Stryker Corp.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 30 April 2026: press release. Guidance figures: 2 kept. The quarter’s numbers.

Key takeaways

Net sales rose 2.6% to $6.0 billion: Net sales were $6,020 million against $5,866 million, up 2.6% reported and 1.0% in constant currency. Organic growth was 2.4%. Source
Reported EPS rose while adjusted EPS fell: Reported diluted EPS was $1.93, up 14.2%. Adjusted diluted EPS was $2.60, down 8.5% from $2.84, after excluded items such as amortization and special charges. Source
Orthopaedics organic growth of 4.1%: Sales were $2,813 million against $2,810 million, up 0.1% reported and down 1.8% in constant currency. Acquisitions and divestitures reduced reported growth by 5.9 points. Source
Structural charges of $118 million: Structural optimization and other special charges were $118 million in operating income, against $41 million. The largest item was $81 million for terminating sales relationships in certain countries. Source
Adjusted operating margin down 180 bps: Adjusted operating income margin was 21.1% against 22.9%, a contraction of 180 basis points. Reported operating income margin was 15.5% against 14.3%. Source
Net debt repayment of $1.0 billion: Net debt payments were $1,000 million, against $2,979 million of net borrowings a year earlier. Long-term debt was $14,224 million at March 31, against $14,859 million at December 31. Source
Ortho Tech combines instruments and Mako: Management says the change simplifies the customer experience and aims to increase speed to market through focused innovation. Source

“I am pleased with our team’s ability to recover quickly from the cyber incident and continue delivering for our customers and their patients,”
Kevin A. Lobo, Chair and CEO

Guidance

Area	Period	Figure	Against last quarter
Organic net sales growth Source	full year 2026	8.0% to 9.5%	Kept
Adjusted net earnings per diluted share Source	full year 2026	$14.90 to $15.10	Kept

What changed from last quarter

New: A new Ortho Tech business combines orthopaedic instruments from Instruments with Mako and enabling technologies from Other Orthopaedics. Source
New: Neuro Cranial and spine enabling technologies were moved into the remaining Instruments business to match internal reporting. Source

Results and growth drivers

Net sales rose 2.6% to $6.0 billion: Net sales were $6,020 million against $5,866 million, up 2.6% reported and 1.0% in constant currency. Organic growth was 2.4%. Source
Reported EPS rose while adjusted EPS fell: Reported diluted EPS was $1.93, up 14.2%. Adjusted diluted EPS was $2.60, down 8.5% from $2.84, after excluded items such as amortization and special charges. Source
Adjusted net earnings near $1.0 billion: Adjusted net earnings were $1,004 million against $1,097 million. Reported net earnings were $745 million, up 13.9% from $654 million. Source
Organic growth compared with prior quarter: Organic growth of 2.4% compares with 11.0% organic growth reported for the fourth quarter of 2025.

Segments and geographic mix

MedSurg and Neurotechnology sales up 5.0%: Sales were $3,207 million against $3,056 million, up 5.0% reported and 3.6% in constant currency. Organic growth was 0.9%, with price contributing 0.6 points. Source
Orthopaedics organic growth of 4.1%: Sales were $2,813 million against $2,810 million, up 0.1% reported and down 1.8% in constant currency. Acquisitions and divestitures reduced reported growth by 5.9 points. Source
United States flat, international up 8.3%: United States sales were $4,476 million, up 0.8%. International sales were $1,544 million, up 8.3% reported and 1.5% in constant currency, from $1,426 million. Source

“We remain committed to meeting our full year guidance for organic sales growth and adjusted earnings per share as our underlying business momentum remains strong.”
Kevin A. Lobo, Chair and CEO

Product lines and customers

Vascular sales up 27.5%: Vascular sales were $517 million against $406 million. International Vascular sales rose 37.9% as reported. Source
Instruments sales up 9.9%: Instruments sales were $920 million against $838 million, up 9.9% reported and 8.7% in constant currency. Source
Medical sales declined 4.6%: Medical sales fell to $902 million from $945 million. Endoscopy was flat at $868 million against $867 million. Source
Trauma and Extremities up 9.5%: Trauma and Extremities sales rose to $1,035 million from $945 million. Knees rose 4.7% to $670 million and Hips 3.7% to $460 million. Source
Spinal Implants sales fell sharply: Spinal Implants sales were $2 million against $166 million, a decline of 98.9% reported. Source
Ortho Tech sales up 4.8%: Ortho Tech sales were $646 million against $617 million, made up of orthopaedic instruments of $489 million and other orthopaedics of $157 million. Source

