ | $( | $( |
Dollar amounts are in millions except per share amounts or as otherwise specified. | 7 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
Nine Months 2025 | Marketable Securities | Pension Plans | Hedges | Financial Statement Translation | Total |
Beginning | $ | $ | $ | $( | $( |
OCI | ( | ( | |||
Income taxes | ( | ( | |||
Reclassifications to: | |||||
Cost of sales | ( | ( | |||
Other (income) expense, net | ( | ( | ( | ||
Income taxes | |||||
Net OCI | $ | $ | $ | $( | $( |
Ending | $ | $ | $ | $( | $( |
Nine Months 2024 | Marketable Securities | Pension Plans | Hedges | Financial Statement Translation | Total |
Beginning | $ | $( | $ | $( | $( |
OCI | ( | ( | ( | ( | |
Income taxes | |||||
Reclassifications to: | |||||
Cost of sales | ( | ( | |||
Other (income) expense, net | ( | ( | ( | ||
Income taxes | |||||
Net OCI | $ | $( | $( | $( | $( |
Ending | $ | $( | $ | $( | $( |
NOTE 4 - DERIVATIVE INSTRUMENTS
We use operational and economic hedges, foreign currency
exchange forward contracts, net investment hedges (both
derivative and non-derivative financial instruments) and interest
rate derivative instruments to manage the impact of currency
exchange and interest rate fluctuations on earnings, cash flow
and equity. We do not enter into derivative instruments for
speculative purposes. We are exposed to potential credit loss in
the event of nonperformance by counterparties on our
outstanding derivative instruments but do not anticipate
nonperformance by any of our counterparties. Should a
counterparty default, our maximum loss exposure is the asset
balance of the instrument. We have not changed our hedging
strategies, accounting practices or objectives from those
disclosed in our Annual Report on Form 10-K for 2024.
Foreign Currency Hedges | ||||
September 2025 | Cash Flow | Net Investment | Non- Designated | Total |
Gross notional amount | $ | $ | $ | $ |
Maximum term in years | ||||
Fair value: | ||||
Other current assets | $ | $ | $ | $ |
Other noncurrent assets | ||||
Other current liabilities | ( | ( | ( | ( |
Other noncurrent liabilities | ( | ( | ||
Total fair value | $ | $( | $( | $( |
December 2024 | Cash Flow | Net Investment | Non- Designated | Total |
Gross notional amount | $ | $ | $ | $ |
Maximum term in years | ||||
Fair value: | ||||
Other current assets | $ | $ | $ | $ |
Other noncurrent assets | ||||
Other current liabilities | ( | ( | ( | |
Other noncurrent liabilities | ( | ( | ( | |
Total fair value | $ | $ | $ | $ |
We had €2.3
2024 in certain forward currency contracts designated as net
investment hedges, for which the maximum term is 9.0 years, to
hedge a portion of our investments in certain of our entities with
functional currencies denominated in Euros. In addition to these
derivative financial instruments designated as net investment
hedges, we had €5.0
December 31, 2024 of senior unsecured notes designated as net
investment hedges to selectively hedge portions of our
investment in certain international subsidiaries. The currency
effects of our Euro-denominated senior unsecured notes are
reflected in AOCI within shareholders' equity where they offset
gains and losses recorded on our net investment in international
subsidiaries.
In the nine months 2024 we settled certain foreign currency
forward contracts designated as net investment hedges resulting
in cash proceeds of $99 . The amounts in AOCI related to settled
net investment hedges will remain in AOCI until the hedged
investment is either sold or substantially liquidated.
The total after-tax gain (loss) recognized in OCI related to
designated net investment hedges was ($709 ) in the nine months
2025.
Currency Exchange Rate Gains (Losses) Recognized in Net
Earnings
Three Months | Nine Months | |||||||
Derivative Instrument | Recognized in: | 2025 | 2024 | 2025 | 2024 | |||
Cash Flow | Cost of sales | $ | $ | $ | $ | |||
Net Investment | Other income (expense), net | |||||||
Non- Designated | Other income (expense), net | |||||||
Total | $ | $ | $ | $ | ||||
Pretax gains (losses) on derivatives designated as cash flow
hedges of $39 and net investment hedges of $35 recorded in
AOCI are expected to be reclassified to cost of sales and other
income (expense), net in earnings within 12 months of
September 30, 2025. This cash flow hedge reclassification is
primarily due to the sale of inventory that includes previously
hedged purchases. A component of the AOCI amounts related to
net investment hedges is reclassified over the life of the hedge
instruments as we elected to exclude the initial value of the
component related to the spot-forward difference from the
effectiveness assessment.
Interest Rate Hedges
Pretax gains (losses) of $5 recorded in AOCI related to interest
rate hedges closed in conjunction with debt issuances are
expected to be reclassified to other income (expense), net in
earnings within 12 months of September 30, 2025. The cash flow
effect of interest rate hedges is recorded in cash flow from
operations.
Dollar amounts are in millions except per share amounts or as otherwise specified. | 8 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
NOTE 5 - FAIR VALUE MEASUREMENTS
Our policies for managing risk related to foreign currency, interest
rates, credit and markets and our process for determining fair
value have not changed from those described in our Annual
Report on Form 10-K for 2024.
In the nine months 2025 we assumed contingent consideration
liabilities with a fair value of $90 related to previous acquisitions
made by Inari. Refer to Note 7 for further information on the
acquisition of Inari.
In 2024 we recorded $208 of contingent consideration related to
various acquisitions described in Note 7.
There were no significant transfers into or out of any level of the
fair value hierarchy in 2025.
Assets Measured at Fair Value | |||
September 30 | December 31 | ||
2025 | 2024 | ||
Cash and cash equivalents | $ | $ | |
Short-term investments | |||
Trading marketable securities | |||
Level 1 - Assets | $ | $ | |
Available-for-sale marketable securities: | |||
Corporate and asset-backed debt securities | $ | $ | |
United States agency debt securities | |||
United States treasury debt securities | |||
Certificates of deposit | |||
Total available-for-sale marketable securities | $ | $ | |
Foreign currency exchange forward contracts | |||
Level 2 - Assets | $ | $ | |
Total assets measured at fair value | $ | $ |
Liabilities Measured at Fair Value | |||
September 30 | December 31 | ||
2025 | 2024 | ||
Deferred compensation arrangements | $ | $ | |
Level 1 - Liabilities | $ | $ | |
Foreign currency exchange forward contracts | $ | $ | |
Level 2 - Liabilities | $ | $ | |
Contingent consideration: | |||
Beginning | $ | $ | |
Additions | |||
Change in estimate and foreign exchange | |||
Settlements | ( | ( | |
Ending | $ | $ | |
Level 3 - Liabilities | $ | $ | |
Total liabilities measured at fair value | $ | $ |
Fair Value of Available for Sale Securities by Maturity | |||
September 30 | December 31 | ||
2025 | 2024 | ||
Due in one year or less | $ | $ | |
Due after one year through three years | $ | $ | |
On September 30, 2025 and December 31, 2024 the aggregate
difference between the cost and fair value of available-for-sale
marketable securities was nominal. Interest income on cash and
cash equivalents and short-term investments and income from
marketable securities was $28 and $30 in the three months 2025
and 2024, and $90 and $92 in the nine months 2025 and 2024,
which was recorded in other income (expense), net.
