Stryker Corporation (SYK) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A indicate positive sentiment. The company raised full-year guidance, achieved margin expansion, and reported strong procedural volumes and product innovations. Despite challenges in certain sectors, the overall outlook is optimistic with sustained growth expected. The Q&A section reinforces confidence in growth strategies and product launches, while addressing competitive and market challenges. The positive guidance, strong financial metrics, and shareholder return plans suggest a likely stock price increase, aligning with a positive sentiment rating.
Key Financial Performance
Organic Sales Growth (Q4) 11%, compared to 10.2% in Q4 2024. Reasons: Pricing had a slightly favorable impact, and foreign currency had a 1% favorable impact on sales.
Organic Sales Growth (Full Year) 10.3%, compared to 10.2% in 2024. Reasons: Favorable price impact of 0.4% and foreign currency impact of 0.5%.
Adjusted Earnings Per Share (Q4) $4.47, up 11.5% from the same quarter last year. Reasons: Driven by sales growth and operating margin expansion, partially offset by tariffs, higher interest expense, and a higher effective tax rate.
Adjusted Earnings Per Share (Full Year) $13.63, up 11.8% from 2024. Reasons: Outstanding sales growth and return to pre-COVID adjusted operating margins with a second consecutive year of at least 100 basis points of expansion.
Adjusted Gross Margin (Q4) 65.2%, 10 basis points lower than Q4 2024. Reasons: Impact of tariffs mostly offset by business mix and cost improvements.
Adjusted Operating Margin (Q4) 30.2% of sales, 100 basis points favorable to Q4 2024. Reasons: Lower adjusted SG&A as a percentage of sales due to operational excellence and margin expansion.
Cash from Operations (Full Year) $5 billion, an increase of $802 million from 2024. Reasons: Higher earnings and year-over-year working capital improvements.
Free Cash Flow as Percentage of Adjusted Net Earnings (Full Year) 81%, compared to 75% last year. Reasons: Higher earnings and working capital improvements.
MedSurg and Neurotechnology Organic Sales Growth (Q4) 12.6%, including U.S. growth of 13% and International growth of 10.9%. Reasons: Strong capital demand in power tools, Steri-Shield, smoke evacuation, and Neptune Waste Management.
Orthopaedics Organic Sales Growth (Q4) 8.4%, including U.S. growth of 9.6% and International growth of 5.4%. Reasons: Market-leading position in robotic-assisted knee procedures and momentum from recent Mako installations.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Mako 4 installations: Record number of installations globally, with over 3,000 systems worldwide. Advanced applications for Hips, Spine, and Shoulder to launch mid-2026.
Peripheral vascular business (Inari): Strong procedural growth in the high teens, with minimal destocking expected in Q1 2026.
New SmartCare business unit: Combines Vocera and care.ai, contributing to growth in the Medical division.
International organic sales growth: 7.5% growth led by emerging markets, South Korea, and Japan. Plans to launch successful U.S. products internationally.
U.S. organic sales growth: 11.2% growth driven by strong demand across product portfolios.
Adjusted operating margin expansion: Achieved over 100 basis points of expansion for the second consecutive year, despite tariff headwinds.
Cash flow performance: $5 billion in cash from operations, with free cash flow as a percentage of adjusted net earnings at 81%.
M&A activity: Active M&A strategy with strong financial position to execute deals in 2026.
Sales force specialization: Creation of new business units and splitting sales forces, such as the new breast care sales force within endoscopy.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Tariff Impacts: The company faced tariff headwinds in 2025, which are expected to increase by $200 million in 2026, totaling $400 million. This could negatively impact operating margins and overall financial performance.
Competitive Pressures in Ischemic Business: The Vascular division's ischemic business faced competitive pressures, which offset strong performance in other areas. This could challenge growth in this segment.
Slower Capital Environment in Europe: A slower capital environment in Europe was noted, which could impact sales growth in this region.
Higher Interest Expense: Increased interest expenses from debt issuances earlier in the year negatively impacted financial results and could continue to do so.
