# Stryker Corp: Form 10-Q for the period ended Mar 31, 2025

- Company: [Stryker Corp](/companies/syk.md) (CIK 310764)
- Form: 10-Q
- Filed: 2025-05-02
- Accepted by EDGAR: May 2, 2025, 11:35 ET
- Period: 2025-03-31
- Accession: 0000310764-25-000075
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/310764/000031076425000075/syk-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/310764/000031076425000075/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $5.87bn | us-gaap:Revenues |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $2.12bn | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $3.74bn | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $405.0m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $2.30bn | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | $837.0m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $110.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $654.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $1.69 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $1.71 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 386,400,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $250.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $123.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2025-01-01 to 2025-03-31 | $320.0m | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2025-03-31 | $2.32bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $13.02bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $46.01bn | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $7.93bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $25.08bn | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $14.38bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-31 | $2.40bn | us-gaap:DebtCurrent |
| Short-term borrowings | at 2025-03-31 | $0 | us-gaap:CommercialPaper |
| Shareholders' equity | at 2025-03-31 | $20.93bn | us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest |
| Shares outstanding | at 2025-03-31 | 382,164,865 shares | dei:EntityCommonStockSharesOutstanding |

## Management's discussion and analysis

As filed, 35,109 characters.

### 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 the first quarter 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 could 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 Months

In the three months 2025 we achieved sales growth of 11.9%

from 2024. Excluding the impact of acquisitions and divestitures,

sales grew 10.1% in constant currency. We reported operating

income margin of 14.3%, net earnings of $654 and net earnings

per diluted share of $1.69. Excluding the impact of certain items,

adjusted operating income margin(1) increased by 100 basis

points to 22.9%, with adjusted net earnings(1) of $1,097 and

adjusted net earnings per diluted share(1) of $2.84, an increase of

13.6% from 2024.

### Recent Developments

In the first quarter 2025 we completed the acquisition of Inari for

total consideration of $4,745, 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 March 31, 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

$2,250.

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.

(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 2025 | 2024 | Percent Net Sales 2025 | 2024 | Percentage Change |
| --- | ---: | ---: | ---: | ---: | ---: |
| **Net sales** | **$5,866** | **$5,243** | **100.0%** | **100.0%** | **11.9%** |
| Gross profit | 3,744 | 3,333 | 63.8 | 63.6 | 12.3 |
| Research, development and engineering expenses | 405 | 368 | 6.9 | 7.0 | 10.1 |
| Selling, general and administrative expenses | 2,300 | 1,837 | 39.2 | 35.0 | 25.2 |
| Amortization of intangible assets | 167 | 153 | 2.8 | 2.9 | 9.2 |
| Goodwill and other impairments | 35 | 3 | 0.6 | 0.1 | nm |
| Other income (expense), net | (73) | (49) | (1.2) | (0.9) | 49.0 |
| Income taxes | 110 | 135 | nm | nm | (18.5) |
| **Net earnings** | **$654** | **$788** | **11.1%** | **15.0%** | **(17.0)%** |
| **Net earnings per diluted share** | **$1.69** | **$2.05** |  |  | **(17.6)%** |
| **Adjusted net earnings per diluted share(1)** | **$2.84** | **$2.50** |  |  | **13.6%** |

nm - not meaningful

### Dollar amounts are in millions except per share amounts or as otherwise specified. 13

### STRYKER CORPORATION 2025 First Quarter Form 10-Q

| Geographic and Segment Net Sales Geographic: | Three Months 2025 | 2024 | Percentage Change As Reported | Constant Currency |
| --- | ---: | ---: | ---: | ---: |
| United States | $4,440 | $3,914 | 13.4% | 13.4% |
| International | 1,426 | 1,329 | 7.3 | 10.8 |
| **Total** | **$5,866** | **$5,243** | **11.9%** | **12.8%** |
| **Segment:** |  |  |  |  |
| MedSurg and Neurotechnology | $3,511 | $3,097 | 13.4% | 14.2% |
| Orthopaedics | 2,355 | 2,146 | 9.7 | 10.7 |
| **Total** | **$5,866** | **$5,243** | **11.9%** | **12.8%** |