Our investments in available-for-sale marketable securities had a
minimum credit quality rating of A2 (Moody's), A (Standard &
Poor's) and A (Fitch). We do not plan to sell the investments, and
it is not more likely than not that we will be required to sell the
investments before recovery of their amortized cost basis, which
NOTE 6 - CONTINGENCIES AND COMMITMENTS
We are involved in various ongoing proceedings, legal actions
and claims arising in the normal course of business, including
proceedings related to product, labor, intellectual property and
other matters, the most significant of which are more fully
described below. The outcomes of these matters will generally
not be known for prolonged periods of time. In certain of the legal
proceedings the claimants seek damages as well as other
compensatory and equitable relief that could result in the
payment of significant claims and settlements and/or the
imposition of injunctions or other equitable relief. For legal
matters for which management had sufficient information to
reasonably estimate our future obligations, a liability representing
management's best estimate of the probable loss, or the
minimum of the range of probable losses when a best estimate
within the range is not known, is recorded. The estimates are
based on consultation with legal counsel, previous settlement
experience and settlement strategies. If actual outcomes are less
favorable than those estimated by management, additional
expense may be incurred, which could unfavorably affect future
operating results. We are self-insured for certain claims and
expenses. The ultimate cost to us with respect to product liability
claims could be materially different than the amount of the current
estimates and accruals and could have a material adverse effect
on our financial position, results of operations and cash flows.
We are currently investigating whether certain business activities
in certain foreign countries violated provisions of the Foreign
Corrupt Practices Act (FCPA) and have engaged outside counsel
to conduct these investigations. We have been contacted by the
United States Securities and Exchange Commission, United
States Department of Justice (DOJ) and certain other regulatory
authorities and are cooperating with these agencies. On April 1,
2025 we were informed by the DOJ that it had closed its inquiry
into potential FCPA violations without further action. At this time
we are unable to predict the outcome of the remaining
investigations or the potential impact, if any, on our financial
statements.
We have conducted voluntary recalls of certain products,
including our Rejuvenate and ABG II Modular-Neck hip stems
and certain lot-specific sizes and offsets of LFIT Anatomic CoCr
V40 Femoral Heads. Additionally, we are responsible for certain
product liability claims, primarily related to certain hip products
sold by Wright Medical Group N.V. prior to its 2014 divestiture of
the OrthoRecon business.
We have incurred, and expect to incur in the future, costs
associated with the defense and settlement of claims and
lawsuits. Based on the information that has been received related
to the matters discussed above, our accrual for these matters
was $147 at September 30, 2025, representing our best estimate
of probable loss. The final outcomes of these matters are
dependent on many factors that are difficult to predict.
Accordingly the ultimate cost related to these matters may be
materially different than the amount of our current estimate and
accruals and could have a material adverse effect on our results
of operations and cash flows.
Dollar amounts are in millions except per share amounts or as otherwise specified. | 9 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
Leases | |||
September 30 | December 31 | ||
2025 | 2024 | ||
Right-of-use assets | $ | $ | |
Lease liabilities, current | $ | $ | |
Lease liabilities, non-current | $ | $ | |
Other information: | |||
Weighted-average remaining lease term (years) | |||
Weighted-average discount rate |
Three Months | Nine Months | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Operating lease cost | $ | $ | $ | $ | |||
Other Contractual Obligations and Commitments
Our outstanding balances of confirmed invoices in the supplier
financing program were $75 and $71 at September 30, 2025 and
December 31, 2024 and are included within accounts payable in
our Consolidated Balance Sheets.
NOTE 7 - ACQUISITIONS
We acquire stock in companies and various assets that continue
to support our capital deployment and product development
strategies. In the nine months 2025 and 2024 cash paid for
acquisitions, net of cash acquired was $4,950 and $1,598 .
In February 2025 we completed the acquisition of Inari for $80
per share, or an aggregate purchase price of $4,810 , net of cash
acquired. Inari's product portfolio includes minimally invasive
products for the treatment of venous thromboembolism. Inari is
part of our Vascular business within MedSurg and
Neurotechnology. The purchase price allocation for Inari is based
on preliminary valuations, primarily related to developed
technology and customer relationships. Goodwill attributable to
the acquisition reflects the strategic benefits of expanding our
market presence, diversifying our product portfolio and advancing
innovations. This goodwill is not deductible for tax purposes.
Share-based awards for Inari employees vested upon our
acquisition and a charge of $139 was recorded in selling, general
and administrative expenses in the nine months 2025.
In 2024 we completed various acquisitions for total consideration
that includes $1,628 in upfront payments, net of cash acquired,
and $400 contingent upon the achievement of certain commercial
or clinical milestones. The combined acquisition-date fair values
of the contingent milestone payments totaled $208 . Goodwill of
$306 and $845 was recorded within our Orthopaedics and our
MedSurg and Neurotechnology segments respectively. The
acquired companies expand the product portfolios of our
Instruments, Endoscopy, Medical and Neuro Cranial businesses
within MedSurg and Neurotechnology and our Trauma and
Extremities and Joint Replacement businesses within
Orthopaedics. The purchase price allocation for certain of our
acquisitions are based on preliminary valuations, primarily related
to customer relationships. Goodwill attributable to the acquisitions
reflects the strategic benefits of expanding our market presence,
diversifying our product portfolio and advancing innovations. This
goodwill is not deductible for tax purposes.
completed in the full year 2024 are:
Purchase Price Allocation of Acquired Net Assets | |||
2025 | 2024 | ||
Inari | Total | ||
Tangible assets acquired: | |||
Accounts receivable | $ | $ | |
Inventory | |||
Deferred income tax assets | |||
Other assets | |||
Debt | ( | ||
Deferred income tax liabilities | ( | ( | |
Other liabilities | ( | ( | |
Intangible assets: | |||
Developed technology | |||
Customer relationships | |||
Patents | |||
Trademarks | |||
Other intangibles | |||
Goodwill | |||
Purchase price, net of cash acquired of $ and $ | $ | $ | |
Weighted average amortization period at acquisition (years): | |||
Developed technologies | |||
Customer relationships | |||
Patents | — | ||
Trademarks | — | ||
Other intangibles | — | ||
Consolidated Estimated Amortization Expense | ||||
Remainder of 2025 | 2026 | 2027 | 2028 | 2029 |
$ | $ | $ | $ | $ |
NOTE 8 - DEBT AND CREDIT FACILITIES
We have lines of credit issued by various financial institutions that
are available to fund our day-to-day operating needs. Certain of
our credit facilities require us to comply with financial and other
covenants. We were in compliance with all covenants on
September 30, 2025.
In February 2025 we entered into a new revolving credit
agreement that replaces our previous agreement dated October
2021. The primary changes included increasing the aggregate
principal amount of the facility by $750 to $3,000 and extending
the maturity date to February 25, 2030. On September 30, 2025
there were no
facility or our commercial paper program which allows for
maturities up to 397 days from the date of issuance. The
maximum amount of our commercial paper that can be
outstanding at any time is $3,000 .
In February 2025 we issued $500 of 4.550 % senior unsecured
notes due February 10, 2027, $700 of 4.700 % senior unsecured
notes due February 10, 2028, $800 of 4.850 % senior unsecured
notes due February 10, 2030 and $1,000 of 5.200 % senior
unsecured notes due February 10, 2035. In June 2025 we repaid
$650 of 1.150 % senior unsecured notes.
Dollar amounts are in millions except per share amounts or as otherwise specified. | 10 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
Summary of Total Debt | ||||||
September 30 | December 31 | |||||
Rate | Due | 2025 | 2024 | |||
Senior unsecured notes: | ||||||
June 15, 2025 | $ | $ | ||||
November 1, 2025 | ||||||
March 15, 2026 | ||||||
February 10, 2027 | ||||||
November 30, 2027 | ||||||
February 10, 2028 | ||||||
March 7, 2028 | ||||||
December 8, 2028 | ||||||
December 11, 2028 | ||||||
March 1, 2029 | ||||||
September 11, 2029 | ||||||
February 10, 2030 | ||||||
June 15, 2030 | ||||||
November 30, 2030 | ||||||
December 3, 2031 | ||||||
September 11, 2032 | ||||||
September 11, 2034 | ||||||
February 10, 2035 | ||||||
September 11, 2036 | ||||||
April 1, 2043 | ||||||
May 15, 2044 | ||||||
March 15, 2046 | ||||||
June 15, 2050 | ||||||
Other | ||||||
Total debt | $ | $ | ||||
Less current maturities | ||||||
Total long-term debt | $ | $ | ||||
September 30 | December 31 | |||||
2025 | 2024 | |||||
Unamortized debt issuance costs | $ | $ | ||||
Borrowing capacity on existing facilities | $ | $ | ||||
Fair value of senior unsecured notes | $ | $ | ||||
The fair value of the senior unsecured notes was estimated using
quoted interest rates, maturities and amounts of borrowings
based on quoted active market prices and yields that took into
account the underlying terms of the debt instruments.
