Stryker SYK Form 10-Q filing Q3 FY2025

ITEM 1. FINANCIAL STATEMENTS

Anti-dilutive shares excluded from the calculation of dilutive employee stock options were de minimis in all periods.

See accompanying notes to Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified. 2

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

See accompanying notes to Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified. 3

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

See accompanying notes to Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified. 4

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

See accompanying notes to Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified. 5

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

General Information

Management believes the accompanying unaudited Consolidated

Financial Statements contain all adjustments, including normal

recurring items, considered necessary to fairly present the

financial position of Stryker Corporation and its consolidated

subsidiaries ("Stryker," the "Company," "we," "us" or "our") on

September 30, 2025 and the results of operations for the three

and nine months 2025. The results of operations included in

these Consolidated Financial Statements may not necessarily be

indicative of our annual results. These statements should be read

in conjunction with our Annual Report on Form 10-K for 2024.

New Accounting Pronouncements Not Yet Adopted

In September 2025 the Financial Accounting Standards Board

(FASB) issued Accounting Standards Update (ASU) 2025-07

(Topics 815 and 606): Derivatives and Hedging: Derivatives

Scope Refinements and Revenue from Contracts with

Customers: Scope Clarification for Share-Based Noncash

Consideration from a Customer in a Revenue Contract. This

update expands the scope exception in Topic 815 to certain non-

exchange-traded contracts for which settlement is based on

operations or activities specific to one of the parties to the

contract. The update is effective for fiscal years beginning after

December 15, 2026 including interim periods within those fiscal

years. Early adoption is permitted. We are evaluating if the ASU

will have an impact on our Consolidated Financial Statements.

In September 2025 the FASB issued ASU 2025-06 (Subtopic

350-40): Intangibles - Goodwill and Other - Internal-Use

Software: Targeted Improvements to the Accounting for Internal-

Use Software. This update clarifies and modernizes the

accounting for costs related to internal-use software by removing

all references to project stages and clarifying that the probable-

to-complete threshold is not met if significant development

uncertainty exists. The update is effective for fiscal years

beginning after December 15, 2027 including interim periods

within those fiscal years. Early adoption is permitted. We are

evaluating if the ASU will have an impact on our Consolidated

Financial Statements.

In 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.

In December 2023 the FASB issued 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. The

new disclosure requirements are effective for fiscal years

beginning after December 15, 2024 and we will adopt this ASU in

the fourth quarter 2025.

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.

NOTE 2 - REVENUE RECOGNITION

Our policies for recognizing sales have not changed from those

described in our Annual Report on Form 10-K for 2024.

We disaggregate our net sales by business and geographic

location for each of our segments as we believe it best depicts

how the nature, amount, timing and certainty of our net sales and

cash flows are affected by economic factors.

In the first quarter 2025 we changed the name of our

Neurovascular business to Vascular due the acquisition of Inari

Medical, Inc. (Inari).

In the fourth quarter 2024 we reorganized our Spine business to

align with certain updates to our internal reporting structure. The

spine enabling technologies portfolio (Enabling Technologies)

was reclassified to Other Orthopaedics and Spine, the

interventional spine (IVS) portfolio was reclassified to Neuro

Cranial and the remaining Spine business was renamed to Spinal

Implants. In addition we changed the name of our "Orthopaedics

and Spine" operating segment to "Orthopaedics." Neuro Cranial

includes sales related to IVS of $100 and $296 for the three and

nine months 2024. Other Orthopaedics includes sales related to

Enabling Technologies of $32 and $94 for the three and nine

months 2024. We have reflected these changes in all historical

periods presented.

Dollar amounts are in millions except per share amounts or as otherwise specified. 6

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

Costs to Obtain or Fulfill a Contract

We typically do not incur costs to fulfill a contract before a

product or service is provided to a customer due to the nature of

our products and services. Our costs to obtain contracts are

typically in the form of sales commissions paid to employees or

third-party agents. Certain sales commissions paid to employees

prior to recognition of sales are recorded as deferred contract

costs. We expense sales commissions associated with obtaining

a contract at the time of the sale or as incurred as the

amortization period is generally less than one year. These costs

have been presented within selling, general and administrative

expenses. On September 30, 2025 and December 31, 2024

deferred contracts costs recorded in our Consolidated Balance

Sheets were not significant.

