UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2026
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-13149
strykerlogoa74.jpg
STRYKER CORPORATION
(Exact name of registrant as specified in its charter)
Michigan
38-1239739
(State of incorporation)
(I.R.S. Employer Identification No.)
1941 Stryker Way
Portage,
Michigan
49002
(Address of principal executive offices)
(Zip Code)
(269)
385-2600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $.10 Par Value
SYK
New York Stock Exchange
2.125% Notes due 2027
SYK27
New York Stock Exchange
3.375% Notes due 2028
SYK28
New York Stock Exchange
0.750% Notes due 2029
SYK29
New York Stock Exchange
2.625% Notes due 2030
SYK30
New York Stock Exchange
1.000% Notes due 2031
SYK31
New York Stock Exchange
3.375% Notes due 2032
SYK32
New York Stock Exchange
3.625% Notes due 2036
SYK36
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.Yes☒No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).Yes☒No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting
company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Emerging growth company
☐
Non-accelerated filer
☐
Smaller reporting company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐No ☒
There were 380,691,004 shares of Common Stock, $0.10 par value, on September 30, 2026.
Dollar amounts are in millions except per share amounts or as otherwise specified.
1
STRYKER CORPORATION
2026Third Quarter Form 10-Q
PART I – FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
Stryker Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
Three Months
Nine Months
2026
2025
2026
2025
Net sales
$6,520
$6,057
$19,129
$17,945
Cost of sales
2,272
2,205
6,573
6,508
Gross profit
$4,248
$3,852
$12,556
$11,437
Research, development and engineering expenses
433
410
1,280
1,222
Selling, general and administrative expenses
2,313
2,045
6,823
6,424
Amortization of intangible assets
175
189
530
543
Goodwill and other impairments
293
73
294
163
Total operating expenses
$3,214
$2,717
$8,927
$8,352
Operating income
$1,034
$1,135
$3,629
$3,085
Interest expense
(143)
(157)
(432)
(453)
Other income
106
51
214
177
Earnings before income taxes
$997
$1,029
$3,411
$2,809
Income taxes
244
170
637
412
Net earnings
$753
$859
$2,774
$2,397
Net earnings per share of common stock:
Basic
$1.97
$2.25
$7.24
$6.27
Diluted
$1.96
$2.22
$7.19
$6.20
Weighted-average shares outstanding (in millions):
Basic
382.2
382.4
382.9
382.1
Effect of dilutive employee stock compensation
2.5
4.3
2.9
4.4
Diluted
384.7
386.7
385.8
386.5
Cash dividends declared per share of common stock
$0.88
$0.84
$2.64
$2.52
Anti-dilutive shares excluded from the calculation of dilutive employee stock options were de minimis in all periods.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
Three Months
Nine Months
2026
2025
2026
2025
Net earnings
$753
$859
$2,774
$2,397
Other comprehensive income (loss), net of tax:
Marketable securities
—
—
—
—
Pension plans
—
—
—
2
Unrealized gains (losses) on designated hedges
(28)
8
(59)
11
Financial statement translation
11
(12)
153
(486)
Total other comprehensive income (loss), net of tax
$(17)
$(4)
$94
$(473)
Comprehensive income
$736
$855
$2,868
$1,924
See accompanying notes to Consolidated Financial Statements.
Dollar amounts are in millions except per share amounts or as otherwise specified.
2
STRYKER CORPORATION
2026Third Quarter Form 10-Q
CONSOLIDATED BALANCE SHEETS
September 30
December 31
2026
2025
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$3,271
$4,011
Marketable securities
—
89
Accounts receivable, less allowance of $226 ($216 in 2025)
3,693
4,039
Inventories:
Materials and supplies
1,377
1,349
Work in process
484
415
Finished goods
3,886
3,546
Total inventories
$5,747
$5,310
Prepaid expenses and other current assets
1,472
1,306
Total current assets
$14,183
$14,755
Property, plant and equipment:
Land, buildings and improvements
1,822
1,793
Machinery and equipment
6,176
5,744
Total property, plant and equipment
$7,998
$7,537
Less allowance for depreciation
3,944
3,661
Property, plant and equipment, net
$4,054
$3,876
Goodwill
19,326
19,291
Other intangibles, net
5,542
5,681
Noncurrent deferred income tax assets
901
1,098
Other noncurrent assets
3,241
3,143
Total assets
$47,247
$47,844
Liabilities and shareholders' equity
Current liabilities
Accounts payable
$1,634
$1,799
Accrued compensation
1,363
1,595
Income taxes
65
418
Dividends payable
335
337
Accrued expenses and other liabilities
2,349
2,645
Current maturities of debt
754
1,000
Total current liabilities
$6,500
$7,794
Long-term debt, excluding current maturities
14,176
14,859
Income taxes
413
402
Other noncurrent liabilities
2,701
2,369
Total liabilities
$23,790
$25,424
Shareholders' equity
Common stock, $0.10 par value
38
38
Additional paid-in capital
2,764
2,597
Retained earnings
21,248
20,472
Accumulated other comprehensive loss
(593)
(687)
Total shareholders' equity
$23,457
$22,420
Total liabilities and shareholders' equity
$47,247
$47,844
See accompanying notes to Consolidated Financial Statements.
Dollar amounts are in millions except per share amounts or as otherwise specified.
3
STRYKER CORPORATION
2026Third Quarter Form 10-Q
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
Three Months
Nine Months
2026
2025
2026
2025
Common stock shares outstanding (in millions)
Beginning
383.5
382.3
382.5
381.4
Issuance of common stock under stock compensation and benefit plans
0.2
0.1
1.2
1.0
Repurchase of common stock
(3.0)
—
(3.0)
—
Ending
380.7
382.4
380.7
382.4
Common stock
Beginning
$38
$38
$38
$38
Issuance of common stock under stock compensation and benefit plans
—
—
—
—
Repurchase of common stock
—
—
—
—
Ending
$38
$38
$38
$38
Additional paid-in capital
Beginning
$2,711
$2,492
$2,597
$2,361
Issuance of common stock under stock compensation and benefit plans
7
(1)
(20)
(3)
Repurchase of common stock
(21)
—
(21)
—
Share-based compensation
67
62
208
195
Ending
$2,764
$2,553
$2,764
$2,553
Retained earnings
Beginning
$21,815
$19,423
$20,472
$18,528
Net earnings
753
859
2,774
2,397
Repurchase of common stock
(987)
—
(987)
—
Cash dividends declared
(333)
(322)
(1,011)
(965)
Ending
$21,248
$19,960
$21,248
$19,960
Accumulated other comprehensive income (loss)
Beginning
$(576)
$(762)
$(687)
$(293)
Other comprehensive income (loss)
(17)
(4)
94
(473)
Ending
$(593)
$(766)
$(593)
$(766)
Total shareholders' equity
$23,457
$21,785
$23,457
$21,785
See accompanying notes to Consolidated Financial Statements.
Dollar amounts are in millions except per share amounts or as otherwise specified.
4
STRYKER CORPORATION
2026Third Quarter Form 10-Q
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months
2026
2025
Operating activities
Net earnings
$2,774
$2,397
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation
361
334
Amortization of intangible assets
530
543
Goodwill and other impairments
294
163
Share-based compensation
208
195
Sale of inventory stepped-up to fair value at acquisition
—
160
Deferred income tax (benefit) expense
166
191
Changes in operating assets and liabilities:
Accounts receivable
320
524
Inventories
(468)
(373)
Accounts payable
(154)
(205)
Accrued expenses and other liabilities
(279)
(78)
Income taxes
(395)
(577)
Other, net
(54)
(373)
Net cash provided by operating activities
$3,303
$2,901
Investing activities
Acquisitions, net of cash acquired
(481)
(4,950)
Purchases of marketable securities
(23)
(32)
Proceeds/(Purchases) of short-term investments
—
750
Proceeds from sales of marketable securities
112
40
Purchases of property, plant and equipment
(605)
(493)
Proceeds from the sale of the Spinal Implants business
—
165
Other investing, net
(14)
(41)
Net cash used in investing activities
$(1,011)
$(4,561)
Financing activities
Proceeds (payments) on short-term borrowings, net
247
1
Proceeds from issuance of long-term debt
—
2,979
Payments on long-term debt
(1,000)
(650)
Payments of dividends
(1,012)
(963)
Repurchases of common stock
(1,000)
—
Cash paid for taxes from withheld shares
(156)
(132)
Other financing, net
(77)
(29)
Net cash provided by (used in) financing activities
$(2,998)
$1,206
Effect of exchange rate changes on cash and cash equivalents
(34)
58
Change in cash and cash equivalents
$(740)
$(396)
Cash and cash equivalents at beginning of period
4,011
3,652
Cash and cash equivalents at end of period
$3,271
$3,256
See accompanying notes to Consolidated Financial Statements.
Dollar amounts are in millions except per share amounts or as otherwise specified.
5
STRYKER CORPORATION
2026Third Quarter Form 10-Q
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - BASIS OF PRESENTATION
General Information
Management believes the accompanying unaudited Consolidated
Financial Statements contain all adjustments, including normal
recurring items, considered necessary to fairly present the
financial position of Stryker Corporation and its consolidated
subsidiaries ("Stryker," the "Company," "we," "us" or "our") on
September 30, 2026 and the results of operations for the three
and nine months 2026. The results of operations included in
these Consolidated Financial Statements may not necessarily be
indicative of our annual results. These statements should be read
in conjunction with our Annual Report on Form 10-K for 2025.
In the first quarter 2026 we 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.
Following this reorganization we continue to have two business
segments, (i) MedSurg and Neurotechnology and (ii)
Orthopaedics, each of which comprise a reportable segment. All
historical segment financial information has been recast to
conform to this new reporting structure in our financial statements
and accompanying notes.