Costs and special charges

Structural charges of $118 million: Structural optimization and other special charges were $118 million in operating income, against $41 million. The largest item was $81 million for terminating sales relationships in certain countries. Source
SG&A slightly lower year on year: Selling, general and administrative expenses were $2,281 million, down 0.8% from $2,300 million. Adjusted SG&A was 35.8% of net sales, against 35.9%. Source
R&D and amortization both higher: Research, development and engineering expenses were $413 million, up 2.0%. Amortization of intangible assets was $180 million, up 7.8%. Source
Cost of sales up 4.1%: Cost of sales was $2,210 million against $2,122 million, up 4.1% on net sales of $6,020 million. Source

Margins, pricing and tax

Adjusted operating margin down 180 bps: Adjusted operating income margin was 21.1% against 22.9%, a contraction of 180 basis points. Reported operating income margin was 15.5% against 14.3%. Source
Gross margins lower on both bases: Adjusted gross profit margin was 63.6% against 65.5%. Reported gross profit margin was 63.3% against 63.8%. Source
Higher prices added 0.3 points: Price contributed 0.3 points to organic growth, including 0.6 points within MedSurg and Neurotechnology. Orthopaedics organic growth was attributed only to unit volume. Source
Adjusted tax rate rose to 14.5%: Adjusted effective tax rate was 14.5% against 13.7%. Reported effective tax rate was 12.4% against 14.4%. Source

Cash, debt and capital returns

Operating cash flow rose to $581 million: Net cash from operating activities was $581 million against $250 million. Changes in operating assets, liabilities and taxes absorbed $464 million, against $676 million. Source
Net debt repayment of $1.0 billion: Net debt payments were $1,000 million, against $2,979 million of net borrowings a year earlier. Long-term debt was $14,224 million at March 31, against $14,859 million at December 31. Source
Cash balance down $1.1 billion: Cash and cash equivalents were $2,878 million at March 31, down from $4,011 million at December 31. Acquisitions used $22 million, against $4,749 million. Source
Capital spending rose to $166 million: Purchases of property, plant and equipment were $166 million, against $123 million. Source
Dividends paid $337 million: Dividend payments were $337 million, against $320 million. Diluted weighted-average shares were 386.5 million, against 386.4 million. Source

Reorganization and operations

Ortho Tech combines instruments and Mako: Management says the change simplifies the customer experience and aims to increase speed to market through focused innovation. Source
Segment history published on website: Segment quarterly revenues for 2023, 2024 and 2025 are on the investor relations website, reflecting the new structure as if effective for those periods. Source
Recovery from cyber incident credited: Management credited the team with recovering quickly from the cyber incident while continuing to deliver for customers and patients. Source

Figures management reported

Figure	Reported
Organic unit volume growth, consolidated Source	2.1%
MedSurg and Neurotechnology organic unit volume growth Source	0.3%
Orthopaedics organic unit volume growth Source	4.1%

Risks management discussed

External: The expected favorable foreign exchange effect on sales and adjusted EPS depends on rates staying near current levels. Source
Financial: Management said the financial impact of structural, acquisition, regulatory, legal and tax items is uncertain and could be material. Source
Regulatory: Management lists costs to comply with medical device regulations, recall-related matters, and regulatory and legal matters among items that affect reported earnings. Source

Earlier plans management reported on

Not stated: Management said it remains committed to meeting the full-year 2026 organic sales growth and adjusted EPS guidance it maintained. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

STRYKER REPORTS FIRST QUARTER 2026 OPERATING RESULTS

Portage, Michigan - April 30, 2026 - Stryker (NYSE:SYK) reported operating results for the first quarter of 2026:

First Quarter Results

Reported net sales increased 2.6% to $6.0 billion
Organic net sales increased 2.4%
Reported operating income margin of 15.5%
Adjusted operating income margin contracted 180 bps to 21.1%
Reported EPS increased 14.2% to $1.93
Adjusted EPS decreased 8.5% to $2.60

