Stryker reports second quarter 2025 operating results

Portage, Michigan, July 31, 2025 (GLOBE NEWSWIRE) -- Stryker (NYSE:SYK) reported operating results for the second quarter of 2025: Second Quarter Results Reported net sales increased 11.1% to $6.0 billionOrganic net sales increased 10.2%Reported operating income margin of 18.5%Adjusted operating income margin(1) increased 110 bps to 25.7%Reported EPS increased 7.0% to $2.29Adjusted EPS(1) increased 11.4% to $3.13 Second Quarter Net Sales Growth Overview Reported Foreign Currency Exchange Constant Currency Acquisitions / Divestitures OrganicMedSurg and Neurotechnology 17.3 % 0.6 % 16.7 % 5.7 % 11.0 %Orthopaedics 2.0 0.9 1.1 (7.9) 9.0 Total 11.1 % 0.8 % 10.3 % 0.1 % 10.2 % “We again delivered double-digit sales and adjusted earnings per share growth in the second quarter,” said Kevin A. Lobo, Chair and CEO. “Our strong sales and earnings power reflect demand for our products, our durable innovation pipeline and ongoing operational execution.” Sales Analysis Consolidated net sales of $6.0 billion increased 11.1% in the quarter and 10.3% in constant currency. Organic net sales increased 10.2% in the quarter including 9.7% from increased unit volume and 0.5% from higher prices. MedSurg and Neurotechnology net sales of $3.8 billion increased 17.3% in the quarter and 16.7% in constant currency. Organic net sales increased 11.0% in the quarter including 10.2% from increased unit volume and 0.8% from higher prices. Orthopaedics net sales of $2.2 billion increased 2.0% in the quarter and 1.1% in constant currency. Excluding the impact of the divested Spinal implant business, Orthopaedics growth increased 10.7% and 9.7% in constant currency. Organic net sales increased 9.0% in the quarter including 9.0% from increased unit volume. Earnings Analysis Reported net earnings of $884 million increased 7.2% in the quarter. Reported net earnings per diluted share of $2.29 increased 7.0% in the quarter. Reported gross profit margin and reported operating income margin were 63.8% and 18.5% in the quarter. Reported net earnings include certain items, such as charges for acquisition and integration-related activities, the amortization of purchased intangible assets, structural optimization and other special charges, goodwill and other impairments, costs to comply with certain medical device regulations, recall-related matters, regulatory and legal matters and tax matters. Excluding the aforementioned items, adjusted gross profit margin(1) was 65.4% in the quarter, and adjusted operating income margin(1) was 25.7% in the quarter. Adjusted net earnings(1) of $1.2 billion increased 11.6% in the quarter. Adjusted net earnings per diluted share(1) of $3.13 increased 11.4% in the quarter. 2025 Outlook Considering our year-to-date results, strong demand for our products and our operational momentum, we are raising our full year 2025 guidance and now expect organic net sales growth(2) of 9.5% to 10.0% and adjusted net earnings per diluted share(2) to be in the range of $13.40 to $13.60. Our updated sales guidance includes a modestly favorable pricing impact. In addition, foreign exchange is expected to have a slightly positive impact on both sales and adjusted net earnings per diluted share(2) should rates hold near current levels. We now estimate a net impact from tariffs in 2025 of approximately $175 million. This estimate reflects the latest updates since the date of our last earnings press release, including a reduction in bilateral United States and China tariffs as well as the recent announcement of the proposed tariff framework between the United States and the European Union. (1) A reconciliation of the non-GAAP financial measures: adjusted gross profit margin, adjusted operating income and adjusted operating income margin, adjusted net earnings and adjusted net earnings per diluted share, to the most directly comparable GAAP measures: gross profit margin, operating income and operating income margin, net earnings and net earnings per diluted share, and other important information