New Accounting Pronouncements Not Yet Adopted
In September 2025 the Financial Accounting Standards Board
(FASB) issued Accounting Standards Update (ASU) 2025-07
(Topics 815 and 606): Derivatives and Hedging: Derivatives
Scope Refinements and Revenue from Contracts with
Customers: Scope Clarification for Share-Based Noncash
Consideration from a Customer in a Revenue Contract. This
update expands the scope exception in Topic 815 to certain non-
exchange-traded contracts for which settlement is based on
operations or activities specific to one of the parties to the
contract. The update is effective for fiscal years beginning after
December 15, 2026 including interim periods within those fiscal
years. Early adoption is permitted. We are evaluating if the ASU
will have an impact on our Consolidated Financial Statements.
In September 2025 the FASB issued ASU 2025-06 (Subtopic
350-40): Intangibles - Goodwill and Other - Internal-Use
Software: Targeted Improvements to the Accounting for Internal-
Use Software. This update clarifies and modernizes the
accounting for costs related to internal-use software by removing
all references to project stages and clarifying that the probable-
to-complete threshold is not met if significant development
uncertainty exists. The update is effective for fiscal years
beginning after December 15, 2027 including interim periods
within those fiscal years. Early adoption is permitted. We are
evaluating if the ASU will have an impact on our Consolidated
Financial Statements.
In November 2024 the FASB issued ASU 2024-03 (Subtopic
220-40): Income Statement: Reporting Comprehensive Income -
Expense Disaggregation Disclosures which requires
disaggregation of certain expense captions into specified
categories in disclosures within the Notes to the Consolidated
Financial Statements. The new disclosure requirements are
effective for fiscal years beginning after December 15, 2026 and
interim periods within fiscal years beginning after December 15,
2027. Early adoption is permitted. We are evaluating these new
expanded disclosure requirements.
We evaluate all ASUs issued by the FASB for consideration of
their applicability. ASUs not included in our disclosures were
assessed and determined to be either not applicable or are not
expected to have a material impact on our Consolidated Financial
Statements.
Accounting Pronouncements Recently Adopted
On January 1, 2026 we adopted ASU 2025-05 (Topic 326):
Financial Instruments - Credit Losses:Measurement of Credit
Losses for Accounts Receivable and Contract Assets.This
update provides a practical expedient allowing entities to assume
that current conditions as of the balance sheet date will remain
unchanged for the remaining life of the asset when estimating
expected credit losses for current accounts receivable and
current contract assets arising from transactions accounted for
under Accounting Standards Codification 606, Revenue from
Contracts with Customers. The adoption of this update did not
have a material impact on our Consolidated Financial
Statements.
NOTE 2 - REVENUE RECOGNITION
Our policies for recognizing sales have not changed from those
described in our Annual Report on Form 10-K for 2025.
We disaggregate our net sales by business and geographic
location for each of our segments as we believe it best depicts
how the nature, amount, timing and certainty of our net sales and
cash flows are affected by economic factors.
In the first quarter 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 were combined with the
remaining Instruments business to align with our internal
reporting structure. Ortho Tech includes sales related to
Orthopaedic Instruments of $535 and $492 and Other
Orthopaedics of $219 and $159 for the three months 2026 and
2025. For the nine months 2026 and 2025 Ortho Tech includes
sales related to Orthopaedic Instruments of $1,547 and $1,477
and Other Orthopaedics of $570 and $440. Instruments includes
sales related to Neuro Cranial of $670 and $637 and Enabling
Technologies of $28 and $45 for the three months 2026 and
2025. For the nine months 2026 and 2025 Instruments includes
sales related to Neuro Cranial of $1,957 and $1,816 and
Enabling Technologies of $82 and $108. We have reflected these
changes in all historical periods presented.
Dollar amounts are in millions except per share amounts or as otherwise specified.
6
STRYKER CORPORATION
2026Third Quarter Form 10-Q
Net Sales by Business
Three Months
Nine Months
2026
2025
2026
2025
MedSurg and Neurotechnology:
Instruments
$996
$949
$2,919
$2,705
Endoscopy
1,021
896
2,893
2,662
Medical
1,081
985
3,105
2,920
Vascular
566
525
1,579
1,429
$3,664
$3,355
$10,496
$9,716
Orthopaedics:
Knees
$635
$628
$1,998
$1,907
Hips
453
457
1,392
1,366
Trauma and Extremities
1,010
960
3,117
2,862
Ortho Tech
754
651
2,117
1,917
Spinal Implants
4
6
9
$177
$2,856
$2,702
$8,633
$8,229
Total
$6,520
$6,057
$19,129
$17,945
Net Sales by Geography
Three Months
Nine Months
2026
2025
2026
2025
United States
$4,950
$4,571
$14,385
$13,565
International
1,570
1,486
4,744
4,380
Total
$6,520
$6,057
$19,129
$17,945
Costs to Obtain or Fulfill a Contract
We typically do not incur costs to fulfill a contract before a
product or service is provided to a customer due to the nature of
our products and services. Our costs to obtain contracts are
typically in the form of sales commissions paid to employees or
third-party agents. Certain sales commissions paid to employees
prior to recognition of sales are recorded as deferred contract
costs. We expense sales commissions associated with obtaining
a contract at the time of the sale or as incurred as the
amortization period is generally less than one year. These costs
have been presented within selling, general and administrative
expenses. On September 30, 2026 and December 31, 2025
deferred contracts costs recorded in our Consolidated Balance
Sheets were not significant.
Contract Assets and Liabilities
Our contract assets primarily relate to conditional rights to
consideration for work completed but not billed at the reporting
date. On September 30, 2026 and December 31, 2025 contract
assets recorded in our Consolidated Balance Sheets were not
significant.
Our contract liabilities arise as a result of consideration received
from customers at inception of contracts for certain businesses or
where the timing of billing for services precedes satisfaction of
our performance obligations. This occurs primarily when payment
is received upfront for certain multi-period extended service
contracts. Our contract liabilities of $960 and $1,024 on
September 30, 2026 and December 31, 2025 are classified within
accrued expenses and other liabilities and other noncurrent
liabilities in our Consolidated Balance Sheets based on the timing
of when we expect to complete our performance obligations.
Changes in contract liabilities during the nine months 2026 were
as follows:
September 30
2026
Beginning contract liabilities
$1,024
Revenue recognized from beginning of year contract liabilities
(615)
Net advance consideration received during the period
551
Ending contract liabilities
$960
Transfers and Servicing of Financial Assets
We sell certain customer lease agreements and the related
leased assets to third-party financial institutions to accelerate our
cash collection cycle. The lease receivables are sold without
recourse and are derecognized from our Consolidated Balance
Sheets at the time of sale. Under the terms of our arrangements,
we collect lease payments on behalf of the financial institutions
but maintain no other form of continuing involvement. Sales of
these lease agreements are classified as operating activities in
our Consolidated Statements of Cash Flows. Fees earned for our
servicing activities are immaterial. Revenue related to customer
lease agreements sold under these arrangements represented
less than 4% of our total revenue for the three and nine months
2026 and 2025.
NOTE 3 - ACCUMULATED OTHER COMPREHENSIVE (LOSS)
INCOME (AOCI)
Three Months 2026
Pension
Plans
Hedges
Financial
Statement
Translation
Total
Beginning
$70
$11
$(657)
$(576)
OCI
1
(31)
30
—
Income taxes
—
9
(11)
(2)
Reclassifications to:
Cost of sales
—
(5)
—
(5)
Interest expense
—
(2)
—
(2)
Other income
(1)
—
(10)
(11)
Income taxes
—
1
2
3
Net OCI
$—
$(28)
$11
$(17)
Ending
$70
$(17)
$(646)
$(593)
Three Months 2025
Pension
Plans
Hedges
Financial
Statement
Translation
Total
Beginning
$6
$34
$(802)
$(762)
OCI
—
19
(4)
15
Income taxes
—
(3)
—
(3)
Reclassifications to:
Cost of sales
—
(8)
—
(8)
Interest expense
—
(1)
—
(1)
Other income
—
—
(11)
(11)
Income taxes
—
1
3
4
Net OCI
$—
$8
$(12)
$(4)
Ending
$6
$42
$(814)
$(766)
Nine Months 2026
Pension
Plans
Hedges
Financial
Statement
Translation
Total
Beginning
$70
$42
$(799)
$(687)
OCI
2
(41)
186
147
Income taxes
1
10
(10)
1
Reclassifications to:
Cost of sales
—
(29)
—
(29)
Interest expense
—
(4)
—
(4)
Other income
(4)
—
(30)
(34)
Income taxes
1
5
7
13
Net OCI
$—
$(59)
$153
$94
Ending
$70
$(17)
$(646)
$(593)
Dollar amounts are in millions except per share amounts or as otherwise specified.
7
STRYKER CORPORATION
2026Third Quarter Form 10-Q
Nine Months 2025
Pension
Plans
Hedges
Financial
Statement
Translation
Total
Beginning
$4
$31
$(328)
$(293)
OCI
3
25
(589)
(561)
Income taxes
(1)
(2)
128
125
Reclassifications to:
Cost of sales
—
(13)
—
(13)
Interest expense
—
(2)
—
(2)
Other income
—
—
(33)
(33)
Income taxes
—
3
8
11
Net OCI
$2
$11
$(486)
$(473)
Ending
$6
$42
$(814)
$(766)
NOTE 4 - DERIVATIVE INSTRUMENTS
We use operational and economic hedges, foreign currency
exchange forward contracts, net investment hedges (both
derivative and non-derivative financial instruments) and interest
rate derivative instruments to manage the impact of currency
exchange and interest rate fluctuations on earnings, cash flow
and equity. We do not enter into derivative instruments for
speculative purposes. We are exposed to potential credit loss in
the event of nonperformance by counterparties on our
outstanding derivative instruments but do not anticipate
nonperformance by any of our counterparties. Should a
counterparty default, our maximum loss exposure is the asset
balance of the instrument. We have not changed our hedging
strategies, accounting practices or objectives from those
disclosed in our Annual Report on Form 10-K for 2025.
