Stryker Corporation

02/11/2026 | Press release | Distributed by Public on 02/11/2026 10:44

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
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.Our
goal is to achieve sales growth at the high-end of the medical
technology (MedTech) industry and maintain our long-term capital
allocation strategy that prioritizes: (1) Acquisitions, (2) Dividends
and (3) Share repurchases.
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
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 continue 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."
Overview of 2025
In 2025we achieved reported net sales growth of 11.2%.
Excluding the impact of acquisitions and divestitures, sales grew
10.3%in constant currency. We reported net earnings of $3,246
and net earnings per diluted share of $8.40. Excluding the impact
of certain items, we achieved adjusted net earnings(1)of $5,267
and adjusted net earnings per diluted share(1) of $13.63
representing growth of 11.8%.
We continued our capital allocation strategy by investing $4,960
in acquisitions and paying $1,284in dividends to our
shareholders.
In 2025we completed various acquisitions for total consideration
of $4,960, net of cash acquired. Refer to Note 6 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 included increasing the aggregate
principal amount of the facility by $750to $3,000and extending
the maturity date to February 25, 2030. On December 31, 2025
there were noborrowings outstanding under our revolving credit
facility or our commercial paper program which allows for
maturities up to 397days from the date of issuance. The
maximum amount of our commercial paper that can be
outstanding at any time is $3,000.
In February 2025we issued $500of 4.550%senior unsecured
notes due February 10, 2027, $700of 4.700%senior unsecured
notes due February 10, 2028, $800of 4.850%senior unsecured
notes due February 10, 2030 and $1,000of 5.200%senior
unsecured notes due February 10, 2035.In the second quarter
2025we repaid $650of 1.150%senior unsecured notes and in
the fourth quarter 2025 we repaid $750of 3.375%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.
Dollar amounts in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2025FORM 10-K
CONSOLIDATED RESULTS OF OPERATIONS
Percent Net Sales
Percentage Change
2025
2024
2023
2025
2024
2023
2025 vs. 2024
2024 vs. 2023
Net sales
$25,116
$22,595
$20,498
100.0%
100.0%
100.0%
11.2%
10.2%
Gross profit
16,065
14,440
13,058
64.0
63.9
63.7
11.3
10.6
Research, development and engineering expenses
1,623
1,466
1,388
6.5
6.5
6.8
10.7
5.6
Selling, general and administrative expenses
8,651
7,685
7,111
34.4
34.0
34.7
12.6
8.1
Amortization of intangible assets
2.9
2.8
3.1
17.5
(1.9)
Goodwill and other impairments
0.7
4.3
0.2
nm
nm
Interest expense
(607)
(409)
(363)
(2.4)
(1.8)
(1.8)
48.4
12.7
Other income
0.9
0.9
0.8
9.4
43.2
Income taxes
1,268
nm
nm
nm
154.1
(1.8)
Net earnings
$3,246
$2,993
$3,165
12.9%
13.2%
15.4%
8.5%
(5.4)%
Net earnings per diluted share
$8.40
$7.76
$8.25
8.2%
(5.9)%
Adjusted net earnings per diluted share(1)
$13.63
$12.19
$10.60
11.8%
15.0%
nm - not meaningful
Geographic and Segment Net Sales
Percentage Change
2025 vs. 2024
2024 vs. 2023
2025
2024
2023
As
Reported
Constant
Currency
As
Reported
Constant
Currency
Geographic:
United States
$19,006
$16,943
$15,257
12.2%
12.2%
11.0%
11.0%
International
6,110
5,652
5,241
8.1
6.4
7.9
9.8
Total
$25,116
$22,595
$20,498
11.2%
10.7%
10.2%
10.7%
Segment:
MedSurg and Neurotechnology
$15,647
$13,518
$12,163
15.7%
15.4%
11.1%
11.6%
Orthopaedics
9,469
9,077
8,335
4.3
3.8
8.9
9.4
Total
$25,116
$22,595
$20,498
11.2%
10.7%
10.2%
10.7%
Supplemental Net Sales Growth Information
Percentage Change
2025 vs. 2024
2024 vs. 2023
United
States
International
United
States
International
2025
2024
2023
As
Reported
Constant
Currency
As
Reported
As
Reported
Constant
Currency
As
Reported
Constant
Currency
As
Reported
As
Reported
Constant
Currency
MedSurg and
Neurotechnology:
Instruments
$3,183
$2,834
$2,534
12.3%
11.9%
13.0%
9.5%
7.5%
11.9%
12.1%
12.5%
9.5%
10.6%
Endoscopy
3,807
3,389
3,068
12.3
12.3
12.2
12.8
12.4
10.5
11.0
11.1
7.7
10.7
Medical
4,204
3,852
3,459
9.1
8.8
10.0
4.8
2.8
11.4
11.7
14.6
(2.0)
(0.3)
Vascular
1,968
1,307
1,226
50.6
50.0
107.5
14.8
13.4
6.6
8.2
4.7
7.9
10.5
Neuro Cranial
2,485
2,136
1,876
16.3
15.9
16.5
15.5
13.1
13.9
14.1
15.0
8.7
10.2
$15,647
$13,518
$12,163
15.7%
15.4%
17.0%
11.3%
9.7%
11.1%
11.6%
12.7%
5.9%
7.9%
Orthopaedics:
Knees
$2,656
$2,447
$2,273
8.5%
8.2%
7.6%
11.0%
9.7%
7.6%
8.2%
6.7%
10.4%
12.2%
Hips
1,865
1,704
1,544
9.5
8.9
7.4
12.9
11.2
10.3
11.3
7.2
15.9
18.4
Trauma and Extremities
3,948
3,507
3,147
12.6
11.8