*Supplemental Net Sales Growth Information*

| MedSurg and Neurotechnology: | Three Months 2025 | 2024 | Percentage Change As Reported | Constant Currency | United States As Reported | International As Reported | Constant Currency |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Instruments | $730 | $667 | 9.4% | 10.1% | 10.4% | 5.5% | 8.7% |
| Endoscopy | 867 | 778 | 11.4 | 12.1 | 11.6 | 10.6 | 14.6 |
| Medical | 945 | 864 | 9.4 | 10.1 | 12.3 | (4.3) | (0.6) |
| Vascular | 406 | 310 | 31.0 | 33.3 | 67.0 | 7.9 | 11.1 |
| Neuro Cranial | 563 | 478 | 17.8 | 18.5 | 19.1 | 12.3 | 15.8 |
|  | **$3,511** | **$3,097** | **13.4%** | **14.2%** | **15.6%** | **6.0%** | **9.5%** |
| **Orthopaedics:** |  |  |  |  |  |  |  |
| Knees | $639 | $588 | 8.7% | 9.8% | 8.3% | 10.0% | 13.9% |
| Hips | 443 | 393 | 12.7 | 14.1 | 7.6 | 21.7 | 25.7 |
| Trauma and Extremities | 945 | 830 | 13.9 | 14.7 | 16.6 | 6.0 | 9.2 |
| Spinal Implants | 166 | 171 | (2.9) | (2.4) | (0.1) | (10.5) | (7.6) |
| Other | 162 | 164 | (1.2) | 0.1 | (1.9) | 1.2 | 4.3 |
|  | **$2,355** | **$2,146** | **9.7%** | **10.7%** | **10.1%** | **8.8%** | **12.3%** |
| **Total** | **$5,866** | **$5,243** | **11.9%** | **12.8%** | **13.4%** | **7.3%** | **10.8%** |

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 $118 and $98 for three months 2025 and 2024. Other Orthopaedics includes sales related to Enabling

Technologies of $29 and $31 for three months 2025 and 2024. We have reflected these changes in all historical periods presented.

### Consolidated Net Sales

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

(IVS) portfolio was reclassified to Neuro Cranial and the

remaining Spine business was renamed to Spinal Implants.

| 2024 Quarterly Net Sales | Q1 | Q2 | Q3 | Q4 | Total |
| --- | ---: | ---: | ---: | ---: | ---: |
| Enabling Technologies | $31 | $31 | $32 | $59 | $153 |
| IVS | 98 | 98 | 100 | 117 | 413 |
| Spinal Implants | 171 | 178 | 172 | 186 | 707 |
| **Total** | **$300** | **$307** | **$304** | **$362** | **$1,273** |

Consolidated net sales increased 11.9% in the three months

2025 as reported and 12.8% in constant currency, as foreign

currency exchange rates negatively impacted net sales by 0.9%.

Excluding the 2.7% impact of acquisitions and divestitures, net

sales in constant currency increased by 9.4% from increased unit

volume and 0.7% 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 13.4% in the

three months 2025 as reported and 14.2% in constant currency,

as foreign currency exchange rates negatively impacted net sales

by 0.8%. Excluding the 3.5% impact of acquisitions and

divestitures, net sales in constant currency increased by 9.5%

from increased unit volume and 1.2% from higher prices. The unit

volume increase was due to higher shipments across all

MedSurg and Neurotechnology businesses.

### Orthopaedics Net Sales

Orthopaedics net sales increased 9.7% in the three months 2025

as reported and 10.7% in constant currency, as foreign currency

exchange rates negatively impacted net sales by 1.0%. Excluding

the 1.4% impact of acquisitions and divestitures, net sales in

constant currency increased 9.3% from increased unit volume.

