Stryker (SYK) Q4 2024 earnings summary

Executive summary

• Achieved over 10% organic sales growth for both Q4 and full year 2024, with strong double-digit growth across multiple business units and geographies.

• Adjusted EPS grew 16% in Q4 and 15% for the full year, reflecting robust earnings and margin expansion, while reported EPS declined due to significant impairment charges in the Spine business.

• Announced the divestiture of the spinal implants business and the acquisition of Inari Medical, aligning with a strategy to focus on high-growth markets.

• Major product launches and active M&A activity enhanced positioning in high-growth markets.

• Leadership transition: CFO Glenn Boehnlein retiring, to be succeeded by Preston Wells.

Financial highlights

• Q4 organic sales growth: 10.2% (U.S. 10.9%, International 7.9%); full-year organic sales growth: 10.2% (U.S. 10.6%, International 8.8%).

• Adjusted EPS: $4.01 in Q4 (+15.9% YoY), $12.19 for the year (+15% YoY).

• Adjusted operating margin improved by 200 bps in Q4 to 29.2% and 110 bps for the year to 25.3%.

• Adjusted gross margin in Q4: 65.3% (+140 bps YoY); full-year adjusted gross margin: 64.5%.

• Cash from operations: $4.2B for 2024, up $531M YoY, with $1.6B spent on acquisitions and $1.2B paid in dividends.

Outlook and guidance

• 2025 organic net sales growth expected at 8%-9%; adjusted EPS guidance for 2025: $13.45-$13.70, excluding Inari impact.

• Full-year adjusted operating margin expected at 26.3%.

• Foreign exchange expected to negatively impact sales by ~1% and EPS by $0.10-$0.15.

• Inari acquisition expected to close by end of February, with $590M sales contribution (10 months) and $0.20-$0.30 EPS dilution.

• Sale of Spinal Implants business impact is included in 2025 guidance.