13.1
11.0
8.2
11.4
11.6
12.6
8.3
9.1
Other
14.5
14.0
18.2
5.3
3.6
8.1
9.6
7.3
10.1
15.4
9,284
8,370
7,622
10.9%
10.3%
10.9%
11.0%
9.0%
9.8%
10.4%
9.3%
10.9%
12.8%
Spinal Implants
(73.9)
(73.9)
(76.0)
(69.3)
(69.2)
(0.7)
(0.3)
(2.1)
2.5
3.8
$9,469
$9,077
$8,335
4.3%
3.8%
4.3%
4.4%
2.6%
8.9%
9.4%
8.4%
10.2%
12.0%
Total
$25,116
$22,595
$20,498
11.2%
10.7%
12.2%
8.1%
6.4%
10.2%
10.7%
11.0%
7.9%
9.8%
Consolidated Net Sales
Consolidated net sales in 2025 increased 11.2%as reported and
10.7%in constant currency, as foreign currency exchange rates
positivelyimpacted net sales by 0.5%. Excluding the 0.4%impact
of acquisitions and divestitures, net sales in constant currency
increasedby 9.9%from increasedunit volume and 0.4%due to
higherprices. The unit volume increasewas primarily due to
highershipments across all businesses.
Consolidated net sales in 2024 increased 10.2%as reported and
10.7%in constant currency, as foreign currency exchange rates
negativelyimpacted net sales by 0.5%. Excluding the 0.5%
impact of acquisitions and divestitures, net sales in constant
currency increased by 9.1%from increasedunit volume and
1.1%due to higherprices. The unit volume increasewas due to
highershipments across all MedSurg and Neurotechnology
businesses and most Orthopaedics businesses.
Dollar amounts in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2025FORM 10-K
MedSurg and Neurotechnology Net Sales
MedSurg and Neurotechnology net sales in 2025 increased
15.7%as reported and 15.4%in constant currency, as foreign
currency exchange rates positivelyimpacted net sales by 0.3%.
Excluding the 4.7%impact of acquisitions and divestitures, net
sales in constant currency increasedby 10.0%from increased
unit volume and 0.7%due to higherprices. The unit volume
increasewas due to highershipments across all MedSurg and
Neurotechnology businesses.
MedSurg and Neurotechnology net sales in 2024 increased
11.1%as reported and 11.6%in constant currency, as foreign
currency exchange rates negativelyimpacted net sales by 0.5%.
Excluding the 0.4%impact of acquisitions and divestitures, net
sales in constant currency increasedby 9.5%from increasedunit
volume and 1.7%due to higherprices. The unit volume increase
was due to highershipments across all MedSurg and
Neurotechnology businesses.
Orthopaedics Net Sales
Orthopaedics net sales in 2025 increased 4.3%as reported and
3.8%in constant currency, as foreign currency exchange rates
positivelyimpacted net sales by 0.5%. Excluding the 5.7%impact
of acquisitions and divestitures, net sales in constant currency
increasedby 9.6%from increasedunit volume partially offset by
0.1%due to lower prices. The unit volume increasewas due to
highershipments across most Orthopaedics businesses.
Orthopaedics net sales in 2024 increased 8.9%as reported and
9.4%in constant currency, as foreign currency exchange rates
negativelyimpacted net sales by 0.5%. Excluding the 0.7%
impact of acquisitions and divestitures, net sales in constant
currency increasedby 8.7%from increased unit volume. The unit
volume increasewas due to highershipments across all
Orthopaedics businesses.
Gross Profit
Gross profit was $16,065, $14,440and $13,058in 2025, 2024,
and 2023. The key components of the change were:
Gross Profit
Percent Net Sales
2023
63.7%
Sales pricing
40 bps
Volume and mix
60 bps
Manufacturing and supply chain costs
(40) bps
Inventory stepped up to fair value
(20) bps
Structural optimization and other special charges
(20) bps
2024
63.9%
Sales pricing
10 bps
Volume and mix
70 bps
Manufacturing and supply chain costs
0 bps
Inventory stepped up to fair value
(60) bps
Structural optimization and other special charges
(10) bps
2025
64.0%
Gross profit as a percentage of net sales increasedto 64.0%in
2025from 63.9%in 2024primarily due to higher sales pricing
and favorable volume partially offset by higher amortization of
inventory stepped up to fair value.
Gross profit as a percentage of net sales increasedto 63.9%in
2024from 63.7%in 2023due to higher sales pricing and
favorable volume offset by higher manufacturing and supply
chain costs primarily due to inflationary pressures impacting fixed
and variable manufacturing costs as well as higher amortization
of inventory stepped up to fair value.
While segment mix was not a significant driver of the change in
gross profit as a percent of net sales between 2025, 2024and
2023, 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 as a
percentage of net sales in 2025of 6.5%remained flat with 2024.
Research, development and engineering expenses as a
percentage of net sales in 2024 decreasedto 6.5%from 6.8%in
2023primarily due to lower spend on medical device regulations
in the European Union.