The unit volume increase was due to higher shipments across

most Orthopaedics businesses.

### Gross Profit

Gross profit was $3,744 and $3,333 in the three months 2025

and 2024. The key components of the change were:

### Dollar amounts are in millions except per share amounts or as otherwise specified. 14

### STRYKER CORPORATION 2025 First Quarter Form 10-Q

|  | Gross Profit Percent Net Sales |
| --- | --- |
| **Three Months 2024** | **63.6%** |
| Sales pricing | 30 bps |
| Volume and mix | 80 bps |
| Manufacturing and supply chain costs | 70 bps |
| Structural optimization and other special charges | (40) bps |
| Inventory stepped up to fair value | (60) bps |
| **Three Months 2025** | **63.8%** |

Gross profit as a percentage of net sales in the three months

2025 remained relatively flat with 2024.

While segment mix was not a significant driver of the change in

gross profit as a percent of net sales between the three 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

$37 or 10.1% in the three months 2025. Expenses as a

percentage of net sales in the three months 2025 of 6.9%

remained relatively flat with 7.0% in 2024.

### Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $463 or

25.2% in the three months 2025. As a percentage of net sales,

expenses increased to 39.2% from 35.0% in 2024, primarily due

to higher acquisition-related costs and continued investments to

support our growth. Expenses in the three 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 $167 and $153 in the three

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 $35 and $3 in the three

months 2025 and 2024. Refer to Note 11 to our Consolidated

Financial Statements for further information on impairment

charges related to assets held for sale at March 31, 2025.

### Operating Income

Operating income was $837 and $972 in the three months 2025

and 2024. Operating income as a percentage of net sales in the

three months 2025 decreased to 14.3% from 18.5% 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 increased to 27.6% in the three months

2025 from 27.3% in 2024. Orthopaedics operating income as a

percentage of net sales increased to 27.2% in the three months

2025 from 26.2% in 2024. The key components of the change

were:

|  | Operating Income Percent Net Sales MedSurg and Neurotechnology | Orthopaedics |
| --- | --- | --- |
| **Three Months 2024** | **27.3%** | **26.2%** |
| Sales pricing | 50 bps | 0 bps |
| Volume | 80 bps | 80 bps |
| Manufacturing and supply chain costs | 120 bps | 40 bps |
| Research, development and engineering expenses | (10) bps | 40 bps |
| Selling, general and administrative expenses | (210) bps | (60) bps |
| **Three Months 2025** | **27.6%** | **27.2%** |

The increase 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 investments to support our growth.

The increase in Orthopaedics operating income as a percentage

of net sales for the three months was primarily driven by higher

unit volumes and lower manufacturing and supply chain costs

partially offset by higher selling, general and administrative

expenses.

### Other Income (Expense), Net

Other income (expense), net was ($73) and ($49) in the three

months 2025 and 2024. The increase in net expense in the three

months 2025 from 2024 was primarily due to higher interest

expense in 2025 partially offset by higher interest income.

### Income Taxes

Our effective tax rates were 14.4% and 14.6% in the three

months 2025 and 2024. The effective tax rates for the three

months 2025 and 2024 reflect the continued lower effective

income tax rates as a result of our European operations and

certain discrete tax items.

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.

### Net Earnings

Net earnings decreased to $654 or $1.69 per diluted share in the

three months 2025 from $788 or $2.05 per diluted share in 2024.

Refer to the discussion above for the primary drivers of the

change.