Contract Assets and Liabilities

Our contract assets primarily relate to conditional rights to

consideration for work completed but not billed at the reporting

date. On September 30, 2025 and December 31, 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 service

contracts. Our contract liabilities of $939 and $978 on

September 30, 2025 and December 31, 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 nine months 2025 were

as follows:

Transfers and Servicing of Financial Assets

We sell certain customer lease agreements and the related

leased assets to third-party financial institutions to accelerate our

cash collection cycle. The lease receivables are sold without

recourse and are derecognized from our Consolidated Balance

Sheets at the time of sale. Under the terms of our arrangements,

we collect lease payments on behalf of the financial institutions

but maintain no other form of continuing involvement. Sales of

these lease agreements are classified as operating activities in

our Consolidated Statements of Cash Flows. Fees earned for our

servicing activities are immaterial. Revenue related to customer

lease agreements sold under these arrangements represented

less than 4% of our total revenue for the three and nine months

2025 and 2024.

NOTE 3 - ACCUMULATED OTHER COMPREHENSIVE (LOSS)

INCOME (AOCI)

Dollar amounts are in millions except per share amounts or as otherwise specified. 7

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

NOTE 4 - DERIVATIVE INSTRUMENTS

We use operational and economic hedges, foreign currency

exchange forward contracts, net investment hedges (both

derivative and non-derivative financial instruments) and interest

rate derivative instruments to manage the impact of currency

exchange and interest rate fluctuations on earnings, cash flow

and equity. We do not enter into derivative instruments for

speculative purposes. We are exposed to potential credit loss in

the event of nonperformance by counterparties on our

outstanding derivative instruments but do not anticipate

nonperformance by any of our counterparties. Should a

counterparty default, our maximum loss exposure is the asset

balance of the instrument. We have not changed our hedging

strategies, accounting practices or objectives from those

disclosed in our Annual Report on Form 10-K for 2024.

We had €2.3 billion at September 30, 2025 and December 31,

2024 in certain forward currency contracts designated as net

investment hedges, for which the maximum term is 9.0 years, to

hedge a portion of our investments in certain of our entities with

functional currencies denominated in Euros. In addition to these

derivative financial instruments designated as net investment

hedges, we had €5.0 billion at September 30, 2025 and

December 31, 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.

In the nine months 2024 we settled certain foreign currency

forward contracts designated as net investment hedges resulting

in cash proceeds of $99. The amounts in AOCI related to settled

net investment hedges will remain in AOCI until the hedged

investment is either sold or substantially liquidated.

The total after-tax gain (loss) recognized in OCI related to

designated net investment hedges was ($709) in the nine months

Currency Exchange Rate Gains (Losses) Recognized in Net

Earnings

Pretax gains (losses) on derivatives designated as cash flow

hedges of $39 and net investment hedges of $35 recorded in

AOCI are expected to be reclassified to cost of sales and other

income (expense), net in earnings within 12 months of

September 30, 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 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 (losses) of $5 recorded in AOCI related to interest

rate hedges closed in conjunction with debt issuances are

expected to be reclassified to other income (expense), net in

earnings within 12 months of September 30, 2025. The cash flow

effect of interest rate hedges is recorded in cash flow from

operations.

Dollar amounts are in millions except per share amounts or as otherwise specified. 8

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

NOTE 5 - FAIR VALUE MEASUREMENTS

Our policies for managing risk related to foreign currency, interest

rates, credit and markets and our process for determining fair

value have not changed from those described in our Annual

Report on Form 10-K for 2024.

In the nine months 2025 we assumed contingent consideration

liabilities with a fair value of $90 related to previous acquisitions

made by Inari. Refer to Note 7 for further information on the

acquisition of Inari.

In 2024 we recorded $208 of contingent consideration related to

various acquisitions described in Note 7.

There were no significant transfers into or out of any level of the

fair value hierarchy in 2025.

On September 30, 2025 and December 31, 2024 the aggregate

difference between the cost and fair value of available-for-sale

marketable securities was nominal. Interest income on cash and

cash equivalents and short-term investments and income from

marketable securities was $28 and $30 in the three months 2025

and 2024, and $90 and $92 in the nine months 2025 and 2024,

which was recorded in other income (expense), net.

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 6 - CONTINGENCIES AND COMMITMENTS

We are involved in various ongoing proceedings, legal actions

and claims arising in the normal course of business, including

proceedings related to product, labor, 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.