	First Quarter Net Sales Growth Overview
	Reported	Foreign Currency Exchange	Constant Currency	Acquisitions / Divestitures	Organic
MedSurg and Neurotechnology	5.0%	1.4%	3.6%	2.7%	0.9%
Orthopaedics	0.1	1.9	(1.8)	(5.9)	4.1
Total	2.6%	1.6%	1.0%	(1.4)%	2.4%

“I am pleased with our team’s ability to recover quickly from the cyber incident and continue delivering for our customers and their patients,” said Kevin A. Lobo, Chair and CEO. “We remain committed to meeting our full year guidance for organic sales growth and adjusted earnings per share as our underlying business momentum remains strong.”

In the first quarter 2026 Stryker announced a change in our organizational structure. Our new Ortho Tech business combines the orthopaedic instruments portfolio from our Instruments business with the Mako and enabling technologies portfolio from our Other Orthopaedics business. By bringing Mako, power tools, cutting accessories, enabling technologies and the teams behind these products together under one business, we are simplifying the customer experience and striving to increase our speed to market through focused innovation. Prior period segment information has been recast to reflect these changes and they will have no impact on our consolidated financial statements. On our Investor Relations website at investors.stryker.com, we have provided additional information on our segment quarterly revenues for 2023, 2024 and 2025 that reflects the change in our organizational structure and other changes as if they had been effective for the periods presented.

Sales Analysis

Consolidated net sales of $6.0 billion increased 2.6% in the quarter and 1.0% in constant currency. Organic net sales increased 2.4% in the quarter including 2.1% from increased unit volume and 0.3% from higher prices.

MedSurg and Neurotechnology net sales of $3.2 billion increased 5.0% in the quarter and 3.6% in constant currency. Organic net sales increased 0.9% in the quarter including 0.3% from increased unit volume and 0.6% from higher prices.

Orthopaedics net sales of $2.8 billion increased 0.1% in the quarter and decreased 1.8% in constant currency. Organic net sales increased 4.1% in the quarter from increased unit volume.

Earnings Analysis

Reported net earnings of $745 million increased 13.9% in the quarter. Reported net earnings per diluted share of $1.93 increased 14.2% in the quarter. Reported gross profit margin and reported operating income margin were 63.3% and 15.5% 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 was 63.6% in the quarter, and adjusted operating income margin was 21.1% in the quarter. Adjusted net earnings of $1.0 billion decreased 8.5% in the quarter. Adjusted net earnings per diluted share of $2.60 decreased 8.5% in the quarter.

2026 Outlook

We are maintaining our full year 2026 guidance of organic net sales growth in the range of 8.0% to 9.5% and adjusted net earnings per diluted share in the range of $14.90 to $15.10. Our sales guidance includes a modestly positive pricing impact. Additionally, foreign exchange is expected to have a slightly favorable impact on both sales and adjusted net earnings per diluted shareshould rates hold near current levels.

(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, April 30, 2026

As previously announced, we will host a conference call on Thursday, April 30, 2026 at 4:30 p.m., Eastern Time, to discuss our operating results for the quarter ended March 31, 2026 and provide an operational update.

Please register for this conference call at: https://stryker-1q2026-earnings.open-exchange.net. 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

Forward-looking statements notice

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's 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's 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 resulting from cyber-attack, data leakage, unauthorized access or theft, including the cybersecurity incident first reported on March 11, 2026; 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

	Three Months
	2026		2025		% Change
STRYKER CORPORATION
For the Three Months March 31
(Unaudited - Millions of Dollars, Except Per Share Amounts)
CONSOLIDATED STATEMENTS OF EARNINGS
Net sales	$6,020		$5,866		2.6%
Cost of sales	2,210		2,122		4.1
Gross profit	$3,810		$3,744		1.8%
% of sales	63.3%		63.8%
Research, development and engineering expenses	413		405		2.0
Selling, general and administrative expenses	2,281		2,300		(0.8)
Amortization of intangible assets	180		167		7.8
Goodwill and other impairments	-		35			nm
Total operating expenses	$2,874		$2,907		(1.1)%
Operating income	$936		$837		11.8%
% of sales	15.5%		14.3%
Other income (expense), net	(86)		(73)			17.8%
Earnings before income taxes	$850		$764		11.3%
Income taxes	105		110		(4.5)
Net earnings	$745		$654		13.9%
Net earnings per share of common stock:
Basic	$1.95		$1.71		14.0%
Diluted	$1.93		$1.69		14.2%
Weighted-average shares outstanding (in millions):
Basic		382.9		381.7
Diluted		386.5		386.4