Substantially all of our debt is classified within Level 2 of the fair
value hierarchy.
Interest expense on outstanding debt and credit facilities,
including required fees incurred, that were included in other
income (expense), net, totaled $157 and $98 for the three
months 2025 and 2024 and $453 and $292 for the nine months
2025 and 2024.
NOTE 9 - INCOME TAXES
Our effective tax rates were 16.5 % and 14.7 % in the three and
nine months 2025 and 20.0 % and 17.4 % in the three and nine
months 2024. The effective income tax rate for the three months
2025 decreased from three months 2024 due to certain discrete
tax items. The effective tax rate for the nine months 2025
decreased from nine months 2024 due to the 2025 tax benefit
related to the sale of the Spinal Implants business and certain
discrete tax items. The effective tax rates for the three and nine
months 2025 and 2024 reflect the continued lower effective
income tax rates as a result of our European operations.
In the normal course of business, income tax authorities in
various income tax jurisdictions both within the United States and
internationally conduct routine audits of our income tax returns
filed in prior years. These audits are generally designed to
determine if individual income tax authorities are in agreement
with our interpretations of complex income tax regulations
regarding the allocation of income to the various income tax
jurisdictions. Any income tax audit assessment or draft income
tax audit assessment received at the conclusion of an audit is
reviewed and evaluated for proper financial statement treatment.
We have not received any audit assessments or draft
assessments that have not been reviewed and evaluated.
NOTE 10 - SEGMENT INFORMATION
We segregate our operations into two reportable business
segments: (i) MedSurg and Neurotechnology and (ii)
Orthopaedics which aligns to our internal reporting structure and
how our Chief Operating Decision Maker (CODM) assesses the
performance of and allocates resources. The CODM is the Chief
Executive Officer. The CODM makes decisions on resource
allocation, assesses performance of the business, and monitors
budget versus actual results using segment operating income.
Our reportable segments and related disclosures reflect certain
reclassifications of prior year amounts from our Orthopaedics
segment to our MedSurg and Neurotechnology segment due to
changes in our internal reporting structure.
Segment Results | |||||||
Three Months | Nine Months | ||||||
2025 | 2024 | 2025 | 2024 | ||||
MedSurg and Neurotechnology | $ | $ | $ | $ | |||
Orthopaedics | |||||||
Net sales | $ | $ | $ | $ | |||
MedSurg and Neurotechnology | $ | $ | $ | $ | |||
Orthopaedics | |||||||
Cost of sales | $ | $ | $ | $ | |||
MedSurg and Neurotechnology | $ | $ | $ | $ | |||
Orthopaedics | |||||||
Segment research, development and engineering expenses | $ | $ | $ | $ | |||
MedSurg and Neurotechnology | $ | $ | $ | $ | |||
Orthopaedics | |||||||
Segment selling, general and administrative expenses | $ | $ | $ | $ | |||
MedSurg and Neurotechnology | $ | $ | $ | $ | |||
Orthopaedics | |||||||
Segment depreciation and amortization | $ | $ | $ | $ | |||
Corporate and Other | $ | $ | $ | $ | |||
Amortization of intangible assets | |||||||
Total depreciation and amortization | $ | $ | $ | $ | |||
MedSurg and Neurotechnology | $ | $ | $ | $ | |||
Orthopaedics | |||||||
Segment operating income | $ | $ | $ | $ | |||
Items not allocated to segments: | |||||||
Corporate and Other | $( | $( | $( | $( | |||
Inventory stepped up to fair value | ( | ( | ( | ( | |||
Acquisition and integration-related charges | ( | ( | ( | ( | |||
Amortization of intangible assets | ( | ( | ( | ( | |||
Structural optimization and other special charges | ( | ( | ( | ( | |||
Goodwill and other impairments | ( | ( | ( | ( | |||
Medical device regulation | ( | ( | ( | ( | |||
Recall-related matters | ( | ( | ( | ||||
Regulatory and legal matters | ( | ||||||
Consolidated operating income | $ | $ | $ | $ | |||
Dollar amounts are in millions except per share amounts or as otherwise specified. | 11 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
Segment Assets | |||
September 30 | December 31 | ||
2025 | 2024 | ||
Assets: | |||
MedSurg and Neurotechnology | $ | $ | |
Orthopaedics | |||
Total segment assets | $ | $ | |
Corporate and Other | |||
Total assets | $ | $ | |
Segment Capital Spending | Nine Months | ||
2025 | 2024 | ||
Purchases of property, plant and equipment: | |||
MedSurg and Neurotechnology | $ | $ | |
Orthopaedics | |||
Total segment purchases of property, plant and equipment | $ | $ | |
Corporate and Other | |||
Total purchases of property, plant and equipment | $ | $ | |
NOTE 11 - SALE OF SPINAL IMPLANTS BUSINESS
During the fourth quarter 2024 management committed to a plan
to sell certain assets associated with the Spinal Implants
business (disposal group) and such assets were classified as
held for sale beginning November 2024. As a result we recorded
a valuation allowance of $362 to record the disposal group at its
fair value less cost to sell.
In April 2025 we completed the sale of the disposal group to the
Viscogliosi Brothers, LLC. In the first half of 2025 we recognized
immaterial impairment charges to record the disposal group at its
fair value less cost to sell within goodwill and other impairments
in our Consolidated Statements of Earnings. The fair value of the
disposal group and consideration received was measured using a
discounted cash flow analysis based upon the selling price and
unobservable inputs, such as market conditions and the rate
used to discount the estimated future cash flows to their present
value based on factors including the disposal group’s cost of
equity and market yield rates, which are Level 3 inputs.
Consideration could increase by up to $57 or decrease by up to
$245 based on the amount received.
The assets associated with the disposal group are reported in our
Orthopaedics segment at December 31, 2024. The assets and
liabilities held for sale at December 31, 2024 are classified within
prepaid expenses and other current assets and accrued
expenses and other liabilities in our Consolidated Balance
Sheets. The assets and liabilities of the disposal group at the
date of sale and at December 31, 2024 were as follows:
Held for Sale | |||
Date of Sale | December 31 | ||
2025 | 2024 | ||
Accounts receivable, net | $ | $ | |
Total inventories | |||
Prepaid expenses and other current assets | |||
Property, plant and equipment, net | |||
Other intangibles, net | |||
Noncurrent deferred income tax assets | |||
Other noncurrent assets | |||
Valuation allowance | ( | ( | |
Total assets | $ | $ | |
Accounts payable | $ | $ | |
Accrued compensation | |||
Accrued expenses and other liabilities | |||
Other noncurrent liabilities | |||
Total liabilities | $ | $ |
Dollar amounts are in millions except per share amounts or as otherwise specified. | 12 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
ABOUT STRYKER
Stryker 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.
We segregate our operations into two reportable business
segments: (i) MedSurg and Neurotechnology and (ii)
Orthopaedics. MedSurg and Neurotechnology products include
surgical equipment and navigation systems (Instruments),
endoscopic and communications systems (Endoscopy), patient
handling, emergency medical equipment and intensive care
disposable products (Medical), minimally invasive products for
the treatment of acute ischemic and hemorrhagic stroke and
venous thromboembolism (Vascular), 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 products
(Neuro Cranial). Orthopaedics products consist primarily of
implants used in hip and knee joint replacements and trauma and
extremity surgeries.