Supply Constraints: Although supply constraints in 2025 are not expected to impact 2026 growth rates, they were a challenge during the year and could pose risks if they reoccur.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
2026 Organic Net Sales Growth: Expected to be in the range of 8% to 9.5%, driven by strong exit from 2025, presence in healthy end markets, sustained procedural volumes, and strong demand for capital products.
Adjusted Net Earnings Per Share for 2026: Projected to be in the range of $14.90 to $15.10.
Foreign Exchange Impact for 2026: Anticipated to have a slightly favorable impact on both sales and adjusted earnings per share if current rates hold.
Seasonality of Sales for 2026: Expected to be similar to 2025.
Tariff Impacts for 2026: Full year tariff impacts expected to be approximately $400 million, including an incremental $200 million compared to 2025, realized in the first half of the year.
Capital Order Book for 2026: Continues to be elevated, supported by healthy hospital CapEx budgets.
Mako 4 Installations and Utilization: Momentum heading into 2026 with record installations in 2025. Advanced primary with revision Hips, Spine, and Shoulder applications to launch midyear 2026.
Peripheral Vascular Business: Set up for success in 2026, approaching its 1-year anniversary as part of Stryker.
Free Cash Flow as a Percentage of Adjusted Net Earnings: Targeting a range of 70% to 80% for 2026, consistent with long-range plan.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:What is the reason for the increased organic growth guidance for 2026 compared to 2025?
A:Kevin Lobo explained that the company has seen four consecutive years of double-digit organic sales growth. The strong order book and Mako performance in Q4 contribute to implant growth, giving them confidence to start the year with a slightly higher range. He also mentioned that 10% growth is possible depending on macro environment and procedure growth.
Q:Why was Spencer Stiles elevated to President and Chief Operating Officer?
A:Kevin Lobo stated that Spencer Stiles is ready for a new challenge and the role provides him a platform to lead the global commercial organization. This change also enables other promotions within the organization, such as Dylan Crotty heading up orthopedics. Lobo looks forward to partnering with Stiles to lead the company.
Q:What are the expectations for pricing in the capital and implant businesses in 2026?
A:Preston Wells mentioned that pricing gains achieved in the past few years are expected to continue into 2026, with 2026 pricing expected to look similar to 2025. Jason Beach added that the capital environment remains strong with an elevated backlog.
Q:What caused the strong performance in Endoscopy, Instruments, and Mako, and what challenges were faced in Trauma and Extremities and Vascular?
A:Kevin Lobo highlighted that Endoscopy and Instruments, including power tools and fluorescence imaging cameras, performed exceptionally well. Mako's transition to Mako 4 was also successful. Challenges in Trauma and Extremities were due to tough comparisons from the prior year and softness in the Foot & Ankle business. In Vascular, the ischemic sector has been tough, but new product launches like the Broadway catheter are expected to improve performance.
Q:What is the company’s view on the changing competitive landscape, including moves by Boston Scientific and J&J?
A:Jason Beach stated that there is no change in Stryker's strategy or market approach despite competitive moves. The company remains confident in its teams and growth prospects for 2026.
Q:What is the company’s outlook on patient volumes given changes in the Affordable Care Act coverage?
A:Jason Beach mentioned that patient volumes remain robust as of the start of 2026. He expects mid-single-digit growth in ortho markets, with Stryker outperforming the market.
Q:What is the company’s perspective on the local coverage determination around total joint arthroplasty and robotics?
A:Kevin Lobo stated that while he is not familiar with the specific case, Stryker has seen extra reimbursement for robotic procedures in other parts of the world. He is optimistic about demonstrating Mako's value through data and does not foresee any reduction in reimbursement.
Q:What is the confidence level in achieving the 150 basis points operating margin expansion target by 2028?
A:Preston Wells expressed confidence in achieving the target, citing operational excellence initiatives like Lean and shared services. He noted that the 2026 margin expectations align with the trajectory toward the 150 basis points expansion.
Q:What is driving the strong growth in the MedSurg business, and is it sustainable?
A:Kevin Lobo attributed the growth to high market shares, continuous product upgrades, tuck-in acquisitions, and specialized sales forces. He emphasized that this growth strategy is sustainable and has been effective over the past several years.
Q:What is the company’s approach to tuck-in acquisitions in 2026?