We are currently investigating whether certain business activities

in certain foreign countries violated provisions of the Foreign

Corrupt Practices Act (FCPA) and have engaged outside counsel

to conduct these investigations. We have been contacted by the

United States Securities and Exchange Commission, United

States Department of Justice (DOJ) and certain other regulatory

authorities and are cooperating with these agencies. On April 1,

2025 we were informed by the DOJ that it had closed its inquiry

into potential FCPA violations without further action. At this time

we are unable to predict the outcome of the remaining

investigations or the potential impact, 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 Medical Group N.V. 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 $147 at September 30, 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.

Dollar amounts are in millions except per share amounts or as otherwise specified. 9

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

Other Contractual Obligations and Commitments

Our outstanding balances of confirmed invoices in the supplier

financing program were $75 and $71 at September 30, 2025 and

December 31, 2024 and are included within accounts payable in

our Consolidated Balance Sheets.

NOTE 7 - ACQUISITIONS

We acquire stock in companies and various assets that continue

to support our capital deployment and product development

strategies. In the nine months 2025 and 2024 cash paid for

acquisitions, net of cash acquired was $4,950 and $1,598.

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 Vascular business within MedSurg and

Neurotechnology. The purchase price allocation for Inari is based

on preliminary valuations, primarily related to developed

technology 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 the nine months 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. Goodwill of

$306 and $845 was recorded within our Orthopaedics and our

MedSurg and Neurotechnology segments respectively. 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. The purchase price allocation for certain of our

acquisitions are based on preliminary valuations, primarily related

to customer relationships. 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:

NOTE 8 - DEBT AND CREDIT FACILITIES

We have lines of credit issued by various financial institutions that

are available to fund our day-to-day operating needs. Certain of

our credit facilities require us to comply with financial and other

covenants. We were in compliance with all covenants on

September 30, 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 September 30, 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.

Dollar amounts are in millions except per share amounts or as otherwise specified. 10

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

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, that were included in other

income (expense), net, totaled $157 and $98 for the three

months 2025 and 2024 and $453 and $292 for the nine months

2025 and 2024.

NOTE 9 - INCOME TAXES

Our effective tax rates were 16.5% and 14.7% in the three and

nine months 2025 and 20.0% and 17.4% in the three and nine

months 2024. The effective income tax rate for the three months

2025 decreased from three months 2024 due to certain discrete

tax items. The effective tax rate for the nine months 2025

decreased from nine months 2024 due to the 2025 tax benefit

related to the sale of the Spinal Implants business and certain

discrete tax items. The effective tax rates for the three and nine

months 2025 and 2024 reflect the continued lower effective

income tax rates as a result of our European operations.

In the normal course of business, income tax authorities in

various income tax jurisdictions both within the United States and

internationally conduct routine audits of our income tax returns

filed in prior years. These audits are generally designed to

determine if individual income tax authorities are in agreement

with our interpretations of complex income tax regulations

regarding the allocation of income to the various income tax

jurisdictions. Any income tax audit assessment or draft income

tax audit assessment received at the conclusion of an audit is

reviewed and evaluated for proper financial statement treatment.

We have not received any audit assessments or draft

assessments that have not been reviewed and evaluated.

NOTE 10 - SEGMENT INFORMATION

We segregate our operations into two reportable business

segments: (i) MedSurg and Neurotechnology and (ii)

Orthopaedics which aligns to our internal reporting structure and

how our Chief Operating Decision Maker (CODM) assesses the

performance of 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.

Our reportable segments and related disclosures reflect certain

reclassifications of prior year amounts from our Orthopaedics

segment to our MedSurg and Neurotechnology segment due to

changes in our internal reporting structure.

Dollar amounts are in millions except per share amounts or as otherwise specified. 11

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

NOTE 11 - 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.

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 group’s 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:

Dollar amounts are in millions except per share amounts or as otherwise specified. 12

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

ITEM 2. MANAGEMENT’S 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.

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

Beginning 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 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" in our Annual Report on Form 10-K for 2024.