Macroeconomic Environment
Beginning in 2025, the United States government has announced
new tariffs on goods imported into the United States from dozens
of countries, including China and the European Union member
states. In response, governments have threatened or imposed
reciprocal tariffs or taken other measures, and the United States
is in the process of negotiating with certain governments. We
continue to monitor and evaluate the situation. Tariffs are
expected to result in an increase in certain product costs or have
adverse impacts on, among other things, demand for our
products and supply chains. The overall macroeconomic and
geopolitical environment, including tariffs or changes in trade
policies, slower economic growth or recession, market volatility
and inflation, and uncertainty regarding all of the foregoing, pose
risks that could impact our business and results of operations.
For more information about these risks, see Item 1A. "Risk
Factors" in our Annual Report on Form 10-K for 2024.
Overview of the Three and Nine Months
In the three months 2025 we achieved sales growth of 10.3%
from 2024. Excluding the impact of acquisitions and divestitures,
sales grew 9.5% in constant currency. We reported operating
income margin of 18.7%, net earnings of $859 and net earnings
per diluted share of $2.22. Excluding the impact of certain items,
adjusted operating income margin(1) increased by 90 basis points
to 25.6%, with adjusted net earnings(1) of $1,233 and adjusted
net earnings per diluted share(1) of $3.19, an increase of 11.1%
from 2024.
In the nine months 2025 we achieved sales growth of 11.1% from
2024. Excluding the impact of acquisitions and divestitures, sales
grew 10.0% in constant currency. We reported operating income
margin of 17.2%, net earnings of $2,397 and net earnings per
diluted share of $6.20. Excluding the impact of certain items,
adjusted operating income margin(1) increased by 100 basis
points to 24.7%, with adjusted net earnings(1) of $3,541 and
adjusted net earnings per diluted share(1) of $9.16, an increase of
12.0% from 2024.
Recent Developments
In the first quarter 2025 we completed the acquisition of Inari for
total consideration of $4,810, in upfront payments, net of cash
acquired. Refer to Note 7 to our Consolidated Financial
Statements for further information.
In February 2025 we entered into a new revolving credit
agreement that replaces our previous agreement dated October
2021. The primary changes were to increase the aggregate
principal amount of the facility by $750 to $3,000 and extend the
maturity date to February 25, 2030. On September 30, 2025
there were no borrowings outstanding under our revolving credit
facility or our commercial paper program which allows for
maturities up to 397 days from the date of issuance. The
maximum amount of our commercial paper that can be
outstanding at any time is $3,000.
In February 2025 we issued $500 of 4.550% senior unsecured
notes due February 10, 2027, $700 of 4.700% senior unsecured
notes due February 10, 2028, $800 of 4.850% senior unsecured
notes due February 10, 2030 and $1,000 of 5.200% senior
unsecured notes due February 10, 2035. In June 2025 we repaid
$650M of 1.150% senior unsecured notes.
(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 | Nine Months | ||||||||||||||||||
Percent Net Sales | Percentage | Percent Net Sales | Percentage | ||||||||||||||||
2025 | 2024 | 2025 | 2024 | Change | 2025 | 2024 | 2025 | 2024 | Change | ||||||||||
Net sales | $6,057 | $5,494 | 100.0% | 100.0% | 10.3% | $17,945 | $16,159 | 100.0% | 100.0% | 11.1% | |||||||||
Gross profit | 3,852 | 3,517 | 63.6 | 64.0 | 9.5 | 11,437 | 10,266 | 63.7 | 63.5 | 11.4 | |||||||||
Research, development and engineering expenses | 410 | 377 | 6.8 | 6.9 | 8.8 | 1,222 | 1,108 | 6.8 | 6.9 | 10.3 | |||||||||
Selling, general and administrative expenses | 2,045 | 1,894 | 33.8 | 34.5 | 8.0 | 6,424 | 5,562 | 35.8 | 34.4 | 15.5 | |||||||||
Amortization of intangible assets | 189 | 159 | 3.1 | 2.9 | 18.9 | 543 | 467 | 3.0 | 2.9 | 16.3 | |||||||||
Goodwill and other impairments | 73 | 2 | 1.2 | — | nm | 163 | 21 | 0.9 | 0.1 | nm | |||||||||
Other income (expense), net | (106) | (42) | (1.8) | (0.8) | 152.4 | (276) | (144) | (1.5) | (0.9) | 91.7 | |||||||||
Income taxes | 170 | 209 | nm | nm | (18.7) | 412 | 517 | nm | nm | (20.3) | |||||||||
Net earnings | $859 | $834 | 14.2% | 15.2% | 3.0% | $2,397 | $2,447 | 13.4% | 15.1% | (2.0)% | |||||||||
Net earnings per diluted share | $2.22 | $2.16 | 2.8% | $6.20 | $6.35 | (2.4)% | |||||||||||||
Adjusted net earnings per diluted share(1) | $3.19 | $2.87 | 11.1% | $9.16 | $8.18 | 12.0% | |||||||||||||
nm - not meaningful
Dollar amounts are in millions except per share amounts or as otherwise specified. | 13 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
Geographic and Segment Net Sales | |||||||||||||
Three Months | Nine Months | ||||||||||||
Percentage Change | Percentage Change | ||||||||||||
2025 | 2024 | As Reported | Constant Currency | 2025 | 2024 | As Reported | Constant Currency | ||||||
Geographic: | |||||||||||||
United States | $4,571 | $4,109 | 11.4% | 11.4% | $13,565 | $12,070 | 12.4% | 12.4% | |||||
International | 1,486 | 1,385 | 6.9 | 4.3 | 4,380 | 4,089 | 7.1 | 6.4 | |||||
Total | $6,057 | $5,494 | 10.3% | 9.6% | $17,945 | $16,159 | 11.1% | 10.9% | |||||
Segment: | |||||||||||||
MedSurg and Neurotechnology | $3,803 | $3,324 | 14.4% | 13.9% | $11,085 | $9,636 | 15.0% | 14.9% | |||||
Orthopaedics | 2,254 | 2,170 | 3.9 | 3.1 | 6,860 | 6,523 | 5.2 | 4.9 | |||||
Total | $6,057 | $5,494 | 10.3% | 9.6% | $17,945 | $16,159 | 11.1% | 10.9% | |||||
Supplemental Net Sales Growth Information | |||||||||||||||||||||||
Three Months | Nine Months | ||||||||||||||||||||||
Percentage Change | Percentage Change | ||||||||||||||||||||||
United States | International | United States | International | ||||||||||||||||||||
2025 | 2024 | As Reported | Constant Currency | As Reported | As Reported | Constant Currency | 2025 | 2024 | As Reported | Constant Currency | As Reported | As Reported | Constant Currency | ||||||||||
MedSurg and Neurotechnology: | |||||||||||||||||||||||
Instruments | $760 | $679 | 11.9% | 11.4% | 11.5% | 13.9% | 11.2% | $2,258 | $2,044 | 10.5% | 10.3% | 10.6% | 9.8% | 8.9% | |||||||||
Endoscopy | 896 | 837 | 7.0 | 6.7 | 7.9 | 2.6 | 0.8 | 2,662 | 2,383 | 11.7 | 11.7 | 12.7 | 7.2 | 7.1 | |||||||||
Medical | 985 | 938 | 5.1 | 4.7 | 5.6 | 2.8 | 0.3 | 2,920 | 2,710 | 7.8 | 7.7 | 9.2 | 0.7 | 0.3 | |||||||||
Vascular | 525 | 329 | 59.6 | 58.9 | 136.9 | 14.3 | 12.4 | 1,429 | 966 | 48.0 | 47.9 | 104.4 | 13.2 | 12.6 | |||||||||
Neuro Cranial | 637 | 541 | 17.6 | 17.0 | 17.3 | 19.0 | 15.5 | 1,816 | 1,533 | 18.4 | 18.2 | 19.2 | 15.0 | 13.7 | |||||||||
$3,803 | $3,324 | 14.4% | 13.9% | 15.7% | 10.1% | 7.7% | $11,085 | $9,636 | 15.0% | 14.9% | 16.8% | 9.0% | 8.4% | ||||||||||
Orthopaedics: | |||||||||||||||||||||||
Knees | $628 | $570 | 10.2% | 9.6% | 8.4% | 14.9% | 12.7% | $1,907 | $1,760 | 8.4% | 8.3% | 7.6% | 10.3% | 10.0% | |||||||||
