STRYKER CORP (SYK)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ABOUT STRYKER

Stryker Corporation ("we" or the "Company") 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.

MedSurg and Neurotechnology products include surgical

equipment, patient and caregiver safety technologies, and 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 (Instruments), endoscopic and communications

systems (Endoscopy), patient handling, emergency medical

equipment, intensive care disposable products, clinical

communication and artificial intelligence-assisted virtual care

platform technology (Medical), and minimally invasive products

for the treatment of acute ischemic and hemorrhagic stroke and

venous thromboembolism (Vascular). Orthopaedics products

include implants and surgical equipment such as navigation

systems and robotics used in total joint replacements, such as

hip, knee and shoulder, ankle and trauma and extremities

surgeries.  We bring patients and physicians advanced implant

designs and specialized instrumentation that make orthopaedic

surgery and recovery simpler, faster and more effective. We

support surgeons with technologies, products and services they

need to support each patient’s clinical challenge.

Overview of the Three and Six Months

In the three months 2026 we achieved sales growth of 9.4% from

2025. Excluding the impact of acquisitions and divestitures, sales

grew 9.0% in constant currency. We reported operating income

margin of 25.2%, net earnings of $1,276 and net earnings per

diluted share of $3.30. Excluding the impact of certain items,

adjusted operating income margin(1) increased by 170 basis

points to 27.4%, with adjusted net earnings(1) of $1,424 and

adjusted net earnings per diluted share(1) of $3.69, an increase of

17.9% from 2025.

In the six months 2026 we achieved sales growth of 6.1% from

2025. Excluding the impact of acquisitions and divestitures, sales

grew 5.8% in constant currency. We reported operating income

margin of 20.6%, net earnings of $2,021 and net earnings per

diluted share of $5.23. Excluding the impact of certain items,

adjusted operating income margin(1) increased by 10 basis points

to 24.4%, with adjusted net earnings(1) of $2,428 and adjusted

net earnings per diluted share(1) of $6.29, an increase of 5.4%

from 2025.

(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

Note: In the first quarter 2026 we announced a change in our organizational structure. Our new Ortho Tech business combines the

orthopaedic instruments portfolio (Orthopaedic Instruments) from Instruments with Other Orthopaedics. In addition, Neuro Cranial and

the spine enabling technologies portfolio (Enabling Technologies) from Other Orthopaedics were combined with the remaining

Instruments business to align with our internal reporting structure. Ortho Tech includes sales related to Orthopaedic Instruments of $523

and $501 and Other Orthopaedics of $194 and $148 for the three months 2026 and 2025. For the six months 2026 and 2025 Ortho

Tech includes sales related to Orthopaedic Instruments of $1,012 and $985 and Other Orthopaedics of $351 and $281. Instruments

includes sales related to Neuro Cranial of $681 and $616 and Enabling Technologies of $28 and $34 for the three months 2026 and

2025. For the six months 2026 and 2025 Instruments includes sales related to Neuro Cranial of $1,287 and $1,179 and Enabling

Technologies of $54 and $63. We have reflected these changes in all historical periods presented.

Consolidated Net Sales

Consolidated net sales increased 9.4% in the three months 2026

as reported and 9.0% in constant currency, as foreign currency

exchange rates positively impacted net sales by 0.4%. Net sales

in constant currency increased by 9.0% from increased unit

volume. The unit volume increase was due to higher product

shipments across most MedSurg and Neurotechnology

businesses and all Orthopaedics businesses.

Consolidated net sales increased 6.1% in the six months 2026 as

reported and 5.0% in constant currency as foreign currency

exchange rates positively impacted net sales by 1.1%. Excluding

the (0.8)% impact of acquisitions and divestitures, net sales in

constant currency increased by 5.6% from increased unit volume

and 0.2% due to higher prices. The unit volume increase was due

to higher product shipments across all MedSurg and

Neurotechnology businesses and all Orthopaedics businesses.

MedSurg and Neurotechnology Net Sales

MedSurg and Neurotechnology net sales increased 9.7% in the

three months 2026 as reported and 9.2% in constant currency, as

foreign currency exchange rates positively impacted net sales by

0.5%. Net sales in constant currency increased by 9.1% from

increased unit volume and 0.1% from higher prices. The unit

volume increase was due to higher shipments across most

Medsurg and Neurotechnology businesses.

MedSurg and Neurotechnology net sales increased 7.4% in the

six months 2026 as re

[Excerpt truncated for page length; source filing is linked above.]

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 by $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.

CONSOLIDATED RESULTS OF OPERATIONS

nm - not meaningful

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.

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 increa

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]