Foreign Currency Hedges
September 2026
Cash Flow
Net
Investment
Non-
Designated
Total
Gross notional amount
$1,967
$2,552
$3,256
$7,775
Maximum term in years
8.0
Fair value:
Other current assets
$14
$—
$37
$51
Other noncurrent assets
2
14
—
16
Other current liabilities
(36)
(35)
(11)
(82)
Other noncurrent
liabilities
(3)
(13)
—
(16)
Total fair value
$(23)
$(34)
$26
$(31)
December 2025
Cash Flow
Net
Investment
Non-
Designated
Total
Gross notional amount
$1,738
$2,647
$4,391
$8,776
Maximum term in years
8.7
Fair value:
Other current assets
$33
$—
$11
$44
Other noncurrent assets
2
—
—
2
Other current liabilities
(10)
(71)
(21)
(102)
Other noncurrent
liabilities
(2)
(66)
—
(68)
Total fair value
$23
$(137)
$(10)
$(124)
We had €2.3 billion at September 30, 2026 and December 31,
2025 in certain forward currency contracts designated as net
investment hedges, for which the maximum term is 8.0 years, to
hedge a portion of our investments in certain of our entities with
functional currencies denominated in Euros. In addition to these
derivative financial instruments designated as net investment
hedges, we had €5.0 billion at September 30, 2026 and
December 31, 2025 of senior unsecured notes designated as net
investment hedges to selectively hedge portions of our
investment in certain international subsidiaries. The currency
effects of our Euro-denominated senior unsecured notes are
reflected in AOCI within shareholders' equity where they offset
gains and losses recorded on our net investment in international
subsidiaries.
The total after-tax gain (loss) recognized in OCI related to
designated net investment hedges was $204 in the nine months
2026.
Currency Exchange Rate Gains (Losses) Recognized in Net
Earnings
Three Months
Nine Months
Derivative
Instrument
Recognized
in:
2026
2025
2026
2025
Cash Flow
Cost of sales
$5
$8
$29
$13
Net
Investment
Other income
10
11
30
33
Non-
Designated
Other income
(3)
3
(2)
31
Total
$12
$22
$57
$77
Pretax gains (losses) on derivatives designated as cash flow
hedges of ($18) and net investment hedges of $28 recorded in
AOCI are expected to be reclassified to cost of sales and other
income in earnings within 12 months of September 30, 2026.
This cash flow hedge reclassification is primarily due to the sale
of inventory that includes previously hedged purchases. A
component of the AOCI amounts related to net investment
hedges is reclassified over the life of the hedge instruments as
we elected to exclude the initial value of the component related to
the spot-forward difference from the effectiveness assessment.
Interest Rate Hedges
Pretax gains of $6 recorded in AOCI related to interest rate
hedges closed in conjunction with debt issuances are expected to
be reclassified to interest expense in earnings within 12 months
of September 30, 2026. The cash flow effect of interest rate
hedges is recorded in cash flow from operations.
NOTE 5 - FAIR VALUE MEASUREMENTS
Our policies for managing risk related to foreign currency, interest
rates, credit and markets and our process for determining fair
value have not changed from those described in our Annual
Report on Form 10-K for 2025.
In the nine months 2026 we recorded $271 of contingent
consideration related to the acquisition of Amplitude Vascular
Systems, Inc. (AVS) described in Note 7.
In 2025 we assumed contingent consideration liabilities with a fair
value of $90 related to previous acquisitions made by Inari
Medical, Inc. (Inari). Refer to Note 7 for further information on the
acquisition of Inari.
There were no significant transfers into or out of any level of the
fair value hierarchy in 2026.
Assets Measured at Fair Value
September 30
December 31
2026
2025
Cash and cash equivalents
$3,271
$4,011
Trading marketable securities
339
307
Level 1 - Assets
$3,610
$4,318
Available-for-sale marketable securities:
Corporate and asset-backed debt securities
$—
$52
United States treasury debt securities
—
37
Total available-for-sale marketable securities
$—
$89
Foreign currency exchange forward contracts
67
46
Level 2 - Assets
$67
$135
Total assets measured at fair value
$3,677
$4,453
Dollar amounts are in millions except per share amounts or as otherwise specified.
8
STRYKER CORPORATION
2026Third Quarter Form 10-Q
Liabilities Measured at Fair Value
September 30
December 31
2026
2025
Deferred compensation arrangements
$339
$307
Level 1 - Liabilities
$339
$307
Foreign currency exchange forward contracts
$98
$170
Level 2 - Liabilities
$98
$170
Contingent consideration:
Beginning
$518
$452
Additions
271
123
Change in estimate and foreign exchange
10
24
Settlements
(90)
(81)
Ending
$709
$518
Level 3 - Liabilities
$709
$518
Total liabilities measured at fair value
$1,146
$995
Fair Value of Available for Sale Securities by Maturity
September 30
December 31
2026
2025
Due in one year or less
$—
$41
Due after one year through three years
$—
$48
The aggregate difference between the cost and fair value of
available-for-sale marketable securities was nominal at
December 31, 2025. Our investments in available-for-sale
marketable securities were sold during the three months ended
September 30, 2026. Interest income on cash and cash
equivalents, short-term investments and income from marketable
securities was $36 and $28 in the three months2026 and 2025,
and $96 and $90 in the nine months 2026 and 2025, which was
recorded in other income.
Our investments in available-for-sale marketable securities had a
minimum credit quality rating of A2 (Moody's), A (Standard &
Poor's) and A (Fitch).
NOTE 6 - CONTINGENCIES AND COMMITMENTS
We are involved in various ongoing proceedings, legal actions
and claims arising in the normal course of business, including
proceedings related to product, labor, tax, intellectual property
and other matters. The outcomes of these matters will generally
not be known for prolonged periods of time. In certain of the legal
proceedings the claimants seek damages as well as other
compensatory and equitable relief that could result in the
payment of significant claims and settlements and/or the
imposition of injunctions or other equitable relief. For legal
matters for which management had sufficient information to
reasonably estimate our future obligations, a liability representing
management's best estimate of the probable loss, or the
minimum of the range of probable losses when a best estimate
within the range is not known, is recorded. The estimates are
based on consultation with legal counsel, previous settlement
experience and settlement strategies. If actual outcomes are less
favorable than those estimated by management, additional
expense may be incurred, which could unfavorably affect future
operating results. We are self-insured for certain claims and
expenses. The ultimate cost to us with respect to product liability
claims could be materially different than the amount of the current
estimates and accruals and could have a material adverse effect
on our financial position, results of operations and cash flows.
Leases
September 30
December 31
2026
2025
Right-of-use assets
$518
$519
Lease liabilities, current
$160
$153
Lease liabilities, non-current
$343
$348
Other information:
Weighted-average remaining lease term (years)
4.5
5.0
Weighted-average discount rate
3.81%
3.77%
Three Months
Nine Months
2026
2025
2026
2025
Operating lease cost
$52
$48
$161
$153
Other Contractual Obligations and Commitments
Our outstanding balances of confirmed invoices in the supplier
financing program were $88 and $75 at September 30, 2026 and
December 31, 2025 and are included within accounts payable in
our Consolidated Balance Sheets.
NOTE 7 - ACQUISITIONS
We acquire stock in companies and various assets that continue
to support our capital deployment and product development
strategies. In the nine months2026 and 2025 cash paid for
acquisitions, net of cash acquired was $481 and $4,950.
In May 2026 we completed the acquisition of AVS for net cash
consideration of $434 and up to $400 in future milestone
payments that had a fair value of $271 at the acquisition date.
AVS is developing a next-generation intravascular lithotripsy
platform designed to treat complex peripheral arterial disease.
AVS is part of our Peripheral Vascular business within MedSurg
and Neurotechnology. Acquired in-process research and
development intangible assets represent projects where the
related product has not yet received regulatory approval. The
purchase price allocation for AVS is based on preliminary
valuations, primarily related to in-process research and
development. Goodwill attributable to the acquisition reflects the
strategic benefits of expanding our peripheral vascular portfolio.
This goodwill is not deductible for tax purposes.
In February 2025 we completed the acquisition of Inari for $80
per share, or an aggregate purchase price of $4,810, net of cash
acquired. Inari's product portfolio includes minimally invasive
products for the treatment of venous thromboembolism. Inari is
part of our Peripheral Vascular business within MedSurg and
Neurotechnology. Goodwill attributable to the acquisition reflects
the strategic benefits of expanding our market presence,
diversifying our product portfolio and advancing innovations. This
goodwill is not deductible for tax purposes. Share-based awards
for Inari employees vested upon our acquisition and a charge of
$139 was recorded in selling, general and administrative
expenses in the nine months2025.
Dollar amounts are in millions except per share amounts or as otherwise specified.
9
STRYKER CORPORATION
2026Third Quarter Form 10-Q
The purchase price allocations for AVS and Inari are:
Purchase Price Allocation of Acquired Net Assets
2026
2025
AVS
Inari
Tangible assets acquired:
Accounts receivable
$—
$78
Inventory
—
215
Deferred income tax assets
3
134
Other assets
14
84
Deferred income tax liabilities
(98)
(489)
Other liabilities
(14)
(189)
Intangible assets:
Developed technologies
—
1,458
In-process research and development
402
—
Customer relationships
—
330
Other intangibles
—
72
Goodwill
398
3,117
Purchase price, net of cash acquired of $10
and $64
$705
$4,810
Weighted average amortization period at
acquisition (years):
Developed technologies
—
13
Customer relationships
—
13
Other intangibles
—
9
Consolidated estimated annual amortization expense for definite-
lived intangible assets is:
Remainder of
2026
2027
2028
2029
2030
$175
$682
$634
$618
$600
NOTE 8 -DEBT AND CREDIT FACILITIES
We have lines of credit issued by various financial institutions that
are available to fund our day-to-day operating needs. Certain of
our credit facilities require us to comply with financial and other
covenants. We were in compliance with all covenants on
September 30, 2026.