	March 31	December 31
	2026	2025
CONDENSED CONSOLIDATED BALANCE SHEETS
Assets
Cash and cash equivalents	$2,878	$4,011
Marketable securities	87	89
Accounts receivable, net	3,571	4,039
Inventories	5,419	5,310
Prepaid expenses and other current assets	1,383	1,306
Total current assets	$13,338	$14,755
Property, plant and equipment, net	3,887	3,876
Goodwill and other intangibles, net	24,704	24,972
Noncurrent deferred income tax assets	1,193	1,098
Other noncurrent assets	3,169	3,143
Total assets	$46,291	$47,844
Liabilities and shareholders' equity
Current liabilities	$6,315	$7,794
Long-term debt, excluding current maturities	14,224	14,859
Income taxes	403	402
Other noncurrent liabilities	2,370	2,369
Shareholders' equity	22,979	22,420
Total liabilities and shareholders' equity	$46,291	$47,844

	Three Months
	2026	2025
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Operating activities
Net earnings	$745	$654
Depreciation	120	105
Amortization of intangible assets	180	167
Changes in operating assets, liabilities, income taxes payable and other, net	(464)	(676)
Net cash provided by operating activities	$581	$250
Investing activities
Acquisitions, net of cash acquired	$(22)	$(4,749)
Proceeds/(Purchases) of short-term investments	-	750
Purchases of property, plant and equipment	(166)	(123)
Other investing, net	3	(14)
Net cash used in investing activities	$(185)	$(4,136)
Financing activities
Borrowings (payments) of debt, net	$(1,000)	$2,979
Payments of dividends	(337)	(320)
Other financing, net	(173)	(125)
Net cash provided by (used in) financing activities	$(1,510)	$2,534
Effect of exchange rate changes on cash and cash equivalents	(19)	20
Change in cash and cash equivalents	$(1,133)	$(1,332)

STRYKER CORPORATION

For the Three Months March 31

(Unaudited - Millions of Dollars)

	Three Months
			Percentage Change
	2026	2025	As Reported	Constant Currency
SALES GROWTH ANALYSIS
Geographic:
United States	$4,476	$4,440	0.8%	0.8%
International	1,544	1,426	8.3	1.5
Total	$6,020	$5,866	2.6%	1.0%
Segment:
MedSurg and Neurotechnology	$3,207	$3,056	5.0%	3.6%
Orthopaedics	2,813	2,810	0.1	(1.8)
Total	$6,020	$5,866	2.6%	1.0%

	Three Months
			Percentage Change
					United States	International
	2026	2025	As Reported	Constant Currency	As Reported	As Reported	Constant Currency
SUPPLEMENTAL SALES GROWTH ANALYSIS
MedSurg and Neurotechnology:
Instruments	$920	$838	9.9%	8.7%	9.1%	14.0%	7.0%
Endoscopy	868	867	0.1	(1.0)	(1.2)	6.0	-
Medical	902	945	(4.6)	(5.6)	(6.9)	8.3	1.1
Vascular	517	406	27.5	24.0	37.9	17.0	10.5
	$3,207	$3,056	5.0%	3.6%	3.2%	11.7%	5.1%
Orthopaedics:
Knees	$670	$639	4.7%	2.8%	1.4%	13.5%	6.1%
Hips	460	443	3.7	1.2	2.3	6.0	(0.3)
Trauma and Extremities	1,035	945	9.5	7.4	7.6	15.3	6.8
Ortho Tech	646	617	4.8	3.2	2.0	12.9	6.5
	$2,811	$2,644	6.3%	4.3%	4.0%	12.2%	4.9%
Spinal Implants	2	166	(98.9)	(99.0)	(100.0)	(96.2)	(96.6)
	$2,813	$2,810	0.1%	(1.8)%	(2.0)%	5.5%	(1.3)%
Total	$6,020	$5,866	2.6%	1.0%	0.8%	8.3%	1.5%