### Dollar amounts are in millions except per share amounts or as otherwise specified. 15

### STRYKER CORPORATION 2025 First Quarter Form 10-Q

### 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.

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 are in millions except per share amounts or as otherwise specified. 16

### STRYKER CORPORATION 2025 First Quarter Form 10-Q

*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** | **$3,744** | **$2,300** | **$405** | **$837** | **$(73)** | **$110** | **$654** | **14.4%** | **$1.69** |
| Reported percent net sales | 63.8% | 39.2% | 6.9% | 14.3% | (1.2)% | nm | 11.1% |  |  |
| Acquisition and integration-related costs: |  |  |  |  |  |  |  |  |  |
| Inventory stepped-up to fair value | 34 | — | — | 34 | — | 8 | 26 | 0.5 | 0.07 |
| Other acquisition and integration-related (a) | 13 | (171) | (1) | 185 | — | 6 | 179 | (2.5) | 0.47 |
| Amortization of purchased intangible assets | — | — | — | 167 | — | 34 | 133 | 1.4 | 0.35 |
| Structural optimization and other special charges (b) | 22 | (19) | — | 41 | — | 14 | 27 | 1.0 | 0.07 |
| Goodwill and other impairments (c) | — | — | — | 35 | — | 9 | 26 | 0.7 | 0.06 |
| Medical device regulations (d) | 1 | — | (11) | 12 | — | 3 | 9 | 0.1 | 0.02 |
| Recall-related matters (e) | 31 | (2) | — | 33 | — | 8 | 25 | 0.5 | 0.06 |
| Regulatory and legal matters (f) | — | — | — | — | — | 1 | (1) | — | — |
| Tax matters (g) | — | — | — | — | — | (19) | 19 | (2.4) | 0.05 |
| **Adjusted** | **$3,845** | **$2,108** | **$393** | **$1,344** | **$(73)** | **$174** | **$1,097** | **13.7%** | **$2.84** |
| Adjusted percent net sales | 65.5% | 35.9% | 6.7% | 22.9% | (1.2)% | nm | 18.7% |  |  |

| 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** | **$3,333** | **$1,837** | **$368** | **$972** | **$(49)** | **$135** | **$788** | **14.6%** | **$2.05** |
| Reported percent net sales | 63.6% | 35.0% | 7.0% | 18.5% | (0.9)% | nm | 15.0% |  |  |
| Acquisition and integration-related costs: |  |  |  |  |  |  |  |  |  |
| Inventory stepped-up to fair value | — | — | — | — | — | — | — | — | — |
| Other acquisition and integration-related (a) | — | 13 | — | (13) | — | 1 | (14) | 0.3 | (0.04) |
| Amortization of purchased intangible assets | — | — | — | 153 | — | 32 | 121 | 1.4 | 0.31 |
| Structural optimization and other special charges (b) | 3 | (8) | — | 11 | — | 3 | 8 | 0.2 | 0.03 |
| Goodwill and other impairments (c) | — | — | — | 3 | — | — | 3 | — | — |
| Medical device regulations (d) | 1 | — | (12) | 13 | — | 3 | 10 | 0.1 | 0.03 |
| Recall-related matters (e) | — | (5) | — | 5 | — | 1 | 4 | 0.1 | 0.01 |
| Regulatory and legal matters (f) | — | (2) | — | 2 | — | 1 | 1 | — | — |
| Tax matters (g) | — | — | — | — | — | (41) | 41 | (4.4) | 0.11 |
| **Adjusted** | **$3,337** | **$1,835** | **$356** | **$1,146** | **$(49)** | **$135** | **$962** | **12.3%** | **$2.50** |
| Adjusted percent net sales | 63.6% | 35.0% | 6.8% | 21.9% | (0.9)% | nm | 18.3% |  |  |

(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:

|  | Three Months 2025 | 2024 |
| --- | ---: | ---: |
| Termination of sales relationships | $— | $1 |
| Employee retention and workforce reductions | 16 | — |
| Changes in the fair value of contingent consideration | (2) | (16) |
| Manufacturing integration costs | 4 | — |
| Stock compensation payments upon a change in control | 139 | — |
| Other integration-related activities | 28 | 2 |
| **Adjustments to Operating Income** | **$185** | **$(13)** |
| Charges for acquisition-related tax provisions | — | — |
| Other income taxes related to acquisition and integration-related costs | 6 | 1 |
| **Adjustments to Income Taxes** | **$6** | **$1** |
| **Adjustments to Net Earnings** | **$179** | **$(14)** |

