Filed 2026-02-11 · Period ending 2025-12-31 · 50,390 words · SEC EDGAR
# STRYKER CORP (SYK) — 10-K
**Filed:** 2026-02-11
**Period ending:** 2025-12-31
**Accession:** 0000310764-26-000010
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/310764/000031076426000010/)
**Origin leaf:** cd08bb2f88b93a95e4535ce132b671ebb991c9b14ce736c9e0abe552a013f942
**Words:** 50,390
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K
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| | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2025
OR
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| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Commission file number: 001-13149
STRYKER CORPORATION
(Exact name of registrant as specified in its charter)
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| Michigan | 38-1239739 | |
| (State of incorporation) | (I.R.S. Employer Identification No.) | |
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| 1941 Stryker Way, | Portage, | Michigan | 49002 | |
| (Address of principal executive offices) | (Zip Code) | |
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| (269) | 385-2600 | |
| (Registrants telephone number, including area code) | |
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| Securities registered pursuant to Section12(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 | |
Securities registered pursuant to Section12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section13 or 15(d) of the Act.Yes No
Indicate by check mark whether the registrant (1)has filed all reports required to be filed by Section13 or 15(d) of the Securities and 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 definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the
Exchange Act.
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| Large accelerated filer | | Accelerated filer | | Emerging growth company | | |
| Non-accelerated filer | | Small 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 has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b). Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YesNoThe aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $144,306,436,547 at June30, 2025. There were 382,688,675 shares outstanding of the registrants common stock, $0.10 par value, on January31, 2026.DOCUMENTS INCORPORATED BY REFERENCEPortions of the proxy statement to be filed with the U.S. Securities and Exchange Commission relating to the 2026 Annual Meeting of Shareholders (the 2026 proxy statement) are incorporated by reference into Part III.
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| STRYKER CORPORATION | 2025 FORM 10-K | |
TABLE OF CONTENTS
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| PART I | |
| Item1. | Business | 1 | |
| Item 1A. | Risk Factors | 5 | |
| Item 1B. | Unresolved Staff Comments | 12 | |
| Item 1C. | Cybersecurity | 12 | |
| Item 2. | Properties | 12 | |
| Item 3. | Legal Proceedings | 12 | |
| Item 4. | Mine Safety Disclosures | 12 | |
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| PART II | |
| Item5. | Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 13 | |
| Item 6. | Selected Financial Data | 14 | |
| Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations | 15 | |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 24 | |
| Item 8. | Financial Statements and Supplementary Data | 25 | |
| Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) | 25 | |
| Consolidated Statements of Earnings | 27 | |
| Consolidated Statements of Comprehensive Income | 27 | |
| Consolidated Balance Sheets | 28 | |
| Consolidated Statements of Shareholders Equity | 29 | |
| Consolidated Statements of Cash Flows | 30 | |
| Notes to Consolidated Financial Statements | 31 | |
| Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | 45 | |
| Item9A. | Controls and Procedures | 45 | |
| Item9B. | Other Information | 46 | |
| Item9C. | Disclosure Regarding Foreign Jurisdictions That Prevent Inspections | 46 | |
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| PART III | |
| Item 10. | Directors, Executive Officers and Corporate Governance | 46 | |
| Item 11. | Executive Compensation | 46 | |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 46 | |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 46 | |
| Item 14. | Principal Accountant Fees and Services | 47 | |
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| PART IV | |
| Item 15. | Exhibits, Financial Statement Schedules | 48 | |
| Item 16. | Form 10-K Summary | 51 | |
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| Dollar amounts in millions except per share amounts or as otherwise specified. | 1 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
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| PART I | |
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| ITEM 1. | BUSINESS. | |
Stryker Corporation (Stryker 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 core values guide our behaviors and actions and are
fundamental to how we execute our mission.
Stryker was incorporated in Michigan in 1946 as the successor
company to a business founded in 1941 by Dr. Homer H. Stryker,
a prominent orthopaedic surgeon and inventor of several medical
products. Our products are sold in approximately 61 countries
through company-owned subsidiaries and branches as well as
third-party dealers and distributors, and include surgical
equipment and surgical navigation systems; endoscopic and
communications systems; patient handling, emergency medical
equipment and intensive care disposable products; clinical
communication and artificial intelligence-assisted virtual care
platform technology; products for traditional brain and open skull-
based surgical procedures; minimally invasive products for the
treatment of acute ischemic and hemorrhagic stroke and venous
thromboembolism; implants used in joint replacement and trauma
surgeries; Mako robotic-arm assisted technology; as well as other
products used in a variety of medical specialties. Most of our
products are marketed directly to doctors, hospitals and other
healthcare facilities.
As used herein, and except where the context otherwise requires,
"Stryker," "we," "us," and "our" refer to Stryker Corporation and its
consolidated subsidiaries.
Business Segments and Geographic Information
We segregate our operations into two reportable business
segments: (i) MedSurg and Neurotechnology and (ii)
Orthopaedics. Financial information regarding our reportable
business segments and certain geographic information is
included under "Consolidated Results of Operations" in Item 7 of
this report and Note 14 to our Consolidated Financial Statements.
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| Net Sales by Reportable Segment | |
| 2025 | 2024 | 2023 | |
| MedSurg and Neurotechnology | $15,647 | 62% | $13,518 | 60% | $12,163 | 59% | |
| Orthopaedics | 9,469 | 38 | 9,077 | 40 | 8,335 | 41 | |
| Total | $25,116 | 100% | $22,595 | 100% | $20,498 | 100% | |
MedSurg and Neurotechnology
MedSurg and Neurotechnology products include surgical
equipment, patient and caregiver safety technologies, and
navigation systems (Instruments), endoscopic and
communications systems (Endoscopy), and patient handling,
emergency medical equipment, intensive care disposable
products, clinical communication and artificial intelligence-
assisted virtual care platform technology (Medical), minimally
invasive products for the treatment of acute ischemic and
hemorrhagic stroke and venous thromboembolism (Vascular) 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 products (Neuro Cranial).
We are one of five leading global competitors in Instruments; the
other four being Zimmer Biomet Holdings, Inc. (Zimmer),
Medtronic plc (Medtronic), Johnson & Johnson MedTech (a
subsidiary of Johnson & Johnson) and ConMed Linvatec, Inc. (a
subsidiary of CONMED Corporation). We are one of seven
leading global competitors in Endoscopy; the other six being Karl
Storz GmbH & Co., Olympus Optical Co. Ltd., Smith & Nephew
plc (Smith & Nephew), ConMed Linvatec, Arthrex, Inc. and
STERIS plc. We are one of five leading global competitors in
Medical; the other four being Baxter International Inc., Zoll
Medical Corporation, Medline Industries and Ferno-Washington,
Inc. We are one of five leading global competitors in Vascular and
Neuro Cranial; the other four being Medtronic, Johnson &
Johnson MedTech, Terumo Corporation and Penumbra, Inc.
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| Composition of MedSurg and Neurotechnology Net Sales | |
| 2025 | 2024 | 2023 | |
| Instruments | $3,183 | 20% | $2,834 | 21% | $2,534 | 21% | |
| Endoscopy | 3,807 | 24 | 3,389 | 25 | 3,068 | 25 | |
| Medical | 4,204 | 27 | 3,852 | 28 | 3,459 | 28 | |
| Vascular | 1,968 | 13 | 1,307 | 10 | 1,226 | 11 | |
| Neuro Cranial | 2,485 | 16 | 2,136 | 16 | 1,876 | 15 | |
| Total | $15,647 | 100% | $13,518 | 100% | $12,163 | 100% | |
In 2025 Instruments launched Steri-Shield 8 which is a lighter,
more comfortable, and more customizable operating room
personal protection system, with improved visibility, cooling, and
battery performance versus prior generations. In addition, we
completed the acquisition of Guard Medical Inc., whose primary
focus is on Negative Pressure Wound Therapy for surgical
patients. The acquisition of Guard Medical, Inc. is
complementary to our Orthopaedic Instruments business as we
continue to focus on the surgical wound care market.
Endoscopy continued to deliver its 4K 1788 Camera platform to
the market in addition to the launch of the Connected OR IP
BRAVoE integration portfolio. Our 1788 Camera platform features
several enhancements for a broader range of clinical applications
and specialties, including urology, neurology, ear, nose, throat
and arthroscopy and can be used to visualize indocyanine green
and CYTALUX. The Connected OR IP BRAVoE launch expands
the connected capabilities of iSuite.
Medical continued the global launch of the LIFEPAK 35 monitor/
defibrillator, our next generation platform designed to optimize
care with new clinical features such as the new Glasgow 30.4
algorithm, cprINSIGHT, 15-lead monitoring capabilities, and STJ
insight and mapping. LIFEPAK 35 combines a modern intuitive
touch screen display and increased processing power with
Bluetooth and WiFi data connectivity. We also launched the
Vocera Sync Badge this year, a trusted clinician handsfree
communication endpoint that provides real-time communication
and alerts while extending Smart Hospital workflows directly into
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| Dollar amounts in millions except per share amounts or as otherwise specified. | 2 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
daily clinical practice. Medical also completed the acquisition of
Advanced Medical Balloons (AMB), an indwelling fecal
management system that specializes in solutions that help
enhance care delivery by combining intelligent design with the
exceptional properties of ultra-thin polyurethane. AMB Medical
adds complementary technology to the Stryker Sage
incontinence portfolio and will help address problems in the
market that include hospital-acquired infections, pressure injuries,
staff satisfaction and retention.
In 2025 we changed the name of our Neurovascular business to
Vascular with the acquisition of Inari Medical, Inc. (Inari) whose
product portfolio includes minimally invasive products for the
treatment of venous thromboembolism. Neurovascular and Inari
are jointly now Vascular. Vascular launched the Broadway
System in the United States, a fully integrated stroke solution that
provides a new level of access and support in large- and super-
bore catheter procedures. Additionally, Vascular accelerated the
launch of the Surpass Elite Flow Diverting Stent (FDS) in the
United States, Europe, and parts of Asia-Pacific. Surpass Elite
FDS is designed to reduce thrombin generation when compared
to unmodified stents.
Neuro Cranial launched OptaBlate BVN in 2025 which is a
radiofrequency nerve ablation system used to access and ablate
the basivertebral nerve to treat vertebrogenic pain.
Orthopaedics
Orthopaedics products primarily include implants 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 the
technologies, products and services they need to support each
patients clinical challenge.
We are one of four leading global competitors for joint
replacement and trauma and extremities products and robotics;
the other three being Zimmer, Johnson & Johnson MedTech and
Smith & Nephew.
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| Composition of Orthopaedics Net Sales | |
| 2025 | 2024 | 2023 | |
| Knees | $2,656 | 28% | $2,447 | 27% | $2,273 | 27% | |
| Hips | 1,865 | 20 | 1,704 | 19 | 1,544 | 18 | |
| Trauma and Extremities | 3,948 | 42 | 3,507 | 39 | 3,147 | 38 | |
| Spinal Implants | 185 | 2 | 707 | 8 | 713 | 9 | |
| Other | 815 | 9 | 712 | 8 | 658 | 8 | |
| Total | $9,469 | 100% | $9,077 | 100% | $8,335 | 100% | |
In 2025 we continued to expand the global footprint of Mako
SmartRobotics, which is now available in more than 45 countries.
To date, over one million robotic Mako Total Knee procedures
and more than two million robotic procedures across Mako Total
Knee, Mako Total Hip, and Mako Partial Knee have been
performed worldwide.
2025 also marked a significant period of product launches and
new application development. Most notably, we introduced the
Mako 4 platform, a meaningful advancement for both newly
established and existing Mako sites. This platform is built around
our QGuidance systeman advanced guidance technology
designed to enable new hardware and software capabilities
across a broad range of subspecialties.
The first application released on the Mako 4 platform is the Total
Hip Advanced Primary and Revision application. We received
510(k) clearance for Mako Total Hip with Advanced Primary and
Revision with full market release in the third quarter of 2025.
Complex primary and revision total hip arthroplasty procedures
often present challenges such as bone loss and absent
anatomical landmarks. With our advanced Mako Total Hip
solution, we aim to extend the benefits of Mako SmartRobotics
to simplify these demanding cases. Mako Total Hip with
Advanced Primary and Revision represents Strykers first-to-
market, robotically enabled revision hip arthroplasty procedure.
We also introduced Mako Shoulder, which expands the
SmartRobotics suite of applications. Mako Shoulder integrates
three market-leading technologies: Tornier implants, Blueprint
planning software, and Mako SmartRobotics. The application
offers haptically guided preparation for Tornier Perform Reversed
Glenoid and Tornier Reversed Augmented Glenoid implants for
primary shoulder arthroplasty. We completed the first Mako
Shoulder cases in 2024, and the application remained in limited
market release throughout 2025. Full commercial launch in the
United States is planned for the first quarter of 2026.
Raw Materials and Inventory
Raw materials essential to our business are generally readily
available from multiple sources; however, certain of our raw
materials are currently sourced from single suppliers.
Substantially all products we manufacture are stocked in
inventory, while certain MedSurg products are assembled to
order.
Patents and Trademarks
Patents and trademarks are significant to our business to the
extent that a product or an attribute of a product represents a
unique design or process. Patent protection of such products
restricts competitors from duplicating these unique designs and
features. We seek to obtain patent protection on our products
whenever appropriate for protecting our competitive advantage.
On December31, 2025 we owned approximately 5,600 United
States patents and approximately 9,000 patents in other
countries.
Seasonality
Our business is generally not seasonal in nature; however, the
number of orthopaedic implant surgeries is typically lower in the
summer months, and sales of capital equipment are generally
higher in the fourth quarter.
Competition
In each of our product lines we compete with local and global
companies. The development of innovative products is important
to our success in all areas of our business. Competition in
research involving the development and improvement of new and
existing products and processes is particularly significant. The
competitive environment requires substantial investments in
continuing research and maintaining sales forces.
We believe our commitment to innovation, quality and service
and our reputation differentiates us in the highly competitive
product categories in which we operate and enables us to
compete effectively. We believe that our competitive position in
the future will depend largely on our ability to develop new
products and make improvements to existing products.
Regulation
Our businesses are subject to varying degrees of governmental
regulation in the countries in which we operate, and the general
trend is toward increasingly stringent regulation. We are required
to comply with the unique regulatory requirements of each
country in which we market and sell our products.
In the United States the Medical Device Amendments of 1976 to
the Federal Food, Drug and Cosmetic Act and its subsequent
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| Dollar amounts in millions except per share amounts or as otherwise specified. | 3 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
amendments and the regulations issued and proposed
thereunder provide for federal regulation by the United States
Food and Drug Administration (FDA) of the design, manufacture
and marketing of medical devices, including most of our products.
In addition, state licensing requirements often apply to certain of
our business operations and products. On the federal level, many
of our new products fall into FDA classifications that require
notification submitted as a 510(k) and review by the FDA before
we begin marketing them. Certain of our products require
extensive clinical testing, consisting of safety and efficacy
studies, followed by pre-market approval applications for specific
surgical indications. Certain of our products also fall under other
FDA classifications, such as drugs and Human Cells, Tissues,
and Cellular and Tissue-Based Products.
The FDA's Quality System regulations set forth standards for our
product design and manufacturing processes, require the
maintenance of certain records and provide for inspections of our
facilities by the FDA. There are also certain requirements of
state, local and foreign governments that must be complied with
in the manufacture and marketing of our products.
The European Union enacted the European Union Medical
Device Regulation in May 2017 with an original effective date of
May 2022, which imposes stricter requirements for the marketing
and sale of medical devices, including in the areas of clinical
evaluation requirements, quality systems, labeling and post-
market surveillance. Extended transition timelines were published
in 2023 which range from May 2026 through December 2028
depending on the type of device and we are on track to meet
these timelines.
Initiatives to limit the growth of general healthcare expenses and
hospital costs are ongoing. These initiatives are sponsored by
government agencies, legislative bodies and the private sector
and include price regulation and competitive pricing. It is not
possible to predict the long-term impact of such cost containment
measures on our future business. In addition, business practices
in the healthcare industry are scrutinized, particularly in the
United States, by federal and state government agencies. Any
resulting investigations and prosecutions potentially carry the risk
of significant civil and criminal penalties.
Environment
We are subject to various rules and regulation in the United
States and internationally related to the protection of human
health and the environment. Our operations involve the use of
substances regulated under environmental laws, primarily in
manufacturing and sterilization processes. We believe our
policies, practices and procedures are properly designed to
comply, in all material respects, with applicable environmental
laws and regulations. We do not expect compliance with these
requirements to have a material effect on purchases of property,
plant and equipment, cash flows, net earnings or competitive
position.
Employees
On December31, 2025 we had approximately 56,000 employees
globally, with approximately 28,000 employees in the United
States. Our talented employees are an integral reason for our
standing as a global leader in medical technologies where,
together with our customers, we are driven to make healthcare
better. Our company values of integrity, accountability, people
and performance are a key component of that mission. Our
people, as one of our core values, continue to be a key focus.
Our success depends on our ability to attract the best talent. To
do so, we continue to focus on establishing and maintaining a
great workplace. We believe in attracting the right people,
maintaining and building employee engagement and developing
our employees. We believe when people are able to do what they
do best, they will look forward to coming to work and, in turn, will
deliver great business results.
Our leadership team and Board of Directors receive regular
updates on our people and culture strategy and provide feedback
on our strategy and goals, including alignment to our mission and
values, peer benchmarking and stakeholder feedback.
Employee Development
Our employee development is extensive and exists at all levels of
the organization, including company-wide training on our Code of
Conduct, job-related technical training and management and
leadership training. Our development programs include on-the-
job learning, coaching and mentoring, management and
leadership development courses, team building and collaboration
training and immersive experiences with expert partners.
We encourage all employees to establish development
objectives, in partnership with their manager, to help employees
gain the needed development experience to grow their careers.
Employee Engagement
An engaged workplace culture that drives performance and
business outcomes is central to our mission. Listening to and
learning from our employees forms the foundation of an engaging
culture. More than 90% of our employees participate in our
annual engagement survey, which provides a valued platform for
listening and allows us to act on the feedback collected.
We supplement our annual engagement survey with targeted
pulse surveys to gather feedback on topics relevant to the current
climate.
We also provide tools and resources that enable managers and
teams to act on the insights we gain from our surveys and to
drive employee engagement and strong business outcomes.
Inclusion
We believe our individual strengths, experiences, and
perspectives are essential for delivering on our mission. By
caring for each other, we foster a culture where everyone feels
heard and valued. How we work together is critical to our
success, and we believe it takes everyone. Every voice. Every
person. Every connection.
Attracting and Hiring
We understand that every employee drives our success. We
focus on attracting, identifying and selecting strong candidates
who will be successful at Stryker and ensuring that each person
we hire brings the talent, expertise and passion we need to
continue to be successful.
Health and Safety
Ensuring our employees' safety is a top priority. It is a
responsibility that we share throughout the company and one that
has evolved to meet the needs of our workforce. Employees'
safety risks vary depending on the roles they perform, so we
tailor our safety efforts accordingly.
Competitive Pay and Benefits
Our compensation and benefits programs are designed to attract
and retain top talent and to incentivize performance and
alignment to our mission and values.
We offer market-competitive base pay and benefits to our
employees in countries around the world. We regularly evaluate
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| Dollar amounts in millions except per share amounts or as otherwise specified. | 4 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
our compensation and benefit offerings and levels, using
recognized outside consulting firms to ensure internal fairness
and competitiveness in our offerings.
Most of our employees also have variable compensation
components that reward employees based on individual,
business unit and/or company-wide performance.
Our proxy statement provides more detail on the competitive
compensation programs we offer to our executive officers.
Information about our Executive Officers
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| As of January 31, 2026 | |
| Name | Age | Title | First Became an Executive Officer | |
| Kevin A. Lobo | 60 | Chair and Chief Executive Officer | 2011 | |
| William E. Berry Jr. | 60 | Vice President, Chief Accounting Officer | 2014 | |
| Dylan B. Crotty | 49 | Group President, Orthopaedics | 2026 | |
| M. Kathryn Fink | 56 | Vice President, Chief Human Resources Officer | 2016 | |
| Robert S. Fletcher | 55 | Vice President, Chief Legal Officer | 2019 | |
| Debra King | 54 | Vice President, Chief Digital and Information Officer | 2025 | |
| Viju S. Menon | 58 | Group President, Global Quality and Operations | 2018 | |
| Kimberly A. Montagnino | 38 | Vice President, Chief Communications Officer | 2025 | |
| J. Andrew Pierce | 52 | Group President, MedSurg and Neurotechnology | 2021 | |
| Spencer S. Stiles | 49 | President and Chief Operating Officer | 2021 | |
| Preston W. Wells | 49 | Vice President, Chief Financial Officer | 2025 | |
Each of our executive officers held the position above or served
Stryker in various executive or administrative capacities for at
least five years, except for Ms. King and Ms. Montagnino. Prior to
joining Stryker in May 2025, Ms. King served as the Chief
Technology Officer at Bunge for two years and as the Chief
Information Officer at Corteva, Inc. from 2017 to 2021. Prior to
joining Stryker in June 2024, Ms. Montagnino held multiple
corporate affairs leadership roles with Johnson & Johnson during
the previous eight years, most recently as Senior Director,
Communications Johnson & Johnson MedTech. While at Stryker,
Ms. Montagnino previously served as Vice President, Global
Communications.
Available Information
Our main corporate website address is www.stryker.com. The
information on our website is not incorporated by reference into
this report. Copies of our filings with the United States Securities
and Exchange Commission (SEC) are available free of charge on
our website within the "Investors Relations" section as soon as
reasonably practicable after having been electronically filed or
furnished to the SEC. All SEC filings are also available at the
SEC's website at www.sec.gov.
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.
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:
weakening of economic conditions, or the anticipation thereof,
that could adversely affect the level of demand for our
products;
geopolitical risks, including from international conflicts and
tariffs, which could, among other things, lead to increased
market volatility;
pricing pressures generally, including cost-containment
measures that have adversely affected and could in the future
adversely affect the price of or demand for our products;
changes in foreign currency exchange markets;
legislative and regulatory actions;
unanticipated issues arising in connection with clinical studies
and otherwise that affect approval of new products by the
FDA and foreign regulatory agencies;
inflationary pressures;
increased interest rates or interest rate volatility;
supply chain disruptions;
changes in labor markets;
changes in coverage and reimbursement levels from third-
party payors;
changes in the competitive environment;
breaches, failures or other disruptions of our or our vendors
or customers information technology systems or products,
including by cyber-attack, data leakage, unauthorized access
or theft;
a significant increase in product liability claims;
the ultimate total cost with respect to recall-related and other
regulatory and quality matters;
the impact of investigative and legal proceedings and
compliance risks;
resolution of tax audits;
changes in tax laws and regulations;
the impact of legislation to reform the healthcare system in the
United States or other countries;
costs to comply with medical device regulations;
changes in financial markets;
changes in our credit ratings;
our ability to integrate and realize the anticipated benefits of
acquisitions in full or at all or within the expected timeframes,
including our acquisition of Inari Medical, Inc. ("Inari");
our ability to realize any anticipated cost savings;
potential negative impacts resulting from climate change or
other environmental, social and governance and sustainability
related matters;
the impact on our operations and financial results of any
public health emergency and any related policies and actions
by governments or other third parties; and
other risks detailed in our filings with the SEC.
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
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| STRYKER CORPORATION | 2025 FORM 10-K | |
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
Trademarks
All trademarks or trade names referred to in this report are the
property of the Company, or, to the extent trademarks or trade
names belonging to other companies are referenced in this
report, the property of their respective owners. Solely for
convenience, the trademarks and trade names in this report are
referred to without the and symbols, but such references
should not be construed as any indicator that the Company or, to
the extent applicable, their respective owners will not assert, to
the fullest extent under applicable law, the Companys or their
rights thereto. We do not intend the use or display of other
companies trademarks and trade names to imply a relationship
with, or endorsement or sponsorship of us by, any other
companies.
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| ITEM1A. | RISK FACTORS. | |
Our operations and financial results are subject to various risks
and uncertainties discussed below that could materially and
adversely affect our business, cash flows, financial condition and
results of operations. Additional risks and uncertainties not
currently known to us or that we currently deem not to be material
or that could apply to any company may also materially and
adversely affect our business, cash flows, financial condition or
results of operations. If any of the risks discussed below or other
risks actually occur or continue to occur, our business, financial
condition, operating results or cash flows could be materially
adversely affected. Accordingly, you should carefully consider the
following risk factors, as well as other information contained in or
incorporated by reference in this report.
BUSINESS AND OPERATIONAL RISKS
We use a variety of raw materials, components, devices and
third-party services in our global supply chains, production
and distribution processes; significant shortages, price
increases or unavailability of third-party services have in the
past increased, and could in the future increase, our
operating costs and could require significant capital
expenditures or adversely impact the competitive position of
our products: Our reliance on certain suppliers to secure raw
materials, components and finished devices, and on certain third-
party service providers, such as sterilization service providers,
exposes us to the risk of product shortages and unanticipated
increases in prices, whether due to inflationary pressure,
regulatory changes, litigation exposure, tariffs, geopolitical
tensions or otherwise. For example, in the past we have
experienced limited product availability due to an electronic
component shortage in certain product lines. If a similar shortage
occurs in the future with respect to any raw materials or
components, we may not be able to obtain them from our
suppliers on a timely basis, or at all, or identify alternative
suppliers. In addition, several raw materials, components,
finished devices and services are procured from a sole source
due to, among other things, the quality considerations, unique
intellectual property considerations or constraints associated with
regulatory requirements. If sole-source suppliers or service
providers are unable or unwilling to deliver these materials or
services as a result of financial difficulties, business disruptions,
acquisition by a third party, natural disasters, embargoes, tariffs
or otherwise, we may not be able to manufacture or have
available one or more products during such period of
unavailability and our business could suffer, possibly materially.
In certain cases, we may not be able to establish additional or
replacement suppliers for such materials or service providers for
such services in a timely or cost-effective manner, often as a
result of FDA and other regulations that require, among other
things, validation of materials, components and services prior to
their use in or with our products. In certain instances we have
been unable to meet demand due to supply chain challenges,
which has led to loss of sales. Although the impacts have not
been material to date, an inability to meet demand due to supply
chain challenges in the future could materially adversely impact
our reputation, the competitive position of our products and our
business. In addition, recently enacted tariffs by the United States
government and retaliatory measures by other governments
could adversely impact our supply chain or the availability of
certain components. Any of the foregoing risks could have a
material adverse impact on our profitability and results of
operations.
In addition, in recent years, the market has experienced
inflationary pressures in part due to global supply chain
disruptions, labor shortages and other impacts following the
COVID-19 pandemic. Inflation in the United States and in many
of the countries where we conduct business has resulted in, and
may in the future result in, high interest rates and increased
capital, energy, shipping and labor costs, weakening or
strengthening exchange rates against the United States Dollar
and other similar effects. We have continued to experience, and
may in the future experience, inflationary increases in
manufacturing costs and operating expenses, as well as negative
impacts from weakening or strengthening exchange rates against
the United States Dollar. Although we have been able to pass
certain cost increases on to our customers, we have not been
able to pass along all cost increases and we cannot guarantee
that we will be able to do so in the future, including in connection
with proposed or enacted tariffs. Inflation, high interest rates,
interest rate volatility or proposed or enacted tariffs may also
cause our customers to reduce or delay orders for our products
and services. Any of the foregoing could have a material adverse
impact on our sales, profitability and results of operations.
We are subject to pricing pressures as a result of cost
containment measures in the United States and other
countries and other factors, including changes in
reimbursement practices and coverage policies and third-
party payor cost containment measures: Initiatives to limit the
growth of general healthcare expenses and hospital costs are
ongoing and gaining increased attention in the markets in which
we do business. These initiatives are sponsored by government
agencies, legislative bodies and the private sector and include
price regulation and competitive pricing. For example, China has
implemented a volume-based procurement process designed to
decrease prices for medical devices and other products. Pricing
pressure has also increased due to pressures on healthcare
budgets, continued consolidation among healthcare providers,
trends toward managed care, the shift toward governments
becoming the primary payers of healthcare expenses, reduction
in coverage or reimbursement levels and medical procedure
volumes and government laws and regulations relating to sales
and promotion, reimbursement and pricing generally. Coverage
policies and reimbursement levels can vary across the payer
community globally, regionally, and locally, and may affect which
products customers purchase, the market acceptance rate for
new technologies and the prices customers are willing to pay for
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| STRYKER CORPORATION | 2025 FORM 10-K | |
those products in a particular jurisdiction. Furthermore, any
changes to the coverage or reimbursement landscape, or
adverse decisions relating to our products by administrators of
these systems could significantly reduce reimbursement for
procedures using our products or result in denial of
reimbursement for those products, which could adversely affect
customer demand, or the price customers are willing to pay for
such products. Public and private payers have challenged, and
are expected to continue to challenge, prices charged for medical
products and services. Such downward pricing pressures from
any or all of these payers may result in an adverse effect on our
business, results of operations, financial condition and cash
flows. We have also reduced prices for certain products due to
increased competition and if we further reduce prices, we could
become less profitable. In addition, due to healthcare industry
consolidation in recent years, competition to provide goods and
services to industry participants has become, and may continue
to become, more intense, and this consolidation has produced,
and may continue to produce, larger enterprises with more
bargaining power. Pricing pressures related to any of the
foregoing or other factors have impacted and could in the future
impact our results of operations and profitability.