On September 30, 2026 we had $250 outstanding under our
commercial paper programs which allow for maturities up to 397
days from the date of issuance. The maximum amount of our
commercial paper that can be outstanding at any time is $3,000.
In March 2026 we repaid $1,000 of 3.500% senior unsecured
notes. The following table summarizes our total debt at
September 30:
Summary of Total Debt
September 30
December 31
Rate
Due
2026
2025
Senior unsecured notes:
3.500%
March 15, 2026
—
1,000
4.550%
February 10, 2027
499
498
2.125%
November 30, 2027
850
881
4.700%
February 10, 2028
698
697
3.650%
March 7, 2028
599
599
4.850%
December 8, 2028
597
597
3.375%
December 11, 2028
679
704
0.750%
March 1, 2029
906
939
4.250%
September 11, 2029
746
744
4.850%
February 10, 2030
795
794
1.950%
June 15, 2030
995
995
2.625%
November 30, 2030
733
759
1.000%
December 3, 2031
846
876
3.375%
September 11, 2032
901
934
4.625%
September 11, 2034
742
741
5.200%
February 10, 2035
991
990
3.625%
September 11, 2036
671
695
4.100%
April 1, 2043
393
393
4.375%
May 15, 2044
396
396
4.625%
March 15, 2046
985
984
2.900%
June 15, 2050
643
643
Commercial paper
250
—
Other
15
—
Total debt
$14,930
$15,859
Less current maturities
754
1,000
Total long-term debt
$14,176
$14,859
September 30
December 31
2026
2025
Unamortized debt issuance costs
$60
$70
Borrowing capacity on existing facilities
$2,664
$2,911
Fair value of senior unsecured notes
$13,499
$15,344
The fair value of the senior unsecured notes was estimated using
quoted interest rates, maturities and amounts of borrowings
based on quoted active market prices and yields that took into
account the underlying terms of the debt instruments.
Substantially all of our debt is classified within Level 2 of the fair
value hierarchy.
Interest expense on outstanding debt and credit facilities,
including required fees incurred totaled $137 and $157 for the
three months 2026 and 2025 and $415 and $453 for the nine
months2026 and 2025.
NOTE 9 - INCOME TAXES
Our effective tax rates were 24.5% and 18.7% in the three and
nine months2026 and 16.5% and 14.7% in the three and nine
months2025. The effective tax rate for the three months2026
increased from the three months2025 due to the 2026 non-
deductible goodwill impairment. The effective tax rate for the nine
months2026 increased from the nine months2025 due to the
2026 non-deductible goodwill impairment and the 2025 tax
benefit related to the sale of the Spinal Implants business. The
effective tax rates for the three and nine months2026 and 2025
reflect the continued lower effective income tax rates as a result
of our European operations and certain discrete tax items.
Income tax authorities in various jurisdictions globally conduct
routine audits of our income tax returns to determine if they agree
with our interpretations of income tax regulations. Any audit
assessment, draft audit assessment or final audit report received
is reviewed for new information and evaluated for proper financial
statement treatment.
Dollar amounts are in millions except per share amounts or as otherwise specified.
10
STRYKER CORPORATION
2026Third Quarter Form 10-Q
NOTE 10 - SEGMENT INFORMATION
We segregate our operations into two reportable business
segments: (i) MedSurg and Neurotechnology and (ii)
Orthopaedics which aligns to our internal reporting structure and
how our Chief Operating Decision Maker (CODM) assesses the
performance and allocates resources. The CODM is the Chief
Executive Officer. The CODM makes decisions on resource
allocation, assesses performance of the business, and monitors
budget versus actual results using segment operating income.
Information about total assets by segment is not disclosed
because such information is not regularly provided to, or used by,
our CODM.
Segment Results
Three Months
Nine Months
2026
2025
2026
2025
MedSurg and Neurotechnology
$3,664
$3,355
$10,496
$9,716
Orthopaedics
2,856
2,702
8,633
8,229
Net sales
$6,520
$6,057
$19,129
$17,945
MedSurg and Neurotechnology
$1,367
$1,294
$4,001
$3,732
Orthopaedics
818
769
2,479
2,325
Cost of sales
$2,185
$2,063
$6,480
$6,057
MedSurg and Neurotechnology
$242
$229
$728
$666
Orthopaedics
161
158
470
476
Segment research, development and
engineering expenses
$403
$387
$1,198
$1,142
MedSurg and Neurotechnology
$944
$902
$2,817
$2,670
Orthopaedics
855
776
2,550
2,445
Segment selling, general and
administrative expenses
$1,799
$1,678
$5,367
$5,115
MedSurg and Neurotechnology
$59
$56
$179
$170
Orthopaedics
131
123
389
353
Segment depreciation and
amortization
$190
$179
$568
$523
Corporate and Other
$32
$34
$98
$87
Amortization of intangible assets
175
189
530
543
Total depreciation and amortization
$397
$402
$1,196
$1,153
MedSurg and Neurotechnology
$1,052
$874
$2,771
$2,478
Orthopaedics
891
876
2,745
2,630
Segment operating income
$1,943
$1,750
$5,516
$5,108
Items not allocated to segments:
Corporate and Other
$(237)
$(200)
$(732)
$(669)
Inventory stepped up to fair value
—
(61)
—
(160)
Acquisition and integration-related
charges
(17)
(39)
(61)
(302)
Amortization of intangible assets
(175)
(189)
(530)
(543)
Structural optimization and other special
charges
(153)
(41)
(366)
(93)
Goodwill and other impairments
(293)
(73)
(294)
(163)
Medical device regulation
(6)
(11)
(16)
(30)
Recall-related matters
4
(1)
(8)
(56)
Regulatory and legal matters
(32)
—
(38)
(7)
Reversal of 2025 tariffs
—
—
158
—
Consolidated operating income
$1,034
$1,135
$3,629
$3,085
Segment Capital Spending
Nine Months
2026
2025
Purchases of property, plant and
equipment:
MedSurg and Neurotechnology
$196
$134
Orthopaedics
208
188
Total segment purchases of property, plant
and equipment
$404
$322
Corporate and Other
201
171
Total purchases of property, plant and
equipment
$605
$493
NOTE 11 - GOODWILL AND OTHER INTANGIBLE ASSETS
We test goodwill annually for impairment at October 31 or
whenever events or circumstances indicate that goodwill may be
impaired. During the third quarter 2026, various factors indicated
it was more likely than not that the carrying value of our
Peripheral Vascular reporting unit exceeded its fair value. As a
result, we performed an interim impairment assessment of
goodwill, indefinite-lived and other long-lived assets of the
Peripheral Vascular reporting unit and a charge of $293 was
recognized in goodwill and other impairments in the Consolidated
Statements of Earnings. The impairment amount represents the
excess of the carrying value of the Peripheral Vascular reporting
unit over its fair value, which we estimated using an income-
based valuation approach.
The impairment charge for the Peripheral Vascular reporting unit
was primarily driven by a reduction in forecasted cash flows
reflecting near-term operational and supply constraints and a
longer expected period to achieve anticipated growth and market
recovery. Significant inputs to the analysis included assumptions
for future revenue growth, operating margin, the effective tax rate
applied to future earnings and the rate used to discount the
estimated future cash flows to their present value, based on the
reporting unit’s estimated weighted average cost of capital.
Future changes in the judgments, assumptions and estimates
that are used in our impairment testing for goodwill, including
discount and tax rates and future cash flow projections, could
result in significantly different estimates of the fair values. A
significant reduction in the estimated fair values could result in
impairment charges that could materially affect our results of
operations.
In the first quarter 2026 we changed our organizational structure
as further described in Note 1. Following this reorganization we
continue to have two reportable segments, MedSurg and
Neurotechnology and Orthopaedics. The reorganization impacts
the composition of the Instruments and Joint Replacement
reporting units and results in a new reporting unit representing
the Ortho Tech business.
In connection with this reorganization we reallocated the goodwill
associated with the impacted businesses using the relative fair
value approach, resulting in a reallocation of $518 of goodwill
from the MedSurg and Neurotechnology segment to the
Orthopaedics segment.
NOTE 12 - SUBSEQUENT EVENTS
In October 2026 we signed an agreement with CMR Surgical, a
global robotics company and maker of the Versius Plus surgical
robot, to invest approximately $400 in cash in exchange for CMR
Surgical's preferred equity. The agreement grants us exclusive
U.S. distribution rights for the Versius portfolio and an exclusive
option to acquire 100% of CMR Surgical's remaining outstanding
equity in the future. The transaction is expected to close in the
fourth quarter 2026, subject to regulatory approval and customary
closing conditions.
In October 2026 our Board of Directors approved an increase of
$3,000 to our existing share repurchase program, bringing the
total share repurchase authorization to $3,033. The manner,
timing and amount of repurchases are determined by
management based on an evaluation of market conditions, stock
price, and other factors and are subject to regulatory
considerations. Purchases may be made from time to time in the
open market, in privately negotiated transactions or otherwise.
Dollar amounts are in millions except per share amounts or as otherwise specified.
11
STRYKER CORPORATION
2026Third Quarter Form 10-Q
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ABOUT STRYKER
Stryker Corporation ("we" or the "Company") is a global leader in
medical technologies and, together with our customers, we are
driven to make healthcare better. We offer innovative products
and services in MedSurg, Neurotechnology, and Orthopaedics
that help improve patient and healthcare outcomes. Alongside
our customers around the world, we impact more than 150 million
patients annually. Our goal is to achieve sales growth at the high-
end of the medical technology (MedTech) industry and maintain
our long-term capital allocation strategy that prioritizes: (1)
Acquisitions, (2) Dividends and (3) Share repurchases.