(b) Structural optimization and other special charges represent the costs associated with:

|  | Three Months 2025 | 2024 |
| --- | ---: | ---: |
| Employee retention and workforce reductions | $32 | $(1) |
| Closure/transfer of manufacturing and other facilities | 5 | 6 |
| Product line exits | 3 | — |
| Other charges | 1 | 6 |
| **Adjustments to Operating Income** | **$41** | **$11** |
| **Adjustments to Income Taxes** | **$14** | **$3** |
| **Adjustments to Net Earnings** | **$27** | **$8** |

### Dollar amounts are in millions except per share amounts or as otherwise specified. 17

### STRYKER CORPORATION 2025 First Quarter Form 10-Q

(c) Goodwill and other impairments represent the costs associated with:

|  | Three Months 2025 | 2024 |
| --- | ---: | ---: |
| Certain long-lived and intangible asset write-offs and impairments | $34 | $3 |
| Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs) | 1 | — |
| **Adjustments to Operating Income** | **$35** | **$3** |
| **Adjustments to Income Taxes** | **$9** | **$—** |
| **Adjustments to Net Earnings** | **$26** | **$3** |

(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 | $(47) | $(47) |
| Other tax matters | 28 | 6 |
| **Adjustments to Income Taxes** | **$(19)** | **$(41)** |
| Charges / benefits for certain tax audit settlements | — | — |
| **Adjustments to Other Income (Expense), Net** | **$—** | **$—** |
| **Adjustments to Net Earnings** | **$19** | **$41** |

### FINANCIAL CONDITION AND LIQUIDITY

| Net cash provided by (used in): | Three Months 2025 | 2024 |
| --- | ---: | ---: |
| Operating activities | $250 | $204 |
| Investing activities | (4,136) | (408) |
| Financing activities | 2,534 | (418) |
| Effect of exchange rate changes | 20 | (19) |
| **Change in cash and cash equivalents** | **$(1,332)** | **$(641)** |

### Operating Activities

Cash provided by operating activities was $250 and $204 in the

three months 2025 and 2024. The increase was primarily due to

higher net earnings partially offset by the timing of payments and

collections in working capital accounts.

### Investing Activities

Cash used in investing activities was $4,136 and $408 in the

three months 2025 and 2024. The three 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. The three 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 $2,534 in the three

months 2025 and cash used in financing activities was $418 in

the three 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 dividend

payments and cash paid for taxes on withheld shares. Cash used

in 2024 was primarily driven by dividend payments and cash paid

for taxes on withheld shares. We did not repurchase any shares

in the three months 2025 and 2024.

### Liquidity

Cash, cash equivalents, short-term investments and marketable

securities were $2,409 and $4,493 on March 31, 2025 and

December 31, 2024. Current assets exceeded current liabilities

by $5,093 and $7,231 on March 31, 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 29% on March 31, 2025 compared to 20% on December 31,

2024.

### 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 as of March 31, 2025.

### 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,

### Dollar amounts are in millions except per share amounts or as otherwise specified. 18

### STRYKER CORPORATION 2025 First Quarter Form 10-Q

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.

## Market risk

As filed, 384 characters.

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.

## Controls and procedures

As filed, 816 characters.

### 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 March 31, 2025. Based on that evaluation, the

Certifying Officers concluded the Company's disclosure controls

and procedures were effective as of March 31, 2025.

### Changes in Internal Control Over Financial Reporting

There was no change to our internal control over financial

reporting during the three months 2025 that materially affected,

or is reasonably likely to materially affect, our internal control over

financial reporting.

## Risk factors

As filed, 142 characters.

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.

Filed May 2, 2025.
Source: SEC EDGAR, the filing index for accession 0000310764-25-000075. Last ingested by Listed: Nov 5, 2026, 19:29 ET. No prices; not investment advice.