We operate in a highly competitive industry in which
competition and the regulatory burden in the development
and improvement of new and existing products is
significant: The markets in which we compete are highly
competitive, and a significant element of our strategy is to
increase revenue growth by focusing on innovation, new product
development and improvement of existing products, including
connectivity solutions. New business models, products and
surgical procedures, as well as improvements to existing
products, are introduced on an ongoing basis and our present or
future products could be rendered obsolete or uneconomical by
internal or external technological advances, including by our
existing competitors and new market entrants, which could
adversely impact demand for certain of our existing products. The
success of our products and services depends on, among other
things, our ability to properly identify customer needs and predict
future needs, including connectivity solutions; innovate and
develop new technologies, services and applications at an
accelerated pace; and appropriately allocate our research and
development spending to products and services with higher
growth. Our existing competitors and new market entrants may
respond more quickly to or integrate new or emerging
technologies such as robotics, artificial intelligence (AI) and
machine learning in their product offerings, undertake more
extensive marketing campaigns, have greater access to clinical
information to support ongoing product position in the market,
have greater financial, marketing and other resources or be more
successful in attracting potential customers, employees and
strategic partners. There can be no assurance that any products
now in development, or that we may seek to develop in the
future, will achieve technological feasibility, obtain regulatory
approval or gain market acceptance. If we are unable to develop
and launch new products, our ability to maintain or expand our
market position in the markets in which we participate may be
negatively impacted.
We may be unable to maintain adequate working
relationships with healthcare professionals: We work with
healthcare professionals in a transparent and responsible
manner and seek to maintain these relationships with respected
physicians and medical personnel in healthcare organizations,
such as hospitals and universities, who assist in product research
and development. We rely on these professionals to assist us in
the development and improvement of proprietary products. If we
are unable to maintain these relationships due to regulatory
restrictions, hospital access restrictions for non-patients or for
other reasons, our ability to develop, market and sell new and
improved products could be adversely affected.
We rely on indirect distribution channels and major
distributors that are independent of Stryker: In many markets
we rely on indirect distribution channels to market, distribute and
sell our products. These indirect channels often are the main
point of contact for the healthcare professionals and healthcare
organization customers who buy and use our products. Our
ability to continue to market, distribute and sell our products may
be at risk if the indirect channels become insolvent, choose to sell
competitive products, choose to stop selling medical technology,
fail to adhere to Stryker requirements or are subject to new or
additional government regulation.
We are subject to risks associated with our extensive global
operations: We develop, manufacture and distribute our products
globally. Our global operations are subject to risks and costs
related to, among other things, changes in coverage or
reimbursement levels from third-party payors in the United States
and other countries; changes in regulatory requirements (such as
the staggered phase-in period for manufacturers to comply with
the European Union Medical Device Regulation (MDR) through
December 2028); differing local product preferences and product
requirements; diminished protection of intellectual property in
some countries; tariffs and other trade protection measures, as
well as increasing localization and protectionism policies in
certain jurisdictions; international trade disputes and import or
export requirements; difficulty in staffing and managing foreign
operations; introduction of new internal business structures and
programs; political and economic instability and uncertainty;
current or potential geopolitical conflicts, such as the tensions
between China and Taiwan and the wars in Ukraine and the
Middle East, and related sanctions and other developments;
disruptions of transportation, including port closures, increased
border controls or border closures or reduced transportation
availability, due to military conflicts, a global pandemic of
contagious diseases; increased energy or transportation costs;
fluctuations in currency exchange rates and financial markets;
and increased security threats to our supply chain. For example,
the United States has recently enacted and proposed to enact
new tariffs. These developments, the perception they could
occur, or changes to the existing exemption framework may have
a material adverse effect on global economic conditions and may
significantly reduce global trade. Many of these risks are rapidly
evolving and subject to an accelerating pace of change. Our
business could be adversely impacted if we are unable to
successfully manage these and other risks of global operations in
an increasingly volatile environment. In addition, in many
countries, the laws and regulations applicable to us or our
industry are evolving, and we have in certain cases become
subject to divergent and conflicting laws and regulations across
our operations, which has increased the risks we are subject to.
We may be unable to capitalize on previous or future
acquisitions: In addition to internally developed products, we
invest in new products and technologies through acquisitions,
including our acquisition of Inari in 2025. Such investments are
inherently risky, and we cannot guarantee that any acquisition will
be successful or will not have a material unfavorable impact on
us. The risks include the activities required and resources
allocated to integrate new businesses, a slower pace of
integration than initially projected, diversion of management time
that could adversely affect managements ability to focus on other
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| STRYKER CORPORATION | 2025 FORM 10-K | |
projects, the inability to realize the expected benefits, savings or
synergies from the acquisition, the loss of key personnel,
litigation resulting from the acquisition and exposure to
unexpected liabilities of acquired companies. Certain acquisitions
are subject to antitrust and competition laws, and antitrust
scrutiny by regulatory agencies and changes to the regulatory
approval process in the United States and foreign jurisdictions
may cause approvals to take longer than anticipated to obtain,
not be obtained at all, or contain burdensome conditions, which
may jeopardize, delay or reduce the anticipated benefits of
acquisitions to us and could impede the execution of our
business strategy. In addition, we cannot be certain that the
businesses we acquire will become or remain profitable.
We, our business partners or our third-party vendors could
experience a material failure or breach of a key information
technology system, network, process or site: We rely
extensively on information technology (IT) systems to conduct
business. In addition, we rely on networks and services, including
internet sites, cloud and software-as-a-service solutions, data
hosting and processing facilities and tools and other hardware,
software (including open-source software) and technical
applications and platforms, some of which are managed, hosted,
provided and/or used by third parties or their vendors, to assist in
conducting our business. Furthermore, numerous and evolving
cybersecurity threats have posed, and will continue to pose, risks
to the security of our IT systems, networks and product offerings,
as well as the confidentiality, availability and integrity of our data.
Emerging technologies such as generative AI may be used by
malicious actors to create more targeted phishing narratives,
spread disinformation about us or our products or otherwise
strengthen social engineering capabilities. An increasing risk of
civil unrest, political tensions, wars or other military conflicts may
also impact the cybersecurity threat risk landscape. Some of our
products, services, and information technology systems contain
or use open-source software which poses particular risks,
including potential security vulnerabilities, licensing compliance
issues and quality issues. We, our customers and third-party
hosting services have experienced, and expect to continue to
experience, security breaches of, unauthorized access to, and
disruptions of, products or systems. While such breaches,
unauthorized access and disruptions have not had a material
effect on us to date, we cannot guarantee that any future breach
or unauthorized access will not be material and any breach or
unauthorized access could impact the use of such products and
systems and the security of information stored therein. Although
we have made investments and expect to continue to make
investments seeking to address these threats, including
monitoring of networks and systems, use of AI, hiring of experts,
employee training, security policies for employees and third-party
providers and designing, developing and maintaining processes
and procedures to come into compliance with regulatory and
legal enactments such as Section 524B of the Federal Food,
Drug, and Cosmetic Act in the United States, the techniques used
in these attacks change frequently and may be difficult to detect
for periods of time and we may face difficulties in anticipating and
implementing adequate preventative measures.
When cybersecurity or other technology related incidents occur,
we follow our incident response protocols and address them in
accordance with applicable governmental regulations and other
legal requirements. Our response to these incidents and our
investments to protect our product offerings and information
technology infrastructure and data may not shield us from
significant losses and potential liability or prevent any future
interruption or breach of our systems. Moreover, given the
increasing complexity and sophistication of the techniques used
by threat actors to obtain unauthorized access or disable or
degrade systems, a cyberattack could occur and persist for an
extended period of time before being detected, and we may not
anticipate these acts or mitigate them adequately or timely, which
may compound damages before the incident is discovered or
remediated. The extent of a particular cyber incident and the
steps that we may need to take to investigate the incident may
not be immediately clear, and it may take a significant amount of
time before such investigation can be completed and full and
reliable information about the incident is known. New regulations
may require us to disclose information about a material
cybersecurity incident before it has been resolved or fully
investigated. Additionally, as threats continue to evolve and
increase, and as the regulatory environment and customer
requirements related to information security, data collection and
use, and privacy become increasingly rigorous, we may be
required to devote significant additional resources to modify and
enhance our security controls and to identify and remediate any
security vulnerabilities, which could adversely impact our net
income. In addition, a significant number of our employees
working remotely has exposed us, and may continue to expose
us, to greater risks related to cybersecurity and cyber-liability.
Hardware and software failures or delays in our key information
technology systems, networks, processes or sites could disrupt
our operations, cause the loss of confidential information or
otherwise adversely impact our business. Our systems, networks,
processes and sites may be vulnerable to damage, disruptions
and shutdown from a variety of sources, including malfunctions in
maintenance updates or security patches, design defects, the
age of the technology, network failures, modernization or other
initiatives, human acts and natural disasters. For example, some
of our information technology systems contain legacy third-party
software components for which we depend on a layered security
approach to protect against exploitation, which may not be
effective. Any such damage or disruptions could also compromise
the security of our information systems and networks. These
issues can also arise as a result of failures by, or in the software
or hardware of, third parties, including networks or service
providers, with whom we do business and over whom we have
limited or no control. Any disruption or failure of our systems,
networks, processes or sites could have a material impact on our
business and operations.
If our IT systems, networks or processes are damaged or cease
to function properly for any reason, the networks, service
providers, hardware or software we rely upon fail to function
properly, or we or one of our third-party providers suffer a loss or
disclosure of our business or stakeholder information due to any
number of causes ranging from catastrophic events or power
outages to improper data handling or security breaches or
unauthorized access and our business continuity plans do not
effectively address these failures on a timely basis, we may be
exposed to reputational, competitive and business harm as well
as litigation and regulatory action and fines, penalties and
expenses related thereto.
An inability to successfully manage the implementation of
our new commercial global enterprise resource planning
(ERP) system could adversely affect our operations and
operating results: We are in the process of implementing a new
commercial ERP system. This system will replace many of our
existing operating and financial systems. The implementation is a
major undertaking, both financially and from a management and
personnel perspective. Any material disruptions, delays or
deficiencies in the design and implementation of our new ERP
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| STRYKER CORPORATION | 2025 FORM 10-K | |
system could adversely affect our ability to process orders, ship
products, provide services and customer support, send invoices
and track payments, fulfill contractual obligations or otherwise
operate our business.
We may be unable to attract, develop and retain executives
and key employees: Our sales, technical and other key
personnel play an integral role in the development, marketing and
selling of new and existing products. Our future performance also
depends in large part on the continued services of our senior
management. If we are unable to recruit, hire, develop and retain
a talented, competitive workforce in our highly competitive
industry, or if we are unable to plan effective succession for the
future, we may not be able to meet our strategic business
objectives. Inflationary pressures, labor demand and shortages
and other macroeconomic factors have increased and could
further increase the cost of labor and could harm our ability to
recruit, hire and retain talented employees. In addition, increased
unionization could negatively impact our labor costs and ability to
create an engaging, connected culture, which could adversely
affect our ability to recruit, hire, develop and retain a talented,
competitive workforce. Further, if we are unable to maintain
competitive and equitable compensation and benefit programs,
including incentive programs which reward financial and
operational performance, our ability to recruit, hire, engage,
motivate and retain talent could be negatively affected.
Additionally, if we are unable to maintain an inclusive culture that
aligns our workforce with our mission and values, it could
adversely impact our ability to recruit, hire, develop and retain
key talent. Further, our remote and hybrid work practices, and
ability to provide flexible and alternative work arrangements may
not meet the needs or expectations of our employees, including
senior management or other key employees, which could
negatively impact our ability to attract and retain highly skilled
employees, or may harm our culture and/or decrease employee
engagement, which could adversely impact our ability to recruit,
hire, develop and retain a talented, competitive workforce.
Effective succession planning is also important to our long-term
success. Failure to ensure effective transfer of knowledge and
smooth transitions involving executives and other key employees
could hinder our strategic planning and execution. Changes in
our management team may be disruptive to our business, and
any failure to successfully integrate key new hires or promoted
employees could adversely affect our business and results of
operations. The loss of the services of any of our senior
management or other key personnel, or our inability to attract
highly qualified senior management and other key personnel,
could harm our business. Our ability to execute our business
strategy could be impaired if we are unable to replace such
persons timely. In addition, recent legal and regulatory changes
affect our ability to enforce post-termination obligations from
certain employees with respect to non-competition, non-
solicitation and protection of confidential information. This may
negatively impact our ability to retain employees and protect our
information and relationships with customers and other third
parties.
Interruption of manufacturing operations could adversely
affect our business: We and our suppliers have manufacturing
and supply sites all over the world. However, the manufacturing
of certain of our product lines is concentrated in one or more
plants or geographic regions. We have principal manufacturing
and distribution facilities in the United States in Arizona,
California, Florida, Illinois, Indiana, Michigan, Minnesota, New
Jersey, Puerto Rico, Tennessee, Texas, Utah and Washington,
and outside the United States in China, France, Germany,
Ireland, Mexico, the Netherlands, Poland, Switzerland and
Turkey. Damage to our facilities, to our suppliers or service
providers facilities, or to our central distribution centers as a
result of natural disasters, fires, explosions or otherwise, as well
as issues in our manufacturing arising from a failure to follow
specific internal protocols and procedures, compliance concerns
relating to the quality systems regulation, equipment breakdown
or malfunction, IT system failures or cybersecurity incidents,
environmental hazard incidents or changes to environmental
regulations or other factors, could adversely affect the availability
of our products. In the event of an interruption in manufacturing,
we may be unable to move quickly to alternate means of
producing and distributing affected products to meet customer
demand. In the event of a significant interruption, we may
experience lengthy delays in resuming production or distribution
of affected products due to the need for regulatory approvals, and
we may experience loss of market share, additional expense and
harm to our reputation.
Our insurance program may not be adequate to cover future
losses: We maintain third-party insurance to cover our exposure
to certain property and casualty losses and are self-insured for
claims and expenses related to other property and casualty
losses, including product liability, intellectual property
infringement and enforcement, environmental, and cybersecurity
and data privacy losses. We manage a portion of our exposure to
self-insured losses through a wholly-owned captive insurance
company. Insurance coverage limits provided by third-party
insurers and/or our captive insurance company may not be
sufficient to fully cover certain losses we may experience.
We have experienced, and may continue to experience, a
significant and unpredictable need to adjust our operations
as market demand for certain of our products has shifted
and continues to shift or as may be mandated by
governmental authorities: Some of our products are particularly
sensitive to reductions in elective medical procedures. It is not
possible to predict whether elective medical procedures will be
suspended or reduced in the future and, to the extent individuals
and customers are required to delay or cancel elective
procedures, our business, cash flows, financial condition and
results of operations could be negatively affected. Further, our
customers have experienced, and may continue to experience,
staffing shortages that may result in decreased demand for our
products, which could negatively affect our business and financial
results.
Unpredictable increases in demand for certain of our products
have exceeded in the past, and could exceed in the future, our
capacity to meet such demand timely, which could adversely
affect our customer relationships and result in negative publicity.
In this regard, the accelerated development and production of
products and services to address medical and other requirements
could increase the risk of regulatory enforcement actions, product
defects or related claims or reputational harm, among other
things.
Our use of AI and other emerging technologies could
adversely impact our business and financial results: We
have begun to deploy AI and other emerging technologies in
various facets of our operations and products and we continue to
explore further use cases. The rapid advancement of these
technologies presents opportunities for us in research,
manufacturing, commercialization, and other business
endeavors, but also entails risks, including that AI-generated
content, analyses, or recommendations we utilize could be
deficient, that our competitors may more quickly or effectively
adopt AI capabilities, or that our use of AI or other emerging
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| STRYKER CORPORATION | 2025 FORM 10-K | |
technologies increases regulatory, cybersecurity and other
significant risks. In addition, any disruption or failure in the AI
functionality we incorporate into our business activities, products
or services could adversely impact our business or result in
delays or errors in our product offerings. The legal and regulatory
landscape surrounding AI technologies is rapidly evolving and
uncertain, including in the areas of intellectual property,
cybersecurity and privacy and data protection. Compliance with
new or changing laws, regulations or industry standards relating
to AI may impose significant costs on us and limit our ability to
effectively develop, deploy or use AI technologies. Furthermore, if
we are unable to effectively manage the use of AI technologies
by our employees and service providers, our confidential
information, intellectual property and reputation could be put at
risk. Failure to appropriately respond to this evolving landscape
may result in reputational, competitive and business harm as well
as litigation and regulatory action and fines, penalties and
expenses related thereto.
Pandemics and public health emergencies, and the fear
thereof, have in the past materially adversely affected and
could in the future materially adversely affect, our
operations, supply chain, manufacturing, product
distribution, customers and other business activities:
Pandemics and public health emergencies, and the fear thereof,
have in the past materially adversely affected and could in the
future materially adversely affect, our operations, supply chain,
manufacturing, product distribution, customers and other
business activities:
In connection with prior pandemics, governmental authorities and
private enterprises implemented, and may in the future
implement in connection with another pandemic or public health
emergency (or in response to the fear thereof), measures, such
as travel bans and restrictions, quarantines, shelter-in-place
orders and shutdowns. Our customers, global suppliers,
distributors and manufacturing facilities have in the past been,
and could in the future be, materially affected by restrictive
measures implemented in response to a pandemic or public
health emergency, which has in the past caused and could in the
future cause them to be unable to hire and retain employees,
distribute or use our products or provide required services. We
have as a result experienced, and could in the future experience,
delays in, or the suspension of, our manufacturing operations,
sales activities, research and product development activities,
regulatory work streams, clinical development programs and
other important commercial functions, which may result in our
inability to satisfy consumer demand for our products in a timely
manner or at all and which could harm our reputation, future
sales and profitability. The extent of any future pandemic or
public health emergencys effect on our business and industry will
depend on, among other things, the severity of the disease, the
successful development, distribution and acceptance of vaccines
for diseases, future resurgences and/or the spread of disease
variants, all of which are uncertain and difficult to predict. The
COVID-19 pandemic materially impacted us, and any future
pandemic or public health emergency could materially impact us
and would heighten many of the other risks described in this
report.
LEGAL AND REGULATORY RISKS
Current economic and political conditions make tax rules in
jurisdictions subject to significant change: 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. In addition, further changes in
the tax laws could arise, including as a result of the base erosion
and profit shifting project undertaken by the Organisation for
Economic Cooperation and Development (OECD). The OECD,
which represents a coalition of member countries, has put forth
two proposed frameworks that revise the existing profit allocation
and nexus rules (Pillar 1) and ensure a minimal level of taxation
(Pillar 2), respectively, and several countries enacted tax
legislation based on these frameworks. In January 2026 the
OECD released Administrative Guidance containing the Side-by-
Side system (SbS System) and introduced two new Pillar 2 safe
harbors for multinationals headquartered in jurisdictions including
the United States with eligible tax systems. The safe harbors
must now be legislated domestically by each country with
enacted Pillar 2 legislation impacted by the new OECD
Administrative Guidance. These tax law changes and any
additional contemplated tax law changes could impact tax
expense in future periods.
We could be negatively impacted by future changes in the
allocation of income to each of the income tax jurisdictions
in which we operate: We operate in multiple income tax
jurisdictions both in the United States and internationally.
Accordingly, our management must determine the appropriate
allocation of income to each jurisdiction based on current
interpretations of complex income tax regulations. Income tax
authorities regularly perform audits of our income tax filings.
Income tax audits associated with the allocation of income and
other complex issues, including inventory transfer pricing and
cost sharing, product royalty and foreign branch arrangements,
may require an extended period to resolve and may result in
significant income tax adjustments including the assessment of
additional income taxes, interest and penalties. For example, we
received a final audit report and assessments from the German
Federal Central Tax Office ("FCTO") related to audits of tax years
2010 through 2017. Although we intend to defend our filing
positions through the FCTO independent appeals process and, if
necessary, litigation, there can be no assurance that we will be
successful. If the resolution of this matter results in additional
German income taxes, we intend to seek associated foreign tax
credits, but such credits may not be available on a timely basis or
at all, or may not fully offset any additional liability. Any such
outcome could materially adversely affect our business, financial
condition and results of operations. See Note 11 to our
Consolidated Financial Statements for more information.
The impact of healthcare reform legislation on our business
remains uncertain: Several markets where we sell our products
are making efforts to expand access to healthcare or health
insurance coverage while decreasing costs. These efforts may
have a direct or unintended negative impact on access to medical
technology and could have a significant effect on our business.
Both in the United States and internationally, governmental
authorities may make legislative or administrative reforms to
existing reimbursement programs, make adverse decisions
relating to our products coverage or reimbursement, or make
changes to patient access to healthcare, all of which could
adversely impact the demand for and usage of our products or
the prices that our customers are willing to pay for them. We
cannot predict what healthcare programs and regulations could
ultimately be implemented at the federal or state level or the
effect that any future legislation or regulation in the United States
may have on our business. Similarly, we cannot predict the
impact that healthcare reform legislation in other countries where
we sell our products may have on our business.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 10 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
We are subject to extensive governmental regulation relating
to the classification, manufacturing, sterilization, licensing,
labeling, marketing and sale of our products: The
classification, manufacturing, sterilization, licensing, labeling,
marketing and sale of our products are subject to extensive and
evolving regulations and rigorous regulatory enforcement by the
FDA, state governments, European Union and other
governmental authorities in the United States and internationally.
These governmental authorities may impose additional
requirements or limits on the methods, procedures or agents we
use to manufacture and sterilize our products, which could have
a negative impact on our business. For example, governmental
authorities in the United States and internationally have or are
considering adopting regulations on the use of per- and
polyfluoroalkyl substances. In addition, the process of obtaining
licenses, regulatory clearances and/or approvals to market and
sell our products can be costly and time consuming and the
clearances and/or approvals might not be granted timely. We
have ongoing responsibilities under the laws and regulations
applicable to the manufacturing of products within our facilities
and those contracted by third parties that are subject to periodic
inspections by the FDA, state Boards of Pharmacy and other
governmental authorities to determine compliance with the quality
system, medical device reporting regulations and other
requirements. We may also be subject to legal obligations in
some countries that require disclosure or sharing of proprietary
information. We incur significant costs to comply with regulations,
including the MDR. If we fail to comply with applicable regulatory
requirements, we may be subject to a range of sanctions,
including substantial fines, warning letters that require corrective
action, product seizures, recalls, import restrictions, the
suspension of product manufacturing or sales, revocation of
approvals, exclusion from future participation in government
healthcare programs, substantial fines and criminal prosecution.
We are subject to federal, state and foreign healthcare
regulations, including anti-bribery, anti-corruption, anti-
kickback and false claims laws, globally and could face
substantial penalties if we fail to comply with such
regulations and laws: The relationships that we, and third
parties that market and/or sell our products, have with healthcare
professionals, such as physicians, hospitals, healthcare
organizations and others, are subject to scrutiny under various
state and federal laws often referred to collectively as healthcare
fraud and abuse laws. In addition, the United States and foreign
government regulators have increased the enforcement of the
Foreign Corrupt Practices Act (FCPA) and other anti-bribery and
anti-kickback laws. We also must comply with a variety of other
laws that impose extensive tracking and reporting related to all
transfers of value provided to certain healthcare professionals
and others. These laws and regulations are broad in scope and
are subject to evolving interpretation and we have in the past
been, and in the future could be, required to incur substantial
costs to investigate, audit and monitor compliance or to alter our
practices. Violations or alleged violations of these laws have in
the past resulted and could in the future result in investigations,
litigation or government proceedings, and we have been and may
in the future be subject to criminal or civil penalties and
sanctions, including substantial fines, imprisonment of current or
former employees and exclusion from participation in
governmental healthcare programs. For example, in 2013 and
2018 we settled claims brought by the SEC related to the FCPA.
Pursuant to these settlements, we paid fines and penalties and
retained an independent compliance consultant. We continue to
implement recommendations that resulted from the independent
compliance consultants review of our commercial practices to
enhance our commercial business practices. In addition, as
disclosed in our prior filings, we were previously contacted by the
SEC, the United States Department of Justice, and other
regulatory authorities involving whether certain business activities
in certain foreign countries violated provisions of the FCPA and
analogous local laws. We have completed our investigation into
these matters. On April 1, 2025, and December 16, 2025, we
were informed by the DOJ and SEC, respectively, that each
agency had closed its inquiry. We are currently responding to
inquiries by certain foreign authorities arising in the normal
course of business, however, we do not expect these matters to
have a material effect, if any, on our financial statements.
We are subject to privacy, data protection and data security
regulations and laws globally, and could face substantial
penalties if we fail to comply with such regulations and laws:
We are subject to a variety of laws and regulations globally
regarding privacy, data protection and data security, including
those related to the collection, storage, handling, use, disclosure,
transfer and security of personally identifiable healthcare
information and the development and use of AI in sharing certain
data. For example, in the United States, privacy and security
regulations under the Health Insurance Portability and
Accountability Act of 1996, including the expanded requirements
under the Health Information Technology for Economic and
Clinical Health Act of 2009, establish comprehensive standards
with respect to the use and disclosure of protected health
information (PHI), by covered entities, in addition to setting
standards to protect the confidentiality, integrity and security of
PHI. Regulators are also imposing new data privacy and security
requirements, including new and greater monetary fines for
privacy violations. For example, the European Unions General
Data Protection Regulation (GDPR) established rules regarding
the handling of personal data. Non-compliance with the GDPR
may result in monetary penalties of up to 4% of total company
revenue. Various government authorities within the United States
and around the world have imposed or are considering similar
types of laws and regulations, data breach reporting and
penalties for non-compliance or unauthorized disclosure and
increasing security requirements. These laws and regulations are
broad in scope and are subject to evolving interpretation and
enforcement and we have in the past been, and in the future
could be, required to incur substantial costs to monitor
compliance or to alter our practices. As new privacy-related laws
and AI-related regulations are implemented, the time and
resources needed for us to comply with such laws and
regulations, as well as our potential liability for non-compliance
and reporting obligations in the case of data breaches, have
increased and may further increase.
We may be adversely affected by product liability claims,
unfavorable court decisions or legal settlements: We are
exposed to potential product liability risks inherent in the design,
manufacture and marketing of medical devices, many of which
are implanted in the human body for long periods of time or
indefinitely. We are currently defendants in a number of product
liability matters, including those relating to our Rejuvenate and
ABGII Modular-Neck hip stems, LFIT Anatomic CoCr V40
Femoral Heads and the product liability lawsuits and claims
relating to Wright Medical Group N.V. (Wright) legacy hip
products discussed in Note 7 to our Consolidated Financial
Statements. These matters are subject to uncertainties and
outcomes are not predictable. Further, the European
Representative Actions Directive (the Collective Redress
Directive) mandates a class action regime in each EU member
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 11 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
state to facilitate domestic and cross-border class actions in a
wide range of areas, including product liability claims with
medical devices. The European Product Liability Directive was
revised in 2024 and will become fully adopted into each member
states national laws by December 9, 2026. The revised Product
Liability Directive and Collective Redress Directive exposes us to
additional litigation risks and could result in significant legal
expenses. In addition, we may incur significant legal expenses or
reputational damage for product liability claims regardless of
whether we are found to be liable.
Intellectual property litigation and infringement claims could
cause us to incur significant expenses or prevent us from
selling certain of our products: The medical device industry is
characterized by extensive intellectual property litigation and,
from time to time, we are the subject of claims of infringement or
misappropriation. Regardless of the outcome, such claims are
expensive to defend and divert management and operating
personnel from other business issues. A successful claim or
claims of patent or other intellectual property infringement against
us could result in payment of significant monetary damages and/
or royalty payments or negatively impact our ability to sell current
or future products in the affected category.
Dependence on intellectual proprietary rights and failing to
protect such rights or to be successful in litigation related to
such rights may impact offerings in our product portfolios:
Our long-term success largely depends on our ability to market
technologically competitive products. If we fail to obtain or
maintain adequate intellectual property protection, it could allow
others to sell products that directly compete with proprietary
features in our product portfolio. Also, our issued patents may be
subject to claims challenging their validity and scope and raising
other issues. In addition, currently pending or future patent
applications may not result in issued patents and the expiration of
patents may lead to a loss of exclusive rights and/or increased
competition.