Selling, General and Administrative Expenses
Selling, general and administrative expenses as a percentage of
net sales in 2025 increasedto 34.4%from 34.0%in 2024
primarily due to higher acquisition-related costs and continued
investments to support our growth. A charge of $139 for share-
based awards for Inari employees that vested upon our
acquisition is included in 2025.
Selling, general and administrative expenses as a percentage of
net sales in 2024 decreasedto 34.0%from 34.7%in 2023
primarily due to continued spend discipline and lower charges for
structural optimization and certain legal matters partially offset by
higher acquisition-related costs.
Amortization of Intangible Assets
Amortization of intangible assets was $732, $623and $635in
2025, 2024and 2023. These amounts include amortization
related to intangible assets acquired in 2025from Inari, 2024
from various acquisitions and 2023from Cerus Endovascular
Limited (Cerus). Refer to Notes 6 and 8 to our Consolidated
Financial Statements for further information.
Goodwill and Other Impairments
Goodwill and other impairments of $170, $977and $36were
recorded in 2025, 2024and 2023.
In 2024we recorded goodwill impairment charges of $456related
to our Spine business and recognized an estimated loss of $362
as a result of classifying certain assets in our Spinal Implants
business as held for sale. Refer to Notes 8 and 16 to our
Consolidated Financial Statements for further information.
In 2025, 2024and 2023we recorded other impairments of $109,
$159and $36. Refer to Note 15 to our Consolidated Financial
Statements for further information.
Operating Income
Operating income was $4,889, $3,689and $3,888in 2025, 2024
and 2023. Operating income increasedas a percentage of sales
to 19.5%in 2025from 16.3%in 2024and increasedfrom 19.0%
in 2023. Refer to the comments above for discussion of the
primary drivers of the change.
MedSurg and Neurotechnology operating income as a
percentage of net sales increasedto 29.9%in 2025from 29.6%
in 2024. MedSurg and Neurotechnology operating income as a
percentage of net sales increasedto 29.6%in 2024from 28.5%
in 2023. Orthopaedics operating income as a percentage of net
sales increasedto 29.8%in 2025from 28.5%in 2024.
Orthopaedics operating income as a percentage of net sales
increased to 28.5%in 2024from 27.2%in 2023.Thekey
components of the change were:
Dollar amounts in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2025FORM 10-K
Operating Income
Percent Net Sales
MedSurg and
Neurotechnology
Orthopaedics
2023
28.5%
27.2%
Sales pricing
70 bps
0 bps
Volume
40 bps
70 bps
Manufacturing and supply chain costs
(40) bps
(20) bps
Research, development and
engineering expenses
0 bps
10 bps
Selling, general and administrative
expenses
40 bps
70 bps
2024
29.6%
28.5%
Sales pricing
30 bps
0 bps
Volume
90 bps
30 bps
Manufacturing and supply chain costs
80 bps
(90) bps
Research, development and
engineering expenses
(30) bps
50 bps
Selling, general and administrative
expenses
(140) bps
140 bps
2025
29.9%
29.8%
The increasein MedSurg and Neurotechnology operating income
as a percentage of net sales in 2025from 2024was primarily
driven by higher unit volumes and prices, and lower
manufacturing and supply chain costs partially offset by higher
selling, general and administrative expenses due to the
acquisition of Inari.
The increasein MedSurg and Neurotechnology operating income
as a percentage of net sales in 2024from 2023was primarily
driven by higher unit volumes, higher prices and a decrease in
selling, general and administrative expenses as a percentage of
sales partially offset by higher manufacturing and supply chain
costs.
The increasein Orthopaedics operating income as a percentage
of net sales for 2025from 2024was primarily by driven lower
selling, general and administrative expenses and higher unit
volumes partially offset by higher manufacturing and supply chain
costs.
The increasein Orthopaedics operating income as a percentage
of net sales for 2024from 2023was primarily driven by higher
sales volumes and a decrease in selling, general and
administrative expenses as a percentage of sales partially offset
by higher manufacturing and supply chain costs.
Interest Expense
Interest expense was $607, $409and $363in 2025, 2024and
2023. The increasein 2025from 2024was due to increased
interest expense from our 2025 debt issuances. The increasein
2024from 2023 was primarily due to the impact of additional
interest expense from our 2024 debt issuances.
Other Income
Other income was $232, $212and $148in 2025, 2024and 2023.
The increasein 2025from 2024was primarily due to higher
interest income in 2025. The increasein 2024from 2023was
primarily due to higher interest income.
IncomeTaxes
Our effective tax rate was 28.1%, 14.3%and 13.8%for 2025,
2024and 2023. The effective income tax rate for 2025increased
from 2024due to the 2025tax effect of transfers of intellectual
property between tax jurisdictions and the 2024tax effect of the
sale of the Spinal Implants business. The effective income tax
rate for 2024increased from 2023due to the 2023tax effect of
transfers of intellectual property between tax jurisdictions offset
by the 2024tax effect of the sale of the Spinal Implants business.