Note: In the first quarter 2026 we announced a change in our organizational structure. Our new Ortho Tech business combines the orthopaedic instruments portfolio (Orthopaedic Instruments) from Instruments with Other Orthopaedics. In addition, Neuro Cranial and the spine enabling technologies portfolio (Enabling Technologies) from Other Orthopaedics was combined with the remaining Instruments business to align with our internal reporting structure. Ortho Tech includes sales related to Orthopaedic Instruments of $489 and $484 and Other Orthopaedics of $157 and $133. Instruments includes sales related to Neuro Cranial of $606 and $563 and Enabling Technologies of $26 and $29 for the three months 2026 and 2025. 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 CORPORATION
For the Three Months March 31
(Unaudited - Millions of Dollars, Except Per Share Amounts)
Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2026	Gross Profit	Selling, General & Administrative Expenses	Research, Development & Engineering Expenses	Operating Income	Other Income (Expense), Net	Income Taxes		Net Earnings	Effective Tax Rate	Diluted EPS
Reported	$3,810	$2,281	$413	$936	$(86)	$105		$745	12.4%	$1.93
Reported percent net sales	63.3%	37.9%	6.9%	15.5%	(1.4)%		nm	12.4%
Acquisition and integration-related costs:
Inventory stepped-up to fair value	-	-	-	-	-	-		-	-	-
Other acquisition and integration-related (a)	2	(13)	(4)	19	-	4		15	0.1	0.04
Amortization of purchased intangible assets	-	-	-	180	-	30		150	0.6	0.38
Structural optimization and other special charges (b)	14	(104)	-	118	(11)	25		82	1.1	0.21
Goodwill and other impairments (c)	-	-	-	-	-	-		-	-	-
Medical device regulations (d)	-	-	(5)	5	-	1		4	-	0.01
Recall-related matters (e)	1	(9)	-	10	-	2		8	0.1	0.02
Regulatory and legal matters (f)	-	(3)	-	3	-	1		2	-	0.01
Tax matters (g)	-	-	-	-	-	2		(2)	0.2	-
Adjusted	$3,827	$2,152	$404	$1,271	$(97)	$170		$1,004	14.5%	$2.60
Adjusted percent net sales	63.6%	35.8%	6.7%	21.1%	(1.6)%		nm	16.7%

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%

nm - not meaningful

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

	Three Months
	2026	2025
Employee retention and workforce reductions	$3	$16
Changes in the fair value of contingent consideration	3	(2)
Manufacturing integration costs	5	4
Stock compensation payments upon a change in control	-	139
Other integration-related activities (e.g., deal costs and legal entity rationalization)	8	28
Adjustments to Operating Income	$19	$185
Other income taxes related to acquisition and integration-related costs	4	6
Adjustments to Income Taxes	$4	$6
Adjustments to Net Earnings	$15	$179

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

	Three Months
	2026	2025
Employee retention and workforce reductions	$7	$32
Closure/transfer of manufacturing and other facilities (e.g., site closure, contract termination and redundant employee costs)	5	5
Product line exits	2	3
Termination of sales relationships in certain countries	81	-
Other charges	23	1
Adjustments to Operating Income	$118	$41
Adjustments to Other Income (Expense), Net	$(11)	$ -
Adjustments to Income Taxes	$25	$14
Adjustments to Net Earnings	$82	$27

	Three Months
	2026	2025
Certain long-lived and intangible asset write-offs and impairments	$ -	$34
Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs)	-	1
Adjustments to Operating Income	$ -	$35
Adjustments to Income Taxes	$ -	$9
Adjustments to Net Earnings	$ -	$26

(d) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.

(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain recall-related matters.

(f) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.

(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:

	Three Months
	2026		2025
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions	$(20)		$(47)
Other tax matters		22		28
Adjustments to Income Taxes	$2		$(19)
Adjustments to Other Income (Expense), Net	$ -		$ -
Adjustments to Net Earnings	$(2)		$19