Stryker (SYK) Q2 2026 earnings summary

Executive summary

• Achieved 9.4% year-over-year sales growth in Q2 2026, with organic sales up 9.0% and strong performance across MedSurg, Neurotechnology, and Orthopaedics segments, despite supply disruptions in Peripheral Vascular.

• Adjusted EPS grew 17.9% to $3.69, while reported EPS increased 44.1% to $3.30, reflecting improved gross margins and operational execution.

• Recovery from a significant cybersecurity incident contributed to strong sales, EPS, and operating cash flow growth, with production ramping up to meet demand.

• International organic sales growth was 8.9%, led by strong results in Australia, New Zealand, Germany, Canada, South Korea, Japan, India, and Brazil.

• Operating income margin improved to 25.2% for Q2, with adjusted margin at 27.4%.

Financial highlights

• Q2 net sales reached $6.6 billion, up from $6.0 billion, with organic growth of 9% and constant currency growth of 9.0%.

• Adjusted EPS was $3.69, up 17.9% year-over-year, driven by sales growth and a net benefit from tariff-related costs.

• Gross profit margin increased to 68.3% (reported) and 66.0% (adjusted); adjusted operating margin was 27.4%.

• Ended Q2 with $3.4 billion in cash and equivalents and $1.84 billion in operating cash flow for the first half.

• Debt-to-equity ratio improved as total liabilities decreased to $23,942M and equity rose to $23,988M.

Outlook and guidance

• Full-year 2026 organic net sales growth guidance narrowed to 8.3%-9.3%, with adjusted EPS forecasted at $14.95-$15.10.

• Guidance reflects strong capital demand, production ramp, and stable procedural environment; modestly positive pricing and favorable foreign exchange impacts expected.

• Confident in ability to deliver on guidance due to elevated backlog and robust order book, especially in capital equipment.

• Management targets high-end MedTech industry sales growth and maintains a capital allocation strategy prioritizing acquisitions, dividends, and share repurchases.