Our future results of operations could be affected by changes in
the effective tax rate as a result of changes in tax laws,
regulations and judicial rulings. We are continuing to evaluate the
impact of tax reform in the countries in which we operate as new
guidance is published and new regulations are adopted. In
addition, further changes in the tax laws could arise, including as
a result of the base erosion and profit shifting project undertaken
by the Organisation for Economic Cooperation and Development
(OECD). The OECD, which represents a coalition of member
countries, has put forth two proposed frameworks that revise the
existing profit allocation and nexus rules (Pillar 1) and ensure a
minimal level of taxation (Pillar 2), respectively, and several
countries enacted tax legislation based on these frameworks. In
January 2026, the OECD released Administrative Guidance
containing the SbS System and introduced two new Pillar 2 safe
harbors for multinationals headquartered in jurisdictions including
the United States with eligible tax systems. The safe harbors
must now be legislated domestically by each country with
enacted Pillar 2 legislation impacted by the new OECD
Administrative Guidance. These tax law changes and any
additional contemplated tax law changes, could impact tax
expense in future periods.
Net Earnings
Net earnings for 2025increased to $3,246or $8.40per diluted
share from $2,993or $7.76per diluted share in 2024and $3,165
or $8.25per diluted share in 2023. Refer to the comments above
for discussion of the primary drivers of the change.
Non-GAAP Financial Measures
We supplement the reporting of our financial information
determined under accounting principles generally accepted in the
United States (GAAP) with certain non-GAAP financial measures,
including percentage sales growth in constant currency;
percentage organic sales growth; adjusted gross profit; adjusted
selling, general and administrative expenses; adjusted research,
development and engineering expenses; adjusted operating
income; adjusted other income (expense), net; adjusted income
taxes; adjusted effective income tax rate; adjusted net earnings;
and adjusted net earnings per diluted share (Diluted EPS). We
believe these non-GAAP financial measures provide meaningful
information to assist investors and shareholders in understanding
our financial results and assessing our prospects for future
performance. Management believes percentage sales growth in
constant currency and the other adjusted measures described
above are important indicators of our operations because they
exclude items that may not be indicative of or are unrelated to our
core operating results and provide a baseline for analyzing trends
in our underlying businesses. Management uses these non-
GAAP financial measures for reviewing the operating results of
reportable business segments and analyzing potential future
business trends in connection with our budget process and bases
certain management incentive compensation on these non-GAAP
financial measures. To measure percentage sales growth in
constant currency, we remove the impact of changes in foreign
currency exchange rates that affect the comparability and trend
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
Dollar amounts in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2025FORM 10-K
exclude certain items that affect the comparability of operating
results and the trend of earnings. The income tax effect of each
adjustment was determined based on the tax effect of the
jurisdiction in which the related pre-tax adjustment was recorded.
These adjustments are irregular in timing and may not be
indicative of our past and future performance. The following are
examples of the types of adjustments that may be included in a
period:
1.Acquisition and integration-related costs. Costs related to
integrating recently acquired businesses (e.g., costs
associated with the termination of sales relationships,
employee retention and workforce reductions, manufacturing
integration costs and other integration-related activities),
changes in the fair value of contingent consideration,
amortization of inventory stepped-up to fair value, specific
costs (e.g., deal costs and costs associated with legal entity
rationalization) related to the consummation of the
acquisition process and legal entity rationalization and
acquisition-related tax items.
2.Amortization of purchased intangible assets. Periodic
amortization expense related to purchased intangible assets.
3.Structural optimization and other special charges.Costs
associated with employee retention and workforce
reductions, the closure or transfer of manufacturing and
other facilities (e.g., site closure costs, contract termination
costs and redundant employee costs during the work
transfers), product line exits (primarily inventory, long-lived
asset and specifically-identified intangible asset write-offs),
certain long-lived and intangible asset write-offs and
impairments and other charges.
4.Medical device regulations.Costs specific to updating our
quality system, product labeling, asset write-offs and product
remanufacturing to comply with the new medical device
reporting regulations and other requirements of the
European Union.
5.Recall-related matters. Changes in our best estimate of the
probable loss, or the minimum of the range of probable
losses when a best estimate within a range is not known, to
resolve the Rejuvenate, LFIT V40, Wright legacy hip
products and other product recalls.
6.Regulatory and legal matters. Changes in our best estimate
of the probable loss, or the minimum of the range of
probable losses when a best estimate within a range is not
known, to resolve certain regulatory or other legal matters
and the amount of favorable awards from settlements.
7.Tax matters. Impact of accounting for certain significant and
discrete tax items.
Because non-GAAP financial measures are not standardized, it
may not be possible to compare these financial measures with
other companies' non-GAAP financial measures having the same
or similar names. These adjusted financial measures should not
be considered in isolation or as a substitute for reported sales
growth, gross profit, selling, general and administrative expenses,
research, development and engineering expenses, operating
income, other income (expense), net, income taxes, effective
income tax rate, net earnings and net earnings per diluted share,
the most directly comparable GAAP financial measures. These
non-GAAP financial measures are an additional way of viewing
aspects of our operations when viewed with our GAAP results
and the reconciliations to corresponding GAAP financial
measures at the end of the discussion of Consolidated Results of
Operations below. We strongly encourage investors and
shareholders to review our financial statements and publicly-filed
reports in their entirety and not to rely on any single financial
measure.
The weighted-average diluted shares outstanding used in the
calculation of adjusted net earnings per diluted share are the
same as those used in the calculation of reported net earnings
per diluted share for the respective period.