MedSurg and Neurotechnology products include surgical
equipment, patient and caregiver safety technologies, and 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 (Instruments), endoscopic and communications
systems (Endoscopy), patient handling, emergency medical
equipment, intensive care disposable products, clinical
communication and artificial intelligence-assisted virtual care
platform technology (Medical), and minimally invasive products
for the treatment of acute ischemic and hemorrhagic stroke and
venous thromboembolism (Vascular). Orthopaedics products
include implants and surgical equipment such as navigation
systems and robotics used in total joint replacements, such as
hip, knee and shoulder, ankle and trauma and extremities
surgeries. We bring patients and physicians advanced implant
designs and specialized instrumentation that make orthopaedic
surgery and recovery simpler, faster and more effective. We
support surgeons with technologies, products and services they
need to support each patient’s clinical challenge.
Overview of the Three and Nine Months
In the three months 2026 we achieved sales growth of 7.7% from
2025. Organic net sales increased7.7%, primarily driven by
increased unit volume. We reported operating income margin of
15.9%, net earnings of $753 and net earnings per diluted share
of $1.96. Excluding the impact of certain items, adjusted
operating income margin(1)increased by 60 basis points to
26.2%, with adjusted net earnings(1) of $1,357 and adjusted net
earnings per diluted share(1) of $3.52, an increase of 10.3% from
2025.
In the nine months 2026 we achieved sales growth of 6.6% from
2025. Excluding the impact of acquisitions and divestitures,
organic net sales increased 6.4%, primarily driven by increased
unit volume. We reported operating income margin of 19.0%, net
earnings of $2,774 and net earnings per diluted share of $7.19.
Excluding the impact of certain items, adjusted operating income
margin(1)increased by 30 basis points to 25.0%, with adjusted
net earnings(1) of $3,785 and adjusted net earnings per diluted
share(1) of $9.81, an increase of 7.1% from 2025.
(1) Refer to "Non-GAAP Financial Measures" for a discussion of non-
GAAP financial measures used in this report and a reconciliation to the
most directly comparable GAAP financial measure.
CONSOLIDATED RESULTS OF OPERATIONS
Three Months
Nine Months
Percent Net
Sales
Percentage
Percent Net
Sales
Percentage
2026
2025
2026
2025
Change
2026
2025
2026
2025
Change
Net sales
$6,520
$6,057
100.0%
100.0%
7.7%
$19,129
$17,945
100.0%
100.0%
6.6%
Gross profit
4,248
3,852
65.2
63.6
10.3
12,556
11,437
65.6
63.7
9.8
Research, development and engineering expenses
433
410
6.6
6.8
5.6
1,280
1,222
6.7
6.8
4.7
Selling, general and administrative expenses
2,313
2,045
35.5
33.8
13.1
6,823
6,424
35.7
35.8
6.2
Amortization of intangible assets
175
189
2.7
3.1
(7.4)
530
543
2.8
3.0
(2.4)
Goodwill and other impairments
293
73
4.5
1.2
nm
294
163
1.5
0.9
nm
Interest expense
(143)
(157)
(2.2)
(2.6)
(8.9)
(432)
(453)
(2.3)
(2.5)
(4.6)
Other income
106
51
1.6
0.8
107.8
214
177
1.1
1.0
20.9
Income taxes
244
170
nm
nm
43.5
637
412
nm
nm
54.6
Net earnings
$753
$859
11.5%
14.2%
(12.3)%
$2,774
$2,397
14.5%
13.4%
15.7%
Net earnings per diluted share
$1.96
$2.22
(11.7)%
$7.19
$6.20
16.0%
Adjusted net earnings per diluted share(1)
$3.52
$3.19
10.3%
$9.81
$9.16
7.1%
nm - not meaningful
Dollar amounts are in millions except per share amounts or as otherwise specified.
12
STRYKER CORPORATION
2026Third Quarter Form 10-Q
SALES GROWTH ANALYSIS
Three Months
Nine Months
Percentage Change
Percentage Change
2026
2025
As
Reported
Constant
Currency
2026
2025
As
Reported
Constant
Currency
MedSurg and Neurotechnology:
Instruments
United States
$835
$797
4.8%
4.8%
$2,441
$2,275
7.4%
7.4%
International
161
152
6.5
7.1
478
430
11.3
8.8
Total
$996
$949
5.1%
5.2%
$2,919
$2,705
8.0%
7.6%
Endoscopy
United States
$839
$743
13.0%
13.0%
$2,359
$2,195
7.5%
7.5%
International
182
153
18.0
18.5
534
467
14.2
11.4
Total
$1,021
$896
13.9%
14.0%
$2,893
$2,662
8.7%
8.2%
Medical
United States
$910
$827
10.0%
10.0%
$2,602
$2,469
5.4%
5.4%
International
171
158
8.1
8.5
503
451
11.4
8.2
Total
$1,081
$985
9.7%
9.8%
$3,105
$2,920
6.3%
5.8%
Vascular
United States
$320
$283
13.0%
13.0%
$850
$754
12.7%
12.7%
International
246
242
2.1
0.8
729
675
8.0
4.9
Total
$566
$525
8.0%
7.4%
$1,579
$1,429
10.5%
9.0%
MedSurg and Neurotechnology
United States
$2,904
$2,650
9.6%
9.6%
$8,252
$7,693
7.3%
7.3%
International
760
705
7.8
7.7
2,244
2,023
10.9
8.0
Total
$3,664
$3,355
9.2%
9.2%
$10,496
$9,716
8.0%
7.4%
Orthopaedics:
Knees
United States
$458
$452
1.3%
1.3%
$1,418
$1,376
3.0%
3.0%
International
177
176
0.5
1.1
580
531
9.3
6.6
Total
$635
$628
1.1%
1.2%
$1,998
$1,907
4.8%
4.0%
Hips
United States
$277
$279
(0.6)%
(0.6)%
$849
$831
2.2%
2.2%
International
176
178
(1.7)
(0.8)
543
535
1.4
(0.6)
Total
$453
$457
(1.0)%
(0.7)%
$1,392
$1,366
1.9%
1.1%
Trauma and Extremities
United States
$735
$703
4.5%
4.5%
$2,293
$2,118
8.2%
8.2%
International
275
257
7.5
8.4
824
744
10.9
7.9
Total
$1,010
$960
5.3%
5.5%
$3,117
$2,862
8.9%
8.1%
Ortho Tech
United States
$576
$487
18.1%
18.1%
$1,573
$1,429
10.0%
10.0%
International
178
164
9.0
9.5
544
488
11.6
9.3
Total
$754
$651
15.8%
16.0%
$2,117
$1,917
10.4%
9.8%
$2,852
$2,696
5.8%
6.0%
$8,624
$8,052
7.1%
6.4%
Spinal Implants
United States
$—
$—
—%
—%
$—
$118
(100.0)%
(100.0)%
International
4
6
(43.9)
(45.4)
9
59
(85.7)
(87.1)
Total
$4
$6
(43.9)%
(45.4)%
$9
$177
(95.2)%
(95.5)%
Orthopaedics
United States
$2,046
$1,921
6.5%
6.5%
$6,133
$5,872
4.4%
4.4%
International
810
781
3.8
4.5
2,500
2,357
6.1
3.5
Total
$2,856
$2,702
5.7%
5.9%
$8,633
$8,229
4.9%
4.1%
Geographic:
United States
$4,950
$4,571
8.3%
8.3%
$14,385
$13,565
6.0%
6.0%
International
1,570
1,486
5.7
6.0
4,744
4,380
8.3
5.6
Total
$6,520
$6,057
7.7%
7.7%
$19,129
$17,945
6.6%
5.9%
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 were combined with the remaining
Instruments business to align with our internal reporting structure. Ortho Tech includes sales related to Orthopaedic Instruments of $535
and $492 and Other Orthopaedics of $219 and $159 for the three months 2026 and 2025. For the nine months 2026 and 2025 Ortho
Tech includes sales related to Orthopaedic Instruments of $1,547 and $1,477 and Other Orthopaedics of $570 and $440. Instruments
includes sales related to Neuro Cranial of $670 and $637 and Enabling Technologies of $28 and $45 for the three months 2026 and
2025. For the nine months 2026 and 2025 Instruments includes sales related to Neuro Cranial of $1,957 and $1,816 and Enabling
Technologies of $82 and $108. We have reflected these changes in all historical periods presented.
Dollar amounts are in millions except per share amounts or as otherwise specified.
13
STRYKER CORPORATION
2026Third Quarter Form 10-Q
Consolidated Net Sales
Consolidated net sales increased7.7% in the three months2026
on both a reported and constant currency basis. Net sales in
constant currency increased by 7.6% from increased unit volume
and0.1% due to higher prices. The unit volume increase was due
to higher product shipments across all MedSurg and
Neurotechnology businesses and certain Orthopaedics
businesses.
Consolidated net sales increased6.6% in the nine months2026
as reported and 5.9% in constant currency as foreign currency
exchange rates positively impacted net sales by 0.7%. Excluding
the (0.5)% impact of acquisitions and divestitures, net sales in
constant currency increased by 6.2% from increased unit volume
and0.2% 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 increased9.2% in the
three months2026 on both a reported and constant currency
basis. Excluding the 0.1% impact of acquisitions and divestitures,
net sales in constant currency increased by 8.9% from increased
unit volume and0.2% from higher prices. The unit volume
increase was due to higher shipments across all Medsurg and
Neurotechnology businesses.
MedSurg and Neurotechnology net sales increased8.0% in the
nine months2026 as reported and 7.4% in constant currency, as
foreign currency exchange rates positively impacted net sales by
0.6%. Excluding the 0.8% impact of acquisitions and divestitures,
net sales in constant currency increased by 6.3% from increased
unit volume and0.3% from higher prices. The unit volume
increase was due to higher shipments across all MedSurg and
Neurotechnology businesses.
Orthopaedics Net Sales
Orthopaedics net sales increased5.7% in the three months2026
as reported and 5.9% in constant currency, as foreign currency
exchange rates negatively impacted net sales by (0.2)%. Net
sales in constant currency increased 5.9% from increased unit
volume. The unit volume increase was due to higher shipments
primarily within the Ortho Tech and Trauma and Extremities
businesses.
