Stryker (SYK) Q1 2025 earnings summary

Executive summary

• Achieved 11.9% year-over-year sales growth in Q1 2025, with 10.1% constant currency organic growth and net sales of $5.9 billion, driven by double-digit MedSurg and Neurotechnology growth and high single-digit Orthopaedics growth, despite one less selling day and a tough prior-year comparison.

• Adjusted EPS increased 13.6% to $2.84, while reported EPS fell 17.6% to $1.69 due to non-recurring charges; adjusted net earnings grew 14.0% to $1.1 billion, but reported net earnings declined 17.0% to $654 million.

• Completed the $4.7 billion acquisition of Inari Medical, expanding the Vascular business, and finalized the sale of the US Spinal Implants business in April 2025.

• Issued $3 billion in new senior unsecured notes and entered a new $3 billion revolving credit facility.

• Strong U.S. performance led by trauma, extremities, neurocranial, medical, endoscopy, and instruments; international growth notable in Australia, New Zealand, Japan, and Europe.

Financial highlights

• Net sales rose to $5,866 million from $5,243 million year-over-year; gross profit increased to $3,744 million.

• Adjusted gross margin was 65.5%, up 190 basis points year-over-year; reported gross margin was 63.8%.

• Adjusted operating margin was 22.9%, up 100 basis points year-over-year; reported operating margin was 14.3%.

• Cash from operations was $250 million, reflecting net earnings, seasonal outflows, and one-time Inari costs; cash used in investing activities was $4.1 billion, mainly for the Inari acquisition.

• U.S. organic sales growth was 10.7%; international organic sales growth was 8.5%.

Outlook and guidance

• Raised full-year 2025 organic net sales growth guidance to 8.5%–9.5%.

• Adjusted EPS guidance set at $13.20–$13.45, reflecting dilution from the Inari acquisition and a $200 million tariff impact.

• Operating margin expansion of approximately 100 basis points expected for the year.

• Tariff impact estimated at $200 million for 2025, with mitigation through sales momentum, pricing, and cost controls.

• Full-year effective tax rate expected in the 15%–16% range.