Dollar amounts in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2025FORM 10-K
Reconciliation of the Most Directly Comparable GAAP Financial Measure to Non-GAAP Financial Measure
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
$16,065
$8,651
$1,623
$4,889
$(375)
$1,268
$3,246
28.1%
$8.40
Acquisition and integration-related costs:
Inventory stepped-up to fair value
-
-
-
0.3
0.34
Other acquisition and integration-related (a)
(296)
(15)
-
(0.3)
0.78
Amortization of purchased intangible assets
-
-
-
-
0.9
1.49
Structural optimization and other special charges (b)
(113)
(4)
(27)
-
0.37
Goodwill and other impairments (c)
-
-
-
-
0.5
0.31
Medical device regulations (d)
-
(37)
-
0.1
0.08
Recall-related matters (e)
(4)
-
-
-
0.12
Regulatory and legal matters (f)
-
(17)
-
-
-
0.03
Tax matters (g)
-
-
-
-
-
(660)
(14.5)
1.71
Adjusted
$16,391
$8,221
$1,567
$6,603
$(402)
$934
$5,267
15.1%
$13.63
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
$14,440
$7,685
$1,466
$3,689
$(197)
$499
$2,993
14.3%
$7.76
Acquisition and integration-related costs:
Inventory stepped-up to fair value
-
-
-
0.2
0.09
Other acquisition and integration-related (a)
-
(107)
(1)
-
0.2
0.22
Amortization of purchased intangible assets
-
-
-
-
1.0
1.28
Structural optimization and other special charges (b)
(77)
(2)
0.3
0.29
Goodwill and other impairments (c)
-
-
-
-
(0.6)
2.21
Medical device regulations (d)
-
(49)
-
0.1
0.11
Recall-related matters (e)
(29)
-
-
0.1
0.08
Regulatory and legal matters (f)
-
(36)
-
-
0.1
0.08
Tax matters (g)
-
-
-
-
-
(28)
(0.9)
0.07
Adjusted
$14,565
$7,436
$1,414
$5,715
$(196)
$819
$4,700
14.8%
$12.19
2023
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
$13,058
$7,111
$1,388
$3,888
$(215)
$508
$3,165
13.8%
$8.25
Acquisition and integration-related costs:
Inventory stepped-up to fair value
-
-
-
-
-
-
-
-
-
Other acquisition and integration-related (a)
-
(20)
-
-
(25)
(0.8)
0.12
Amortization of purchased intangible assets
-
-
-
-
1.2
1.31
Structural optimization and other special charges (b)
(130)
(1)
-
0.4
0.34
Goodwill and other impairments (c)
-
-
-
-
0.1
0.08
Medical device regulations (d)
-
(94)
-
0.2
0.19
Recall-related matters (e)
-
(18)
-
-
-
0.04
Regulatory and legal matters (f)
-
(92)
-
-
0.4
0.16
Tax matters (g)
-
-
-
-
(8)
(51)
(1.2)
0.11
Adjusted
$13,099
$6,851
$1,293
$4,955
$(223)
$666
$4,066
14.1%
$10.60
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
2025
2024
2023
Termination of sales relationships
$-
$4
$5
Employee retention and workforce reductions
Changes in the fair value of contingent consideration
(1)
Manufacturing integration costs
Stock compensation payments upon a change in control
-
Other integration-related activities
Adjustments to Operating Income
$335
$108
$20
Charges for acquisition-related tax provisions
-
-
-
Other income taxes related to acquisition and integration-related costs
(25)
Adjustments to Income Taxes
$36
$23
$(25)
Adjustments to Net Earnings
$299
$85
$45
Dollar amounts in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2025FORM 10-K
(b) Structural optimization and other special charges represent the costs associated with:
2025
2024
2023
Employee retention and workforce reductions
$55
$23
$69
Closure/transfer of manufacturing and other facilities
Product line exits
Termination of sales relationships
-
Other charges
Adjustments to Operating Income
$191
$138
$170
Adjustments to Other Income (Expense), Net
$(27)
$1
$-
Adjustments to Income Taxes
$24
$29
$38
Adjustments to Net Earnings
$140
$110
$132
(c) Goodwill and other impairments represent the costs associated with:
2025
2024
2023
Goodwill impairments
$-
$456
$-
Certain long-lived and intangible asset write-offs and impairments
Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs)
Adjustments to Operating Income
$170
$977
$36
Adjustments to Income Taxes
$50
$125
$9
Adjustments to Net Earnings
$120
$852
$27
(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:
2025
2024
2023
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions
$(718)
$(185)
$(89)
Certain tax audit settlements
-
(1)
Deferred tax benefit on outside basis related to the anticipated sale of the Spinal Implants business
-
-
Other tax matters
(12)
Adjustments to Income Taxes
$(660)
$(28)
$(51)
Benefits for certain tax audit settlements
-
-
(9)
Other tax related adjustments
-
-
Adjustments to Other Income (Expense), Net
$-
$-
$(8)
Adjustments to Net Earnings
$660
$28
$43
FINANCIAL CONDITION AND LIQUIDITY
Net cash provided by (used in):
2025
2024
2023
Operating activities
$5,044
$4,242
$3,711
Investing activities
(4,866)
(3,000)
(962)
Financing activities
(525)
(1,594)
Effect of exchange rate changes
(36)
(28)
Change in cash and cash equivalents
$359
$681
$1,127
We believe our financial condition continues to be of high quality,
as evidenced by our ability to generate substantial cash from
operations and to readily access capital markets at competitive
rates despite the current macroeconomic environment. Operating
cash flow provides the primary source of cash to fund operating
needs and capital expenditures. Excess operating cash is used
first to fund acquisitions to complement our portfolio of
businesses. Other discretionary uses include dividends and
potentially share repurchases. We supplement operating cash
flow with debt to fund our activities as necessary. Our overall
cash position reflects our business results and a global cash
management strategy that takes into account liquidity
management, economic factors and tax considerations.