Hips | 457 | 420 | 8.9 | 7.9 | 8.7 | 9.2 | 6.8 | 1,366 | 1,241 | 10.1 | 9.7 | 8.1 | 13.2 | 12.3 | |||||||||
Trauma and Extremities | 960 | 849 | 13.0 | 11.9 | 13.2 | 12.5 | 8.5 | 2,862 | 2,511 | 14.0 | 13.5 | 15.0 | 11.1 | 9.4 | |||||||||
Other | 203 | 159 | 28.1 | 27.5 | 38.5 | 3.6 | 1.3 | 548 | 490 | 11.9 | 11.8 | 13.5 | 8.1 | 7.8 | |||||||||
$2,248 | $1,998 | 12.5% | 11.7% | 12.9% | 11.5% | 8.6% | $6,683 | $6,002 | 11.3% | 11.1% | 11.4% | 11.2% | 10.2% | ||||||||||
Spinal Implants | 6 | 172 | (96.7) | (96.9) | (100.0) | (89.3) | (89.7) | 177 | 521 | (66.1) | (65.9) | (67.4) | (63.1) | (62.4) | |||||||||
$2,254 | $2,170 | 3.9% | 3.1% | 4.1% | 3.2% | 0.5% | $6,860 | $6,523 | 5.2% | 4.9% | 5.2% | 5.0% | 4.2% | ||||||||||
Total | $6,057 | $5,494 | 10.3% | 9.6% | 11.4% | 6.9% | 4.3% | $17,945 | $16,159 | 11.1% | 10.9% | 12.4% | 7.1% | 6.4% | |||||||||
Note: In the first quarter 2025 we changed the name of our Neurovascular business to Vascular due the acquisition of Inari. In the fourth
quarter 2024 we reorganized our Spine business to align with certain updates to our internal reporting structure. The spine enabling
technologies portfolio (Enabling Technologies) was reclassified to Other Orthopaedics, the interventional spine portfolio was reclassified
to Neuro Cranial and the remaining Spine business was renamed to Spinal Implants. Neuro Cranial includes sales related to
interventional spine of $100 for the three months 2024 and $296 for the nine months 2024. Other Orthopaedics includes sales related to
Enabling Technologies of $32 for the three months 2024 and $94 for the nine months 2024. We have reflected these changes in all
historical periods presented.
Consolidated Net Sales
Consolidated net sales increased 10.3% in the three months
2025 as reported and 9.6% in constant currency, as foreign
currency exchange rates positively impacted net sales by 0.7%.
Excluding the 0.1% impact of acquisitions and divestitures, net
sales in constant currency increased by 9.1% from increased unit
volume and 0.4% due to higher prices. The unit volume increase
was due to higher product shipments across all MedSurg and
Neurotechnology businesses and most Orthopaedics businesses.
Consolidated net sales increased 11.1% in the nine months 2025
as reported and 10.9% in constant currency, as foreign currency
exchange rates positively impacted net sales by 0.2%. Excluding
the 0.9% impact of acquisitions and divestitures, net sales in
constant currency increased by 9.5% from increased unit volume
and 0.5% due to higher prices. The unit volume increase was due
to higher product shipments across all MedSurg and
Neurotechnology businesses and most Orthopaedics businesses.
MedSurg and Neurotechnology Net Sales
MedSurg and Neurotechnology net sales increased 14.4% in the
three months 2025 as reported and 13.9% in constant currency,
as foreign currency exchange rates positively impacted net sales
by 0.5%. Excluding the 5.5% impact of acquisitions and
divestitures, net sales in constant currency increased by 7.6%
from increased unit volume and 0.8% from higher prices. The unit
volume increase was due to higher shipments across all
MedSurg and Neurotechnology businesses.
MedSurg and Neurotechnology net sales increased 15.0% in the
nine months 2025 as reported and 14.9% in constant currency,
as foreign currency exchange rates positively impacted net sales
by 0.1%. Excluding the 5.0% impact of acquisitions and
divestitures, net sales in constant currency increased by 9.0%
from increased unit volume and 0.9% from higher prices. The unit
Dollar amounts are in millions except per share amounts or as otherwise specified. | 14 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
volume increase was due to higher shipments across all
MedSurg and Neurotechnology businesses.
Orthopaedics Net Sales
Orthopaedics net sales increased 3.9% in the three months 2025
as reported and 3.1% in constant currency, as foreign currency
exchange rates positively impacted net sales by 0.8%. Excluding
the 8.3% impact of acquisitions and divestitures, net sales in
constant currency increased 11.7% from increased unit volume
partially offset by 0.3% from lower prices. The unit volume
increase was due to higher shipments across most Orthopaedics
businesses.
Orthopaedics net sales increased 5.2% in the nine months 2025
as reported and 4.9% in constant currency, as foreign currency
exchange rates positively impacted net sales by 0.2%. Excluding
the 5.0% impact of acquisitions and divestitures, net sales in
constant currency increased 10.0% from increased unit volume
partially offset by 0.1% from lower prices. The unit volume
increase was due to higher shipments across most Orthopaedics
businesses.
Gross Profit
Gross profit was $3,852 and $3,517 in the three months 2025
and 2024. The key components of the change were:
Gross Profit Percent Net Sales | |
Three Months 2024 | 64.0% |
Sales pricing | 10 bps |
Volume and mix | 70 bps |
Manufacturing and supply chain costs | (30) bps |
Structural optimization and other special charges | (10) bps |
Inventory stepped up to fair value | (80) bps |
Three Months 2025 | 63.6% |
Gross profit as a percentage of net sales in the three months
2025 remained relatively flat with 2024.
Gross profit was $11,437 and $10,266 in the nine months 2025
and 2024. The key components of the change were:
Gross Profit Percent Net Sales | |
Nine Months 2024 | 63.5% |
Sales pricing | 20 bps |
Volume and mix | 70 bps |
Manufacturing and supply chain costs | 30 bps |
Structural optimization and other special charges | (20) bps |
Inventory stepped up to fair value | (80) bps |
Nine Months 2025 | 63.7% |
While segment mix was not a significant driver of the change in
gross profit as a percent of net sales between the nine months
2025 and 2024, 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
$33 or 8.8% in the three months 2025 and $114 or 10.3% in the
nine months 2025. Expenses as a percentage of net sales in the
three and nine months 2025 of 6.8% remained relatively flat with
6.9% in 2024.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $151 or
8.0% in the three months 2025. As a percentage of net sales,
expenses decreased to 33.8% from 34.5% in 2024, primarily due
to continued spend discipline.
Selling, general and administrative expenses increased $862 or
15.5% in the nine months 2025. As a percentage of net sales,
expenses increased to 35.8% from 34.4% in 2024, primarily due
to higher acquisition-related costs and continued investments to
support our growth. Expenses in the nine 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 $189 and $159 in the three
months and $543 and $467 and nine months 2025 and 2024.
Refer to Note 7 to our Consolidated Financial Statements for
further information.
Goodwill and other impairments
Goodwill and other impairments was $73 and $2 in the three
months and $163 and $21 in the nine months 2025 and 2024.
Operating Income
Operating income was $1,135 and $1,085 in the three months
2025 and 2024. Operating income as a percentage of net sales in
the three months 2025 decreased to 18.7% from 19.7% in 2024.