MARKET RISKS
We have exposure to exchange rate fluctuations on cross border
transactions and translation of local currency results into United
States Dollars: We report our financial results in United States
Dollars and approximately 24% of our net sales are denominated
in foreign currencies, including the Australian Dollar, British
Pound, Canadian Dollar, Euro and Japanese Yen. Cross border
transactions with external parties, financing transactions in
currencies other than the United States Dollar and intercompany
relationships result in increased exposure to foreign currency
exchange effects. While we use derivative instruments to
manage the impact of currency exchange, our hedging strategies
may not be successful, and our unhedged exposures continue to
be subject to currency fluctuations. In addition, the weakening or
strengthening of the United States Dollar results in favorable or
unfavorable translation effects when the results of our foreign
locations are translated into United States Dollars. Currency
exchange rates continue to be volatile, and these currency
fluctuations have affected, and may continue to affect, our results
of operations.
Additional capital that we may require in the future may not
be available to us or may only be available to us on
unfavorable terms, which could negatively affect our
liquidity: Our future capital requirements will depend on many
factors, including operating requirements, current and future
acquisitions and the need to refinance existing debt. Our ability to
issue additional debt or enter into other financing arrangements
on acceptable terms could be adversely affected by our debt
levels, unfavorable changes in economic conditions or
uncertainties that affect the capital markets. Changes in credit
ratings issued by nationally recognized credit rating agencies
could also adversely affect our access to and cost of financing.
Higher borrowing costs or the inability to access capital markets
could adversely affect our ability to support future growth and
operating requirements. In addition, we have experienced, and
could in the future experience, loss of sales and profits due to
delayed payments or insolvency of healthcare professionals,
hospitals and other customers and suppliers facing liquidity
issues due to the current macroeconomic environment, type and
number of conditions being treated or for other reasons. As a
result, we may be compelled to take additional measures to
preserve our cash flow, including through the reduction of
operating expenses or suspension of dividend payments.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE RISKS
We could be negatively impacted by evolving requirements
and expectations related to corporate responsibility and
sustainability-related matters, including those related to
climate: Governments, investors, customers, employees and
other stakeholders have been focused on corporate responsibility
practices and disclosures, and expectations in this area continue
to rapidly evolve, including in diverging directions. On occasion,
we announce new initiatives and make disclosures, including
goals, relating to various corporate responsibility matters.
Implementation of these initiatives involves risks and
uncertainties, requires investments and depends in part on third-
party performance or data that is outside our control. We cannot
guarantee that we will achieve our announced corporate
responsibility initiatives. If we fail or are perceived to have failed
to achieve previously announced initiatives or goals, comply with
corporate responsibility laws and regulations, meet evolving
expectations or accurately disclose our progress, we could face
legal and regulatory proceedings and our reputation, business,
financial condition and results of operations could be adversely
impacted. Furthermore, there is no guarantee that we will satisfy
the evolving and diverging expectations of our various
stakeholders on corporate responsibility matters, and a failure to
satisfy the expectations of any key stakeholder group could result
in, among other things, reduced demand for our products,
reduced profits, increased investigations and litigation and an
increased risk of reputational damage. If we are unable to satisfy
evolving and diverging expectations on these matters, certain
investors and other stakeholders may conclude that our policies
and/or actions with respect to corporate responsibility matters are
inadequate or undesirable.
Physical weather events, as well as legal, regulatory or
market measures related to environmental, climate and other
sustainability matters, could adversely affect our operations
and operating results: Weather-related events and evolving
environmental conditions may result in operational, supply chain
and infrastructure disruptions. Such events, including hurricanes,
tornadoes, wildfires, droughts, extreme temperatures, flooding,
and other natural disasters, could damage our facilities and
products, or those of our suppliers, disrupt manufacturing and
distribution, reduce workforce availability, increase raw material
and component costs, increase liabilities, or adversely affect the
operations of hospitals, medical care facilities and other
customers, any of which could negatively impact our results of
operations. In addition, sustainability-related matters continue to
be the subject of regulatory, legal and market attention.
Regulatory requirements and enforcement approaches may
evolve, differ by jurisdiction, or change over time, including
through the adoption, modification, interpretation, or enforcement
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 12 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
of environmental laws and regulations. Such developments may
increase compliance costs, create uncertainty, affect raw material
availability and sourcing, require operational changes, or
otherwise adversely affect our manufacturing, supply chain,
distribution activities or operating results.
| |
| ITEM1B. | UNRESOLVED STAFF COMMENTS. | |
None.
| |
| ITEM1C. | CYBERSECURITY. | |
RISK MANAGEMENT AND STRATEGY
We review cybersecurity risk as part of our overall enterprise risk
management program. This ensures that cybersecurity risk
management remains a top priority in our business strategy and
operations.
MANAGEMENT'S ROLE IN MANAGING RISK
Primary management responsibility for assessing, monitoring and
managing our cybersecurity risks rests with our chief information
security officer ("CISO"). Our current CISO has over 30 years of
experience in information technology and cybersecurity in the
United States military, retail and healthcare sectors and oversees
our team of cybersecurity professionals. The CISO is regularly
informed about recent developments in cybersecurity, including
potential threats and innovative risk management techniques.
The CISO implements and oversees processes for the regular
monitoring of our information systems. We use various tools and
methodologies to manage cybersecurity risk that are tested
regularly. We also monitor and evaluate our cybersecurity
posture and performance on an ongoing basis through regular
vulnerability scans, penetration tests and threat intelligence
feeds. In addition, we engage third-party consultants to conduct
annual cybersecurity assessments and to conduct audits for
compliance with regulatory, Sarbanes-Oxley Act, Service
Organization Control Type 2 and International Organization for
Standardization standards. We also engage third parties to
assess our cybersecurity maturity and risk management
programs.
We use a cross-departmental approach to addressing
cybersecurity risk, with our cybersecurity, product security and
legal teams presenting quarterly on key topics to a committee of
leaders in technology, legal, finance, regulatory and corporate
affairs functions. This leadership committee meets quarterly to
ensure that we have input and oversight from critical
stakeholders into our cybersecurity program and evolving issues.
The CISO oversees a training and awareness program for
employees to take part in protecting the Company against
cybersecurity risks. We have implemented annual mandatory
security education to help employees understand cybersecurity
risks and comply with our cybersecurity policies. Additionally, we
provide frequent communications around pertinent cybersecurity
topics and policies to all employees. We also provide additional
cybersecurity and data protection training to employees in certain
roles.
As part of our cybersecurity risk management program, we also
conduct cybersecurity, data protection, and privacy assessments
on all third parties who integrate with Strykers data, network,
systems and products. We use a combination of internal and
external tools to confirm that these third parties meet our security
requirements. We leverage standard industry threat model and
privacy impact assessment concepts to confirm that data
minimization and adequate data protections are in place. We
perform supplemental reviews as necessary, commensurate with
the risk associated with each vendor.
In the event of a cybersecurity incident, we have an incident
response plan that includes immediate actions to mitigate the
impact and long-term strategies for remediation and prevention of
future incidents. The cybersecurity and product security teams
routinely practice this plan with functions across the organization.
We conduct tabletop exercises with senior management, during
which we practice the procedures in place to ensure that
potentially material cybersecurity risks and incidents are
escalated to management and the Board of Directors where
applicable.
GOVERNANCE
Cybersecurity risks are overseen by the full Board of Directors
and the Audit Committee. The Audit Committee is central to the
Board of Directors oversight of cybersecurity risks and bears the
primary responsibility for overseeing cybersecurity risk. The Audit
Committee actively participates in strategic decisions related to
cybersecurity, offering guidance and approval for major
cybersecurity initiatives. This involvement ensures that
cybersecurity considerations are integrated into our broader
strategic objectives.
Our CISO provides comprehensive updates to the Audit
Committee at least three times a year and the full Board of
Directors periodically. These briefings include a range of topics,
including:
Current cybersecurity landscape and emerging threats
Status of ongoing cybersecurity initiatives and strategies
Incident reports and learnings from any cybersecurity events
Metrics demonstrating company and industry-standard
prevention of common threats; and
Regulatory changes impacting cybersecurity requirements
and strategy.
The Board of Directors is aware of the critical nature of managing
risks associated with cybersecurity threats and is actively
engaged in our cybersecurity risk management strategy.
RISKS FROM CYBERSECURITY THREATS
Although cybersecurity risks have not materially affected us,
including our business strategy, results of operations or financial
condition, to date, we face numerous and evolving cybersecurity
threats in our business. For more information about the
cybersecurity risks we face, see the risk factor entitled "We, our
business partners or our third-party vendors could experience a
material failure or breach of a key information technology system,
network, process or site" in Item 1A. Risk Factors.
| |
| ITEM2. | PROPERTIES. | |
We have approximately 27 company-owned and 306 leased
locations worldwide including 55 manufacturing locations. We
believe that our properties are in good operating condition and
adequate for the manufacture and distribution of our products.
We do not anticipate difficulty in renewing existing leases as they
expire or in finding alternative facilities.
| |
| ITEM3. | LEGAL PROCEEDINGS. | |
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 Notes 7 and 11 to our Consolidated
Financial Statements for further information.
| |
| ITEM4. | MINE SAFETY DISCLOSURES. | |
Not applicable.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 13 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| PART II | |
| |
| ITEM5. | MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. | |
Our common stock is traded on the New York Stock Exchange
under the symbol SYK.
Our Board of Directors considers payment of cash dividends at
its quarterly meetings. On January31, 2026 there were 2,323
shareholders of record of our common stock.
We did not repurchase any shares in the three months ended
December31, 2025 and the total dollar value of shares that could
be acquired under our authorized repurchase program at
December31, 2025 was $1,033.
In the fourth quarter 2025 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 are not events
of sale within the meaning of Section 2(a)(3) of the Act.
The following graph compares our total returns (including
reinvestment of dividends) against the Standard& Poors (S&P)
500 Index and the S&P 500 Health Care Index. The graph
assumes $100 (not in millions) invested on December31, 2020 in
our common stock and each of the indices.
| |
| Company / Index | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
| Stryker Corporation | $100.00 | $110.22 | $102.05 | $126.33 | $153.30 | $151.03 | |
| S&P 500 Index | $100.00 | $128.71 | $105.40 | $133.10 | $166.40 | $196.16 | |
| S&P 500 Health Care Index | $100.00 | $126.13 | $123.67 | $126.21 | $129.46 | $148.36 | |
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 14 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| ITEM6. | SELECTED FINANCIAL DATA. | |
| |
| Statement of Earnings Data | 2025 | 2024 | 2023 | 2022 | 2021 | |
| Net sales | $25,116 | $22,595 | $20,498 | $18,449 | $17,108 | |
| Cost of sales | 9,051 | 8,155 | 7,440 | 6,871 | 6,140 | |
| Gross profit | $16,065 | $14,440 | $13,058 | $11,578 | $10,968 | |
| Research, development and engineering expenses | 1,623 | 1,466 | 1,388 | 1,454 | 1,235 | |
| Selling, general and administrative expenses | 8,651 | 7,685 | 7,111 | 6,386 | 6,266 | |
| Amortization of intangible assets | 732 | 623 | 635 | 627 | 619 | |
| Goodwill and other impairments | 170 | 977 | 36 | 270 | 264 | |
| Total operating expenses | $11,176 | $10,751 | $9,170 | $8,737 | $8,384 | |
| Operating income | $4,889 | $3,689 | $3,888 | $2,841 | $2,584 | |
| Interest expense | (607) | (409) | (363) | (341) | (354) | |
| Other income | 232 | 212 | 148 | 183 | 51 | |
| Earnings before income taxes | $4,514 | $3,492 | $3,673 | $2,683 | $2,281 | |
| Income taxes | 1,268 | 499 | 508 | 325 | 287 | |
| Net earnings | $3,246 | $2,993 | $3,165 | $2,358 | $1,994 | |
| |
| Net earnings per share of common stock: | |
| Basic | $8.49 | $7.86 | $8.34 | $6.23 | $5.29 | |
| Diluted | $8.40 | $7.76 | $8.25 | $6.17 | $5.21 | |
| |
| Dividends declared per share of common stock | $3.400 | $3.240 | $3.050 | $2.835 | $2.585 | |
| |
| Balance Sheet Data | |
| Cash, cash equivalents and current marketable securities | $4,100 | $3,743 | $3,053 | $1,928 | $3,019 | |
| Accounts receivable, net | 4,039 | 3,987 | 3,765 | 3,565 | 3,022 | |
| Inventories | 5,310 | 4,774 | 4,843 | 3,995 | 3,314 | |
| Property, plant and equipment, net | 3,876 | 3,448 | 3,215 | 2,970 | 2,833 | |
| Total assets | $47,844 | $42,971 | $39,912 | $36,884 | $34,631 | |
| Accounts payable | 1,799 | 1,679 | 1,517 | 1,413 | 1,129 | |
| Total debt | 15,859 | 13,597 | 12,995 | 13,048 | 12,479 | |
| Shareholders equity | $22,420 | $20,634 | $18,593 | $16,616 | $14,877 | |
| |
| Cash Flow Data | |
| Net cash provided by operating activities | $5,044 | $4,242 | $3,711 | $2,624 | $3,263 | |
| Purchases of property, plant and equipment | 761 | 755 | 575 | 588 | 525 | |
| Depreciation | 461 | 427 | 393 | 371 | 371 | |
| Acquisitions, net of cash acquired | 4,960 | 1,628 | 390 | 2,563 | 339 | |
| Amortization of intangible assets | 732 | 623 | 635 | 627 | 619 | |
| Payments of dividends | 1,284 | 1,219 | 1,139 | 1,051 | 950 | |
| |
| Other Data | |
| Number of shareholders of record | 2,334 | 2,520 | 2,518 | 2,533 | 2,551 | |
| Approximate number of employees | 56,000 | 53,000 | 52,000 | 51,000 | 46,000 | |
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 15 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| ITEM7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. | |
About Stryker
Stryker is a global leader in medical technologies and, together
with our customers, we are driven to make healthcare better. We
offer innovative products and services in MedSurg,
Neurotechnology, and Orthopaedics that help improve patient
and healthcare outcomes. Alongside our customers around the
world, we impact more than 150 million patients annually. 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.
We segregate our operations into two reportable business
segments: (i) MedSurg and Neurotechnology and (ii)
Orthopaedics. MedSurg and Neurotechnology products include
surgical equipment and navigation systems (Instruments),
endoscopic and communications systems (Endoscopy), patient
handling, emergency medical equipment and intensive care
disposable products (Medical), minimally invasive products for
the treatment of acute ischemic and hemorrhagic stroke and
venous thromboembolism (Vascular), a comprehensive line of
products for traditional brain and open skull-based surgical
procedures; orthobiologic and biosurgery products, including
synthetic bone grafts and vertebral augmentation products
(Neuro Cranial). Orthopaedics products consist primarily of
implants used in hip and knee joint replacements and trauma and
extremity surgeries.
Macroeconomic Environment
In 2025 the United States government has announced new tariffs
on goods imported into the United States from dozens of
countries, including China and the European Union member
states. In response, governments have threatened or imposed
reciprocal tariffs or taken other measures, and the United States
is in the process of negotiating with certain governments. We
continue to monitor and evaluate the situation. Tariffs are
expected to continue to result in an increase in certain product
costs or have adverse impacts on, among other things, demand
for our products and supply chains. The overall macroeconomic
and geopolitical environment, including tariffs or changes in trade
policies, slower economic growth or recession, market volatility
and inflation, and uncertainty regarding all of the foregoing, pose
risks that could impact our business and results of operations.
For more information about these risks, see Item 1A. "Risk
Factors."
Overview of 2025
In 2025 we achieved reported net sales growth of 11.2%.
Excluding the impact of acquisitions and divestitures, sales grew
10.3% in constant currency. We reported net earnings of $3,246
and net earnings per diluted share of $8.40. Excluding the impact
of certain items, we achieved adjusted net earnings(1) of $5,267
and adjusted net earnings per diluted share(1) of $13.63
representing growth of 11.8%.
We continued our capital allocation strategy by investing $4,960
in acquisitions and paying $1,284 in dividends to our
shareholders.
In 2025 we completed various acquisitions for total consideration
of $4,960, net of cash acquired. Refer to Note 6 to our
Consolidated Financial Statements for further information.
In February 2025 we entered into a new revolving credit
agreement that replaces our previous agreement dated October
2021. The primary changes included increasing the aggregate
principal amount of the facility by $750 to $3,000 and extending
the maturity date to February 25, 2030. On December31, 2025
there were no borrowings outstanding under our revolving credit
facility or our commercial paper program which allows for
maturities up to 397 days from the date of issuance. The
maximum amount of our commercial paper that can be
outstanding at any time is $3,000.
In February 2025 we issued $500 of 4.550% senior unsecured
notes due February 10, 2027, $700 of 4.700% senior unsecured
notes due February 10, 2028, $800 of 4.850% senior unsecured
notes due February 10, 2030 and $1,000 of 5.200% senior
unsecured notes due February 10, 2035. In the second quarter
2025 we repaid $650 of 1.150% senior unsecured notes and in
the fourth quarter 2025 we repaid $750 of 3.375% senior
unsecured notes.
(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.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 16 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| |
CONSOLIDATED RESULTS OF OPERATIONS
| |
| Percent Net Sales | Percentage Change | |
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | |
| Net sales | $25,116 | $22,595 | $20,498 | 100.0% | 100.0% | 100.0% | 11.2% | 10.2% | |
| Gross profit | 16,065 | 14,440 | 13,058 | 64.0 | 63.9 | 63.7 | 11.3 | 10.6 | |
| Research, development and engineering expenses | 1,623 | 1,466 | 1,388 | 6.5 | 6.5 | 6.8 | 10.7 | 5.6 | |
| Selling, general and administrative expenses | 8,651 | 7,685 | 7,111 | 34.4 | 34.0 | 34.7 | 12.6 | 8.1 | |
| Amortization of intangible assets | 732 | 623 | 635 | 2.9 | 2.8 | 3.1 | 17.5 | (1.9) | |
| Goodwill and other impairments | 170 | 977 | 36 | 0.7 | 4.3 | 0.2 | nm | nm | |
| Interest expense | (607) | (409) | (363) | (2.4) | (1.8) | (1.8) | 48.4 | 12.7 | |
| Other income | 232 | 212 | 148 | 0.9 | 0.9 | 0.8 | 9.4 | 43.2 | |
| Income taxes | 1,268 | 499 | 508 | nm | nm | nm | 154.1 | (1.8) | |
| Net earnings | $3,246 | $2,993 | $3,165 | 12.9% | 13.2% | 15.4% | 8.5% | (5.4)% | |
| |
| Net earnings per diluted share | $8.40 | $7.76 | $8.25 | 8.2% | (5.9)% | |
| Adjusted net earnings per diluted share(1) | $13.63 | $12.19 | $10.60 | 11.8% | 15.0% | |
nm - not meaningful
| |
| Geographic and Segment Net Sales | Percentage Change | |
| 2025 vs. 2024 | 2024 vs. 2023 | |
| 2025 | 2024 | 2023 | As Reported | ConstantCurrency | As Reported | ConstantCurrency | |
| Geographic: | |
| United States | $19,006 | $16,943 | $15,257 | 12.2% | 12.2% | 11.0% | 11.0% | |
| International | 6,110 | 5,652 | 5,241 | 8.1 | 6.4 | 7.9 | 9.8 | |
| Total | $25,116 | $22,595 | $20,498 | 11.2% | 10.7% | 10.2% | 10.7% | |
| Segment: | |
| MedSurg and Neurotechnology | $15,647 | $13,518 | $12,163 | 15.7% | 15.4% | 11.1% | 11.6% | |
| Orthopaedics | 9,469 | 9,077 | 8,335 | 4.3 | 3.8 | 8.9 | 9.4 | |
| Total | $25,116 | $22,595 | $20,498 | 11.2% | 10.7% | 10.2% | 10.7% | |
| |
| |
| Supplemental Net Sales Growth Information | |
| Percentage Change | |
| 2025 vs. 2024 | 2024 vs. 2023 | |
| United States | International | United States | International | |
| 2025 | 2024 | 2023 | As Reported | Constant Currency | As Reported | As Reported | Constant Currency | As Reported | Constant Currency | As Reported | As Reported | Constant Currency | |
| MedSurg and Neurotechnology: | |
| Instruments | $3,183 | $2,834 | $2,534 | 12.3% | 11.9% | 13.0% | 9.5% | 7.5% | 11.9% | 12.1% | 12.5% | 9.5% | 10.6% | |
| Endoscopy | 3,807 | 3,389 | 3,068 | 12.3 | 12.3 | 12.2 | 12.8 | 12.4 | 10.5 | 11.0 | 11.1 | 7.7 | 10.7 | |
| Medical | 4,204 | 3,852 | 3,459 | 9.1 | 8.8 | 10.0 | 4.8 | 2.8 | 11.4 | 11.7 | 14.6 | (2.0) | (0.3) | |
| Vascular | 1,968 | 1,307 | 1,226 | 50.6 | 50.0 | 107.5 | 14.8 | 13.4 | 6.6 | 8.2 | 4.7 | 7.9 | 10.5 | |
| Neuro Cranial | 2,485 | 2,136 | 1,876 | 16.3 | 15.9 | 16.5 | 15.5 | 13.1 | 13.9 | 14.1 | 15.0 | 8.7 | 10.2 | |
| $15,647 | $13,518 | $12,163 | 15.7% | 15.4% | 17.0% | 11.3% | 9.7% | 11.1% | 11.6% | 12.7% | 5.9% | 7.9% | |
| Orthopaedics: | |
| Knees | $2,656 | $2,447 | $2,273 | 8.5% | 8.2% | 7.6% | 11.0% | 9.7% | 7.6% | 8.2% | 6.7% | 10.4% | 12.2% | |
| Hips | 1,865 | 1,704 | 1,544 | 9.5 | 8.9 | 7.4 | 12.9 | 11.2 | 10.3 | 11.3 | 7.2 | 15.9 | 18.4 | |
| Trauma and Extremities | 3,948 | 3,507 | 3,147 | 12.6 | 11.8 | 13.1 | 11.0 | 8.2 | 11.4 | 11.6 | 12.6 | 8.3 | 9.1 | |
| Other | 815 | 712 | 658 | 14.5 | 14.0 | 18.2 | 5.3 | 3.6 | 8.1 | 9.6 | 7.3 | 10.1 | 15.4 | |
| 9,284 | 8,370 | 7,622 | 10.9% | 10.3% | 10.9% | 11.0% | 9.0% | 9.8% | 10.4% | 9.3% | 10.9% | 12.8% | |
| Spinal Implants | 185 | 707 | 713 | (73.9) | (73.9) | (76.0) | (69.3) | (69.2) | (0.7) | (0.3) | (2.1) | 2.5 | 3.8 | |
| $9,469 | $9,077 | $8,335 | 4.3% | 3.8% | 4.3% | 4.4% | 2.6% | 8.9% | 9.4% | 8.4% | 10.2% | 12.0% | |
| Total | $25,116 | $22,595 | $20,498 | 11.2% | 10.7% | 12.2% | 8.1% | 6.4% | 10.2% | 10.7% | 11.0% | 7.9% | 9.8% | |
| |
| |
Consolidated Net SalesConsolidated net sales in 2025 increased 11.2% as reported and 10.7% in constant currency, as foreign currency exchange rates positively impacted net sales by 0.5%. Excluding the 0.4% impact of acquisitions and divestitures, net sales in constant currency increased by 9.9% from increased unit volume and 0.4% due to higher prices. The unit volume increase was primarily due to higher shipments across all businesses.Consolidated net sales in 2024 increased 10.2% as reported and 10.7% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.5%. Excluding the 0.5% impact of acquisitions and divestitures, net sales in constant currency increased by 9.1% from increased unit volume and 1.1% due to higher prices. The unit volume increase was due to higher shipments across all MedSurg and Neurotechnology businesses and most Orthopaedics businesses.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 17 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
MedSurg and Neurotechnology Net Sales
MedSurg and Neurotechnology net sales in 2025 increased
15.7% as reported and 15.4% in constant currency, as foreign
currency exchange rates positively impacted net sales by 0.3%.
Excluding the 4.7% impact of acquisitions and divestitures, net
sales in constant currency increased by 10.0% from increased
unit volume and 0.7% due to higher prices. The unit volume
increase was due to higher shipments across all MedSurg and
Neurotechnology businesses.
MedSurg and Neurotechnology net sales in 2024 increased
11.1% as reported and 11.6% in constant currency, as foreign
currency exchange rates negatively impacted net sales by 0.5%.
Excluding the 0.4% impact of acquisitions and divestitures, net
sales in constant currency increased by 9.5% from increased unit
volume and 1.7% due to higher prices. The unit volume increase
was due to higher shipments across all MedSurg and
Neurotechnology businesses.
Orthopaedics Net Sales
Orthopaedics net sales in 2025 increased 4.3% as reported and
3.8% in constant currency, as foreign currency exchange rates
positively impacted net sales by 0.5%. Excluding the 5.7% impact
of acquisitions and divestitures, net sales in constant currency
increased by 9.6% from increased unit volume partially offset by
0.1% due to lower prices. The unit volume increase was due to
higher shipments across most Orthopaedics businesses.
Orthopaedics net sales in2024increased 8.9% as reported and
9.4% in constant currency, as foreign currency exchange rates
negatively impacted net sales by 0.5%. Excluding the 0.7%
impact of acquisitions and divestitures, net sales in constant
currency increased by 8.7% from increased unit volume. The unit
volume increase was due to higher shipments across all
Orthopaedics businesses.
Gross Profit
Gross profit was $16,065, $14,440 and $13,058 in 2025, 2024,
and 2023. The key components of the change were:
| |
| Gross Profit Percent Net Sales | |
| 2023 | 63.7% | |
| Sales pricing | 40 bps | |
| Volume and mix | 60 bps | |
| Manufacturing and supply chain costs | (40) bps | |
| Inventory stepped up to fair value | (20) bps | |
| Structural optimization and other special charges | (20) bps | |
| 2024 | 63.9% | |
| Sales pricing | 10 bps | |
| Volume and mix | 70 bps | |
| Manufacturing and supply chain costs | 0 bps | |
| Inventory stepped up to fair value | (60) bps | |
| Structural optimization and other special charges | (10) bps | |
| 2025 | 64.0% | |
Gross profit as a percentage of net sales increased to 64.0% in
2025 from 63.9% in 2024 primarily due to higher sales pricing
and favorable volume partially offset by higher amortization of
inventory stepped up to fair value.
Gross profit as a percentage of net sales increased to 63.9% in
2024 from 63.7% in 2023 due to higher sales pricing and
favorable volume offset by higher manufacturing and supply
chain costs primarily due to inflationary pressures impacting fixed
and variable manufacturing costs as well as higher amortization
of inventory stepped up to fair value.
While segment mix was not a significant driver of the change in
gross profit as a percent of net sales between 2025, 2024 and
2023, 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 as a
percentage of net sales in 2025 of 6.5% remained flat with 2024.
Research, development and engineering expenses as a
percentage of net sales in 2024 decreased to 6.5% from 6.8% in
2023 primarily due to lower spend on medical device regulations
in the European Union.
Selling, General and Administrative Expenses
Selling, general and administrative expenses as a percentage of
net sales in 2025 increased to 34.4% from 34.0% in 2024
primarily due to higher acquisition-related costs and continued
investments to support our growth. A charge of $139 for share-
based awards for Inari employees that vested upon our
acquisition is included in 2025.
Selling, general and administrative expenses as a percentage of
net sales in 2024 decreased to 34.0% from 34.7% in 2023
primarily due to continued spend discipline and lower charges for
structural optimization and certain legal matters partially offset by
higher acquisition-related costs.
Amortization of Intangible Assets
Amortization of intangible assets was $732, $623 and $635 in
2025, 2024 and 2023. These amounts include amortization
related to intangible assets acquired in 2025 from Inari, 2024
from various acquisitions and 2023 from Cerus Endovascular
Limited (Cerus). Refer to Notes 6 and 8 to our Consolidated
Financial Statements for further information.
Goodwill and Other Impairments
Goodwill and other impairments of $170, $977 and $36 were
recorded in 2025, 2024 and 2023.
In 2024 we recorded goodwill impairment charges of $456 related
to our Spine business and recognized an estimated loss of $362
as a result of classifying certain assets in our Spinal Implants
business as held for sale. Refer to Notes 8 and 16 to our
Consolidated Financial Statements for further information.
In 2025, 2024 and 2023 we recorded other impairments of $109,
$159 and $36. Refer to Note 15 to our Consolidated Financial
Statements for further information.