Overview of the Three and Nine Months

In the three months 2025 we achieved sales growth of 10.3%

from 2024. Excluding the impact of acquisitions and divestitures,

sales grew 9.5% in constant currency. We reported operating

income margin of 18.7%, net earnings of $859 and net earnings

per diluted share of $2.22. Excluding the impact of certain items,

adjusted operating income margin(1) increased by 90 basis points

to 25.6%, with adjusted net earnings(1) of $1,233 and adjusted

net earnings per diluted share(1) of $3.19, an increase of 11.1%

from 2024.

In the nine months 2025 we achieved sales growth of 11.1% from

2024. Excluding the impact of acquisitions and divestitures, sales

grew 10.0% in constant currency. We reported operating income

margin of 17.2%, net earnings of $2,397 and net earnings per

diluted share of $6.20. Excluding the impact of certain items,

adjusted operating income margin(1) increased by 100 basis

points to 24.7%, with adjusted net earnings(1) of $3,541 and

adjusted net earnings per diluted share(1) of $9.16, an increase of

12.0% from 2024.

Recent Developments

In the first quarter 2025 we completed the acquisition of Inari for

total consideration of $4,810, in upfront payments, net of cash

acquired. Refer to Note 7 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 were to increase the aggregate

principal amount of the facility by $750 to $3,000 and extend the

maturity date to February 25, 2030. On September 30, 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

$650M of 1.150% 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.

nm - not meaningful

Dollar amounts are in millions except per share amounts or as otherwise specified. 13

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

Note: In the first quarter 2025 we changed the name of our Neurovascular business to Vascular due the acquisition of Inari. In the fourth

quarter 2024 we reorganized our Spine business to align with certain updates to our internal reporting structure. The spine enabling

technologies portfolio (Enabling Technologies) was reclassified to Other Orthopaedics, the interventional spine portfolio was reclassified

to Neuro Cranial and the remaining Spine business was renamed to Spinal Implants. Neuro Cranial includes sales related to

interventional spine of $100 for the three months 2024 and $296 for the nine months 2024. Other Orthopaedics includes sales related to

Enabling Technologies of $32 for the three months 2024 and $94 for the nine months 2024. We have reflected these changes in all

historical periods presented.

Consolidated Net Sales

Consolidated net sales increased 10.3% in the three months

2025 as reported and 9.6% in constant currency, as foreign

currency exchange rates positively impacted net sales by 0.7%.

Excluding the 0.1% impact of acquisitions and divestitures, net

sales in constant currency increased by 9.1% from increased unit

volume and 0.4% due to higher prices. The unit volume increase

was due to higher product shipments across all MedSurg and

Neurotechnology businesses and most Orthopaedics businesses.

Consolidated net sales increased 11.1% in the nine months 2025

as reported and 10.9% in constant currency, as foreign currency

exchange rates positively impacted net sales by 0.2%. Excluding

the 0.9% impact of acquisitions and divestitures, net sales in

constant currency increased by 9.5% from increased unit volume

and 0.5% due to higher prices. The unit volume increase was due

to higher product shipments across all MedSurg and

Neurotechnology businesses and most Orthopaedics businesses.

MedSurg and Neurotechnology Net Sales

MedSurg and Neurotechnology net sales increased 14.4% in the

three months 2025 as reported and 13.9% in constant currency,

as foreign currency exchange rates positively impacted net sales

by 0.5%. Excluding the 5.5% impact of acquisitions and

divestitures, net sales in constant currency increased by 7.6%

from increased unit volume and 0.8% from higher prices. The unit

volume increase was due to higher shipments across all

MedSurg and Neurotechnology businesses.

MedSurg and Neurotechnology net sales increased 15.0% in the

nine months 2025 as reported and 14.9% in constant currency,

as foreign currency exchange rates positively impacted net sales

by 0.1%. Excluding the 5.0% impact of acquisitions and

divestitures, net sales in constant currency increased by 9.0%

from increased unit volume and 0.9% from higher prices. The unit

Dollar amounts are in millions except per share amounts or as otherwise specified. 14

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

volume increase was due to higher shipments across all

MedSurg and Neurotechnology businesses.

Orthopaedics Net Sales

Orthopaedics net sales increased 3.9% in the three months 2025

as reported and 3.1% in constant currency, as foreign currency

exchange rates positively impacted net sales by 0.8%. Excluding

the 8.3% impact of acquisitions and divestitures, net sales in

constant currency increased 11.7% from increased unit volume

partially offset by 0.3% from lower prices. The unit volume

increase was due to higher shipments across most Orthopaedics

businesses.