Operating Activities
Cash provided by operating activities was $5,044, $4,242and
$3,711in 2025, 2024and 2023. The increase in 2025was
primarily due to higher cash earnings and working capital
improvements. The increase in 2024from 2023was primarily due
to higher cash earnings partially offset by changes in working
capital.
Investing Activities
Cash used in investing activities was $4,866, $3,000and $962in
2025, 2024and 2023. Cash used in 2025 included cash paid for
the acquisition of Inari, purchases of property, plant and
equipment, partially offset by proceeds from the sale of short
term investments and our Spinal Implants business. Cash used in
2024included cash paid for various acquisitions and purchases
of short-term investments partially offset by proceeds from other
investing activities.
Financing Activities
Cash provided by financing activities in 2025was $113and used
in financing activities in 2024and 2023was $525and $1,594.
Cash provided by 2025was primarily driven by dividend
payments of $1,284and repayments of $1,400to pay off
maturing senior unsecured notes. These repayments were offset
by net proceeds of $2,979from the issuance of senior unsecured
notes as described in Note 10 to our Consolidated Financial
statements. Cash used in 2024was primarily driven by dividend
payments of $1,219and repayments of $2,039to pay off
maturing senior unsecured notes. These repayments were offset
by net proceeds of $3,011from issuance of senior unsecured
notes.
We maintain debt levels that we consider appropriate after
evaluating a number of factors including cash requirements for
ongoing operations, investment and financing plans (including
acquisitions and share repurchase activities) and overall cost of
Dollar amounts in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2025FORM 10-K
capital. Refer to Note 10 to our Consolidated Financial
Statements for further information.
2025
2024
2023
Dividends paid per common share
$3.36
$3.20
$3.00
Total dividends paid to common shareholders
$1,284
$1,219
$1,139
Liquidity
Cash, cash equivalents and marketable securities were $4,100
and $3,743, and our current assets exceeded current liabilities by
$6,961and $7,231on December 31, 2025and 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 also
have a revolving credit agreement maturing in February 2030
with an aggregate principal amount of $3,000.
We raised funds in the capital 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 and marketable securities held in
locations outside the United States was approximately 20% on
December 31, 2025and 2024.
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.
CONTRACTUAL OBLIGATIONS AND FORWARD-LOOKING
CASH REQUIREMENTS
In 2025we recorded charges for various legal matters as further
described in Note 7 to our Consolidated Financial Statements.
Recorded reserves represent the 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. The final outcome of
these matters is dependent on many variables that are difficult to
predict. The ultimate cost to entirely resolve these matters may
be materially different from the amount of the current estimates
and could have a material adverse effect on our financial
position, results of operations and cash flows. We are not able to
reasonably estimate the future periods in which payments will be
made.
As further described in Note 11 to our Consolidated Financial
Statements, on December 31, 2025we had a reserve for
uncertain income tax positions of $403. Due to uncertainties
regarding the ultimate resolution of income tax audits, we are not
able to reasonably estimate the future periods in which any
income tax payments to settle these uncertain income tax
positions will be made.
As further described in Note 12 to our Consolidated Financial
Statements, on December 31, 2025our defined benefit pension
plans were underfunded by $269, of which approximately $268
related to plans outside the United States. Due to the rules
affecting tax-deductible contributions in the jurisdictions in which
the plans are offered and the impact of future plan asset
performance, changes in interest rates and potential changes in
legislation in the United States and other foreign jurisdictions, we
are not able to reasonably estimate the amounts that may be
required to fund defined benefit pension plans.
Contractual Obligations
Total
2026
2027-
2028
2029-
2030
After
2030
Debt repayments
$15,973
$1,000
$3,988
$4,256
$6,729
Interest payments
4,287
2,124
Minimum lease payments
Other
Total
$20,869
$1,706
$5,185
$5,046
$8,932
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
In preparing our financial statements in accordance with
generally accepted accounting principles, there are certain
accounting policies, which may require substantial judgment or
estimation in their application. We believe these accounting
policies and the others set forth in Note 1 to our Consolidated
Financial Statements are critical to understanding our results of
operations and financial condition. Actual results could differ from
our estimates and assumptions, and any such differences could
be material to our results of operations and financial condition.
Income Taxes
Our annual tax rate is determined based on our income, statutory
tax rates and the tax impacts of items treated differently for tax
purposes than for financial reporting purposes. Tax law requires
certain items be included in the tax return at different times than
the items are reflected in the financial statements. Some of these
differences are permanent, such as expenses that are not
deductible in our tax return, and some differences are temporary
and reverse over time, such as depreciation expense. These
temporary differences create deferred tax assets and liabilities.