Operating Income
Operating income was $4,889, $3,689 and $3,888 in 2025, 2024
and 2023. Operating income increased as a percentage of sales
to 19.5% in 2025 from 16.3% in 2024 and increased from 19.0%
in 2023. Refer to the comments above for discussion of the
primary drivers of the change.
MedSurg and Neurotechnology operating income as a
percentage of net sales increased to 29.9% in 2025 from 29.6%
in 2024. MedSurg and Neurotechnology operating income as a
percentage of net sales increased to 29.6% in 2024 from 28.5%
in 2023. Orthopaedics operating income as a percentage of net
sales increased to 29.8% in 2025 from 28.5% in 2024.
Orthopaedics operating income as a percentage of net sales
increased to 28.5% in 2024 from 27.2% in 2023. The key
components of the change were:
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 18 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| Operating IncomePercent Net Sales | |
| MedSurg and Neurotechnology | Orthopaedics | |
| 2023 | 28.5% | 27.2% | |
| Sales pricing | 70 bps | 0 bps | |
| Volume | 40 bps | 70 bps | |
| Manufacturing and supply chain costs | (40) bps | (20) bps | |
| Research, development and engineering expenses | 0 bps | 10 bps | |
| Selling, general and administrative expenses | 40 bps | 70 bps | |
| 2024 | 29.6% | 28.5% | |
| Sales pricing | 30 bps | 0 bps | |
| Volume | 90 bps | 30 bps | |
| Manufacturing and supply chain costs | 80 bps | (90) bps | |
| Research, development and engineering expenses | (30) bps | 50 bps | |
| Selling, general and administrative expenses | (140) bps | 140 bps | |
| 2025 | 29.9% | 29.8% | |
The increase in MedSurg and Neurotechnology operating income
as a percentage of net sales in 2025 from 2024 was primarily
driven by higher unit volumes and prices, and lower
manufacturing and supply chain costs partially offset by higher
selling, general and administrative expenses due to the
acquisition of Inari.
The increase in MedSurg and Neurotechnology operating income
as a percentage of net sales in 2024 from 2023 was primarily
driven by higher unit volumes, higher prices and a decrease in
selling, general and administrative expenses as a percentage of
sales partially offset by higher manufacturing and supply chain
costs.
The increase in Orthopaedics operating income as a percentage
of net sales for 2025 from 2024 was primarily by driven lower
selling, general and administrative expenses and higher unit
volumes partially offset by higher manufacturing and supply chain
costs.
The increase in Orthopaedics operating income as a percentage
of net sales for 2024 from 2023 was primarily driven by higher
sales volumes and a decrease in selling, general and
administrative expenses as a percentage of sales partially offset
by higher manufacturing and supply chain costs.
Interest Expense
Interest expense was $607, $409 and $363 in 2025, 2024 and
2023. The increase in 2025 from 2024 was due to increased
interest expense from our 2025 debt issuances. The increase in
2024 from 2023 was primarily due to the impact of additional
interest expense from our 2024 debt issuances.
Other Income
Other income was $232, $212 and $148 in 2025, 2024 and 2023.
The increase in 2025 from 2024 was primarily due to higher
interest income in 2025. The increase in 2024 from 2023 was
primarily due to higher interest income.
Income Taxes
Our effective tax rate was 28.1%, 14.3% and 13.8% for 2025,
2024 and 2023. The effective income tax rate for 2025 increased
from 2024 due to the 2025 tax effect of transfers of intellectual
property between tax jurisdictions and the 2024 tax effect of the
sale of the Spinal Implants business. The effective income tax
rate for 2024 increased from 2023 due to the 2023 tax effect of
transfers of intellectual property between tax jurisdictions offset
by the 2024 tax effect of the sale of the Spinal Implants business.
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. In
addition, further changes in the tax laws could arise, including as
a result of the base erosion and profit shifting project undertaken
by the Organisation for Economic Cooperation and Development
(OECD). The OECD, which represents a coalition of member
countries, has put forth two proposed frameworks that revise the
existing profit allocation and nexus rules (Pillar 1) and ensure a
minimal level of taxation (Pillar 2), respectively, and several
countries enacted tax legislation based on these frameworks. In
January 2026, the OECD released Administrative Guidance
containing the SbS System and introduced two new Pillar 2 safe
harbors for multinationals headquartered in jurisdictions including
the United States with eligible tax systems. The safe harbors
must now be legislated domestically by each country with
enacted Pillar 2 legislation impacted by the new OECD
Administrative Guidance. These tax law changes and any
additional contemplated tax law changes, could impact tax
expense in future periods.
Net Earnings
Net earnings for 2025 increased to $3,246 or $8.40 per diluted
share from $2,993 or $7.76 per diluted share in 2024 and $3,165
or $8.25 per diluted share in 2023. Refer to the comments above
for discussion of 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
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
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 19 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
exclude certain items that affect the comparability of operating
results and the trend of earnings. The income tax effect of each
adjustment was determined based on the tax effect of the
jurisdiction in which the related pre-tax adjustment was recorded.
These adjustments are irregular in timing and may not be
indicative of our past and future performance. The following are
examples of the types of adjustments that may be included in a
period:
1.Acquisition and integration-related costs. Costs related to
integrating recently acquired businesses (e.g., costs
associated with the termination of sales relationships,
employee retention and workforce reductions, manufacturing
integration costs and other integration-related activities),
changes in the fair value of contingent consideration,
amortization of inventory stepped-up to fair value, specific
costs (e.g., deal costs and costs associated with legal entity
rationalization) related to the consummation of the
acquisition process and legal entity rationalization and
acquisition-related tax items.
2.Amortization of purchased intangible assets. Periodic
amortization expense related to purchased intangible assets.
3.Structural optimization and other special charges. Costs
associated with employee retention and workforce
reductions, the closure or transfer of manufacturing and
other facilities (e.g., site closure costs, contract termination
costs and redundant employee costs during the work
transfers), product line exits (primarily inventory, long-lived
asset and specifically-identified intangible asset write-offs),
certain long-lived and intangible asset write-offs and
impairments and other charges.
4.Medical device regulations. Costs specific to updating our
quality system, product labeling, asset write-offs and product
remanufacturing to comply with the new medical device
reporting regulations and other requirements of the
European Union.
5.Recall-related matters. Changes in our best estimate of the
probable loss, or the minimum of the range of probable
losses when a best estimate within a range is not known, to
resolve the Rejuvenate, LFIT V40, Wright legacy hip
products and other product recalls.
6.Regulatory and legal matters. Changes in our best estimate
of the probable loss, or the minimum of the range of
probable losses when a best estimate within a range is not
known, to resolve certain regulatory or other legal matters
and the amount of favorable awards from settlements.
7.Tax matters. Impact of accounting for certain significant and
discrete tax items.
Because non-GAAP financial measures are not standardized, it
may not be possible to compare these financial measures with
other companies' non-GAAP financial measures having the same
or similar names. These adjusted financial measures should not
be considered in isolation or as a substitute for reported sales
growth, gross profit, selling, general and administrative expenses,
research, development and engineering expenses, operating
income, other income (expense), net, income taxes, effective
income tax rate, net earnings and net earnings per diluted share,
the most directly comparable GAAP financial measures. These
non-GAAP financial measures are an additional way of viewing
aspects of our operations when viewed with our GAAP results
and the reconciliations to corresponding GAAP financial
measures at the end of the discussion of Consolidated Results of
Operations below. We strongly encourage investors and
shareholders to review our financial statements and publicly-filed
reports in their entirety and not to rely on any single financial
measure.
The weighted-average diluted shares outstanding used in the
calculation of adjusted net earnings per diluted share are the
same as those used in the calculation of reported net earnings
per diluted share for the respective period.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 20 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| |
Reconciliation of the Most Directly Comparable GAAP Financial Measure to Non-GAAP Financial Measure
| |
| 2025 | Gross Profit | Selling, General & Administrative Expenses | Research, Development & Engineering Expenses | Operating Income | Other Income (Expense), Net | Income Taxes | Net Earnings | EffectiveTax Rate | Diluted EPS | |
| Reported | $16,065 | $8,651 | $1,623 | $4,889 | $(375) | $1,268 | $3,246 | 28.1% | $8.40 | |
| Acquisition and integration-related costs: | |
| Inventory stepped-up to fair value | 173 | | | 173 | | 42 | 131 | 0.3 | 0.34 | |
| Other acquisition and integration-related (a) | 24 | (296) | (15) | 335 | | 36 | 299 | (0.3) | 0.78 | |
| Amortization of purchased intangible assets | | | | 732 | | 151 | 581 | 0.9 | 1.49 | |
| Structural optimization and other special charges (b) | 74 | (113) | (4) | 191 | (27) | 24 | 140 | | 0.37 | |
| Goodwill and other impairments (c) | | | | 170 | | 50 | 120 | 0.5 | 0.31 | |
| Medical device regulations (d) | 1 | | (37) | 38 | | 8 | 30 | 0.1 | 0.08 | |
| Recall-related matters (e) | 54 | (4) | | 58 | | 10 | 48 | | 0.12 | |
| Regulatory and legal matters (f) | | (17) | | 17 | | 5 | 12 | | 0.03 | |
| Tax matters (g) | | | | | | (660) | 660 | (14.5) | 1.71 | |
| Adjusted | $16,391 | $8,221 | $1,567 | $6,603 | $(402) | $934 | $5,267 | 15.1% | $13.63 | |
| |
| 2024 | Gross Profit | Selling, General & Administrative Expenses | Research, Development & Engineering Expenses | Operating Income | Other Income (Expense), Net | Income Taxes | Net Earnings | EffectiveTax Rate | Diluted EPS | |
| Reported | $14,440 | $7,685 | $1,466 | $3,689 | $(197) | $499 | $2,993 | 14.3% | $7.76 | |
| Acquisition and integration-related costs: | |
| Inventory stepped-up to fair value | 46 | | | 46 | | 12 | 34 | 0.2 | 0.09 | |
| Other acquisition and integration-related (a) | | (107) | (1) | 108 | | 23 | 85 | 0.2 | 0.22 | |
| Amortization of purchased intangible assets | | | | 623 | | 128 | 495 | 1.0 | 1.28 | |
| Structural optimization and other special charges (b) | 59 | (77) | (2) | 138 | 1 | 29 | 110 | 0.3 | 0.29 | |
| Goodwill and other impairments (c) | | | | 977 | | 125 | 852 | (0.6) | 2.21 | |
| Medical device regulations (d) | 9 | | (49) | 58 | | 14 | 44 | 0.1 | 0.11 | |
| Recall-related matters (e) | 11 | (29) | | 40 | | 10 | 30 | 0.1 | 0.08 | |
| Regulatory and legal matters (f) | | (36) | | 36 | | 7 | 29 | 0.1 | 0.08 | |
| Tax matters (g) | | | | | | (28) | 28 | (0.9) | 0.07 | |
| Adjusted | $14,565 | $7,436 | $1,414 | $5,715 | $(196) | $819 | $4,700 | 14.8% | $12.19 | |
| |
| 2023 | Gross Profit | Selling, General & Administrative Expenses | Research, Development & Engineering Expenses | Operating Income | Other Income (Expense), Net | Income Taxes | Net Earnings | EffectiveTax Rate | Diluted EPS | |
| Reported | $13,058 | $7,111 | $1,388 | $3,888 | $(215) | $508 | $3,165 | 13.8% | $8.25 | |
| Acquisition and integration-related costs: | |
| Inventory stepped-up to fair value | | | | | | | | | | |
| Other acquisition and integration-related (a) | | (20) | | 20 | | (25) | 45 | (0.8) | 0.12 | |
| Amortization of purchased intangible assets | | | | 635 | | 132 | 503 | 1.2 | 1.31 | |
| Structural optimization and other special charges (b) | 39 | (130) | (1) | 170 | | 38 | 132 | 0.4 | 0.34 | |
| Goodwill and other impairments (c) | | | | 36 | | 9 | 27 | 0.1 | 0.08 | |
| Medical device regulations (d) | 2 | | (94) | 96 | | 22 | 74 | 0.2 | 0.19 | |
| Recall-related matters (e) | | (18) | | 18 | | 4 | 14 | | 0.04 | |
| Regulatory and legal matters (f) | | (92) | | 92 | | 29 | 63 | 0.4 | 0.16 | |
| Tax matters (g) | | | | | (8) | (51) | 43 | (1.2) | 0.11 | |
| Adjusted | $13,099 | $6,851 | $1,293 | $4,955 | $(223) | $666 | $4,066 | 14.1% | $10.60 | |
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
| |
| 2025 | 2024 | 2023 | |
| Termination of sales relationships | $ | $4 | $5 | |
| Employee retention and workforce reductions | 60 | 22 | 6 | |
| Changes in the fair value of contingent consideration | 21 | 8 | (1) | |
| Manufacturing integration costs | 19 | 3 | 2 | |
| Stock compensation payments upon a change in control | 140 | 22 | | |
| Other integration-related activities | 95 | 49 | 8 | |
| Adjustments to Operating Income | $335 | $108 | $20 | |
| Charges for acquisition-related tax provisions | | | | |
| Other income taxes related to acquisition and integration-related costs | 36 | 23 | (25) | |
| Adjustments to Income Taxes | $36 | $23 | $(25) | |
| Adjustments to Net Earnings | $299 | $85 | $45 | |
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 21 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
(b) Structural optimization and other special charges represent the costs associated with:
| |
| 2025 | 2024 | 2023 | |
| Employee retention and workforce reductions | $55 | $23 | $69 | |
| Closure/transfer of manufacturing and other facilities | 31 | 31 | 50 | |
| Product line exits | 13 | 37 | 22 | |
| Termination of sales relationships | 7 | 8 | | |
| Other charges | 85 | 39 | 29 | |
| Adjustments to Operating Income | $191 | $138 | $170 | |
| Adjustments to Other Income (Expense), Net | $(27) | $1 | $ | |
| Adjustments to Income Taxes | $24 | $29 | $38 | |
| Adjustments to Net Earnings | $140 | $110 | $132 | |
(c) Goodwill and other impairments represent the costs associated with:
| |
| 2025 | 2024 | 2023 | |
| Goodwill impairments | $ | $456 | $ | |
| Certain long-lived and intangible asset write-offs and impairments | 114 | 466 | 26 | |
| Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs) | 56 | 55 | 10 | |
| Adjustments to Operating Income | $170 | $977 | $36 | |
| Adjustments to Income Taxes | $50 | $125 | $9 | |
| Adjustments to Net Earnings | $120 | $852 | $27 | |
(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:
| |
| 2025 | 2024 | 2023 | |
| Adjustments related to the transfer of certain intellectual properties between tax jurisdictions | $(718) | $(185) | $(89) | |
| Certain tax audit settlements | | (1) | 24 | |
| Deferred tax benefit on outside basis related to the anticipated sale of the Spinal Implants business | | 170 | | |
| Other tax matters | 58 | (12) | 14 | |
| Adjustments to Income Taxes | $(660) | $(28) | $(51) | |
| Benefits for certain tax audit settlements | | | (9) | |
| Other tax related adjustments | | | 1 | |
| Adjustments to Other Income (Expense), Net | $ | $ | $(8) | |
| Adjustments to Net Earnings | $660 | $28 | $43 | |
FINANCIAL CONDITION AND LIQUIDITY
| |
| Net cash provided by (used in): | 2025 | 2024 | 2023 | |
| Operating activities | $5,044 | $4,242 | $3,711 | |
| Investing activities | (4,866) | (3,000) | (962) | |
| Financing activities | 113 | (525) | (1,594) | |
| Effect of exchange rate changes | 68 | (36) | (28) | |
| Change in cash and cash equivalents | $359 | $681 | $1,127 | |
We believe our financial condition continues to be of high quality,
as evidenced by our ability to generate substantial cash from
operations and to readily access capital markets at competitive
rates despite the current macroeconomic environment. Operating
cash flow provides the primary source of cash to fund operating
needs and capital expenditures. Excess operating cash is used
first to fund acquisitions to complement our portfolio of
businesses. Other discretionary uses include dividends and
potentially share repurchases. We supplement operating cash
flow with debt to fund our activities as necessary. Our overall
cash position reflects our business results and a global cash
management strategy that takes into account liquidity
management, economic factors and tax considerations.
Operating Activities
Cash provided by operating activities was $5,044, $4,242 and
$3,711 in 2025, 2024 and 2023. The increase in 2025 was
primarily due to higher cash earnings and working capital
improvements. The increase in 2024 from 2023 was primarily due
to higher cash earnings partially offset by changes in working
capital.
Investing Activities
Cash used in investing activities was $4,866, $3,000 and $962 in
2025, 2024 and 2023. Cash used in 2025 included cash paid for
the acquisition of Inari, purchases of property, plant and
equipment, partially offset by proceeds from the sale of short
term investments and our Spinal Implants business. Cash used in
2024 included cash paid for various acquisitions and purchases
of short-term investments partially offset by proceeds from other
investing activities.
Financing Activities
Cash provided by financing activities in 2025 was $113 and used
in financing activities in 2024 and 2023 was $525 and $1,594.
Cash provided by 2025 was primarily driven by dividend
payments of $1,284 and repayments of $1,400 to pay off
maturing senior unsecured notes. These repayments were offset
by net proceeds of $2,979 from the issuance of senior unsecured
notes as described in Note 10 to our Consolidated Financial
statements. Cash used in 2024 was primarily driven by dividend
payments of $1,219 and repayments of $2,039 to pay off
maturing senior unsecured notes. These repayments were offset
by net proceeds of $3,011 from issuance of senior unsecured
notes.
We maintain debt levels that we consider appropriate after
evaluating a number of factors including cash requirements for
ongoing operations, investment and financing plans (including
acquisitions and share repurchase activities) and overall cost of
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 22 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
capital. Refer to Note 10 to our Consolidated Financial
Statements for further information.
| |
| 2025 | 2024 | 2023 | |
| Dividends paid per common share | $3.36 | $3.20 | $3.00 | |
| Total dividends paid to common shareholders | $1,284 | $1,219 | $1,139 | |
Liquidity
Cash, cash equivalents and marketable securities were $4,100
and $3,743, and our current assets exceeded current liabilities by
$6,961 and $7,231 on December31, 2025 and 2024. We
anticipate being able to support our short-term liquidity and
operating needs from a variety of sources including cash from
operations, commercial paper and existing credit lines. We also
have a revolving credit agreement maturing in February 2030
with an aggregate principal amount of $3,000.
We raised funds in the capital 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 and marketable securities held in
locations outside the United States was approximately 20% on
December31, 2025 and 2024.
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.
CONTRACTUAL OBLIGATIONS AND FORWARD-LOOKING
CASH REQUIREMENTS
In 2025 we recorded charges for various legal matters as further
described in Note 7 to our Consolidated Financial Statements.
Recorded reserves represent the 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. The final outcome of
these matters is dependent on many variables that are difficult to
predict. The ultimate cost to entirely resolve these matters may
be materially different from the amount of the current estimates
and could have a material adverse effect on our financial
position, results of operations and cash flows. We are not able to
reasonably estimate the future periods in which payments will be
made.
As further described in Note 11 to our Consolidated Financial
Statements, on December31, 2025 we had a reserve for
uncertain income tax positions of $403. Due to uncertainties
regarding the ultimate resolution of income tax audits, we are not
able to reasonably estimate the future periods in which any
income tax payments to settle these uncertain income tax
positions will be made.
As further described in Note 12 to our Consolidated Financial
Statements, on December31, 2025 our defined benefit pension
plans were underfunded by $269, of which approximately $268
related to plans outside the United States. Due to the rules
affecting tax-deductible contributions in the jurisdictions in which
the plans are offered and the impact of future plan asset
performance, changes in interest rates and potential changes in
legislation in the United States and other foreign jurisdictions, we
are not able to reasonably estimate the amounts that may be
required to fund defined benefit pension plans.
| |
| Contractual Obligations | Total | 2026 | 2027-2028 | 2029-2030 | After 2030 | |
| Debt repayments | $15,973 | $1,000 | $3,988 | $4,256 | $6,729 | |
| Interest payments | 4,287 | 536 | 957 | 670 | 2,124 | |
| Minimum lease payments | 524 | 164 | 212 | 93 | 55 | |
| Other | 85 | 6 | 28 | 27 | 24 | |
| Total | $20,869 | $1,706 | $5,185 | $5,046 | $8,932 | |
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
In preparing our financial statements in accordance with
generally accepted accounting principles, there are certain
accounting policies, which may require substantial judgment or
estimation in their application. We believe these accounting
policies and the others set forth in Note 1 to our Consolidated
Financial Statements are critical to understanding our results of
operations and financial condition. Actual results could differ from
our estimates and assumptions, and any such differences could
be material to our results of operations and financial condition.
Income Taxes
Our annual tax rate is determined based on our income, statutory
tax rates and the tax impacts of items treated differently for tax
purposes than for financial reporting purposes. Tax law requires
certain items be included in the tax return at different times than
the items are reflected in the financial statements. Some of these
differences are permanent, such as expenses that are not
deductible in our tax return, and some differences are temporary
and reverse over time, such as depreciation expense. These
temporary differences create deferred tax assets and liabilities.
Deferred tax assets generally represent the tax effect of items
that can be used as a tax deduction or credit in future years for
which we have already recorded the tax benefit in our income
statement. Deferred tax liabilities generally represent tax expense
recognized in our financial statements for which payment was
deferred, the tax effect of expenditures for which a deduction was
taken in our tax return but has not yet been recognized in our
financial statements or assets recorded at fair value in business
combinations for which there was no corresponding tax basis
adjustment.
Inherent in determining our annual tax rate are judgments
regarding business plans, tax planning opportunities and
expectations about future outcomes. Realization of certain
deferred tax assets is dependent upon generating sufficient
taxable income in the appropriate jurisdiction prior to the
expiration of the carryforward periods. Although realization is not
assured, management believes it is more likely than not that our
deferred tax assets, net of valuation allowances, will be realized.
We operate in multiple jurisdictions with complex tax policy and
regulatory environments. In certain of these jurisdictions, we may
take tax positions that management believes are supportable but
are potentially subject to successful challenge by the applicable
taxing authority. These differences of interpretation with the
respective governmental taxing authorities can be impacted by
the local economic and fiscal environment. We evaluate our tax
positions and establish liabilities in accordance with the
applicable accounting guidance on uncertainty in income taxes.
We review these tax uncertainties in light of changing facts and
circumstances, such as the progress of tax audits, and adjust
them accordingly. We have a number of audits in process in
various jurisdictions. Although the resolution of these tax
positions is uncertain, based on currently available information,
we believe that it is more likely than not that the ultimate
outcomes will not have a material adverse effect on our financial
position, results of operations or cash flows.
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| Dollar amounts in millions except per share amounts or as otherwise specified. | 23 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
Due to the number of estimates and assumptions inherent in
calculating the various components of our tax provision, certain
changes or future events, such as changes in tax legislation,
geographic mix of earnings, completion of tax audits or earnings
repatriation plans, could have an impact on those estimates and
our effective tax rate.
We received a final audit report and assessments from the
German Federal Central Tax Office (FCTO) related to the years
2010 through 2017 of $754 and expect to receive additional
assessments of $11 based on the final audit report. We intend to
defend our filing positions through the FCTO independent
appeals process and/or litigation as necessary. If the resolution of
this matter results in additional German income taxes, we expect
to pursue a claim for associated foreign tax credits. Our
unrecognized tax benefits associated with this matter remain
unchanged from 2024. Refer to Note 11 to our Consolidated
Financial Statements for further discussion.
Acquisitions, Goodwill and Intangibles, and Long-Lived
Assets
Our financial statements include the operations of an acquired
business starting from the completion of the acquisition. In
addition, the assets acquired and liabilities assumed are recorded
on the date of acquisition at their respective estimated fair values,
with any excess of the purchase price over the estimated fair
values of the net assets acquired recorded as goodwill.
Significant judgment is required in estimating the fair value of
intangible assets and in assigning their respective useful lives.
Accordingly, we typically obtain the assistance of third-party
valuation specialists for significant items. The fair value estimates
are based on available historical information and on future
expectations and assumptions deemed reasonable by
management but are inherently uncertain. We typically use an
income method to estimate the fair value of intangible assets,
which is based on forecasts of the expected future cash flows
attributable to the respective assets. Significant estimates and
assumptions inherent in the valuations reflect a consideration of
other marketplace participants and include the amount and timing
of future cash flows (including expected growth rates and
profitability), the underlying product or technology life cycles, the
economic barriers to entry and the discount rate applied to the
cash flows. Unanticipated market or macroeconomic events and
circumstances may occur that could affect the accuracy or
validity of the estimates and assumptions.
Determining the useful life of an intangible asset also requires
judgment. With the exception of certain trade names, the majority
of our acquired intangible assets (e.g., certain trademarks or
brands, customer and distributor relationships, patents and
technologies) are expected to have determinable useful lives.
Our assessment as to the useful lives of these intangible assets
is based on a number of factors including competitive
environment, market share, trademark, brand history, underlying
product life cycles, operating plans and the macroeconomic
environment of the countries in which the trademarked or
branded products are sold. Our estimates of the useful lives of
determinable-lived intangibles are primarily based on these same
factors. Determinable-lived intangible assets are amortized to
expense over their estimated useful life.
In some of our acquisitions, we acquire in-process research and
development (IPRD) intangible assets. For acquisitions
accounted for as business combinations, IPRD is considered to
be an indefinite-lived intangible asset until the research is
completed (then it becomes a determinable-lived intangible
asset) or determined to have no future use (then it is impaired).
For asset acquisitions, IPRD is expensed immediately unless
there is an alternative future use.
Indefinite-lived intangible assets and goodwill are not amortized
but are tested annually for impairment or whenever events or
circumstances indicate such assets may be impaired. Our annual
impairment testing date is October 31. When it is unlikely that an
indefinite-lived intangible asset or goodwill of a reporting unit is
impaired, we perform a qualitative assessment. For goodwill, that
qualitative assessment may be periodically supplemented with a
corroborative quantitative analysis.
When necessary, we perform a quantitative impairment test and
determine the fair value of the indefinite-lived intangible asset or
reporting unit using an income approach. For the quantitative
impairment test of goodwill, when appropriate, we corroborate
our concluded value under the income approach using a market
approach that utilizes trading multiples derived from a peer set of
similar companies. The income approach calculates the present
value of estimated future cash flows and requires certain
assumptions and estimates be made regarding market conditions
and our future profitability. Considerable management judgment
is necessary to evaluate the impact of operating and
macroeconomic changes and to estimate future cash flows used
to measure fair value. Assumptions used in our impairment
evaluations, such as forecasted growth rates and cost of capital,
are consistent with internal business plans. We believe such
assumptions and estimates are also comparable to those that
would be used by other marketplace participants.
We review our other long-lived assets for indicators of impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. The evaluation is
performed at the lowest level of identifiable cash flows, which is
at the individual asset level or the asset group level. The
undiscounted cash flows expected to be generated by the related
assets are estimated over their useful life based on updated
projections. If the evaluation indicates that the carrying amount of
the assets may not be recoverable, any potential impairment is
measured based upon the fair value of the related assets or
asset group as determined by an appropriate market appraisal or
other valuation technique. Assets classified as held for sale, if
any, are recorded at the lower of carrying amount or fair value
less costs to sell.
In our annual impairment test of goodwill as of October 31, 2024
we performed a quantitative assessment of the Spine reporting
unit using a discounted cash flow analysis to estimate the fair
value. The carrying value of the Spine reporting unit exceeded its
fair value and a charge of $273 was recognized in goodwill and
other impairments in our Consolidated Statements of Earnings.
The impairment charge for the Spine reporting unit was driven by
a decrease in future product demand due to the competitive
environment and an increase in the Spine reporting units
weighted average cost of capital.
During the fourth quarter 2024 management committed to a plan
to sell certain assets associated with the Spinal Implants
business (disposal group) and such assets were classified as
held for sale beginning November 2024. We tested the net
carrying amounts of other assets, such as working capital
accounts, and determined that there was no impairment as the
fair values of these assets approximated their carrying values.
Goodwill was allocated to the disposal group and the retained
portion of the Spine reporting unit based on the relative fair
values. Goodwill allocated to the disposal group was tested for
impairment which resulted in an impairment charge of $183. As of
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| Dollar amounts in millions except per share amounts or as otherwise specified. | 24 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
December 31, 2024, there was no goodwill remaining attributable
to the Spinal Implants disposal group.
Finally we compared the carrying amount of the disposal group to
the fair value less cost to sell. As a result, we recognized an
estimated loss of $362 to record the disposal group at its fair
value less cost to sell in goodwill and other impairments in our
Consolidated Statements of Earnings.