A:Kevin Lobo stated that the company has a strong balance sheet and is actively looking at tuck-ins and adjacencies. He did not provide specific details but expressed excitement about potential acquisitions.
Q:What are the key innovations and product launches expected in 2026?
A:Kevin Lobo mentioned several innovations, including the Mako RPS handheld robot, Vocera Sync Badge, OptaBlate BBNA, Incompass total ankle, and Artix arterial product. He also highlighted the continued success of existing products like ProCuity and the Endoscopy camera.
Q:What is the outlook for the Mako robotic system and its applications?
A:Kevin Lobo stated that Mako 4 has been a success, with strong feedback on its new applications like revision hip. The system is gaining traction internationally, particularly in Japan. The company is optimistic about the upcoming launch of Mako Shoulder and expects continued growth in robotic-assisted procedures.
Q:What is the company’s strategy for addressing tariffs and their impact on margins?
A:Preston Wells mentioned that the $200 million tariff impact for 2026 reflects mitigation efforts already undertaken. Kevin Lobo added that despite the tariffs, the company is driving meaningful operating margin expansion, demonstrating its margin management capabilities.
Q:What is the company’s view on the ASC (Ambulatory Surgery Center) market and its impact on growth?
A:Kevin Lobo stated that the ASC market is a growth opportunity for Stryker due to its broad portfolio. The company benefits from new ASC construction and the shift of procedures to ASCs, which aligns with its product offerings.
Q:What is the significance of the Triathlon Gold product launch?
A:Kevin Lobo explained that Triathlon Gold addresses a gap in the portfolio for metal-sensitive patients, representing about 5% of the market. The product is premium-priced and has received positive feedback, with potential to grow beyond its current market share.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on pricing for Mako 4 and the handheld robot, as well as the exact impact of MDR changes in Europe on the MedSurg business. Additionally, they did not elaborate on the potential size of tuck-in acquisitions or the exact timeline for achieving certain clinical trial results, such as PEERLESS II.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Endoscopy Instruments
Full Stryker
Hips Shoulder
Hips momentum
Hips utilization
Hospital budget
Inari finish
Instruments Medical
Instruments Trauma
Japan country
Knees Hips
Leila today
Medical combine
Neurocranial Endoscopy
Preston cash
Preston detail
Shoulder midyear
SmartCare unit
States cash
Stryker reminder
Vascular division
anniversary Stryker
application primary
base system
beginning momentum
breast care
budget capital
cadence product
combine sale
commitment mission
comparative sale
component talent
country market
culture cadence
dedication Vice
demographic demand
record
SYK Transcript
Stryker Corporation (SYK) Q4 2025 Earnings Call Transcript
Positive1-30
The earnings call summary and Q&A indicate positive sentiment. The company raised full-year guidance, achieved margin expansion, and reported strong procedural volumes and product innovations. Despite challenges in certain sectors, the overall outlook is optimistic with sustained growth expected. The Q&A section reinforces confidence in growth strategies and product launches, while addressing competitive and market challenges. The positive guidance, strong financial metrics, and shareholder return plans suggest a likely stock price increase, aligning with a positive sentiment rating.
Stryker Corporation (SYK) Q3 2025 Earnings Call Transcript
Positive10-30
The earnings call highlights strong financial performance with adjusted margin improvements, robust cash flow, and a positive outlook on procedural volumes and capital markets. Despite some supply chain disruptions, the company maintains a strong growth trajectory, supported by new product launches and strategic acquisitions. The Q&A section reveals healthy market conditions and confidence in sustaining growth, albeit with some management evasiveness on long-term targets. Overall, the positive guidance and strategic initiatives suggest a positive stock price movement.
Stryker Corporation (SYK) Presents At Wells Fargo 20th Annual Healthcare Conference 2025 Transcript
Neutral9-4
Stryker Corporation (SYK) Q2 2025 Earnings Call Transcript
Positive7-31
The earnings call reveals strong financial performance, with record new system additions for Mako and a 19% growth in U.S. Endoscopy. The company is on track with product launches and international expansion, despite tariff impacts. Optimistic EPS guidance and operational strength offset uncertainties, and shareholder returns are likely to be positive. Overall, the sentiment leans towards a positive stock price movement.
SYK Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