Refer to the discussion above for the primary drivers of the
change.
Operating income was $3,085 and $3,108 in the nine months
2025 and 2024. Operating income as a percentage of net sales in
the nine months 2025 decreased to 17.2% from 19.2% in 2024.
Refer to the discussion above for the primary drivers of the
change.
MedSurg and Neurotechnology operating income as a
percentage of net sales decreased to 29.0% in the three months
2025 from 29.1% in 2024. Orthopaedics operating income as a
percentage of net sales increased to 28.8% in the three months
2025 from 27.7% in 2024. The key components of the change
were:
Operating Income Percent Net Sales | ||
MedSurg and Neurotechnology | Orthopaedics | |
Three Months 2024 | 29.1% | 27.7% |
Sales pricing | 30 bps | (10) bps |
Volume | 90 bps | 20 bps |
Manufacturing and supply chain costs | 110 bps | (190) bps |
Research, development and engineering expenses | (30) bps | 50 bps |
Selling, general and administrative expenses | (210) bps | 240 bps |
Three Months 2025 | 29.0% | 28.8% |
The decrease in MedSurg and Neurotechnology operating
income as a percentage of net sales for the three months was
primarily driven by lower manufacturing and supply chain costs
and higher unit volumes and prices offset by higher selling,
general and administrative expenses primarily due to the
acquisition of Inari and continued spend discipline.
The increase in Orthopaedics operating income as a percentage
of net sales for the three months was primarily driven by higher
unit volumes, lower selling, general and administrative expenses
and lower research, development and engineering expenses
partially offset by higher manufacturing and supply chain costs.
MedSurg and Neurotechnology operating income as a
percentage of net sales increased to 28.3% in the nine months
2025 from 28.2% in 2024. Orthopaedics operating income as a
percentage of net sales increased to 28.7% in the nine months
2025 from 27.5% in 2024. The key components of the change
were:
Dollar amounts are in millions except per share amounts or as otherwise specified. | 15 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
Operating Income Percent Net Sales | ||
MedSurg and Neurotechnology | Orthopaedics | |
Nine Months 2024 | 28.2% | 27.5% |
Sales pricing | 40 bps | 0 bps |
Volume | 90 bps | 30 bps |
Manufacturing and supply chain costs | 110 bps | (60) bps |
Research, development and engineering expenses | (30) bps | 50 bps |
Selling, general and administrative expenses | (200) bps | 100 bps |
Nine Months 2025 | 28.3% | 28.7% |
The increased in MedSurg and Neurotechnology operating
income as a percentage of net sales for the nine months was
primarily driven by lower manufacturing and supply chain costs
and higher unit volumes and prices offset by higher selling,
general and administrative expenses primarily due to the
acquisition of Inari and continued spend discipline.
The increase in Orthopaedics operating income as a percentage
of net sales for the nine 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.
Other Income (Expense), Net
Other income (expense), net was ($106) and ($42) in the three
months and ($276) and ($144) in the nine months 2025 and
2024. The increase in net expense in the three months and nine
months 2025 from 2024 was primarily due to higher interest
expense in 2025.
Income Taxes
Our effective tax rates were 16.5% and 14.7% in the three and
nine months 2025 and 20.0% and 17.4% in the three and nine
months 2024. The effective income tax rate for the three months
2025 decreased from three months 2024 due to certain discrete
tax items. The effective tax rate for the nine months 2025
decreased from nine months 2024 due to the 2025 tax benefit
related to the sale of the Spinal Implants business and certain
discrete tax items. The effective tax rates for the three and nine
months 2025 and 2024 reflect the continued lower effective
income tax rates as a result of our European operations.
The Organisation for Economic Cooperation and Development
(OECD), which represents a coalition of member countries, has
put forth two proposed base erosion and profit shifting
frameworks that revise the existing profit allocation and nexus
rules (Pillar One) and ensure a minimal level of taxation (Pillar
Two). On December 12, 2022 the European Union member
states agreed to implement the Inclusive Framework’s global
corporate minimum tax rate of 15%, and various countries within
and outside the European Union have either enacted or proposed
new tax laws implementing Pillar Two in 2024. The OECD
continues to release additional guidance and we anticipate more
countries will enact similar tax laws. Some of the new tax laws
became effective in 2024 while others will be effective in 2025
and future years. These tax law changes and any additional
contemplated tax law changes could increase tax expense in
future periods.
On July 4, 2025 the One Big Beautiful Bill Act (OBBBA) was
enacted into United States law. We evaluated the impact of the
OBBBA and recorded the tax-related provisions in the three
months 2025. The impact was not material to the Consolidated
Financial Statements.
Net Earnings
Net earnings increased to $859 or $2.22 per diluted share in the
three months 2025 from $834 or $2.16 per diluted share in 2024.
Net earnings decreased to $2,397 or $6.20 per diluted share in
nine months 2025 from $2,447 or $6.35 per diluted share in
2024.
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
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.
Dollar amounts are in millions except per share amounts or as otherwise specified. | 16 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
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 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 | $3,852 | $2,045 | $410 | $1,135 | $(106) | $170 | $859 | 16.5% | $2.22 |
Reported percent net sales | 63.6% | 33.8% | 6.8% | 18.7% | (1.8)% | nm | 14.2% | ||
Acquisition and integration-related costs: | |||||||||
Inventory stepped-up to fair value | 61 | — | — | 61 | — | 15 | 46 | 0.6 | 0.12 |
Other acquisition and integration-related (a) | 5 | (33) | (1) | 39 | — | 6 | 33 | 0.1 | 0.08 |
Amortization of purchased intangible assets | — | — | — | 189 | — | 39 | 150 | 1.2 | 0.39 |
Structural optimization and other special charges (b) | 15 | (26) | — | 41 | (10) | 3 | 28 | (0.1) | 0.07 |
Goodwill and other impairments (c) | — | — | — | 73 | — | 15 | 58 | 0.4 | 0.16 |
Medical device regulations (d) | — | — | (11) | 11 | — | 3 | 8 | 0.1 | 0.02 |
Recall-related matters (e) | — | (1) | — | 1 | — | — | 1 | — | — |
Regulatory and legal matters (f) | — | — | — | — | — | — | — | — | — |
Tax matters (g) | — | — | — | — | — | (50) | 50 | (4.8) | 0.13 |
Adjusted | $3,933 | $1,985 | $398 | $1,550 | $(116) | $201 | $1,233 | 14.0% | $3.19 |
Adjusted percent net sales | 65.0% | 32.8% | 6.6% | 25.6% | (1.9)% | nm | 20.4% | ||
Dollar amounts are in millions except per share amounts or as otherwise specified. | 17 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
Three Months 2024 | 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 | $3,517 | $1,894 | $377 | $1,085 | $(42) | $209 | $834 | 20.0% | $2.16 |
Reported percent net sales | 64.0% | 34.5% | 6.9% | 19.7% | (0.8)% | nm | 15.2% | ||
Acquisition and integration-related costs: | |||||||||
Inventory stepped-up to fair value | 29 | — | — | 29 | — | 7 | 22 | 0.2 | 0.06 |
Other acquisition and integration-related (a) | — | (48) | — | 48 | — | 11 | 37 | 0.3 | 0.10 |
Amortization of purchased intangible assets | — | — | — | 159 | — | 32 | 127 | 0.7 | 0.32 |
Structural optimization and other special charges (b) | (2) | (24) | — | 22 | — | 4 | 18 | — | 0.05 |
Goodwill and other impairments (c) | — | — | — | 2 | — | — | 2 | — | — |
Medical device regulations (d) | — | — | (13) | 13 | — | 2 | 11 | 0.1 | 0.03 |
Recall-related matters (e) | — | — | — | — | — | — | — | — | — |
Regulatory and legal matters (f) | — | 1 | — | (1) | — | — | (1) | — | — |
Tax matters (g) | — | — | — | — | — | (57) | 57 | (5.5) | 0.15 |
Adjusted | $3,544 | $1,823 | $364 | $1,357 | $(42) | $208 | $1,107 | 15.8% | $2.87 |
Adjusted percent net sales | 64.5% | 33.2% | 6.6% | 24.7% | (0.8)% | nm | 20.1% |
nm - not meaningful
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
Three Months | |||
2025 | 2024 | ||
Employee retention and workforce reductions | $11 | $13 | |
Changes in the fair value of contingent consideration | 12 | 2 | |
Manufacturing integration costs | 7 | 1 | |
Stock compensation payments upon a change in control | — | 22 | |
Other integration-related activities | 9 | 10 | |
Adjustments to Operating Income | $39 | $48 | |
Other income taxes related to acquisition and integration-related costs | 6 | 11 | |
Adjustments to Income Taxes | $6 | $11 | |
Adjustments to Net Earnings | $33 | $37 | |
(b) Structural optimization and other special charges represent the costs associated with:
Three Months | |||
2025 | 2024 | ||
Employee retention and workforce reductions | $5 | $12 | |
Closure/transfer of manufacturing and other facilities | 10 | 2 | |
Product line exits | 10 | 3 | |
Termination of sales relationships in certain countries | 2 | 6 | |
Other charges | 14 | (1) | |
Adjustments to Operating Income | $41 | $22 | |
Adjustments to Other Income (Expense), Net | $(10) | $— | |
Adjustments to Income Taxes | $3 | $4 | |
Adjustments to Net Earnings | $28 | $18 | |
(c) Goodwill and other impairments represent the costs associated with:
Three Months | |||
2025 | 2024 | ||
Certain long-lived and intangible asset write-offs and impairments | $22 | $— | |
Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs) | 51 | 2 | |
Adjustments to Operating Income | $73 | $2 | |
Adjustments to Income Taxes | $15 | $— | |
Adjustments to Net Earnings | $58 | $2 | |
(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.