In April 2025 we completed the sale of the disposal group to the
Viscogliosi Brothers, LLC as further discussed in Note 16. In the
first half of 2025 we recognized immaterial impairment charges to
record the disposal group at its fair value less cost to sell within
goodwill and other impairments in our Consolidated Statements
of Earnings. The fair value of the disposal group and
consideration received was measured using a discounted cash
flow analysis based upon the selling price and unobservable
inputs, such as market conditions and the rate used to discount
the estimated future cash flows to their present value based on
factors including the disposal groups cost of equity and market
yield rates, which are Level 3 inputs. Consideration could
increase by up to $57 or decrease by up to $245 based on the
amount received.
With the acquisition of Inari in February 2025 discussed in Note 6
to our Consolidated Financial Statements, we established a new
Peripheral Vascular reporting unit consisting of the acquired Inari
business. Given the proximity of the impairment testing date to
the date of acquisition, the fair value of this new reporting unit
was not expected to exceed its carrying value by a significant
amount. We performed a quantitative impairment test for our
Peripheral Vascular reporting unit at October 31, 2025 and
determined that its fair value exceeded its carrying amount by
12%. At October 31, 2025, goodwill attributable to this reporting
unit was $3,203. The fair value of this 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 and the rate used to discount the estimated future cash
flows to their present value, based on the reporting units
estimated weighted average cost of capital. 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 we do not achieve our 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 impairment charges as follows:
| |
| Change in selected assumption | Percentage decline in fair value | Impairment charge | |
| 100 bps increase in discount rate | 14% | $198 | |
| 100 bps decrease in long-term revenue growth | 8 | | |
| 100 bps decrease in long-term operating margin | 2 | | |
We did not identify any factors in 2025 or 2024 that would lead us
to believe that our other reporting units were at risk of a goodwill
impairment. Accordingly, we performed qualitative assessments
and concluded it was more likely than not that the fair values of
those reporting units exceeded their respective carrying amounts.
In 2025 our qualitative assessment was supplemented with a
corroborative quantitative analysis which indicated that the
implied fair values of our other reporting units exceed their
respective carrying amounts by at least 100%. Future changes in
the judgments, assumptions and estimates that are used in our
impairment testing for goodwill and indefinite-lived intangible
assets, including discount rates and cash flow projections, could
result in different estimates of fair value. A significant reduction in
estimated fair values could result in impairment charges that
could materially affect our results of operations.
Legal and Other Contingencies
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 that are more fully described in Notes 7 and 11
to our Consolidated Financial Statements. 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, for the resolution of these legal
matters 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 projected by management, additional expense may be
incurred, which could unfavorably affect future operating results.
We are currently 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.
NEW ACCOUNTING PRONOUNCEMENTS
Refer to Note 1 to our Consolidated Financial Statements for
further information.
| |
| ITEM7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. | |
We sell our products globally and, as a result, our operations and
financial results could be significantly affected by market risk
exposure from exchange rate risk. Our operating results are
primarily exposed to changes in exchange rates among the
United States Dollar, Australian Dollar, British Pound, Canadian
Dollar, Euro and Japanese Yen. We develop and manufacture
products in the United States, Canada, China, Costa Rica,
France, Germany, India, Ireland, Israel, Mexico, Poland,
Switzerland, Turkey and the United Kingdom and incur costs in
the applicable local currencies. This global deployment of
facilities serves to partially mitigate the impact of currency
exchange rate changes on our cost of sales. Refer to Notes 1, 4
and 5 to our Consolidated Financial Statements for information
regarding our use of derivative instruments to mitigate these
risks. A hypothetical 10% change in foreign currencies relative to
the United States Dollar would change the December31, 2025
fair value of these instruments by approximately $449.
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| 25 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| ITEM8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. | |
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Stryker Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Stryker Corporation and subsidiaries (the Company) as of
December 31, 2025 and 2024, the related consolidated statements of earnings, comprehensive income, shareholders equity and cash
flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed
in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results
of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally
accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our
report dated February 11, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the
Companys financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe
that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were
communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to
the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical
audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or
disclosures to which they relate.
| |
| Uncertain Tax Positions | |
| Description of the Matter | As described in Note 11 to the consolidated financial statements, the Company is involved in various income tax matters for which the ultimate outcomes are uncertain. As of December 31, 2025, the Company had unrecognized tax benefits of $403. The Company received a final audit report and assessments from the German Federal Central Tax Office (FCTO) related to the years 2010 through 2017 of $754 and expect to receive additional assessments of $11 based on the final audit report. Auditing managements evaluation of the uncertain tax positions associated with the FCTO tax assessments was especially challenging due to the level of subjectivity and significant judgment associated with the recognition and measurement of the tax positions. | |
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Companys accounting process for uncertain tax positions. For example, we tested controls over managements identification of uncertain tax positions and its application of the recognition and measurement principles, including managements review of developments related to existing uncertain tax positions.Our audit procedures included, among others, evaluating the assumptions the Company used to assess its uncertain tax positions and related unrecognized tax benefits. We evaluated evidence of managements assessment of the uncertain tax positions related to certain German tax matters. Including inspection of technical memos, inspection of the FCTO tax assessments, and written representations of management. We involved professionals with specialized skill and knowledge to assist in our evaluation of the tax technical merits of the Companys assessments, the amount of the potential benefits to be realized, and the application of relevant tax law. We also assessed the Companys disclosures of uncertain tax positions included in Note 11 related to this tax matter. | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| Acquisitions | |
| Description of the Matter | As described in Note 6 to the consolidated financial statements, in 2025 the Company completed the acquisition of Inari Medical, Inc. (Inari) for total consideration of $4,810, net of cash acquired. The acquisition was accounted for as a business combination. Auditing the Companys fair value measurement of certain acquired developed technologies was complex and required significant auditor judgment due to the significant estimation uncertainty in determining the fair value of these intangible assets. The Company used an income approach to measure the developed technology intangible assets acquired. The significant assumptions used to estimate the fair value of the intangible assets included discount rates and certain assumptions that form the basis of the forecasted results, including revenue growth rates and profit margins. | |
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of the controls over the identification and measurement of developed technologies. For example, we tested controls over the valuation of intangibles, including the valuation models and underlying assumptions used to develop such estimates.To test the fair value measurement of developed technologies, we performed audit procedures that included, among others, evaluating the Company's use of the income approach and testing the significant assumptions used in the model, as described above. We involved our valuation specialists in assisting with the evaluation of methodologies used by the Company and significant assumptions included in the fair value measurements. For example, to evaluate the revenue growth rates and projected profit margins, we compared the amounts to historical results of the Companys business, as well as the acquired business historical results, and current industry and market trends for those in which the Company operates and performed sensitivity analyses on key assumptions. We also evaluated the adequacy of the Companys disclosures included in Note 6 related to these acquisitions. | |
/s/Ernst& Young LLP
We have served as the Company's auditor since 1974.
Grand Rapids, Michigan
February11, 2026
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 27 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
Stryker Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
| |
| 2025 | 2024 | 2023 | |
| Net sales | $25,116 | $22,595 | $20,498 | |
| Cost of sales | 9,051 | 8,155 | 7,440 | |
| Gross profit | $16,065 | $14,440 | $13,058 | |
| Research, development and engineering expenses | 1,623 | 1,466 | 1,388 | |
| Selling, general and administrative expenses | 8,651 | 7,685 | 7,111 | |
| Amortization of intangible assets | 732 | 623 | 635 | |
| Goodwill and other impairments | 170 | 977 | 36 | |
| Total operating expenses | $11,176 | $10,751 | $9,170 | |
| Operating income | $4,889 | $3,689 | $3,888 | |
| Interest expense | (607) | (409) | (363) | |
| Other income | 232 | 212 | 148 | |
| Earnings before income taxes | $4,514 | $3,492 | $3,673 | |
| Income taxes | 1,268 | 499 | 508 | |
| Net earnings | $3,246 | $2,993 | $3,165 | |
| |
| Net earnings per share of common stock: | |
| Basic | $8.49 | $7.86 | $8.34 | |
| Diluted | $8.40 | $7.76 | $8.25 | |
| |
| Weighted-average shares outstanding (in millions): | |
| Basic | 382.2 | 381.0 | 379.6 | |
| Effect of dilutive employee stock compensation | 4.3 | 4.6 | 4.1 | |
| Diluted | 386.5 | 385.6 | 383.7 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| |
| 2025 | 2024 | 2023 | |
| Net earnings | $3,246 | $2,993 | $3,165 | |
| Other comprehensive income (loss), net of tax | |
| Marketable securities | | | 1 | |
| Pension plans | 66 | 32 | (59) | |
| Unrealized gains (losses) on designated hedges | 11 | (8) | (13) | |
| Financial statement translation | (471) | 99 | (124) | |
| Total other comprehensive income (loss), net of tax | $(394) | $123 | $(195) | |
| Comprehensive income | $2,852 | $3,116 | $2,970 | |
See accompanying notes to Consolidated Financial Statements.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 28 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
Stryker Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
| |
| 2025 | 2024 | |
| Assets | |
| Current assets | |
| Cash and cash equivalents | $4,011 | $3,652 | |
| Short-term investments | | 750 | |
| Marketable securities | 89 | 91 | |
| Accounts receivable, less allowance of $216 ($213 in 2024) | 4,039 | 3,987 | |
| Inventories: | |
| Materials and supplies | 1,349 | 1,147 | |
| Work in process | 415 | 336 | |
| Finished goods | 3,546 | 3,291 | |
| Total inventories | $5,310 | $4,774 | |
| Prepaid expenses and other current assets | 1,306 | 1,593 | |
| Total current assets | $14,755 | $14,847 | |
| Property, plant and equipment: | |
| Land, buildings and improvements | 1,793 | 1,627 | |
| Machinery and equipment | 5,744 | 5,056 | |
| Total property, plant and equipment | 7,537 | 6,683 | |
| Less allowance for depreciation | 3,661 | 3,235 | |
| Property, plant and equipment, net | $3,876 | $3,448 | |
| Goodwill | 19,291 | 15,855 | |
| Other intangibles, net | 5,681 | 4,395 | |
| Noncurrent deferred income tax assets | 1,098 | 1,742 | |
| Other noncurrent assets | 3,143 | 2,684 | |
| Total assets | $47,844 | $42,971 | |
| |
| Liabilities and shareholders' equity | |
| Current liabilities | |
| Accounts payable | $1,799 | $1,679 | |
| Accrued compensation | 1,595 | 1,403 | |
| Income taxes | 418 | 539 | |
| Dividend payable | 337 | 320 | |
| Accrued expenses and other liabilities | 2,645 | 2,266 | |
| Current maturities of debt | 1,000 | 1,409 | |
| Total current liabilities | $7,794 | $7,616 | |
| Long-term debt, excluding current maturities | 14,859 | 12,188 | |
| Income taxes | 402 | 349 | |
| Other noncurrent liabilities | 2,369 | 2,184 | |
| Total liabilities | $25,424 | $22,337 | |
| Shareholders' equity | |
| Common stock, $0.10 par value | 38 | 38 | |
| Additional paid-in capital | 2,597 | 2,361 | |
| Retained earnings | 20,472 | 18,528 | |
| Accumulated other comprehensive loss | (687) | (293) | |
| Total shareholders' equity | $22,420 | $20,634 | |
| Total liabilities & shareholders' equity | $47,844 | $42,971 | |
See accompanying notes to Consolidated Financial Statements.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 29 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
Stryker Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
| |
| 2025 | 2024 | 2023 | |
| Shares | Amount | Shares | Amount | Shares | Amount | |
| Common stock | |
| Beginning | 381.4 | $38 | 380.1 | $38 | 378.7 | $38 | |
| Issuance of common stock under stock compensation and benefit plans | 1.1 | | 1.3 | | 1.4 | | |
| Ending | 382.5 | $38 | 381.4 | $38 | 380.1 | $38 | |
| Additional paid-in capital | |
| Beginning | $2,361 | $2,200 | $2,034 | |
| Issuance of common stock under stock compensation and benefit plans | (7) | (68) | (39) | |
| Share-based compensation | 243 | 229 | 205 | |
| Ending | $2,597 | $2,361 | $2,200 | |
| Retained earnings | |
| Beginning | $18,528 | $16,771 | $14,765 | |
| Net earnings | 3,246 | 2,993 | 3,165 | |
| Cash dividends declared | (1,302) | (1,236) | (1,159) | |
| Ending | $20,472 | $18,528 | $16,771 | |
| Accumulated other comprehensive (loss) income | |
| Beginning | $(293) | $(416) | $(221) | |
| Other comprehensive income (loss) | (394) | 123 | (195) | |
| Ending | $(687) | $(293) | $(416) | |
| Total shareholders' equity | $22,420 | $20,634 | $18,593 | |
See accompanying notes to Consolidated Financial Statements.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 30 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
Stryker Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
| |
| 2025 | 2024 | 2023 | |
| Operating activities | |
| Net earnings | $3,246 | $2,993 | $3,165 | |
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |
| Depreciation | 461 | 427 | 393 | |
| Amortization of intangible assets | 732 | 623 | 635 | |
| Goodwill and other impairments | 170 | 977 | 36 | |
| Share-based compensation | 243 | 229 | 205 | |
| Sale of inventory stepped up to fair value at acquisition | 173 | 46 | | |
| Deferred income tax (benefit) expense | 392 | (370) | (206) | |
| Changes in operating assets and liabilities: | |
| Accounts receivable | 127 | (321) | (175) | |
| Inventories | (297) | (206) | (797) | |
| Accounts payable | 94 | 192 | 77 | |
| Accrued expenses and other liabilities | 318 | 74 | 516 | |
| Income taxes | (145) | (116) | (4) | |
| Other, net | (470) | (306) | (134) | |
| Net cash provided by operating activities | $5,044 | $4,242 | $3,711 | |
| Investing activities | |
| Acquisitions, net of cash acquired | (4,960) | (1,628) | (390) | |
| Proceeds/(Purchases) of short-term investments | 750 | (750) | | |
| Purchases of property, plant and equipment | (761) | (755) | (575) | |
| Proceeds from the sale of the Spinal Implants business | 165 | | | |
| Other investing, net | (60) | 133 | 3 | |
| Net cash used in investing activities | $(4,866) | $(3,000) | $(962) | |
| Financing activities | |
| Proceeds (payments) on short-term borrowings, net | | (32) | 540 | |
| Proceeds from issuance of long-term debt | 2,979 | 3,011 | 1,241 | |
| Payments on long-term debt | (1,400) | (2,039) | (2,058) | |
| Payments of dividends | (1,284) | (1,219) | (1,139) | |
| Cash paid for taxes from withheld shares | (149) | (195) | (155) | |
| Other financing, net | (33) | (51) | (23) | |
| Net cash provided by (used in) financing activities | $113 | $(525) | $(1,594) | |
| Effect of exchange rate changes on cash and cash equivalents | 68 | (36) | (28) | |
| Change in cash and cash equivalents | $359 | $681 | $1,127 | |
| Cash and cash equivalents at beginning of year | 3,652 | 2,971 | 1,844 | |
| Cash and cash equivalents at end of year | $4,011 | $3,652 | $2,971 | |
| |
| Supplemental cash flow disclosure: | |
| Cash paid for income taxes, net of refunds | $1,002 | $989 | $693 | |
| Cash paid for interest on debt | $582 | $396 | $356 | |
See accompanying notes to Consolidated Financial Statements.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 31 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations: Stryker (the "Company," "we," "us," or
"our") 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. Our products include surgical equipment
and surgical navigation systems; endoscopic and
communications systems; patient handling, emergency medical
equipment and intensive care disposable products; clinical
communication and artificial intelligence-assisted virtual care
platform technology; products for traditional brain and open skull-
based surgical procedures; minimally invasive products for the
treatment of acute ischemic and hemorrhagic stroke and venous
thromboembolism; implants used in joint replacement and trauma
surgeries; Mako robotic-arm assisted technology; as well as other
products used in a variety of medical specialties.
Basis of Presentation and Consolidation: The Consolidated
Financial Statements include the Company and its subsidiaries.
All significant intercompany accounts and transactions are
eliminated in consolidation. We have no material interests in
variable interest entities. Certain prior year amounts have been
reclassified to conform with current year presentation in our
Consolidated Financial Statements.
Use of Estimates: The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States (GAAP) requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities on the
date of the financial statements and the reported amounts of net
sales and expenses in the reporting period. Actual results could
differ from those estimates.
Revenue Recognition: Sales are recognized as the
performance obligations to deliver products or services (including
services under extended warranty service contracts) are satisfied
and are recorded based on the amount of consideration we
expect to receive in exchange for satisfying the performance
obligations. Our sales are recognized primarily when we transfer
control to the customer, which can be on the date of shipment,
the date of receipt by the customer or, for most Orthopaedics
products, when we have received a purchase order and
appropriate notification the product has been used or implanted.
Products and services are primarily transferred to customers at a
point in time, with some transfers of services taking place over
time.
Sales represent the amount of consideration we expect to receive
from customers in exchange for transferring products and
services. Net sales exclude sales, value added and other taxes
we collect from customers. Other costs to obtain and fulfill
contracts are generally expensed as incurred due to the short-
term nature of most of our sales. We extend terms of payment to
our customers based on commercially reasonable terms for the
markets of our customers, while also considering their credit
quality.
A provision for estimated sales returns, discounts and rebates is
recognized as a reduction of sales in the same period that the
sales are recognized. Our estimate of the provision for sales
returns has been established based on contract terms with our
customers and historical business practices and current trends.
Shipping and handling costs charged to customers are included
in net sales.
Cost of Sales: Cost of sales include direct materials and
supplies consumed in the manufacture of product, as well as
manufacturing labor, depreciation expense and direct overhead
expense necessary to acquire and convert the purchased
materials and supplies into finished product. Cost of sales also
includes the cost to distribute products to customers, inbound
freight costs, warehousing costs and other shipping and handling
activity.
Research, Development and Engineering Expenses:
Research, development and engineering costs are charged to
expense as incurred and include research, development and
engineering activities relating to the development of new
products, improvement of existing products, technical support of
products and compliance with governmental regulations for the
protection of customers and patients. Costs primarily include
salaries, wages, consulting and depreciation and maintenance of
research facilities and equipment.
Selling, General and Administrative Expenses: Costs include
selling expenses, marketing expenses, administrative and other
indirect overhead costs, amortization of loaner instrumentation,
depreciation and amortization expense of non-manufacturing
assets and other miscellaneous operating items.
Currency Translation: Financial statements of subsidiaries
outside the United States generally are measured using the local
currency as the functional currency. Adjustments to translate
those statements into United States Dollars are recorded in other
comprehensive income (OCI). Transactional exchange gains and
losses are included in other income.
Cash Equivalents: Highly liquid investments with remaining
stated maturities of three months or less when purchased or
other money market instruments that are redeemable upon
demand are considered cash equivalents and recorded at cost.
Short-term Investments: Short-term investments that have a
maturity greater than three months and less than a year from the
date of purchase primarily include time deposits, certificates of
deposit, commercial paper, bonds and notes, substantially all of
which are denominated in United States Dollars and are stated at
cost plus accrued interest, which approximates fair value. We
expect to hold all of our short-term investments to maturity.
Marketable Securities: Marketable securities include marketable
debt securities and mutual funds. Mutual funds are acquired to
offset changes in certain liabilities related to deferred
compensation arrangements and are expected to be used to
settle these liabilities. Mutual funds are recognized in other
noncurrent assets. Pursuant to our investment policy, all
individual marketable security investments must have a minimum
credit quality of single A (Standard& Poors and Fitch) and A2
(Moodys Corporation) at the time of acquisition, while the overall
portfolio of marketable securities must maintain a minimum
average credit quality of double A (Standard& Poors and Fitch)
or Aa (Moodys Corporation). In the event of a rating downgrade
below the minimum credit quality subsequent to purchase, the
marketable security investment is evaluated to determine the
appropriate action to take to minimize the overall risk to our
marketable security investment portfolio. Our marketable
securities are classified as available-for-sale and trading
securities. Investments in trading securities represent participant-
directed investments of deferred employee compensation.
Accounts Receivable: Accounts receivable include trade and
other miscellaneous receivables. An allowance is maintained for
doubtful accounts for estimated losses in the collection of
accounts receivable. Estimates are made regarding the ability of
customers to make required payments based on historical credit
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 32 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
experience, current market conditions and expected credit
losses. Accounts receivable are written off when all reasonable
collection efforts are exhausted.
Inventories: Inventories are stated at the lower of cost or net
realizable value, with cost generally determined using the first-in,
first-out (FIFO) cost method. For excess and obsolete inventory
resulting from the potential inability to sell specific products at
prices in excess of current carrying costs, reserves are
maintained to reduce current carrying cost to net realizable value.
Financial Instruments: Our financial instruments include cash,
cash equivalents, marketable securities, accounts receivable,
other investments, accounts payable, debt and foreign currency
exchange contracts. The carrying value of our financial
instruments, with the exception of our senior unsecured notes,
approximates fair value on December31, 2025 and 2024. Refer
to Notes 3 and 10 for further details.
All marketable securities are recognized at fair value.
Adjustments to the fair value of marketable securities that are
classified as available-for-sale are recognized as increases or
decreases, net of income taxes, within accumulated other
comprehensive income (AOCI) in shareholders equity and
adjustments to the fair value of marketable securities that are
classified as trading are recognized in earnings. The amortized
cost of marketable debt securities is adjusted for amortization of
premiums and discounts to maturity computed under the effective
interest method. Such amortization, interest and realized gains
and losses are included in other income. The cost of securities
sold is determined by the specific identification method.
We review declines in the fair value of our investments classified
as available-for-sale to determine whether the decline in fair
value is a result of credit loss or other factors. Impairments of
available-for-sale marketable debt securities related to credit loss
are included in earnings and impairments related to other factors
are recognized within AOCI.
Derivatives: All derivatives are recognized at fair value and
reported on a gross basis. We enter into forward currency
exchange contracts to mitigate the impact of currency fluctuations
on transactions denominated in nonfunctional currencies, thereby
limiting our risk that would otherwise result from changes in
exchange rates. The periods of the forward currency exchange
contracts correspond to the periods of the exposed transactions,
with realized gains and losses included in the measurement and
recording of transactions denominated in the nonfunctional
currencies. All forward currency exchange contracts are recorded
at their fair value each period.
Forward currency exchange contracts designated as cash flow
hedges are designed to hedge the variability of cash flows
associated with forecasted transactions denominated in a foreign
currency that will take place in the future. These nonfunctional
currency exposures principally relate to forecasted intercompany
sales and purchases of manufactured products and generally
have maturities up to eighteen months. Changes in value of
derivatives designated as cash flow hedges are recorded in AOCI
in shareholders equity until earnings are affected by the
variability of the underlying cash flows. At that time, the
applicable amount of gain or loss from the derivative instrument
that is deferred in shareholders equity is reclassified into
earnings and is included in cost of goods sold. Cash flows
associated with these hedges are included in cash provided by
operating activities in the same category as the cash flows from
the items being hedged.
Forward currency exchange contracts are used to offset our
exposure to the change in value of specific foreign currency
denominated assets and liabilities, primarily intercompany
payables and receivables. These derivatives are not designated
as hedges and, therefore, changes in the value of these forward
contracts are recognized in earnings, thereby offsetting the
current earnings effect of the related changes in value of foreign
currency denominated assets and liabilities. The estimated fair
value of our forward currency exchange contracts represents the
measurement of the contracts at month-end spot rates as
adjusted by current forward points.
From time to time, we designate derivative and non-derivative
financial instruments as net investment hedges of our
investments in certain international subsidiaries. For derivative
instruments that are designated and qualify as a net investment
hedge, the effective portion of the derivative's gain or loss is
recognized in OCI and reported as a component of AOCI. We
have elected to use the spot method to assess effectiveness for
our derivatives designated as net investment hedges.
Accordingly, the change in fair value attributable to changes in
the spot rate is recorded in AOCI. We exclude the spot-forward
difference from the assessment of hedge effectiveness and
amortize this amount separately on a straight-line basis over the
term of the forward contracts. This amortization is recognized in
other income.
From time to time, we designate forward starting interest rate
derivative instruments as cash flow hedges to manage the
exposure to interest rate volatility with regard to future issuance
and refinancing of debt. Changes in value of derivatives
designated as cash flow hedges are recorded in AOCI until
earnings are affected by the variability of the underlying cash
flows. At that time, the applicable amount of gain or loss from the
derivative instrument that is deferred in shareholders equity is
reclassified into earnings and is included in interest expense.
Interest rate derivative instruments designated as fair value
hedges have been used in the past to manage the exposure to
interest rate movements and to reduce borrowing costs by
converting fixed-rate debt into floating-rate debt. Under these
agreements, we agree to exchange, at specified intervals, the
difference between fixed and floating interest amounts calculated
by reference to an agreed-upon notional principal amount.
Property, Plant and Equipment: Property, plant and equipment
is stated at cost. Depreciation is generally computed by the
straight-line method over the estimated useful lives of three to 30
years for buildings and improvements and three to 15 years for
machinery and equipment.
Goodwill and Other Intangible Assets: Goodwill represents the
excess of purchase price over fair value of tangible net assets of
acquired businesses at the acquisition date, after amounts
allocated to other identifiable intangible assets. Factors that
contribute to the recognition of goodwill include synergies that are
specific to our business and not available to other market
participants and are expected to increase net sales and profits;
acquisition of a talented workforce; cost savings opportunities;
the strategic benefit of expanding our presence in core and
adjacent markets; and diversifying our product portfolio.
The fair values of other identifiable intangible assets acquired in a
business combination are primarily determined using the income
approach. Other intangible assets include, but are not limited to,
developed technologies, customer and distributor relationships
(which reflect expected continued customer or distributor
patronage) and trademarks and patents. Intangible assets with
determinable useful lives are amortized on a straight-line basis
over their estimated useful lives of four to 40 years. Certain
acquired trade names are considered to have indefinite lives and
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 33 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
are not amortized, but are assessed annually for potential
impairment as described below.
In some of our acquisitions, we acquire in-process research and
development (IPRD) intangible assets. For acquisitions
accounted for as business combinations IPRD is considered to
be an indefinite-lived intangible asset until the research is
completed (then it becomes a determinable-lived intangible
asset) or determined to have no future use (then it is impaired).
For asset acquisitions IPRD is expensed immediately unless
there is an alternative future use.
Goodwill, Intangibles and Long-Lived Asset Impairment
Tests: We perform our annual impairment test for goodwill as of
October 31 each year. We consider qualitative indicators of the
fair value of a reporting unit when it is unlikely that a reporting
unit has impaired goodwill and periodically corroborate that
assessment with quantitative information. In certain
circumstances, we may also utilize a discounted cash flow
analysis that requires certain assumptions and estimates be
made regarding market conditions and our future profitability.
Indefinite-lived intangible assets are also tested at least annually
for impairment by comparing the individual carrying values to the
fair value.
We review long-lived assets for indicators of impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. The evaluation is
performed at the lowest level of identifiable cash flows.
Undiscounted cash flows expected to be generated by the related
assets are estimated over the asset's useful life based on
updated projections. If the evaluation indicates that the carrying
amount of the asset may not be recoverable, any potential
impairment is measured based upon the fair value of the related
asset or asset group as determined by an appropriate market
appraisal or other valuation technique.
Assets and Liabilities Held for Sale: We classify assets and
liabilities or disposal groups to be sold as held for sale in the
period in which all of the following criteria are met: management,
having the authority to approve the action, commits to a plan to
sell the disposal group; the disposal group is available for
immediate sale in its present condition subject only to terms that
are usual and customary for sales of such disposal groups; an
active program to locate a buyer and other actions required to
complete the plan to sell the disposal group have been initiated;
the sale of the disposal group is probable, and transfer of the
disposal group is expected to qualify for recognition as a
completed sale within one year, except if events or circumstances
beyond our control extend the period of time required to sell the
disposal group beyond one year; the disposal group is being
actively marketed for sale at a price that is reasonable in relation
to its current fair value; and actions required to complete the plan
indicate that it is unlikely that significant changes to the plan will
be made or that the plan will be withdrawn.
We initially measure a disposal group that is classified as held for
sale at the lower of its carrying value or fair value less any costs
to sell. Any loss resulting from this measurement is recognized in
the period in which the held for sale criteria are met. Conversely,
gains are not recognized on the sale of a disposal group until the
sale is completed. We assess the fair value of a disposal group,
less any costs to sell, each reporting period it remains classified
as held for sale and report any subsequent changes as an
adjustment to the carrying value of the disposal group, as long as
the new carrying value does not exceed the carrying value of the
disposal group at the time it was initially classified as held for
sale.
Upon determining that a disposal group meets the criteria to be
classified as held for sale, we cease depreciation and
amortization of the assets and disclose the major classes of
assets and liabilities of the disposal group in the Notes to the
Consolidated Financial Statements. Refer to Note 16 for further
information.