Orthopaedics net sales increased4.9% in the nine months2026
as reported and 4.1% in constant currency, as foreign currency
exchange rates positively impacted net sales by 0.8%. Excluding
the (2.1)% impact of acquisitions and divestitures, net sales in
constant currency increased6.2% from increased unit volume.
The unit volume increase was due to higher shipments across
most Orthopaedics businesses.
Gross Profit
Gross profit was $4,248 and $3,852 in the three months2026
and 2025. The key components of the change were:
Gross Profit
Percent Net Sales
Three Months 2025
63.6%
Volume and mix
60 bps
Manufacturing and supply chain costs
(20) bps
Structural optimization and other special charges
20 bps
Inventory stepped up to fair value
100 bps
Three Months 2026
65.2%
Gross profit as a percentage of net sales in the three months
2026increased to 65.2% from 63.6% in 2025 primarily driven by
lower amortization of inventory stepped up to fair value.
Gross profit was $12,556 and $11,437 in the nine months2026
and 2025. The key components of the change were:
Gross Profit
Percent Net Sales
Nine Months 2025
63.7%
Sales pricing
10 bps
Volume and mix
50 bps
Manufacturing and supply chain costs
(80) bps
Structural optimization and other special charges
30 bps
Inventory stepped up to fair value
90 bps
Reversal of 2025 tariffs
90 bps
Nine Months 2026
65.6%
Gross profit as a percentage of net sales in the nine months2026
increased to 65.6% from 63.7% in 2025 driven by a reduction of
certain import tariffs and lower amortization of inventory stepped
up to fair value partially offset by higher manufacturing and
supply chain costs primarily due to idle production time related to
the cybersecurity incident in the first quarter 2026.
While segment mix was not a significant driver of the change in
gross profit as a percent of net sales between the nine months
2026 and 2025, 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
$23 or 5.6% in the three months2026 and $58 or 4.7% in the
nine months2026. Expenses as a percentage of net sales of
6.6% in the three months and 6.7% in the nine months2026
remained relatively flat with 6.8% in the three and nine months
2025.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased$268 or
13.1% in the three months2026. As a percentage of net sales,
expenses increased to 35.5% from 33.8% in 2025, primarily due
to higher structural optimization and other special charges.
Selling, general and administrative expenses increased$399 or
6.2% in the nine months2026. Expenses as a percentage of net
sales of 35.7% remained relatively flat with 35.8% in 2025.
Higher structural optimization and other special charges in the
nine months 2026 were offset by lower acquisition and
integration-related costs.
Amortization of Intangible Assets
Amortization of intangible assets was $175 and $189 in the three
months and $530 and $543 in the nine months2026 and 2025.
Refer to Note 7 to our Consolidated Financial Statements for
further information.
Goodwill and Other Impairments
We recorded a goodwill impairment charge of $293 in the three
months2026 related to our Peripheral Vascular business. Refer
to Note 11 to our Consolidated Financial Statements for further
information.
We recorded other impairments of $73 in the three months 2025
and $1 and $163 in the nine months2026 and 2025.
Operating Income
Operating income was $1,034 and $1,135 in the three months
2026 and 2025. Operating income as a percentage of net sales in
the three months2026decreased to 15.9% from 18.7% in 2025.
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.
14
STRYKER CORPORATION
2026Third Quarter Form 10-Q
Operating income was $3,629 and $3,085 in the nine months
2026 and 2025. Operating income as a percentage of net sales in
the nine months2026increased to 19.0% from 17.2% in 2025.
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 28.7% in the three months
2026 from 26.1% in 2025. Orthopaedics operating income as a
percentage of net sales decreased to 31.2% in the three months
2026 from 32.4% in 2025. The key components of the change
were:
Operating Income
Percent Net Sales
MedSurg and
Neurotechnology
Orthopaedics
Three Months 2025
26.1%
32.4%
Sales pricing
10 bps
0 bps
Volume
70 bps
40 bps
Manufacturing and supply chain costs
50 bps
(70) bps
Research, development and
engineering expenses
20 bps
20 bps
Selling, general and administrative
expenses
110 bps
(110) bps
Three Months 2026
28.7%
31.2%
The increase in MedSurg and Neurotechnology operating income
as a percentage of net sales for the three months was primarily
driven by lower selling, general and administrative expenses,
lower manufacturing and supply chain costs and higher unit
volumes.
The decrease in Orthopaedics operating income as a percentage
of net sales for the three months was primarily driven by higher
selling, general and administrative expenses and higher
manufacturing and supply chain costs, partially offset by higher
unit volumes.
MedSurg and Neurotechnology operating income as a
percentage of net sales increased to 26.4% in the nine months
2026 from 25.5% in 2025. Orthopaedics operating income as a
percentage of net sales decreased to 31.8% in the nine months
2026 from 32.0% in 2025. The key components of the change
were:
Operating Income
Percent Net Sales
MedSurg and
Neurotechnology
Orthopaedics
Nine Months 2025
25.5%
32.0%
Sales pricing
10 bps
0 bps
Volume
50 bps
30 bps
Manufacturing and supply chain costs
(20) bps
(90) bps
Research, development and
engineering expenses
(10) bps
30 bps
Selling, general and administrative
expenses
60 bps
10 bps
Nine Months 2026
26.4%
31.8%
The increase in MedSurg and Neurotechnology operating income
as a percentage of net sales for the nine months was primarily
driven by lower selling, general and administrative expenses and
higher unit volumes, partially offset by higher manufacturing and
supply chain costs and higher research, development and
engineering expenses.
The decrease in Orthopaedics operating income as a percentage
of net sales for the nine months was primarily driven by higher
manufacturing and supply chain costs, partially offset by lower
research, development and engineering expenses, lower selling,
general and administrative expenses and higher unit volumes.
Interest Expense
Interest expense was $143 and $157 in the three months and
$432 and $453 in the nine months2026 and 2025. The decrease
in interest expense in the three and nine months2026 from 2025
was due to lower outstanding debt and credit facilities partially
offset by higher average interest rates.
Other Income
Other income was $106 and $51 in the three months and $214
and $177 in the nine months2026 and 2025. The increase in
other income in the three and nine months2026 from 2025 was
primarily due to income from intellectual property licensing in
2026.
Income Taxes
Our effective tax rates were 24.5% and 18.7% in the three and
nine months2026 and 16.5% and 14.7% in the three and nine
months2025. The effective tax rate for the three months 2026
increased from the three months2025 due to the 2026 non-
deductible goodwill impairment. The effective tax rate for the nine
months2026 increased from the nine months2025 due to the
2026 non-deductible goodwill impairment and the 2025 tax
benefit related to the sale of the Spinal Implants business. The
effective tax rates for the three and nine months2026 and 2025
reflect the continued lower effective income tax rates as a result
of our European operations and certain discrete tax items.
Our future results of operations could be affected by changes in
the effective tax rate as a result of changes in tax laws,
regulations and judicial rulings. We are continuing to evaluate the
impact of tax reform in the countries in which we operate as new
guidance is published and new regulations are adopted.
Net Earnings
Net earnings decreased to $753 or $1.96 per diluted share in the
three months2026 from $859 or $2.22 per diluted share in 2025.
Net earnings increased to $2,774 or $7.19 per diluted share in
thenine months2026 from $2,397 or $6.20 per diluted share in
2025. Refer to the discussion above for the primary drivers of the
change.
Non-GAAP Financial Measures
We supplement the reporting of our financial information
determined under accounting principles generally accepted in the
United States (GAAP) with certain non-GAAP financial measures,
including percentage sales growth in constant currency;
percentage organic sales growth; adjusted gross profit; adjusted
selling, general and administrative expenses; adjusted research,
development and engineering expenses; adjusted operating
income; adjusted other income (expense), net; adjusted income
taxes; adjusted effective income tax rate; adjusted net earnings;
and adjusted net earnings per diluted share (Diluted EPS). We
believe these non-GAAP financial measures provide meaningful
information to assist investors and shareholders in understanding
our financial results and assessing our prospects for future
performance. Management believes percentage sales growth in
constant currency and the other adjusted measures described
above are important indicators of our operations because they
exclude items that may not be indicative of or are unrelated to our
core operating results and provide a baseline for analyzing trends
in our underlying businesses. Management uses these non-
GAAP financial measures for reviewing the operating results of
reportable business segments and analyzing potential future
business trends in connection with our budget process and bases
certain management incentive compensation on these non-GAAP
financial measures. To measure percentage sales growth in
Dollar amounts are in millions except per share amounts or as otherwise specified.
15
STRYKER CORPORATION
2026Third Quarter Form 10-Q
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.
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
$4,248
$2,313
$433
$1,034
$(37)
$244
$753
24.5%
$1.96
Reported percent net sales
65.2%
35.5%
6.6%
15.9%
(0.6)%
nm
11.5%
Acquisition and integration-related costs:
Inventory stepped-up to fair value
—
—
—
—
—
—
—
—
—
Other acquisition and integration-related (a)
6
(5)
(6)
17
—
3
14
—
0.04
Amortization of purchased intangible assets
—
—
—
175
—
33
142
0.5
0.37
Structural optimization and other special charges (b)
12
(137)
(4)
153
(54)
23
76
0.8
0.20
Goodwill and other impairments (c)
—
—
—
293
—
—
293
(4.8)
0.76
Medical device regulations (d)
—
—
(6)
6
—
1
5
—
0.01
Recall-related matters (e)
—
4
—
(4)
—
(2)
(2)
(0.1)
—
Regulatory and legal matters (f)
—
(32)
—
32
—
6
26
0.1
0.07
Tax matters (g)
—
—
—
—
—
(50)
50
(5.0)
0.11
Reversal of 2025 tariffs
—
—
—
—
—
—
—
—
—
Adjusted
$4,266
$2,143
$417
$1,706
$(91)
$258
$1,357
16.0%
$3.52
Adjusted percent net sales
65.4%
32.8%
6.4%
26.2%
(1.4)%
nm
20.8%
Dollar amounts are in millions except per share amounts or as otherwise specified.