Dollar amounts are in millions except per share amounts or as otherwise specified. | 18 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:
Three Months | |||
2025 | 2024 | ||
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions | $(61) | $(47) | |
Other tax matters | 11 | (10) | |
Adjustments to Income Taxes | $(50) | $(57) | |
Adjustments to Other Income (Expense), Net | $— | $— | |
Adjustments to Net Earnings | $50 | $57 | |
Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures | |||||||||
Nine 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 | $11,437 | $6,424 | $1,222 | $3,085 | $(276) | $412 | $2,397 | 14.7% | $6.20 |
Reported percent net sales | 63.7% | 35.8% | 6.8% | 17.2% | (1.5)% | nm | 13.4% | ||
Acquisition and integration-related costs: | |||||||||
Inventory stepped-up to fair value | 160 | — | — | 160 | — | 39 | 121 | 0.5 | 0.31 |
Other acquisition and integration-related (a) | 19 | (280) | (3) | 302 | — | 32 | 270 | (0.4) | 0.70 |
Amortization of purchased intangible assets | — | — | — | 543 | — | 112 | 431 | 1.2 | 1.11 |
Structural optimization and other special charges (b) | 43 | (47) | (3) | 93 | (19) | 15 | 59 | 0.2 | 0.15 |
Goodwill and other impairments (c) | — | — | — | 163 | — | 46 | 117 | 0.8 | 0.32 |
Medical device regulations (d) | 1 | — | (29) | 30 | — | 7 | 23 | 0.1 | 0.06 |
Recall-related matters (e) | 52 | (4) | — | 56 | — | 9 | 47 | — | 0.12 |
Regulatory and legal matters (f) | — | (7) | — | 7 | — | 2 | 5 | — | 0.01 |
Tax matters (g) | — | — | — | — | — | (71) | 71 | (2.5) | 0.18 |
Adjusted | $11,712 | $6,086 | $1,187 | $4,439 | $(295) | $603 | $3,541 | 14.6% | $9.16 |
Adjusted percent net sales | 65.3% | 33.9% | 6.6% | 24.7% | (1.6)% | nm | 19.7% | ||
Nine Months 2024 | 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 | $10,266 | $5,562 | $1,108 | $3,108 | $(144) | $517 | $2,447 | 17.4% | $6.35 |
Reported percent net sales | 63.5% | 34.4% | 6.9% | 19.2% | (0.9)% | nm | 15.1% | ||
Acquisition and integration-related costs: | |||||||||
Inventory stepped-up to fair value | 38 | — | — | 38 | — | 9 | 29 | 0.3 | 0.08 |
Other acquisition and integration-related (a) | — | (49) | — | 49 | — | 14 | 35 | 0.2 | 0.09 |
Amortization of purchased intangible assets | — | — | — | 467 | — | 96 | 371 | 1.0 | 0.96 |
Structural optimization and other special charges (b) | 41 | (51) | — | 92 | — | 24 | 68 | 0.2 | 0.23 |
Goodwill and other impairments (c) | — | — | — | 21 | — | — | 21 | — | — |
Medical device regulations (d) | 5 | — | (36) | 41 | — | 9 | 32 | 0.1 | 0.08 |
Recall-related matters (e) | 11 | (11) | — | 22 | — | 5 | 17 | 0.1 | 0.04 |
Regulatory and legal matters (f) | — | 1 | — | (1) | — | — | (1) | — | — |
Tax matters (g) | — | — | — | — | (1) | (136) | 135 | (4.7) | 0.35 |
Adjusted | $10,361 | $5,452 | $1,072 | $3,837 | $(145) | $538 | $3,154 | 14.6% | $8.18 |
Adjusted percent net sales | 64.1% | 33.7% | 6.6% | 23.7% | (0.9)% | nm | 19.5% |
nm - not meaningful
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
Nine Months | |||
2025 | 2024 | ||
Termination of sales relationships | $— | $3 | |
Employee retention and workforce reductions | 56 | 17 | |
Changes in the fair value of contingent consideration | 13 | (12) | |
Manufacturing integration costs | 14 | 2 | |
Stock compensation payments upon a change in control | 139 | 22 | |
Other integration-related activities | 80 | 17 | |
Adjustments to Operating Income | $302 | $49 | |
Other income taxes related to acquisition and integration-related costs | 32 | 14 | |
Adjustments to Income Taxes | $32 | $14 | |
Adjustments to Net Earnings | $270 | $35 | |
Dollar amounts are in millions except per share amounts or as otherwise specified. | 19 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
(b) Structural optimization and other special charges represent the costs associated with:
Nine Months | |||
2025 | 2024 | ||
Employee retention and workforce reductions | $43 | $14 | |
Closure/transfer of manufacturing and other facilities (e.g., site closure, contract termination and redundant employee costs) | 22 | 18 | |
Product line exits (e.g., inventory, long-lived asset and specifically-identified intangible asset write-offs) | 3 | 9 | |
Termination of sales relationships in certain countries | (2) | 7 | |
Other charges | 27 | 44 | |
Adjustments to Operating Income | $93 | $92 | |
Adjustments to Income Taxes | $15 | $24 | |
Adjustments to Other Income (Expense), Net | $(19) | $— | |
Adjustments to Net Earnings | $59 | $68 | |
(c) Goodwill and other impairments represent the costs associated with:
Nine Months | |||
2025 | 2024 | ||
Certain long-lived and intangible asset write-offs and impairments | $108 | $11 | |
Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs) | 55 | 10 | |
Adjustments to Operating Income | $163 | $21 | |
Adjustments to Income Taxes | $46 | $— | |
Adjustments to Net Earnings | $117 | $21 | |
(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:
Nine Months | |||
2025 | 2024 | ||
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions | $(153) | $(141) | |
Certain tax audit settlements | — | (2) | |
Other tax matters | 82 | 7 | |
Adjustments to Income Taxes | $(71) | $(136) | |
Adjustments to Other Income (Expense), Net | $— | $(1) | |
Adjustments to Net Earnings | $71 | $135 | |
FINANCIAL CONDITION AND LIQUIDITY
Nine Months | |||
Net cash provided by (used in): | 2025 | 2024 | |
Operating activities | $2,901 | $2,311 | |
Investing activities | (4,561) | (2,697) | |
Financing activities | 1,206 | 1,269 | |
Effect of exchange rate changes | 58 | (4) | |
Change in cash and cash equivalents | $(396) | $879 | |
Operating Activities
Cash provided by operating activities was $2,901 and $2,311 in
the nine months 2025 and 2024. The increase was primarily due
to the timing of payments and collections in working capital
accounts.