Share-Based Compensation: Share-based compensation is in
the form of stock options, restricted stock units (RSUs) and
performance stock units (PSUs). Stock options are granted under
long-term incentive plans to certain key employees and non-
employee directors at an exercise price not less than the fair
market value of the underlying common stock, which is the
quoted closing price of our common stock on the day prior to the
date of grant. The options are granted for periods of up to 10
years and become exercisable in varying installments.
We grant RSUs to key employees and non-employee directors
and PSUs to certain key employees under our long-term
incentive plans. The fair value of RSUs is determined based on
the number of shares granted and the quoted closing price of our
common stock on the date of grant, adjusted for the fact that
RSUs do not include anticipated dividends. RSUs generally vest
in one-third increments over a three-year period and are settled
in stock. PSUs are earned over a three-year performance cycle
and vest in March of the year following the end of that
performance cycle. The number of PSUs that will ultimately be
earned is based on our performance relative to pre-established
goals in that three-year performance cycle. The fair value of
PSUs is determined based on the quoted closing price of our
common stock on the day of grant.
Compensation expense is recognized in the Consolidated
Statements of Earnings based on the estimated fair value of the
awards on the grant date. Compensation expense recognized
reflects an estimate of the number of awards expected to vest
after taking into consideration an estimate of award forfeitures
based on actual experience and is recognized on a straight-line
basis over the requisite service period, which is generally the
period required to obtain full vesting. Management expectations
related to the achievement of performance goals associated with
PSU grants is assessed regularly and that assessment is used to
determine whether PSU grants are expected to vest. If
performance-based milestones related to PSU grants are not met
or not expected to be met, any compensation expense
recognized associated with such grants will be reversed.
Income Taxes: Deferred income tax assets and liabilities are
determined based on differences between financial reporting and
income tax bases of assets and liabilities and are measured
using the enacted income tax rates in effect for the years in which
the differences are expected to reverse. Deferred income tax
benefits generally represent the change in net deferred income
tax assets and liabilities in the year. Other amounts result from
adjustments related to acquisitions and foreign currency as
appropriate.
We operate in multiple income tax jurisdictions both within the
United States and internationally. Accordingly, management must
determine the appropriate allocation of income to each of these
jurisdictions based on current interpretations of complex income
tax regulations. Income tax authorities in these jurisdictions
regularly perform audits of our income tax filings. Income tax
audits associated with the allocation of this income and other
complex issues, including inventory transfer pricing and cost
sharing, product royalty and foreign branch arrangements, may
require an extended period of time to resolve and may result in
significant income tax adjustments if changes to the income
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 34 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
allocation are required between jurisdictions with different income
tax rates.
The Tax Cuts and Jobs Act (the Act) was enacted in 2017 in the
United States. The Act also subjects a United States shareholder
to tax on Global Intangible Low-Taxed Income (GILTI) earned by
certain foreign subsidiaries. We have elected to account for GILTI
tax in the year the tax is incurred.
New Accounting Pronouncements Not Yet Adopted
In December 2025 the Financial Accounting Standards Board
(FASB) issued ASU 2025-10 (Topic 832): Accounting for
Government Grants Received by Business Entities. This update
establishes guidance on the recognition, measurement and
presentation of government grants received by business entities
including grants related to the purchase, construction or
acquisition of an asset and grants related to income. The update
is effective for fiscal years beginning after December 15, 2028
including interim periods within those fiscal years. Early adoption
is permitted. We do not expect this ASU to have a significant
impact on our Consolidated Financial Statements.
In September 2025 the FASB issued 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 nonexchange-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 do not
expect this ASU to have a significant impact on our Consolidated
Financial Statements.
In July 2025 the FASB issued 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 accounting for
under Accounting Standards Codification 606, Revenue from
Contracts with Customers. The update is effective for fiscal years
beginning after December 15, 2025 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
We adopted ASU 2023-09 (Topic 740): Income Taxes:
Improvements to Income Tax Disclosures for the annual period
beginning on January 1, 2025. Refer to Note 11 for further
information.
NOTE 2 - REVENUE RECOGNITION
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.
Products and services are primarily transferred to customers at a
point in time, with some transfers of services taking place over
time. In 2025 less than 10% of our sales were recognized as
services transferred over time. Refer to Note 1 for further
discussion on our revenue recognition policies.
| |
| Segment Net Sales | |
| MedSurg and Neurotechnology: | 2025 | 2024 | 2023 | |
| Instruments | $3,183 | $2,834 | $2,534 | |
| Endoscopy | 3,807 | 3,389 | 3,068 | |
| Medical | 4,204 | 3,852 | 3,459 | |
| Vascular | 1,968 | 1,307 | 1,226 | |
| Neuro Cranial | 2,485 | 2,136 | 1,876 | |
| $15,647 | $13,518 | $12,163 | |
| Orthopaedics: | |
| Knees | $2,656 | $2,447 | $2,273 | |
| Hips | 1,865 | 1,704 | 1,544 | |
| Trauma and Extremities | 3,948 | 3,507 | 3,147 | |
| Spinal Implants | 185 | 707 | 713 | |
| Other | 815 | 712 | 658 | |
| $9,469 | $9,077 | $8,335 | |
| Total | $25,116 | $22,595 | $20,498 | |
| |
| United States Net Sales | |
| MedSurg and Neurotechnology: | 2025 | 2024 | 2023 | |
| Instruments | $2,562 | $2,267 | $2,016 | |
| Endoscopy | 3,133 | 2,792 | 2,513 | |
| Medical | 3,510 | 3,191 | 2,785 | |
| Vascular | 1,048 | 506 | 483 | |
| Neuro Cranial | 2,052 | 1,761 | 1,531 | |
| $12,305 | $10,517 | $9,328 | |
| Orthopaedics: | |
| Knees | $1,924 | $1,788 | $1,676 | |
| Hips | 1,137 | 1,059 | 988 | |
| Trauma and Extremities | 2,926 | 2,586 | 2,297 | |
| Spinal Implants | 118 | 489 | 500 | |
| Other | 596 | 504 | 468 | |
| $6,701 | $6,426 | $5,929 | |
| Total | $19,006 | $16,943 | $15,257 | |
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| Dollar amounts in millions except per share amounts or as otherwise specified. | 35 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| International Net Sales | |
| MedSurg and Neurotechnology: | 2025 | 2024 | 2023 | |
| Instruments | $621 | $567 | $518 | |
| Endoscopy | 674 | 597 | 555 | |
| Medical | 694 | 661 | 674 | |
| Vascular | 920 | 801 | 743 | |
| Neuro Cranial | 433 | 375 | 345 | |
| $3,342 | $3,001 | $2,835 | |
| Orthopaedics: | |
| Knees | $732 | $659 | $597 | |
| Hips | 728 | 645 | 556 | |
| Trauma and Extremities | 1,022 | 921 | 850 | |
| Spinal Implants | 67 | 218 | 213 | |
| Other | 219 | 208 | 190 | |
| $2,768 | $2,651 | $2,406 | |
| Total | $6,110 | $5,652 | $5,241 | |
MedSurg and Neurotechnology
MedSurg and Neurotechnology products include surgical
equipment, patient and caregiver safety technologies, and
navigation systems (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), minimally
invasive products for the treatment of acute ischemic and
hemorrhagic stroke and venous thromboembolism (Vascular) 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 products (Neuro Cranial). Substantially all
MedSurg and Neurotechnology sales are recognized when a
purchase order has been received and control has transferred.
For certain Endoscopy, Instruments and Medical services, we
may recognize sales over time as we satisfy performance
obligations that may include an obligation to complete installation,
provide training and perform ongoing services, generally
performed within one year.
Orthopaedics
Orthopaedics products primarily include implants used in total
joint replacements, such as hip, knee and shoulder, ankle and
trauma and extremities surgeries. Substantially all Orthopaedics
sales are recognized when we have received a purchase order
and appropriate notification the product has been used or
implanted. For certain Orthopaedic products in the "other"
category, we recognize sales at a point in time, as well as over
time for performance obligations that may include an obligation to
complete installation and provide training and ongoing services.
Performance obligations are generally satisfied within one year.
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 December31, 2025 and 2024 deferred contract
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 December31, 2025 and 2024 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 warranty
service contracts. Our contract liabilities of $1,024 and $978 on
December31, 2025 and 2024 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 year were as follows:
| |
| 2025 | 2024 | |
| Beginning contract liabilities | $978 | $860 | |
| Revenue recognized from beginning of year contract liabilities | (546) | (553) | |
| Net advance consideration received during the period | 592 | 671 | |
| Ending contract liabilities | $1,024 | $978 | |
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 2025, 2024 and 2023.
NOTE 3 - FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Financial
assets and liabilities carried at fair value are classified in their
entirety based on the lowest level of input and disclosed in one of
the following three categories:
| |
| Level 1 | Quoted market prices in active markets for identical assets or liabilities. | |
| Level 2 | Observable market-based inputs or unobservable inputs that are corroborated by market data. | |
| Level 3 | Unobservable inputs reflecting our assumptions or external inputs from active markets. | |
Use of observable market data, when available, is required in
making fair value measurements. When inputs used fall within
different levels of the hierarchy, the level within which the fair
value measurement is categorized is based on the lowest level
input that is significant to the fair value measurement. We
determine fair value for Level 1 instruments using exchange-
traded prices for identical instruments. We determine fair value of
Level 2 instruments using exchange-traded prices of similar
instruments, where available, or utilizing other observable inputs
that take into account our credit risk and that of our
counterparties. Foreign currency exchange contracts and interest
rate hedges, when outstanding, are included in Level 2 and are
primarily valued using standard calculations and models that use
readily observable market data as their basis. Our Level 3
liabilities comprise contingent consideration arising from recently
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| STRYKER CORPORATION | 2025 FORM 10-K | |
completed acquisitions. We determine fair value of these Level 3
liabilities using a discounted cash flow technique. Significant
unobservable inputs were used in our assessment of fair value,
including assumptions regarding future business results, discount
rates, discount periods and probability assessments based on the
likelihood of reaching various targets. We remeasure the fair
value of our assets and liabilities each reporting period. We
record the changes in fair value within selling, general and
administrative expense.
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 6 for further information on the
acquisition of Inari.
In 2024 we recorded $208 of contingent consideration related to
various acquisitions described in Note 6.
There were no significant transfers into or out of any level of the
fair value hierarchy in 2025.
| |
| Assets Measured at Fair Value | |
| 2025 | 2024 | |
| Cash and cash equivalents | $4,011 | $3,652 | |
| Short-term investments | | 750 | |
| Trading marketable securities | 307 | 259 | |
| Level 1 - Assets | $4,318 | $4,661 | |
| Available-for-sale marketable securities: | |
| Corporate and asset-backed debt securities | $52 | $53 | |
| United States agency debt securities | | 1 | |
| United States treasury debt securities | 37 | 34 | |
| Certificates of deposit | | 3 | |
| Total available-for-sale marketable securities | $89 | $91 | |
| Foreign currency exchange forward contracts | 46 | 225 | |
| Level 2 - Assets | $135 | $316 | |
| Total assets measured at fair value | $4,453 | $4,977 | |
| |
| Liabilities Measured at Fair Value | |
| 2025 | 2024 | |
| Deferred compensation arrangements | $307 | $259 | |
| Level 1 - Liabilities | $307 | $259 | |
| Foreign currency exchange forward contracts | $170 | $77 | |
| Level 2 - Liabilities | $170 | $77 | |
| Contingent consideration: | |
| Beginning | $452 | $289 | |
| Additions | 123 | 208 | |
| Change in estimate and foreign exchange | 24 | 8 | |
| Settlements | (81) | (53) | |
| Ending | $518 | $452 | |
| Level 3 - Liabilities | $518 | $452 | |
| Total liabilities measured at fair value | $995 | $788 | |
| |
| Fair Value of Available for Sale Securities by Maturity | |
| 2025 | 2024 | |
| Due in one year or less | $41 | $47 | |
| Due after one year through three years | $48 | $44 | |
On December31, 2025 the aggregate difference between the
cost and fair value of available-for-sale marketable securities was
nominal. Interest income on cash and cash equivalents, short-
term investments and marketable securities income was $121,
$139 and $75 in 2025, 2024 and 2023, 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). We do not plan to sell the investments, and
it is not more likely than not that we will be required to sell the
investments before recovery of their amortized cost basis, which
may be maturity.
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.
Foreign Currency Hedges
| |
| 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) | |
| 2024 | Cash Flow | Net Investment | Non-Designated | Total | |
| Gross notional amount | $1,588 | $2,338 | $5,164 | $9,090 | |
| Maximum term in years | 9.7 | |
| Fair value: | |
| Other current assets | $43 | $24 | $119 | $186 | |
| Other noncurrent assets | 4 | 35 | | 39 | |
| Other current liabilities | (29) | | (41) | (70) | |
| Other noncurrent liabilities | (3) | (4) | | (7) | |
| Total fair value | $15 | $55 | $78 | $148 | |
We had 2.3billion at December 31, 2025 and 2024 in certain
forward currency contracts designated as net investment hedges,
for which the maximum term is 8.7 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 5.0billion at December 31, 2025 and 2024 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 ($715) in 2025.
| |
| Currency Exchange Rate Gains (Losses) Recognized in Net Earnings | |
| Derivative Instrument | Recognized in: | 2025 | 2024 | 2023 | |
| Cash Flow | Cost of sales | $25 | $31 | $39 | |
| Net Investment | Other income | 44 | 35 | 34 | |
| Non-Designated | Other income | 33 | 40 | 25 | |
| Total | $102 | $106 | $98 | |
Pretax gains (losses) on derivatives designated as cash flow
hedges of $39 and net investment hedges of $38 recorded in
AOCI are expected to be reclassified to cost of sales and other
income in earnings within 12 months of December31, 2025. 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
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 37 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
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 $5 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 December31, 2025. The cash flow effect of interest rate
hedges is recorded in cash flow from operations.
NOTE 5 - ACCUMULATED OTHER COMPREHENSIVE (LOSS)
INCOME (AOCI)
| |
| Pension Plans | Hedges | Financial Statement Translation | Total | |
| 2023 | $(28) | $39 | $(427) | $(416) | |
| OCI | 43 | 26 | 236 | 305 | |
| Income taxes | (11) | (7) | (110) | (128) | |
| Reclassifications to: | |
| Cost of sales | | (31) | | (31) | |
| Interest expense | | (4) | | (4) | |
| Other income | | | (35) | (35) | |
| Income taxes | | 8 | 8 | 16 | |
| Net OCI | $32 | $(8) | $99 | $123 | |
| 2024 | $4 | $31 | $(328) | $(293) | |
| OCI | 93 | 37 | (562) | (432) | |
| Income taxes | (27) | (4) | 125 | 94 | |
| Reclassifications to: | |
| Cost of sales | | (25) | | (25) | |
| Interest expense | | (3) | | (3) | |
| Other income | | | (44) | (44) | |
| Income taxes | | 6 | 10 | 16 | |
| Net OCI | $66 | $11 | $(471) | $(394) | |
| 2025 | $70 | $42 | $(799) | $(687) | |
NOTE 6 - ACQUISITIONS
We acquire stock in companies and various assets that continue
to support our capital deployment and product development
strategies. Cash paid for acquisitions, net of cash acquired was
$4,960 and $1,628 in 2025 and 2024.
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. The purchase price allocation for Inari is based
on preliminary valuations, primarily related to developed
technologies and customer relationships. 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 2025.
In 2024 we completed various acquisitions for total consideration
that includes $1,628 in upfront payments, net of cash acquired,
and $400 contingent upon the achievement of certain commercial
or clinical milestones. The combined acquisition-date fair values
of the contingent milestone payments totaled $208. The acquired
companies expand the product portfolios of our Instruments,
Endoscopy, Medical and Neuro Cranial businesses within
MedSurg and Neurotechnology and our Trauma and Extremities
and Joint Replacement businesses within Orthopaedics. Goodwill
attributable to the acquisitions reflects the strategic benefits of
expanding our market presence, diversifying our product portfolio
and advancing innovations. This goodwill is not deductible for tax
purposes.
The purchase price allocations for Inari and the acquisitions
completed in the full year 2024 are:
| |
| Purchase Price Allocation of Acquired Net Assets | |
| 2025 | 2024 | |
| Inari | Total | |
| Tangible assets acquired: | |
| Accounts receivable | $78 | $40 | |
| Inventory | 215 | 99 | |
| Deferred income tax assets | 59 | 49 | |
| Other assets | 84 | 26 | |
| Debt | | (32) | |
| Deferred income tax liabilities | (486) | (204) | |
| Other liabilities | (191) | (107) | |
| Intangible assets: | |
| Developed technologies | 1,458 | 596 | |
| Customer relationships | 330 | 215 | |
| Patents | | 6 | |
| Trademarks | | 2 | |
| Other intangibles | 72 | | |
| Goodwill | 3,191 | 1,146 | |
| Purchase price, net of cash acquired of $64 and $56 | $4,810 | $1,836 | |
| Weighted-average amortization period at acquisition (years): | |
| Developed technologies | 13 | 12 | |
| Customer relationships | 13 | 14 | |
| Patents | | 12 | |
| Trademarks | | 5 | |
| Other intangibles | 9 | | |
NOTE 7 - 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 most significant of which are more fully
described below. 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.
Previously we were contacted by the United States Securities
and Exchange Commission (SEC), United States Department of
Justice (DOJ) and certain other regulatory authorities regarding
whether certain business activities in certain foreign countries
violated provisions of the FCPA and analogous local laws. We
have completed our investigation into these matters. During 2025
we were informed by the SEC and DOJ that each agency had
closed its inquiry. We are currently responding to inquiries by
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| Dollar amounts in millions except per share amounts or as otherwise specified. | 38 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
certain foreign authorities arising in the normal course of
business. We do not expect these matters to have a material
effect, if any, on our financial statements.
We have conducted voluntary recalls of certain products,
including our Rejuvenate and ABG II Modular-Neck hip stems
and certain lot-specific sizes and offsets of LFIT Anatomic CoCr
V40 Femoral Heads. Additionally, we are responsible for certain
product liability claims, primarily related to certain hip products
sold by Wright prior to its 2014 divestiture of the OrthoRecon
business.
We have incurred, and expect to incur in the future, costs
associated with the defense and settlement of claims and
lawsuits. Based on the information that has been received related
to the matters discussed above, our accrual for these matters
was $144 at December31, 2025, representing our best estimate
of probable loss. The final outcomes of these matters are
dependent on many factors that are difficult to predict.
Accordingly the ultimate cost related to these matters may be
materially different than the amount of our current estimate and
accruals and could have a material adverse effect on our results
of operations and cash flows.
Leases
We lease various manufacturing, warehousing and distribution
facilities, administrative and sales offices as well as equipment
under operating leases. We evaluate our contracts to identify
leases, which is generally if there is an identified asset and we
have the right to direct the use of and obtain substantially all of
the economic benefit from the use of the identified asset. Certain
of our lease agreements contain rent escalation clauses
(including index-based escalations), rent holidays, capital
improvement funding or other lease incentives. We recognize our
minimum rental expense on a straight-line basis over the term of
the lease beginning with the date of initial control of the asset.
Right-of-use assets are recorded in other noncurrent assets on
our Consolidated Balance Sheets. Current and noncurrent lease
liabilities are recorded in accrued expenses and other liabilities
and other noncurrent liabilities, respectively.
We have made certain significant assumptions and judgments
when recording leases. For all asset classes, we do not
recognize a right-of-use asset and lease liability for short-term
leases. We also do not separate non-lease components from
lease components to which they relate and account for the
combined lease and non-lease components as a single lease
component. The determination of the discount rate used in a
lease is our incremental borrowing rate which is based on what
we would normally pay to borrow on a collateralized basis over a
similar term an amount equal to the lease payments.
| |
| 2025 | 2024 | |
| Right-of-use assets | $519 | $516 | |
| Lease liabilities, current | $153 | $144 | |
| Lease liabilities, noncurrent | $348 | $379 | |
| |
| Other information: | |
| Weighted-average remaining lease term (years) | 5.0 | 5.1 | |
| Weighted-average discount rate | 3.77% | 3.87% | |
Operating lease expense totaled $205, $190 and $172 in 2025,
2024 and 2023.
Future Obligations
We lease various manufacturing, warehousing and distribution
facilities, administrative and sales offices as well as equipment
under operating leases. Refer to Note 10 for more information on
the debt obligations.
| |
| 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | |
| Debt repayments | $1,000 | $1,382 | $2,606 | $1,691 | $2,565 | $6,729 | |
| Minimum lease payments | $164 | $125 | $87 | $55 | $38 | $55 | |
Other Contractual Obligations and Commitments
We participate in a supplier financing program that enables our
suppliers, at their sole discretion, to sell their Stryker receivables
to a financial institution on a non-recourse basis in order to be
paid earlier than our payment terms provide. Under this program,
we agree to pay participating banks the stated amount of
confirmed invoices from its designated suppliers on the original
maturity dates of the invoices, generally within 90 days of the
invoice date. We or the banks may agree to terminate the
agreements with advance notice. Separately, the banks may
have arrangements with the suppliers that provide them the
option to request early payment from the bank for invoices
confirmed by us. Our outstanding balances of confirmed invoices
in the programs were $75 and $71 on December31, 2025 and
2024 and are included within accounts payable on our
Consolidated Balance Sheets.
| |
| 2025 | 2024 | |
| Beginning confirmed obligations | $71 | $51 | |
| Additions | 420 | 392 | |
| Settlements | (416) | (372) | |
| Ending confirmed obligations | $75 | $71 | |
NOTE 8 - GOODWILL AND OTHER INTANGIBLE ASSETS
In our annual impairment test of goodwill as of October 31, 2024
we performed a quantitative assessment of the Spine reporting
unit using a discounted cash flow analysis to estimate the fair
value. The carrying value of the Spine reporting unit exceeded its
fair value and a charge of $273 was recognized in goodwill and
other impairments in the Consolidated Statements of Earnings.
The impairment charge for the Spine reporting unit was driven by
a decrease in future product demand due to the competitive
environment and an increase in the Spine reporting units
weighted average cost of capital. Subsequent to the annual
goodwill impairment test management committed to a plan to sell
certain assets associated withthe Spinal Implants business
(disposal group).Goodwill was allocated to the disposal group
based on the relative fair values of the disposal group and the
portion of the Spine reporting unit that will be retained. Goodwill
allocated to the disposal group was tested for impairment which
resulted in an impairment charge of $183 recognized in goodwill
and other impairments in the Consolidated Statements of
Earnings. Refer to Note 16 for additional information on the sale
of the Spinal Implants business.
In our annual impairment test as of October 31, 2025 we
performed a quantitative impairment test for our Peripheral
Vascular reporting unit and determined that its fair value
exceeded its carrying amount by 12%. At October 31, 2025,
goodwill attributable to the Peripheral Vascular reporting unit was
$3,203. The fair value of this 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 and the rate used to
discount the estimated future cash flows to their present value,
based on the reporting units estimated weighted average cost of
capital.
For our other reporting units, we considered qualitative indicators
of impairment as it was considered more likely than not that the
fair values of those reporting units exceeded their respective
carrying values. No impairment was identified for those reporting
units in 2025 or 2024.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 39 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
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 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 2024 goodwill of $117 previously reported within Orthopaedics
was reclassified to MedSurg and Neurotechnology to reflect the
reclassification of the Interventional Spine reporting unit from
Orthopaedics to MedSurg and Neurotechnology to align with
certain updates in our internal reporting structure.
| |
| Changes in the Net Carrying Value of Goodwill by Segment | |
| MedSurg and Neurotechnology | Orthopaedics | Total | |
| 2023 | $8,270 | $6,973 | $15,243 | |
| Goodwill impairment | | (456) | (456) | |
| Additions and adjustments | 852 | 300 | 1,152 | |
| Foreign exchange and other | 86 | (170) | (84) | |
| 2024 | $9,208 | $6,647 | $15,855 | |
| Additions and adjustments | 3,275 | (1) | 3,274 | |
| Foreign exchange and other | 73 | 89 | 162 | |
| 2025 | $12,556 | $6,735 | $19,291 | |
| |
| Summary of Other Intangible Assets | |
| GrossCarryingAmount | LessAccumulatedAmortization | NetCarryingAmount | |
| Developed technologies | |
| 2025 | $7,273 | $3,430 | $3,843 | |
| 2024 | 5,698 | 2,931 | 2,767 | |
| Customer relationships | |
| 2025 | $3,425 | $1,844 | $1,581 | |
| 2024 | 3,055 | 1,636 | 1,419 | |
| Patents | |
| 2025 | $157 | $144 | $13 | |
| 2024 | 153 | 136 | 17 | |
| Trademarks | |
| 2025 | $420 | $281 | $139 | |
| 2024 | 413 | 256 | 157 | |
| In-process research and development | |
| 2025 | $34 | $ | $34 | |
| 2024 | 34 | | 34 | |
| Other | |
| 2025 | $132 | $61 | $71 | |
| 2024 | 63 | 62 | 1 | |
| Total | |
| 2025 | $11,441 | $5,760 | $5,681 | |
| 2024 | 9,416 | 5,021 | 4,395 | |
| |
| Estimated Amortization Expense | |
| 2026 | 2027 | 2028 | 2029 | 2030 | |
| $699 | $711 | $631 | $616 | $597 | |
NOTE 9 - CAPITAL STOCK
The aggregate number of shares of all classes of stock which we
are authorized to issue is up to 1,000,500,000, divided into two
classes consisting of 500,000 shares of $1 par value preferred
stock and 1,000,000,000 shares of common stock with a par
value of $0.10. No shares of preferred stock were outstanding on
December31, 2025.
We made no repurchases of shares in 2025. 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 are made from time-to-time in the open market, in
privately negotiated transactions or otherwise. On December31,
2025 the total dollar value of shares of our common stock that
could be purchased under our authorized repurchase program
was $1,033.
Shares reserved for future compensation grants of our common
stock were 31million and 18millionon December31, 2025 and
2024.
Stock Options
We measure the cost of employee stock options based on the
grant-date fair value and recognize that cost using the straight-
line method over the period in which a recipient is required to
provide services in exchange for the options, typically the vesting
period. The weighted-average fair value per share of options is
estimated on the date of grant using the Black-Scholes option
pricing model.
| |
| Option Value and Assumptions | |
| 2025 | 2024 | 2023 | |
| Weighted-average fair value per share | $141.40 | $118.22 | $83.59 | |
| Assumptions: | |
| Risk-free interest rate | 4.4% | 4.3% | 4.0% | |
| Expected dividend yield | 0.9% | 1.1% | 1.2% | |
| Expected stock price volatility | 29.1% | 29.9% | 29.0% | |
| Expected option life (years) | 6.4 | 6.3 | 6.2 | |
The risk-free interest rate for periods within the expected life of
options granted is based on the United States Treasury yield
curve in effect at the time of grant. Expected stock price volatility
is based on the historical volatility of our stock. The expected
option life, representing the period of time that options granted
are expected to be outstanding, is based on historical option
exercise and employee termination data.
| |
| 2025 Stock Option Activity | |
| Shares (in millions) | Weighted-AverageExercisePrice | Weighted-AverageRemainingTerm (in years) | AggregateIntrinsic Value | |
| Outstanding January1 | 10.8 | $214.87 | |
| Granted | 1.0 | 392.36 | |
| Exercised | (1.2) | 158.83 | |
| Canceled or forfeited | (0.2) | 313.05 | |
| Outstanding December31 | 10.4 | $234.56 | 5.0 | $1,246.1 | |
| Exercisable December31 | 6.9 | $195.53 | 3.7 | $1,073.4 | |
| Options expected to vest | 3.3 | $309.91 | 7.5 | $166.7 | |
The aggregate intrinsic value of options, which represents the
cumulative difference between the fair market value of the
underlying common stock and the option exercise prices,
exercised was $260, $362 and $318 in 2025, 2024 and 2023.
Exercise prices for options outstanding ranged from $96.64 to
$392.39 on December31, 2025. On December31, 2025 there
was $160 of unrecognized compensation cost related to
nonvested stock options granted under the long-term incentive
plans. That cost is expected to be recognized as expense over
the weighted-average period of approximately 1.5 years.
| |
| Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) Activity | |
| Shares(inmillions) | Weighted-AverageGrantDate Fair Value | |
| RSUs | PSUs | RSUs | PSUs | |
| Nonvested on January 1 | 0.7 | 0.2 | $290.58 | $287.51 | |
| Granted | 0.3 | 0.1 | 385.68 | 334.24 | |
| Vested | (0.3) | (0.1) | 277.40 | 254.47 | |
| Canceled or forfeited | (0.1) | | 337.17 | | |
| Nonvested on December 31 | 0.6 | 0.2 | $344.25 | $333.06 | |
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 40 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
On December31, 2025 there was $100 of unrecognized
compensation cost related to nonvested RSUs. That cost is
expected to be recognized as expense over the weighted-
average period of approximately one year. The weighted-average
grant date fair value per share of RSUs granted was $385.68 and
$332.64 in 2025 and 2024. The fair value of RSUs and PSUs
vested in 2025 was $91 and $26. On December31, 2025 there
was $26 of unrecognized compensation cost related to
nonvested PSUs. That cost is expected to be recognized as
expense over the weighted-average period of approximately one
year.