Orthopaedics net sales increased 5.2% in the nine months 2025

as reported and 4.9% in constant currency, as foreign currency

exchange rates positively impacted net sales by 0.2%. Excluding

the 5.0% impact of acquisitions and divestitures, net sales in

constant currency increased 10.0% from increased unit volume

partially offset by 0.1% from lower prices. The unit volume

increase was due to higher shipments across most Orthopaedics

businesses.

Gross Profit

Gross profit was $3,852 and $3,517 in the three months 2025

and 2024. The key components of the change were:

Gross profit as a percentage of net sales in the three months

2025 remained relatively flat with 2024.

Gross profit was $11,437 and $10,266 in the nine months 2025

and 2024. The key components of the change were:

While segment mix was not a significant driver of the change in

gross profit as a percent of net sales between the nine months

2025 and 2024, we generally expect segment mix to have an

unfavorable impact for the foreseeable future as we anticipate

more rapid sales growth in our lower gross margin MedSurg and

Neurotechnology segment than our Orthopaedics segment.

Research, Development and Engineering Expenses

Research, development and engineering expenses increased

$33 or 8.8% in the three months 2025 and $114 or 10.3% in the

nine months 2025. Expenses as a percentage of net sales in the

three and nine months 2025 of 6.8% remained relatively flat with

6.9% in 2024.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $151 or

8.0% in the three months 2025. As a percentage of net sales,

expenses decreased to 33.8% from 34.5% in 2024, primarily due

to continued spend discipline.

Selling, general and administrative expenses increased $862 or

15.5% in the nine months 2025. As a percentage of net sales,

expenses increased to 35.8% from 34.4% in 2024, primarily due

to higher acquisition-related costs and continued investments to

support our growth. Expenses in the nine months 2025 included

a charge of $139 for share-based awards for Inari employees that

vested upon our acquisition.

Amortization of Intangible Assets

Amortization of intangible assets was $189 and $159 in the three

months and $543 and $467 and nine months 2025 and 2024.

Refer to Note 7 to our Consolidated Financial Statements for

further information.

Goodwill and other impairments

Goodwill and other impairments was $73 and $2 in the three

months and $163 and $21 in the nine months 2025 and 2024.

Operating Income

Operating income was $1,135 and $1,085 in the three months

2025 and 2024. Operating income as a percentage of net sales in

the three months 2025 decreased to 18.7% from 19.7% in 2024.

Refer to the discussion above for the primary drivers of the

change.

Operating income was $3,085 and $3,108 in the nine months

2025 and 2024. Operating income as a percentage of net sales in

the nine months 2025 decreased to 17.2% from 19.2% in 2024.

Refer to the discussion above for the primary drivers of the

change.

MedSurg and Neurotechnology operating income as a

percentage of net sales decreased to 29.0% in the three months

2025 from 29.1% in 2024. Orthopaedics operating income as a

percentage of net sales increased to 28.8% in the three months

2025 from 27.7% in 2024. The key components of the change

were:

The decrease in MedSurg and Neurotechnology operating

income as a percentage of net sales for the three months was

primarily driven by lower manufacturing and supply chain costs

and higher unit volumes and prices offset by higher selling,

general and administrative expenses primarily due to the

acquisition of Inari and continued spend discipline.

The increase in Orthopaedics operating income as a percentage

of net sales for the three months was primarily driven by higher

unit volumes, lower selling, general and administrative expenses

and lower research, development and engineering expenses

partially offset by higher manufacturing and supply chain costs.

MedSurg and Neurotechnology operating income as a

percentage of net sales increased to 28.3% in the nine months

2025 from 28.2% in 2024. Orthopaedics operating income as a

percentage of net sales increased to 28.7% in the nine months

2025 from 27.5% in 2024. The key components of the change

were:

Dollar amounts are in millions except per share amounts or as otherwise specified. 15

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

The increased in MedSurg and Neurotechnology operating

income as a percentage of net sales for the nine months was

primarily driven by lower manufacturing and supply chain costs

and higher unit volumes and prices offset by higher selling,

general and administrative expenses primarily due to the

acquisition of Inari and continued spend discipline.

The increase in Orthopaedics operating income as a percentage

of net sales for the nine months was primarily driven by higher

unit volumes, lower research, development and engineering

expenses and lower selling, general and administrative expenses

partially offset by higher manufacturing and supply chain costs.

