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Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.08pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Real-time Form 4 intelligence. Smarter insider tracking.
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.07pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
negatively+1
penalties+1
fear+1
threat+1
investigation+1
Positive rising
successful+1
gaining+1
Risk Factors (Item 1A)
7,943 words
ITEM 1A.
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 , price
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
impairments+3
adverse+1
threatened+1
slower+1
recession+1
Positive rising
positively+3
profitability+1
achieve+1
improvements+1
MD&A (Item 7)
8,880 words
ITEM 7.
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. 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 b y $750 to $3,000 and extending
the maturity date to February 25, 2030. On December 31, 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.
STRYKER CORPORATION
2025 FORM 10-K
CONSOLIDATED RESULTS OF OPERATIONS
Percent Net Sales
Percentage Change
Net sales
Gross profit
Research, development and engineering expenses
Selling, general and administrative expenses
Amortization of intangible assets
Goodwill and other impairments
Interest expense
Other income
Income taxes
Net earnings
Net earnings per diluted share
Adjusted net earnings per diluted share (1)
nm - not meaningful
Geographic and Segment Net Sales
Percentage Change
Reported
Constant
Currency
Reported
Constant
Currency
Geographic:
United States
International
Total
Segment:
MedSurg and Neurotechnology
Orthopaedics
Total
Supplemental Net Sales Growth Information
Percentage Change
United
States
International
United
States
International
Reported
Constant
Currency
Reported
Reported
Constant
Currency
Reported
Constant
Currency
Reported
Reported
Constant
Currency
MedSurg and
Neurotechnology:
Instruments
Endoscopy
Medical
Vascular
Neuro Cranial
Orthopaedics:
Knees
Hips
Trauma and Extremities
Other
Spinal Implants
Total
Consolidated Net Sales
Consolidated 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.
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 in 2024 increased 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 Pro fit
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
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
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
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.
STRYKER CORPORATION
2025 FORM 10-K
Operating Income
Percent Net Sales
MedSurg and
Neurotechnology
Orthopaedics
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
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
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 eff ective 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;
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.
STRYKER CORPORATION
2025 FORM 10-K
Reconciliation of the Most Directly Comparable GAAP Financial Measure to Non-GAAP Financial Measure
Gross
Profit
Selling,
General &
Administrative
Expenses
Research,
Development &
Engineering
Expenses
Operating
Income
Other
Income
(Expense),
Net
Income
Taxes
Net
Earnings
Effective
Tax Rate
Diluted
EPS
Reported
Acquisition and integration-related costs:
Inventory stepped-up to fair value
Other acquisition and integration-related (a)
Amortization of purchased intangible assets
Structural optimization and other special charges (b)
Goodwill and other impairments (c)
Medical device regulations (d)
Recall-related matters (e)
Regulatory and legal matters (f)
Tax matters (g)
Adjusted
Gross
Profit
Selling,
General &
Administrative
Expenses
Research,
Development &
Engineering
Expenses
Operating
Income
Other
Income
(Expense),
Net
Income
Taxes
Net
Earnings
Effective
Tax Rate
Diluted
EPS
Reported
Acquisition and integration-related costs:
Inventory stepped-up to fair value
Other acquisition and integration-related (a)
Amortization of purchased intangible assets
Structural optimization and other special charges (b)
Goodwill and other impairments (c)
Medical device regulations (d)
Recall-related matters (e)
Regulatory and legal matters (f)
Tax matters (g)
Adjusted
Gross
Profit
Selling,
General &
Administrative
Expenses
Research,
Development &
Engineering
Expenses
Operating
Income
Other
Income
(Expense),
Net
Income
Taxes
Net
Earnings
Effective
Tax Rate
Diluted
EPS
Reported
Acquisition and integration-related costs:
Inventory stepped-up to fair value
Other acquisition and integration-related (a)
Amortization of purchased intangible assets
Structural optimization and other special charges (b)
Goodwill and other impairments (c)
Medical device regulations (d)
Recall-related matters (e)
Regulatory and legal matters (f)
Tax matters (g)
Adjusted
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
Termination of sales relationships
Employee retention and workforce reductions
Changes in the fair value of contingent consideration
Manufacturing integration costs
Stock compensation payments upon a change in control
Other integration-related activities
Adjustments to Operating Income
Charges for acquisition-related tax provisions
Other income taxes related to acquisition and integration-related costs
Adjustments to Income Taxes
Adjustments to Net Earnings
Dollar amounts in millions except per share amounts or as otherwise specified.
STRYKER CORPORATION
2025 FORM 10-K
(b) Structural optimization and other special charges represent the costs associated with:
Employee retention and workforce reductions
Closure/transfer of manufacturing and other facilities
Product line exits
Termination of sales relationships
Other charges
Adjustments to Operating Income
Adjustments to Other Income (Expense), Net
Adjustments to Income Taxes
Adjustments to Net Earnings
(c) Goodwill and other impairments represent the costs associated with:
Goodwill impairments
Certain long-lived and intangible asset write-offs and impairments
Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs)
Adjustments to Operating Income
Adjustments to Income Taxes
Adjustments to Net Earnings
(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:
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions
Certain tax audit settlements
Deferred tax benefit on outside basis related to the anticipated sale of the Spinal Implants business
Other tax matters
Adjustments to Income Taxes
Benefits for certain tax audit settlements
Other tax related adjustments
Adjustments to Other Income (Expense), Net
Adjustments to Net Earnings
FINANCIAL CONDITION AND LIQUIDITY
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Effect of exchange rate changes
Change in cash and cash equivalents
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.
STRYKER CORPORATION
2025 FORM 10-K
capital. Refer to Note 10 to our Consolidated Financial
Statements for further information.
Dividends paid per common share
Total dividends paid to common shareholders
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 December 31, 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
December 31, 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 December 31, 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 December 31, 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
After
Debt repayments
Interest payments
Minimum lease payments
Other
Total
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 successfulchallenge 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.
Dollar amounts in millions except per share amounts or as otherwise specified.
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