accompanies this press release. (2) We are unable to present a quantitative reconciliation of our expected net sales growth to expected organic net sales growth as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of acquisitions and divestitures and the impact of foreign currency exchange rates. We are unable to present a quantitative reconciliation of our expected net earnings per diluted share to expected adjusted net earnings per diluted share as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of structural optimization and other special charges, acquisition-related expenses and the outcome of certain regulatory, legal and tax matters. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to our Consolidated Statements of Earnings. Conference Call on Thursday, July 31, 2025 As previously announced, we will host a conference call on Thursday, July 31, 2025 at 4:30 p.m., Eastern Time, to discuss our operating results for the quarter ended June 30, 2025 and provide an operational update. Please register for this conference call at: https://www.veracast.com/webcasts/stryker/events/SYK2Q25.cfm. After registering, a confirmation will be sent via email, including dial-in details and unique conference call access codes required for call entry. Registration is open throughout the live call. To ensure you are connected prior to the beginning of the call, we suggest registering a minimum of 15 minutes before the start of the call. A simultaneous webcast of the call will be accessible via the Investor Relations page of our website at www.stryker.com. For those not planning to ask a question of management, we recommend listening via the webcast. Please allow 15 minutes to register, download and install any necessary software. Following the conference call, a replay will be available on our website up to one year from the time of the earnings call. Caution Concerning Forward-Looking Statements This press release contains information that includes or is based on forward-looking statements within the meaning of the federal securities law that are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such risks and uncertainties include, but are not limited to: weakening of economic conditions, or the anticipation thereof, that could adversely affect the level of demand for our or Inari products; geopolitical risks, including from tariffs and the potential for further changes in trade policies and international conflicts, which have led to and could continue to lead to, among other things, increased market volatility; pricing pressures generally, including cost-containment measures that have adversely affected and could in the future adversely affect the price of or demand for our or Inari’s products; changes in foreign currency exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect approval of new products, including Inari products, by the United States Food and Drug Administration and foreign regulatory agencies; inflationary pressures; increased interest rates or interest rate volatility; supply chain disruptions; changes in labor markets; changes in coverage and reimbursement levels from third-party payors; changes in the competitive environment; breaches, failures or other disruptions of our or our vendors’ or customers’ information technology systems or products, including by cyber-attack, data leakage, unauthorized access or theft; a significant increase in product liability claims; the ultimate total cost with respect to recall-related and other regulatory and quality matters; the impact of investigative and legal proceedings and compliance risks; resolution of tax audits; changes in tax laws and regulations; the impact of legislation to reform the healthcare system in the United States or other countries; costs to comply with medical device regulations; changes in financial markets; changes in our credit ratings; our ability to integrate and realize the anticipated benefits of acquisitions in full or at all or within the expected timeframes, including our acquisition of Inari; our ability to realize any anticipated cost