Other Income (Expense), Net

Other income (expense), net was ($106) and ($42) in the three

months and ($276) and ($144) in the nine months 2025 and

2024. The increase in net expense in the three months and nine

months 2025 from 2024 was primarily due to higher interest

expense in 2025.

Income Taxes

Our effective tax rates were 16.5% and 14.7% in the three and

nine months 2025 and 20.0% and 17.4% in the three and nine

months 2024. The effective income tax rate for the three months

2025 decreased from three months 2024 due to certain discrete

tax items. The effective tax rate for the nine months 2025

decreased from nine months 2024 due to the 2025 tax benefit

related to the sale of the Spinal Implants business and certain

discrete tax items. The effective tax rates for the three and nine

months 2025 and 2024 reflect the continued lower effective

income tax rates as a result of our European operations.

The Organisation for Economic Cooperation and Development

(OECD), which represents a coalition of member countries, has

put forth two proposed base erosion and profit shifting

frameworks that revise the existing profit allocation and nexus

rules (Pillar One) and ensure a minimal level of taxation (Pillar

Two). On December 12, 2022 the European Union member

states agreed to implement the Inclusive Framework’s global

corporate minimum tax rate of 15%, and various countries within

and outside the European Union have either enacted or proposed

new tax laws implementing Pillar Two in 2024. The OECD

continues to release additional guidance and we anticipate more

countries will enact similar tax laws. Some of the new tax laws

became effective in 2024 while others will be effective in 2025

and future years. These tax law changes and any additional

contemplated tax law changes could increase tax expense in

future periods.

On July 4, 2025 the One Big Beautiful Bill Act (OBBBA) was

enacted into United States law. We evaluated the impact of the

OBBBA and recorded the tax-related provisions in the three

months 2025. The impact was not material to the Consolidated

Financial Statements.

Net Earnings

Net earnings increased to $859 or $2.22 per diluted share in the

three months 2025 from $834 or $2.16 per diluted share in 2024.

Net earnings decreased to $2,397 or $6.20 per diluted share in

nine months 2025 from $2,447 or $6.35 per diluted share in

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

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.

Dollar amounts are in millions except per share amounts or as otherwise specified. 16

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

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 are in millions except per share amounts or as otherwise specified. 17

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

nm - not meaningful

(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:

(b) Structural optimization and other special charges represent the costs associated with:

(c) Goodwill and other impairments represent the costs associated with:

(d) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device

reporting regulations and other requirements of the new medical device regulations in the European Union.

(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to

resolve certain recall-related matters.

(f) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to

resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.

Dollar amounts are in millions except per share amounts or as otherwise specified. 18

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:

nm - not meaningful

(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:

Dollar amounts are in millions except per share amounts or as otherwise specified. 19

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

(b) Structural optimization and other special charges represent the costs associated with:

(c) Goodwill and other impairments represent the costs associated with:

(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:

FINANCIAL CONDITION AND LIQUIDITY

Operating Activities

Cash provided by operating activities was $2,901 and $2,311 in

the nine months 2025 and 2024. The increase was primarily due

to the timing of payments and collections in working capital

accounts.

Investing Activities

Cash used in investing activities was $4,561 and $2,697 in the

nine months 2025 and 2024. The nine months 2025 included

cash paid to acquire Inari and purchases of property, plant and

equipment partially offset by proceeds from the sale of short-term

investments and the sale of the Spinal Implants business. The

nine months 2024 included cash paid for the Serf acquisition.

Refer to Note 7 to our Consolidated Financial Statements for

further information on acquisitions.

Financing Activities

Cash provided by financing activities was $1,206 in the nine

months 2025 and cash provided by financing activities was

$1,269 in the nine months 2024. In 2025, cash provided was

primarily driven by proceeds from the issuance of various senior

unsecured notes as described in Note 8 to our Consolidated

Financial Statements. This was partially offset by debt payments,

dividend payments and cash paid for taxes on withheld shares.

Cash provided by 2024 was primarily driven by proceeds from

the issuance of various senior unsecured notes. This was

partially offset by debt payments, dividend payments and cash

paid for taxes on withheld shares. We did not repurchase any

shares in the nine months 2025 and 2024.

