Stryker Q2 Earnings Call Highlights

Stryker reported strong Q2 results, with 9% organic sales growth and adjusted EPS of $3.69, up 17.9% year over year. Both MedSurg and Neurotechnology and Orthopaedics delivered high-single-digit organic growth as operations recovered from a cybersecurity incident. The company achieved record second-quarter Mako installations and cited strong hospital capital demand, while launching Mako RPS and advancing several other product rollouts. However, a Peripheral Vascular supply disruption caused a 6.7% decline in U.S. vascular sales, with recovery expected in the second half. Stryker narrowed its full-year outlook to 8.3%–9.3% organic sales growth and adjusted EPS of $14.95–$15.10. With $3.5 billion in cash and $1.8 billion in year-to-date operating cash flow, the company plans to resume share repurchases while keeping acquisitions as its top capital-allocation priority. Stryker reported 9% organic sales growth in the second quarter of 2026 and adjusted earnings per share growth of 17.9%, as the medical technology company continued recovering from a cybersecurity incident that disrupted operations earlier in the year. Chair and CEO Kevin Lobo stated the company regained momentum during the quarter as it increased production to meet demand and support patient care. Stryker reported high-single-digit organic sales growth in both its MedSurg and Neurotechnology and Orthopaedics businesses, while U.S. organic sales rose 9% and international organic sales increased 8.9%. Lobo commented, “We exited Q2 with regained momentum and expect a strong second half of the year,” citing demand for capital products, production increases, and commercial execution. Adjusted earnings per share totaled $3.69, up $0.56 from a year earlier. CFO Preston Wells noted the increase reflected sales growth, operational execution, and a net benefit from tariff-related costs. Foreign currency translation provided a $0.01 favorable impact to adjusted EPS. Adjusted gross margin was 66%, improving 60 basis points from the prior-year quarter, while adjusted operating margin rose 170 basis points to 27.4% of sales. Wells attributed the operating-margin improvement to gross-margin gains and lower adjusted selling, general, and administrative expenses as a percentage of sales. MedSurg and Neurotechnology organic sales increased 9.2%, including 8.9% growth in the U.S. and 10.5% growth internationally. Within the U.S. business: Instruments organic sales rose 8.4%, led by interventional spine pain and surgical technologies products. Endoscopy organic sales increased 10.2%, supported by operating-room infrastructure and renovations, Oculan Lighting, urology, connected operating-room products, and sports medicine. Medical organic sales climbed 13.1%, with strong growth in Sage and emergency care. Preoperative skin preparation products, powered cots, and the LIFEPAK 35 were among the drivers. U.S. vascular organic sales declined 6.7% because of an operational disruption in Peripheral Vascular. Growth in the company’s hemorrhagic portfolio, including Surpass Evolve flow-diverting stents, partly offset the decline. Orthopaedics organic sales grew 8.6%, with U.S. organic growth of 9.1% and international growth of 7.5%. U.S. trauma and extremities sales rose 12.5%, while Ortho Tech organic sales increased 9.2%, supported by Mako installations. U.S. knee sales grew 6.2% and hip sales rose 4.9%.