Stryker(SYK) - 2025 Q2 - Quarterly Results

Financial Performance - Consolidated net sales increased by 11.1% to $6.0 billion in Q2 2025, with organic net sales growth of 10.2%[2][6] - Reported net earnings rose by 7.2% to $884 million, with diluted earnings per share increasing by 7.0% to $2.29[4][6] - Adjusted net earnings increased by 11.6% to $1.2 billion, with adjusted earnings per diluted share rising by 11.4% to $3.13[4][6] - For the six months ended June 30, 2025, net earnings decreased to $1,538 million from $1,613 million in 2024, representing a decline of 4.6%[20] - Reported net earnings for the six months of 2025 were $1,538 million, with an effective tax rate of 13.6% and diluted EPS of $3.98, compared to $1,613 million and 16.0% with diluted EPS of $4.19 in 2024[35] - Adjusted net earnings for the six months of 2025 were $2,308 million, reflecting a 14.9% effective tax rate and diluted EPS of $5.97, compared to $2,047 million and 13.9% with diluted EPS of $5.31 in 2024[35] Sales Performance - MedSurg and Neurotechnology net sales reached $3.8 billion, reflecting a 17.3% increase, while Orthopaedics net sales were $2.2 billion, up 2.0%[2][3] - Total sales for the six months in 2025 reached $11,888 million, an increase of 11.5% compared to $10,665 million in 2024[23] - In the United States, sales grew by 13.0% to $8,994 million for the six months in 2025, up from $7,961 million in 2024[23] - International sales increased by 7.0% to $2,894 million for the six months in 2025, compared to $2,704 million in 2024[23] - The MedSurg and Neurotechnology segment reported a 15.4% increase in sales to $7,282 million for the six months in 2025, up from $6,312 million in 2024[25] - The Orthopaedics segment saw a sales increase of 5.8% to $4,606 million for the six months in 2025, compared to $4,353 million in 2024[25] Guidance and Expectations - The company raised its full-year 2025 guidance, expecting organic net sales growth of 9.5% to 10.0% and adjusted net earnings per diluted share in the range of $13.40 to $13.60[5] Profitability and Margins - The gross profit margin was reported at 63.8%, while the adjusted operating income margin increased by 110 basis points to 25.7%[4][6] - Reported gross profit for Q2 2025 was $3,841 million, representing 63.8% of net sales[31] - Gross profit for the six months of 2025 was $7,585 million, representing 63.8% of net sales, compared to $6,749 million or 63.3% in 2024[35] - The company reported a gross profit margin increase to 65.4% in 2025 from 63.9% in 2024, indicating improved operational efficiency[35] Expenses and Costs - Total selling, general, and administrative expenses for Q2 2025 were $2,079 million, accounting for 34.5% of net sales[31] - Research and development expenses for Q2 2025 were $407 million, which is 6.8% of net sales[31] - The company incurred acquisition and integration-related costs of $78 million in Q2 2025, impacting operating income[32] - Total selling, general, and administrative expenses for the six months of 2025 were $4,379 million, which is 36.8% of net sales, compared to $3,668 million or 34.4% in 2024[35] - Acquisition and integration-related costs for the six months of 2025 amounted to $263 million, with adjustments to net earnings of $237 million, compared to $1 million and adjustments of $(2) million in 2024[36] - Structural optimization and other special charges for the six months of 2025 were $52 million, with adjustments to net earnings of $31 million, compared to $70 million and $50 million in 2024[36] - Goodwill and other impairments for the six months of 2025 were $90 million, with adjustments to net earnings of $59 million, compared to $19 million and $19 million in 2024[36] Cash Flow and Assets - Net cash provided by operating activities for the six months in 2025 was $1,361 million, significantly higher than $837 million in 2024[20] - Cash used in investing activities increased to $4,240 million in 2025, primarily due to acquisitions, compared to $525 million in 2024[20] - The company reported a net cash inflow from financing activities of $1,545 million in 2025, compared to a net outflow of $1,384 million in 2024[20] - Total assets as of June 30, 2025, were $46.3 billion, an increase from $43.0 billion at the end of 2024[18] - Current liabilities decreased to $7.3 billion from $7.6 billion, while long-term debt increased to $14.8 billion from $12.2 billion[18] Tax Matters - Adjustments related to tax matters for the six months of 2025 included a charge of $(21) million, with adjustments to net earnings of $21 million, compared to $(79) million and $78 million in 2024[38] - Other tax matters resulted in a benefit of $71 million for the six months of 2025, compared to $17 million in 2024[38] Tariffs and Trade Policies - The impact from tariffs in 2025 is estimated to be approximately $175 million, reflecting recent updates on trade policies[5] Research and Development - Research, development, and engineering expenses increased by 12.1% to $407 million in Q2 2025[16]