16
STRYKER CORPORATION
2026Third Quarter Form 10-Q
Three Months 2025
Gross
Profit
Selling,
General &
Administrative
Expenses
Research,
Development &
Engineering
Expenses
Operating
Income
Other
Income
(Expense),
Net
Income
Taxes
Net
Earnings
Effective
Tax Rate
Diluted
EPS
Reported
$3,852
$2,045
$410
$1,135
$(106)
$170
$859
16.5%
$2.22
Reported percent net sales
63.6%
33.8%
6.8%
18.7%
(1.8)%
nm
14.2%
Acquisition and integration-related costs:
Inventory stepped-up to fair value
61
—
—
61
—
15
46
0.6
0.12
Other acquisition and integration-related (a)
5
(33)
(1)
39
—
6
33
0.1
0.08
Amortization of purchased intangible assets
—
—
—
189
—
39
150
1.2
0.39
Structural optimization and other special charges (b)
15
(26)
—
41
(10)
3
28
(0.1)
0.07
Goodwill and other impairments (c)
—
—
—
73
—
15
58
0.4
0.16
Medical device regulations (d)
—
—
(11)
11
—
3
8
0.1
0.02
Recall-related matters (e)
—
(1)
—
1
—
—
1
—
—
Regulatory and legal matters (f)
—
—
—
—
—
—
—
—
—
Tax matters (g)
—
—
—
—
—
(50)
50
(4.8)
0.13
Adjusted
$3,933
$1,985
$398
$1,550
$(116)
$201
$1,233
14.0%
$3.19
Adjusted percent net sales
65.0%
32.8%
6.6%
25.6%
(1.9)%
nm
20.4%
nm - not meaningful
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
Three Months
2026
2025
Termination of sales relationships
$1
$—
Employee retention and workforce reductions
1
11
Changes in the fair value of contingent consideration
1
12
Manufacturing integration costs
17
7
Other integration-related activities
(3)
9
Adjustments to Operating Income
$17
$39
Adjustments to Income Taxes
$3
$6
Adjustments to Net Earnings
$14
$33
(b) Structural optimization and other special charges represent the costs associated with:
Three Months
2026
2025
Employee retention and workforce reductions
$7
$6
Closure/transfer of manufacturing and other facilities
8
8
Product line exits
(5)
9
Termination of sales relationships in certain countries
37
2
Spinal Implants sale related
77
9
Other charges
29
7
Adjustments to Operating Income
$153
$41
Adjustments to Other Income (Expense), Net
$(54)
$(10)
Adjustments to Income Taxes
$23
$3
Adjustments to Net Earnings
$76
$28
(c) Goodwill and other impairments represent the costs associated with:
Three Months
2026
2025
Goodwill impairment
$293
$—
Certain long-lived and intangible asset write-offs and impairments
—
22
Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs)
—
51
Adjustments to Operating Income
$293
$73
Adjustments to Income Taxes
$—
$15
Adjustments to Net Earnings
$293
$58
(d) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device
reporting regulations and other requirements of the new medical device regulations in the European Union.
(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to
resolve certain recall-related matters.
(f) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to
resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.
Dollar amounts are in millions except per share amounts or as otherwise specified.
17
STRYKER CORPORATION
2026Third Quarter Form 10-Q
(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
$(56)
$(61)
Other tax matters
6
11
Adjustments to Income Taxes
$(50)
$(50)
Adjustments to Other Income (Expense), Net
$—
$—
Adjustments to Net Earnings
$50
$50
Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Nine 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
$12,556
$6,823
$1,280
$3,629
$(218)
$637
$2,774
18.7%
$7.19
Reported percent net sales
65.6%
35.7%
6.7%
19.0%
(1.1)%
nm
14.5%
Acquisition and integration-related costs:
Inventory stepped-up to fair value
—
—
—
—
—
—
—
—
—
Other acquisition and integration-related (a)
15
(32)
(14)
61
—
10
51
—
0.14
Amortization of purchased intangible assets
—
—
—
530
—
96
434
0.4
1.12
Structural optimization and other special charges (b)
31
(330)
(5)
366
(71)
68
227
0.6
0.59
Goodwill and other impairments (c)
—
—
—
294
—
—
294
(1.3)
0.76
Medical device regulations (d)
—
—
(16)
16
—
3
13
—
0.03
Recall-related matters (e)
—
(8)
—
8
—
1
7
—
0.02
Regulatory and legal matters (f)
—
(38)
—
38
—
7
31
—
0.08
Tax matters (g)
—
—
—
—
—
(87)
87
(2.6)
0.22
Reversal of 2025 tariffs
(158)
—
—
(158)
—
(25)
(133)
—
(0.34)
Adjusted
$12,444
$6,415
$1,245
$4,784
$(289)
$710
$3,785
15.8%
$9.81
Adjusted percent net sales
65.1%
33.5%
6.5%
25.0%
(1.5)%
nm
19.8%
Nine Months 2025
Gross
Profit
Selling,
General &
Administrative
Expenses
Research,
Development &
Engineering
Expenses
Operating
Income
Other
Income
(Expense),
Net
Income
Taxes
Net
Earnings
Effective
Tax Rate
Diluted
EPS
Reported
$11,437
$6,424
$1,222
$3,085
$(276)
$412
$2,397
14.7%
$6.20
Reported percent net sales
63.7%
35.8%
6.8%
17.2%
(1.5)%
nm
13.4%
Acquisition and integration-related costs:
Inventory stepped-up to fair value
160
—
—
160
—
39
121
0.5
0.31
Other acquisition and integration-related (a)
19
(280)
(3)
302
—
32
270
(0.4)
0.70
Amortization of purchased intangible assets
—
—
—
543
—
112
431
1.2
1.11
Structural optimization and other special charges (b)
43
(47)
(3)
93
(19)
15
59
0.2
0.15
Goodwill and other impairments (c)
—
—
—
163
—
46
117
0.8
0.32
Medical device regulations (d)
1
—
(29)
30
—
7
23
0.1
0.06
Recall-related matters (e)
52
(4)
—
56
—
9
47
—
0.12
Regulatory and legal matters (f)
—
(7)
—
7
—
2
5
—
0.01
Tax matters (g)
—
—
—
—
—
(71)
71
(2.5)
0.18
Adjusted
$11,712
$6,086
$1,187
$4,439
$(295)
$603
$3,541
14.6%
$9.16
Adjusted percent net sales
65.3%
33.9%
6.6%
24.7%
(1.6)%
nm
19.7%
nm - not meaningful
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
Nine Months
2026
2025
Termination of sales relationships
$7
$—
Employee retention and workforce reductions
1
56
Changes in the fair value of contingent consideration
10
13
Manufacturing integration costs
27
14
Stock compensation payments upon a change in control
—
139
Other integration-related activities
16
80
Adjustments to Operating Income
$61
$302
Adjustments to Income Taxes
$10
$32
Adjustments to Net Earnings
$51
$270
Dollar amounts are in millions except per share amounts or as otherwise specified.
18
STRYKER CORPORATION
2026Third Quarter Form 10-Q
(b) Structural optimization and other special charges represent the costs associated with:
Nine Months
2026
2025
Employee retention and workforce reductions
$20
$36
Closure/transfer of manufacturing and other facilities
17
20
Product line exits
6
2
Termination of sales relationships in certain countries
124
(2)
Spinal Implants sale related
128
17
Other charges
71
20
Adjustments to Operating Income
$366
$93
Adjustments to Other Income (Expense), Net
$(71)
$(19)
Adjustments to Income Taxes
$68
$15
Adjustments to Net Earnings
$227
$59
(c) Goodwill and other impairments represent the costs associated with:
Nine Months
2026
2025
Goodwill impairment
$293
$—
Certain long-lived and intangible asset write-offs and impairments
—
108
Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs)
1
55
Adjustments to Operating Income
$294
$163
Adjustments to Income Taxes
$—
$46
Adjustments to Net Earnings
$294
$117
(d) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device
reporting regulations and other requirements of the new medical device regulations in the European Union.
(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to
resolve certain recall-related matters.
(f) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to
resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.
(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:
Nine Months
2026
2025
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions
$(131)
$(153)
Other tax matters
44
82
Adjustments to Income Taxes
$(87)
$(71)
Adjustments to Other Income (Expense), Net
$—
$—
Adjustments to Net Earnings
$87
$71
FINANCIAL CONDITION AND LIQUIDITY
Nine Months
Net cash provided by (used in):
2026
2025
Operating activities
$3,303
$2,901
Investing activities
(1,011)
(4,561)
Financing activities
(2,998)
1,206
Effect of exchange rate changes
(34)
58
Change in cash and cash equivalents
$(740)
$(396)
Operating Activities
Cash providedby operating activities was $3,303 and $2,901 in
the nine months2026 and 2025. The increase was primarily due
to higher net earnings partially offset by changes in working
capital.
Investing Activities
Cash usedin investing activities was $1,011 and $4,561 in the
nine months2026 and 2025. The nine months2026 included
cash paid for purchases of property, plant and equipment as well
as for the net cash consideration paid to complete the acquisition
of AVS. The nine months2025 included cash paid to acquire Inari
and purchases of property, plant and equipment partially offset by
proceeds from the sale of short-term investments. Refer to Note
7 to our Consolidated Financial Statements for further information
on acquisitions.
Financing Activities
Cash usedin financing activities was $2,998 in the nine months
2026 and cash providedby financing activities was $1,206 in the
nine months2025. In 2026 cash used was primarily driven by
repayments of $1,000 to pay off maturing unsecured notes as
described in Note 8 to our Consolidated Financial Statements,
$1,000repurchases of common stock and dividend payments.
Cash providedby financing activities in 2025 was primarily driven
by proceeds from the issuance of various senior unsecured notes
partially offset by dividend payments.
Liquidity
Cash, cash equivalents, short-term investments and marketable
securities were $3,271 and $4,100 on September 30, 2026 and
December 31, 2025. Current assets exceeded current liabilities
by $7,683 and $6,961 on September 30, 2026 and December 31,
2025. 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
Dollar amounts are in millions except per share amounts or as otherwise specified.