savings; risks relating to climate change or other environmental, social and governance and sustainability related matters; the impact on our operations and financial results of any public health emergency and any related policies and actions by governments or other third parties; unexpected liabilities, costs, charges or expenses in connection with the acquisition of Inari; and the effects of the Inari transaction on the parties’ relationships with employees, customers, other business partners or governmental entities. Additional information concerning these and other factors is contained in our filings with the United States Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We 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, except to the extent required by law. 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. More information is available at www.stryker.com. For investor inquiries: Jason Beach, Vice President, Finance and Investor Relations at 269-385-2600 or jason.beach@stryker.com For media inquiries: Kim Montagnino, Vice President, Chief Communications Officer at 269-385-2600 or kim.montagnino@stryker.com STRYKER CORPORATIONFor the Three and Six Months June 30(Unaudited - Millions of Dollars, Except Per Share Amounts) CONSOLIDATED STATEMENTS OF EARNINGS Three Months Six Months 2025 2024 % Change 2025 2024 % ChangeNet sales$ 6,022 $ 5,422 11.1 % $ 11,888 $ 10,665 11.5 %Cost of sales 2,181 2,006 8.7 4,303 3,916 9.9 Gross profit$ 3,841 $ 3,416 12.4 % $ 7,585 $ 6,749 12.4 %% of sales 63.8 % 63.0 % 63.8 % 63.3 % Research, development and engineering expenses 407 363 12.1 812 731 11.1 Selling, general and administrative expenses 2,079 1,831 13.5 4,379 3,668 19.4 Amortization of intangible assets 187 155 20.6 354 308 14.9 Goodwill and other impairments 55 16 nm 90 19 nmTotal operating expenses$ 2,728 $ 2,365 15.3 % $ 5,635 $ 4,726 19.2 %Operating income$ 1,113 $ 1,051 5.9 % $ 1,950 $ 2,023 (3.6) %% of sales 18.5 % 19.4 % 16.4 % 19.0 % Other income (expense), net (97) (53) 83.0 % (170) (102) 66.7 Earnings before income taxes$ 1,016 $ 998 1.8 % $ 1,780 $ 1,921 (7.3) %Income taxes 132 173 (23.7) 242 308 (21.4) Net earnings$ 884 $ 825 7.2 % $ 1,538 $ 1,613 (4.6) %Net earnings per share of common stock: Basic$ 2.32 $ 2.17 6.9 % $ 4.03 $ 4.24 (5.0) %Diluted$ 2.29 $ 2.14 7.0 % $ 3.98 $ 4.19 (5.0) %Weighted-average shares outstanding (in millions): Basic 382.2 381.0 382.0 380.7 Diluted 386.4 385.4 386.4 385.2 CONDENSED CONSOLIDATED BALANCE SHEETS June 30 December 31 2025 2024 Assets Cash and cash equivalents$ 2,375 $ 3,652 Short-term investments — 750 Marketable securities 89 91 Accounts receivable, net 3,918 3,987 Inventories 5,289 4,774 Prepaid expenses and other current assets 1,332 1,593 Total current assets$ 13,003 $ 14,847 Property, plant and equipment, net 3,702 3,448 Goodwill and other intangibles, net 25,145 20,250 Noncurrent deferred income tax assets 1,375 1,742 Other noncurrent assets 3,106 2,684 Total assets$ 46,331 $ 42,971 Liabilities and shareholders' equity Current liabilities$ 7,288 $ 7,616 Long-term debt, excluding current maturities 14,829 12,188 Income taxes 395 349 Other noncurrent liabilities 2,628 2,184 Shareholders' equity 21,191 20,634 Total liabilities and shareholders' equity$ 46,331 $ 42,971 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months 2025 2024 Operating activities Net earnings$ 1,538 $ 1,613 Depreciation 214 210 Amortization of intangible assets 354 308 Changes in operating assets, liabilities, income taxes payable and other, net (745) (1,294) Net cash provided by operating activities$ 1,361 $ 837 Investing activities Acquisitions, net of cash acquired$ (4,814) $ (334) Proceeds from maturity of short-term investments 750 — Purchases of property, plant and equipment (306) (319) Other investing, net 130 128 Net cash used in investing activities$ (4,240) $ (525) Financing activities Borrowings (payments) of debt, net$ 2,331 $ (600) Payments of dividends (641) (609) Other financing, net (145) (175) Net cash provided by (used in) financing activities$ 1,545 $ (1,384) Effect