Liquidity

Cash, cash equivalents, short-term investments and marketable

securities were $3,343 and $4,493 on September 30, 2025 and

December 31, 2024. Current assets exceeded current liabilities

by $6,297 and $7,231 on September 30, 2025 and December 31,

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 have raised funds in the capital markets and have accessed

the credit markets in the past and may continue to do so from

time-to-time. We continue to have strong investment-grade short-

term and long-term debt ratings that we believe should enable us

to refinance our debt as needed.

Our cash, cash equivalents, short-term investments and

marketable securities held in locations outside the United States

was 35% on September 30, 2025 compared to 20% on

December 31, 2024.

Dollar amounts are in millions except per share amounts or as otherwise specified. 20

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There were no changes to our critical accounting policies and

estimates from those disclosed in our Annual Report on Form 10-

K for 2024, except as follows.

Refer to Note 11 to our Consolidated Financial Statements for

discussion of estimates related to the Spinal Implants assets

classified as held for sale at December 31, 2024.

New Accounting Pronouncements Not Yet Adopted

Refer to Note 1 to our Consolidated Financial Statements for

information.

Guarantees and Other Off-Balance Sheet Arrangements

We do not have guarantees or other off-balance sheet financing

arrangements, including variable interest entities, of a magnitude

that we believe could have a material impact on our financial

condition or liquidity.

OTHER MATTERS

Legal and Regulatory Matters

We are involved in various ongoing proceedings, legal actions

and claims arising in the normal course of our business, including

proceedings related to product, labor, intellectual property and

other matters. Refer to Note 6 to our Consolidated Financial

Statements for further information.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We consider our greatest potential area of market risk exposure

to be exchange rate risk on our operating results. Quantitative

and qualitative disclosures about exchange rate risk are included

in Item 7A "Quantitative and Qualitative Disclosures About Market

Risk" of our Annual Report on Form 10-K for 2024. There were

no material changes from the information provided therein.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of the Chief Executive

Officer and Chief Financial Officer (the Certifying Officers),

evaluated the effectiveness of the Company's disclosure controls

and procedures (as defined in Rules 13a-15(e) or 15d-15(e)

promulgated under the Securities Exchange Act of 1934, as

amended) on September 30, 2025. Based on that evaluation, the

Certifying Officers concluded the Company's disclosure controls

and procedures were effective as of September 30, 2025.

Changes in Internal Control Over Financial Reporting

There was no change to our internal control over financial

reporting during the nine months 2025 that materially affected, or

is reasonably likely to materially affect, our internal control over

financial reporting.

PART II – OTHER INFORMATION

ITEM 1A. RISK FACTORS

We are not aware of any material changes to the risk factors

included in Item 1A. "Risk Factors" in our Annual Report on Form

10-K for 2024.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In the three months 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 would not be

events of sale within the meaning of Section 2(a)(3) of the Act.

In March 2015 we announced that our Board of Directors had

authorized us to purchase up to $2,000 of our common stock.

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.

In the nine months 2025 we did not repurchase any shares of our

common stock under our authorized repurchase program. The

total dollar value of shares of our common stock that could be

acquired under our authorized repurchase program was $1,033

as of September 30, 2025.

ITEM 5. OTHER INFORMATION

Certain of our officers or directors have made elections to

participate in, and are participating in, our employee stock

purchase plan and 401(k) plan and have made, and may from

time to time make, elections to have shares withheld to cover

withholding taxes due or pay the exercise price of stock options,

restricted stock units and performance stock units, which may

constitute non-Rule 10b5–1 trading arrangements (as defined in

Item 408(c) of Regulation S-K).

21

STRYKER CORPORATION 2025 Third Quarter Form 10-Q

ITEM 6. EXHIBITS

| | |

31(i)† Certification of Principal Executive Officer of Stryker Corporation pursuant to Rule 13a-14(a). 31(ii)† Certification of Principal Financial Officer of Stryker Corporation pursuant to Rule 13a-14(a). 32(i)†† Certification by Principal Executive Officer of Stryker Corporation pursuant to 18 U.S.C. Section 1350. 32(ii)†† Certification by Principal Financial Officer of Stryker Corporation pursuant to 18 U.S.C. Section 1350. 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-Q | | | †† Furnished with this Form 10-Q |

22

STRYKER CORPORATION 2025 Third Quarter Form 10-Q