19
STRYKER CORPORATION
2026Third Quarter Form 10-Q
was approximately 44% on September 30, 2026 compared to
20% on December 31, 2025.
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 2025, except as follows:
We test goodwill annually for impairment at October 31 or
whenever events or circumstances indicate that goodwill may be
impaired. When it is unlikely that goodwill of a reporting unit is
impaired, we perform a qualitative assessment that may be
periodically supplemented with a corroborative quantitative
analysis.
The Peripheral Vascular business’s operating results have been
affected by a reduction in forecasted cash flows reflecting near-
term operational and supply constraints and a longer expected
period to achieve anticipated growth and market recovery. These
inputs were included in the updated projections used in our
annual long-range financial plan, which was approved during the
third quarter 2026. As a result of these factors, we performed an
interim impairment assessment of goodwill, indefinite-lived and
other long-lived assets of the Peripheral Vascular reporting unit
and a charge of $293 was recognized in goodwill and other
impairments in the Consolidated Statements of Earnings.
Goodwill attributable to the Peripheral Vascular reporting unit was
approximately $3,259 at September 30, 2026.
In our interim quantitative goodwill impairment test, the fair value
of our Peripheral Vascular reporting unit was determined using a
discounted cash flow analysis, which is a form of the income
approach. Significant inputs to the analysis included assumptions
for future revenue growth, operating margin, the effective tax rate
applied to future earnings and the rate used to discount the
estimated future cash flows to their present value based on the
reporting unit’s estimated weighted average cost of capital. Our
assumptions for revenue growth and operating margin
considered several operating factors, including supply constraints
and our competitive environment. We believe our estimates are
appropriate based upon current and future market conditions and
the best information available at the impairment assessment
date; however, future impairment charges could be required if our
Peripheral Vascular reporting unit does not achieve its cash flow,
revenue and profitability projections or if there is an increase in
the weighted average cost of capital.
The assumptions used in the discounted cash flow analysis are
subject to inherent uncertainties and subjectivity. The use of
different assumptions, estimates or judgments with respect to the
estimation of future cash flows and the determination of the
discount rate used to reduce such estimated future cash flows to
their net present value could materially affect the determination of
any impairment charges. Hypothetical changes in our estimates
of the discount rate, long-term revenue growth and long-term
operating margin would result in incremental impairment charges
as follows:
Change in selected assumption
Percentage
decline in fair
value
Incremental
impairment
charge
100 bps increase in discount rate
15%
$823
100 bps decrease in long-term revenue growth
3
145
100 bps decrease in long-term operating margin
9
497
Refer to Note 11 to our Consolidated Financial Statements for
discussion on the impact of changes to our organizational
structure in the first quarter 2026 on our reportable segments and
the related goodwill.
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, tax, intellectual property
and other matters. Refer to Note 6 to our Consolidated Financial
Statements for further information.
FORWARD-LOOKING STATEMENTS
This report contains statements that are not historical facts and
are considered "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. These
statements are based on current projections about operations,
industry conditions, financial condition and liquidity. Words that
identify forward-looking statements include, without limitation,
words such as "may," "could," "will," "should," "possible," "plan,"
"predict," "forecast," "potential," "anticipate," "estimate," "expect,"
"project," "intend," "believe," "may impact," "on track," "goal,"
"strategy" and words and terms of similar substance used in
connection with any discussion of future operating or financial
performance, an acquisition or our businesses. In addition, any
statements that refer to expectations, projections or other
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. Those
statements are not guarantees and are subject to risks,
uncertainties and assumptions that are difficult to predict,
including uncertainties related to the impact of the cybersecurity
incident first reported on March 11, 2026 on our operations and
financial results. 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
2025. 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 2025. While we believe that the assumptions
underlying such forward-looking statements are reasonable,
there can be no assurance that future events or developments
will not cause such statements to be inaccurate. All forward-
looking statements contained in this report are qualified in their
entirety by this cautionary statement. We expressly disclaim any
intention or obligation to publicly update or revise any forward-
looking statement to reflect any change in our expectations or in
events, conditions or circumstances on which those expectations
may be based, or that affect the likelihood that actual results will
differ from those contained in the forward-looking statements.
ITEM 3.
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
We consider our greatest potential area of market risk exposure
to be exchange rate risk on our operating results. Quantitative
and qualitative disclosures about exchange rate risk are included
in Item 7A "Quantitative and Qualitative Disclosures About Market
Risk" of our Annual Report on Form 10-K for 2025. There were
no material changes from the information provided therein.
Dollar amounts are in millions except per share amounts or as otherwise specified.
20
STRYKER CORPORATION
2026Third Quarter Form 10-Q
ITEM 4.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of the Chief Executive
Officer and Chief Financial Officer (the Certifying Officers),
evaluated the effectiveness of the Company's disclosure controls
and procedures (as defined in Rules 13a-15(e) or 15d-15(e)
promulgated under the Securities Exchange Act of 1934, as
amended) on September 30, 2026. Based on that evaluation, the
Certifying Officers concluded the Company's disclosure controls
and procedures were effective as of September 30, 2026.
Changes in Internal Control Over Financial Reporting
There was no change to our internal control over financial
reporting during the nine months 2026 that materially affected, or
is reasonably likely to materially affect, our internal control over
financial reporting.
PART II – OTHER INFORMATION
ITEM 1A.
RISK FACTORS
We are not aware of any material changes to the risk factors
included in Item 1A. "Risk Factors" in our Annual Report on Form
10-K for 2025 and Part II, Item 1A. "Risk Factors" in our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2026.
ITEM 2.
UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS
In the three months 2026 we did not issue shares of our common
stock as performance incentive awards to employees. When
issued, these shares are not registered under the Securities Act
of 1933 based on the conclusion that the awards would not be
events of sale within the meaning of Section 2(a)(3) of the Act.
In March 2015 we announced that our Board of Directors had
authorized us to purchase up to $2,000 of our common stock. In
October 2026 our Board of Directors approved an increase of
$3,000 to our existing share repurchase program, bringing the
total share repurchase authorization to $3,033. The manner,
timing and amount of repurchases are determined by
management based on an evaluation of market conditions, stock
price, and other factors and are subject to regulatory
considerations. Purchases may be made from time to time in the
open market, in privately negotiated transactions, accelerated
share repurchase programs or otherwise.
In 2026 we repurchased 3 million shares of our common stock at
a cost of $1,000 under our authorized share repurchase program.
The total dollar value of our shares of common stock that could
be acquired under our authorized repurchase program was $33
as of September 30, 2026.
2026 Period
Total
Number of
Shares
Purchased
(in millions)
Average
Price
Paid
Per Share
Purchased
as Part of
Publicly
Announced
Plans
(in millions)
Approximate
Dollar Value
of Shares that
may yet be
Purchased
Under the Plans
July
—
$—
—
$1,033
August
2.8
335.17
2.8
83
September
0.2
321.61
0.2
33
Total
3
$334.46
3
ITEM 5.
OTHER INFORMATION
Trading Plan Arrangements
Certain of our officers or directors have made elections to
participate in and are participating in, our employee stock
purchase plan and 401(k) plan and have made and may from
time to time make elections to have shares withheld to cover
withholding taxes due or pay the exercise price of stock options,
restricted stock units and performance stock units which may
constitute non-Rule 10b5–1 trading arrangements (as defined in
Item 408(c) of Regulation S-K).
Disclosure Pursuant to Section 13(r) of the Exchange Act
Section 13(r) of the Exchange Act requires an issuer to disclose
in its annual or quarterly reports whether it or any of its affiliates
knowingly engaged in certain activities, transactions or dealings
relating to parties subject to sanctions administered by the Office
of Foreign Assets Control (OFAC) within the United States
Department of the Treasury, whether or not such activities are
prohibited or sanctionable under United States law. On March 2,
2021 the United States government designated the Russian
Federal Security Service (FSB) under additional sanctions
authorities. On the same day, OFAC issued General License No.
1B (OFAC General License) which generally authorizes certain
licensing, permitting, certification, notification and related
transactions with the FSB as may be required pursuant to
Russian encryption product import controls for the importation,
distribution or use of certain information technology products and
radio frequency technology products in the Russian Federation.
As required under Russian law and as permitted under the OFAC
General License one of our subsidiaries in Russia periodically
files notifications with or applies for import licenses and permits
from the FSB on our behalf in connection with the importation of
our products into Russia. These notification and licensing
activities are free of charge and none of our gross revenue or net
profits are attributable to such activities. We expect to continue to
file notifications with and apply for import licenses and permits
from the FSB to qualify our products for importation and
distribution in the Russian Federation to the extent required
under Russian law but only so long as such notification and
licensing activities are authorized by the OFAC General License,
any successor general license or other authorization issued by
OFAC.
During the three months 2026 we filed three notifications with the
FSB as described above.
21
STRYKER CORPORATION
2026Third Quarter Form 10-Q
ITEM 6.
EXHIBITS
31(i)†
31(ii)†
32(i)††
32(ii)††
101.INS
iXBRL Instance Document
101.SCH
iXBRL Schema Document
101.CAL
iXBRL Calculation Linkbase Document
101.DEF
iXBRL Definition Linkbase Document
101.LAB
iXBRL Label Linkbase Document
101.PRE
iXBRL Presentation Linkbase Document
104
Cover Page Interactive Data File (the cover page
XBRL tags are embedded within the Inline XBRL
document)
† Filed with this Form 10-Q
†† Furnished with this Form 10-Q
22
STRYKER CORPORATION
2026Third Quarter Form 10-Q
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
STRYKER CORPORATION
(Registrant)
Date:
October 30, 2026
/s/ KEVIN A. LOBO
Kevin A. Lobo
Chair and Chief Executive Officer
Date:
October 30, 2026
/s/ PRESTON W. WELLS
Preston W. Wells
Vice President, Chief Financial Officer