Deferred tax assets generally represent the tax effect of items
that can be used as a tax deduction or credit in future years for
which we have already recorded the tax benefit in our income
statement. Deferred tax liabilities generally represent tax expense
recognized in our financial statements for which payment was
deferred, the tax effect of expenditures for which a deduction was
taken in our tax return but has not yet been recognized in our
financial statements or assets recorded at fair value in business
combinations for which there was no corresponding tax basis
adjustment.
Inherent in determining our annual tax rate are judgments
regarding business plans, tax planning opportunities and
expectations about future outcomes. Realization of certain
deferred tax assets is dependent upon generating sufficient
taxable income in the appropriate jurisdiction prior to the
expiration of the carryforward periods. Although realization is not
assured, management believes it is more likely than not that our
deferred tax assets, net of valuation allowances, will be realized.
We operate in multiple jurisdictions with complex tax policy and
regulatory environments. In certain of these jurisdictions, we may
take tax positions that management believes are supportable but
are potentially subject to successful challenge by the applicable
taxing authority. These differences of interpretation with the
respective governmental taxing authorities can be impacted by
the local economic and fiscal environment. We evaluate our tax
positions and establish liabilities in accordance with the
applicable accounting guidance on uncertainty in income taxes.
We review these tax uncertainties in light of changing facts and
circumstances, such as the progress of tax audits, and adjust
them accordingly. We have a number of audits in process in
various jurisdictions. Although the resolution of these tax
positions is uncertain, based on currently available information,
we believe that it is more likely than not that the ultimate
outcomes will not have a material adverse effect on our financial
position, results of operations or cash flows.
Dollar amounts in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2025FORM 10-K
Due to the number of estimates and assumptions inherent in
calculating the various components of our tax provision, certain
changes or future events, such as changes in tax legislation,
geographic mix of earnings, completion of tax audits or earnings
repatriation plans, could have an impact on those estimates and
our effective tax rate.
We received a final audit report and assessments from the
German Federal Central Tax Office (FCTO) related to the years
2010 through 2017 of $754 and expect to receive additional
assessments of $11 based on the final audit report. We intend to
defend our filing positions through the FCTO independent
appeals process and/or litigation as necessary. If the resolution of
this matter results in additional German income taxes, we expect
to pursue a claim for associated foreign tax credits. Our
unrecognized tax benefits associated with this matter remain
unchanged from 2024. Refer to Note 11 to our Consolidated
Financial Statements for further discussion.
Acquisitions, Goodwill and Intangibles, and Long-Lived
Assets
Our financial statements include the operations of an acquired
business starting from the completion of the acquisition. In
addition, the assets acquired and liabilities assumed are recorded
on the date of acquisition at their respective estimated fair values,
with any excess of the purchase price over the estimated fair
values of the net assets acquired recorded as goodwill.
Significant judgment is required in estimating the fair value of
intangible assets and in assigning their respective useful lives.
Accordingly, we typically obtain the assistance of third-party
valuation specialists for significant items. The fair value estimates
are based on available historical information and on future
expectations and assumptions deemed reasonable by
management but are inherently uncertain. We typically use an
income method to estimate the fair value of intangible assets,
which is based on forecasts of the expected future cash flows
attributable to the respective assets. Significant estimates and
assumptions inherent in the valuations reflect a consideration of
other marketplace participants and include the amount and timing
of future cash flows (including expected growth rates and
profitability), the underlying product or technology life cycles, the
economic barriers to entry and the discount rate applied to the
cash flows. Unanticipated market or macroeconomic events and
circumstances may occur that could affect the accuracy or
validity of the estimates and assumptions.
Determining the useful life of an intangible asset also requires
judgment. With the exception of certain trade names, the majority
of our acquired intangible assets (e.g., certain trademarks or
brands, customer and distributor relationships, patents and
technologies) are expected to have determinable useful lives.
Our assessment as to the useful lives of these intangible assets
is based on a number of factors including competitive
environment, market share, trademark, brand history, underlying
product life cycles, operating plans and the macroeconomic
environment of the countries in which the trademarked or
branded products are sold. Our estimates of the useful lives of
determinable-lived intangibles are primarily based on these same
factors. Determinable-lived intangible assets are amortized to
expense over their estimated useful life.
In some of our acquisitions, we acquire in-process research and
development (IPRD) intangible assets. For acquisitions
accounted for as business combinations, IPRD is considered to
be an indefinite-lived intangible asset until the research is
completed (then it becomes a determinable-lived intangible
asset) or determined to have no future use (then it is impaired).
For asset acquisitions, IPRD is expensed immediately unless
there is an alternative future use.
Indefinite-lived intangible assets and goodwill are not amortized
but are tested annually for impairment or whenever events or
circumstances indicate such assets may be impaired. Our annual
impairment testing date is October 31. When it is unlikely that an
indefinite-lived intangible asset or goodwill of a reporting unit is
impaired, we perform a qualitative assessment. For goodwill, that
qualitative assessment may be periodically supplemented with a
corroborative quantitative analysis.
When necessary, we perform a quantitative impairment test and
determine the fair value of the indefinite-lived intangible asset or
reporting unit using an income approach. For the quantitative
impairment test of goodwill, when appropriate, we corroborate
our concluded value under the income approach using a market
approach that utilizes trading multiples derived from a peer set of
similar companies. The income approach calculates the present
value of estimated future cash flows and requires certain
assumptions and estimates be made regarding market conditions
and our future profitability. Considerable management judgment
is necessary to evaluate the impact of operating and
macroeconomic changes and to estimate future cash flows used
to measure fair value. Assumptions used in our impairment
evaluations, such as forecasted growth rates and cost of capital,
are consistent with internal business plans. We believe such
assumptions and estimates are also comparable to those that
would be used by other marketplace participants.