Employee Stock Purchase Plans (ESPP)
Employees may participate in our ESPP provided they meet
certain eligibility requirements. The purchase price for our
common stock under the terms of the ESPP is defined as 95% of
the closing stock price on the last trading day of a purchase
period. We issued 178,090 and 173,708 shares under the ESPP
in 2025 and 2024.
NOTE 10 - 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
December31, 2025.
In February 2025 we entered into a new revolving credit
agreement that replaces our previous agreement dated October
2021. The primary changes included increasing the aggregate
principal amount of the facility by $750 to $3,000 and extending
the maturity date to February 25, 2030. On December31, 2025
there were no borrowings outstanding under our revolving credit
facility or our commercial paper program which allows for
maturities up to 397 days from the date of issuance. The
maximum amount of our commercial paper that can be
outstanding at any time is $3,000.
In February 2025 we issued $500 of 4.550% senior unsecured
notes due February 10, 2027, $700 of 4.700% senior unsecured
notes due February 10, 2028, $800 of 4.850% senior unsecured
notes due February 10, 2030 and $1,000 of 5.200% senior
unsecured notes due February 10, 2035. In June 2025 we repaid
$650 of 1.150% senior unsecured notes. In November 2025 we
repaid $750 of 3.375% senior unsecured notes. The following
table summarizes our total debt at December 31:
| |
| Summary of Total Debt | |
| Rate | Due | 2025 | 2024 | |
| Senior unsecured notes: | |
| 1.150% | June 15, 2025 | $ | $649 | |
| 3.375% | November 1, 2025 | | 750 | |
| 3.500% | March 15, 2026 | 1,000 | 998 | |
| 4.550% | February 10, 2027 | 498 | | |
| 2.125% | November 30, 2027 | 881 | 777 | |
| 4.700% | February 10, 2028 | 697 | | |
| 3.650% | March 7, 2028 | 599 | 598 | |
| 4.850% | December 8, 2028 | 597 | 596 | |
| 3.375% | December 11, 2028 | 704 | 621 | |
| 0.750% | March 1, 2029 | 939 | 828 | |
| 4.250% | September 11, 2029 | 744 | 743 | |
| 4.850% | February 10, 2030 | 794 | | |
| 1.950% | June 15, 2030 | 995 | 993 | |
| 2.625% | November 30, 2030 | 759 | 669 | |
| 1.000% | December 3, 2031 | 876 | 772 | |
| 3.375% | September 11, 2032 | 934 | 824 | |
| 4.625% | September 11, 2034 | 741 | 740 | |
| 5.200% | February 10, 2035 | 990 | | |
| 3.625% | September 11, 2036 | 695 | 613 | |
| 4.100% | April 1, 2043 | 393 | 393 | |
| 4.375% | May 15, 2044 | 396 | 396 | |
| 4.625% | March 15, 2046 | 984 | 984 | |
| 2.900% | June 15, 2050 | 643 | 643 | |
| Other | | 10 | |
| Total debt | $15,859 | $13,597 | |
| Less current maturities | 1,000 | 1,409 | |
| Total long-term debt | $14,859 | $12,188 | |
| |
| Unamortized debt issuance costs | $70 | $63 | |
| Borrowing capacity on existing facilities | $2,911 | $2,160 | |
| Fair value of senior unsecured notes | $15,344 | $12,780 | |
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 $582, $396 and $356 in
2025, 2024 and 2023.
NOTE 11 - INCOME TAXES
On January 1, 2025 we prospectively adopted ASU 2023-09
(Topic 740): Income Taxes: Improvements to Income Tax
Disclosures which expands the existing rules on income tax
disclosures. This update requires entities to disclose specific
categories in the tax rate reconciliation, provide additional
information for reconciling items that meet a quantitative
threshold and disclose additional information about income taxes
paid on an annual basis. In determining the reconciling items we
considered the effect of tax rulings as part of the statutory tax
rate.
Our effective tax rate was 28.1%, 14.3% and 13.8% for 2025,
2024 and 2023. The effective income tax rate for 2025 increased
from 2024 due to the 2025 tax effect of transfers of intellectual
property between tax jurisdictions and the 2024 tax effect of the
sale of the Spinal Implants business. The effective income tax
rate for 2024 increased from 2023 due to the 2023 tax effect of
transfers of intellectual property between tax jurisdictions offset
by the 2024 tax effect of the sale of the Spinal Implants business.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 41 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| Effective Income Tax Rate Reconciliation | |
| 2025 | |
| Amount | Percent | |
| United States federal statutory rate | $948 | 21.0% | |
| State and Local Income Taxes, Net of Federal Income Tax Effect(1) | 173 | 3.8 | |
| Foreign Tax Effects | |
| Ireland | |
| Statutory tax rate difference | (177) | (3.9) | |
| Other | 17 | 0.4 | |
| Puerto Rico | |
| Statutory tax rate difference | (49) | (1.1) | |
| Withholding Tax | 60 | 1.3 | |
| Expiration of credits carryforward | 78 | 1.7 | |
| Change in valuation allowance | (78) | (1.7) | |
| Other | (4) | (0.1) | |
| Other foreign jurisdictions | 20 | 0.4 | |
| Effect of changes in tax laws or rates enacted in the current period | | | |
| Effect of Cross-Border Tax Laws | |
| Direct foreign tax credits | (90) | (2.0) | |
| Global intangible low-taxed income | 70 | 1.6 | |
| Tax Credits | |
| Research and development tax credits | (53) | (1.2) | |
| Changes in Valuation Allowances | | | |
| Nontaxable or Nondeductible Items | |
| Spinal Implants divestiture | (51) | (1.1) | |
| Transfers of intellectual property | 405 | 9.0 | |
| Changes in unrecognized Tax Benefits | 17 | 0.4 | |
| Other Adjustments | (18) | (0.4) | |
| Effective Tax Rate | $1,268 | 28.1% | |
(1) State taxes in Pennsylvania, New York, Illinois, Florida, California, Michigan,
Indiana, and Tennessee accounted for the majority (greater than 50%) of the tax
effect in this category.
| |
| Effective Income Tax Rate Reconciliation | |
| 2024 | 2023 | |
| United States federal statutory rate | 21.0% | 21.0% | |
| United States state and local income taxes, less federal deduction | 1.1 | 1.1 | |
| Foreign income tax at rates other than 21% | (4.1) | (6.8) | |
| Tax related to repatriation of foreign earnings | 0.3 | 1.2 | |
| United States research and development credits | (1.4) | (1.2) | |
| Intellectual property transfers | | (3.3) | |
| Goodwill impairment | 2.8 | | |
| Outside basis difference related to the anticipated sale of the Spinal Implants business | (4.9) | | |
| Other | (0.5) | 1.8 | |
| Effective income tax rate | 14.3% | 13.8% | |
| |
| Cash paid for income taxes (net of refunds received) | |
| 2025 | |
| United States - Federal | 533 | |
| United States - State | 71 | |
| Foreign | |
| Ireland | 175 | |
| Other | 223 | |
| Subtotal | 398 | |
| Total | $1,002 | |
| |
| Earnings Before Income Taxes | |
| 2025 | 2024 | 2023 | |
| United States | $1,434 | $523 | $701 | |
| International | 3,080 | 2,969 | 2,972 | |
| Total | $4,514 | $3,492 | $3,673 | |
| |
| Components of Income Tax Expense (Benefit) | |
| Current income tax expense (benefit): | 2025 | 2024 | 2023 | |
| United States federal | $414 | $490 | $236 | |
| United States state and local | 149 | 90 | 48 | |
| International | 313 | 289 | 430 | |
| Total current income tax expense | $876 | $869 | $714 | |
| Deferred income tax expense (benefit): | |
| United States federal | $186 | $(462) | $(212) | |
| United States state and local | 78 | (76) | (20) | |
| International | 128 | 168 | 26 | |
| Total deferred income tax expense (benefit) | $392 | $(370) | $(206) | |
| Total income tax expense | $1,268 | $499 | $508 | |
Interest included in interest expense was $18, $13, and $1 in
2025, 2024 and 2023. The United States federal deferred income
tax expense (benefit) includes the utilization of net operating loss
carryforwards of $32, $9 and $189 in 2025, 2024 and 2023.
| |
| Deferred Income Tax Assets and Liabilities | |
| Deferred income tax assets: | 2025 | 2024 | |
| Inventories | $553 | $551 | |
| Other accrued expenses | 401 | 207 | |
| Depreciation and amortization | 546 | 715 | |
| State income taxes | 90 | 167 | |
| Share-based compensation | 117 | 100 | |
| Research and development capitalization | 40 | 408 | |
| International interest expense carryforwards | 56 | 52 | |
| Net operating loss and credit carryforwards | 315 | 410 | |
| Outside basis difference related to the anticipated sale of the Spinal Implants business | | 170 | |
| Other | 352 | 310 | |
| Total deferred income tax assets | $2,470 | $3,090 | |
| Less valuation allowances | (148) | (228) | |
| Net deferred income tax assets | $2,322 | $2,862 | |
| Deferred income tax liabilities: | |
| Depreciation and amortization | $(1,222) | $(1,141) | |
| Undistributed earnings | (139) | (61) | |
| Total deferred income tax liabilities | $(1,361) | $(1,202) | |
| Net deferred income tax assets | $961 | $1,660 | |
| Reported as: | |
| Noncurrent deferred income tax assets | $1,098 | $1,742 | |
| Noncurrent liabilitiesOther liabilities | (137) | (82) | |
| Total | $961 | $1,660 | |
Accrued interest was $96 and $71 on December31, 2025 and
2024 which was reported in accrued expenses and other
liabilities and other noncurrent liabilities.
United States federal loss carryforwards of $271, with $57 of
associated deferred tax asset and with $2 being subject to a
valuation allowance, begin to expire in 2026. United States state
loss carryforwards of $1,606, with $64 associated deferred tax
asset and with $33 being subject to a valuation allowance, begin
to expire in 2026. International loss carryforwards of $309, with
$67 of associated deferred tax asset and with $61 being subject
to a valuation allowance, begin to expire in 2026; however, some
have no expiration. We also have tax credit carryforwards of
$141 with $4 being subject to a full valuation allowance. The
credits with a full valuation allowance begin to expire in 2026.
We recorded deferred income tax on undistributed earnings of
foreign subsidiaries not determined to be indefinitely reinvested.
The amount of undistributed earnings of foreign subsidiaries
determined to be indefinitely reinvested at December 31, 2025
was approximately $11.7billion. Determination of the total
amount of unrecognized deferred income tax on undistributed
earnings of foreign subsidiaries is not practicable.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 42 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| Uncertain Income Tax Positions | |
| | 2025 | 2024 | |
| Beginning uncertain tax positions | $349 | $371 | |
| Increases related to current year income tax positions | 19 | 18 | |
| Increases related to prior year income tax positions | 12 | | |
| Decreases related to prior year income tax positions | | (4) | |
| Settlements of income tax audits | | (21) | |
| Statute of limitations expirations and other | (4) | (3) | |
| Foreign currency translation | 27 | (12) | |
| Ending uncertain tax positions | $403 | $349 | |
| Reported as: | |
| Noncurrent liabilitiesIncome taxes | $403 | $349 | |
Our income tax expense would have been reduced by $279 and
$224 in 2025 and 2024 had our uncertain income tax positions
been favorably resolved. It is reasonably possible that the
amount of unrecognized tax benefits will significantly change due
to one or more of the following events in the next 12 months:
expiring statutes, audit activity, tax payments, competent
authority proceedings related to transfer pricing or final decisions
in matters that are the subject of controversy in various taxing
jurisdictions in which we operate, including inventory transfer
pricing, cost sharing, product royalty and foreign branch
arrangements. We are not able to reasonably estimate the
amount or the future periods in which changes in unrecognized
tax benefits may be resolved. Interest incurred associated with
uncertain tax positions is included in interest expense.
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. We received a final audit report and
assessments from the German Federal Central Tax Office
(FCTO) related to the years 2010 through 2017 of $754 and
expect to receive additional assessments of $11 based on the
final audit report. We intend to defend our filing positions through
the FCTO independent appeals process and/or litigation as
necessary. If the resolution of this matter results in additional
German income taxes, we expect to pursue a claim for
associated foreign tax credits. Our unrecognized tax benefits
associated with this matter remain unchanged from 2024.
Income tax years are open from 2019 through 2025 for the
United States federal jurisdiction and are open for other major
jurisdictions from 2010 through 2025.
NOTE 12 - RETIREMENT PLANS
Defined Contribution Plans
We provide certain employees with defined contribution plans
and other types of retirement plans. A portion of our retirement
plan expense under the defined contribution plans is funded with
Stryker common stock. The use of Stryker common stock
represents a non-cash operating activity that is not reflected in
our Consolidated Statements of Cash Flows.
| |
| 2025 | 2024 | 2023 | |
| Plan expense | $399 | $376 | $327 | |
| Expense funded with Stryker common stock | 72 | 62 | 57 | |
| Stryker common stock held by plan: | |
| Dollar amount | $763 | $781 | $649 | |
| Shares (in millions) | 2.2 | 2.2 | 2.2 | |
| Value as a percentage of total plan assets | 8% | 10% | 10% | |
Defined Benefit Plans
Certain of our subsidiaries have both funded and unfunded
defined benefit pension plans covering some or all of their
employees. The majority of our defined benefit pension plans
have projected benefit obligations in excess of plan assets.
Discount Rate
The discount rates were selected using a hypothetical portfolio of
high quality bonds on December 31 that would provide the
necessary cash flows to match our projected benefit payments.
Expected Return on Plan Assets
The expected return on plan assets is determined by applying the
target allocation in each asset category of plan investments to the
anticipated return for each asset category based on historical and
projected returns.
| |
| Components of Net Periodic Pension Cost | |
| Net periodic benefit cost: | 2025 | 2024 | 2023 | |
| Service cost | $(42) | $(39) | $(32) | |
| Interest cost | (24) | (21) | (23) | |
| Expected return on plan assets | 22 | 19 | 18 | |
| Amortization of prior service credit | 2 | 1 | 1 | |
| Recognized actuarial gain (loss) | (2) | (1) | 4 | |
| Net periodic benefit cost | $(44) | $(41) | $(32) | |
| Changes in assets and benefit obligations recognized in OCI: | |
| Net actuarial gain (loss) | $93 | $43 | $(67) | |
| Recognized net actuarial (gain) loss | 2 | 1 | (4) | |
| Prior service credit and transition amount | (2) | (1) | (1) | |
| Total recognized in other comprehensive income (loss) | $93 | $43 | $(72) | |
| Total recognized in net periodic benefit cost and OCI | $49 | $2 | $(104) | |
| Weighted-average rates used to determine net periodic benefit cost: | |
| Discount rate | 2.9% | 2.8% | 3.3% | |
| Expected return on plan assets | 4.1% | 4.3% | 4.2% | |
| Rate of compensation increase | 2.9% | 3.0% | 3.0% | |
| Weighted-average discount rate used to determine projected benefit obligations | 3.6% | 2.9% | 2.8% | |
The actuarial gain (loss) for all pension plans was primarily
related to a change in the discount rate used to measure the
benefit obligations of those plans.
Investment Strategy
The investment strategy for our defined benefit pension plans is
to meet the liabilities of the plans as they fall due and to
maximize the return on invested assets within appropriate risk
tolerances.
| |
| 2025 | 2024 | |
| Fair value of plan assets | $560 | $492 | |
| Benefit obligations | (829) | (782) | |
| Funded status | $(269) | $(290) | |
| Reported as: | |
| Noncurrent assetsother assets | $72 | $48 | |
| Current liabilitiesaccrued compensation | (5) | (3) | |
| Noncurrent liabilitiesother liabilities | (336) | (335) | |
| Pre-tax amounts recognized in AOCI: | |
| Unrecognized net actuarial gain (loss) | 101 | 6 | |
| Unrecognized prior service credit | 8 | 8 | |
| Total | $109 | $14 | |
| |
| Change in Benefit Obligations | |
| 2025 | 2024 | |
| Beginning projected benefit obligations | $782 | $826 | |
| Service cost | 42 | 39 | |
| Interest cost | 24 | 21 | |
| Foreign exchange impact and other | 114 | (52) | |
| Employee contributions | 9 | 7 | |
| Actuarial (gains) losses | (116) | (40) | |
| Benefits paid | (26) | (19) | |
| Ending projected benefit obligations | $829 | $782 | |
| Ending accumulated benefit obligations | $786 | $748 | |
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 43 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| Change in Plan Assets | |
| 2025 | 2024 | |
| Beginning fair value of plan assets | $492 | $485 | |
| Actual return | (3) | 22 | |
| Employer contributions | 23 | 23 | |
| Employee contributions | 9 | 7 | |
| Foreign exchange impact | 60 | (31) | |
| Benefits paid | (21) | (14) | |
| Ending fair value of plan assets | $560 | $492 | |
| |
| Allocation of Plan Assets | |
| 2026 Target | 2025 Actual | 2024 Actual | |
| Equity securities | 26% | 32% | 28% | |
| Debt securities | 41 | 39 | 40 | |
| Other | 33 | 29 | 32 | |
| Total | 100% | 100% | 100% | |
| |
| Valuation of Plan Assets | |
| 2025 | Level 1 | Level 2 | Level 3 | Total | |
| Cash and cash equivalents | $16 | $ | $ | $16 | |
| Equity securities | 9 | 162 | | 171 | |
| Debt securities | 2 | 230 | | 232 | |
| Other | 4 | 83 | 54 | 141 | |
| Total | $31 | $475 | $54 | $560 | |
| |
| 2024 | Level 1 | Level 2 | Level 3 | Total | |
| Cash and cash equivalents | $17 | $ | $ | $17 | |
| Equity securities | 8 | 125 | | 133 | |
| Debt securities | 2 | 203 | | 205 | |
| Other | 4 | 76 | 57 | 137 | |
| Total | $31 | $404 | $57 | $492 | |
Our Level 3 pension plan assets primarily include guaranteed
investment contracts with insurance companies. The insurance
contracts guarantee us principal repayment and a fixed rate of
return. The $3 decrease in Level 3 pension plan assets is
primarily driven by the change in the corresponding pension
liability. We expect to contribute $24 to our defined benefit
pension plans in 2026.
| |
| Estimated Future Benefit Payments | |
| 2026 | 2027 | 2028 | 2029 | 2030 | 2031-2035 | |
| $29 | $32 | $33 | $34 | $38 | $223 | |
NOTE 13 - SUMMARY OF QUARTERLY DATA (UNAUDITED)
| |
| 2025 Quarters | Mar 31 | Jun30 | Sep 30 | Dec 31 | |
| Net sales | $5,866 | $6,022 | $6,057 | $7,171 | |
| Gross profit | 3,744 | 3,841 | 3,852 | 4,628 | |
| Earnings before income taxes | 764 | 1,016 | 1,029 | 1,705 | |
| Net earnings | 654 | 884 | 859 | 849 | |
| Net earnings per share of common stock: | |
| Basic | $1.71 | $2.32 | $2.25 | $2.21 | |
| Diluted | $1.69 | $2.29 | $2.22 | $2.20 | |
| Dividends declared per share of common stock | $0.84 | $0.84 | $0.84 | $0.88 | |
| |
| 2024 Quarters | Mar 31 | Jun30 | Sep 30 | Dec 31 | |
| Net sales | $5,243 | $5,422 | $5,494 | $6,436 | |
| Gross profit | 3,333 | 3,416 | 3,517 | 4,174 | |
| Earnings before income taxes | 923 | 998 | 1,043 | 528 | |
| Net earnings | 788 | 825 | 834 | 546 | |
| Net earnings per share of common stock: | |
| Basic | $2.07 | $2.17 | $2.18 | $1.43 | |
| Diluted | $2.05 | $2.14 | $2.16 | $1.41 | |
| Dividends declared per share of common stock | $0.80 | $0.80 | $0.80 | $0.84 | |
NOTE 14 - SEGMENT AND GEOGRAPHIC DATA
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
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.
The Corporate and Other category shown in the table below
includes corporate and administration, corporate initiatives and
share-based compensation, which includes compensation related
to employee stock options, restricted stock units and
performance stock unit grants and director stock options and
restricted stock unit grants.
| |
| Segment Results | 2025 | 2024 | 2023 | |
| MedSurg and Neurotechnology | $15,647 | $13,518 | $12,163 | |
| Orthopaedics | $9,469 | 9,077 | 8,335 | |
| Net sales | $25,116 | $22,595 | $20,498 | |
| MedSurg and Neurotechnology | $5,859 | $5,320 | $4,876 | |
| Orthopaedics | $2,570 | 2,400 | 2,254 | |
| Cost of sales | $8,429 | $7,720 | $7,130 | |
| MedSurg and Neurotechnology | $948 | $784 | $702 | |
| Orthopaedics | $524 | 540 | 508 | |
| Segment research, development and engineering expenses | $1,472 | $1,324 | $1,210 | |
| MedSurg and Neurotechnology | $3,931 | $3,203 | $2,934 | |
| Orthopaedics | $3,132 | 3,111 | 2,922 | |
| Segment selling, general and administrative expenses | $7,063 | $6,314 | $5,856 | |
| MedSurg and Neurotechnology | $237 | $208 | $181 | |
| Orthopaedics | 423 | 433 | 386 | |
| Segment depreciation and amortization | $660 | $641 | $567 | |
| Corporate and Other | 178 | 162 | 139 | |
| Amortization of intangible assets | 732 | 623 | 635 | |
| Total depreciation and amortization | $1,570 | $1,426 | $1,341 | |
| MedSurg and Neurotechnology | $4,672 | $4,004 | $3,470 | |
| Orthopaedics | 2,820 | 2,591 | 2,265 | |
| Segment operating income | $7,492 | $6,595 | $5,735 | |
| Items not allocated to segments: | |
| Corporate and Other | $(889) | $(880) | $(780) | |
| Inventory stepped up to fair value | (173) | (46) | | |
| Acquisition and integration-related charges | (335) | (108) | (20) | |
| Amortization of intangible assets | (732) | (623) | (635) | |
| Structural optimization and other special charges | (191) | (138) | (170) | |
| Goodwill and other impairments | (170) | (977) | (36) | |
| Medical device regulation | (38) | (58) | (96) | |
| Recall-related matters | (58) | (40) | (18) | |
| Regulatory and legal matters | (17) | (36) | (92) | |
| Consolidated operating income | $4,889 | $3,689 | $3,888 | |
| |
| Segment Assets and Capital Spending | |
| Assets: | 2025 | 2024 | |
| MedSurg and Neurotechnology | $27,647 | $23,115 | |
| Orthopaedics | 18,641 | 18,507 | |
| Total segment assets | $46,288 | $41,622 | |
| Corporate and Other | 1,556 | 1,349 | |
| Total assets | $47,844 | $42,971 | |
| Purchases of property, plant and equipment: | 2025 | 2024 | 2023 | |
| Orthopaedics | $296 | $230 | $179 | |
| MedSurg and Neurotechnology | 220 | 276 | 183 | |
| Total segment purchases of property, plant and equipment | $516 | $506 | $362 | |
| Corporate and Other | 245 | 249 | 213 | |
| Total purchases of property, plant and equipment | $761 | $755 | $575 | |
We measure the financial results of our reportable segments
using an internal performance measure that excludes acquisition
and integration-related charges, structural optimization and other
special charges, goodwill and other impairments, reserves for
certain product recall matters and reserves for certain legal and
regulatory matters. Identifiable assets are those assets used
exclusively in the operations of each business segment or
allocated when used jointly. Corporate assets are principally
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 44 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
property, plant and equipment and noncurrent assets.
The countries in which we have local revenue generating
operations have been combined into the following geographic
areas: the United States; Europe, Middle East, Africa; Asia
Pacific; and other foreign countries, which include Canada and
countries in the Latin American region. Net sales are reported
based on the geographic area of the Stryker location where the
sales to the customer originated.
| |
| Geographic Information | |
| Net Sales | Net Property, Plant and Equipment | |
| 2025 | 2024 | 2023 | 2025 | 2024 | |
| United States | $19,006 | $16,943 | $15,257 | $2,084 | $1,997 | |
| Europe, Middle East, Africa | 3,181 | 2,897 | 2,618 | 1,562 | 1,260 | |
| Asia Pacific | 2,164 | 2,020 | 1,946 | 97 | 75 | |
| Other countries | 765 | 735 | 677 | 133 | 116 | |
| Total | $25,116 | $22,595 | $20,498 | $3,876 | $3,448 | |
NOTE 15 - ASSET IMPAIRMENTS
During 2025, 2024 and 2023 we recorded impairment charges of
$109, $159 and $36 to write off long-lived and intangible assets
excluding long-lived assets held for sale which included charges
related to certain product line exits.
NOTE 16 - SALE OF SPINAL IMPLANTS BUSINESS
During the fourth quarter 2024 management committed to a plan
to sell certain assets associated with the Spinal Implants
business (disposal group) and such assets were classified as
held for sale beginning November 2024. As a result we recorded
a valuation allowance of $362 to record the disposal group at its
fair value less cost to sell within goodwill and other impairments
in our Consolidated Statements of Earnings.
In April 2025 we completed the sale of the disposal group to the
Viscogliosi Brothers, LLC. In the first half of 2025 we recognized
immaterial impairment charges to record the disposal group at its
fair value less cost to sell within goodwill and other impairments
in our Consolidated Statements of Earnings. The fair value of the
disposal group and consideration received was measured using a
discounted cash flow analysis based upon the selling price and
unobservable inputs, such as market conditions and the rate
used to discount the estimated future cash flows to their present
value based on factors including the disposal groups cost of
equity and market yield rates, which are Level 3 inputs.
Consideration could increase by up to $57 or decrease by up to
$245 based on the amount received.
The assets associated with the disposal group are reported in our
Orthopaedics segment at December 31, 2024. The assets and
liabilities held for sale at December 31, 2024 are classified within
prepaid expenses and other current assets and accrued
expenses and other liabilities in our Consolidated Balance
Sheets. The assets and liabilities of the disposal group at the
date of sale and at December 31, 2024 were as follows:
| |
| Held for Sale | |
| Date of Sale | December 31 | |
| 2025 | 2024 | |
| Accounts receivable, net | $56 | $62 | |
| Total inventories | 195 | 183 | |
| Prepaid expenses and other current assets | 27 | 10 | |
| Property, plant and equipment, net | 53 | 51 | |
| Other intangibles, net | 323 | 326 | |
| Noncurrent deferred income tax assets | 9 | 9 | |
| Other noncurrent assets | 179 | 171 | |
| Valuation allowance | (395) | (362) | |
| Total assets | $447 | $450 | |
| |
| Accounts payable | $41 | $28 | |
| Accrued compensation | 20 | 26 | |
| Accrued expenses and other liabilities | 24 | 29 | |
| Other noncurrent liabilities | 27 | 21 | |
| Total liabilities | $112 | $104 | |
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 45 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| ITEM9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. | |
Not applicable.
| |
| ITEM9A. | CONTROLS AND PROCEDURES. | |
Evaluation of Disclosure Controls and Procedures
The Company's management, with the participation of the Chief
Executive Officer and Chief Financial Officer (the Certifying
Officers), evaluated the effectiveness of the Companys
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) (Exchange Act) as of
December31, 2025. Based on that evaluation, the Certifying
Officers concluded that the Companys disclosure controls and
procedures were effective as of December31, 2025.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial
reporting during the fourth quarter of 2025 that materially
affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
Management's Report on Internal Control Over Financial
Reporting
The Company's management is responsible for establishing and
maintaining adequate internal control over financial reporting, as
such term is defined in Exchange Act Rule 13a-15(f). The
Company's internal control over financial reporting was designed
to provide reasonable assurance to the Company's management
and Board of Directors regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that: (i)
pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of
the assets of the Company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the
Company are being made only in accordance with authorizations
of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company's
assets that could have a material effect on the financial
statements.
The Company's management assessed the effectiveness of our
internal control over financial reporting on December31, 2025. In
making this assessment, we used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway
Commission in Internal ControlIntegrated Framework (2013).