Investing Activities
Cash used in investing activities was $4,561 and $2,697 in the
nine months 2025 and 2024. The nine 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 and the sale of the Spinal Implants business. The
nine months 2024 included cash paid for the Serf acquisition.
Refer to Note 7 to our Consolidated Financial Statements for
further information on acquisitions.
Financing Activities
Cash provided by financing activities was $1,206 in the nine
months 2025 and cash provided by financing activities was
$1,269 in the nine months 2024. In 2025, cash provided was
primarily driven by proceeds from the issuance of various senior
unsecured notes as described in Note 8 to our Consolidated
Financial Statements. This was partially offset by debt payments,
dividend payments and cash paid for taxes on withheld shares.
Cash provided by 2024 was primarily driven by proceeds from
the issuance of various senior unsecured notes. This was
partially offset by debt payments, dividend payments and cash
paid for taxes on withheld shares. We did not repurchase any
shares in the nine months 2025 and 2024.
Liquidity
Cash, cash equivalents, short-term investments and marketable
securities were $3,343 and $4,493 on September 30, 2025 and
December 31, 2024. Current assets exceeded current liabilities
by $6,297 and $7,231 on September 30, 2025 and December 31,
2024. 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 35% on September 30, 2025 compared to 20% on
December 31, 2024.
Dollar amounts are in millions except per share amounts or as otherwise specified. | 20 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
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 2024, except as follows.
Refer to Note 11 to our Consolidated Financial Statements for
discussion of estimates related to the Spinal Implants assets
classified as held for sale at December 31, 2024.
New Accounting Pronouncements Not Yet Adopted
Refer to Note 1 to our Consolidated Financial Statements for
information.
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, 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
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.
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 Item
1A. "Risk Factors" of our Annual Report on Form 10-K for 2024.
This Form 10-Q should be read in conjunction with our
Consolidated Financial Statements and accompanying notes to
our Consolidated Financial Statements in our Annual Report on
Form 10-K for 2024. While we believe that the assumptions
underlying such forward-looking statements are reasonable,
there can be no assurance that future events or developments
will not cause such statements to be inaccurate. All forward-
looking statements contained in this report are qualified in their
entirety by this cautionary statement. We expressly disclaim any
intention or obligation to publicly update or revise any forward-
looking statement to reflect any change in our expectations or in
events, conditions or circumstances on which those expectations
may be based, or that affect the likelihood that actual results will
differ from those contained in the forward-looking statements.
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
We consider our greatest potential area of market risk exposure
to be exchange rate risk on our operating results. Quantitative
and qualitative disclosures about exchange rate risk are included
in Item 7A "Quantitative and Qualitative Disclosures About Market
Risk" of our Annual Report on Form 10-K for 2024. There were
no material changes from the information provided therein.
ITEM 4. | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of the Chief Executive
Officer and Chief Financial Officer (the Certifying Officers),
evaluated the effectiveness of the Company's disclosure controls
and procedures (as defined in Rules 13a-15(e) or 15d-15(e)
promulgated under the Securities Exchange Act of 1934, as
amended) on September 30, 2025. Based on that evaluation, the
Certifying Officers concluded the Company's disclosure controls
and procedures were effective as of September 30, 2025.
Changes in Internal Control Over Financial Reporting
There was no change to our internal control over financial
reporting during the nine months 2025 that materially affected, or
is reasonably likely to materially affect, our internal control over
financial reporting.
PART II – OTHER INFORMATION
ITEM 1A. | RISK FACTORS |
We are not aware of any material changes to the risk factors
included in Item 1A. "Risk Factors" in our Annual Report on Form
10-K for 2024.
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
In the three months 2025 we did not issue shares of our common
stock as performance incentive awards to employees. When
issued, these shares are not registered under the Securities Act
of 1933 based on the conclusion that the awards would not be
events of sale within the meaning of Section 2(a)(3) of the Act.
In March 2015 we announced that our Board of Directors had
authorized us to purchase up to $2,000 of our common stock.
The manner, timing and amount of repurchases are determined
by management based on an evaluation of market conditions,
stock price, and other factors and are subject to regulatory
considerations. Purchases are made from time-to-time in the
open market, in privately negotiated transactions or otherwise.
In the nine months 2025 we did not repurchase any shares of our
common stock under our authorized repurchase program. The
total dollar value of shares of our common stock that could be
acquired under our authorized repurchase program was $1,033
as of September 30, 2025.
ITEM 5. |
Certain of our officers or directors have made elections to
participate in, and are participating in, our employee stock
purchase plan and 401(k) plan and have made, and may from
time to time make, elections to have shares withheld to cover
withholding taxes due or pay the exercise price of stock options,
restricted stock units and performance stock units, which may
constitute non-Rule 10b5–1 trading arrangements (as defined in
Item 408(c) of Regulation S-K).
21 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
ITEM 6. | EXHIBITS |
31(i)† | Certification of Principal Executive Officer of Stryker Corporation pursuant to Rule 13a-14(a). |
31(ii)† | Certification of Principal Financial Officer of Stryker Corporation pursuant to Rule 13a-14(a). |
32(i)†† | Certification by Principal Executive Officer of Stryker Corporation pursuant to 18 U.S.C. Section 1350. |
32(ii)†† | Certification by Principal Financial Officer of Stryker Corporation pursuant to 18 U.S.C. Section 1350. |
101.INS | iXBRL Instance Document |
101.SCH | iXBRL Schema Document |
101.CAL | iXBRL Calculation Linkbase Document |
101.DEF | iXBRL Definition Linkbase Document |
101.LAB | iXBRL Label Linkbase Document |
101.PRE | iXBRL Presentation Linkbase Document |
104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) |
* Compensation arrangement | |
† Filed with this Form 10-Q | |
†† Furnished with this Form 10-Q |
22 |
STRYKER CORPORATION | 2025 Third Quarter Form 10-Q |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
STRYKER CORPORATION | |||
(Registrant) | |||
Date: | October 31, 2025 | /s/ KEVIN A. LOBO | |
Kevin A. Lobo | |||
Chair, Chief Executive Officer and President | |||
Date: | October 31, 2025 | /s/ PRESTON W. WELLS | |
Preston W. Wells | |||
Vice President, Chief Financial Officer |
FAQ
How did Stryker (SYK) perform in Q3 2025?
Net sales were $6,057 million (up 10.3% year over year) and diluted EPS was $2.22.
Which SYK segment drove growth in Q3 2025?
MedSurg and Neurotechnology led with $3,803 million in sales, up 14.4%.
What were SYK’s nine‑month 2025 results?
Revenue was $17,945 million with diluted EPS of $6.20 and operating cash flow of $2,901 million.
What acquisitions or divestitures did SYK complete?
Stryker acquired Inari Medical for $4,810 million and completed the sale of its Spinal Implants business.
How did SYK finance recent transactions?
It issued $3,000 million of senior notes and repaid $650 million, ending with total debt of $16,595 million.
How many SYK shares were outstanding?
There were 382,423,648 common shares outstanding as of September 30, 2025.
Did SYK provide any legal or regulatory updates?
The DOJ closed its FCPA inquiry on April 1, 2025; other investigations remain under review.