We review our other long-lived assets for indicators of impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. The evaluation is
performed at the lowest level of identifiable cash flows, which is
at the individual asset level or the asset group level. The
undiscounted cash flows expected to be generated by the related
assets are estimated over their useful life based on updated
projections. If the evaluation indicates that the carrying amount of
the assets may not be recoverable, any potential impairment is
measured based upon the fair value of the related assets or
asset group as determined by an appropriate market appraisal or
other valuation technique. Assets classified as held for sale, if
any, are recorded at the lower of carrying amount or fair value
less costs to sell.
In our annual impairment test of goodwill as of October 31, 2024
we performed a quantitative assessment of the Spine reporting
unit using a discounted cash flow analysis to estimate the fair
value. The carrying value of the Spine reporting unit exceeded its
fair value and a charge of $273was recognized in goodwill and
other impairments in our Consolidated Statements of Earnings.
The impairment charge for the Spine reporting unit was driven by
a decrease in future product demand due to the competitive
environment and an increase in the Spine reporting unit's
weighted average cost of capital.
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. We tested the net
carrying amounts of other assets, such as working capital
accounts, and determined that there was no impairment as the
fair values of these assets approximated their carrying values.
Goodwill was allocated to the disposal group and the retained
portion of the Spine reporting unit based on the relative fair
values. Goodwill allocated to the disposal group was tested for
impairment which resulted in an impairment charge of $183. As of
Dollar amounts in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2025FORM 10-K
December 31, 2024, there was no goodwill remaining attributable
to the Spinal Implants disposal group.
Finally we compared the carrying amount of the disposal group to
the fair value less cost to sell. As a result, we recognized an
estimated loss of $362to record the disposal group at its fair
value less cost to sell in goodwill and other impairments in our
Consolidated Statements of Earnings.
In April 2025 we completed the sale of the disposal group to the
Viscogliosi Brothers, LLC as further discussed in Note 16. 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 $57or decrease by up to $245based on the
amount received.
With the acquisition of Inari in February 2025 discussed in Note 6
to our Consolidated Financial Statements, we established a new
Peripheral Vascular reporting unit consisting of the acquired Inari
business. Given the proximity of the impairment testing date to
the date of acquisition, the fair value of this new reporting unit
was not expected to exceed its carrying value by a significant
amount. We performed a quantitative impairment test for our
Peripheral Vascular reporting unit at October 31, 2025 and
determined that its fair value exceeded its carrying amount by
12%. At October 31, 2025, goodwill attributable to this reporting
unit was $3,203. The fair value of this reporting unit was
determined using a discounted cash flow analysis, which is a
form of the income approach. Significant inputs to the analysis
included assumptions for future revenue growth, operating
margin and the rate used to discount the estimated future cash
flows to their present value, based on the reporting unit's
estimated weighted average cost of capital. We believe our
estimates are appropriate based upon current and future market
conditions and the best information available at the impairment
assessment date; however, future impairment charges could be
required if we do not achieve our cash flow, revenue and
profitability projections or if there is an increase in the weighted
average cost of capital.
The assumptions used in the discounted cash flow analysis are
subject to inherent uncertainties and subjectivity. The use of
different assumptions, estimates or judgments with respect to the
estimation of future cash flows and the determination of the
discount rate used to reduce such estimated future cash flows to
their net present value could materially affect the determination of
any impairment charges. Hypothetical changes in our estimates
of the discount rate, long-term revenue growth and long-term
operating margin would result in impairment charges as follows:
Change in selected assumption
Percentage
decline in fair
value
Impairment
charge
100 bps increase in discount rate
14%
$198
100 bps decrease in long-term revenue growth
-
100 bps decrease in long-term operating margin
-
We did not identify any factors in 2025 or 2024 that would lead us
to believe that our other reporting units were at risk of a goodwill
impairment. Accordingly, we performed qualitative assessments
and concluded it was more likely than not that the fair values of
those reporting units exceeded their respective carrying amounts.
In 2025 our qualitative assessment was supplemented with a
corroborative quantitative analysiswhich indicated that the
implied fair values of our other reporting units exceed their
respective carrying amounts by at least 100%. Future changes in
the judgments, assumptions and estimates that are used in our
impairment testing for goodwill and indefinite-lived intangible
assets, including discount rates and cash flow projections, could
result in different estimates of fair value. A significant reduction in
estimated fair values could result in impairment charges that
could materially affect our results of operations.
Legal and Other Contingencies
We are involved in various ongoing proceedings, legal actions
and claims arising in the normal course of business, including
proceedings related to product, labor, tax, intellectual property
and other matters that are more fully described in Notes 7 and 11
to our Consolidated Financial Statements. 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, for the resolution of these legal
matters 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 projected by management, additional expense may be
incurred, which could unfavorably affect future operating results.
We are currently 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.
NEW ACCOUNTING PRONOUNCEMENTS
Refer to Note 1 to our Consolidated Financial Statements for
further information.
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