of exchange rate changes on cash and cash equivalents 57 (25) Change in cash and cash equivalents$ (1,277) $ (1,097) STRYKER CORPORATIONFor the Three and Six Months June 30(Unaudited - Millions of Dollars) SALES GROWTH ANALYSIS Three Months Six Months Percentage Change Percentage Change 2025 2024 As ReportedConstantCurrency 2025 2024 As ReportedConstantCurrencyGeographic: United States$ 4,554 $ 4,047 12.5 % 12.5 % $ 8,994 $ 7,961 13.0 % 13.0 %International 1,468 1,375 6.8 3.9 2,894 2,704 7.0 7.3 Total$ 6,022 $ 5,422 11.1 % 10.3 % $ 11,888 $ 10,665 11.5 % 11.5 %Segment: MedSurg and Neurotechnology$ 3,771 $ 3,215 17.3 % 16.7 % $ 7,282 $ 6,312 15.4 % 15.5 %Orthopaedics 2,251 2,207 2.0 1.1 4,606 4,353 5.8 5.8 Total$ 6,022 $ 5,422 11.1 % 10.3 % $ 11,888 $ 10,665 11.5 % 11.5 % SUPPLEMENTAL SALES GROWTH ANALYSIS Three Months United States International Percentage Change 2025 2024 As ReportedConstant Currency As Reported As ReportedConstant CurrencyMedSurg and Neurotechnology: Instruments$ 768 $ 698 10.0 % 9.4 % 10.1 % 9.7 % 6.8 %Endoscopy 899 768 17.1 16.7 19.1 8.3 6.4 Medical 990 908 9.0 8.6 10.1 3.4 1.2 Vascular 498 327 52.3 50.7 111.0 15.0 11.7 Neuro Cranial 616 514 19.8 19.2 21.3 13.5 9.9 $ 3,771 $ 3,215 17.3 % 16.7 % 19.4 % 10.1 % 7.4 %Orthopaedics: Knees$ 640 $ 602 6.3 % 5.6 % 6.2 % 6.5 % 4.1 %Hips 466 428 8.9 7.5 8.4 9.6 6.3 Trauma and Extremities 957 832 15.0 14.0 15.1 14.9 10.5 Other 183 167 9.6 8.5 5.6 20.9 19.0 2,246 2,029 10.7 % 9.7 % 10.4 % 11.5 % 8.1 %Spinal Implants 5 178 (97.2) (97.0) (100.0) (90.7) (90.2) $ 2,251 $ 2,207 2.0 % 1.1 % 1.5 % 3.1 % — %Total $ 6,022 $ 5,422 11.1 % 10.3 % 12.5 % 6.8 % 3.9 % Six Months United States International Percentage Change 2025 2024 As ReportedConstant Currency As Reported As ReportedConstant CurrencyMedSurg and Neurotechnology: Instruments$ 1,498 $ 1,365 9.7 % 9.7 % 10.2 % 7.8 % 7.8 %Endoscopy 1,766 1,546 14.2 14.4 15.3 9.4 10.4 Medical 1,935 1,772 9.2 9.3 11.1 (0.3) 0.3 Vascular 904 637 41.9 42.3 89.9 11.3 11.4 Neuro Cranial 1,179 992 18.9 18.8 20.3 12.5 12.7 $ 7,282 $ 6,312 15.4 % 15.5 % 17.5 % 8.0 % 8.4 %Orthopaedics: Knees$ 1,279 $ 1,190 7.5 % 7.7 % 7.2 % 8.2 % 8.8 %Hips 909 821 10.7 10.6 7.8 15.5 15.2 Trauma and Extremities 1,902 1,662 14.4 14.3 15.9 10.4 9.9 Other 345 331 4.2 4.3 1.7 10.5 11.0 $ 4,435 $ 4,004 10.8 % 10.8 % 10.6 % 11.1 % 11.1 %Spinal Implants 171 349 (51.0) (50.7) (51.0) (50.9) (49.2) $ 4,606 $ 4,353 5.8 % 5.8 % 5.8 % 5.9 % 6.0 %Total $ 11,888 $ 10,665 11.5 % 11.5 % 13.0 % 7.0 % 7.3 % 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 $129 and $98 for the three months 2025 and 2024 and $247 and $196 for the six months 2025 and 2024. Other Orthopaedics includes sales related to Enabling Technologies of $34 and $31 for the three months 2025 and 2024 and $63 and $62 for the six months 2025 and 2024. We have reflected these changes in all historical periods presented. SUPPLEMENTAL INFORMATION - RECONCILIATION OF GAAP TO 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. 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 that, when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures below, provide a more complete understanding of our business. 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 following reconciles the non-GAAP financial measures discussed above with the most directly comparable GAAP financial measures. 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. STRYKER CORPORATIONFor the Three and Six Months June 30(Unaudited - Millions of Dollars, Except Per Share Amounts) Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial MeasuresThree Months 2025Gross ProfitSelling, General & Administrative ExpensesResearch, Development & Engineering ExpensesOperating IncomeOther Income (Expense), NetIncome TaxesNet EarningsEffectiveTax RateDiluted EPSReported$ 3,841 $ 2,079 $ 407 $ 1,113 $ (97) $ 132 $ 884 13.0 %$ 2.29 Reported percent net sales 63.8 % 34.5 % 6.8 % 18.5 % (1.6) %nm 14.7 % Acquisition and integration-related costs: Inventory stepped-up to fair value 65 — — 65 — 16 49 0.5 0.12 Other acquisition and integration-related (a) 1 (76) (1) 78 — 20 58 0.7 0.15 Amortization of purchased intangible assets — — — 187 — 39 148 1.0 0.37 Structural optimization and other special charges (b) 6 (2) (3) 11 (9) (2) 4 (0.2) 0.01 Goodwill and other impairments (c) — — — 55 — 22 33 1.2 0.10 Medical device regulations (d) — — (7) 7 — 1 6 0.1 0.02 Recall-related matters (e) 21 (1) — 22 — 1 21 (0.3) 0.06 Regulatory and legal matters (f) — (7) — 7 — 1 6 0.1 0.01 Tax matters (g) — — — — — (2) 2 (0.2) — Adjusted$ 3,934 $ 1,993 $ 396 $ 1,545 $ (106) $ 228 $ 1,211 15.9 %$ 3.13 Adjusted percent net sales 65.4 % 33.1 % 6.6 % 25.7 % (1.8) %nm 20.1 % Three Months 2024Gross ProfitSelling, General & Administrative ExpensesResearch, Development & Engineering ExpensesOperating IncomeOther Income (Expense), NetIncome TaxesNet EarningsEffectiveTax RateDiluted EPSReported$ 3,416 $ 1,831 $ 363 $ 1,051 $ (53) $ 173 $ 825 17.3 %$ 2.14 Reported percent net sales 63.0 % 33.8 % 6.7 % 19.4 % (1.0) %nm 15.2 % Acquisition and integration-related costs: Inventory stepped-up to fair value 9 — — 9 — 2 7 0.1 0.02 Other acquisition and integration-related (a) — (14) — 14 — 2 12 0.1 0.03 Amortization of purchased intangible assets — — — 155 — 32 123 0.8 0.33 Structural optimization and other special charges (b) 40 (19) — 59 — 17 42 0.5 0.11 Goodwill and other impairments (c) — — — 16 — — 16 — 0.04 Medical device regulations (d) 4 — (11) 15 — 4 11 0.1 0.02 Recall-related matters (e) 11 (6) — 17 — 4 13 0.1 0.03 Regulatory and legal matters (f) — 2 — (2) — (1) (1) — — Tax matters (g) — — — — (1) (38) 37 (3.8) 0.09 Adjusted$ 3,480 $ 1,794 $ 352 $ 1,334 $ (54) $ 195 $ 1,085 15.2 %$ 2.81 Adjusted percent net sales 64.2 % 33.1 % 6.5 % 24.6 % (1.0) %nm 20.0 % nm - not meaningful (a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including: Three Months 2025 2024 Termination of sales relationships$ — $ 2 Employee retention and workforce reductions 29 4 Changes in the fair value of contingent consideration 3 2 Manufacturing integration costs 3 1 Other integration-related activities (e.g., deal costs and legal entity rationalization) 43 5 Adjustments to Operating Income $ 78 $ 14 Other income taxes related to acquisition and integration-related costs 20 2 Adjustments to Income Taxes$ 20 $ 2 Adjustments to Net Earnings$ 58 $ 12 (b) Structural optimization and other special charges represent the costs associated with: Three Months 2025 2024 Employee retention and workforce reductions$ 5 $ 3 Closure/transfer of manufacturing and other facilities (e.g., site closure, contract termination and redundant employee costs) 7 10 Product line exits (10) 6 Termination of sales relationships in certain countries (3) 1 Other charges 12 39 Adjustments to Operating Income $ 11 $ 59 Adjustments to Other Income (Expense), Net$ (9) $ — Adjustments to Income Taxes$ (2) $ 17 Adjustments to Net Earnings$ 4 $ 42 (c) Goodwill and other impairments represent the costs associated with: Three Months 2025 2024 Certain long-lived and intangible asset write-offs and impairments$ 52 $ 7 Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs) 3 9 Adjustments to Operating Income$ 55 $ 16 Adjustments to Income Taxes$ 22 $ — Adjustments to Net Earnings$ 33 $ 16 (d) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain recall-related matters.(f) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including: Three Months 2025 2024 Adjustments related to the transfer of certain intellectual properties between tax jurisdictions$ (45) $ (47) Certain tax audit settlements — (2) Other tax matters 43 11 Adjustments to Income Taxes$ (2) $ (38) Charges / (benefits) for certain tax audit settlements — (1) Adjustments to Other Income (Expense), Net$ — $ (1) Adjustments to Net Earnings$ 2 $ 37 Six Months 2025Gross ProfitSelling, General & Administrative ExpensesResearch, Development & Engineering ExpensesOperating IncomeOther Income (Expense), NetIncome TaxesNet EarningsEffectiveTax RateDiluted EPSReported$ 7,585 $ 4,379 $ 812 $ 1,950 $ (170) $ 242 $ 1,538 13.6 %$ 3.98 Reported percent net sales 63.8 % 36.8 % 6.8 % 16.4 % (1.4) %nm 12.9 % Acquisition and integration-related costs: Inventory stepped-up to fair value 99 — — 99 — 24 75 0.5 0.19 Other acquisition and integration-related (a) 14 (247) (2) 263 — 26 237 (0.7) 0.62 Amortization of purchased intangible assets — — — 354 — 73 281 1.1 0.72 Structural optimization and other special charges (b) 28 (21) (3) 52 (9) 12 31 0.3 0.08 Goodwill and other impairments (c) — — 90 — 31 59 1.0 0.16 Medical device regulations (d) 1 — (18) 19 — 4 15 0.1 0.04 Recall-related matters (e) 52 (3) — 55 — 9 46 0.1 0.12 Regulatory and legal matters (f) — (7) — 7 — 2 5 0.1 0.01 Tax matters (g) — — — — — (21) 21 (1.2) 0.05 Adjusted$ 7,779 $ 4,101 $ 789 $ 2,889 $ (179) $ 402 $ 2,308 14.9 %$ 5.97 Adjusted percent net sales 65.4 % 34.5 % 6.6 % 24.3 % (1.5) %nm 19.4 % Six Months 2024Gross ProfitSelling, General & Administrative ExpensesResearch, Development & Engineering ExpensesOperating IncomeOther Income (Expense), NetIncome TaxesNet EarningsEffectiveTax RateDiluted EPSReported$ 6,749 $ 3,668 $ 731 $ 2,023 $ (102) $ 308 $ 1,613 16.0 %$ 4.19 Reported percent net sales 63.3 % 34.4 % 6.9 % 19.0 % (1.0) %nm 15.1 % Acquisition and integration-related costs: Inventory stepped-up to fair value 9 — — 9 — 2 7 0.1 0.02 Other acquisition and integration-related (a) — (1) — 1 — 3 (2) 0.2 (0.01) Amortization of purchased intangible assets — — — 308 — 64 244 1.1 0.64 Structural optimization and other special charges (b) 43 (27) — 70 — 20 50 0.4 0.18 Goodwill and other impairments (c) — — — 19 — — 19 — — Medical device regulations (d) 5 — (23) 28 — 7 21 0.1 0.05 Recall-related matters (e) 11 (11) — 22 — 5 17 0.1 0.04 Regulatory and legal matters (f) — — — — — — — — — Tax matters (g) — — — — (1) (79) 78 (4.1) 0.20 Adjusted$ 6,817 $ 3,629 $ 708 $ 2,480 $ (103) $ 330 $ 2,047 13.9 %$ 5.31 Adjusted percent net sales 63.9 % 34.0 % 6.6 % 23.3 % (1.0) %nm 19.2 % nm - not meaningful (a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including: Six Months 2025 2024 Termination of sales relationships$ — $ 3 Employee retention and workforce reductions 45 4 Changes in the fair value of contingent consideration 1 (14) Manufacturing integration costs 7 1 Stock compensation payments upon a change in control 139 — Other integration-related activities (e.g., deal costs and legal entity rationalization) 71 7 Adjustments to Operating Income $ 263 $ 1 Other income taxes related to acquisition and integration-related costs 26 3 Adjustments to Income Taxes$ 26 $ 3 Adjustments to Net Earnings$ 237 $ (2) (b) Structural optimization and other special charges represent the costs associated with: Six Months 2025 2024 Employee retention and workforce reductions$ 38 $ 2 Closure/transfer of manufacturing and other facilities (e.g., site closure, contract termination and redundant employee costs) 12 16 Product line exits (e.g., inventory, long-lived asset and specifically-identified intangible asset write-offs) (7) 6 Termination of sales relationships in certain countries (4) 1 Other charges 13 45 Adjustments to Operating Income $ 52 $ 70 Adjustments to Income Taxes$ 12 $ 20 Adjustments to Other Income (Expense), Net$ (9) $ — Adjustments to Net Earnings$ 31 $ 50 (c) Goodwill and other impairments represent the costs associated with: Six Months 2025 2024 Certain long-lived and intangible asset write-offs and impairments$ 86 $ 10 Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs) 4 9 Adjustments to Operating Income$ 90 $ 19 Adjustments to Income Taxes$ 31 $ — Adjustments to Net Earnings$ 59 $ 19 (d) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain recall-related matters.(f) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including: Six Months 2025 2024 Adjustments related to the transfer of certain intellectual properties between tax jurisdictions$ (92) $ (94) Certain tax audit settlements — (2) Other tax matters 71 17 Adjustments to Income Taxes$ (21) $ (79) Adjustments to Other Income (Expense), Net$ — $ (1) Adjustments to Net Earnings$ 21 $ 78

Stryker reports second quarter 2025 operating results

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