We have excluded from our assessment the operations and
related assets of Inari, which we acquired in February 2025. As of
December 31, 2025 Inari represented approximately 10% of our
total assets, including the goodwill and intangible assets recorded
as part of the purchase price allocation, and approximately 2.3%
of our net sales for the year ended December 31, 2025. Based
on its assessment, management concluded that our internal
control over financial reporting was effective as of December31,
2025.
Strykers independent registered public accounting firm has
issued an audit report on their assessment of the effectiveness of
the Companys internal control over financial reporting.
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Stryker
Corporation
Opinion on Internal Control Over Financial Reporting
We have audited Stryker Corporation and subsidiaries internal
control over financial reporting as of December 31, 2025, based
on criteria established in Internal ControlIntegrated Framework
issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) (the COSO criteria). In
our opinion, Stryker Corporation and subsidiaries (the Company)
maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2025, based on the COSO
criteria.
As indicated in the accompanying Managements Annual Report
on Internal Control Over Financial Reporting, managements
assessment of and conclusion on the effectiveness of internal
control over financial reporting did not include the internal
controls of Inari Medical, Inc. (Inari), which is included in the 2025
consolidated financial statements of the Company and
constituted 10% of total assets as of December 31, 2025 and
2.3% of net sales for the year then ended. Our audit of internal
control over financial reporting of the Company also did not
include an evaluation of the internal control over financial
reporting of Inari.
We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States)
(PCAOB), the 2025 consolidated financial statements of the
Company and our report dated February 11, 2026 expressed an
unqualified opinion thereon.
Basis for Opinion
The Companys management is responsible for maintaining
effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial
reporting included in the accompanying Managements Report on
Internal Control Over Financial Reporting. Our responsibility is to
express an opinion on the Companys internal control over
financial reporting based on our audit. We are a public
accounting firm registered with the PCAOB and are required to
be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audit in accordance with the standards of the
PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all
material respects.
Our audit included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in
the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial
Reporting
A companys internal control over financial reporting is a process
designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles. A companys internal control over
financial reporting includes those policies and procedures that (1)
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 46 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of
the assets of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations
of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the companys
assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
/s/Ernst& Young LLP
Grand Rapids, Michigan
February11, 2026
| |
| ITEM9B. | 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 10b51 trading arrangements (as defined in
Item 408(c) of Regulation S-K).
| |
| ITEM9C. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. | |
Not applicable.
| |
| PART III | |
| |
| ITEM10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. | |
Information regarding our executive officers appears under the
caption "Information about our Executive Officers" in Part I, Item
1 of this report.
Information regarding our directors and certain corporate
governance and other matters appearing under the captions
"Proposal 1Election of Directors," "Corporate Governance,"
and "Additional InformationDelinquent Section 16(a) Reports"
in the 2026 proxy statement is incorporated herein by reference.
We have adopted Corporate Policy 6 (Trading in Securities by
Company Personnel) and Insider Trading Guidelines (collectively,
Insider Trading Policies) which govern the purchase, sale and/or
other disposition of our securities by our directors, officers and
employees, as well as by the Company itself, that we believe are
reasonably designed to promote compliance with insider trading
laws, rules and regulations and New York Stock Exchange listing
standards. Copies of the Insider Trading Policies are filed as
Exhibits 19(i) and 19(ii) to this report.
The Corporate Governance Guidelines adopted by our Board of
Directors, as well as the charters of each of the Audit Committee,
the Governance and Nominating Committee and the
Compensation Committee and the Code of Conduct applicable to
the principal executive officer, president, principal financial officer
and principal accounting officer or controller or persons
performing similar functions are posted on the "Corporate
Governance" section of our website at www.stryker.com.
| |
| ITEM11. | EXECUTIVE COMPENSATION. | |
Information regarding the compensation of our management
appearing under the captions "Compensation Discussion and
Analysis," "Compensation and Human Capital Committee
Report," "Executive Compensation" and "Compensation of
Directors" in the 2026 proxy statement is incorporated herein by
reference.
| |
| ITEM12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. | |
The information under the caption "Stock Ownership" in the 2026
proxy statement is incorporated herein by reference.
On December31, 2025 we had an equity compensation plan
under which options were granted at a price not less than fair
market value at the date of grant and under which awards of
restricted stock units (RSUs) and performance stock units (PSUs)
were made. Options and RSUs were also awarded under a
previous plan. Additional information regarding our equity
compensation plans appears in Note 1 and Note 9 to our
Consolidated Financial Statements. On December31, 2025 we
also had a stock performance incentive award program pursuant
to which shares of our common stock were and may be issued to
certain employees with respect to performance. The status of
these plans, each of which were previously submitted to and
approved by our shareholders, on December31, 2025 is as
follows:
| |
| Plan | Numberofsecurities to be issued upon exerciseofoutstandingoptions, warrants and rights | Weighted-average exercise price of outstandingoptions, warrants and rights | Numberofsecurities remaining available for future issuance under equity compensationplans (excluding sharesreflectedinthefirstcolumn) | |
| 2008 Employee Stock Purchase Plan | N/A | N/A | 4,925,529 | |
| 2011 Long-Term Incentive Plan(1) | 11,165,209 | $234.56 | 31,297,061 | |
| 2011 Performance Incentive Award Plan | N/A | N/A | 335,395 | |
| Total | 36,557,985 | |
(1) The 2011 Long-Term Incentive Plan securities to be issued
upon exercise include 627,908 RSUs and 174,228 PSUs. The
weighted-average exercise price does not take these awards into
account.
| |
| ITEM13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. | |
The information under the caption "Corporate Governance" and
"Corporate GovernanceCertain Relationships and Related
Party Transactions" in the 2026 proxy statement is incorporated
herein by reference.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 47 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| ITEM14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. | |
The information under the caption "Proposal 2Ratification of
Appointment of our Independent Registered Public Accounting
Firm" in the 2026 proxy statement is incorporated herein by
reference.
| |
| Dollar amounts in millions except per share amounts or as otherwise specified. | 48 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| PART IV | |
| |
| ITEM15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES. | |
| |
| (a)1. | Financial Statements | |
| The following Consolidated Financial Statements are set forth in Part II, Item 8 of this report. | |
| Report of Independent Registered Public Accounting Firm | 25 | |
| Consolidated Statements of Earnings for 2025, 2024 and 2023 | 27 | |
| Consolidated Statements of Comprehensive Income for 2025, 2024 and 2023 | 27 | |
| Consolidated Balance Sheets on 2025 and 2024 | 28 | |
| Consolidated Statements of Shareholders Equity for 2025, 2024 and 2023 | 29 | |
| Consolidated Statements of Cash Flows for 2025, 2024 and 2023 | 30 | |
| Notes to Consolidated Financial Statements | 31 | |
| |
| (a) 2. | Financial Statement Schedules | |
| The Consolidated Financial Statement schedule of Stryker Corporation and its subsidiaries is: | |
| SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |
| | | Additions | Deductions | | |
| Description | BalanceatBeginningof Period | ChargedtoCosts &Expenses | Uncollectible Amounts Written Off, Net of Recoveries | Effect of Changes in Foreign Currency Exchange Rates | Balanceat Endof Period | |
| DEDUCTED FROM ASSET ACCOUNTS | |
| Allowance for Doubtful Accounts: | |
| Year ended December31, 2025 | $213 | $95 | $91 | $1 | $216 | |
| Year ended December31, 2024 | $182 | $69 | $36 | $2 | $213 | |
| Year ended December31, 2023 | $154 | $69 | $40 | $1 | $182 | |
| |
| All other schedules for which provision is made in the applicable accounting regulation of the United States Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted. | |
| |
| (a) 3. | Exhibits | |
FORM 10-KITEM 15(a) 3. AND ITEM15(c)STRYKER CORPORATION AND SUBSIDIARIESEXHIBIT INDEX
| |
| Exhibit 2 | Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession | |
| (i) | Purchase Agreement, dated as of November 4, 2019, among Stryker Corporation, Stryker B.V. and Wright Medical Group N.V. Incorporated by reference to Exhibit 2.1 to the Companys Form 8-K dated November 6, 2019 (Commission File No. 001-13149). | |
| (ii) | | Agreement and Plan of Merger, dated as of January 6, 2022, by and among Stryker Corporation, Voice Merger Sub Corp., and Vocera Communications, Inc. Incorporated by reference to Exhibit 2.1 to the Companys Form 8-K dated January 11, 2022 (Commission File No. 001-13149). | |
| (iii) | Agreement and Plan of Merger, dated January 6, 2025, by and between Stryker Corporation and Inari Medical, Inc. Incorporated by reference to Exhibit 2.1 to the Companys Form 8-K dated January 7, 2025 (Commission File No. 001-13149). | |
| |
| Exhibit 3 | Articles of Incorporation and By-Laws | |
| (i) | Restated Articles of Incorporation Incorporated by reference to Exhibit 3(i) to the Company's Form 10-Q for the quarterly period ended September 30, 2018 (Commission File No. 00-09165). | |
| (ii) | Amended and Restated Bylaws - Incorporated by reference to Exhibit 3(ii) to the Company's Form 10-K for the year ended December 31, 2022 (Commission File No. 001-13149). | |
| |
| Exhibit 4 | Instruments defining the rights of security holders, including indenturesWe agree to furnish to the Commission upon request a copy of each instrument pursuant to which long-term debt of Stryker Corporation and its subsidiaries not exceeding 10% of the total assets of Stryker Corporation and its consolidated subsidiaries is authorized. | |
| (i) | Indenture, dated January 15, 2010, between Stryker Corporation and U.S. Bank National Association. Incorporated by reference to Exhibit 4.1 to the Company's Form 8-K dated January 15, 2010 (Commission File No. 000-09165). | |
| |
| 49 | |
| |
| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| (ii) | Fifth Supplemental Indenture (including the form of 2043 note) dated March 25, 2013, between Stryker Corporation and U.S. Bank National Association. Incorporated by reference to Exhibit 4.3 to the Company's Form 8-K dated March 25, 2013 (Commission File No. 000-09165). | |
| (iii) | Seventh Supplemental Indenture (including the form of 2044 note), dated May 1, 2014, between Stryker Corporation and U.S. Bank National Association. Incorporated by reference to Exhibit 4.3 to the Company's Form 8-K dated May 1, 2014 (Commission File No. 000-09165). | |
| (iv) | Eighth Supplemental Indenture (including the form of 2025 note), dated October 29, 2015, between Stryker Corporation and U.S. Bank National association. Incorporated by reference to Exhibit 4.2 to the Company's Form 8-K dated October 29, 2015 (Commission File No. 000-09165). | |
| (v) | Eleventh Supplemental Indenture (including the form of the 2026 note), dated March 10, 2016, between Stryker Corporation and U.S. Bank National Association. Incorporated by reference to Exhibit 4.4 to the Company's Form 8-K dated March 10, 2016 (Commission File No. 000-09615). | |
| (vi) | Twelfth Supplemental Indenture (including the form of the 2046 note), dated March 10, 2016, between Stryker Corporation and U.S. Bank National Association. Incorporated by reference to Exhibit 4.5 to the Company's Form 8-K dated March 10, 2016 (Commission File No. 000-09615). | |
| (vii) | Fourteenth Supplemental Indenture (including the form of the 2028 note), dated March 7, 2018, between Stryker Corporation and U.S. Bank National Association. Incorporated by reference to Exhibit 4.2 to the Company's Form 8-K dated March 7, 2018 (Commission File No. 000-09615). | |
| (viii) | Sixteenth Supplemental Indenture (including the form of the 2027 note), dated November 30, 2018, between Stryker Corporation and U.S. Bank National Association. Incorporated by reference to Exhibit 4.3 to the Company's Form 8-K dated November 30, 2018 (Commission File No. 000-09615). | |
| (ix) | Seventeenth Supplemental Indenture (including the form of the 2030 note), dated November 30, 2018, between Stryker Corporation and U.S. Bank National Association. Incorporated by reference to Exhibit 4.4 to the Company's Form 8-K dated November 30, 2018 (Commission File No. 000-09615). | |
| (x) | Twentieth Supplemental Indenture (including the form of the 2029 note), dated December 3, 2019, between Stryker Corporation and U.S. Bank National Association. Incorporated by reference to Exhibit 4.3 to the Company's Form 8-K dated December 3, 2019 (Commission File No. 001-13149). | |
| (xi) | Twenty-First Supplemental Indenture (including the form of the 2031 note), dated December 3, 2019, between Stryker Corporation and U.S. Bank National Association. Incorporated by reference to Exhibit 4.4 to the Company's Form 8-K dated December 3, 2019 (Commission File No. 001-13149). | |
| (xii) | Twenty-Second Supplemental Indenture (including the form of the 2025 note), dated June 4, 2020, between Stryker Corporation and U.S. Bank National Association, as trustee - Incorporated by reference to Exhibit 4.2 to the Companys Form 8-K dated June 4, 2020 (Commission File No. 001-13149). | |
| (xiii) | Twenty-Third Supplemental Indenture (including the form of the 2030 note), dated June 4, 2020, between Stryker Corporation and U.S. Bank National Association Incorporated by reference to Exhibit 4.3 to the Companys Form 8-K dated June 4, 2020 (Commission File No. 001-13149). | |
| (xiv) | Twenty-Fourth Supplemental Indenture (including the form of the 2050 note), dated June 4, 2020, between Stryker Corporation and U.S. Bank National Association Incorporated by reference to Exhibit 4.4 to the Companys Form 8-K dated June 4, 2020 (Commission File No. 001-13149). | |
| (xv) | Twenty-Sixth Supplemental Indenture (including the form of the 2028 note), dated December 8, 2023, between Stryker Corporation and U.S. Bank Trust Company, National Association, as trustee Incorporated by reference to Exhibit 4.2 to the Companys Form 8-K dated December 8, 2023 (Commission File No. 001-13149). | |
| (xvi) | Twenty-Seventh Supplemental Indenture (including the form of the 2028 note), dated December 11, 2023, between Stryker Corporation and U.S. Bank Trust Company, National Association, as trustee Incorporated by reference to Exhibit 4.2 to the Companys Form 8-K dated December 11, 2023 (Commission File No. 001-13149). | |
| (xvii) | Twenty-Eighth Supplemental Indenture (including the form of 2032 note), dated September 11, 2024, between Stryker Corporation and U.S. Bank Trust Company, National Association, as trustee Incorporated by reference to Exhibit 4.2 to the Companys Form 8-K dated September 11, 2024 (Commission File No. 001-13149). | |
| (xviii) | Twenty-Ninth Supplemental Indenture (including the form of 2036 note), dated September 11, 2024, between Stryker Corporation and U.S. Bank Trust Company, National Association, as trustee Incorporated by reference to Exhibit 4.3 to the Companys Form 8-K dated September 11, 2024 (Commission File No. 001-13149). | |
| (xix) | Thirtieth Supplemental Indenture (including the form of 2029 note), dated September 11, 2024, between Stryker Corporation and U.S. Bank Trust Company, National Association, as trustee Incorporated by reference to Exhibit 4.4 to the Companys Form 8-K dated September 11, 2024 (Commission File No. 001-13149). | |
| (xx) | Thirty-First Supplemental Indenture (including the form of 2034 note), dated September 11, 2024, between Stryker Corporation and U.S. Bank Trust Company, National Association, as trustee Incorporated by reference to Exhibit 4.5 to the Companys Form 8-K dated September 11, 2024 (Commission File No. 001-13149). | |
| (xxi) | Thirty-Second Supplemental Indenture (including the form of 2027 note), dated February 10, 2025, between Stryker Corporation and U.S. Bank Trust Company, National Association, as trustee Incorporated by reference to Exhibit 4.2 to the Companys Form 8-K dated February 10, 2025 (Commission File No. 001-13149). | |
| (xxii) | Thirty-Third Supplemental Indenture (including the form of 2028 note), dated February 10, 2025, between Stryker Corporation and U.S. Bank Trust Company, National Association, as trustee Incorporated by reference to Exhibit 4.3 to the Companys Form 8-K dated February 10, 2025 (Commission File No. 001-13149). | |
| (xxiii) | Thirty-Fourth Supplemental Indenture (including the form of 2030 note), dated February 10, 2025, between Stryker Corporation and U.S. Bank Trust Company, National Association, as trustee Incorporated by reference to Exhibit 4.4 to the Companys Form 8-K dated February 10, 2025 (Commission File No. 001-13149). | |
| (xxiv) | Thirty-Fifth Supplemental Indenture (including the form of 2035 note), dated February 10, 2025, between Stryker Corporation and U.S. Bank Trust Company, National Association, as trustee Incorporated by reference to Exhibit 4.5 to the Companys Form 8-K dated February 10, 2025 (Commission File No. 001-13149). | |
| (xxv) | | Description of Securities | |
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| 50 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| Exhibit10 | Material contracts | |
| (i)* | | Form of grant notice and terms and conditions for stock options granted in 2026 under the 2011 Long-Term Incentive Plan. | |
| (ii)* | | Form of grant notice and terms and conditions for restricted stock units granted in 2026 under the 2011 Long-Term Incentive Plan. | |
| (iii)* | | Form of grant notice and terms and conditions for performance stock units granted in 2026 under the 2011 Long-Term Incentive Plan. | |
| (iv)* | | Form of grant notice and terms and conditions for restricted stock units with no retirement provisions granted in 2026 under the 2011 Long-Term Incentive Plan. | |
| (v)* | Form of grant notice and terms and conditions for stock options granted in 2025 under the 2011 Long-Term Incentive Plan Incorporated by reference to Exhibit 10(i) to the Companys Form 10-K for the year ended December 31, 2024 (Commission File No. 001-13149). | |
| (vi)* | Form of grant notice and terms and conditions for restricted stock units granted in 2025 under the 2011 Long-Term Incentive Plan Incorporated by reference to Exhibit 10(ii) to the Companys Form 10-K for the year ended December 31, 2024 (Commission File No. 001-13149). | |
| (vii)* | Form of grant notice and terms and conditions for performance stock units granted in 2025 under the 2011 Long-Term Incentive Plan Incorporated by reference to Exhibit 10(iii) to the Companys Form 10-K for the year ended December 31, 2024 (Commission File No. 001-13149). | |
| (viii)* | Form of grant notice and terms and conditions for restricted stock units with no retirement provisions granted in 2025 under the 2011 Long-Term Incentive Plan Incorporated by reference to Exhibit 10(iv) to the Companys Form 10-K for the year ended December 31, 2024 (Commission File No. 001-13149). | |
| (ix)* | Form of grant notice and terms and conditions for restricted stock units granted in 2025 under the 2011 Long-Term Incentive Plan to non-employee directors Incorporated by reference to Exhibit 10.1(i) to the Companys Form 10-Q for the quarterly period ended June 30, 2025 (Commission File No. 001-13149). | |
| (x)* | Form of grant notice and terms and conditions for restricted stock units granted in 2024 under the 2011 Long-Term Incentive Plan to non-employee directors Incorporated by reference to Exhibit 10.1 to the Companys Form 10-Q for the quarterly period ended June 30, 2024 (Commission File No. 001-13149). | |
| (xi)* | Form of grant notice and terms and conditions for stock options granted in 2024 under the 2011 Long-Term Incentive Plan Incorporated by reference to Exhibit 10(i) to the Companys Form 10-K for the year ended December 31, 2023 (Commission File No. 001-13149). | |
| (xii)* | Form of grant notice and terms and conditions for restricted stock units granted in 2024 under the 2011 Long-Term Incentive Plan Incorporated by reference to Exhibit 10(ii) to the Companys Form 10-K for the year ended December 31, 2023 (Commission File No. 001-13149). | |
| (xiii)* | Form of grant notice and terms and conditions for performance stock units granted in 2024 under the 2011 Long-Term Incentive Plan Incorporated by reference to Exhibit 10(iii) to the Companys Form 10-K for the year ended December 31, 2023 (Commission File No. 001-13149). | |
| (xiv)* | Form of grant notice and terms and conditions for restricted stock units granted in 2023 under the 2011 Long-Term Incentive Plan to non-employee directors Incorporated by reference to Exhibit 10(i) to the Companys Form 10-Q for the quarterly period ended June 30, 2023 (Commission File No. 000-09165). | |
| (xv)* | Form of grant notice and terms and conditions for stock options granted in 2023 under the 2011 Long-Term Incentive Plan - Incorporated by reference to Exhibit 10(i) to the Company's Form 10-K for the year ended December 31, 2022 (Commission File No. 001-13149). | |
| (xvi)* | Form of grant notice and terms and conditions for restricted stock units granted in 2023 under the 2011 Long-Term Incentive Plan - Incorporated by reference to Exhibit 10(ii) to the Company's Form 10-K for the year ended December 31, 2022 (Commission File No. 001-13149). | |
| (xvii)* | Form of grant notice and terms and conditions for performance stock units granted in 2023 under the 2011 Long-Term Incentive Plan - Incorporated by reference to Exhibit 10(iii) to the Company's Form 10-K for the year ended December 31, 2022 (Commission File No. 001-13149). | |
| (xviii)* | Form of grant notice and terms and conditions for restricted stock units granted in 2022 under the 2011 Long-Term Incentive Plan to non-employee directors Incorporated by reference to Exhibit 10(i) to the Company's Form 10-Q for the quarterly period ended June 30, 2022 (Commission File No. 001-13149). | |
| (xix)* | Form of grant notice and terms and conditions for stock options granted in 2022 under the 2011 Long-Term Incentive Plan Incorporated by reference to Exhibit 10(i) to the Company's Form 10-K for the year ended December 31, 2021 (Commission File No. 001-13149). | |
| (xx)* | Form of grant notice and terms and conditions for stock options granted in 2021 under the 2011 Long-Term Incentive Plan Incorporated by reference to Exhibit 10(i) to the Company's Form 10-K for the year ended December 31, 2020 (Commission File No. 001-13149). | |
| (xxi)* | 2011 Long-Term Incentive Plan (as amended and restated effective May 8, 2025) Incorporated by reference to Appendix B to the Proxy Statement for the Company's 2025 Annual Meeting of Shareholders (Commission File No. 001-13149). | |
| (xxii)* | Form of grant notice and terms and conditions for stock options granted in 2020 under the 2011 Long-Term Incentive Plan Incorporated by reference to Exhibit 10(ii) to the Company's Form 10-K for the year ended December 31, 2019 (Commission File No. 001-13149). | |
| (xxiii)* | Supplemental Savings and Retirement Plan (as amended effective January 1, 2008 and January 1, 2019) Incorporated by reference to Exhibit 10(vi) to the Company's Form 10-K for the year ended December 31, 2019 (Commission File No. 001-13149) | |
| (xxiv)* | Form of grant notice and terms and conditions for stock options granted in 2019 under the 2011 Long-Term Incentive Plan Incorporated by reference to Exhibit 10(ii) to the Company's Form 10-K for the year ended December 31, 2018 (Commission File No. 001-13149). | |
| (xxv)* | Form of grant notice and terms and conditions for stock options granted in 2018 under the 2011 Long-Term Incentive Plan Incorporated by reference to Exhibit 10(ii) to the Company's Form 10-K for the year ended December 31, 2017 (Commission File | |
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| 51 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
| |
| (xxvi)* | Stryker Corporation Executive Bonus Plan Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K dated February 21, 2007 (Commission File No. 000-09165). | |
| (xxvii)* | Letter Agreement between Stryker Corporation and Glenn Boehnlein Incorporated by reference to Exhibit 10.2 to the Company's Form 8-K dated January 26, 2016 (Commission File No. 000-09165) | |
| (xxviii) | Form of Indemnification Agreement for Directors Incorporated by reference to Exhibit 10 (xiv) to the Company's Form 10-K for the year ended December 31, 2008 (Commission File No. 000-09165). | |
| (xxix) | Form of Indemnification Agreement for Certain OfficersIncorporated by reference to Exhibit 10 (xv) to the Company's Form 10-K for the year ended December 31, 2008 (Commission File No. 000-09165).. | |
| (xxx) | Settlement Agreement between Howmedica Osteonics Corp. and the counsel listed on the signature pages thereto, dated as of November 3, 2014 (Rejuvenate and ABF II Hip Implant Products Liability Litigation) Incorporated by reference to Exhibit 10xxiii | |
| (xxxi)* | Letter Agreement, dated January 27, 2025, between Stryker Corporation and Preston Wells Incorporated by reference to Exhibit 10.2 to the Companys Form 8-K dated January 28, 2025 (Commission File No. 001-13149). | |
| (xxxii) | Credit Agreement, dated February 25, 2025, between Stryker Corporation, certain subsidiaries as borrowers, Wells Fargo Bank, National Association as Administrative Agent, Swing Line Lender and L/C Issuer, Bank of America, N.A. and Citibank, N.A. as Syndication Agents, the Co-Documentation Agents and Other Lenders party thereto Incorporated by reference to Exhibit 10.1 to the Companys Form 8-K dated February 25, 2025 (Commission File No. 001-13149). | |
| (xxxiii)* | Letter Agreement, dated December 2, 2025, between Stryker Corporation and Spencer Stiles Incorporated by reference to Exhibit 10.1 to the Companys Form 8-K dated December 4, 2025 (Commission File No. 001-13149). | |
| (xxxiv)* | Letter Agreement, dated December 2, 2025, between Stryker Corporation and Dylan Crotty Incorporated by reference to Exhibit 10.2 to the Companys Form 8-K dated December 4, 2025 (Commission File No. 001-13149). | |
| |
| Exhibit 19 | Insider Trading Policy | |
| (i) | | Corporate Policy No. 6 | |
| (ii) | | Insider Trading Guidelines | |
| |
| Exhibit 21 | | Subsidiaries of the registrant | |
| (i) | | List of Subsidiaries. | |
| |
| Exhibit 23 | | Consent of experts and counsel | |
| (i) | | Consent of Independent Registered Public Accounting Firm. | |
| |
| Exhibit 31 | | Rule 13a-14(a) Certifications | |
| (i) | | Certification by Principal Executive Officer of Stryker Corporation. | |
| (ii) | | Certification by Principal Financial Officer of Stryker Corporation. | |
| |
| Exhibit 32 | | 18 U.S.C. Section 1350 Certifications | |
| (i) | | Certification by Principal Executive Officer of Stryker Corporation. | |
| (ii) | | Certification by Principal Financial Officer of Stryker Corporation. | |
| |
| Exhibit 97 | Policy Relating to Recovery of Erroneously Awarded Compensation | |
| (i) | Stryker Corporation Mandatory Clawback Policy Incorporated by reference to Exhibit 97(i) to the Company's Form 10-K for the year ended December 31, 2023 (Commission File No. 001-13149). | |
| |
| Exhibit101 | iXBRL (Inline Extensible Business Reporting Language) Documents | |
| 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) | |
| |
| * | Compensation arrangement | |
| |
| | Filed with this Form 10-K | |
| |
| | Furnished with this Form 10-K | |
| |
| | Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Stryker hereby agrees to furnish supplementally a copy of any omitted schedule upon request by the U.S. Securities and Exchange Commission. | |
| |
| ITEM16. | FORM 10-K SUMMARY. | |
None.
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| 52 | |
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| STRYKER CORPORATION | 2025 FORM 10-K | |
SIGNATURES
Pursuant to the requirements of Section13 or 15(d) 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 | |
| Date: | February 11, 2026 | /s/ PRESTON W. WELLS | |
| Preston W. Wells | |
| Vice President, Chief Financial Officer | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on the
date indicated above on behalf of the registrant and in the capacities indicated.
| |
| |
| /s/ KEVIN A. LOBO | /s/ PRESTON W. WELLS | |
| Kevin A. Lobo | Preston W. Wells | |
| Chair and Chief Executive Officer | Vice President, Chief Financial Officer | |
| (Principal Executive Officer) | (Principal Financial Officer) | |
| |
| /s/ WILLIAM E. BERRY JR. | |
| William E. Berry, Jr. | |
| Vice President, Chief Accounting Officer | |
| (Principal Accounting Officer) | |
| |
| /s/ SHERILYN S. MCCOY | /s/ ANDREW K. SILVERNAIL | |
| Sherilyn S. McCoy | Andrew K. Silvernail | |
| Lead Independent Director | Director | |
| |
| /s/ MARY K. BRAINERD | /s/ LISA M. SKEETE TATUM | |
| Mary K. Brainerd | Lisa M. Skeete Tatum | |
| Director | Director | |
| |
| /s/ GIOVANNI CAFORIO | /s/ RONDA E. STRYKER | |
| Giovanni Caforio, M.D. | Ronda E. Stryker | |
| Director | Director | |
| |
| /s/ RACHEL M. RUGGERI | /s/ RAJEEV SURI | |
| Rachel M. Ruggeri | Rajeev Suri | |
| Director | Director | |
| |
| /s/ EMMANUEL P. MACEDA | |
| Emmanuel P. Maceda | |
| Director | |